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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549





FORM 20-F







| ̈ | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------------

OR



|x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ------------------------------------------------------------------------------------

For the fiscal year ended December 31, 2013

OR



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------

OR



| ̈ | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | -------------------------------------------------------------------------------------------

Commission file number 001-15102





EMBRAER S.A.

(Exact name of Registrant as specified in its charter)





EMBRAER Inc.

(Translation of Registrants name into English)

Federative Republic of Brazil

(Jurisdiction of incorporation)

Avenida Brigadeiro Faria Lima, 2170

12227-901 São José dos Campos, São Paulo, Brazil

(Address of principal executive offices)

Luciano Rodrigues Fróes

Head of Investor Relations

(55) 12 3927 4404

investor.relations@embraer.com

Investor relations department, (55) 12 3927 4404, investor.relations@embraer.com.br

(Name, Telephone, E-mail and/or facsimile number and Address of Company Contact Person)

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



|                                                                                                                                                                                                                               |  |                                          
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | -----------------------------------------
|Title of each class:                                                                                                                                                                                                           |  | Name of each exchange on which registered
|Common shares, without par value (represented by, and traded only in the form of, American Depositary Shares (evidenced by American Depositary Receipts), with each American Depositary Share representing four common
shares) |  | New York Stock Exchange                  
|                                                                                                                                                                                                                               | 
|US$500,000,000 5.150% Notes due 2022 of Embraer S.A.                                                                                                                                                                           |  | New York Stock Exchange                  

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

None.

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

Title of each class

US$400,000,000 6.375% Guaranteed Notes due 2017 of Embraer Overseas Ltd.

Guaranteed by Embraer S.A.

US$500,000,000 6.375% Guaranteed Notes due 2020 of Embraer Overseas Ltd. Guaranteed by Embraer S.A.

Number of outstanding shares of each of the issuers classes of capital or common stock as of December 31, 2013:

740,465,044 common shares, without par value





Indicate by check mark if the
registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities
Act.    Yes  x    No   ̈

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No   ̈

Indicate by check mark
whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No   ̈

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



|                                                                                                                                      |  |                                                                                                          |  |                         
|------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------- |  | ------------------------
|Large Accelerated Filer  x                                                                                                            |  | Accelerated Filer   ̈                                                                                     |  | Non-accelerated filer   ̈
|                                                                                                                                     
|Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
|                                                                                                                                      |  |                                                                                                         
|U.S. GAAP   ̈                                                                                                                          |  | International Financial Reporting Standards as issued by the International Accounting Standards Board  x |  | Other   ̈                

If Other has been checked in response to the previous question, indicate by check mark which financial statement
item the registrant has elected to follow. Item 17   ̈ Item 18   ̈

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act).    Yes   ̈    No  x









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TABLE OF CONTENTS



|          |  |                                                         |  |      |     | 
|--------- |  | ------------------------------------------------------- |  | ---- | --- | 
|Part I    | 
|          |  |                                                        
|          |  |                                                         |  | Page |    
|          |  |                                                        
|ITEM  1.  |  | IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS   |  |      | 4   | 
|ITEM  2.  |  | OFFER STATISTICS AND EXPECTED TIMETABLE                 |  |      | 4   | 
|ITEM  3.  |  | KEY INFORMATION                                         |  |      | 4   | 
|3A.       |  | Selected Financial Data                                 |  |      | 4   | 
|3B.       |  | Capitalization and Indebtedness                         |  |      | 8   | 
|3C.       |  | Reasons for the Offer and Use of Proceeds               |  |      | 8   | 
|3D.       |  | Risk Factors                                            |  |      | 8   | 
|ITEM  4.  |  | INFORMATION ON THE COMPANY                              |  |      | 19  | 
|4A.       |  | Unresolved Staff Comments                               |  |      | 19  | 
|4B.       |  | History and Development of the Company                  |  |      | 19  | 
|4C.       |  | Business Overview                                       |  |      | 24  | 
|4D.       |  | Organizational Structure                                |  |      | 47  | 
|4E.       |  | Property, Plant and Equipment                           |  |      | 47  | 
|ITEM  5.  |  | OPERATING AND FINANCIAL REVIEW AND PROSPECTS            |  |      | 52  | 
|5A.       |  | Operating Results                                       |  |      | 53  | 
|5B.       |  | Liquidity and Capital Resources                         |  |      | 71  | 
|5C.       |  | Research and Development, Patents and Licenses, etc.    |  |      | 76  | 
|5D.       |  | Trend Information                                       |  |      | 78  | 
|5E.       |  | Off-Balance Sheet Arrangements                          |  |      | 82  | 
|5F.       |  | Tabular Disclosure of Contractual Obligations           |  |      | 85  | 
|5G.       |  | Safe Harbor                                             |  |      | 86  | 
|ITEM  6.  |  | DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES              |  |      | 86  | 
|6A.       |  | Directors and Senior Management                         |  |      | 86  | 
|6B.       |  | Compensation                                            |  |      | 92  | 
|6C.       |  | Board Practices                                         |  |      | 94  | 
|6D.       |  | Employees                                               |  |      | 96  | 
|6E.       |  | Share Ownership                                         |  |      | 96  | 
|ITEM  7.  |  | MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS       |  |      | 97  | 
|7A.       |  | Major Shareholders                                      |  |      | 97  | 
|7B.       |  | Related Party Transactions                              |  |      | 98  | 
|7C.       |  | Interests of Experts and Counsel                        |  |      | 99  | 
|ITEM  8.  |  | FINANCIAL INFORMATION                                   |  |      | 99  | 
|8A.       |  | Consolidated Statements and Other Financial Information |  |      | 99  | 
|8B.       |  | Significant Changes                                     |  |      | 104 | 
|ITEM  9.  |  | THE OFFER AND LISTING                                   |  |      | 104 | 
|9A.       |  | Offer and Listing Details                               |  |      | 104 | 
|9B.       |  | Plan of Distribution                                    |  |      | 106 | 
|9C.       |  | Markets                                                 |  |      | 106 | 
|9D.       |  | Selling Shareholders                                    |  |      | 109 | 
|9E.       |  | Dilution                                                |  |      | 109 | 
|9F.       |  | Expenses of the Issue                                   |  |      | 109 | 
|ITEM  10. |  | ADDITIONAL INFORMATION                                  |  |      | 109 | 
|10A.      |  | Share Capital                                           |  |      | 109 | 
|10B.      |  | Memorandum and Articles of Association                  |  |      | 109 | 
|10C.      |  | Material Contracts                                      |  |      | 122 | 
|10D.      |  | Exchange Controls                                       |  |      | 122 | 
|10E.      |  | Taxation                                                |  |      | 123 | 
|10F.      |  | Dividends and Paying Agents                             |  |      | 129 | 
|10G.      |  | Statements by Experts                                   |  |      | 129 | 



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|           |  |                                                                              |  |  |     | 
|---------- |  | ---------------------------------------------------------------------------- |  |  | --- | 
|10H.       |  | Documents on Display                                                         |  |  | 129 | 
|10I.       |  | Subsidiary Information                                                       |  |  | 130 | 
|ITEM  11.  |  | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                   |  |  | 130 | 
|ITEM  12.  |  | DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES                       |  |  | 133 | 
|12A.       |  | Debt Securities                                                              |  |  | 133 | 
|12B.       |  | Warrants and Rights                                                          |  |  | 133 | 
|12C.       |  | Other Securities                                                             |  |  | 134 | 
|12D.       |  | American Depositary Shares                                                   |  |  | 134 | 
|          
|Part II    | 
|           |  |                                                                             
|ITEM  13.  |  | DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES                              |  |  | 135 | 
|ITEM  14.  |  | MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS |  |  | 135 | 
|ITEM  15.  |  | CONTROLS AND PROCEDURES                                                      |  |  | 135 | 
|ITEM  16.A |  | AUDIT COMMITTEE FINANCIAL EXPERT                                             |  |  | 136 | 
|ITEM  16.B |  | CODE OF ETHICS                                                               |  |  | 136 | 
|ITEM  16.C |  | PRINCIPAL ACCOUNTANT FEES AND SERVICES                                       |  |  | 137 | 
|ITEM  16.D |  | EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES                   |  |  | 137 | 
|ITEM  16.E |  | PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS       |  |  | 137 | 
|ITEM  16.F |  | CHANGE IN REGISTRANTS CERTIFYING ACCOUNTANT                                 |  |  | 138 | 
|ITEM  16.G |  | CORPORATE GOVERNANCE                                                         |  |  | 138 | 
|ITEM  16.H |  | MINE SAFETY DISCLOSURE                                                       |  |  | 141 | 
|          
|Part III   | 
|           |  |                                                                             
|ITEM  17.  |  | FINANCIAL STATEMENTS                                                         |  |  | 141 | 
|ITEM  18.  |  | FINANCIAL STATEMENTS                                                         |  |  | 141 | 
|ITEM  19.  |  | EXHIBITS                                                                     |  |  | 141 | 



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INTRODUCTION

In this annual report, Embraer, we, us, our or the Company refer to Embraer
S.A. All references herein to the real, reais or R$ are to the Brazilian real, the official currency of Brazil. All references to US$, dollars or U.S.
dollars are to United States dollars.

Presentation of Financial and Other Data

Financial Data

Our audited
consolidated financial statements at December 31, 2013 and 2012 and for each of the years ended December 31, 2013, 2012 and 2011 are included in this annual report.

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

After analyzing our operations and businesses with regard to the applicability of
International Accounting Standards, or IAS, 21  The Effects of Changes in Foreign Exchange Rates, particularly in relation to the factors involved in determining our functional currency, management concluded that our
functional currency is the U.S. dollar. This conclusion was based on an analysis of the following factors, as set forth in IAS 21: (1) the currency that mainly influences the sale prices of our goods and services, (2) the currency of the
countries whose competitive forces mainly determine the sale prices of our goods and services, (3) the currency that mainly influences prices of raw materials and other costs involved in providing our goods and services, (4) the currency
in which the funds for financial operations are principally obtained, and (5) the currency in which revenue from operations is usually received. Items included in the financial statements of each of our subsidiaries are measured using the
currency of the primary economic environment in which such subsidiary operates. Our audited consolidated financial statements included elsewhere in this annual report are presented in U.S. dollars, which is our presentation currency. Our financial
statements and financial data presented herein and prepared in accordance with IFRS do not reflect the effects of inflation.

In our 2013,
2012 and 2011 consolidated financial statements, gains or losses resulting from the remeasurement of the monetary items and from foreign currency transactions have been reported in the consolidated statement of income as a single line item.

For certain purposes, such as providing reports to our Brazilian shareholders, filing financial statements with the Comissão
de Valores Mobiliários (Brazilian securities commission), or CVM, and determining dividend payments and other distributions and tax liabilities in Brazil, we have prepared, and will continue to be required to prepare, financial statements
in accordance with Law No. 6,404 of December 15, 1976, as amended, or the Brazilian Corporate Law. Effective 2008, significant changes were introduced to the accounting aspects of the Brazilian Corporate Law by Law 11,638 of
December 28, 2007. In addition, in 2008 certain changes to the accounting principles in Brazil, as well as other changes to the accounting practices adopted in Brazil, or Brazilian GAAP, were introduced by the Comitê de Pronunciamentos
Contábeis (Brazilian Accounting Standards Setting Board), and became effective in 2010. These changes to the accounting aspects of the Brazilian Corporate Law and Brazilian GAAP impacted our parent company financial statements as of and
for the years ended December 31, 2013, 2012 and 2011 and the basis of our distribution of minimum mandatory dividends. Other than that, such changes had no effect on our consolidated financial statements prepared in accordance with IFRS that
are included elsewhere in this annual report.

Because we list our common shares on the Novo Mercado segment of the
BM&FBOVESPA S.A.Bolsa de Valores, Mercadorias e Futuros de São Paulo, or São Paulo Stock Exchange, as of January 2009 we have been required to translate our quarterly and annual financial statements into English.
Foreign private issuers are not subject to the quarterly reporting requirements of Exchange Act Rules 13a-13 and 15d-13. Accordingly, foreign private issuers that file annual reports on Form 20-F are only required to promptly furnish, in a Form 6-K,
material information such as in a press release that is (1) distributed to stockholders or filed with a national exchange, if made public by that exchange, or (2) required by its domestic laws to be made public.



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Other Data and Backlog

In this annual report:



| |  |  | some of the financial data reflects the effect of rounding;
| | - |  | -----------------------------------------------------------



| |  |  | aircraft ranges are indicated in nautical miles;
| | - |  | ------------------------------------------------



| |  |  | one nautical mile is equal to approximately 1.15 ordinary or statute miles, or approximately 1.85 kilometers;
| | - |  | ---------------------------------------------------------------------------------------------------------------



| |  |  | aircraft speeds are indicated in nautical miles per hour, or knots, or in Mach, which is a measure of the speed of sound;
| | - |  | -------------------------------------------------------------------------------------------------------------------------



| |  |  | the term regional jet refers to narrow body jet aircraft with 30-60 passenger seats;
| | - |  | --------------------------------------------------------------------------------------



| |  |  | the term mid-capacity jet refers to jet aircraft with 70-120 passenger seats - all of our regional and mid-capacity jet aircraft are sold in the commercial aviation segment;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the term commercial aircraft, as it applies to Embraer, refers to our regional jets and mid-capacity jets;
| | - |  | ------------------------------------------------------------------------------------------------------------



| |  |  | the terms entry-level jet and light jet refer to executive jets that carry from six to eight passengers and up to nine passengers, respectively, that are designed for short take-off distances;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the term ultra-large jet refers to executive jets that have longer range and over-sized cabin space and carry, on average, 19 passengers; and
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the term executive jets, as it applies to Embraer, refers to our aircraft sold to companies, including fractional ownership companies, charter companies and air-taxi companies and high net-worth individuals.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

We calculate the value of our backlog by considering all firm orders that have not yet been delivered. A firm order is a
firm commitment from a customer, represented by a signed contract and customarily accompanied by a down payment, for which we have reserved a place on one of our production lines. Every time we refer to our backlog in this annual report, we make
reference only to firm orders and not to options. We also include the number of aircraft sold by our Defense & Security segment to state-owned airlines in our commercial aircraft backlog.

Special Note Regarding Forward-Looking Statements

This annual report includes forward-looking statements, within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended,
or the Securities Act, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended, or the Exchange Act, principally in Items 3 through 5 and Item 11 of this annual report. We have based these forward-looking statements largely
on our current expectations and projections about future events and industry and financial trends affecting our business. These forward-looking statements are subject to risks, uncertainties and assumptions, including, among other things:



| |  |  | general economic, political and business conditions, both in Brazil and in our other markets;
| | - |  | ---------------------------------------------------------------------------------------------



| |  |  | changes in competitive conditions and in the general level of demand for our products;
| | - |  | --------------------------------------------------------------------------------------



| |  |  | managements expectations and estimates concerning our future financial performance, financing plans and programs, and the effects of competition;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the effects of customers canceling, modifying and/or rescheduling contractual orders;
| | - |  | -------------------------------------------------------------------------------------



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| |  |  | the effect of changing priorities or reductions in the Brazilian federal government or international government defense budgets on our revenues;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | continued successful development and marketing of the EMBRAER 170/190 jet family, our line of executive jets (including the Phenom 100, Phenom 300, Lineage 1000, Legacy 450 and Legacy 500) and our defense aircraft;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | our level of indebtedness;
| | - |  | --------------------------



| |  |  | anticipated trends in our industry, including but not limited to the continuation of long-term trends in passenger traffic and revenue yields in the airline industry;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | our short- and long-term outlook for the 30-120 seat commercial airline market;
| | - |  | -------------------------------------------------------------------------------



| |  |  | our expenditure plans;
| | - |  | ----------------------



| |  |  | inflation and fluctuations in exchange rates;
| | - |  | ---------------------------------------------



| |  |  | the impact of volatile fuel prices and the airline industrys response;
| | - |  | -----------------------------------------------------------------------



| |  |  | our ability to develop and deliver our products on a timely basis;
| | - |  | ------------------------------------------------------------------



| |  |  | availability of sales financing for our existing and potential customers;
| | - |  | -------------------------------------------------------------------------



| |  |  | existing and future governmental regulation;
| | - |  | --------------------------------------------



| |  |  | our relationship with our workforce; and
| | - |  | ----------------------------------------



| |  |  | other risk factors, such as those set forth under Item 3D. Key InformationRisk Factors.
| | - |  | ------------------------------------------------------------------------------------------

The words believe, may, will, forecast, estimate, plan,
continue, anticipate, intend, expect and similar words herein are intended to identify forward-looking statements. We undertake no obligation to update publicly or revise any forward-looking statements
because of new information, future events or other factors. In light of these risks and uncertainties, the forward-looking events and circumstances discussed in this annual report might not occur. Our actual results and performance could differ
substantially from those anticipated in our forward-looking statements. As a result of various factors such as those risks described in Item 3D. Key InformationRisk Factors, undue reliance should not be placed on these
forward-looking statements.



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PART I



|ITEM 1. | IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
|------- | -----------------------------------------------------

Not applicable.



|ITEM 2. | OFFER STATISTICS AND EXPECTED TIMETABLE
|------- | ---------------------------------------

Not applicable.



|ITEM 3. | KEY INFORMATION
|------- | ---------------



|3A. | Selected Financial Data
|--- | -----------------------

The following table presents our selected financial data which
has been derived from our consolidated audited financial statements prepared in accordance with IFRS as issued by the IASB and other data as of and for the years ended December 31, 2013, 2012, 2011, 2010 and 2009. The data for the years ended
December 31, 2013 and 2012 is derived from our consolidated financial statements, which were audited by KPMG Auditores Independentes, an independent registered public accounting firm, as stated in their report included in this annual report.
The data for the years ended December 31, 2011, 2010 and 2009 was audited by PricewaterhouseCoopers Auditores Independentes, an independent registered public accounting firm. You should read this selected financial data in conjunction with our
audited consolidated financial statements and related notes thereto included elsewhere in this annual report.



|                                                   |  |                                 |          |   |              |  |          |              |  |  |          |   |  |         |          |   |  |  |          |  
|-------------------------------------------------- |  | ------------------------------- | -------- | - | ------------ |  | -------- | ------------ |  |  | -------- | - |  | ------- | -------- | - |  |  | -------- | -
|                                                   |  | Year ended December 31,         |         
|Consolidated Statements of Income Data             |  | 2013                            |          |   | 2012Restated |  |          | 2011Restated |  |  | 2010(1)  |   |  | 2009(1) |         
|                                                   |  | (in US$ millions)               |         
|Revenue                                            |  |                                 | 6,235.0  |   |              |  | 6,167.0  |              |  |  | 5,790.9  |   |  |         | 5,364.1  |   |  |  | 5,497.8  |  
|Cost of sales and services                         |  |                                 | (4,818.9 | ) |              |  | (4,676.6 | )            |  |  | (4,488.1 | ) |  |         | (4,338.1 | ) |  |  | (4,428.4 | )
|                                                   |  |                                 |          |   |              |  |          |              |  |  |          |   |  |         |          |   |  |  |          |  
|Gross profit                                       |  |                                 | 1,416.1  |   |              |  | 1,490.4  |              |  |  | 1,302.8  |   |  |         | 1,026.0  |   |  |  | 1,069.4  |  
|Operating income (expense)                         |  |                                 |          |   |              |  |          |              |  |  |          |   |  |         |          |   |  |  |          |  
|Administrative                                     |  |                                 | (210.5   | ) |              |  | (279.2   | )            |  |  | (261.3   | ) |  |         | (197.5   | ) |  |  | (191.3   | )
|Selling                                            |  |                                 | (454.4   | ) |              |  | (480.4   | )            |  |  | (418.6   | ) |  |         | (374.1   | ) |  |  | (304.6   | )
|Research                                           |  |                                 | (74.7    | ) |              |  | (77.3    | )            |  |  | (85.3    | ) |  |         | (72.1    | ) |  |  | (55.6    | )
|Other operating (expense) income, net              |  |                                 | 36.9     |   |              |  | (42.8    | )            |  |  | (219.7   | ) |  |         | 9.4      |   |  |  | (138.5   | )
|Equity in losses of associates                     |  |                                 |         |   |              |  | 1.2      |              |  |  | 0.3      |   |  |         |         |   |  |  |         |  
|                                                   |  |                                 |          |   |              |  |          |              |  |  |          |   |  |         |          |   |  |  |          |  
|Operating profit before financial income (expense) |  |                                 | 713.4    |   |              |  | 611.9    |              |  |  | 318.2    |   |  |         | 391.7    |   |  |  | 379.4    |  
|Financial income (expense), net                    |  |                                 | (96.4    | ) |              |  | (6.8     | )            |  |  | (90.5    | ) |  |         | 17.5     |   |  |  | 10.2     |  
|Foreign exchange gain (loss), net                  |  |                                 | (14.6    | ) |              |  | 8.7      |              |  |  | 20.1     |   |  |         | (1.1     | ) |  |  | (68.8    | )
|                                                   |  |                                 |          |   |              |  |          |              |  |  |          |   |  |         |          |   |  |  |          |  
|Profit before taxes on income                      |  |                                 | 602.4    |   |              |  | 613.8    |              |  |  | 247.8    |   |  |         | 408.1    |   |  |  | 320.8    |  
|Income tax (expense) benefit                       |  |                                 | (256.4   | ) |              |  | (265.2   | )            |  |  | (127.4   | ) |  |         | (62.7    | ) |  |  | 158.1    |  
|                                                   |  |                                 |          |   |              |  |          |              |  |  |          |   |  |         |          |   |  |  |          |  
|Net income                                         |  |                                 | 346.0    |   |              |  | 348.6    |              |  |  | 120.4    |   |  |         | 345.4    |   |  |  | 478.9    |  
|                                                   |  |                                 |          |   |              |  |          |              |  |  |          |   |  |         |          |   |  |  |          |  
|Attributable to:                                   |  |                                 |          |   |              |  |          |              |  |  |          |   |  |         |          |   |  |  |          |  
|Owners of Embraer                                  |  |                                 | 342.0    |   |              |  | 347.8    |              |  |  | 111.6    |   |  |         | 330.2    |   |  |  | 465.2    |  
|Noncontrolling interest                            |  |                                 | 4.0      |   |              |  | 0.8      |              |  |  | 8.8      |   |  |         | 15.2     |   |  |  | 13.7     |  
|                                                   | 
|                                                   |  | Year ended December 31,         |         
|Earnings per Share  Basic                         |  | 2013                            |          |   | 2012Restated |  |          | 2011Restated |  |  | 2010(1)  |   |  | 2009(1) |         
|                                                   |  | (in US$, except for share data) |         
|Net income attributable to owners of Embraer       |  |                                 | 342.0    |   |              |  | 347.8    |              |  |  | 111.6    |   |  |         | 330.2    |   |  |  | 465.2    |  
|Weighted average number of shares (in thousands)   |  |                                 | 729,001  |   |              |  | 725,023  |              |  |  | 723,667  |   |  |         | 723,665  |   |  |  | 723,665  |  
|Basic earnings per share  U.S. dollars            |  |                                 | 0.4691   |   |              |  | 0.4797   |              |  |  | 0.1542   |   |  |         | 0.4563   |   |  |  | 0.6428   |  



4



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##### Table of Contents

|                                                           |  |                                 |          |   |              |  |         |              |  |  |         |   |  |         |         |   |  |  |         |  
|---------------------------------------------------------- |  | ------------------------------- | -------- | - | ------------ |  | ------- | ------------ |  |  | ------- | - |  | ------- | ------- | - |  |  | ------- | -
|                                                           |  | Year ended December 31,         |         
|Earnings per Share  Diluted                               |  | 2013                            |          |   | 2012Restated |  |         | 2011Restated |  |  | 2010(1) |   |  | 2009(1) |        
|                                                           |  | (in US$, except for share data) |         
|Net income attributable to owners of Embraer               |  |                                 | 342.0    |   |              |  | 347.8   |              |  |  | 111.6   |   |  |         | 330.2   |   |  |  | 465.2   |  
|Weighted average number of shares (in thousands)  diluted |  |                                 | 729,001  |   |              |  | 725,023 |              |  |  | 723,667 |   |  |         | 723,665 |   |  |  | 723,665 |  
|Dilution  issuance of stock options (in thousands)        |  |                                 | 4.795    |   |              |  | 2.708   |              |  |  | 1.18    |   |  |         | 354     |   |  |  |        |  
|Weighted average number of shares (in thousands)           |  |                                 | 733,796  |   |              |  | 727,731 |              |  |  | 724,847 |   |  |         | 724,019 |   |  |  | 723,665 |  
|Diluted earnings per share                                 |  |                                 | 0.4661   |   |              |  | 0.4780  |              |  |  | 0.1540  |   |  |         | 0.4562  |   |  |  | 0.6428  |  
|                                                           | 
|                                                           |  | At December 31,                 |         
|Consolidated Statement of Financial Position Data          |  | 2013                            |          |   | 2012Restated |  |         | 2011Restated |  |  | 2010(1) |   |  | 2009(1) |        
|                                                           |  | (in US$ millions)               |         
|Cash and cash equivalents                                  |  |                                 | 1,683.7  |   |              |  | 1,797.0 |              |  |  | 1,347.8 |   |  |         | 1,393.1 |   |  |  | 1,592.4 |  
|Financial investments                                      |  |                                 | 939.9    |   |              |  | 578.2   |              |  |  | 753.6   |   |  |         | 733.5   |   |  |  | 953.8   |  
|Other current assets                                       |  |                                 | 3,144.2  |   |              |  | 2,983.5 |              |  |  | 3,062.5 |   |  |         | 2,856.2 |   |  |  | 3,096.5 |  
|Property, plant and equipment                              |  |                                 | 1,993.3  |   |              |  | 1,738.4 |              |  |  | 1,450.4 |   |  |         | 1,201.0 |   |  |  | 1,101.3 |  
|Intangible assets                                          |  |                                 | 1,109.1  |   |              |  | 958.8   |              |  |  | 808.3   |   |  |         | 716.3   |   |  |  | 725.5   |  
|Other long-term assets                                     |  |                                 | 1,272.3  |   |              |  | 1,425.0 |              |  |  | 1,426.1 |   |  |         | 1,490.9 |   |  |  | 1,420.0 |  
|                                                           |  |                                 |          |   |              |  |         |              |  |  |         |   |  |         |         |   |  |  |         |  
|Total assets                                               |  |                                 | 10,142.5 |   |              |  | 9,480.9 |              |  |  | 8,848.7 |   |  |         | 8,391.0 |   |  |  | 8,889.5 |  
|                                                           |  |                                 |          |   |              |  |         |              |  |  |         |   |  |         |         |   |  |  |         |  
|Short-term loans and financing                             |  |                                 | 79.3     |   |              |  | 336.3   |              |  |  | 251.8   |   |  |         | 72.6    |   |  |  | 592.4   |  
|Other current payables                                     |  |                                 | 2,813.4  |   |              |  | 2,452.4 |              |  |  | 2,586.6 |   |  |         | 2,316.1 |   |  |  | 2,158.2 |  
|Long-term loans and financing                              |  |                                 | 2,115.0  |   |              |  | 1,730.2 |              |  |  | 1,406.3 |   |  |         | 1,362.2 |   |  |  | 1,465.9 |  
|Other long-term liabilities                                |  |                                 | 1,502.6  |   |              |  | 1,611.7 |              |  |  | 1,486.2 |   |  |         | 1,508.6 |   |  |  | 1,790.0 |  
|Company shareholders equity                               |  |                                 | 3,533.3  |   |              |  | 3,258.3 |              |  |  | 3,007.3 |   |  |         | 3,028.4 |   |  |  | 2,792.7 |  
|Noncontrolling interest                                    |  |                                 | 98.9     |   |              |  | 92.0    |              |  |  | 110.5   |   |  |         | 103.1   |   |  |  | 90.3    |  
|                                                           |  |                                 |          |   |              |  |         |              |  |  |         |   |  |         |         |   |  |  |         |  
|Total shareholders equity                                 |  |                                 | 3,632.2  |   |              |  | 3,350.3 |              |  |  | 3,117.8 |   |  |         | 3,131.5 |   |  |  | 2,883.0 |  
|                                                           |  |                                 |          |   |              |  |         |              |  |  |         |   |  |         |         |   |  |  |         |  
|Total liabilities and shareholders equity                 |  |                                 | 10,142.5 |   |              |  | 9,480.9 |              |  |  | 8,848.7 |   |  |         | 8,391.0 |   |  |  | 8,889.5 |  
|                                                           |  |                                 |          |   |              |  |         |              |  |  |         |   |  |         |         |   |  |  |         |  
|                                                           | 
|                                                           |  | Year ended December 31,         |         
|Other Consolidated Financial Data                          |  | 2013                            |          |   | 2012Restated |  |         | 2011Restated |  |  | 2010(1) |   |  | 2009(1) |        
|                                                           |  | (in US$ millions)               |         
|Net cash generated by operating activities                 |  |                                 | 564.6    |   |              |  | 693.0   |              |  |  | 480.1   |   |  |         | 873.8   |   |  |  | 3.6     |  
|Net cash used in investing activities                      |  |                                 | (764.0   | ) |              |  | (617.3  | )            |  |  | (602.0  | ) |  |         | (288.3  | ) |  |  | (378.0  | )
|Net cash generated by (used in) financing activities       |  |                                 | 192.5    |   |              |  | 422.3   |              |  |  | 96.4    |   |  |         | (802.2  | ) |  |  | (23.9   | )
|Depreciation and amortization                              |  |                                 | 290.6    |   |              |  | 278.8   |              |  |  | 238.8   |   |  |         | 219.2   |   |  |  | 229.3   |  



|(1) | No restatement of financial information was made because there were no changes generated in the period by the retrospective application of new accounting rules which came into effect as of 2013.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



5



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##### Table of Contents

|                                                                           |  |                                        |          |  |      |     |          |      |  |     |          |  |  |      |          |     |  |     |          | 
|-------------------------------------------------------------------------- |  | -------------------------------------- | -------- |  | ---- | --- | -------- | ---- |  | --- | -------- |  |  | ---- | -------- | --- |  | --- | -------- | 
|                                                                           |  | At and for the year ended December 31, |         
|                                                                           |  | 2013                                   |          |  | 2012 |     |          | 2011 |  |     | 2010     |  |  | 2009 |         
|Other Data:                                                                |  |                                        |          |  |      |     |          |      |  |     |          |  |  |      |          |     |  |     |          | 
|Aircraft delivered during period:                                          |  |                                        |          |  |      |     |          |      |  |     |          |  |  |      |          |     |  |     |          | 
|To the Commercial Aviation Market                                          |  |                                        |          |  |      |     |          |      |  |     |          |  |  |      |          |     |  |     |          | 
|ERJ 145                                                                    |  |                                        |         |  |      |     |         |      |  |     | 2        |  |  |      | 6        |     |  |     | 7        | 
|EMBRAER 170                                                                |  |                                        | 4        |  |      |     | 1        |      |  |     | 1        |  |  |      | 9/2      | (1) |  |     | 22       | 
|EMBRAER 175                                                                |  |                                        | 24       |  |      |     | 20       |      |  |     | 10       |  |  |      | 8        |     |  |     | 11       | 
|EMBRAER 190                                                                |  |                                        | 45       |  |      |     | 62       |      |  |     | 68       |  |  |      | 58       |     |  |     | 62       | 
|EMBRAER 195                                                                |  |                                        | 17       |  |      |     | 23       |      |  |     | 24       |  |  |      | 17       |     |  |     | 20       | 
|To the Defense & Security Market                                           |  |                                        |          |  |      |     |          |      |  |     |          |  |  |      |          |     |  |     |          | 
|Legacy 600                                                                 |  |                                        |         |  |      |     |         |      |  |     |         |  |  |      | 1        |     |  |     |         | 
|Phenom 100                                                                 |  |                                        |         |  |      |     |         |      |  |     |         |  |  |      |         |     |  |     | 4        | 
|EMB 135                                                                    |  |                                        |         |  |      |     |         |      |  |     |         |  |  |      | 1        |     |  |     | 1        | 
|EMBRAER 170                                                                |  |                                        |         |  |      |     |         |      |  |     |         |  |  |      |         |     |  |     |         | 
|EMBRAER 190                                                                |  |                                        |         |  |      |     |         |      |  |     |         |  |  |      |         |     |  |     | 2        | 
|EMB 145 AEW&C/RS/MP                                                        |  |                                        |          |  |      |     | 2        |      |  |     |         |  |  |      |         |     |  |     |         | 
|EMB 312 Tucano/AL-X/ Super Tucano                                          |  |                                        | 6        |  |      |     | 14       |      |  |     |         |  |  |      |         |     |  |     | 26       | 
|To the Executive Jets Market                                               |  |                                        |          |  |      |     |          |      |  |     |          |  |  |      |          |     |  |     |          | 
|Legacy 600/650                                                             |  |                                        | 23       |  |      |     | 19       |      |  |     | 13       |  |  |      | 10       |     |  |     | 18       | 
|EMBRAER 145/170/190 Shuttle                                                |  |                                        | 2        |  |      |     | 1        |      |  |     |         |  |  |      | 3        |     |  |     | 3        | 
|Phenom 100                                                                 |  |                                        | 30       |  |      |     | 29       |      |  |     | 41       |  |  |      | 100      |     |  |     | 93       | 
|Phenom 300                                                                 |  |                                        | 60       |  |      |     | 48       |      |  |     | 42       |  |  |      | 26       |     |  |     | 1        | 
|Lineage 1000                                                               |  |                                        | 4        |  |      |     | 2        |      |  |     | 3        |  |  |      | 5        |     |  |     | 3        | 
|To the General Aviation Market                                             |  |                                        |          |  |      |     |          |      |  |     |          |  |  |      |          |     |  |     |          | 
|Light Propeller Aircraft                                                   |  |                                        | 60       |  |      |     | 62       |      |  |     | 54       |  |  |      | 40       |     |  |     | 34       | 
|                                                                           |  |                                        |          |  |      |     |          |      |  |     |          |  |  |      |          |     |  |     |          | 
|Total delivered                                                            |  |                                        | 275      |  |      |     | 283      |      |  |     | 258      |  |  |      | 286      |     |  |     | 304      | 
|                                                                           |  |                                        |          |  |      |     |          |      |  |     |          |  |  |      |          |     |  |     |          | 
|Aircraft in backlog at the end of period:                                  |  |                                        |          |  |      |     |          |      |  |     |          |  |  |      |          |     |  |     |          | 
|In the Commercial Aviation Market                                          |  |                                        |          |  |      |     |          |      |  |     |          |  |  |      |          |     |  |     |          | 
|ERJ 145                                                                    |  |                                        |         |  |      |     |         |      |  |     |         |  |  |      | 2        |     |  |     | 8        | 
|EMBRAER 170                                                                |  |                                        | 1        |  |      |     | 10       |      |  |     | 6        |  |  |      | 10       |     |  |     | 17       | 
|EMBRAER 175                                                                |  |                                        | 188      |  |      |     | 35       |      |  |     | 46       |  |  |      | 40       |     |  |     | 15       | 
|EMBRAER 190                                                                |  |                                        | 73       |  |      |     | 109      |      |  |     | 162      |  |  |      | 157      |     |  |     | 185      | 
|EMBRAER 195                                                                |  |                                        | 17       |  |      |     | 31       |      |  |     | 35       |  |  |      | 41       |     |  |     | 40       | 
|EMBRAER 170 - E2                                                           |  |                                        | 100      |  |      |     |          |      |  |     |          |  |  |      |          |     |  |     |          | 
|EMBRAER 175 - E2                                                           |  |                                        | 25       |  |      |     |          |      |  |     |          |  |  |      |          |     |  |     |          | 
|EMBRAER 190 - E2                                                           |  |                                        | 25       |  |      |     |          |      |  |     |          |  |  |      |          |     |  |     |          | 
|In the Defense & Security Market                                           |  |                                        |          |  |      |     |          |      |  |     |          |  |  |      |          |     |  |     |          | 
|EMB 145 AEW&C/RS/MP                                                        |  |                                        | 1        |  |      |     | 1        |      |  |     | 3        |  |  |      | 3        |     |  |     | 3        | 
|EMB 312 Tucano/EMB 314/EP Super Tucano                                     |  |                                        | 12       |  |      |     | 18       |      |  |     | 24       |  |  |      | 16       |     |  |     | 57       | 
|LAS                                                                        |  |                                        | 20       |  |      |     |          |      |  |     |          |  |  |      |          |     |  |     |          | 
|E99                                                                        |  |                                        | 5        |  |      |     |          |      |  |     |          |  |  |      |          |     |  |     |          | 
|EMB 135                                                                    |  |                                        |         |  |      |     |         |      |  |     |         |  |  |      |         |     |  |     | 1        | 
|Legacy 600/Phenom 100                                                      |  |                                        |         |  |      |     |         |      |  |     |         |  |  |      |         |     |  |     |         | 
|EMBRAER 170/ EMBRAER 190                                                   |  |                                        |         |  |      |     |         |      |  |     |         |  |  |      |         |     |  |     |         | 
|In the Executive Jets Market                                               |  |                                        |          |  |      |     |          |      |  |     |          |  |  |      |          |     |  |     |          | 
|Legacy 450/500/600/650/Phenom 100/300/Lineage 1000/EMBRAER 170/190 Shuttle |  |                                        | 208      |  |      |     | 272      |      |  |     | 421      |  |  |      | 551      |     |  |     | 737      | 
|In the General Aviation Market                                             |  |                                        |          |  |      |     |          |      |  |     |          |  |  |      |          |     |  |     |          | 
|Light Propeller Aircraft                                                   |  |                                        |         |  |      |     |         |      |  |     |         |  |  |      |         |     |  |     |         | 
|                                                                           |  |                                        |          |  |      |     |          |      |  |     |          |  |  |      |          |     |  |     |          | 
|Total backlog(in aircraft)                                                 |  |                                        | 675      |  |      |     | 476      |      |  |     | 697      |  |  |      | 820      |     |  |     | 1,063    | 
|                                                                           |  |                                        |          |  |      |     |          |      |  |     |          |  |  |      |          |     |  |     |          | 
|Total backlog (in millions)                                                |  | US$                                    | 18,205.5 |  |      | US$ | 12,462.2 |      |  | US$ | 15,441.2 |  |  | US$  | 15,543.2 |     |  | US$ | 16,634.8 | 



|(1) | Figures appearing after a forward slash (/) refer to aircraft delivered under operating leases.
|--- | -----------------------------------------------------------------------------------------------



6



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##### Table of Contents

Exchange Rates

Prior to March 4, 2005, there were two principal legal foreign exchange markets in Brazil:



| |  |  | the commercial rate exchange market, and
| | - |  | ----------------------------------------



| |  |  | the floating rate exchange market.
| | - |  | ----------------------------------

Most trade and financial foreign exchange transactions
were carried out on the commercial rate exchange market. These included the purchase or sale of shares or payment of dividends or interest with respect to shares. Foreign currencies could be purchased only in the commercial exchange market through a
Brazilian bank authorized to buy and sell currency in these markets. In both markets, rates were freely negotiated.

Resolution
No. 3,265 by the Conselho Monetário Nacional (National Monetary Council), or CMN, dated March 4, 2005, consolidated the foreign exchange markets into one single foreign exchange market, effective as of March 14, 2005.
All foreign exchange transactions are now carried out through institutions authorized to operate in the consolidated market and are subject to registration with the electronic registration system of the Central Bank of Brazil, or Central Bank.
Foreign exchange rates continue to be freely negotiated, but may be influenced by Central Bank intervention.

Since 1999,
the Central Bank has allowed the real/U.S. dollar exchange rate to float freely, and during that period, the real/U.S. dollar exchange rate has fluctuated considerably. In the past, the Central Bank has intervened occasionally to
control unstable movements in foreign exchange rates. We cannot predict whether the Central Bank or the Brazilian federal government will continue to let the real float freely or will intervene in the exchange rate market through a currency
band system or otherwise. The real may depreciate or appreciate against the U.S. dollar substantially in the future. See Item 3D. Key InformationRisk FactorsRisks Relating to Brazil.

The following table sets forth the selling exchange rate, expressed in reais per U.S. dollar, for the periods indicated:



|                        |  |                                   |        |  |      |  |        |            |  |  |            |  |  |  |        | 
|----------------------- |  | --------------------------------- | ------ |  | ---- |  | ------ | ---------- |  |  | ---------- |  |  |  | ------ | 
|                        |  | Exchange Rate of Reais to US$1.00 |       
|Year ended December 31, |  | Low                               |        |  | High |  |        | Average(1) |  |  | Period-end | 
|2009                    |  |                                   | 1.7024 |  |      |  | 2.4218 |            |  |  | 1.9957     |  |  |  | 1.7412 | 
|2010                    |  |                                   | 1.6554 |  |      |  | 1.8811 |            |  |  | 1.7601     |  |  |  | 1.6662 | 
|2011                    |  |                                   | 1.5345 |  |      |  | 1.9016 |            |  |  | 1.6709     |  |  |  | 1.8758 | 
|2012                    |  |                                   | 1.7024 |  |      |  | 2.1121 |            |  |  | 1.9588     |  |  |  | 2.0435 | 
|2013                    |  |                                   | 1.9528 |  |      |  | 2.4457 |            |  |  | 2.1741     |  |  |  | 2.3426 | 



|                   |  |                                   |        |  |      |  |        |            |  |  |            |  |  |  |        | 
|------------------ |  | --------------------------------- | ------ |  | ---- |  | ------ | ---------- |  |  | ---------- |  |  |  | ------ | 
|                   |  | Exchange Rate of Reais to US$1.00 |       
|Month/period ended |  | Low                               |        |  | High |  |        | Average(2) |  |  | Period-end | 
|October 31, 2013   |  |                                   | 2.1611 |  |      |  | 2.2123 |            |  |  | 2.1886     |  |  |  | 2.2026 | 
|November 30, 2013  |  |                                   | 2.2426 |  |      |  | 2.3362 |            |  |  | 2.2954     |  |  |  | 2.3249 | 
|December 31, 2013  |  |                                   | 2.3102 |  |      |  | 2.3817 |            |  |  | 2.3455     |  |  |  | 2.3426 | 
|January 31, 2014   |  |                                   | 2.3335 |  |      |  | 2.4397 |            |  |  | 2.3822     |  |  |  | 2.4263 | 
|February 28, 2014  |  |                                   | 2.3334 |  |      |  | 2.4238 |            |  |  | 2.3837     |  |  |  | 2.3334 | 



Source:
Central Bank.

|(1) | Represents the average of the exchange rates on the last day of each month during the relevant periods.
|--- | -------------------------------------------------------------------------------------------------------

|(2) | Represents the average of the exchange rates during the relevant periods.
|--- | -------------------------------------------------------------------------

We will pay
any cash dividends and make any other cash distributions with respect to the common shares in reais. Accordingly, exchange rate fluctuations may affect the U.S. dollar amounts received by the holders of American Depositary Shares, or ADSs,
upon the conversion into U.S. dollars by the depositary of our ADS program of such distributions for payment to holders of ADSs. Fluctuations in the exchange rate between the real and the U.S. dollar may also affect the U.S. dollar equivalent
of the real price of our common shares on the São Paulo Stock Exchange.



7



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|3B. | Capitalization and Indebtedness
|--- | -------------------------------

Not applicable.



|3C. | Reasons for the Offer and Use of Proceeds
|--- | -----------------------------------------

Not applicable.



|3D. | Risk Factors
|--- | ------------

Risks Relating to Embraer

A downturn in commercial aviation may reduce our sales and revenue, and, consequently, our profitability, in any given year.

We expect that a substantial portion of our sales in the near future will be derived from sales of commercial aircraft, particularly the
EMBRAER 170/190 jet family. Historically, the market for commercial aircraft has been cyclical due to a variety of factors that are both external and internal to the air travel industry, including general economic conditions.

Although the U.S. and world economies have recovered gradually from 2008 crisis, airlines continued to face decreased passenger yields due to
increased competition, escalating costs, credit downgrades, liquidity concerns and bankruptcy.

Economic downturns in our industry may
reduce air travel demand and corporate and personal spending, which may negatively impact our product lines. Additional impacts of such downturns on the air transport industry have included a decrease in orders of executive jets and a decrease in
the volume of financing available to our customers for aircraft purchases, particularly in the Commercial Aviation and Executive Jets segments (see Item 4C. Information on The CompanyBusiness OverviewAircraft Financing
Arrangements). A continued downturn in general economic conditions could result in further reductions in air travel and decreased orders from our customers for our aircraft. Our customers could also defer or cancel their purchases of our
aircraft. We cannot predict the magnitude or duration of the impact that the above events will have on the air transport industry as a whole and on our business in particular.

In February 2009, we laid off approximately 20% of our labor force as part of our efforts to reposition Embraer in view of the global economic
downturn. The cost of these layoffs was US$61.3 million. In addition, we also experienced aggregate cancellations of 60 aircraft orders by several of our customers. For more information on aircraft cancellations, see Item 3D. Our
aircraft sales are subject to cancellation provisions that may reduce our cash flow.

We cannot assure you that material
cancellations will not occur in the future or that our other businesses will not be affected. Material cancellations, delays or decreases in the number of aircraft delivered in any year in the future would likely reduce our revenue and backlog.

We depend on key customers and key suppliers, the loss of any of which could harm our business.

Commercial aircraft. As of December 31, 2013, 88% of our firm orders in backlog for the EMBRAER 170/190 jet family were from the
airlines Skywest, American, United, Republic, JetBlue and Flybe, and the leasing companies ILFC and Aldus. We believe that we will continue to depend on a select number of key customers, the loss of any one of which could reduce our sales and reduce
our market share. Fewer sales could reduce our profitability.

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



8



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##### Table of Contents

Defense aircraft. The Força Aérea Brasileira, or Brazilian Air Force,
is our largest customer of defense aircraft products. Revenue from sales to the Brazilian federal government accounted for more than 71% of our Defense & Security revenue for the year ended December 31, 2013. A decrease in defense
spending by the Brazilian federal government due to defense spending cuts, general budgetary constraints or other factors that are out of our control could decrease our Defense & Security revenue. We cannot assure you that the Brazilian
federal government will continue to purchase aircraft or services from us in the future at the same rate or at all.

Key
suppliers. Our risk-sharing partners develop and manufacture significant portions of our aircraft, including the engines, hydraulic components, avionics, interior and parts of the fuselage and tail. Once risk-sharing partners have been selected
and program development and aircraft production have begun, it is difficult to substitute these partners. In some cases, the aircraft are designed specifically to accommodate a particular component, such as the engine, which cannot be substituted by
another manufacturer without significant delays and expense. This dependence of ours on these key suppliers makes us susceptible to the risks of performance, product quality and financial condition of these risk-sharing partners.

We cannot assure you that we will not experience significant delays in obtaining key equipment in our manufacturing process in the future. A
large amount of the equipment employed by the aircraft industry is subject to export control regulations and, as such, deliveries are dependent on suppliers having secured the applicable export licenses. Although we work closely with, and monitor
the production process of, our risk-sharing partners and major suppliers, the failure of our risk-sharing partners and other major suppliers to meet our performance specifications, quality standards or delivery schedules or to comply with regulatory
requirements (including export control requirements) could affect our ability to deliver new aircraft to customers in a timely manner.

Our aircraft
sales are subject to cancellation provisions that may reduce our cash flow.

A portion of our aircraft firm orders is subject to
significant contingencies before delivery. Prior to delivery, some of our purchase contracts may be terminated, or all or a portion of a particular firm order may be canceled, for different reasons, including:



| |  |  | extended delays in delivering aircraft or failure to obtain certification of the aircraft or otherwise meet performance milestones and other requirements;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | failure of a customer to honor its aircraft purchases; or
| | - |  | ---------------------------------------------------------



| |  |  | production rate shortfalls.
| | - |  | ---------------------------

Our customers may also reschedule deliveries or cancel orders,
particularly during an economic downturn. In 2013, we had revenue of US$40.8 million related to contractual fines charged from customers due to contract cancellations, compared to contractual fine charges of US$41.7 million in 2012 and US$67.1
million in 2011. Material cancellations, delays or decreases in the number of aircraft delivered in any year in the future would likely reduce our sales and revenue, and, consequently, our profitability, for that year. A substantial number of
cancellations or extensions of delivery schedules could reduce our sales and revenue for a given year, which in turn would reduce our cash flow and backlog.

Some of our aircraft sales may be subject to financial and residual value guarantees and trade-in options that may require us to make significant cash
disbursements in the future.

We have in the past guaranteed, and may in the future guarantee, the financial performance of a
portion of the financing for, and the residual value of, some of our aircraft that have already been delivered. Financial guarantees are provided to financing parties to support a portion of the payment obligations of purchasers of our aircraft
under their financing arrangements to mitigate default-related losses. These guarantees are collateralized by the financed aircraft.

Residual value guarantees typically ensure that, 15 years after the aircraft delivery date, the relevant aircraft will have a residual market
value equal to a percentage of the original sale price. More recently, residual value guarantees have been issued to ensure a residual market value 10 years after the aircraft delivery date. Most of our residual value guarantees are subject to a
limitation (a cap) and, therefore, on average, our residual value



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guarantee exposure is limited to 17% of the original sale price. In the event of an exercise by a purchaser of its residual value guarantee, we will bear the difference, if any, between the
guaranteed residual value and the market value of the aircraft at the time of exercise.

Assuming all customers who are supported by
off-balance sheet financial guarantees defaulted on their aircraft financing arrangements, and also assuming we were required to pay the full aggregate amount of outstanding financial and residual value guarantees and were unable to remarket any of
the aircraft to offset our obligations, our maximum exposure would have been US$810.7 million (or, subtracting provisions and liabilities already recorded in the amount of US$155.3 million as reflected in Note 25 to our audited consolidated
financial statements, US$655.4 million) under these guarantees as of December 31, 2013. As a result, we would be obligated to make substantial payments that may not be recoverable through proceeds from aircraft sales or leases, particularly if
in the future we are not able to remarket any of the aircraft to offset our obligations or financing defaults occur with respect to a significant portion of our aircraft. The value of the underlying aircraft is more likely to decrease and third
parties are more likely to default during economic downturns. For further discussion see our exposure to these guarantees in Note 37 to our audited consolidated financial statements.

In addition, we sometimes provide trade-in options to our customers in purchase agreements for new aircraft. These options provide customers
with the right to trade in existing Embraer aircraft upon the purchase and acceptance of a new aircraft. We had one trade-in option outstanding in 2011, which was cancelled in 2012, before it was exercised. In 2013, we accepted 15 aircraft, with a
total value of US$118.1 million, for trade-in pursuant to trade-in options signed in 2012, with respect to 7 aircraft and 2013, with respect to 16 aircraft. As a result, we are currently subject to trade-in options relating to 8 aircraft, as a
result of trade-ins tied to contractual obligations with customers and to their taking delivery of certain new aircraft. In addition, other aircraft may become subject to trade-in due to new sales agreements. The trade-in price is determined based
on the new aircraft sold, as well as other factors, including a market value assessment performed by independent third party appraisers. We may be required to accept trade-ins at prices that are above the market price of the aircraft, which would
result in financial loss for us when we remarket the aircraft.

We continuously re-evaluate our risk related to financial guarantees and
trade-in obligations based on a number of factors, including the estimated future market value of our aircraft based on third-party appraisals, information on similar aircraft remarketing in the secondary market and the credit rating of the
customers. In this respect, based on our risk assessment of Mesas Chapter 11 filing, in 2009 we reserved US$74.4 million of collateral in the form of cash deposited in escrow in recognition of estimated losses that at the time we had
classified as probable with respect to financial guarantees extended by us in connection with sales of our aircraft to Mesa.

In 2011, we
made a total net provision of US$362.8 million related to exposure from financial guarantees and residual value guarantee obligations. Of this amount, US$107.4 million was accounted for under financial (expenses) income, net, and, therefore, did not
impact our operating margin. The remaining US$255.4 million was accounted for under other operating income (expenses), net, and, therefore, impacted our operating margin for the year. In 2013 and 2012, we made additional provisions of US$6.7 million
and of US$6.0 million, respectively, which are accounted for under operating income (expense), net. In the fourth quarter of 2013, a total of US$180.7 million positively impacted operating results, recognized in the other operating (expense) income,
net account. The US$180.7 million comprised a provision reversal of US$109.3 million, coupled with a US$71.4 million payment reversal, which we had already made on these financial guarantees.

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



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Any decrease in Brazilian federal government-sponsored customer financing, or increase in
government-sponsored financing that benefits our competitors, may decrease the cost-competitiveness of our aircraft.

Traditionally, aircraft original equipment manufacturers, or OEMs, from time to time, have received support from governments through
governmental export credit agencies, or ECAs, in order to offer competitive financing conditions to their customers, especially in periods of credit tightening from the traditional lending market. After the credit crunch in 2008, the
participation of ECAs grew in importance, playing a crucial role in the aviation industry.

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

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

The Brazilian federal government may reduce funds available to our
customers under government-sponsored financing programs.

From 2004 through 2013, approximately 20% of the total value of
our Commercial Aviation export deliveries was subject to financing support by the BNDES and the Export Guarantee Fund (Fundo de Garantia à Exportação), or FGE, a special fund linked to the Ministry of Finance and managed
by the BNDES to foster exports. We cannot ensure that the Brazilian federal government will continue to provide sufficient funding for the financing of our aircraft or that other sources of funding will be available to our customers. The loss or
significant reduction of funds available to our customers, without an adequate substitute, could lead to fewer deliveries and result in lower profitability for us.

We may face a number of challenges resulting from the development of new products and the possible pursuit of strategic growth opportunities.

As we continue to develop new products, we may need to reallocate existing resources and coordinate with new suppliers and risk-sharing
partners. From time to time, there is significant competition within the aviation industry for skilled personnel in general and engineers in particular. To the extent such competition reoccurs, we may be unable to recruit and retain the necessary
number of highly skilled engineers and other personnel we require. Failure to coordinate our resources in a timely manner or to attract and retain skilled personnel could slow down our development efforts and cause delays in production and
deliveries of our aircraft, which would delay recognition of revenue.

We may pursue strategic growth opportunities, including joint
ventures, acquisitions or other transactions, to expand our business or enhance our products and technology. We may face a number of challenges, including difficulties in identifying appropriate candidates, assimilating their operations and
personnel and maintaining internal standards and controls, as well as the diversion of our managements focus from our ongoing business. We cannot assure you that we will be able to meet these challenges or that our business will not face
disruptions.



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We may be required to refund cash contributions in connection with the production or development of our
aircraft if certain milestones for our aircraft are not reached.

We have arrangements with our risk-sharing partners, pursuant to
which they have contributed to us, in cash over the years, a total of US$737.0 million since the beginning of the development of the EMBRAER 170/190, Phenom 100/300 Legacy 450/500 jet families and the E2 jet family through December 31, 2013. A
portion of these cash contributions would have to be refunded by us to the risk-sharing partners if we had failed to fulfill certain agreed-upon milestones. The full amount of these cash contributions had become nonrefundable during 2013, as we had
met all the required milestones.

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

We face significant international competition, which may adversely affect our market share.

The worldwide commercial aircraft manufacturing industry is highly competitive. Along with Boeing, Airbus and Bombardier, all large
international companies, we are one of the leading manufacturers of commercial aircraft (i.e., regional and mid-capacity aircraft) in the world. Certain of these competitors may have greater financial, marketing and other resources than we
have. Although we have attained a significant share of the market for our commercial aircraft products, we cannot assure you that we will be able to maintain our current market share. Our ability to maintain our market share and remain competitive
in the commercial aircraft manufacturing market over the long term requires continued enhancement of our products technology and performance. Our primary competitor in the regional and mid-capacity jet markets is Bombardier Inc., a Canadian
company, which has significant technological capabilities and financial and marketing resources and, in some instances, benefits from government-sponsored product development subsidies. Additionally, Chinese, Russian and Japanese companies are also
developing mid-capacity jets and already have firm orders in backlog.

As a relatively new entrant to the business jet market, we
face significant competition from companies with longer operating histories and established reputations in this industry. Also, some of our competitors in the business jet market may reach the market with their product before we do, allowing them to
establish a customer base and frustrating our efforts to gain greater market share. We cannot assure you that we will continue to increase our market share in the business jet market segment, or that we will not experience a reduction in our current
market share in this segment.

We may have to make significant payments as a result of unfavorable outcomes of pending challenges to various taxes
and payroll charges.

We have challenged the constitutionality of certain Brazilian taxes and payroll charges, as well as
modifications and increases in the rates and basis of calculation of such taxes and charges. Interest on the total amount of these unpaid taxes and payroll charges accrues monthly based on the Selic rate, the principal lending rate of the Central
Bank, and we make an accrual as part of the financial expenses, net item in our statements of income.

As of December 31, 2013, there
was a US$232.0 million provision recorded as a liability on our statement of financial position in connection with litigation contingencies that we classify as probable losses. We are awaiting a final decision in these proceedings. We cannot assure
you that we will prevail in these proceedings or that we will not have to pay significant amounts, including interest, to the Brazilian federal government in the future as a result of these proceedings.

We may be required to pay substantial fines and/or to incur other sanctions as a result of an inquiry by the U.S. Securities and Exchange Commission, or
SEC, and U.S. Department of Justice, or DOJ, concerning the possibility of non-compliance with the U.S. Foreign Corrupt Practices Act.

We received a subpoena from the SEC and associated inquiries from the DOJ into the possibility of non-compliance with the U.S. Foreign Corrupt
Practices Act, or FCPA, in September 2010, which inquired about certain operations concerning sales of aircraft abroad. The internal investigation and related government inquiries concerning these matters remain ongoing and we, with the support of
our outside counsel, have concluded that it is



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still not possible to estimate the duration, scope or results of the internal investigation or related inquiries by relevant authorities. In the event that the authorities take action against us
with respect to these or any related matters that may arise in the future, or we enter into an agreement to settle such matters, we may be required to pay substantial fines and/or to incur other sanctions or liabilities. See Item 8A. 
Consolidated Statements and Other Financial InformationLegal Proceedings.

Our business, financial condition and results of operations
could suffer as a result of current or future regulatory proceedings and/or litigation.

We are subject to risks relating to legal,
governmental and regulatory proceedings and/or investigations to which we are currently a party or to which we may become a party in the future. Such proceedings and/or investigations involve, among other things, non-compliance with labor and tax
regulations and/or alleged or suspected violations of applicable laws. For additional information with respect to specific proceedings see Item 8A.  Consolidated Statements and Other Financial Information - Legal Proceedings. Under
certain circumstances we either record a provision for risks arising from legal disputes and proceedings or report possible contingent liabilities, as per Notes 23 and 26 to our audited consolidated financial statements. There can be no assurance
that the results of these or any other proceedings and/or investigations will not materially harm our business or reputation. In addition, each of these risks may have a material adverse effect on our financial condition or results of operations,
and our provisions for legal proceedings-related losses may not be sufficient to cover our ultimate losses or expenditures.

Risks Relating to the
Commercial Airline Industry

Scope clause restrictions in airline pilot contracts may limit demand for regional and mid-capacity jets in the U.S.
market.

A key limiting factor in demand for regional and mid-capacity jets is the existence of scope clauses contained in airline
pilot contracts. These scope clauses are union-negotiated restrictions on the number and/or size of regional and mid-capacity jets that a particular carrier may operate. Current scope clause restrictions, which are more prevalent in the United
States, include restrictions on the number of seats, weight of aircraft and number of 76 seat commercial jet aircraft in an airlines fleet operated by regional carriers. As a result, our opportunities for near-term growth in the U.S. regional
jet market in the 76 seat jet category may be limited. The continuation or further tightening of scope clauses could also lead some of our customers who have purchased options to acquire our regional and mid-capacity jets not to exercise those
options. We cannot assure you that current restrictions will be lessened, or will not be expanded, including by amending these scope clauses to cover larger-sized commercial aircraft. Furthermore, although scope clauses are less prevalent outside
the United States, we cannot assure you that scope clauses will not become more prevalent or restrictive, or that some other form of restriction will not take effect, in Europe or in other markets.

We are subject to stringent certification and regulatory requirements, which may adversely affect us.

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



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We and our customers are also subject to extensive Brazilian federal, state and local and foreign
environmental protection laws and regulations concerning matters such as discharge and emission of substances into the environment, the disposal of hazardous wastes, the remediation and abatement of contaminants and other activities affecting the
environment. We currently have several ongoing comprehensive programs to reduce the effects of our operations on the environment. For more information, see Item 4E. Information on the CompanyProperty, Plant and Equipment. Changes
to current environmental regulations may demand that we spend additional amounts to enhance our environmental compliance programs. In addition, environmental regulations, such as those requiring the reduction of greenhouse gas emissions, are
becoming one of the main drivers of airline fleet decisions, potentially causing our customers to change their purchasing plans or requiring us to make additional capital investments to adapt to new requirements.

The various products manufactured and sold by us must also comply with relevant health and safety and substances and preparations related laws
and regulations in the jurisdictions in which we operate. Although we seek to ensure that our products meet the highest quality standards, increasingly stringent and complex laws and regulations, new scientific discoveries, delivery of defective
products or the obligation to notify or provide regulatory authorities or others with required information (such as under the EU regulation known as REACH, which addresses the production and use of chemical substances) may force us to
adapt, redesign, redevelop, recertify and/or eliminate products from the markets in which we operate. Seizures of non-compliant products may be required, and we may incur administrative, civil or criminal penalties. In the event of an accident or
other serious incident involving a product, we may be required to conduct investigations and undertake remedial activities.

Any catastrophic events
involving our aircraft could adversely affect our reputation and future sales of our aircraft, as well as the market price of the common shares and the ADSs.

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

Risks Relating to Brazil

Brazilian political and
economic conditions have a direct impact on our business and the trading price of our common shares and ADSs.

The Brazilian
federal government has frequently intervened in the Brazilian economy and occasionally has made drastic changes in policy and regulations. The Brazilian federal governments actions to control inflation and effect other policies and regulations
have often involved, among other measures, increases in interest rates, changes in tax policies, price controls, currency devaluations, capital controls and limits on imports. Our business, financial condition, results of operations and the trading
price of the common shares and the ADSs may be adversely affected by changes in policy or regulations at the federal, state or municipal level involving or affecting factors such as:



| |  |  | interest rates;
| | - |  | ---------------



| |  |  | monetary policies;
| | - |  | ------------------



| |  |  | exchange controls and restrictions on remittances abroad (such as those that were imposed in 1989 and early 1990);
| | - |  | ------------------------------------------------------------------------------------------------------------------



| |  |  | currency fluctuations;
| | - |  | ----------------------



| |  |  | inflation;
| | - |  | ----------



| |  |  | liquidity of domestic capital and lending markets;
| | - |  | --------------------------------------------------



| |  |  | tax policies; and
| | - |  | -----------------



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| |  |  | other political, diplomatic, social and economic developments in or affecting Brazil.
| | - |  | -------------------------------------------------------------------------------------

Uncertainty over whether the Brazilian federal government will implement changes in policy or regulation affecting these or other factors in
the future may contribute to economic uncertainty in Brazil and to heightened volatility in the Brazilian securities markets and securities issued abroad by Brazilian companies. These and other future developments in the Brazilian economy and
governmental policies may adversely affect us and our business and results of operations and may adversely affect the trading price of our common shares and ADSs.

Inflation and government efforts to combat inflation may contribute significantly to economic uncertainty in Brazil and to heightened volatility in the
Brazilian securities markets and, consequently, may adversely affect the market value of our common shares and ADSs.

Brazil
experienced extremely high rates of inflation during the decade of the 1980s and in the early part of the 1990s. Since 1994, Brazils inflation has been under control. More recently, Brazils annual rate of inflation was 4.3%, 5.9%,
6.5%,5.8% and 5.9%, from 2009 through 2013, respectively, as measured by the Índice Nacional de Preços ao Consumidor Amplo (National Consumer Price Index), or IPCA. Although inflation rates in Brazil are under control to a
certain extent, there continues to be some inflationary pressure as a result of the strong expansion of the Brazilian economy in recent years. Among the effects of such inflationary pressure, labor costs have risen. More recently, the Brazilian
government has taken certain fiscal actions in order to keep inflation under control.

Future Brazilian federal government
actions, including interest rate decreases, intervention in the foreign exchange market and actions to adjust or fix value of the real may trigger increases in inflation. If Brazil experiences high inflation again in the future, our operating
expenses and borrowing costs may increase, our operating and net margins may decrease and, if investor confidence decreases, the price of our common shares and ADSs may fall.

Exchange rate instability may adversely affect our financial condition and results of operations and the market price of our common shares and
ADSs.

Although most of our revenue and debt is U.S. dollar-denominated, the relationship of the real to the value of
the U.S. dollar, and the rate of depreciation of the real relative to the prevailing rate of inflation, may adversely affect us.

As a result of inflationary pressures, among other factors, the Brazilian currency has devalued periodically during the last four decades.
Throughout this period, the Brazilian federal government has implemented various economic plans and utilized a number of exchange rate policies, including sudden devaluations, periodic mini-devaluations during which the frequency of adjustments has
ranged from daily to monthly, floating exchange rate systems, exchange controls and dual exchange rate markets. Although over long periods depreciation of the Brazilian currency generally has correlated with the rate of inflation in Brazil,
devaluation over shorter periods has resulted in significant fluctuations in the exchange rate between the Brazilian currency and the U.S. dollar and other currencies.

For example, in 2002, the real to U.S. dollar exchange rate increased by 52.3% due in part to political uncertainty surrounding the
Brazilian presidential elections and the global economic slowdown. Although the R$ to US$ exchange rate decreased by 18.2%, 8.1%, 11.8%, 8.7%, and 17.2% in 2003, 2004, 2005, 2006, and 2007, respectively, in 2008 it appreciated by 31.9%, mainly as a
result of the global economic crisis. In 2009 and 2010, the real to U.S. dollar exchange rate decreased by 25.5% and 4.3%, respectively, mainly as the effects of the global economic crisis on the Brazilian economy appeared to be less severe
than in other parts of the world. In 2013 and 2012, such rate increased by 14.6% and 8.9%, respectively. No assurance can be given that the real will not appreciate or depreciate significantly against the U.S. dollar in the future. See
Item 3A.Exchange Rates.

Historically, depreciations in the real relative to the U.S. dollar have also created
additional inflationary pressures in Brazil by generally increasing the price of imported products and requiring recessionary government policies to curb aggregate demand. On the other hand, appreciation of the real against the U.S. dollar may lead
to a deterioration of the current account and the balance of payments, as well as dampen export-driven growth. Depreciations generally curtail access to foreign financial markets and may prompt government intervention, including recessionary
governmental policies. Depreciations of the real relative to the U.S. dollar would also reduce the U.S. dollar value of distributions and dividends on our ADSs and may also reduce the market value of our common shares and ADSs.



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Appreciation of the real against the U.S. dollar may also have an adverse impact on
the competitiveness of our products, as approximately 25% of our total costs are incurred and denominated in reais. Therefore, appreciations of the real against the U.S. dollar or other currencies increase the costs of our products
when measured in U.S. dollars, and may result in a decrease in our margins.

In addition, because taxes on income are
largely determined and paid in reaisbased on our Brazilian tax books, the income tax expense (benefit) line item of our statements of income, which has the U.S. dollar as our functional currency, is significantly impacted by appreciations of
the real relative to the U.S. dollar to the extent we must record deferred taxes resulting from exchange rate fluctuations on the reported basis of our nonmonetary assets (principally property, plant and equipment and intangible assets).

Economic developments and investor perceptions of risk in other countries, including both in developed or emerging market economies, may
adversely affect the trading price of Brazilian securities, including our common shares and ADSs.

The market value of securities
of Brazilian issuers is affected in varying degrees by economic and market conditions in other countries, including in developed countries, such as the United States and certain European countries, and in emerging market countries. Although economic
conditions in such countries may differ significantly from economic conditions in Brazil, the reaction of investors to developments in these other countries may have an adverse effect on the market value of securities of Brazilian issuers. For
example, the 2008 global economic crisis has had an impact on many economies and capital markets around the world. This crisis was evidenced by instability in the value of securities and capital markets, stock and credit market volatility,
instability of most currencies, unavailability of credit, higher interest rates, a widespread reduction in demand, a general economic slowdown and other factors that could adversely affect our financial condition and diminish investors
interest in securities of Brazilian issuers, including ours. Future crises in other countries could adversely affect the trading price of our common shares and ADSs, diminish investor interest in securities of Brazilian issuers, including our common
shares and ADSs, and make it more difficult for us to access the capital markets and finance our operations on acceptable terms or at all.

Risks
Relating to Our Common Shares and ADSs

If holders of our ADSs exchange the ADSs for common shares, they risk losing the ability to remit foreign
currency abroad and Brazilian tax advantages.

The Brazilian custodian for the common shares has obtained an electronic certificate
of registration from the Central Bank permitting it to remit foreign currency abroad for payments of dividends and other distributions relating to the common shares or upon the disposition of the common shares. If holders of ADSs decide to exchange
their ADSs for the underlying common shares, they will be entitled to continue to rely on the custodians electronic certificate of registration for five business days from the date of exchange. Thereafter, such holders of ADSs may not be able
to obtain and remit foreign currency abroad upon the disposition of, or distributions relating to, the common shares unless they obtain their own electronic certificate of registration or register their investment in the common shares pursuant to
Resolution No. 2,689, which entitles certain foreign investors to buy and sell securities on the São Paulo Stock Exchange. Holders who do not qualify under Resolution No. 2,689 will generally be subject to less favorable tax
treatment on gains with respect to the common shares. If holders of ADSs attempt to obtain their own electronic certificate of registration, they may incur expenses or suffer delays in the application process, which could delay their ability to
receive dividends or distributions relating to the common shares or delay the return of their capital in a timely manner. In addition, we cannot assure you that the custodians electronic certificate of registration or any certificate of
foreign capital registration obtained by a holder of ADSs will not be affected by future legislative or other regulatory changes, or that additional restrictions applicable to such holder, to the disposition of the underlying common shares or to the
repatriation of the proceeds from such disposition, will not be imposed in the future.



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The Brazilian federal government has veto power over our change of control, name, trademark or corporate
purpose and over the creation or alteration of our Defense & Security programs, and its interests could conflict with the interests of the holders of our common shares or ADSs.

The Brazilian federal government holds one share of a special class of our common stock called a golden share, which carries veto
power over our change of control, name, trademark or corporate purpose and over the creation or alteration of our Defense & Security programs (whether or not the Brazilian federal government participates in such programs). For example, in
2010, we changed our corporate name to Embraer S.A. and altered our bylaws to allow us to enter the defense and security market, which required the approval of the Brazilian federal government. The Brazilian federal government may veto transactions
that may be in the interest of the holders of our common shares or ADSs. We cannot assure you that we will be able to obtain approvals from the Brazilian federal government in the future to effect important corporate changes, such as those carried
out in 2010, or other important corporate changes that may be required in the future.

Our bylaws contain provisions that could discourage our
acquisition or prevent or delay transactions that you may favor.

Our bylaws contain provisions that have the effect of avoiding
the concentration of our common shares in the hands of a small group of investors so as to promote the dispersed ownership of such shares. These provisions require any shareholder or group of shareholders that acquires or becomes the holder of
(1) 35% or more of the total shares issued by us or (2) other rights over shares issued by us that represent more than 35% of our capital, to submit to the Brazilian federal government a request for making a public tender offer to purchase
all of our shares on the terms specified in our bylaws. If the request is approved, such shareholder or group of shareholders must commence the public tender offer to purchase all of our shares within 60 days of the date of approval. If the request
is refused, such shareholder or group of shareholders must sell all of such shareholders shares that exceed the 35% limit within 30 days, so that the holding of such shareholder or group of shareholders falls below 35% of our capital stock.
These provisions may have anti-takeover effects and may discourage, delay or prevent a merger or acquisition, including transactions in which our shareholders might otherwise receive a premium for their common shares and ADSs. These provisions can
only be altered or overridden with the approval of our Board of Directors and our shareholders in a shareholders meeting convened for this purpose and, with the consent of the Brazilian federal government, as holder of the golden share.

The absence of a single, controlling shareholder or group of controlling shareholders may render us susceptible to shareholder disputes or other
unanticipated developments.

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

Our bylaws contain provisions that limit the voting rights of certain shareholders including non-Brazilian shareholders.

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

Our bylaws also contain provisions that limit the right of non-Brazilian shareholders to exercise voting rights in respect of more than
two-thirds of the voting rights that may be exercised by Brazilian shareholders present at any general meeting of shareholders. This limitation will effectively prevent our takeover by non-Brazilian shareholders and limit the ability of
non-Brazilian shareholders to effect control over us. See Item 10B. Additional InformationMemorandum and Articles of AssociationDescription of Capital StockVoting Rights of SharesLimitations on the Voting Rights of
Non-Brazilian Shareholders.



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Holders of ADSs may not be able to exercise their voting rights.

Holders of ADSs may only exercise their voting rights with respect to the underlying common shares in accordance with the provisions of the
deposit agreement governing our ADSs. Under the deposit agreement, ADS holders must vote the common shares underlying their ADSs by giving voting instructions to the depositary. Upon receipt of the voting instructions from the ADS holder, the
depositary will vote the underlying common shares in accordance with these instructions. Otherwise, ADS holders will not be able to exercise their right to vote unless they surrender the ADS for cancellation in exchange for the common shares.
Pursuant to our bylaws, the first call for a shareholders meeting must be published at least 30 days in advance of the meeting, the second call must be published at least 15 days in advance of the meeting, and the third call, if necessary,
must be published at least 8 days in advance of the meeting. When a shareholders meeting is convened, holders of ADSs may not receive sufficient advance notice to surrender the ADSs in exchange for the underlying common shares to allow them to
vote with respect to any specific matter. In addition, the depositary has no obligation to notify ADS holders of an upcoming vote or distribute voting cards and related materials to ADS holders, unless we specifically instruct the depositary to do
so. If we ask the depositary to seek voting instructions from ADS holders, the depositary will notify ADS holders of the upcoming vote and will arrange to deliver proxy cards to such holders. We cannot ensure that ADS holders will receive proxy
cards in time to allow them to instruct the depositary to vote the shares underlying their ADSs. In addition, the depositary and its agents are not responsible for failing to carry out voting instructions or for an untimely solicitation of voting
instructions. As a result, holders of ADSs may not be able to fully exercise their voting rights.

The relative illiquidity and volatility of the
Brazilian securities markets may substantially limit the ability of holders of our common shares or the ADSs to sell the common shares underlying ADSs at the price and time they desire.

Investing in securities, such as the common shares or the ADSs, of issuers from emerging market countries, including Brazil, involves a higher
degree of risk than investing in securities of issuers from more developed countries.

The Brazilian securities markets are substantially
smaller, less liquid, more concentrated and more volatile than major securities markets in the United States and other jurisdictions, and are not as highly regulated or supervised as some other markets. The relatively small market capitalization and
illiquidity of the Brazilian equity markets may substantially limit the ability of holders of our common shares or ADSs to sell the common shares or the ADSs at the price and time desired.

There is also significantly greater concentration in the Brazilian securities markets than in major securities markets in the United States.
See Item 9C. The Offer and ListingMarketsTrading on the São Paulo Stock Exchange.

The sale of a substantial number
of common shares, or the belief that this may occur, could decrease the trading price of the common shares and the ADSs; holders of our common shares and/or ADSs may not be able to sell their securities at or above the price they paid for
them.

Sales of a substantial number of common shares, or the belief that this may occur, could decrease the trading price of our
common shares and ADSs. As a consequence of sales by existing shareholders, the market price of the common shares and, by extension, the ADSs may decrease significantly. As a result, the holders of the ADSs and/or common shares may not be able to
sell their securities at or above the price they paid for them.

Holders of our ADSs might be unable to exercise preemptive rights with respect to
the common shares.

Holders of our ADSs may not be able to exercise the preemptive rights relating to the common shares underlying
their ADSs unless a registration statement under the Securities Act is effective with respect to those rights or an exemption from the registration requirements of the Securities Act is available. We are not obligated to file a registration
statement with respect to the shares or other securities relating to these preemptive rights, and we



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cannot assure holders of our ADSs that we will file any such registration statement. Unless we file a registration statement or an exemption from registration applies, holders of our ADSs may
receive only the net proceeds from the sale of their preemptive rights by the depositary or, if the preemptive rights cannot be sold, the rights will be allowed to lapse.

Judgments of Brazilian courts with respect to our common shares will be payable only in reais.

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



|ITEM 4. | INFORMATION ON THE COMPANY
|------- | --------------------------



|4A. | Unresolved Staff Comments
|--- | -------------------------

We have no unresolved staff comments.



|4B. | History and Development of the Company
|--- | --------------------------------------

Overview

Embraer S.A. is a joint stock company duly incorporated under the laws of Brazil with an indefinite term of duration. Originally formed in 1969
by the Brazilian federal government, we were privatized in 1994. In connection with our privatization, we were transformed into a publicly-held corporation, and we are subject to the provisions of the Brazilian Corporate Law. Our principal executive
offices are located at Avenida Brigadeiro Faria Lima, 2170, 12227-901 São José dos Campos, São Paulo State, Brazil. Our telephone number is 55-12-3927-4404. Our agent for service of process in the United States is National
Registered Agents, Inc., with offices at 875 Avenue of the Americas, Suite 501, New York, New York 10001.

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

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

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



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in the first half of 2018. The E195-E2 is slated to enter service in 2019 and the E175-E2 in 2020. We are also marketing and selling the Legacy 450, Legacy 500 and Legacy 600, a line of executive
jets in the mid-light, mid-size and super mid-size categories, and the Phenom 100, Phenom 300 and Lineage 1000, which are positioned in the entry-level, light and ultra-large categories, respectively. In addition, in 2009 we presented the new Legacy
650, a large executive jet that will be positioned in our executive jet portfolio between the Legacy 600 and the Lineage 1000. In the defense and security market, we offer a line of intelligence, surveillance and reconnaissance aircraft based on the
ERJ 145 regional jet platform, services, systems and solutions, ground radar, transportation of authorities, tactical military transport and aerial refueling (KC-390), basic and advanced training and light attack aircraft (Super Tucano), unmanned
aerial systems (UAS), and geostationary defense and communications satellites.

On November 19, 2010, our shareholders approved a
change to our corporate name from Embraer  Empresa Brasileira de Aeronáutica S.A. to Embraer S.A., as well as the addition of capabilities and the broadening of the scope of our defense business unit to allow such business unit to
manufacture and trade equipment, materials, systems, software, accessories and components for the defense, security and energy industries, as well as to perform technical activities and services related to these areas. As a result, our
bylaws were amended to reflect the addition of these activities to our corporate purposes.

Strategic Alliances and Growth Opportunities

We intend to review strategic growth opportunities, which may include joint ventures and acquisitions, and other strategic transactions, as
well as enhance our existing relationships with significant world players in the aerospace and defense and security industries, including any members of the groups or companies below.

Strategic Alliances

European Aerospace and
Defense Group

On November 5, 1999, a group consisting of (1) Aerospatiale Matra, currently known as European Aeronautic,
Defense and Space Company N.V., or EADS, (2) Dassault Aviation, (3) Thomson-CSF, currently referred to by its trade name ThalesTM, and (4) Société Nationale
dÉtude et de Construction de Moteurs dAviation, or Safran, all of which we refer to collectively as the European Aerospace and Defense Group, purchased 20% of our outstanding common stock from our existing common shareholders at
that time. Most of the common stock purchased by the European Aerospace and Defense Group was owned by our former controlling shareholders.

Because the members of the European Aerospace and Defense Group were, at the time, considered by our former controlling shareholders to be
strategic partners of Embraer, they were granted the right, as a group, to appoint two members to our Board of Directors. However, as a result of the termination of the shareholders agreement among our former controlling shareholders as part
of our 2006 corporate reorganization, the European Aerospace and Defense Group no longer has the right to appoint members to our Board of Directors, other than pursuant to the general right provided for in the Brazilian Corporate Law. In addition,
under Brazilian law the European Aerospace and Defense Group is no longer recognized as a group for voting purposes nor considered to be a strategic shareholder of Embraer. ThalesTM sold all of
its shares in October 2006, and EADS sold all of its shares in a secondary offering in February 2007.

AEL Sistemas

In April 2011, we and AEL Sistemas, a subsidiary of the Israeli company Elbit Systems Ltd., announced the execution of a strategic agreement
with the purpose of evaluating joint exploration prospects for unmanned aerial systems (UAS), including the potential creation of a company to explore this segment with a majority participation of our Defense & Security business unit.

Boeing

In April 2012, we entered into a
cooperation agreement with Boeing, in which we agreed to pursue several areas of cooperation, including commercial aircraft features that enhance safety and efficiency, research and technology and sustainable aviation biofuels.



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In June 2012, we and Boeing announced the execution of a cooperation agreement with the purpose
of joining our sales efforts on the KC-390 aircraft program. Under this agreement, Boeing and Embraer will share specific technical knowledge and evaluate markets for medium-lift military transport opportunities.

In July 2012, we and Boeing announced at the Farnborough Airshow the execution of another cooperation agreement that further enhances the
collaboration between the two companies. This agreement also brings additional capabilities to Embraers A-29 Super Tucano through new weapons integration developments to meet future customer requirements.

In December 2012, we and Boeing announced the Runway Situation Awareness Tools project, which will provide a shared set of tools to customers
of both companies and reduce runway excursions. This new project strengthens the collaboration between two of the worlds largest aerospace companies.

At the Paris Air Show in June, 2013, we announced a partnership with Boeing to market and sell the KC-390 medium-airlift aircraft. Under the
agreement, Boeing is the lead for KC-390 sales, support and training opportunities in the U.S., United Kingdom and select Middle Eastern markets. Embraer will manufacture the aircraft and collaborate on sales, support and training.

Joint Ventures

HEAI

In December 2002, we formed HEAI, a joint venture company with Harbin Aircraft Industry (Group) Co., Ltd. and Hafei Aviation Industry Co.,
Ltd., both subsidiaries of AVIC, to provide for the manufacture, sale and after-sale support of the ERJ 145 regional jet family. We own 51% of the equity of HEAI. We have granted HEAI a license for the exclusive rights to produce, sell and provide
support for the ERJ 145 regional jet family in the Chinese markets, and we contributed US$12.4 million in cash, tooling and inventory to the joint venture. Our joint venture partners have contributed the land use rights in Harbin, China, and
contributed US$10.8 million in cash and facilities to the joint venture. The roll-out of the first ERJ 145 manufactured by the joint venture occurred in December 2003, and the joint venture entered into its first sales contract for six aircraft with
China Southern Airlines in February 2004. In October 2007, the 1,000th jet of the ERJ 145 family was delivered by Harbin Embraer Aircraft Industry Co. Ltd.

In April 2011, we entered into a framework agreement with AVIC for the implementation of a Legacy 600/650 production line in China, using the
infrastructure, financial resources and workforce of HEAI. This industrial cooperation program will focus on the production of the Legacy 600/650 family in China, which is to replace the discontinued ERJ 145 family, and aims to serve the growing
demand of the Chinese executive aviation market. In 2013, we initially produced one Legacy 600/650 jet in China, and have plans to increase capacity in the future.

CAE

In October 2006, we entered into an
agreement with the Canadian company CAE Inc., or CAE, to form a global training joint venture. The partnership provides comprehensive entitlement training and post-entitlement training for pilots, maintenance technicians and dispatch personnel for
Phenom 100 entry-level jets and Phenom 300 light jets. This training program was first offered at CAE SimuFlite in Dallas, Texas, following the commencement of operation of the Phenom 100 in 2008, and expanded to Burgess Hill in the U.K. in 2009 and
Guarulhos in 2012.

Liebherr Aerospace

In July 2008, we acquired a 40% interest owned by Liebherr Aerospace SAS, or Liebherr, in ELEBEquipamentos Ltda., or ELEB, a 60%/40%
joint venture that we formed with Liebherr in 1999, for US$20.0 million, making us the sole equity holder of ELEB. ELEB is an aerospace system and component manufacturer and its main products include landing gear systems, hydraulics and
electro-mechanical sub-assemblies, such as actuators, valves, accumulators and pylons.



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Bradar

In May 2011, we executed a US$25.7 million agreement to purchase a 90% stake in the capital stock of the radar business of OrbiSat da
Amazônia Indústria e Aerolevantamento S.A., or Bradar, a Brazilian company that created a radar business in 2002 to develop state-of-the-art technology for air, sea and land remote sensing and aerial surveillance. This was the first
acquisition made by the Defense & Security business unit. As a result of this transaction, the company was renamed Orbisat Indústria e Aerolevantamento S.A. and then, in early 2013, renamed Orbisat Indústria S.A. A subsidiary
named Orbisat Aerolevantamento Ltda. was also established. In late 2013, the company announced the adoption of the new brand Bradar and the names Bradar Indústria S.A. and Bradar Aerolevantamento Ltda., which are still pending
finalization on December 31, 2013. Bradar also announced contracts valued at approximately US$25 million in the areas of radar and remote sensing services.

Atech

In April 2011, we announced the
acquisition of US$23.3 million of 50% of the capital stock of Atech Negócios em Tecnologias S.A., or Atech, with the purpose of increasing our capacity for developing products and services in the area of Command, Control, Communications,
Computer and Intelligence, or C4I, systems and improving our capabilities of providing integrated systems for the defense and security, command and control, air defense and air traffic control markets. In September 2013, Embraer Defense &
Security signed a contract to acquire the remaining 50% of the shares of Atech and is now the only shareholder of Atech.

AEL & Harpia

In April 2011, Embraers Defense & Security business unit and AEL Sistemas S.A., or AEL, a subsidiary of the Israeli
company Elbit Systems Ltd., announced the execution of a strategic agreement for the evaluation of joint exploration of unmanned aerial systems, including the potential creation of a company with majority participation of Embraers
Defense & Security business unit to work in the segment.

In September 2011, Embraers Defense & Security
department and AEL formalized this partnership and created a new company, Harpia Sistemas S.A., or Harpia, to focus on the unmanned aerial systems market. We hold 51% of Harpias capital, and AEL holds the remaining 49%. Harpias
activities will involve marketing, development, systems integration, manufacture, sales, and after-sale support for unmanned aerial systems, as well as simulators and the modernization of avionics systems. We aim to provide broader solutions for
complex systems, with a view to increasing the market share of Brazilian-made products in the national defense and security market. As a part of this partnership, and for the purpose of participating in the process of transferring technology to
Brazil, we acquired 25% of AELs capital for R$5.0 million.

In February, 2013, Embraer Defense & Security and AEL announced
the acquisition by Avibras Air and Naval Division, Inc., or Avibras, of shares of Harpia to jointly develop the market for unmanned aircraft systems in Brazil. As a result, Avibras will hold a 9% stake of the company, whereas AEL will hold 40%.
Embraer Defense & Security will remain the majority shareholder, with 51%.

Visiona Tecnologia Espacial S.A.

In November 2011, Embraer and Telecomunicações Brasileiras S.A., or Telebras, announced the signing of a memorandum
of understanding for the purpose of forming a company, of which Embraer will hold a 51% stake and Telebras 49%, to work with the Brazilian federal government to meet the needs of Brazils plan for satellite development, including the National
Broadband Program and strategic governmental communications.

In May 2012, we and Telebras signed the Shareholders Agreement
and the Bylaws to form Visiona Tecnologia Espacial S.A., or Visiona, with the initial goal of acting in a Brazilian geostationary satellite program, with whole system integration, including the space segment, the service launch and
ground segments. This is a key step for our entry into the space segment, specifically the satellite sector.

Visionas head offices
will be located in the Technological Park of the city of São José dos Campos, São Paulo, Brazil, where it also intends to establish a Space Technology Development Center, working in partnership with Brazils most relevant
aerospace educational and research organizations, and accelerating the capabilities of the Brazilian space industry.



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In November 2012, the operation and constitution of Visiona Tecnologia Espacial S.A. was approved
by the Administrative Council of Economic Defense, or CADE, without restrictions.

In November 2013, Visiona was selected by Telebras to
be the integrator of the SGDC system that, once delivered, will be operated by Telebras and the Brazilian Ministry of Defense. In December, Visiona signed a contract with Thales Alenia Space France and Arianespace, which have agreed to furnish a
satellite and to launch it, respectively.

Savis Tecnologia e Sistemas S.A.

In November 2012, the Brazilian Army signed a contract for the implementation of Phase I of the Sisfron program (Sistema Integrado de
Monitoramento de Fronteiras) with a consortium, or the Tepro consortium, composed of two companies, Savis Tecnologia e Sistemas S.A. and OrbiSat Indústria e Aerolevantamento S.A., both controlled by Embraer Defense & Security.
Sisfron is the Integrated Border Surveillance System the Brazilian Army is developing on the Western borders of Brazil. This contract is worth R$839 million (approximately US$404 million).

Sisfrons first phase will include the monitoring of approximately 650 kilometers of land border, covering the border between the
Brazilian State of Mato Grosso do Sul, an area that falls under the responsibility of the Brazilian Western Military Command (Comando Militar do Oeste). The subsystems to be developed during this first phase are under the responsibility of
the Fourth Mechanized Cavalry Brigade, in Dourados, the Brazilian Western Military Commands headquarters, in Campo Grande, and the Brazilian Armys High Command, in Brasília (Federal District). Sisfron has as its main objective the
surveillance and protection of Brazilian land borders stretching 16,886 kilometers dividing 11 Brazilian states and 10 neighboring countries, encompassing 27% of the nations territory.

In May 2013, the Tepro consortium concluded its selection of the primary suppliers of the electromagnetic signal sensor, tactical
communications, optronics, and infrastructure systems. In June 2013, it concluded the selection of the main suppliers for all subsystems of Sisfrons first phase.

Capital Expenditures (Property, Plant and Equipment and Development)

We include our investments in both development and property, plant and equipment as part of our capital expenditures.

As part of our transition to IFRS, in 2010 we have started to capitalize our expenditures related to product development projects as
non-current intangible assets on our statement of financial position when it is probable that the relevant projects will generate future benefits, taking into account their commercial and technological feasibility and availability of technological
and financial resources and only if their cost can be reliably measured. We amortize such assets in the form of charges to cost of sales and services on our statements of income, based on the total estimated number of aircraft to be delivered for
each new product development project. We also capitalize expenditures related to property, plant and equipment as non-current assets on our statement of financial position and depreciate such assets in the form of charges to cost of sales and
services on our statements of income. For information on how we amortize our intangible assets and depreciate our property, plant and equipment, see Item 5A. Operating and Financial Review and ProspectsOperating ResultsPrincipal
Operating Data and Components of Our Statement of IncomeCost of Sales and Services.

Most of our development expenditures are
associated with the development of new products either for the Commercial Aviation or Executive Jets segments. Development expenditures totaled US$230.6 million in 2013, US$209.3 million in 2012, US$121.3 million in 2011 and US$62.8 million in 2010,
net of used cash contributions from risk-sharing partners, which totaled US$51.8 million in 2013, US$1.0 million in 2012, US$85.8 million in 2011 and US$99.4 million in 2010. Development expenditures for 2013 remained stable in comparison to 2012,
mainly due to consistent expenditures related to Executive Jets programs, and the increase in development expenditures in 2011 relative to 2010 is mainly attributable to the Executive Jets business as well.



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The increase in cash contributions from risk-sharing partners in 2013 relative to 2012 is mainly
due to the E-Jets E2 family, which commenced development in 2013. The significant decrease in cash contributions from risk-sharing partners in 2012 relative to 2011 is mainly due to the lack of contractual milestones that were set to take place in
2012. The decrease in cash contributions from risk-sharing partners in 2011 relative to 2010 is mainly due to the contribution schedule agreed with our risk sharing partners. See Item 5C. Operating and Financial Review and
ProspectsResearch.

Our main ongoing project is the development of the E-Jets E2 family, comprising three new airplanes, the
E175-E2, E190-E2, and E195-E2. We estimate our total investment in this project will be R$1.7 billion through 2020. Our investment in the Legacy 450/500 executive jets is estimated at US$750.0 million and is expected to be invested through 2015, in
property, plant and equipment and development for the Legacy 450/500 programs, which were launched by us in April 2008. The Legacy 500 executive jet is expected to enter into service in the first half of 2014, and the Legacy 450 is expected to enter
service one year after the Legacy 500.

Our total disbursements in capital expenditures related to property, plant and equipment
(excluding spare parts for pool programs and aircraft under lease or available for lease) were US$294.3 million in 2013, US$207.9 million in 2012 and US$162.2 million in 2011. These investments are related mainly to (1) construction of new
facilities and (2) improvements and modifications to our plants and production facilities for the production of new aircraft models.

In 2014, we expect to invest approximately US$650 million in capital expenditures for research, product development and property, plant and
equipment. Of this amount, approximately US$400 million will be invested in our research and product development activities, exclusive of contributions of risk-sharing partners, and US$250 million will be invested in property, plant and equipment.
The US$250 million capital expenditures to be disbursed in connection with property, plant and equipment are primarily related to (1) improvements to our existing facilities, (2) E-Jets E2 family, and (3) the construction of two
plants in Evora, Portugal, which was started in July 2008.

We expect to invest approximately 80% of our budgeted US$650 million capital
expenditures for 2014 in Brazil, most of which will be invested in research and development activities. The remaining 20% of our capital expenditures will be invested abroad, mainly on property, plant and equipment at our new industrial facilities
in the city of Evora, Portugal.

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

We incur few
development expenditures for defense and security programs, as those are primarily funded by the Brazilian federal government and other government customers under long-term development contracts.



|4C. | Business Overview
|--- | -----------------

We are one of the leading manufacturers of commercial aircraft (i.e.,
regional and mid-capacity jets) in the world, based on 2013 revenue arising from sales of commercial aircraft, and have a global customer base. Our focus is achieving customer satisfaction with a range of products and services addressing the
commercial airline, executive jet and defense and security markets. Our Commercial Aviation business, including aviation-related services, accounted for 53% of our revenue in 2013. We are the leading supplier of defense aircraft to the Brazilian Air
Force, based on number of aircraft sold, and we have sold aircraft to armed forces in Europe, Asia, the United States and Latin America. Our Defense & Security business, including aviation related services, accounted for 19.2% of our
revenue in 2013. We have developed a line of executive jets based on one of our regional jet platforms and launched new executive jets in the entry-level, light, ultra-large and mid-light/mid-size categories: the Phenom 100/300 family, the Lineage
1000 and the Legacy 450/500 family, respectively. Our Executive Jets business, including aviation related services, accounted for 26.4% of our revenue in 2013. Providing high quality customer support is a key element of our customer focus and is
critical to our ability to maintain long-term customer relationships. Other related businesses accounted for 1.4% of our revenue in 2013. For the year ended December 31, 2013, we generated revenue of US$6,235 million, of which approximately 78%
was U.S. dollar-denominated. At December 31, 2013, we had a total firm order backlog of US$18.2 billion, which included 429 firm orders for commercial aircraft.



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Our Strengths

We believe that our primary strengths are:

Leading Commercial Aircraft Manufacturer with a Global Customer Base. Based on the number of aircraft sold, we are a leading
manufacturer of jets up to 130 seats, with a strong global customer base. More than 85 airlines from over 50 countries are flying our commercial jet aircraft on the five continents of the world. Our customers include some of the largest and most
significant regional and low-cost airlines and commercial carriers in the world.

Aircraft Design; Cost and Operating
Efficiency. We conceive, develop and manufacture aircraft to provide our customers with reduced operating, maintenance and training costs due to the similarity and efficiency in design and the commonality of parts within a jet family. These
similarities enable us to significantly reduce our design, development and production costs and pass these savings along to our customers in our sales price. These similarities also reduce the development time of our aircraft.

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

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

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

Experienced and Highly Skilled Workforce. Our employees are experienced and highly skilled. As of December 31, 2013, engineers
comprised 29.1% of our workforce. Due to the high level of knowledge and skill of our employees, and our continuous training programs, we are able to efficiently pursue new programs and provide our customers with differentiated technical expertise
and guidance.

Continued Focus on Customer Satisfaction and Services. We strongly believe that a long-term relationship with
our customer base is essential to our growth strategy. Providing an appropriate services portfolio for different market segments and fleet ages is a key element of our customer focus and an important tool for maintaining long-term relationships with
our customers and product competitiveness.

As the number of our aircraft in operation continues to grow, we have further
increased our commitment to providing our customers with an appropriate level of after-sale support, including technical assistance, training, maintenance, spare parts and other related services. This is evidenced, for example, by the worldwide
expansion of our customer support facilities and our service centers network.

We own and operate several service centers, located in
various parts of the world. In addition, our customers can rely on dozens of authorized third-party centers located worldwide to meet their maintenance needs. For further information on our support and services network, see Services and
Support.



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Business Strategies

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

Continuing to Market Our
Commercial Aircraft. We are fully committed to continuing to market our jets up to 130 seats (ERJ 145 family and the E-Jets family). As of December 31, 2013, we had approximately 700 units of the ERJ 145 jet family and 1,000 units of the
EMBRAER 170/190 jet family in activity and service. We believe that market opportunities exist for the EMBRAER 170/190 jet family with regional airlines that are seeking to expand their fleet, as well as increase their penetration in higher density
markets and add longer routes. We also believe that the EMBRAER 170/190 jet family will have opportunities with mainline and low-cost airlines that are right-sizing their fleets in order to adjust capacity to explore low to mid-density markets. As
of December 31, 2013, we were leaders in the segment of jets up to 130 seats in terms of number of aircraft sold. Additionally, we believe that our commercial aircraft will provide us with significant opportunities to increase our
competitiveness by offering a full range of jets up to 130 seats to our customers.

Strengthening Our Position in the Executive
Jet Market. We believe that the executive jet market provides us with significant growth opportunities. We expect to offer products in all executive jet categories, from the entry-level to the ultra large. We have developed the Legacy 600, a
super mid-size jet, the Phenom 100, an entry-level jet, the Phenom 300, a light jet, and the Lineage 1000, an ultra large jet, and are developing the Legacy 450 and the Legacy 500 in the mid-light and mid-size categories, respectively. In addition,
in 2010 we made the first delivery of the Legacy 650, a large executive jet, which is positioned in our executive jet portfolio between the Legacy 600 and the Lineage 1000. We have endeavored to understand and respond to market and customer needs,
in an effort to continuously improve the product and customer support for our executive jets.

Continue to Pursue Market Niche
Opportunities in the Defense and Security Market. We currently offer products for transportation, training, light-attack, intelligence, surveillance and reconnaissance. Since our products offer multi-mission capabilities at a competitive price
and are designed to be operated in any environment at low operating costs, we believe our products meet the needs of governments in countering present threats which are a global concern, such as terrorism, drug dealing and weapon smuggling.

Continued Focus on Customer Satisfaction and Support. We believe that our focus on customer satisfaction is fundamental to our
entrepreneurial success and our business strategy. Providing high quality customer support and services is a key element of our customer focus and it is critical to our ability to maintain long-term relationships with our customers and keep our
products competitive in the market. As the number of our aircraft in operation continues to grow, and our Executive Jets business expands, we have further increased our commitment to providing our customers with an appropriate level of after-sale
support, including technical assistance, training, maintenance, spare parts and other related services. This is evidenced, for example, by the expansion of our customer support and services base.

We own and operate several service centers, located in various parts of the world. In addition, our customers can rely on dozens of authorized
third-party centers located around the world to comply with their maintenance needs. For further information on our support and services network, see Services and Support.

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



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Commercial Aviation Business

We design, develop and manufacture a variety of commercial aircraft. Our Commercial Aviation business is our primary business, accounting for
53% of our revenue for the year ended December 31, 2013.

Products

We developed the ERJ 145 family, our 37-50-passenger twin jet-powered regional aircraft, introduced in 1996, to address the growing demand
among regional airlines for medium-range, jet-powered aircraft. We are continuing to develop the EMBRAER 170/190 jet family, our 70-130 seat platform, to serve the trend in the commercial airline market toward larger, faster and longer range jets
and to further diversify our strength in the jet market. We continue to monitor and analyze market trends, customer requirements and aircraft demand to guide our product development according to market needs.

ERJ 145 Regional Jet Family

The ERJ 145
is a twin jet-powered regional aircraft accommodating up to 50 passengers. This jet was developed in response to the increasing demand from the regional airline industry for an aircraft that offered more speed and comfort than a turboprop. The ERJ
145 was certified by the Brazilian Aviation Authority in November 1996, the FAA in December 1996, the European Aviation Authority in April 1997, the Australian Aviation Authority in June 1998 and the Civil Aviation Administration of China, or CAAC,
in December 2000. We began delivering the ERJ 145 in December 1996. In September 2007, we delivered our 1,000th ERJ 145 aircraft, manufactured by Harbin Embraer Aircraft Industry Co. Ltd., to the
HNA Group.

The development of the ERJ 145 aircraft was partially based on the EMB 120 Brasilia and has approximately 30% commonality in
terms of parts and components with that aircraft, including the nose section and cabin. The ERJ 145 has a maximum cruising speed of Mach.78, or 450 knots, and a maximum fully loaded range of 1,200 nautical miles in its standard version. The ERJ 145
is equipped with engines built by Rolls-Royce Allison. In addition, the ERJ 145 is equipped with sophisticated flight instruments, such as engine-indication instruments, crew-alert systems and digital flight control systems produced by Honeywell.

The ERJ 145 is also available in a long-range, or LR, version, and, in response to customer requests, we have developed an
extra-long-range, or XR, version of the aircraft. The ERJ 145 LR features a larger fuel tank, more powerful engines and greater range than the standard version. The ERJ 145 LR, which was certified by the Brazilian Aviation Authority, the FAA and the
European Aviation Authority in 1998, and by the CAAC in November 2000, uses more powerful engines than the standard version, allowing the fully loaded aircraft to operate on routes of up to 1,550 nautical miles. The ERJ 145 XR features a new and
updated turbofan engine, increased capacity fuel tanks and winglets. The ERJ 145 XR, which was certified by the Brazilian Aviation Authority in August 2002 and by the FAA in October 2002, offers a maximum, fully loaded range of 2,000 nautical miles
and enhanced operational capabilities for hot weather and high altitudes. Deliveries of the ERJ 145 LR began in February 1998, and deliveries of the ERJ 145 XR began in October 2002.

The ERJ 135 is a 37-seat regional jet based on the same design as the ERJ 145. The ERJ 135 has approximately 96% commonality in terms of parts
and components with the ERJ 145, resulting in reduced spare-parts requirements and permitting the utilization of the same ground support equipment for customers that use both aircraft. The ERJ 135 was certified by the Brazilian Aviation Authority in
June 1999, by the FAA in July 1999 and by the European aviation authority in October 1999. Deliveries of the ERJ 135 began in July 1999.

The ERJ 135 has a maximum operating speed of Mach .78, or 450 knots, and a maximum fully loaded range of 1,300 nautical miles in its standard
version. The ERJ 135 uses the same engines, sophisticated flight instruments, digital flight control systems and body design as the ERJ 145. The ERJ 135s fuselage is 11.6 feet shorter than the ERJ 145s. The ERJ 135 is also available in a
LR version, with maximum fully loaded range of l,750 nautical miles. The LR version received certification simultaneously with the standard version and began deliveries in August 1999.

We developed the ERJ 140 in response to customer requests. The ERJ 140 is a 44-seat regional jet based on the same design as the ERJ 135 and
is manufactured on the same production line as the ERJ 145 and ERJ 135. The ERJ 140 has approximately 96% commonality with the ERJ 145 and ERJ 135, providing our customers with



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significant maintenance and operational benefits. The ERJ 140 was certified by the Brazilian Aviation Authority in June 2001 and by the FAA in July 2001. The ERJ 140 has a maximum fully loaded
range of 1,250 nautical miles in its standard version. The ERJ 140 is available in LR version, with maximum fully loaded range of 1,650 nautical miles. We began delivering the ERJ 140 in August 2001.

The ERJ 145 regional jet family allows for standardized pilot certification and maintenance procedures.

EMBRAER 170/190 Jet Family

The EMBRAER
170/190 jet family provides our customers with a choice of four aircraft in the mid-capacity passenger range. The EMBRAER 170 is a 70-78 seat jet and the EMBRAER 175 is a 78-88 seat jet, while the EMBRAER 190 is a 98-114 seat jet and the EMBRAER 195
is a 108-124 seat jet.

The EMBRAER 170 was certified by the Brazilian Aviation Authority, the FAA, the Joint aviation authority of Europe
(the former advisory organization that made certification recommendations to non-EU national authorities), or JAA, the EASA and the aviation authority of Poland in February 2004, and deliveries of the EMBRAER 170 began in March 2004. The EMBRAER 175
was certified by the Brazilian Aviation Authority in December 2004, by the EASA in January 2005, by TCCA, the Canadian certification authority, in July 2005 and by the FAA in August 2006. The EMBRAER 190 was certified by the Brazilian Aviation
Authority in August 2005, by the FAA in September 2005 and by the EASA in June 2006. The EMBRAER 195 was certified by the Brazilian Aviation Authority in June 2006, by the EASA in July 2006 and by the FAA in June 2007.

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

The EMBRAER 170/190 jet familys principal features are:



| |  |  | Performance. All four jets in the EMBRAER 170/190 jet family have a maximum cruising speed of Mach .82. The EMBRAER 170 and the EMBRAER 175 have maximum fully loaded ranges of 1,800 and 1,700 nautical miles,
respectively, and each is available in the long-range version, with maximum fully loaded ranges of 2,100 and 2,000 nautical miles, respectively. The EMBRAER 190 and EMBRAER 195 have maximum fully loaded ranges of 1,800 and 1,500 nautical miles,
respectively, and each is available in the long-range version with maximum fully loaded ranges of 2,400 and 2,200 nautical miles, respectively.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Ground servicing. The underwing engine design and the existence of four doors, two in the front and two in the back, provide for enhanced accessibility and efficiency of ground services.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Cabin and cargo space. We have enhanced passenger safety and comfort in the EMBRAER 170/190 jet family. The aircrafts double-bubble design enables a four-abreast cabin, a wide aisle, greater
interior space and headroom and a larger baggage compartment than the existing mid-capacity jets of our competitors, including those mid-capacity jets that are in the development stage.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

In June 2013, Embraer launched the second generation of its E-Jets family of commercial aircraft, named the E-Jets E2, comprising three new
airplanes, the E175-E2, E190-E2, and E195-E2. The E190-E2 is expected to enter service in the first half of 2018. The E195-E2 is slated to enter service in 2019 and the E175-E2 in 2020. Embraer estimates its total investments in the new E-Jets E2
models to be US$1.7 billion over the next eight years.

The launch of the E2 builds on our vision to offer leading-edge commercial jets
with a capacity right-sized for 70 to 130 seats, seamless mainline comfort, and performance for flexible and efficient utilization by regional,



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low-cost, and network carriers. Our strategy is to offer all the benefits of a clean-sheet design, but with the reliability of a mature platform and commonality with current generation E-Jets. We
have continually invested in the E-Jets program, so that our customers can stay competitive with aircraft that have the lowest operating costs and the highest passenger appeal, today and in the future.

In a typical single-class layout, the E175-E2 was extended by one seat row, compared to the current generation E175, and will seat up to 88
passengers, while the E190-E2 is the same size as the E190, of up to 106 seats. The E195-E2, compared to the current E195, has grown by three seat rows and will accommodate up to 132 seats.

EMB 120 Brasilia

The EMB 120 Brasilia is
a pressurized twin wing-mounted turboprop aircraft that accommodates up to 30 passengers. The EMB 120 Brasilia was developed in response to the commercial airline industrys demand for a high-speed and fuel-efficient 30-seat regional aircraft.
The EMB 120 Brasilia was certified by the FAA in May 1985 and by the Brazilian Aviation Authority in July 1985. Since its introduction in 1985, we have delivered 352 EMB 120 Brasilias for the regional market and six EMB 120 Brasilias for the defense
and security market.

Customers

We have a diverse, global customer base, mainly in the commercial airline market in Europe, the Middle East, Africa, Asia (particularly China)
and the Americas. Our major customers for commercial aircraft include some of the largest regional, low-cost and mainline airlines in the world. As of December 31, 2013, our largest customers, by aircraft in service, were Express Jet, American
Eagle, Republic, Azul, Tianjin  HNA, JetBlue, Aeromexico, HOP!  Air France, Air Canada, Lufthansa, Trans States, LOT, KLM Cityhopper, Flybe, Austral  Aerolineas Argentinas, Kenya Airways, China Southern, US Airways, Virgin
Australia, Saudia, JAL and COPA.

For a discussion of these significant customer relationships, see Item 3D. Key
InformationRisk FactorsRisks Relating to EmbraerWe depend on key customers and key suppliers, the loss of any of which could harm our business.

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

Sales and Marketing

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



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Production, New Orders and Options

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

We include an order in backlog once we have received a firm commitment, represented by a signed contract. Our backlog excludes options and
letters of intent for which definitive contracts have not been executed. For the sales of our commercial aircraft, we customarily receive a deposit upon signing of the purchase agreement and progress payments in the amount of 5% of the sales price
of the aircraft 18 months before scheduled delivery, another 5% twelve months before scheduled delivery and another 5% six months before scheduled delivery. For the EMBRAER 170/190 jet family, we receive an additional 5% progress payment 24 months
before scheduled delivery. We typically receive the remaining amount of the sales price upon delivery of the aircraft. The deposits and the progress payments are for the most part nonrefundable in the event orders are cancelled.

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

Services and Support  Commercial Aircraft

We are working on further developing our portfolio of services for our Commercial Aviation customers, which comprises the following areas:



| |  |  | Field Support, which provides conveniently accessible on-site or remote assistance for all operational and technical issues in order to maximize customer performance;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Technical Support, which serves technical needs through analytics, engineering expertise, and real-time fleet monitoring;
| | - |  | -------------------------------------------------------------------------------------------------------------------------



| |  |  | Flight Operations, which supports the efficiency and safety of airline operations through tailored solutions, consulting, supervision, and training resources;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Aircraft Modification, which provides total execution and coordination of system upgrades for improved fleet performance and cabin modifications for enhanced onboard amenities;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Materials, which ensures availability and economy in parts and materials management for both scheduled and unscheduled maintenance;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------



| |  |  | Maintenance, which provides optimized maintenance solutions based on best practices for efficiency, safety, and effectiveness;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------



| |  |  | Training, which prepares crew, maintenance technicians, and operations personnel for the highest levels of competence; and
| | - |  | --------------------------------------------------------------------------------------------------------------------------



| |  |  | eSolutions, which deploys the internet as the core communication channel for 24/7 collaboration and information exchange.
| | - |  | -------------------------------------------------------------------------------------------------------------------------



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We have a worldwide presence, with five regional units strategically positioned around the globe
in order to provide us with greater agility in understanding the needs and desires of our customers, respecting the cultural diversity of the different regions where our customers are based. Our regional units are located as follows:



| |  |  | Fort Lauderdale, Florida, U.S.A., which supports our customers in North America;
| | - |  | --------------------------------------------------------------------------------



| |  |  | Villepinte, France, which supports our customers in Europe, Africa and the Middle East;
| | - |  | ---------------------------------------------------------------------------------------



| |  |  | Singapore, which supports our customers in the Asia Pacific region;
| | - |  | -------------------------------------------------------------------



| |  |  | Beijing, China, which supports our customers in China; and
| | - |  | ----------------------------------------------------------



| |  |  | São José dos Campos, Brazil, which supports our customers in Latin America.
| | - |  | ---------------------------------------------------------------------------

All
units mentioned above have the following infrastructure:



| |  |  | a spare parts distribution center;
| | - |  | ----------------------------------



| |  |  | technical and material field support teams with field engineers and customer account managers;
| | - |  | ----------------------------------------------------------------------------------------------



| |  |  | warranty and repair administration offices; and
| | - |  | -----------------------------------------------



| |  |  | services sales managers.
| | - |  | ------------------------

Our headquarters in São José dos Campos also offers
the following services:



| |  |  | Customer Care Center (CCC) providing an integrated solution of technical and spare parts support available 24 hours a day, seven days a week;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | spare parts planning and material engineering;
| | - |  | ----------------------------------------------



| |  |  | technical support;
| | - |  | ------------------



| |  |  | flight operations support;
| | - |  | --------------------------



| |  |  | maintenance support engineering;
| | - |  | --------------------------------



| |  |  | MRO Network strategy and policy;
| | - |  | --------------------------------



| |  |  | business development;
| | - |  | ---------------------



| |  |  | technical publications development; and
| | - |  | ---------------------------------------



| |  |  | other customer maintenance training (such as a mechanic training program offered through major training providers worldwide).
| | - |  | -----------------------------------------------------------------------------------------------------------------------------

In addition, we also have spare parts distribution centers in Louisville, Kentucky and Dubai, UAE.

Beyond parts fulfillment and simple rental plans, we also provide innovative programs for material planning, logistics, and acquisitions, such
as:



| |  |  | Fleet-Hour Pool Program;
| | - |  | ------------------------



| |  |  | Parts Consignment Program;
| | - |  | --------------------------



| |  |  | Embraer Collaborative Inventory Plan (ECIP);
| | - |  | --------------------------------------------



| |  |  | Embraer Parts Exchange Program (EPEP); and
| | - |  | ------------------------------------------



| |  |  | Customer Stock Optimization.
| | - |  | ----------------------------



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We also own and operate MRO facilities to support commercial, executive and defense aircraft
around the world, including in:



| |  |  | Nashville, Tennessee, where we have an Embraer Aircraft Maintenance Services (EAMS);
| | - |  | ------------------------------------------------------------------------------------



| |  |  | Alverca, Portugal, which we refer to as OGMA and began to operate in March 2005;
| | - |  | --------------------------------------------------------------------------------



| |  |  | Gavião Peixoto, in the State of São Paulo, Brazil, where we have a dedicated service center for defense customers; and
| | - |  | ----------------------------------------------------------------------------------------------------------------------



| |  |  | São José dos Campos, in the State of São Paulo, Brazil.
| | - |  | -------------------------------------------------------

The Embraer
network of authorized service centers that support our Commercial Aviation aircraft fleet is also expanding with our recent additions of third-party repair stations. As of December 31, 2013, these centers are:



| |  |  | TAP Maintenance & Engineering, in Porto Alegre, in the State of Rio Grande do Sul, Brazil;
| | - |  | ------------------------------------------------------------------------------------------



| |  |  | FlyBe Aviation Services, in Exeter, United Kingdom;
| | - |  | ---------------------------------------------------



| |  |  | Tianjin Airlines, in Tianjin, China;
| | - |  | ------------------------------------



| |  |  | HOP REGIONAL Maintenance Services, in Clermont-Ferrand, France;
| | - |  | ---------------------------------------------------------------



| |  |  | Atlantic Air Industries (AAI), in Toulouse, France, with a subsidiary in Casablanca, Morocco;
| | - |  | ---------------------------------------------------------------------------------------------



| |  |  | LOTAMS  LOT Aircraft Maintenance Services, in Warsaw, Poland;
| | - |  | --------------------------------------------------------------



| |  |  | John Holland Aviation Services, in Melbourne, Australia;
| | - |  | --------------------------------------------------------



| |  |  | STAECO, in Jinan, China;
| | - |  | -------------------------



| |  |  | Egyptair Maintenance & Engineering, in Cairo, Egypt; and
| | - |  | --------------------------------------------------------



| |  |  | LLC NORD-TECHNIK, in Arkhangelsk, Russia.
| | - |  | -----------------------------------------

It is Embraers intention to continue
providing our customers with high quality customer support by expanding our presence worldwide, both through our own operations and through agreements with established and reputable authorized service centers.

We constantly monitor customer satisfaction levels and keep open communication channels with them in order to understand customer needs and
define the most appropriate actions for the continuous improvement of our customer support. To do so, we make use of the following tools and forums:



| |  |  | a customer satisfaction assessment performed bi-monthly, which aims to develop action plans to allow us to provide effective responses to our clients;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | a customer support satisfaction survey performed every other year in order to identify the competitive position of EMBRAER;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------



| |  |  | specific action plans and commitments with each customer, known as Customer Integrated Action Plans;
| | - |  | ----------------------------------------------------------------------------------------------------



| |  |  | teamwork and systematic identification and integrated action plans to solve problems affecting us, our suppliers and customers;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------



| |  |  | periodic dedicated meetings at the customers headquarters;
| | - |  | -----------------------------------------------------------



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| |  |  | Embraer Operators Conferences that take place yearly in the various regions of the world where we have customer operators;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------



| |  |  | a maintenance cost workshop that occurs yearly, where operators share best maintenance practices and discuss cost reduction initiatives;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------



| |  |  | events organized by customers, including the Operators Maintenance Forum and the European Customer Community Conference;
| | - |  | -------------------------------------------------------------------------------------------------------------------------



| |  |  | interactive forums for discussions in the web portal FlyEmbraer, to foster the exchange of experiences among customers and Embraer; and
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------



| |  |  | an internal program named EECE (Embraer Excellence in Customer Experience), aiming to address changes in the Services & Support area of the Commercial Aviation division, in order to elevate the performance of
the Commercial Aviation business, covering contemporary and future market needs, with the purpose of obtaining the highest levels of customer experience in the commercial aviation industry.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Competition

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

50seat category

The main competitors of the ERJ 145 regional jet family are:



| |  |  | the CRJ-100/200/440 (in October 2005, Bombardier announced its plans to stop manufacturing the CRJ-100/200/440 aircraft);
| | - |  | -------------------------------------------------------------------------------------------------------------------------



| |  |  | the ATR-42, a 50-seat turboprop manufactured by ATR, a joint project of Italys Alenia Aeronautica and EADS; and
| | - |  | ----------------------------------------------------------------------------------------------------------------



| |  |  | the Q-300, a 50-seat turboprop manufactured by Bombardier, the production of which Bombardier discontinued in May 2009.
| | - |  | -----------------------------------------------------------------------------------------------------------------------

Given the success of our regional jet family, the maturity of this market segment and the significant entry barriers in this segment, due
mainly to the high development expenses of a new model and the extensive and time-consuming development cycle of a new jet, we believe that we are well-positioned to maintain our market share in the 30-60seat category with our ERJ 145 regional
jet family.

70-130seat categories

We currently face our strongest competition against the following aircraft in these categories:



| |  |  | ATR-72, a 64-seat turboprop produced by ATR;
| | - |  | --------------------------------------------



| |  |  | Q-400, a 72-seat turboprop produced by Bombardier;
| | - |  | --------------------------------------------------



| |  |  | CRJ-700, CRJ-900 and CRJ-1000, 70-seat, 85-seat and 98-seat regional jets, respectively, produced by Bombardier;
| | - |  | ----------------------------------------------------------------------------------------------------------------



| |  |  | A318, a 100-plus-seat jet produced by Airbus;
| | - |  | ---------------------------------------------



| |  |  | 737-600, a 100-plus-seat jet produced by Boeing; and
| | - |  | ----------------------------------------------------



| |  |  | SSJ100, a 95-seat regional jet produced by Sukhoi.
| | - |  | --------------------------------------------------



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We expect new developments in this market segment from current and new competitors, including:



| |  |  | Bombardiers CSeries jet launched in 2008, which seats 110 to 130 passengers, and is expected to enter into service by 2015;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------



| |  |  | COMACs ARJ21, with the 90-seat regional jet version officially scheduled to enter into service in 2014; and
| | - |  | ------------------------------------------------------------------------------------------------------------



| |  |  | Mitsubishi Heavy Industries MRJ, a 75- to 92-seat regional jet launched in March 2008, which is expected to enter into service by 2016.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------

The key competitive factors in the markets in which we participate include design and technological strength, aircraft operational costs,
price of aircraft, including financing costs, customer service and manufacturing efficiency. We believe that we will be able to compete favorably on the basis of our aircraft performance, efficiency, low operating costs, product development
experience, global customer base, market acceptance, cabin design and aircraft price.

Defense and Security Business

In 2011, Embraer added capabilities and broadened the scope of its corporate unit dedicated to the defense and security market. The creation of
the new Embraer Defense & Security unit is an important step towards consolidating Embraer as a key supplier of defense and security solutions for the Brazilian federal government, as well as other governments worldwide.

We conceive, design, develop, manufacture and support a wide range of integrated solutions for the defense and security market. Our products
include training/light attack aircraft, aerial surveillance platforms, military transport aircraft, government transport aircraft and Command, Control, Communications, Computer, Intelligence, Surveillance and Reconnaissance systems, or C4ISR
systems. We offer a complete portfolio of customer services, ranging from maintenance and material solutions to complete Contractor Logistic Support programs. We have positioned ourselves to play a major role in projects focused on border
surveillance and security for the upcoming major sporting events in Brazil.

As of December 31, 2013, we had sold more than 1,350
defense aircraft, including government transport aircraft, to more than 40 armed forces and operators worldwide. We are also the leading supplier of defense aircraft to the Brazilian Air Force based on the total number of aircraft in its fleet. Our
defense and security business accounted for 19.2% of our revenue for the year ended December 31, 2013.

Products

C4ISR Systems

Embraer has developed three
cost-effective, reliable and flexible special-mission aircraft based on the ERJ 145 regional aircraft platform: the EMB 145 Airborne Early Warning and Control, or AEW&C, the EMB 145 Multi Intel and the EMB 145 Maritime Patrol, or MP. Since its
first delivery, a total of 18 such aircraft have been manufactured for the Brazilian, Mexican, Greek and Indian Air Forces.

We believe
the EMB 145 AEW&C is the most advanced and affordable Airborne Early Warning and Control aircraft available in the market. It combines Embraers reliable and cost-effective ERJ 145 regional airplane platform with a unique, high-performance,
multi-mode active phased-array AEW radar, a powerful C4I system and a comprehensive set of support systems such as self-protection and communications, including data links. The EMB 145 AEW&C is operational in the Brazilian, Mexican, Greek and
Indian Air Forces. In 2008 we executed a contract with the Indian Air Force to sell them three units of our EMB 145 AEW&C aircraft. In 2012, we delivered two of the three EMB 145 AEW&C aircraft ordered by the Indian government. These
deliveries represent an important milestone in the program, which continues on track. The remaining aircraft is currently being assembled in accordance with the delivery schedule for this contract.



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The EMB 145 Multi Intel, also known as the EMB 145 Remote Sensing/Airborne Ground Surveillance,
or RS/AGS, aircraft is designed to accomplish electronic and reconnaissance missions. It features state-of-the-art sensors for Image Intelligence (IMINT), Signal Intelligence (SIGINT), and Measurement and Signature Intelligence (MASINT), and is
capable of providing real-time imagery and signals intelligence over ground objectives. It is equipped with extensive sensor suites ranging from high-performance synthetic aperture radar to electro-optical sensors, and includes communications and
electronic exploitation systems capable of gathering complete intelligence information. The EMB 145 Multi Intel is currently operational in the Brazilian Air Force.

The EMB 145 MP aircraft is designed to address coastal and blue-water threats. The EMB 145 MP is designed to carry out maritime patrol by
using maritime and ground surveillance radar and electro-optical sensors, as well as dedicated communications and surveillance equipment. In the ASW configuration, the EMB 145 MP is designed to carry out anti-submarine warfare missions. The EMB 145
MP is operational in the Mexican Air Force.

Embraer also develops and integrates state-of-the-art C4ISR systems for defense customers
that require accurate information on a real-time basis. Our C4ISR systems operate in all three of our EMB aircraft. The information provided by C4ISR systems seeks to give top defense organizations the capability to collect, process and disseminate
an uninterrupted flow of accurate and timely data that enables them to make better decisions and act faster and more effectively. We believe that the entry of Embraer in the C4ISR systems sector is made possible by Embraers technical
understanding of several key topics such as knowledge management, visualization technologies, decision-making tools and concept-development methodologies. One practical example of Embraers contributions to the C4ISR field is the definition and
development of a datalink protocol delivered to the Brazilian Air Force in 2009.

Training and Light Attack  Super Tucano

The Super Tucano, designated as A-29 by the Brazilian Air Force, is a single-engine, multipurpose, military turboprop that combines effective
training and operational capabilities with low acquisition and operating costs. It is an evolution of the EMB-312 Tucano, a prior trainer aircraft with a proven track record, of which 620 units were sold to 15 air forces around the world.

It offers solutions for basic to advanced weapons training, such as in-flight virtual training. It also offers operational capabilities
required for border surveillance, close air support operations and counterinsurgency (COIN), missions. It offers avionics comparable to those of fourth generation fighter jets, ejection seats, an onboard oxygen-generating system and outstanding
external load capability.

The Super Tucano is used for advanced pilot training and for surveillance operations in the Amazon
region of Brazil in connection with the Brazilian federal governments Sistema de Vigilância da Amazônia (System for the Surveillance of the Amazon), or SIVAM, program.

The Super Tucano is still one of the highlights of our Defense & Security business unit due to its versatility, its excellent
performance for training and operational missions and its competitive pricing, together with its low operating and maintenance costs. In 2012, we signed an agreement with Boeing that will add capabilities to the A-29 Super Tucano by the integration
of weapons that meet the future demand of our customers. The Super Tucano currently has 210 firm orders, out of which 178 aircraft have already been delivered.

During 2013, six Super Tucanos were delivered to the National Air Force of Angola.

In February 2013, the A-29 Super Tucano was selected by the United States Air Force, or USAF, for its Light Air Support, or LAS program, with
a firm order for 20 aircraft. The aircraft will be supplied in partnership with Sierra Nevada Corporation, the prime contractor, and will be used to conduct advanced flight training, aerial reconnaissance, and light air support operations.

Military Transport  KC-390

In
April 2009, Embraer signed the KC-390 development contract with the Brazilian Air Force. This new jet will meet the needs of the Brazilian Air Force, and will be in compliance with the new National Defense Strategy.



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The first flight of the KC-390 prototype is expected to occur in 2014 and initial deliveries are expected for 2016. Development expenditures associated with the KC-390 will be borne by the
Brazilian Air Force.

The KC-390 development program is ongoing and on schedule. In 2011, the selection of key suppliers and partners was
completed and the joint definition phase, during which the specific configuration of the KC-390 was more clearly defined, began. Main suppliers include:



| |  |  | International Aero Engines (IAE), for the propulsion system;
| | - |  | ------------------------------------------------------------



| |  |  | Rockwell Collins International, which will supply the basic avionics systems;
| | - |  | -----------------------------------------------------------------------------



| |  |  | DRS Defense Solutions, for the cargo handling and aerial delivery system (CHS/ADS);
| | - |  | -----------------------------------------------------------------------------------



| |  |  | ELEB, an Embraer industrial unit, which will develop and manufacture the landing gears and hydraulic reservoirs;
| | - |  | ----------------------------------------------------------------------------------------------------------------



| |  |  | Aeroletronica (AEL), for the mission computers, head-up displays, self protection systems, enhanced vision system and the directed infrared countermeasures system (DIRCM);
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Liebherr Aerospace, which will supply the environmental and cabin pressure control systems;
| | - |  | -------------------------------------------------------------------------------------------



| |  |  | BAE Systems, for the flight controls electronics and the pilots sidesticks;
| | - |  | ----------------------------------------------------------------------------



| |  |  | UTAS (formerly Goodrich Corp.), for the primary flight controls actuators, air data system and a number of other components; and
| | - |  | --------------------------------------------------------------------------------------------------------------------------------



| |  |  | Esterline Control Systems, for the autothrottle system and other cockpit inceptors, except for the sidesticks.
| | - |  | --------------------------------------------------------------------------------------------------------------

Industrial partnerships on the KC-390 airframe include Aero Vodochody, in the Czech Republic, FAdeA, in Argentina, and Embraers
subsidiary OGMA  Indústria Aeronáutica de Portugal and EEA  Empresa de Engenharia Aeronáutica, in Portugal.

In 2012, we signed a cooperation agreement with Boeing Defense, Space and Security for the KC-390 program. The agreement provides for the
sharing of expertise and joint evaluation of specific markets where sales strategies can be established for medium-sized military transport aircraft. This agreement allows the KC-390 to have penetration in markets not previously considered in the
original business plan of the aircraft.

In March 2013, Embraer successfully completed the Critical Design Review (CDR) phase of the
KC-390 with the Brazilian Air Force. One month later, the commercial campaign for the new aircraft was formally launched.

This marked an
important milestone in the cooperative program between Embraer and the Brazilian Air Force. The technical aspects and design solutions which have been adopted for the structure and the systems of the aircraft, along with its main components and
interfaces, demonstrate that the project has achieved its goal for this phase.

The KC-390 program already has letters of intent for 60
aircraft orders: 28 aircraft for the Brazilian Air Force, 6 for the Argentinean Air Force, 12 for the Colombian Air Force, 6 for the Chilean Air Force, 2 for the Czech Republic Air Force and 6 for the Portuguese Air Force.

This twin jet transport will be equipped with an aft ramp to allow loading and unloading of a wide range of cargo, including armored vehicles,
and it will be able to air launch paratroops and cargo.

The KC-390 can be refueled in flight and also be used for in-flight or on-ground
refueling of other aircraft. The cargo bay will allow configurations for medical evacuation (MEDEVAC) missions, search and rescue (SAR) and forest firefighting missions. The technical advances of the KC-390 include full closed loop fly-by-wire
technology, which lessens pilots work load, increases safety and helps to optimize mission performance.



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Government Transport Aircraft

We are marketing our wide line of commercial and executive jets, as well as derivatives of these airplanes, to Defense & Security
customers. For example, in 2008, we delivered one Legacy 600 to the Ecuadorian government, and in 2009 we delivered two modified versions of the EMBRAER 190 commercial aircraft to the Brazilian Air Force to serve as the presidential aircraft. These
aircraft have a spacious and comfortable cabin, including space for meetings and a private area for the Brazilian president. In 2009, Embraer also delivered two ERJ 135s to the Thai Armed Forces for VIP transport and four Phenom 100s to the
Pakistani Air Force. In 2010, two other aircraft for the transportation of authorities were delivered: an ERJ 135 to the Thai Navy and a Legacy 600 to the government of Panama.

In addition to these governments, our base of customers operating Embraer jets for the transportation of authorities includes Belgium, Greece,
Colombia, Angola, Nigeria and India.

Modernization Programs

We offer military aircraft modernization services and we currently have five ongoing programs under contract, four with the Brazilian Armed
Forces and one with the Colombian Air Force. The first program, known as F-5BR, which signed in 2000, is focused on performing structural and electronics upgrades for 46 F-5 fighter jets. As the prime contractor, we are responsible for integrating
the multi-mode radar, the advanced navigation and attack systems, and the enhanced self-protection systems into the existing aircraft platform. In 2012, we delivered the two remaining modernized F-5 fighter jets under this program. In continuation
of this contract, in the beginning of 2011 we signed a contract with the Brazilian Air Force to modernize 11 additional F-5 fighters jets and to supply 1 more flight simulator for these fighters. The first delivery of this second group of
upgraded jets is scheduled for 2014.

The second program with the Brazilian Air Force, known as the A-1M modernization program, focuses on
modernizing the AMX. The goal of this modernization project is to keep the fleet of 43 AMX jets on active duty for another 20 years. In June 2012, in a ceremony held in our Gavião Peixoto facility, the first A-1M made its first flight. In
September, 2013, Embraer Defense & Security delivered the first A-1M fighter jet to the Brazilian Air Force.

By the end of 2013,
25 aircraft were already in our facilities: 2 flight test prototypes and 23 serial production AMXs in different phases of the revitalization and modernization processes.

The third modernization program is to upgrade 12 A-4 Skyhawk (AF-1 Brazilian Navy Designation) aircraft of the Brazilian Navy with a view to
incorporating new technology for these aircraft, including new avionics, radars, power production and autonomous oxygen generating systems. We reached an important milestone at the end of 2011 with the completion of the project configuration phase.
This modernization program is on track, and in 2012 we tested the embedded software of the avionics RIG and material was made available for initiating the modernization of the first test prototype. The first flight was performed in August, 2013.
First deliveries will begin in 2014.

In January, 2013, Embraer Defense & Security and the Brazilian Air Force signed a contract
to modernize five EMB 145 AEW&C (Airborne Early Warning and Control). The contract provides for the updating of electronic warfare systems, command and control systems, electronic countermeasures and air surveillance radar. The contract also
provides for six mission planning and analysis stations that will be employed in the training and improvement of crews.

In January, 2011,
Embraer Defense & Security signed a contract for modernizing 14 EMB 312 Tucano training aircraft of the Colombian Air Force (FAC). This program includes the installation of state-of-the-art digital avionics and the substitution of their
wings and landing gear.

Services and Support  Defense & Security

Our Defense & Security customer service portfolio involves Material Support, Training, Field Support, Technical Support and
MROMaintenance, Repair and Overhaul.



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Our Customer Support and Services department provides the support and services required by our
customers for aircraft operational success, ensuring readiness and sustained mission capability. The provision of world-class support and services to our customers is essential to our business strategy and the maintenance of enduring relationships
with customers.

In 2013, our sales efforts resulted in a contract for logistics support for the fleet of 92 A29 Super Tucano family
aircraft operated by the Brazilian Air Force. The contract, for up to R$252 million, including R$29 million of additional services, covers a wide range of services, aimed at increasing the availability of aircraft for required missions.

Competition

Our military aircraft
face rigorous competition from various manufacturers from different countries in each market segment.

The Super Tucano competes in the
basic/advanced training market with the Pilatus PC-9M (basic) and the PC-21 (advanced) aircraft from Switzerland, the Beechcraft T-6A/B (basic/advanced) from the U.S., and the Korea Aerospace Industries KT-1 (basic). In the Light Attack
market, the Super Tucano competes with the Beechcraft AT-6 and Korea Aerospace Industries KO-1.

In the special mission aircraft
market, which includes Airborne Early Warning & Control, Remote Sensing, Airborne Ground Surveillance, Maritime Patrol, Anti-Surface Warfare and Multi-mission Aircraft, there are several platforms with a wide range of sensor combinations
that compete with our products: the Bombardier Global Express, Boeing 737, Northrop Grumman E-2C/D Hawkeye, Gulfstream G550, SAAB 2000, Alenia ATR 42 and 72, EADS CASA CN-235 and C-295, and the Bombardier Dash 8, among others.

In the military transport segment, our competitors include the Lockheed Martin C-130, the Airbus A400M, the Alenia C-27J and the CASA C-295.

Executive Aviation Business

We
refer to our executive aviation business segment as Executive Jets. We developed a line of executive jets: the Legacy 600, a super mid-size jet, followed by the Phenom 100, an entry-level jet, and the Phenom 300, a light jet. The Lineage
1000, an ultra-large jet, was added as the largest executive jet in our executive jet portfolio and, during 2008, we launched the Legacy 450 and Legacy 500, a mid-light and a mid-size jet, respectively, that we believe will establish our executive
jet portfolio as one of the most comprehensive of the executive aviation industry. The Legacy 500 and 450 development program continues on track, with more than 650 employees fully engaged in these projects, and the first delivery of the Legacy 500
is planned for the first half of 2014, while the first delivery of the Legacy 450 is planned for one year later. In 2009, we presented the new Legacy 650, a large executive jet that is positioned in our executive jet portfolio between the Legacy 600
and the Lineage 1000.

We market our executive jets to companies, including fractional ownership companies, charter and air-taxi
companies, and high-net-worth individuals. Our Executive Jets segment accounted for 26.4% of our revenue for the year ended December 31, 2013, resulting from the delivery of 30 Phenom 100 jets, 60 Phenom 300 jets, 25 Legacy 600/650 jets and 4
Lineage 1000 jets. On December 31, 2013, our firm orders in backlog for our executive jets totaled US$2.4 billion.

The Legacy 600
shares important qualities with our regional jet platform. However, although the Legacy 600 has some of the same components of our airliners, such as the ERJ 135, the Legacy 600s interior, fuel tank, controller and indication systems and its
winglets differ from those of our airliners. The executive version of the Legacy 600 was certified by the Brazilian aviation authority in December 2001, by the JAA in July 2002 and by the FAA in August 2002.

In May 2005, we launched the Phenom 100 and Phenom 300, which are executive jets in the entry-level and light jet categories, respectively.
The Phenom 300 carries up to nine people and has a larger fuselage and wingspan and longer range than the Phenom 100. It is powered by Pratt & Whitney Canadas PW535E engine and has entered into service in the second half of 2009. The
Phenom 100 jet carries from six to eight people and is powered by Pratt & Whitney Canadas PW617F engine. In the second half of 2008, the Phenom 100 entered into service.



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In May 2006, we launched the Lineage 1000, an ultra-large executive jet based on the EMBRAER 190
commercial jet platform. The Lineage 1000 is configured to accommodate up to 19 people in a total cabin volume of 4,085 cubic feet (115.7 cubic meters), and is powered by GE CF34-10E7 engines. The Lineage 1000 entered into service in the first half
of 2009.

In April 2008, we formally launched two new programs in the medium jet categories, namely the mid-light Legacy 450 jet, with a
2,300 nautical mile range, and the mid-size Legacy 500 jet, with a 3,000 nautical mile range. Both programs were approved by our Board of Directors in March 2008. The Legacy 450/500 jets are positioned in our executive jets portfolio between the
Phenom 300 and the Legacy 600.

In October 2009, we presented the Legacy 650 jet during a press conference at the 62nd Annual Meeting and
Convention of the National Business Aviation Association in Orlando, Florida. The Legacy 650 is a large category jet based on the successful platform of the super mid-size Legacy 600, having a longer range for up to 14 passengers. The Legacy 650 may
fly up to 3,900 nautical miles nonstop with four passengers or 3,800 nautical miles with eight passengers, which is approximately 500 nautical miles more than the Legacy 600s range.

The Legacy 600 and the Legacy 650 compete with aircraft produced by Dassault Aviation, Bombardier, Gulfstream and Hawker Beechcraft. Phenom
100 and Phenom 300 competitors in the entry-level and light jet categories include Cessna and Bombardier. Boeing and Airbus are the main competitors for the Lineage 1000 ultra-large jet.

We include an executive jet order in backlog once we have received a firm commitment, represented by a signed contract. We customarily receive
a deposit at the time of order, progress payments totaling 15% to 30% of the aircraft price, and the full payment of the balance is due upon delivery. We generally receive between US$10,000 and US$200,000 for each option to purchase an executive
jet.

Services and Support  Executive Jets

We expect to enhance customer support and services offered to the Executive Jets segment. In this respect, we have added four wholly-owned
service centers since 2007, in Fort Lauderdale, Florida; Mesa, Arizona; Le Bourget, France; and Bradley, Connecticut, and we are revamping the authorized service center network for executive jets. At the end of 2013, we had 66 service centers to
support our executive jet fleet. In 2006, we entered into an agreement with CAE to form a global training joint venture, to provide comprehensive pilot and ground crew training to customers of the Phenom 100 entry-level jet and Phenom 300 light jet
aircraft. The initial training program has started to be offered at CAE SimuFlite in Dallas, Texas, as the Phenom 100 started to operate in 2008, and expanded to Burgess Hill in the U.K. in 2009. In 2012, a new training center was opened in
Guarulhos, Brazil, in order to support the growing fleet of Phenom jets in the region. This joint venture provides entitlement training and post-entitlement training for pilots, maintenance technicians and dispatch personnel. We also plan to
continue to invest in parts inventory and logistics worldwide as our executive aircraft fleet continues to grow. In 2012, we implemented a mobile rescue support service in the United States and in Brazil, with fully equipped trucks and vans. We also
implemented a spare parts distribution center in Las Vegas in order to better support the executive jet customers on the west coast of the United States.

We have further developed our customer support and services structure to enhance our customers satisfaction in operating our executive
jets, and to measure this satisfaction, we take a yearly customer experience survey of the Executive Jet customers, aimed at the development of action plans that will allow us to provide effective responses to our clients.

In August 2013, our Executive Jets product support was once more ranked in second place in the business aviation industry, according to a
survey by Aviation International News magazine. The magazine noted the consistent results from its 2012 survey, gauged from positive responses of customers who recognize our work in providing excellent customer support and services.



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Once more, our three service centers in the United States have received the FAA Diamond award, a
certificate of excellence related to maintenance technician training, for the third time.

In 2013, we completed the certification of
approximately four new authorized service centers worldwide.

We have signed memoranda of understanding with 17 service centers around the
world for the Legacy 450/500 entry to service, and the agreements will be finalized before the aircraft enters service in 2014.

During
2013, FlightSafety International was selected as the training provider for the Legacy 450/500 and by year end the first Full Flight Simulator was already built and is scheduled to be certified before the aircraft entry to service in 2014.

In the area of technological innovation, we launched the eTechPubs app for iPad, which offers all technical manual information for the Phenom
100/300 and Legacy 600/650 jets operators.

In the last quarter of 2013, we celebrated the opening of our Executive Jets Service Center in
Sorocaba, complementing our São José dos Campos facility, Brazil, with expanded operations and capacity for a larger hangar.

In 2009, we announced our new Customer Support Contact Center dedicated to our executive jets and offering complete and timely assistance for
their operational, technical and maintenance needs. This Customer Support Contact Center is based at Embraers headquarters, in São José dos Campos. Its priority is to minimize downtime, from the customers first contact to
the final solution, by quickly and efficiently applying appropriate resources to critical needs, thus assuring that customers have expert assistance anywhere in the world.

We held 14 face-to-face meetings with customer groups during 2013, including the Embraer Executive Operators Conferences, or EEOCs, and
dedicated mini-conferences with our fleet operators.

Other Related Businesses

We provide structural parts and mechanical and hydraulic systems to Sikorsky Corporation for its production of helicopters. We also manufacture
general aviation propeller aircraft, such as crop dusters, also known as light aircraft. Our Other Related Businesses accounted for 1.4% of our revenue for the year ended December 31, 2013.

Subcontracting

We provide
subcontracting services to Sikorsky Corporation in connection with the development and manufacture of the landing gear, fuel system and fuel tanks for the S-92 Helibus helicopter. We also act as a risk-sharing partner to Sikorsky. These contracts
expire in 2015.

General Aviation Aircraft

We build general aviation propeller aircraft. These aircraft include a six-passenger aircraft that is produced only on demand for use by
corporations and by air-taxi companies. We have delivered a total of 2,326 of these aircraft, and the last delivery of this type of aircraft was in 2000. We also developed a crop duster aircraft pursuant to specifications of the Brazilian Ministry
of Agriculture. These aircraft are produced only on demand. Through December 31, 2013, we had delivered a total of 1,315 of these aircraft, including 60 in 2013.

Aircraft Operating Lease Activities

In order to provide better financial support to our commercial activities, as well as to manage and reduce financial risks related to the
marketing of aircraft, we created, in September 2002, ECC Leasing.

The mission of ECC Leasing is to manage and remarket Embraers
aircraft portfolio, which as a result of contractual obligations, may be acquired by us as trade-in transactions. We also provide re-marketing services to third parties looking to sell their Embraer manufactured aircraft.



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We have successfully completed sales campaigns for new aircraft, where the acceptance of trade-in
aircraft as part of payment was allowed. We have also generated additional revenues through the sale and lease of aircraft received as trade-ins. Furthermore, leasing operations involving EMBRAER 170, EMBRAER 175 and EMBRAER 190 pre-series aircraft
contributed to the current results. Since its establishment in 2002, ECC Leasing and one other Embraer wholly-owned subsidiary managed a portfolio composed of 168 aircraft, of which 26 are under operating leases, 54 are available or under lease/sale
negotiations, 4 are performing flight tests at Embraer, and 84 were sold to airlines, corporations and government entities in North America, South America, Asia and Europe.

All sale and leasing transactions were executed based on market rates, thereby helping to sustain the present and future values of our
products. In addition, we continue to actively work with third parties to facilitate the placement of their aircraft.

The continued
improvement in financial performance is directly related to ECC Leasings ability to re-market aircraft in its existing portfolio with similar conditions as those currently in place, as well as to sell aircraft to operators, leasing companies
and/or financial institutions, at values close to market rates and without any guarantee from Embraer.

Furthermore, we believe the
results of ECC Leasing will be largely dependent on market conditions, aircraft availability levels and the demand for regional jets in the 37 to 50 seat category. Although new markets such as Eastern Europe and Latin America are important, the
risks related to operators credit and asset repossession will continue to require an adequate financial evaluation by Embraer.

As
more pre-owned aircraft begin to trade in the market, Embraer and ECC Leasing are working together to create the Embraer Lifetime Programme to better support our customers. The program will allow customers of our pre-owned and new aircraft to select
from a wide array of services, including, among other things, training, spare parts, technical support, engine programs, technical representation, maintenance and overhaul coverage. Customers who enroll in this program will pay us periodic fees, so
that we can provide them with scheduled and unscheduled maintenance, support and repair services, among other things. We believe this program represents an innovative approach, which offers our customers an attractive combination of pre-owned
aircraft backed by Embraers comprehensive support package. The program will allow us to continuously improve the level of support we offer to our pre-owned aircraft customers.

Markets

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



|                              |  |                         |         |  |              |  |         |              |  |  |         |  |  |         |         |  |  |  |         | 
|----------------------------- |  | ----------------------- | ------- |  | ------------ |  | ------- | ------------ |  |  | ------- |  |  | ------- | ------- |  |  |  | ------- | 
|                              |  | Year ended December 31, |        
|                              |  | 2013                    |         |  | 2012Restated |  |         | 2011Restated |  |  | 2010(1) |  |  | 2009(1) |        
|                              |  | (in US$ millions)       |        
|Commercial Aviation           |  |                         |         | 
|North America                 |  |                         | 1,089.4 |  |              |  | 875.3   |              |  |  | 739.1   |  |  |         | 347.3   |  |  |  | 796.8   | 
|Latin America (except Brazil) |  |                         | 457.9   |  |              |  | 144.6   |              |  |  | 540.3   |  |  |         | 426.7   |  |  |  | 157.9   | 
|Asia Pacific                  |  |                         | 546.3   |  |              |  | 920.8   |              |  |  | 1,041.5 |  |  |         | 773.4   |  |  |  | 815.8   | 
|Brazil                        |  |                         | 103.5   |  |              |  | 46.0    |              |  |  | 294.9   |  |  |         | 230.0   |  |  |  | 282.8   | 
|Europe                        |  |                         | 916.4   |  |              |  | 1,510.8 |              |  |  | 1,013.8 |  |  |         | 1,374.1 |  |  |  | 1,463.8 | 
|Others                        |  |                         | 193.5   |  |              |  | 257.9   |              |  |  | 121.6   |  |  |         | 106.4   |  |  |  | 268.6   | 
|                              |  |                         |         |  |              |  |         |              |  |  |         |  |  |         |         |  |  |  |         | 
|Total                         |  |                         | 3,307.0 |  |              |  | 3,755.4 |              |  |  | 3,751.2 |  |  |         | 3,257.9 |  |  |  | 3,785.7 | 
|                              |  |                         |         |  |              |  |         |              |  |  |         |  |  |         |         |  |  |  |         | 



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|                              |  |                         |         |  |              |  |         |              |  |  |         |  |  |         |         |  |  |  |       | 
|----------------------------- |  | ----------------------- | ------- |  | ------------ |  | ------- | ------------ |  |  | ------- |  |  | ------- | ------- |  |  |  | ----- | 
|                              |  | Year ended December 31, |        
|                              |  | 2013                    |         |  | 2012Restated |  |         | 2011Restated |  |  | 2010(1) |  |  | 2009(1) |        
|                              |  | (in US$ millions)       |        
|Executive Jets                |  |                         |         |  |              |  |         |              |  |  |         |  |  |         |         |  |  |  |       | 
|North America                 |  |                         | 632.2   |  |              |  | 505.9   |              |  |  | 360.8   |  |  |         | 293.6   |  |  |  | 326.0 | 
|Latin America (except Brazil) |  |                         | 6.3     |  |              |  | 43.3    |              |  |  | 83.9    |  |  |         | 123.5   |  |  |  | 47.7  | 
|Asia Pacific                  |  |                         | 336.6   |  |              |  | 327.4   |              |  |  | 155.0   |  |  |         | 294.7   |  |  |  | 240.7 | 
|Brazil                        |  |                         | 357.7   |  |              |  | 136.8   |              |  |  | 210.5   |  |  |         | 211.5   |  |  |  | 80.8  | 
|Europe                        |  |                         | 290.6   |  |              |  | 254.6   |              |  |  | 281.1   |  |  |         | 241.2   |  |  |  | 186.9 | 
|Others                        |  |                         | 21.1    |  |              |  | 24.0    |              |  |  | 27.5    |  |  |         | 45.0    |  |  |  | 54.8  | 
|                              |  |                         |         |  |              |  |         |              |  |  |         |  |  |         |         |  |  |  |       | 
|Total                         |  |                         | 1,644.5 |  |              |  | 1,292.0 |              |  |  | 1,118.8 |  |  |         | 1,209.5 |  |  |  | 936.9 | 
|                              |  |                         |         |  |              |  |         |              |  |  |         |  |  |         |         |  |  |  |       | 
|Defense & Security            |  |                         |         |  |              |  |         |              |  |  |         |  |  |         |         |  |  |  |       | 
|North America                 |  |                         | 26.4    |  |              |  | 20.0    |              |  |  | 27.6    |  |  |         | 24.1    |  |  |  | 14.3  | 
|Latin America (except Brazil) |  |                         | 16.3    |  |              |  | 21.7    |              |  |  | 15.6    |  |  |         | 276.9   |  |  |  | 185.3 | 
|Asia Pacific                  |  |                         | 71.0    |  |              |  | 79.5    |              |  |  | 145.2   |  |  |         | 123.0   |  |  |  | 78.6  | 
|Brazil                        |  |                         | 848.5   |  |              |  | 648.5   |              |  |  | 446.2   |  |  |         | 221.9   |  |  |  | 216.2 | 
|Europe                        |  |                         | 166.9   |  |              |  | 178.4   |              |  |  | 175.9   |  |  |         | 129.7   |  |  |  | 158.2 | 
|Others                        |  |                         | 67.8    |  |              |  | 97.1    |              |  |  | 29.4    |  |  |         | 46.2    |  |  |  | 25.2  | 
|                              |  |                         |         |  |              |  |         |              |  |  |         |  |  |         |         |  |  |  |       | 
|Total                         |  |                         | 1,196.9 |  |              |  | 1,045.2 |              |  |  | 839.9   |  |  |         | 821.8   |  |  |  | 677.8 | 
|                              |  |                         |         |  |              |  |         |              |  |  |         |  |  |         |         |  |  |  |       | 
|Other Related Businesses      |  |                         |         |  |              |  |         |              |  |  |         |  |  |         |         |  |  |  |       | 
|North America                 |  |                         | 59.7    |  |              |  | 47.4    |              |  |  | 55.5    |  |  |         | 52.9    |  |  |  | 43.9  | 
|Latin America (except Brazil) |  |                         |        |  |              |  | 0.4     |              |  |  |        |  |  |         | 0.3     |  |  |  | 0.6   | 
|Asia Pacific                  |  |                         |        |  |              |  |        |              |  |  |        |  |  |         | 2.5     |  |  |  | 17.2  | 
|Brazil                        |  |                         | 26.9    |  |              |  | 26.6    |              |  |  | 25.5    |  |  |         | 17.1    |  |  |  | 10.2  | 
|Europe                        |  |                         |        |  |              |  |        |              |  |  |        |  |  |         | 1.6     |  |  |  | 21.7  | 
|Others                        |  |                         |        |  |              |  |        |              |  |  |        |  |  |         | 0.5     |  |  |  | 3.8   | 
|                              |  |                         |         |  |              |  |         |              |  |  |         |  |  |         |         |  |  |  |       | 
|Total                         |  |                         | 86.6    |  |              |  | 74.4    |              |  |  | 81.0    |  |  |         | 74.9    |  |  |  | 97.4  | 
|                              |  |                         |         |  |              |  |         |              |  |  |         |  |  |         |         |  |  |  |       | 



|(1) | No restatement of financial information was made because there were no changes generated in the period by the retrospective application of new accounting rules which came into effect as of 2013.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Suppliers and Components; Risk-Sharing Arrangements

We do not manufacture all of the parts and components used in the production of our aircraft. More than 80% of the production costs of our
aircraft consist of materials and equipment purchased from our risk-sharing partners and other major suppliers. Risk-sharing arrangements with suppliers of key components enable us to focus on our core business: design, development, manufacture and
sale of aircraft and systems for the Commercial Aviation, Executive Jets, and Defense & Security segments. Risk-sharing arrangements are those in which suppliers are responsible for the design, development and manufacture of major
components or systems of our aircraft, such as wings, tail or fuselage. Our risk-sharing partners, therefore, must invest their own money in development and share the risk and success of our products with us.

In our Commercial Aviation and Executive Jets businesses, we rely on risk-sharing partners to supply vital components of our aircraft, such as
the engines, hydraulic components, avionics, interior and parts of the fuselage and portions of the tail. We select suppliers on the basis of, among other factors, technical performance and quality of their products, production capacity, prior
relationship and financial condition. We have had continuing relationships with most of our major suppliers since production of the Bandeirante aircraft began in 1975.

In addition, we have entered into purchase agreements with our major suppliers, which cover our requirements for five to ten years of
production. These contracts contain pricing formulas that take into consideration the various factors that affect the business of our suppliers, and help us mitigate the effects of price volatility (which in some cases can be significant) of the
materials, parts and components that are required for our



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operating activities. We are not obligated to purchase a minimum amount of materials annually under any of these supply contracts. Our ongoing supplier relationships depend on cooperation,
performance and the maintenance of competitive pricing. Once we select our risk-sharing partners, and program development and aircraft production begins, it is difficult to substitute these partners. In some cases, our aircraft are designed
specifically to accommodate a particular component, such as the engines, which cannot be substituted by another manufacturer without significant delay and expense. This dependence makes us susceptible to the performance, quality and financial
condition of these risk-sharing partners. See Item 3D. Key InformationRisk FactorsRisks Relating to EmbraerWe depend on key customers and key suppliers, the loss of any of which could harm our business.

ERJ 145 Regional Jet Family

Risk-sharing partners. We entered into risk-sharing arrangements with the following four suppliers in connection with the development
and production of the ERJ 145 regional jet family:



| |  |  | Aernnova Aerospace S.A., or Aernnova, a Spanish company owned by Iberdrola S.A., a European power utility, and Banco Bilbao Vizcaya, a large Spanish financial institution, supplies the wings, engine nacelles and main
landing-gear doors;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Sonaca S.A.Société Nationale de Constructions Aerospatiales, a Belgian company, supplies portions of the central and rear fuselages, the service, main and baggage doors and engine pylons;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | ENAEREmpresa Nacional de Aeronáutica, a Chilean company, supplies the vertical fin, horizontal stabilizers and elevators; and
| | - |  | ------------------------------------------------------------------------------------------------------------------------------



| |  |  | C&D Aerospace, Inc., a U.S. company, supplies the cabin and cargo compartment interiors.
| | - |  | ----------------------------------------------------------------------------------------

Our risk-sharing partners generally receive payment for supplied components within three to five months after delivery of the components to
us. The partnering relationship with these suppliers results in lower production costs and higher product quality for the ERJ 145 regional jet family. In addition, our line of executive jets benefits from the risk-sharing arrangements with Aernnova,
Sonaca and ENAER. The interior of the Legacy 600 executive jet is provided by The Nordam Group, Inc., Duncan Aviation Inc. and us.

Other major suppliers. We have also entered into other agreements with numerous European, American, Canadian and Brazilian suppliers to
provide key components for a number of our products, including the ERJ 145 regional jet family. These supply arrangements cover systems and components such as engines, avionics, landing gear and flight control systems. Our major suppliers include,
among other companies, Rolls-Royce Allison, Parker Hannifin Corp., or Parker, BF Goodrich Co., United Technologies Corp.  Hamilton Sundstrand Division, Honeywell, Rosemount Aerospace and Alcoa Inc.

EMBRAER 170/190 Jet Family

We are
continuing to improve the EMBRAER 170/190 jet family, together with risk-sharing partners that supply key systems for the aircraft. Our supplier arrangements for the EMBRAER 170/190 jet family differ from the ERJ 145 regional jet family in that we
use fewer suppliers. In the EMBRAER 170/190 jet family, each risk-sharing partner is responsible for the development and production of aircraft systems, such as the landing gear, the hydraulic system and the flight control system, rather than
individual components, and fewer components are supplied by companies that are not risk-sharing partners. The assumption of responsibility for systems by our risk-sharing partners lowers our capital expenditures, which thereby decreases our
development risks and increases our operating efficiency by reducing the number of suppliers per product and cutting production costs. It also shortens development and production time. The primary risk-sharing partners for the EMBRAER 170/190 jet
family are General Electric (CF34-8E/l0E turbofan engines and nacelles), Honeywell (avionics), Liebherr (landing gear), Hamilton Sundstrand (auxiliary power unit, electrical systems and air management system), Sonaca (wing slats), Aernnova (rear
fuselage, vertical and horizontal tail surfaces), Latecoere (fuselage sections), C&D Aerospace (aircraft interior) and Grimes Aerospace Company (exterior and cockpit lighting).



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

To prepare for the expected production increase for the EMBRAER 190 and EMBRAER 195 aircraft, on June 1, 2006, we entered into an
agreement with KHI and KAB, under which they transferred to us assets required for the final assembly of the wings of the EMBRAER 190 and EMBRAER 195 aircraft and paid us compensation of US$57 million. As a result, we began assembling the wings of
the EMBRAER 190 and EMBRAER 195 aircraft. KHI will continue producing the wing control surfaces and the main landing gear doors for these aircraft. However, our agreement with KHI and KAB does not cover the production of parts for the EMBRAER 170
and EMBRAER 175 aircraft.

The application of advanced technologies for engines, wings, and avionics distinguishes the E-Jets E2 by
providing airlines with maximum efficiency gains, while maintaining commonality with current E-Jets. New aerodynamic advancements, high-aspect ratios, distinctively shaped wings, improved systems and avionics, including fourth generation full
fly-by-wire flight controls, and Pratt & Whitneys PurePowerTM Geared Turbofan high by-pass ratio engines (PW1700G on the E175-E2, PW1900G on the E190-E2 and E195-E2) are expected to result in double-digit reductions in fuel
consumption, emissions, noise and maintenance costs, and increased aircraft availability. Cockpit commonality with current generation E-Jets was a key driver in the design of the E-Jets E2, in order to promote
a smooth transition for pilots who will fly the E2. Honeywells Primus Epic 2 advanced integrated avionics system with large landscape displays and advanced graphics capabilities, and Honeywells Next Generation Flight Management
System (NGFMS), already in development with current-generation E-Jets, will provide exceptional pilot situational awareness and flexibility for continuous innovation on the flight deck.

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

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

Executive
Jets

The risk-sharing partners for the Legacy 600 and the Lineage 1000 are the same as those for our ERJ 145 jet family and
EMBRAER 170/190 jet family, respectively. The main risk-sharing partners for the Legacy 450/500 jet family are Honeywell and Rockwell Collins, and the main risk-sharing partners for the Legacy 650 include Rolls-Royce and Honeywell. The risk-sharing
partners for the Phenom 100 and Phenom 300 jets are Pratt & Whitney Canada, the supplier of the engines, Garmin, the supplier of the avionic systems, and Eaton Corporation, the supplier of hydraulic systems.

Cash contributions for the production of the EMBRAER 170/190 and Phenom 100/300 jet families and the development of the Legacy 450/500 jet families and the
development of the E2 jet family

We have arrangements with our risk-sharing partners pursuant to which they have contributed to us, in
cash, a total of US$737.0 million through December 31, 2013, for the production of the EMBRAER 170/190 and Phenom 100/300 jet families, the development of the Legacy 450/500 jet families and the development of E2 jet family. Such contributions
are recorded as a reduction of intangible assets. We believe that these financial commitments are a strong endorsement of our aircraft design and our ability to execute our business plan. A portion of these cash contributions would have to be
refunded by us to the risk-sharing partners if we had failed to fulfill certain agreed-upon milestones. We generally do not need to refund these contributions as a result of insufficient market demand. The amount of US$737.0 million of these cash
contributions had become nonrefundable through December 31, 2013,



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as we had fulfilled all developmental milestones. The Phenom 100 and the Phenom 300 were certified in 2008 and 2009, respectively. The Legacy 500 executive jet is expected to enter into service
in early 2014, and the Legacy 450 is expected to enter service one year after the Legacy 500.

Services and Support

In 2011, we decided to allocate the revenues and profits of the Aviation Services Business to the principal business segments: Commercial
Aviation, Executive Jets and Defense & Security. The operating leases previously allocated to other business were also aggregated to the business units. This change was made to report the results of operations of the business segments in
accordance with the manner in which we have managed them as of 2011. Amounts related to the Aviation Services Business from previous periods were reclassified for comparison purposes. The amounts that are not directly recorded to the principal
business segments are allocated based on the criteria deemed appropriate by our management.

We provide after-sales customer support and
services for the fleet of our commercial, executive and defense customers. Activities in this segment include sales, inventory pooling programs, MRO services, customer training and other product support services.

Aviation services revenue is expected to continue to grow as the number of our aircraft in service increases. Our customers require aircraft
manufacturers and their suppliers to maintain adequate spare parts and ground support equipment inventories for a period of ten years after the production of the last aircraft of the same type, or until fewer than five aircraft are operated in
scheduled commercial air transport service. We also established pooling programs that allow customers to exchange used parts for new or refurbished parts, such as our POOL  Flight Hour Program (for Commercial Aviation and Defense &
Security customers), and total support programs like our EEC  Embraer Executive Care, a total care program that includes parts exchange and complete service and maintenance packages.

Customer satisfaction is critical to our success. Our goal is to best serve our customers and, with this goal in mind, we are constantly
seeking to support our customers and develop services for the enhancement of airline operations, the optimization of operating costs and the maximization of aircraft availability.

Aircraft Financing Arrangements

We
generally do not provide long-term financing directly to our customers. Instead, we assist our customers in obtaining financing arrangements from different sources, including ECAs, capital providers such as leasing companies, commercial banks and
capital markets. In addition, we have been working together with customers and banks to develop new sources of funds, especially from nontraditional financing sources. We are also looking for long-term relationships and expect to broaden the
alternatives available to support our clients financing needs.

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

We expect that ECAs will continue to play an important role in aircraft financing in 2014, helping fulfill the financing needs of the
commercial aviation industry as a whole. The Brazilian ECA Program provides Embraers customers with direct financing and export credit insurance (or a combination of both) on financial terms and conditions which comply with the Aircraft Sector
Understanding of the OECD. In 2013, approximately 43% of our Commercial Aviation deliveries were supported by the BNDES-exim Program. Brazilian official support only accounted for 20% of the total deliveries for the EJets program since its launch in
2004.

See Item 3D. Key InformationRisk FactorsRisks Relating to EmbraerA downturn in commercial aviation may
reduce our sales and revenue, and, consequently, our profitability, in any given year and Item 3D. Key InformationRisk FactorsRisks Relating to EmbraerThe Brazilian federal government may reduce funds available to our
customers under government-sponsored financing programs.



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Government Regulation and Aircraft Certification

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

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

The certification history of our aircraft is as follows:



| |  |  | The ERJ 145 was certified by the Brazilian Aviation Authority in November 1996, the FAA in December 1996 and the European Aviation Authority in May 1997.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The ERJ 145 XR version was certified by the Brazilian Aviation Authority in August 2002 and the FAA in October 2002.
| | - |  | --------------------------------------------------------------------------------------------------------------------



| |  |  | The ERJ 135 was certified by the Brazilian Aviation Authority in June 1999, the FAA in July 1999 and the European aviation authority in November 1999.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The ERJ 140 was certified by the Brazilian Aviation Authority in June 2001 and the FAA in July 2001.
| | - |  | ----------------------------------------------------------------------------------------------------



| |  |  | The Legacy 600 executive jet was certified by the Brazilian Aviation Authority in December 2001, the JAA in August 2002 and the FAA in August 2002.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The Legacy 650 executive jet was certified by the Brazilian Aviation Authority in August 2010, by the EASA in September 2010, by the FAA in February 2011.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The EMBRAER 170 was certified by the Brazilian Aviation Authority, the FAA, the EASA in February 2004.
| | - |  | ------------------------------------------------------------------------------------------------------



| |  |  | The EMBRAER 175 was certified by the Brazilian Aviation Authority in December 2004, the EASA in January 2005 and the FAA in August 2006.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The EMBRAER 190 was certified by the Brazilian Aviation Authority in August 2005, the FAA in September 2005 and the EASA in June 2006.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The EMBRAER 195 was certified by the Brazilian Aviation Authority in June 2006, the EASA in July 2006 and the FAA in June 2007.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------



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| |  |  | The Phenom 100 entry level executive jet was certified by the Brazilian Aviation Authority and the FAA in December 2008, the EASA in April 2009, the Civil Aviation Authority of the Philippines, or CAAP, in October 2009
and by the Ukraine in October 2011.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The Phenom 300 was certified by the Brazilian Aviation Authority and FAA in December 2009, and the EASA in April 2010
| | - |  | ---------------------------------------------------------------------------------------------------------------------



| |  |  | The Lineage 1000 executive jet was certified by the Brazilian Aviation Authority in October 2007, the FAA in November 2007, and the EASA in November 2007.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------

Seasonality

No material portion of our
business is considered to be seasonal in any material respect.



|4D. | Organizational Structure
|--- | ------------------------

Our operations are conducted by Embraer S.A. as the
controlling and principal operating company. We have a number of direct and indirect subsidiaries, none of which is considered significant. A complete list of our subsidiaries is filed as Exhibit 8.1 to this annual report.



|4E. | Property, Plant and Equipment
|--- | -----------------------------

We own our headquarters and plant, located in
São José dos Campos. Significant portions of our facilities in São José dos Campos are subject to mortgages held by the BNDES  Banco Nacional de Desenvolvimento Econômico e Social. We lease, own or have
the right to use the following properties:



|                                                   |  |                                                              |  |                           |  |              |  |                            
|-------------------------------------------------- |  | ------------------------------------------------------------ |  | ------------------------- |  | ------------ |  | ---------------------------
|Location                                           |  | Purpose                                                      |  | ApproximateSquare Footage |  | Owned/Leased |  | Lease Expiration           
|São José dos Campos, SP, Brazil                    |  | Headquarters, principal assembly facility and support center |  | 5,902,102                 |  | Owned        |  |                           
|São José dos Campos, SP, Brazil (Eugênio de Mello) |  | Assembly facility                                            |  | 3,658,884                 |  | Owned        |  |                           
|Botucatu, SP, Brazil                               |  | Assembly facility                                            |  | 222,000                   |  | Owned        |  |                           
|Harbin, China                                      |  | Assembly facility                                            |  | 258,067                   |  | Owned(1)     |  |                           
|Gavião Peixoto, SP, Brazil                         |  | Testing and assembly facilities                              |  | 191,648,512               |  | N/A(2)       |  |                           
|Alverca, Portugal                                  |  | Aircraft maintenance and support center                      |  | 417,000                   |  | Leased       |  | 2035                       
|São Paulo, SP, Brazil                              |  | Administrative offices                                       |  | 12,056                    |  | Leased       |  | 2018                       
|São Paulo, SP, Brazil                              |  | Administrative offices                                       |  | 5,705                     |  | Leased       |  | 2014                       
|Fort Lauderdale, Florida                           |  | Support center                                               |  | 91,500                    |  | Leased       |  | 2030                       
|Nashville, Tennessee                               |  | Aircraft maintenance and support center                      |  | 316,128                   |  | Leased       |  | 2018(renewable
through2028)
|Le Bourget, France                                 |  | Aircraft maintenance and support center                      |  | 33,500                    |  | Leased       |  | 2016                       
|Farnborough, UK                                    |  | Representative office for EMEA executive aviation            |  | 2,225                     |  | Leased(3)    |  | 2013                       
|Villepinte, France                                 |  | Representative offices and support center                    |  | 70,202                    |  | Leased       |  | 2014                       



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|                                |  |                                                                                          |  |                           |  |                                                                 |  |                            
|------------------------------- |  | ---------------------------------------------------------------------------------------- |  | ------------------------- |  | --------------------------------------------------------------- |  | ---------------------------
|Location                        |  | Purpose                                                                                  |  | ApproximateSquare Footage |  | Owned/Leased                                                    |  | Lease Expiration           
|Dubai                           |  | Bureau for Executive Aviation                                                            |  | 100                       |  | Leased                                                          |  | 2014                       
|Beijing, China                  |  | Representative offices                                                                   |  | 3,444                     |  | Leased                                                          |  | 2017                       
|Singapore                       |  | Representative offices and support center                                                |  | 5,910                     |  | Leased                                                          |  | 2016                       
|Mesa, Arizona                   |  | Aircraft maintenance and support center                                                  |  | 46,500                    |  | Land isleased.Buildings areleaseholdimprovementsowned byEmbraer |  | 2026(renewable
through2036)
|Windsor-Locks, Connecticut      |  | Aircraft maintenance and support center                                                  |  | 46,500                    |  | Land isleased.Buildings areleaseholdimprovementsowned byEmbraer |  | 2026(renewable
through2038)
|Fort Lauderdale, Florida        |  | Aircraft maintenance and support center                                                  |  | 54,000                    |  | Land isleased.Buildings areleaseholdimprovementsowned byEmbraer |  | 2030(renewable
through2035)
|Melbourne, Florida              |  | Assembly facility                                                                        |  | 181,000                   |  | Land isleased.Buildings areleaseholdimprovementsowned byEmbraer |  | 2038(renewable
through2058)
|Dallas, Texas                   |  | Training center for pilots and aircraft maintenance personnel                            |  | 8,564                     |  | Leased                                                          |  | 2022                       
|Burgess Hill, UK                |  | Training center for pilots and aircraft maintenance personnel                            |  | 8,500                     |  | Leased                                                          |  | 2022                       
|Evora, Portugal                 |  | Manufacturing facility for metallic aeronautical structures                              |  | 964,511                   |  | Owned                                                           |  |                           
|Evora, Portugal                 |  | Manufacturing facility for aeronautical structures in composite                          |  | 1,519,832                 |  | Owned                                                           |  |                           
|Dublin, Ireland                 |  | Administrative offices                                                                   |  | 220                       |  | Leased                                                          |  | 2016                       
|Amsterdam, Holland              |  | Management of Embraers investment abroad                                                |  | 121                       |  | Leased                                                          |  | 2016                       
|São José dos Campos, SP, Brazil |  | Headquarters, principal assembly facility and support center  Affiliated Company Bradar |  | 11,535                    |  | Leased                                                          |  | 2014                       
|Campinas, SP, Brazil            |  | Development Center and Offices  Affiliated Company Bradar                               |  | 17,165                    |  | Leased                                                          |  | 2014                       
|São José dos Campos, SP, Brazil |  | Offices (engineering & systems development)  Affiliated Company Harpia                  |  | 3,875                     |  | Leased                                                          |  | 2015                       



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|                                |  |                                                                                     |  |                           |  |              |  |                 
|------------------------------- |  | ----------------------------------------------------------------------------------- |  | ------------------------- |  | ------------ |  | ----------------
|Location                        |  | Purpose                                                                             |  | ApproximateSquare Footage |  | Owned/Leased |  | Lease Expiration
|São Paulo, SP, Brazil           |  | Headquarters administrative, sales office and operations  Affiliated Company Atech |  | 24,466                    |  | Leased       |  | 2014&2015       
|São José dos Campos, SP, Brazil |  | Operational Office  Affiliated Company Atech                                       |  | 2,766                     |  | Leased       |  | 2014            
|Brasilia, Brazil                |  | Sales office  Affiliated Company Atech                                             |  | 678                       |  | Leased       |  | 2015            
|São José dos Campos, SP, Brazil |  | Administrative and Engineering Offices  Affiliated Visiona                         |  | 7,255                     |  | Leased       |  | 2016            
|Campinas, SP, Brazil            |  | Administrative and Engineering Office  Affiliated Company (SAVIS)                  |  | 6,164                     |  | Leased       |  | 2014and2016     
|Sorocaba, SP, Brazil            |  | Aircraft maintenance and support center                                             |  | 215,278                   |  | Leased       |  | 2039            
|Belo Horizonte, Brazil          |  | Engineering and Technology Center                                                   |  | 7,535                     |  | Leased       |  | 2020            
|Chihuahua, Mexico               |  | Manufacturing Facility  Affiliated Company EZ Air Interior Limited                 |  | 157,315                   |  | Leased       |  | 2016            
|Dublin, Ireland                 |  | Administrative Office  Affiliated Company EZ Air Interior Limited                  |  | 183                       |  | Leased       |  | 2014            
|Jacksonville, Florida           |  | Assembly facility                                                                   |  | 167,920                   |  | Leased       |  | 2023            
|Brasília, DF, Brazil            |  | Representative offices and support center                                           |  | 6,048                     |  | Leased       |  | 2015            



|(1) | The land is owned pursuant to a land use rights certificate.
|--- | ------------------------------------------------------------

|(2) | We currently have a temporary authorization from the State of São Paulo to use the land and expect to receive a concession for the land as soon as legal formalities are satisfied. The facilities are owned by
Embraer.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Lease renewal currently under negotiation.
|--- | ------------------------------------------

In 2008, we announced construction of a new
150,000 square foot state-of-the-art facility that will house a final assembly line  the first Embraer final assembly line in the U.S.  at the Melbourne International Airport in Melbourne, Florida. It will be capable of producing both
the Phenom 100 and the Phenom 300 executive jet models, and includes a paint shop and a delivery and customer design center. This production facility was inaugurated in 2011, and the delivery and customer design center commenced operations in 2011.

In 2008, we also announced plans for implementing two new industrial units dedicated to manufacturing complex airframe structures, one
focused on metallic assemblies and the other on composites, both of which are to be located in the city of Evora, Portugal. On September 21, 2012, we launched the operations of these industrial units, and the first deliveries occurred in
November of the same year.

For a discussion of our capital expenditures relating to property, plant and equipment, see Item
4B.History and Development of the CompanyCapital Expenditures (Property, Plant and Equipment and Development).

Production

The manufacture of an aircraft consists of three principal stages: production of primary parts, assembly of major components and final
assembly. Primary parts include metal sheets and plates (produced from die-cast molds, stretch forming or various chemical treatments), parts produced using computerized and non-computerized machines,



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and prefabricated parts. The primary parts are then assembled, or mated, with one another to produce the aircrafts major components, which are in turn joined to create the aircrafts
basic structure. In the final assembly stage, the aircrafts various operating systems (such as wiring and electronics) are installed into the structure and tested.

Production facilities for our commercial, executive and defense aircraft are located in São José dos Campos in the State of
São Paulo, Brazil. We reduced the production time of aircraft in the ERJ 145 family from eight months in 1996 to 3.1 months in 2004. From December 31, 1999 to December 31, 2000, we increased our production from 12 to 16 ERJ 145
family aircraft per month. At March 31, 2001, our production rate was 16 aircraft per month. In response to decreased market demand after the September 11, 2001 terrorist attacks and the related global economic slowdown, we decreased our
production to 11 aircraft per month and, in 2005, decreased it further to nine aircraft per month.

Production time for our EMBRAER 170
aircraft has been reduced from approximately seven months at the beginning of its production in March 2004 to approximately four months at the end of 2005. We have the flexibility to increase production in the future in response to increased demand.
We achieved the production rate of 14 aircraft per month at the end of 2008 for the EMBRAER 170/190 jet family, due to the reorganization of some industrial processes, and the implementation of a third shift in our workforce. In addition, in June
2006, we entered into an agreement with KHI and KAB, pursuant to which we began assembling the wings of the EMBRAER 190 and EMBRAER 195 aircraft in order to meet demand for these types of aircraft. See Item 4C.Business
OverviewCommercial Aviation BusinessProductsEMBRAER 170/190 Jet Family.

To accommodate our production of the ERJ
145 regional jet family and our EMBRAER 170/190 jet family, as well as any production of our executive jets, we have expanded our production facilities and acquired new facilities and will continue to coordinate with our risk-sharing partners to
accommodate any future production needs. We built a new facility in Gavião Peixoto, in the State of São Paulo, Brazil, to enhance our flight-testing capabilities and provide a final assembly line for our defense aircraft and of our
executive jets. This facility has been operational since November 2002 and consists of a test runway and other features to handle the assembly of our defense programs, an MRO facility, and the Phenoms production hangar in Gavião
Peixoto. We are also conducting our flight tests for the EMBRAER 170/190 jet family and have a fully operational executive jet interior factory at Gavião Peixoto. In September 2000, we purchased a new facility in São José dos
Campos in the State of São Paulo, Brazil, where we currently manufacture small parts and components for our aircraft. Our China joint venture has constructed a production facility for the ERJ 145 jet family in Harbin, China.

In July 2009, in line with the initiatives of the Business Efficiency Front (Frente Eficiência Empresarial) linked to P3E,
we inaugurated the final assembly line of EJets with an approximately 60% reduction in the final assembly cycle time. In addition to this initiative, we transferred the assembly line of Phenom 100 and Phenom 300 from the plant located in
Gavião Peixoto to the plant located in São José dos Campos, São Paulo. In 2012, the 100th Phenom 300 aircraft was manufactured in the plant located in Gavião Peixoto.

As part of the international expansion of our manufacturing activities, we have opened three new units abroad in recent years. In June 2011,
the newest assembly plant of the Phenom 100 and Phenom 300 executive aircraft was opened in Melbourne, Florida, being fully operational by the end of 2012. On September 21, 2012, we opened two plants in Évora, Portugal, one for the
manufacture and assembly of metal components and one for the manufacture and assembly of components in composite material. The start-up of these plants occurred as planned, and they made their first deliveries in November of the same year.

EZ Air Interior Limited, our joint venture with Zodiac Aerospace for the production in Mexican factories of interior parts for our Commercial
Aviation Segment, began production and shipping of parts to Brazil in 2013. EZ Air Interiors is organized in Ireland.

In April 2013, the
first building for the KC-390 program was completed in our Botucatu unit. The building will be used for structural assembly. The construction of an assembly hangar in our Gavião Peixoto unit is currently underway.



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Environmental Matters

Most environmental regulation in Brazil is established at the state rather than at the federal or municipal level, with environmental
authorities in most states granting operating permits to individual facilities rather than through general regulations. We have all material permits required to operate our business. The terms of these operating permits are reviewed every year and,
as of December 31, 2013, we were in compliance with our permits. In addition, we adhere internally to international ISO 14000 environmental standards. Our Integrated Development of Environmentally Sustainable Products (DIPAS) and Design for
Environment (DfE) programs aim to incorporate environmental requirements into product development throughout the various stages of production. In addition, Embraer continues to enhance its production processes through the efficient use of natural
resources and minimization of waste in its plants. With the goal of taking these activities to a more strategic level, Embraer also launched the Embraer Eco-Efficiency program in 2012, which is focused on seeking eco-efficiency in production. In
2013, 2012, 2011, 2010 and 2009 we invested US$3.3 million, US$4.0 million, US$5.0 million, US$4.1 million and US$2.5 million, respectively, in environmental projects, and we expect to spend approximately US$3.4 million on environmental projects in
2014 for the modification of existing facilities relating to environmental compliance and improvements.

We seek to anticipate and address
future environmental challenges as part of our commitment to reconciling environmental responsibility with economic success. For example, our Environmental and Occupational Health and Safety Management System  SIG-MASSQ was established in 2002
to organize our processes based on ISO 14001 and OHSAS 18001.

ISO 14001 is an internationally recognized standard of environmental
management system efficiency for businesses and organizations. We encourage not only the environmental certification of our operations but also the development of a full life cycle orientation for products and services, as this remains the most
cost-efficient and practical way to effectively reduce environmental impacts. Certified environmental management systems have been progressively implemented across our manufacturing sites, and over 91% of our employees operate under an ISO 14001.
The site and product life cycle orientation of the environmental management system attempts to create economic value by reducing environmental costs and exposure at each stage of the product life, from design to operations to end of life.

The implementation of further innovative and eco-efficient technologies and processes is a key factor in ensuring our sustainability,
increasing the attractiveness of our products and our overall competitiveness. We continuously pursue eco-efficiency by seeking green business opportunities, mitigating the environmental impact of our activities and products throughout
their life cycle, developing breakthrough technologies, products and services and, more generally, integrating environment into our business. We also believe that environmental requirements, such as reduction of greenhouse gas emissions, are
becoming one of the main drivers of airline fleet decisions and will influence future aircraft developments.

The European REACH
(Registration, Evaluation and Authorization of Chemicals) regulation (EU No. 2007/1906) came into force on June 1, 2007. REACH aims at improving the protection of human health and the environment through closer regulation of chemical use
by industry; it replaces the pre-existing EU regulatory framework on chemicals. REACH introduces a range of new obligations over a period of 11 years which are intended to reduce the risks of harm that the 30,000 most frequently used chemicals may
cause. The regulation will also bring about the phased withdrawal from use of some of the substances that are considered to be of very high concern for human health and the environment.

The regulation requires that any company which produces, imports, uses or places substances, preparations or other items on the EU market be
responsible for ensuring that the item complies with REACH. We are affected by the regulation because our products can be exported, not only to the countries of the EU, but also to all countries in which compliance with REACH is required. Embraer
has not suffered any penalties in connection with REACH.

Over the past few years, we have been substituting substances used in our
production processes with those which are less harmful to the environment and our employees. In this context, various materials have been replaced in accordance with the restrictions imposed by REACH. In addition, we are studying the feasibility of
replacing more substances which are widely used in the aviation industry but which also have usage restrictions under REACH. We also participate in working groups, such as IAEG (International Aerospace Environmental Group) and



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AIA (Aerospace Industries Association), with other firms in the aviation industry to develop solutions for complying with REACH and other environmental laws, and we are working with our supply
chain on several initiatives to avoid supply chain disruptions and provide support to customers, including the REACH questionnaire on the Risk Assessment of Suppliers. In summary, we are working to fulfill our responsibilities under REACH.

In addition, certain developments in current or proposed carbon emission reduction laws and regulations could in the future indirectly affect
our business and results. In 2010, the International Civil Aviation Organization, through its Environmental Protection Committee, began to develop carbon emission standards for airplanes. The study of these standards is being carried out
concurrently with the implementation of local or regional regulations aimed at limiting carbon emissions, such as those adopted by the European Union, with its emissions market (EU ETS  European Union Emissions Trading System). This system
establishes goals for emissions reduction by aviation companies. Depending on the compensatory payments and limits imposed, as well as on the cost of carbon equivalents, regulations of this nature may impact the growth potential of the air
transportation industry as a whole, due to: (1) the internalization of carbon emission-related costs by air transportation companies, which would reduce their profit margins and, consequently, cut down the demand for new aircraft; or
(2) higher prices of air tickets, charged by air transportation companies in an attempt to pass emission-related costs along to their passengers, who would in turn seek alternative means of transportation, reducing the demand for air travel
and, as a consequence, causing aircraft sales to decline. The effects of either scenario would likely be a decrease in demand for new aircraft in the affected markets, thereby negatively affecting our results.

For information on how climate change may affect our commercial aircraft segment, see Item 5A. Operating and Financial Review and
ProspectsOperating ResultsCurrent Conditions and Future Trends in the Commercial Airline Industry and Executive Jet MarketCommercial Aircraft.

Insurance

We insure all of our plants
and equipment for loss and replacement. We also carry insurance to cover all potential damages to our own fleet of aircraft, including those occurring during commercial and demonstration flights. In addition, we maintain a comprehensive aviation
products liability policy, which covers damage arising out of the manufacture, distribution, sale and servicing of our aircraft and parts. We also carry natural disaster and business interruption insurance covering property damage and the related
loss of gross income, as defined in the policy, and additional expenses, such as those incurred by us to offset the loss of production and delivery of aircraft due to partial or total interruption of our business because of material losses caused by
an accident. We consider the amounts of our insurance coverage to be typical for a company of our size and adequate to meet all foreseeable risks associated with our operations.

We also maintain officers and directors liability insurance in the total amount of US$100 million. This insurance covers our
officers and directors for liabilities resulting from wrongful acts, including any act or omission committed or attempted by any officer or director acting in his or her capacity as officer or director or any matter claimed against an officer or
director solely by reason of his or her serving in such capacity.



|ITEM 5. | OPERATING AND FINANCIAL REVIEW AND PROSPECTS
|------- | --------------------------------------------

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

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



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|5A. | Operating Results
|--- | -----------------

Current Conditions and Future Trends in the Commercial Airline Industry and
Executive Jet Market

The following discussion is based largely upon our current expectations about future events, and trends
affecting our business, actual results for our industry and performance could differ substantially. See IntroductionSpecial Note Regarding Forward-Looking Statements. For factors which could affect our industry in the future and
our own future performance, see Item 3D. Key InformationRisk Factors.

Commercial Aircraft

The fundamental drivers of air travel growth are economic growth with improved per capita income distribution, globalization, increased
commercial trade and liberalization of air traffic rights between countries, all of which tend to generate more propensity to travel. As the air transportation industry continues its recovery from the 2008 financial crisis, selected world regions
lead the return to growth and appear likely to emerge as economic powerhouses. According to the International Air Transport Association, or IATA, global air travel demand, measured by revenue passenger kilometers, continues to trend upward, with
5.2% growth in the January to October 2013 period. The pace of growth in air travel accelerated slightly in the middle of the year, consistent with positive developments in business confidence and better performance of major advanced economies.
International air travel rose by 5.3% and domestic by 4.8%, with airlines in all regions seeing growth. The demand environment for air travel continues to improve, suggesting the strong growth seen in October should be at least maintained through
the end of the year. Business confidence is rising and emerging economies, particularly in Asia, are accelerating after a mid-year slowdown. Positive indicators for international trade should also support business travel growth, which generates
significant revenue for airlines.

The performance of Asia Pacific airlines has improved, in part due to better performance of major
advanced economies, but there has also been resilience in domestic demand in smaller Asian economies like Korea and Malaysia. International trade volumes in emerging Asia rebounded in September, a turnaround from significant declines mid-year, which
should support business travel related to internationally trading industries.

In Europe, modest economic improvements and rising consumer
and business confidence have provided a stronger demand base for international air travel. The Eurozone stopped contracting in the second quarter of 2013 and maintained a modest economic recovery in the second half of 2013. Indicators of business
and consumer confidence do suggest that there was further growth in the Eurozone through the end of 2013, albeit at a weak pace, which should help sustain demand for air transport.

Middle Eastern carriers experienced the strongest rate of increase in demand for international travel measured by revenue passenger
kilometers, with growth of 12% in the period from January to November of 2013, according to IATA. Airlines in the region have benefited from strong growth in business-related premium travel throughout the year, particularly to developing markets
like Africa. Continued increases in export orders suggest that business travel related to internationally trading industries will continue to grow. Solid performance of key economies like Saudi Arabia and the United Arab Emirates has also supported
strong expansion in both business and leisure travel to other regions, such as Europe.

Growth in demand for international travel was also
strong in Latin America, up 8.2% in the period from January to November of 2013, compared to 2012, according to IATA, buoyed by solid trade growth and business related travel. While tax breaks and investment incentives are doing little to boost
growth in the Brazilian economy, other economies like Colombia, Peru and Chile are expanding strongly and supporting demand for international air travel. Markets like North and Latin America have recorded robust growth during 2013, for both business
and leisure travel, supported by growth in the aforementioned economies.

Recent indicators in North America have suggested a more
supportive business environment, with consumer confidence and business activity showing improvement throughout the third quarter of 2013. International travel demand for airlines in the region increased by 2.8% in the period from January to November
2013, according to IATA.

Domestic air travel growth continues to show significant variation across markets. The Chinese and



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Russian markets recorded some of the strongest increases, up 12% and 10.1%, respectively, in the January to October 2013 period. While in China growth in domestic air travel is consistent with
robust economic activity, growth in Russias air travel market continues despite indicators showing a slowdown in economic activity, with weakness in consumer demand and trade activity.

Indian domestic air travel was up 4.6%, with growth rates experiencing substantial volatility in 2013. Brazils weaker domestic demand,
coupled with capacity reductions, resulted in growth of just 0.2% in domestic air travel. Domestic air travel in advanced economies showed mixed results. Japans market continues to show strong growth, supported by sustained increases in
business activity and trade growth. In the United States, growth of 2.8% in October 2013 was a solid result compared to expansion of 1.7% during the year, suggesting reduced impact on domestic air travel demand from the U.S. government shutdown.
Demand for air travel in Australia has been contained by weaker domestic demand and earlier sluggishness in growth of major trade partners like China. Despite interest rate cuts, the Australian economy remains broadly sluggish, with rising
unemployment and fragile business and consumer confidence tainting the performance outlook for the coming year.

IATA projects the global
commercial airline industry to generate net post-tax profits of $12.9 billion in 2013 and $19.7 billion, or 2.6% of revenues, in 2014, an upward revision from previous projections due to lower jet fuel prices and improvements to industry structure
and efficiency. The outlook for revenues is unchanged but its composition is different, with stronger passenger markets but weaker cargo. A downward revision in the outlook for costs reflects reduced projected increases in crude oil prices and
projected slower growth in capacity, reflecting the changes in industry structure and an accompanying focus on improving the efficiency and the utilization of aircraft. The fortunes of the commercial airline industry are closely linked to the
strength of global economic development. After the post-recession 2010 peak, economic activity slowed in both 2011 and 2012. Airline industry profits fell in both years, after their 2010 peak. The improvement in financial performance during 2013 was
in part due to the upturn in economic growth, first signaled by rising business confidence in the fourth quarter of 2012 and then followed by a slow but significant upturn in industrial production and world trade growth.

We project that from 2013 to 2032, world air travel demand, measured by revenue passenger kilometers, should tend to grow by an average of
4.8% per year. We expect the Middle East and China to lead growth in air travel in the next 20 years, with an average annual rate of around 7.0%, and Latin America with 6.4%. We expect Asia, Africa and the Commonwealth of Independent States
demand to grow by around 5.5% per year, and North America and Europe to grow by around 3% and 4% per year, respectively. However, economic downturns, fuel price increases, natural disasters and credit shortages might impair the ability of
commercial airlines, including certain of our customers, to finance aircraft acquisitions (see Item 4C. Information on the CompanyBusiness OverviewAircraft Financing Arrangements).

In North America, the main airlines strategies have been focused on cost reductions, increased productivity and consolidation aiming at
improved operational and financial efficiency. Focusing on profitability and not on capacity increases will position airlines to sustain better financial results and stability through business cycles. Regional airlines continue to provide essential
hub feeder and capacity adjustments to mainline airlines.

In Europe, the revenue environment will remain under pressure due gradual
Eurozone economic recovery. Regional airlines are supporting mainline airlines adjustments of capacity and frequency of services as part of their structural cost reduction and improvement programs. Mobility is vital for the intra-European
market as Europeans continue to enjoy the freedom to travel that came with air transport liberalization in 1987. European airlines are still adapting to a more dynamic competitive environment and facing many issues such as challenges with labor,
increased charges and fees (regulatory, airport and environmental), and the restructuring of businesses to exploit emerging opportunities. In Eastern European countries, we expect more opportunities due to an improved economic environment and
maturing markets.

Latin Americas relevance is increasing in the global economy and geopolitics due to macroeconomic reforms
promoted over the past decade. A growing middle class is demanding different services, such as discretionary expenditures in air travel, and airlines are introducing more fuel-efficient and right-sized aircraft to expand intra-regional aviation. As
the region becomes more integrated, there will be opportunities for jets up to 130 seats to increase network connectivity and expand services to low to mid-density cities.



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In the Asia Pacific region, economic prosperity, combined with robust population growth, economic
decentralization, rapid rates of urbanization and regional air service liberalization, tend to support increased air travel demand. The role of regional aviation in Asia Pacific/China is related to national integration, providing access to smaller
communities in countries like Australia, China and Indonesia. Liberalization policies in some sub-regions tend to encourage the development of intra-regional air transport, which may generate major opportunities for regional aviation in the coming
years.

Middle Eastern carriers have become global players, driven by the emergence of global hubs with high frequency flights connecting
long-haul East-West passengers. Intra-Middle Eastern flights have increased significantly in the past years with the acquisition of smaller aircraft to feed international hubs and cover underserved markets.

In Africa, regional integration and growing foreign direct investment are fostering regional aviation. Challenges in infrastructure, lack of
financing and a highly regulated environment are being addressed, albeit at a slow pace. As a result of regional liberalization, some airlines are introducing new aircraft to develop their intra-regional network.

The air transport industry in the Commonwealth of Independent States is diverse, consisting of aged fleets belonging to several small,
state-owned airlines. In Russia, import taxes represent a significant barrier for airlines that intend to renew their fleet with Western aircraft. Airline consolidation is in progress in the region and is focused on the improvement of air transport
system efficiency. Opportunities for regional aviation rely on the replacement of the old and inefficient fleet of the former Soviet Union.

We estimate a global demand for around 6,400 jets in the 70- to 130-seat-category over the next 20 years. This segment has an important role
in aviation, providing flexibility to airlines to deal with market volatility, feeding main hubs, complementing larger aircraft operation, as well as allowing airlines to efficiently explore low to mid-density markets.

The 70- to 130-seat capacity category has been providing much needed flexibility and efficiency improvements to airlines by right-sizing
larger jets, replacing aging aircraft, developing new markets, expanding from smaller regional jets and supporting the natural growth of regional airlines on high-demand routes operated by smaller jets.

Executive Aircraft

Market Overview

Due to the global economic weakness that has affected the executive aviation market since mid-2008, this segment has registered one of the most
severe reductions in global sales in its history, surpassing the impacts caused by the recession of the 1980s and the September 2001 terrorist attacks. The lack of investor confidence, the risk perception of European economies and the economic
slowdown in emerging markets make it less likely that a surge in demand will occur in the short-term, thus taking longer for demand to achieve pre-2008 levels.

Despite the positive recent performance of demand growth drivers such as the increase in the number and wealth of high net worth individuals
and corporate profits, we believe that corporations will continue to be more reluctant to spend on travel alternatives, at least in the short-term.

This scenario has prevented a more solid growth momentum for business jets sales. The industrys output level in 2013 was 677 jets,
representing an increase of 2.1% over 2012. In terms of revenues, the business jet industry increased 19.5% in 2013 due to a better product mix. Over the next 10 years, market forecast indicates that 9,250 aircraft will be delivered, totaling US$250
billion in the period.

We estimate a compound annual growth rate for the executive jet industry from 2014 to 2023 of 4.3% in terms of
both revenue and units delivered.

In early 2013, the General Aviation Manufacturers Association reported that the industry delivered 663
business jets during 2012 (6% less than 2011), equivalent to US$17.1 billion (2% less than 2011). The expectation for 2013 is that deliveries will be equivalent in terms of units, but there will be a slight increase in terms of revenues, due to a
greater share of heavy jets in the delivered product mix.



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During the global economic crisis which began in 2008, investors were fearful of poor performance
by economies around the globe. Initially, the U.S. economy was the primary concern, followed by the economic contagion in Europe, both of which contributed to a significant reduction in global economic growth. The resilient economic performance of
the Asia Pacific countries, especially China, and certain Latin American countries, especially Brazil, helped avoid a deeper global economic crisis. Now, five years later, economic growth in the emerging markets is slowing while the U.S. economy is
showing signs of an imminent recovery and there is positive economic news and increased investment in Europe.

We expect that over the
next 10 years, the regional distribution of business jet deliveries will be as follows:



| |  |  | The North American market will continue to be the largest by far, representing 49% and 47% of the world markets volume and revenue, respectively. These figures are well below the 64% participation of the region in
the current world fleet and are a function of the growth of markets in other regions rather than an actual reduction in its market size.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The European, Middle Eastern and African markets will generate 25% of world deliveries in terms of units and 28% in terms of revenues. These figures are lower than last years forecast and reflect the weakness of
the European economies.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Latin America, Asia Pacific and China will together represent 26% of world deliveries in terms of units and generate 25% of the worlds total business jet market revenue.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Our Executive Aircraft

Overview

We continued to make solid progress throughout 2013, achieving important milestones in each program of our product portfolio and
advancing in the development of our integrated solutions for the executive aviation market.

Since launching the Phenom 100, Phenom 300
and Lineage 1000, we have continued to evaluate and explore opportunities in the executive aviation market. In April 2008, we formally launched the mid-light jet Legacy 450 and the mid-size jet Legacy 500. The Legacy 450/500 jets will be positioned
in our executive jets portfolio between the Phenom 300 and the Legacy 600. In 2010, we delivered the first Legacy 650, a large executive jet that is positioned in our executive jet portfolio between the Legacy 600 and the Lineage 1000.

Although the business jet market has not yet recovered from the 2008 economic crisis that began in 2008, the Embraer executive jet fleet in
service has experienced a compound annual growth rate of 37% since then. In 2013 we delivered a total of 119 units, 20% more than 2012. Of these, 90 were small jets, representing an increase of 17% over 2012, and 29 were large jets, 32% more than
last year. As Embraer continues to introduce new products in the executive jet market, we expect the total number of deliveries in this segment to continue to increase in upcoming years.

Legacy 600 and Legacy 650

In October 2009, we presented the new Legacy 650 jet during a press conference at the 62nd Annual Meeting and Convention of the National
Business Aviation Association, in Orlando, Florida. The large executive jet category Legacy 650 is based on the successful platform of the super mid-size Legacy 600, having a longer range for up to 14 passengers. The Legacy 650 can fly up to 3,900
nautical miles nonstop with four passengers, or 3,800 nautical miles with eight passengers, which is approximately 500 nautical miles farther than the Legacy 600.

We have introduced several new and innovative features in the Legacy 650. In January 2013, the Hurun Report named the Legacy 650 as the
Large-Size Business Jet Star Performer in Ninth Hurun Best-of the-Best Awards Ceremony in Shanghai, China.



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In March 2013, the full flight simulator for the Embraer Executive Jets Legacy 650, built in a
partnership with FlightSafety, was qualified to Level D by the FAA, ANAC and EASA.

An important milestone for the Embraer AVIC
partnership and for the history of Chinese executive aviation industry occurred in August 2013, with the maiden flight of the first Legacy 650 large executive jet assembled in China.

Although demand from Europe and the Middle East, traditional Legacy 600/650 markets, has decreased in 2013, our deliveries of these products
increased in the period. Asia Pacific, China, Brazil and the Commonwealth of Independent States were the main destinations for Embraer heavy jets during 2013.

Legacy 600 and 650 deliveries increased from 17 units in 2012 to 25 units in 2013, with a fleet of more than 230 jets in service in 33
countries.

Legacy 450 and Legacy 500

An estimated US$850 million is expected to be invested overall in fixed assets, research and development for the new Legacy 500 and Legacy 450
models. The Legacy 500 executive jet is expected to enter into service in 2014, and the Legacy 450 is expected to enter into service one year after the Legacy 500. We believe that these two aircraft programs will help strengthen our position in the
market and establish our portfolio as one of the most comprehensive of the executive aviation industry.

We have four Legacy 500
prototypes in a flight test campaign. The prototypes have already completed more than 900 flight hours on different certification tests. The development of the mid-light jet Legacy 450 is proceeding as scheduled in its flight test campaign, with the
first flight occurring in December 2013.

The Legacy 450 and Legacy 500 jets will be equipped with full fly-by-wire (FBW) technology,
which will establish them as pioneers in their respective categories. The following new enhancements for Legacy 450 and Legacy 500 were announced in October 2013:



| |  |  | The range of the Legacy 450 has been increased to 2,500 nautical miles, with four passengers; 200 nautical miles farther than its initial specification.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The Legacy 450 fuselage has been extended to provide more cabin space.
| | - |  | ----------------------------------------------------------------------



| |  |  | New interior designs for the Legacy 450 and Legacy 500 have been announced.
| | - |  | ---------------------------------------------------------------------------



| |  |  | The Rockwell Collins HGS-3500, the first-ever Head-up Guidance System (HGS) for mid-light and mid-size business jets, and the new multi-spectral EVS-3000 enhanced vision system were retested for the Legacy 450 and
Legacy 500 program.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Also in October 2013, the world renowned actor and philanthropist Jackie Chan selected Legacy 500 as
his business jet and became the first customer of the Legacy 500 executive jet in China.

Phenom 100 and Phenom 300

The first units of the Phenom 100, an entry level jet, were delivered in 2008 and the first unit of the Phenom 300, a light jet, was delivered
in 2009. Five years after the first delivery, we delivered the 400th jet of the Phenom series, in June 2013.

In May 2013, NetJets®, the worldwide leader in the jet fractional ownership business, received its first Phenom 300, entitled Signature SeriesTM. In the same month, the Federal Aviation Administration
 FAA certified the Phenom 300s assembly facility in Melbourne, Florida. The first aircraft manufactured in that facility had already been delivered at the end of March.

Once again, Robb Report magazine named Phenom 100 and Phenom 300 as the Best of the Best for 2013, in their respective categories.
This is the third consecutive year that both Phenom 100 and Phenom 300 receive the award. The Phenom 100 had also been awarded in the 2008 and 2010 editions.



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In 2014, the Phenom 100 will be renamed the Phenom 100E and will include new features such as
multi-function spoilers, 11 new interior collections and new optional items including a refreshment center, stowage space monuments and premium seats.

By the end of 2013, the Phenom 100 fleet was composed of more than 290 aircraft distributed in 24 countries and the Phenom 300 fleet was
composed of more than 170 jets distributed in 23 countries.

Lineage 1000

Lineage 1000 deliveries began in 2009 and in April 2013 the ultra-large jet reached 10,000 flown hours.

In October 2013 we announced the Lineage 1000E during the NBAA Business Aviation Convention & Exhibition. This jet features an array
of enhancements that deliver an extended range, enhanced interior features and functionalities, including latest generation in-flight entertainment, enhanced cockpit options and a distinctive exterior design.

By the end of 2013, the Lineage 1000 fleet was composed of more than 20 units distributed in 11 countries.

Brazilian Economic Environment

Despite
recent signs of mild economic recovery, the global economic slowdown, including the events negatively affecting the commercial and executive airline industry and the U.S., has adversely affected the global and Brazilian economies and securities
markets, and has resulted in:



| |  |  | increased volatility in the market price of securities;
| | - |  | -------------------------------------------------------



| |  |  | significant decline in corporate earnings estimates;
| | - |  | ----------------------------------------------------



| |  |  | substantial losses in important industries, including the air transport and insurance industries; and
| | - |  | -----------------------------------------------------------------------------------------------------



| |  |  | significant erosion of consumer confidence.
| | - |  | -------------------------------------------

As discussed below, any uncertainty surrounding
the U.S., Brazilian and global economies could result in the Brazilian federal government changing existing laws or regulations or imposing new ones, and/or the Central Bank changing base interest rates, which could adversely affect our operations.

The Brazilian federal government has frequently intervened in the Brazilian economy and occasionally made drastic changes in policy and
regulations. The Brazilian federal governments actions to control inflation and affect other policies and regulations have often involved, among other measures, increases in interest rates, changes in tax policies, price controls, currency
devaluations, capital controls and limits on imports. For example, the Brazilian federal government has the authority, when a serious imbalance in Brazils balance of payments occurs, to impose restrictions on the remittance to foreign
investors of the proceeds of their investments in Brazil and on the conversion of Brazilian currency into foreign currencies. Changes in Brazils monetary, credit, tariff and other policies could adversely affect our business, as could
inflation, currency and interest-rate fluctuations, social instability and other political, economic or diplomatic developments in Brazil, as well as the Brazilian federal governments response to such developments.

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

Brazilian economic conditions may also be negatively affected by economic and political conditions elsewhere, particularly in other Latin
American and emerging-market countries. Although economic conditions in such countries may differ significantly from economic conditions in Brazil, the reaction of investors to developments in such countries may have an adverse effect on the market
value of securities of Brazilian issuers. For example, the recent uncertainty in the economies of U.S. and other OECD countries has caused a retraction of



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credit on a worldwide basis, significant volatility in the international capital markets (including Brazil) and diminished investor interest in securities of Brazilian issuers, including ours.
Crises in other emerging-market countries also have at times significantly affected the availability of credit in the Brazilian economy and resulted in considerable outflows of funds and declines in the amount of foreign currency invested in Brazil.

In 2008, Brazils GDP increased by 4.8% and the real exchange rate decreased by 31.9% against the U.S. dollar, to
R$2.3370 per US$1.00 at December 31, 2008. Inflation in 2008, as measured by the IPCA, was 5.90% and the average CDI interest rate was 12.0% in the same period.

In 2009, the Brazilian economy demonstrated resilience to the economic crisis in comparison with certain other countries. Several
macroeconomic indicators improved during the year, and despite the deceleration of GDP growth for 2009, the Central Bank reported in its Focus Report published on January 8, 2010 its expectation of only a small decrease in Brazilian GDP of 0.3%
in 2009. In addition, solid macroeconomic conditions and greater economic stability allowed the Central Bank to return to the strategy of reducing interest rates, with the effective cumulative SELIC rate reaching 8.75% by the end of July 2009, its
lowest historical level. Similarly, thereal strengthened and appreciated by 25.5% against the U.S. dollar during 2009. According to the Central Bank, international reserves remained above US$200 billion throughout the year (US$238 billion as
of December 31, 2009), which represented a significant increase relative to the end of 2008.

In 2010, the Brazilian
GDP increased by 7.5%. The real continued its appreciation trend of 2009, having advanced 4.3% against the U.S. dollar. Brazilian international reserves were higher in 2010 than in 2009, having increased to US$288.6 billion as of
December 31, 2010 from US$239.1 billion as of December 31, 2009.

In 2011, Brazils GDP increased by 2.7%.
The real appreciated against the U.S. dollar in the first several months of 2011, but began to depreciate in August of 2011, reaching R$1.88 per US$1.00 on December 31, 2011, representing a 12.6% depreciation against the U.S. dollar. The
Brazilian economy was characterized by continued inflation during the year 2011, but fears of a global economic slowdown prompted the Central Bank to begin reducing the SELIC rate near the end of the period. The SELIC rate was at 11.0% on
December 31, 2011. Inflation in 2011, as measured by the IPCA, was 6.50% and the CDI average was 9.3% in the same period.

In 2012, Brazils GDP increased by 0.9%. The real depreciated against the U.S. dollar, reaching R$2.04 per US$1.00 on
December 31, 2012, representing an 8.9% depreciation against the U.S. dollar. The Central Bank further reduced the SELIC rate to 7.25% on December 31, 2012. Inflation in 2012, as measured by the IPCA, was 5.8% and the CDI average was 8.4%
in the same period.

In 2013, Brazils GDP increased by 2.3%. The real depreciated against the U.S. dollar,
reaching R$2.34 per US$1.00 on December 31, 2013, representing a 14.6% depreciation against the U.S. dollar. The Central Bank further increased the SELIC rate to 10.0% on December 31, 2013. Inflation in 2013, as measured by the IPCA, was
5.9% and the CDI average was 8.1% in the same period.

According to the Focus report published by the Central Bank on
January 10, 2014, positive growth of 2.0% is estimated for Brazilian GDP in 2014, and an inflation rate of 6.0% is expected for the same year.

Effects of Inflation and Currency Exchange Fluctuations

Until the adoption of the Real Plan in 1994, Brazil had for many years experienced very high, and generally unpredictable, rates
of inflation and steady devaluation of its currency relative to the U.S. dollar. The following table sets forth, for the periods shown, more recent rates of inflation in Brazil, as measured by the IPCA and published annually by theInstituto
Brasileiro de Geografia e Estatística  IBGE, and the fluctuation of the real against the U.S. dollar as measured by comparing the daily exchange rates published by the Central Bank on the last day of each period:



|                                          |  |      |       |    |      |  |      |      |  |  |       |    |  |      |      |   |  |  |      |  
|----------------------------------------- |  | ---- | ----- | -- | ---- |  | ---- | ---- |  |  | ----- | -- |  | ---- | ---- | - |  |  | ---- | -
|                                          |  | 2013 |       |    | 2012 |  |      | 2011 |  |  | 2010  |    |  | 2009 |     
|Inflation (National Consumer Price Index) |  |      | 5.9   | %  |      |  | 5.8  | %    |  |  | 6.5   | %  |  |      | 5.91 | % |  |  | 4.31 | %
|Exchange Rate Variation (R$/US$)          |  |      | (14.6 | )% |      |  | (8.9 | )%   |  |  | (12.6 | )% |  |      | 4.3  | % |  |  | 25.5 | %



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Inflation and exchange-rate variations have had, and may continue to have, substantial
effects on our financial condition and results of operations. Inflation and exchange-rate variations affect our monetary assets and liabilities denominated in reais. The value of such assets and liabilities as expressed in U.S. dollars
declines when the real devalues against the U.S. dollar and increases when the real appreciates. In periods of devaluation of the real, we report (a) a remeasurement loss on real-denominated monetary assets and
(b) a remeasurement gain on real-denominated monetary liabilities.

Critical Accounting Estimates

The preparation of the financial statements in conformity with IFRS requires management to make estimates and adopt assumptions that affect the
reported amounts of assets and liabilities, disclosure of contingent assets and liabilities and the fair value of financial instruments and guarantees on the statement of financial position dates and the reported amounts of revenues and expenses
during the reporting period. Actual results may differ from such estimates.

In order to provide an understanding of how management forms
its judgments about future events, including the variables and assumptions underlying the estimates, and the sensitivity of those judgments to different variables and conditions, the estimates and assumptions that may cause a risk of material
adjustment to the carrying amounts of assets and liabilities are addressed below:

Sales and Other Operating Revenues

We recognize revenues from sales made by the Commercial Aviation, Executive Jets, and Defense & Security businesses when benefits and
risk of ownership are transferred to customers, which, in the case of aircraft, occurs when delivery is made, and, in the case of aviation services, when the service is rendered.

We also recognize rental revenue for leased aircraft, classified as operating leases, on a straight-line basis over the lease term and, when
presenting information by operating segment, rental revenue is recorded in its respective operating segment.

In the Defense &
Security segment, a significant portion of revenue is derived from long-term development contracts with the Brazilian and foreign governments accounted for using the percentage of completion method. These contracts contain provisions for price
escalation based on a mix of indices related to raw material and labor cost. From time to time, we reassess the expected margins of certain long-term contracts, adjusting revenue recognition based upon projected remaining costs to completion. Use of
the percentage of completion method requires us to estimate the total costs to be incurred in connection with the contracts. Were the total costs to be incurred to be 10% below managements estimates, the amount of revenue recognized in the
year 2013 would increase by US$195.6 million, and if the total costs were to be 10% above the estimate, the amount of revenue recognized would decrease by US$210.5 million.

Revenue under exchange pool programs is recognized monthly over the contract term and consists partly of a fixed fee and partly of a variable
fee directly related to aircraft flying hours.

We enter into transactions that represent multiple-element arrangements, such as training,
technical assistance, spare parts and other concessions, which are included in the aircraft purchase price. Multiple-element arrangements are assessed to determine whether they can be separated into more than one unit of accounting when all of the
following criteria are met:



| |  |  | the delivered item has value to the client on a stand-alone basis; and
| | - |  | ----------------------------------------------------------------------



| |  |  | there is objective and reliable evidence of the fair value of the undelivered item.
| | - |  | -----------------------------------------------------------------------------------

If these
criteria are not met, the arrangement is accounted for as a single unit of accounting, which results in revenue being deferred until the earlier of when such criteria are met or when the last completed element is delivered. If these criteria are met
for each element and there is objective and reliable evidence of fair value for all units of accounting in an arrangement, the arrangement consideration is allocated to the separate units of accounting based on each units relative fair value.



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Product Warranties

Generally, aircraft sales are accompanied by a standard warranty for systems, accessories, equipment, parts and software manufactured by us
and/or by our risk-sharing partners and suppliers. We recognize warranty expenses, as cost of sales and services, at the time of sale based on the estimated warranty costs anticipated to be incurred. These estimates are based on a number of factors,
including historical warranty claims and cost experience, the type and duration of the warranty coverage, volume and mix of aircraft sold and in service and warranty coverage available from the related suppliers. Actual product warranty costs may
have different patterns from past experience, mainly when a new family of aircraft enters service, which could require us to increase the product warranty reserve. The warranty period is three years for spare parts and five years for components that
are a part of the aircraft when sold.

Financial Guarantees

We may offer financial guarantees related to aircraft sold. The guarantee is granted at fair value at the time of delivery of the aircraft when
it is supported by a financing agreement. The guarantee is recorded as a reduction in sales and an increase in deferred revenue. The deferred revenue is amortized to the income statement over the period of the guarantee. We evaluate the
creditworthiness of the obligor at aircraft delivery and disclose our maximum exposure under the guarantee as a contingent liability in Note 37. We monitor the obligors credit worthiness periodically. In the event of an official restructuring
or default, a provision is recognized when it is more likely than not that payment will be made and the amount can be estimated reliably.

Residual
Value Guarantees

We may offer residual value guarantees related to sold aircraft. At the time of the offering, the guarantees are
evaluated based on the fair value of the aircraft and are reviewed and updated quarterly to reflect depreciation in value. The future fair value of aircraft is estimated using assessments of third parties, including information obtained from the
sale or lease of similar aircraft in the secondary market.

Residual Interests in Aircraft

In structured financing arrangements, an entity purchases an aircraft from us, pays the full purchase price on delivery or at the conclusion of
the sales financing structure and leases the aircraft to the ultimate customer. A third-party financial institution facilitates the financing of the aircraft, and a portion of the credit risk remains with that third party.

Although we have no equity investee interests, we control special purpose entity, or SPE, operations or take a majority share of their risks
and rewards. When we no longer hold control, the assets and liabilities related to the aircraft are deconsolidated from our statement of financial position.

We principally evaluate our control over an SPE based on a qualitative assessment. This includes a review of the SPEs capital structure,
contractual relationships and terms, nature of the SPEs operations and purpose, nature of the SPEs interests issued, and our interests in the entity which either creates or absorbs variability. We evaluate the design of the SPE and the
related risks that the entity and the variable interest holders are exposed to in evaluating consolidation. In several cases, when it is unclear from a qualitative standpoint if we have control over an SPE, we use a quantitative analysis to
calculate the probability-weighted expected losses and probability-weighted expected residual returns using cash flow and statistical risk measurement modeling.

Impairment

Non-current assets
held for use are subject to impairment assessment if facts and circumstances indicate that their carrying value is no longer recoverable based upon the higher of their discounted future cash flows and their net realizable value. Our cash-generating
units (CGUs) have been defined and are reviewed annually, in accordance with the aircraft families/platforms and other business conducted by us and our subsidiaries. The corporate assets and those that are included in more than one CGU are allocated
in proportion to the income attributed to each such asset. The goodwill pertaining to an asset is allocated to the assets respective CGU or, if applicable, to a group of CGUs.



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In this case, the goodwill is assessed for impairment on a corporate basis, i.e., for the
consolidated financial statements, taking into account the synergies between the companies that comprise each CGU. However, any adjustments made are proportional and affect all the companies in a particular CGU. The net carrying value of the
underlying assets is adjusted if the net realizable value is less than the net carrying value.

A number of assumptions are used to
determine the expected discounted cash flows, including the forecasts of future cash flows, based on the best estimate of future sales and operating costs, which depends primarily on existing firm orders, expected future orders, contracts with
suppliers and general market conditions.

Changes in these forecasts could significantly change the amount of an impairment loss, if any.
If the discount rate used to discount the cash flows of all CGUs to present value were 10% lower or 10% higher compared to the rate used by management, adjustments for non-recovery of assets would still not need to have been made.

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. We use our
judgment to select a variety of methods using assumptions that are mainly based on market conditions existing at the end of each reporting period.

Income Taxes

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

Because the majority of our tax basis is in reais and
its functional currency is the dollar, the income tax expense line item is highly sensitive to the effects of changes in exchange rates, particularly from changes in non-monetary assets.

Had the real devalued or appreciated by 10% against the dollar in relation to the actual exchange rate as of December 31,
2013, the deferred income tax expense would have been higher or lower by approximately US$115.3 million.

Principal Operating Data and
Components of Our Statement of Income

Operating Data

The following chart sets forth statistical data for our deliveries and backlog of our aircraft at the end of the respective periods. Deliveries
consist of aircraft that have been delivered to customers and for which the corresponding revenue has been recognized. Our backlog consists of all firm orders that have not yet been delivered. A firm order is a contractual commitment from a
customer, customarily accompanied by a down payment, for which we have reserved a place on one of our production lines. See Item 5D.Trend Information for certain information on our firm orders and options.



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|                                                       |  |                                        |          |  |      |     |          |      |  |     |          |  |  |      |          |  |  |     |          | 
|------------------------------------------------------ |  | -------------------------------------- | -------- |  | ---- | --- | -------- | ---- |  | --- | -------- |  |  | ---- | -------- |  |  | --- | -------- | 
|                                                       |  | At and for the year ended December 31, |         
|                                                       |  | 2013                                   |          |  | 2012 |     |          | 2011 |  |     | 2010     |  |  | 2009 |         
|Commercial Aviation                                    |  |                                        |          |  |      |     |          |      |  |     |          |  |  |      |          |  |  |     |          | 
|Deliveries                                             |  |                                        | 90       |  |      |     | 106      |      |  |     | 105      |  |  |      | 100      |  |  |     | 122      | 
|ERJ 145                                                |  |                                        |         |  |      |     |         |      |  |     | 2        |  |  |      | 6        |  |  |     | 7        | 
|EMBRAER 170(1)                                         |  |                                        | 4        |  |      |     | 1        |      |  |     | 1        |  |  |      | 9/2      |  |  |     | 22       | 
|EMBRAER 175                                            |  |                                        | 24       |  |      |     | 20       |      |  |     | 10       |  |  |      | 8        |  |  |     | 11       | 
|EMBRAER 190                                            |  |                                        | 45       |  |      |     | 62       |      |  |     | 68       |  |  |      | 58       |  |  |     | 62       | 
|EMBRAER 195                                            |  |                                        | 17       |  |      |     | 23       |      |  |     | 24       |  |  |      | 17       |  |  |     | 20       | 
|Defense & Security(2)                                  |  |                                        |          |  |      |     |          |      |  |     |          |  |  |      |          |  |  |     |          | 
|Deliveries                                             |  |                                        |         |  |      |     |         |      |  |     |         |  |  |      | 2        |  |  |     | 7        | 
|Executive Jets                                         |  |                                        |          |  |      |     |          |      |  |     |          |  |  |      |          |  |  |     |          | 
|Deliveries                                             |  |                                        | 119      |  |      |     | 99       |      |  |     | 99       |  |  |      | 144      |  |  |     | 115      | 
|Other Operating Information Total Backlog(in millions) |  | US$                                    | 18,205.5 |  |      | US$ | 12,462.2 |      |  | US$ | 15,441.2 |  |  | US$  | 15,543.2 |  |  | US$ | 16,634.8 | 



|(1) | Figures appearing after a forward slash (/) refer to aircraft delivered under operating leases.
|--- | -----------------------------------------------------------------------------------------------

|(2) | Includes only aircraft delivered to state-owned airlines and for government transportation and, therefore, excludes deliveries of Tucano family aircraft, as such aircraft are not for transportation purposes.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Revenue

We generate revenue primarily from sales of commercial and executive aircraft products. We also generate revenue from the sale of
defense aircraft and systems. Of total revenues, 77.2% are generated through aircraft sales. Revenue arising from the sale of commercial and executive aircraft is denominated in U.S. dollars. In 2013, total Defense & Security revenue
included 59% of revenue denominated in foreign currency, predominantly in U.S. dollars, and 41% denominated in Brazilian reais. In addition, we generate revenue from our aviation services which include after-sales support (including the sale
of spare parts, maintenance and repair, training and other product support services). Finally, we generate revenue from our Other Related Businesses, which include single-source supply of structural parts and mechanical and hydraulic systems to
other aircraft manufacturers, and general aviation propeller aircraft, such as crop dusters, which are also referred to as light aircraft.

We generally recognize revenue for the sale of our commercial and executive aircraft when the aircraft is delivered to the customer. We
customarily receive a deposit upon signing of the purchase agreement for the sale of our commercial aircraft and progress payments in the amount of 5% of the sales price of the aircraft 18 months, 12 months and six months before scheduled delivery.
We receive a 5% deposit upon signing of a purchase agreement for our executive aircraft and an additional deposit of 30% to 50% of the purchase price prior to delivery, depending on the specific terms of the purchase agreement and the aircraft sold.
For the EMBRAER 170/190 jet family, we receive an additional 5% progress payment 24 months before scheduled delivery. We typically receive the remaining amount of the sales price upon delivery. Payments in advance of delivery are recorded under
advances from customers as a liability on our statement of financial position and, when we deliver the aircraft, these payments are recorded against trade account receivables of such aircraft. See Item 5A.Operating ResultsCritical
Accounting EstimatesSales and Other Operating Revenues.

Our sales contracts with our customers typically include adjustments
to the purchase price of the aircraft based on an escalation formula which is based on a mix of indices related to raw material and labor costs. The deposits, progress payments and option payments are nonrefundable for the most part. Once a customer
decides to exercise an option, we account for it as a firm order, and we begin to receive progress payments and recognize revenue upon delivery as discussed above.

We recognize revenue from the sale of our defense aircraft, including the research and development for specific programs, in accordance with
the percentage of completion method. Certain contracts contain provisions for the redetermination of price based upon future economic conditions. Our defense customers continue to provide customer advances, which are converted into revenue as we
fulfill pre-determined stages of completion of the project, such as conception, development and design, and engineering, systems integration and customization. These installments are nonrefundable for the most part.



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Cost of Sales and Services

Cost of sales and services consists of the cost of the aircraft, spare parts and services rendered, comprising:



| |  |  | Raw materials. Substantially all materials costs are covered by contracts with suppliers. Prices under these contracts are generally adjusted based on an escalation formula which reflects, in part, inflation in
the United States.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Labor. These costs are primarily real-denominated.
| | - |  | --------------------------------------------------



| |  |  | Depreciation. Property, plant and equipment are depreciated over their useful lives, ranging from five to 48 years, on a straight-line basis. On average, property, plant and equipment are depreciated over 16
years. Depreciation of aircraft under operating leases is recorded in cost of sales and services from the beginning of the lease term using the straight-line method over the estimated useful life and considering a residual value at the end of the
lease term.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Amortization. Internally-generated intangible assets are amortized in accordance with the estimated sales of the series of aircraft. Intangible assets acquired from third parties are amortized on straight-line
bases over the estimated useful lives of the assets.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

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

Recent Developments

Backlog

Overview

We continue to implement improvements to our industrial processes, reaffirming the commitment made to our shareholders, customers and
suppliers. We currently maintain our estimates to deliver 92 to 97 commercial aircraft, 80 to 90 light executive jets and 25 to 30 large executive jets during 2014.

Results of Operations

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



|                           |  |                         |          |   |              |  |          |              |  |  |          |   |  |         |          |   |  |  |          |  
|-------------------------- |  | ----------------------- | -------- | - | ------------ |  | -------- | ------------ |  |  | -------- | - |  | ------- | -------- | - |  |  | -------- | -
|                           |  | Year ended December 31, |         
|                           |  | 2013                    |          |   | 2012Restated |  |          | 2011Restated |  |  | 2010(1)  |   |  | 2009(1) |         
|                           |  | (in US$ millions)       |         
|Revenue                    |  |                         |          |   |              |  |          |              |  |  |          |   |  |         |          |  
|Commercial aviation        |  |                         | 3,307.0  |   |              |  | 3,755.4  |              |  |  | 3,751.2  |   |  |         | 3,257.9  |   |  |  | 3,785.7  |  
|Executive jets             |  |                         | 1,644.5  |   |              |  | 1,292.0  |              |  |  | 1,118.8  |   |  |         | 1,209.5  |   |  |  | 936.9    |  
|Defense & Security         |  |                         | 1,196.9  |   |              |  | 1,045.2  |              |  |  | 839.9    |   |  |         | 821.8    |   |  |  | 677.8    |  
|Other related businesses   |  |                         | 86.6     |   |              |  | 74.4     |              |  |  | 81.0     |   |  |         | 74.9     |   |  |  | 97.4     |  
|                           |  |                         |          |   |              |  |          |              |  |  |          |   |  |         |          |   |  |  |          |  
|Total                      |  |                         | 6,235.0  |   |              |  | 6,167.0  |              |  |  | 5,790.9  |   |  |         | 5,364.1  |   |  |  | 5,497.8  |  
|Cost of sales and services |  |                         |          |   |              |  |          |              |  |  |          |  
|Commercial aviation        |  |                         | (2,532.6 | ) |              |  | (2,809.3 | )            |  |  | (2,921.8 | ) |  |         | (2,680.8 | ) |  |  | (3,072.2 | )
|Executive jets             |  |                         | (1,284.7 | ) |              |  | (1,035.8 | )            |  |  | (888.8   | ) |  |         | (987.3   | ) |  |  | (750.8   | )
|Defense & Security         |  |                         | (951.2   | ) |              |  | (785.5   | )            |  |  | (636.8   | ) |  |         | (599.5   | ) |  |  | (520.1   | )



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|                                                 |  |                         |          |   |              |  |          |              |  |  |          |   |  |         |          |   |  |  |          |  
|------------------------------------------------ |  | ----------------------- | -------- | - | ------------ |  | -------- | ------------ |  |  | -------- | - |  | ------- | -------- | - |  |  | -------- | -
|                                                 |  | Year ended December 31, |         
|                                                 |  | 2013                    |          |   | 2012Restated |  |          | 2011Restated |  |  | 2010(1)  |   |  | 2009(1) |         
|                                                 |  | (in US$ millions)       |         
|Other related businesses                         |  |                         | (50.4    | ) |              |  | (46.0    | )            |  |  | (40.7    | ) |  |         | (70.5    | ) |  |  | (85.3    | )
|                                                 |  |                         |          |   |              |  |          |              |  |  |          |   |  |         |          |   |  |  |          |  
|Total                                            |  |                         | (4,818.9 | ) |              |  | (4,676.6 | )            |  |  | (4,488.1 | ) |  |         | (4,338.1 | ) |  |  | (4,428.4 | )
|Gross profit                                     |  |                         |          |   |              |  |          |              |  |  |          |   |  |         |          |   |  |  |          |  
|Commercial aviation                              |  |                         | 774.4    |   |              |  | 946.1    |              |  |  | 829.4    |   |  |         | 577.1    |   |  |  | 713.5    |  
|Executive jets                                   |  |                         | 359.8    |   |              |  | 256.2    |              |  |  | 230.0    |   |  |         | 222.2    |   |  |  | 186.1    |  
|Defense & Security                               |  |                         | 245.7    |   |              |  | 259.7    |              |  |  | 203.1    |   |  |         | 222.3    |   |  |  | 157.7    |  
|Other related businesses                         |  |                         | 36.2     |   |              |  | 28.4     |              |  |  | 40.3     |   |  |         | 4.4      |   |  |  | 12.1     |  
|                                                 |  |                         |          |   |              |  |          |              |  |  |          |   |  |         |          |   |  |  |          |  
|Total                                            |  |                         | 1,416.1  |   |              |  | 1,490.4  |              |  |  | 1,302.8  |   |  |         | 1,026.0  |   |  |  | 1,069.4  |  
|Operating expenses                               |  |                         |          |   |              |  |          |              |  |  |          |   |  |         |          |   |  |  |          |  
|Commercial aviation                              |  |                         | (272.3   | ) |              |  | (507.7   | )            |  |  | (672.3   | ) |  |         | (345.3   | ) |  |  | (400.0   | )
|Executive jets                                   |  |                         | (262.8   | ) |              |  | (216.7   | )            |  |  | (174.8   | ) |  |         | (142.3   | ) |  |  | (172.9   | )
|Defense & Security                               |  |                         | (154.1   | ) |              |  | (144.9   | )            |  |  | (121.1   | ) |  |         | (115.6   | ) |  |  | (89.6    | )
|Other related businesses                         |  |                         | (13.5    | ) |              |  | (9.2     | )            |  |  | (16.4    | ) |  |         | (31.1    | ) |  |  | (27.5    | )
|                                                 |  |                         |          |   |              |  |          |              |  |  |          |   |  |         |          |   |  |  |          |  
|Total                                            |  |                         | (702.7   | ) |              |  | (878.5   | )            |  |  | (984.6   | ) |  |         | (634.3   | ) |  |  | (690.0   | )
|                                                 |  |                         |          |   |              |  |          |              |  |  |          |   |  |         |          |   |  |  |          |  
|Operating profit before finance income (expense) |  |                         | 713.4    |   |              |  | 611.9    |              |  |  | 318.2    |   |  |         | 391.7    |   |  |  | 379.4    |  
|                                                 |  |                         |          |   |              |  |          |              |  |  |          |   |  |         |          |   |  |  |          |  



|(1) | No restatement of financial information was made because there were no changes generated in the period by the retrospective application of new accounting rules which came into effect as of 2013.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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



|                                                   |  |                                       |          |   |              |  |      |              |  |  |          |   |  |         |      |   |  |  |          |   |  |  |      |   |  |  |          |   |  |  |      |   |  |  |          |   |  |  |      |  
|-------------------------------------------------- |  | ------------------------------------- | -------- | - | ------------ |  | ---- | ------------ |  |  | -------- | - |  | ------- | ---- | - |  |  | -------- | - |  |  | ---- | - |  |  | -------- | - |  |  | ---- | - |  |  | -------- | - |  |  | ---- | -
|                                                   |  | Year ended December 31,               |         
|                                                   |  | 2013                                  |          |   | 2012Restated |  |      | 2011Restated |  |  | 2010(1)  |   |  | 2009(1) |     
|                                                   |  | (in US$ millions, except percentages) |         
|Consolidated Statements of Income                  |  |                                       |          |   |              |  |      |              |  |  |          |   |  |         |      |   |  |  |          |   |  |  |      |   |  |  |          |   |  |  |      |   |  |  |          |   |  |  |      |  
|Revenue                                            |  |                                       | 6,235.0  |   |              |  | 100  | %            |  |  | 6,167.0  |   |  |         | 100  | % |  |  | 5,790.9  |   |  |  | 100  | % |  |  | 5,364.1  |   |  |  | 100  | % |  |  | 5,497.8  |   |  |  | 100  | %
|Cost of sales and services                         |  |                                       | (4,818.9 | ) |              |  | 77.3 |              |  |  | (4,676.6 | ) |  |         | 75.8 |   |  |  | (4,488.1 | ) |  |  | 77.5 |   |  |  | (4,338.1 | ) |  |  | 80.9 |   |  |  | (4,428.4 | ) |  |  | 80.5 |  
|Gross profit                                       |  |                                       | 1,416.1  |   |              |  | 22.7 |              |  |  | 1,490.4  |   |  |         | 24.2 |   |  |  | 1,302.8  |   |  |  | 22.5 |   |  |  | 1,026.0  |   |  |  | 19.1 |   |  |  | 1,069.4  |   |  |  | 19.5 |  
|Operating income (expense)                         |  |                                       |          |   |              |  |      |              |  |  |          |   |  |         |      |   |  |  |          |   |  |  |      |   |  |  |          |   |  |  |      |   |  |  |          |   |  |  |      |  
|Administrative                                     |  |                                       | (210.5   | ) |              |  | 3.4  |              |  |  | (279.2   | ) |  |         | 4.5  |   |  |  | (261.3   | ) |  |  | 4.5  |   |  |  | (197.5   | ) |  |  | 3.7  |   |  |  | (191.3   | ) |  |  | 3.5  |  
|Selling                                            |  |                                       | (454.4   | ) |              |  | 7.3  |              |  |  | (480.4   | ) |  |         | 7.8  |   |  |  | (418.6   | ) |  |  | 7.2  |   |  |  | (374.1   | ) |  |  | 7    |   |  |  | (304.6   | ) |  |  | 5.5  |  
|Research                                           |  |                                       | (74.7    | ) |              |  | 1.2  |              |  |  | (77.3    | ) |  |         | 1.3  |   |  |  | (85.3    | ) |  |  | 1.5  |   |  |  | (72.1    | ) |  |  | 1.3  |   |  |  | (55.6    | ) |  |  | 1    |  
|Other operating income (expense), net              |  |                                       | 36.9     |   |              |  | 0.6  |              |  |  | (42.8    | ) |  |         | 0.7  |   |  |  | (219.7   | ) |  |  | 3.8  |   |  |  | 9.4      |   |  |  | 0.2  |   |  |  | (138.5   | ) |  |  | 2.5  |  
|Equity in losses of associates                     |  |                                       |         |   |              |  |     |              |  |  | 1.2      |   |  |         |     |   |  |  | 0.3      |   |  |  | 0.0  |   |  |  |         |   |  |  |     |   |  |  |         |   |  |  |     |  
|                                                   |  |                                       |          |   |              |  |      |              |  |  |          |   |  |         |      |   |  |  |          |   |  |  |      |   |  |  |          |   |  |  |      |   |  |  |          |   |  |  |      |  
|Operating profit before financial income (expense) |  |                                       | 713.4    |   |              |  | 11.4 |              |  |  | 611.9    |   |  |         | 9.9  |   |  |  | 318.2    |   |  |  | 5.5  |   |  |  | 391.7    |   |  |  | 7.3  |   |  |  | 379.4    |   |  |  | 6.9  |  
|Financial expenses, net                            |  |                                       | (96.4    | ) |              |  | 1.5  |              |  |  | (6.8     | ) |  |         | 0.1  |   |  |  | (90.5    | ) |  |  | 1.6  |   |  |  | 17.5     |   |  |  | 0.3  |   |  |  | 10.2     |   |  |  | 0.2  |  
|Foreign exchange gain (loss), net                  |  |                                       | (14.6    | ) |              |  | 0.2  |              |  |  | 8.7      |   |  |         | 0.1  |   |  |  | 20.1     |   |  |  | 0.3  |   |  |  | (1.1     | ) |  |  |     |   |  |  | (68.8    | ) |  |  | 1.3  |  
|                                                   |  |                                       |          |   |              |  |      |              |  |  |          |   |  |         |      |   |  |  |          |   |  |  |      |   |  |  |          |   |  |  |      |   |  |  |          |   |  |  |      |  
|Profit before taxes on income                      |  |                                       | 602.4    |   |              |  | 9.6  |              |  |  | 613.8    |   |  |         | 10.0 |   |  |  | 247.8    |   |  |  | 4.3  |   |  |  | 408.1    |   |  |  | 7.6  |   |  |  | 320.8    |   |  |  | 5.8  |  
|Income taxes expense (benefit)                     |  |                                       | (256.4   | ) |              |  | 4.1  |              |  |  | (265.2   | ) |  |         | 4.3  |   |  |  | (127.4   | ) |  |  | 2.2  |   |  |  | (62.7    | ) |  |  | 1.2  |   |  |  | 158.1    |   |  |  | 2.9  |  
|                                                   |  |                                       |          |   |              |  |      |              |  |  |          |   |  |         |      |   |  |  |          |   |  |  |      |   |  |  |          |   |  |  |      |   |  |  |          |   |  |  |      |  
|Net income                                         |  |                                       | 346.0    |   |              |  | 5.5  |              |  |  | 348.6    |   |  |         | 5.7  |   |  |  | 120.4    |   |  |  | 2.1  |   |  |  | 345.4    |   |  |  | 6.4  |   |  |  | 478.9    |   |  |  | 8.7  |  
|                                                   |  |                                       |          |   |              |  |      |              |  |  |          |   |  |         |      |   |  |  |          |   |  |  |      |   |  |  |          |   |  |  |      |   |  |  |          |   |  |  |      |  
|Attributable to:                                   |  |                                       |          |   |              |  |      |              |  |  |          |   |  |         |      |   |  |  |          |   |  |  |      |   |  |  |          |   |  |  |      |   |  |  |          |   |  |  |      |  
|Owners of Embraer                                  |  |                                       | 342.0    |   |              |  | 5.5  |              |  |  | 347.8    |   |  |         | 5.6  |   |  |  | 111.6    |   |  |  | 1.9  |   |  |  | 330.2    |   |  |  | 6.2  |   |  |  | 465.2    |   |  |  | 8.5  |  
|Noncontrolling interest                            |  |                                       | 4.0      |   |              |  | 0.1  |              |  |  | 0.8      |   |  |         | 0.0  |   |  |  | 8.8      |   |  |  | 0.2  |   |  |  | 15.2     |   |  |  | 0.2  |   |  |  | 13.7     |   |  |  | 0.2  |  



|(1) | No restatement of financial information was made because there were no changes generated in the period by the retrospective application of new accounting rules which came into effect as of 2013.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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2013 Compared with 2012

Revenue

Revenue increased 1.1% to
US$6,235.0 million in 2013, from US$6,167.0 million in 2012. Revenue in the Commercial Aviation segment declined 11.9% to US$3,307.0 million in 2013, from US$3,755.4 million in 2012. Executive Jets revenues increased 27.3% to US$1,644.5 million in
2013, from US$1,292.0 million in 2012. Defense and Security revenues increased by 14.5% to US$1,196.9 million in 2013, from US$1,045.2 million in 2012. Other Related Businesses segment revenues increased 16.4% to US$86.6 million in 2013, from
US$74.4 million in 2012.

Commercial Aviation revenues declined in 2013, principally due to a lower level of deliveries in the year
compared to 2012, representing a decrease of 15.1%. In 2013, the Commercial Aviation segment delivered 90 commercial aircraft compared to 106 aircraft in 2012, with a slightly less favorable product mix in the year, as a result of a higher
proportion of smaller E170 and E175 jets delivered relative to E190 and E195 models.

The increase in Executive Jets segment revenues in
2013 is largely driven by an increase in the number of executive jets delivered during the year, as compared to 2012. During 2013, we delivered 119 executive jets (90 light jets and 29 large jets) compared to deliveries of 99 executive jets (77
light jets and 22 large jets) in 2012, an increase of 20.2%. In addition, we had a slightly more positive mix of large jet deliveries in the year (24.4% in 2013, compared to 22.2% in 2012).

Defense & Security segment revenues are accounted for under the percentage-of-completion method, and we continued to execute under
our contracts with the Brazilian federal government, specifically the KC-390 development program as well as the Integrated Border Monitoring System (SISFRON). In addition, deliveries of the Super Tucano to militaries around the world and ongoing
modernization programs with the Brazilian federal government continued apace, helping to drive revenue growth of 14.5% to US$1,196.9 million, compared to US$1,045.2 million in 2012.

Cost of Sales and Services

Cost
of sales and services increased 3.0% to US$4,818.9 million in 2013, from US$4,676.6 million in 2012. The 3.0% increase in cost of sales was higher than the 1.1% growth in revenues in 2013, thus driving an increase in cost of sales and services as a
percentage of revenue, to 77.3% in 2013 compared to 75.8% in 2012. This increase in cost of sales and services is mainly a result of a less favorable product and services mix in 2013, combined with inflation in direct labor costs, partially offset
by ongoing efforts to improve productivity and efficiency, the appreciation of the dollar against the real, and the stimulus packages implemented in Brazil.

Cost of sales and services in the Commercial Aviation segment decreased 9.8%, to US$2,532.6 million in 2013, from US$2,809.3 million in
2012. The decrease in cost of sales and services was lower than the 11.9% decrease in revenues in this segment due to a less favorable product and services mix, coupled with lower operating leverage on a decline of commercial aircraft deliveries in
2013. These impacts were only partially offset by the appreciation of the dollar against the real, ongoing efforts to improve productivity, and the stimulus packages implemented in Brazil. Gross margin in the Commercial Aviation segment
declined from 25.2% in 2012 to 23.4% in 2013.

Cost of sales and services in the Executive Jets segment increased 24.0% to
US$1,284.7 million in 2013 from US$1,035.8 million in 2012. The increase in cost of sales and services in this segment increased less than the 27.3% increase in revenues in 2013, representing a shift to a more favorable product mix as we delivered
more large planes and benefitted from the appreciation of the dollar against the real, as well as stimulus packages implemented in Brazil and our efforts to improve productivity and efficiency.

Cost of sales and services in the Defense & Security segment increased by 21.1% to US$951.2 million in 2013, from US$785.5 million in
2012. The increase in cost of sales and services was higher than the 14.5% increase in revenues in 2013, driven primarily by a less favorable revenue and product mix delivered in 2013, as well as higher costs related to certain contracts in this
segment.



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Cost of sales and services in Other Related Businesses increased 9.6% to US$50.4 million in 2013,
from US$46.0 million in 2012, while revenues for this segment increased 16.4% in 2013.

Gross Profit

As a result of the aforementioned factors, our gross profit decreased 5.0%, to US$1,416.1 million in 2013 from US$1,490.4 million in 2012. Our
gross margin also fell from 24.2% in 2012 to 22.7% in 2013.

Operating Income (Expense)

As further discussed below, operating expense decreased 20.0%, to US$702.7 million in 2013, from US$878.5 million in 2012. Operating expense as
a percentage of revenues decreased to 11.3% in 2013 from 14.2% in 2012.

Administrative. Administrative expenses decreased 24.6%,
to US$210.5 million in 2013, from US$279.2 million in 2012, due to the appreciation of the dollar against the real, as well as the stimulus packages implemented in Brazil.

Selling. Selling expenses decreased 5.4% to US$454.4 million in 2013, compared to US$480.4 million in 2012. The decline in selling
expenses is due to reductions in the Defense & Security segment, government fiscal benefits and the appreciation of the dollar against the real.

Research. Research expenses declined 3.4% to US$74.7 million in 2013, from US$77.3 million in 2012. The decrease in this expense is
primarily explained by the launch of the E2 second generation E-Jets program, in which program costs are now capitalized to intangible assets instead of recognized as research expenses, following approval by our Board of Directors of the economic
viability of the program.

Other operating (expense) income, net. Other operating (expense) income, net improved from an
expense of US$42.8 million in 2012 to income of US$36.9 million in 2013. The expense in 2012 is mainly due to the expense of US$37.4 million in renegotiated financing arrangement expenses in connection with the restructuring of Chautauqua Airlines,
Inc., an airline operator controlled by Republic Airways Holdings.

The change in income from 2012 to 2013 was due to a variety of
non-recurring factors. In 2011, as a result of the bankruptcy filing of AMR Corporation, or AMR, the parent company of our customer American Airlines, we provisioned a total of US$317.5 million to our results in the fourth quarter to account for
expected expenses related to obligations from financial guarantees and residual value guarantees for the fleet of 216 ERJ 145 family aircraft operated by AMR. Of the US$317.5 million provision related to the AMR bankruptcy process, US$241.9 million
was provisioned under other operating (expense) income, net. As a consequence of the more favorable final outcome of the AMR bankruptcy process in the last quarter of 2013, since the initial provisions made in the fourth quarter of 2011, we incurred
total expenses of approximately US$43 million related to the financial guarantees for AMR (including the purchase of 39 ERJ 145 family aircraft). As a consequence of this outcome, in the fourth quarter of 2013 a total of US$180.7 million positively
impacted operating results, recognized in the other operating (expense) income, net account. The US$180.7 million was comprised of a provision reversal of US$109.3 million coupled with a US$71.4 million payment reversal, which we had already made on
these financial guarantees. In the fourth quarter of 2013, we also recognized a US$33.7 million expense related to deferred revenues, attached to a total of US$199 million of financial guarantee obligations which remain for 163 aircraft of the
original AMR ERJ 145 family fleet that have been added back to our off-balance sheet exposure. Therefore, the net effect in the fourth quarter of reversals and expenses related to the AMR financial guarantees is US$147.0 million (US$180.7 million
less US$33.7 million).

Also, in 2013, the Brazilian federal government initiated a multi-industry effort, known as Programa de
Recuperação Fiscal (Fiscal Recovery Program), or Refis, to resolve various open tax debt negotiations with a number of companies. As part of this initiative, the Brazilian federal government offers favorable terms to companies that
choose to voluntarily enroll in the program and settle their tax debts. In the last three months of 2013,



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we opted to enroll in this program in order to take advantage of the opportunity to resolve our related tax negotiations with the government. Consequently, we recorded a provision of US$36.9
million in the other operating (expense) income, net account. We do not anticipate that additional provisions will be made relating to this item.

Equity in loss of associates. Equity in loss of associates decreased from positive US$1.2 million in 2012 to zero in 2013.

Operating Profit Before Financial Income (Expense)

As a result of the aforementioned factors, our consolidated operating profit increased 16.6% to US$713.4 million in 2013, from US$611.9 million
in 2012. Our operating margin increased to 11.4% in 2013 from 9.9% in 2012.

As mentioned above regarding cost of sales and services and
operating income (expense), the operating profit by segment for 2013 for the Commercial Aviation, Executive Jets, Defense & Security and Other Related Businesses segments was US$502.1 million, US$97.0 million, US$91.6 million, and US$22.7
million, respectively. In 2012, the operating profit for these segments was US$438.4 million, US$39.5 million, US$114.8 million, and US$19.2 million, respectively. See Note 39 to our audited consolidated financial statements for operating profit by
segment.

Financial income (expense), net

Financial expense, net increased from US$6.8 million in 2012 to US$96.4 million in 2013, due to a combination of non-recurring and recurring
factors. In 2011, as a result of the AMR bankruptcy filing, we provisioned a total of US$317.5 million to our fourth quarter results to account for expected expenses related to obligations for financial guarantees and residual value guarantees, as
explained above. Of the US$317.5 million provision related to this bankruptcy process in the fourth quarter of 2011, US$75.6 million was recognized in financial income (expense), net, as this amount was related to residual value guarantees. This
amount was not reversed in the fourth quarter of 2013, as we took the opportunity to reduce our total exposure by buying back US$98 million in residual value guarantees related to a portion of the AMR fleet of ERJ 145 family aircraft. Considering
that since the original provision in the fourth quarter of 2011, as a result of ongoing revisions of residual value projections observed by independent aircraft appraisers, we reversed US$17.1 million of this original provision, in the fourth
quarter of 2013 an additional non-recurring expense of US$40 million was accounted for in financial income (expense), net to complete all required provisions for these residual value guarantees. As a result, we no longer have any outstanding
residual value guarantee exposure related to the AMR fleet of ERJ 145 family aircraft.

In addition, we also recognized an expense of
US$7.9 million in financial income (expense), net related to the accrued interest on the tax obligations related to the Refis program, explained in greater detail under Operating Income (Expense).

Foreign exchange gain (loss), net

Foreign exchange gain (loss), net changed to a loss of US$14.6 million in 2013 from a gain of US$8.7 million in 2012, reflecting net foreign
exchange rate changes on monetary assets and liabilities denominated in other currencies which are translated into our functional currency, the U.S. dollar.

Profit Before Taxes on Income

As a
result of the aforementioned factors, profit before taxes on income decreased 1.9% to US$602.4 million in 2013 from US$613.8 million in 2012.

Income
tax benefit (expense)

Income taxes represented an expense of US$256.4 million in 2013, compared to an expense of US$265.2 million in
2012. Income taxes declined principally due to lower profit before taxes on income in 2013 as compared to 2012.



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Our effective tax rate was relatively stable in 2013 as compared 2012, at 42.6% compared to
43.2%, respectively, declining slightly due to the slightly lower profit before taxes in 2013.

Net Income

As a consequence of the aforementioned factors, our consolidated net income after taxes decreased 0.7% to US$346.0 million in 2013, from
US$348.6 million in 2012. As a percent of revenue, net income after taxes was 5.5% in 2013 compared to 5.7% in 2012.

2012 Compared with
2011

Revenue

Revenue
increased 6.5%, to US$6,167.0 million in 2012, from US$5,790.9 million in 2011. Revenue in the Commercial Aviation segment increased slightly, by 1.1%, to US$3,755.4 million in 2012, from US$3,751.2 million in 2011. Executive Jets revenues increased
15.5%, to US$1,292.0 million in 2012, from US$1,118.8 million in 2011. Defense & Security revenues increased by 24.4%, to US$1,045.2 million in 2012, from US$839.9 million in 2011. Other Related Businesses revenues decreased 8.1%, to
US$74.4 million in 2012, from US$81.0 million in 2011.

Commercial Aviation revenues remained stable primarily as a consequence of a
similar number of aircraft deliveries, as well as a similar product and service mix in 2012. We delivered 106 commercial aircraft in 2012 as compared to 105 aircraft in 2011, an increase of one commercial aircraft, or 1.0%.

The increase in Executive Jets revenues is mainly driven by changes in product mix between small and large jets, which resulted in a reduction
of 7.2% in deliveries of small executive jets and an increase of 37.5% in deliveries of large executive jets in 2012, totaling 99 executive jets in 2012 (including 19 Legacy 600/650, 29 Phenom 100, 48 Phenom 300, 2 Lineage 1000 and 1 Embraer 190
Shuttle) compared to 99 in 2011 (including 13 Legacy 600/650, 41 Phenom 100, 42 Phenom 300, 2 Lineage 1000 and 1 Embraer 190 Shuttle).

Defense and Security revenues are accounted for using the percentage-of-completion method and increased 24.4%, to US$1,045.2 million in 2012,
from US$839.9 million in 2011, primarily as a result of growth in deliveries of the Super Tucano and the evolution of the development of the KC-390.

Cost of Sales and Services

Cost
of sales and services increased 4.2%, to US$4,676.6 million in 2012, from US$4,488.1 million in 2011. This increase in cost of sales of 4.2% was less than the 6.5% increase in revenue in 2012. Cost of sales and services as a percentage of revenue
decreased to 75.8% in 2012, from 77.5% in 2011. This reduction in cost of sales and services is a result of a more favorable product and revenue mix in 2012, our ongoing efforts to improve efficiency and productivity, the appreciation of the dollar
against the real, as well as the stimulus packages implemented in Brazil.

Cost of sales and services in the
Commercial Aviation segment decreased 3.9%, to US$2,809.3 million in 2012, from US$2,921.8 million in 2011, due to a more favorable product and revenue mix in 2012, our ongoing efforts to improve efficiency and productivity, the appreciation of the
dollar against the real, as well as the stimulus packages implemented in Brazil, compared to a slight increase of 1.1% in revenues for the Commercial Aviation segment.

Cost of sales and services in the Executive Jets segment increased by 16.5%, to US$1,035.8 million in 2012, from US$888.8 million in 2011, in
line with the 15.5% increase in revenues for this segment. Most of our costs relating to sales and services in the Executive Jets segment are variable, considering that the majority of costs are related to aircraft parts and components, such as
engines and avionics, the prices of which increased in 2012.

Cost of sales and services in the Defense and Security segment increased by
23.4% to US$785.5 million in 2012, from US$636.8 million in 2011, while revenues in this segment increased by 24.4%. This increase comes primarily as a result of the different revenue and product mix delivered in this segment during 2012.



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Cost of sales and services in Other Related Businesses increased 13.0%, to US$46.0 million in
2012, from US$40.7 million in 2011, while revenues for this segment decreased 8.1%.

Gross Profit

As a result of the foregoing factors, our gross profit increased 14.4%, to US$1,490.4 million in 2012, from US$1,302.8 million in 2011. Our
gross margin also increased to 24.2% in 2012 from 22.5% in 2011.

Operating Income (Expense)

As further discussed below, operating expense decreased 10.8%, to US$878.5 million in 2012, from US$984.6 million in 2011. Operating expenses
as a percentage of revenue decreased to 14.2% in 2012 from 17.0% in 2011.

Administrative. Administrative expenses increased 6.9%,
to US$279.2 million in 2012, from US$261.3 million in 2011, primarily as a result of the increase of approximately 10% in Brazilian labor expenses, which were partially offset by the appreciation of the dollar against the real, as well as the
stimulus packages implemented in Brazil.

Selling. Selling expenses increased 14.8%, to US$480.4 million in 2012, from
US$418.6 million in 2011. This increase was mainly due to Embraers efforts to take advantage of market improvements to generate sales, and as our worldwide fleet continued to grow through 2012, particularly in the executive aviation market,
our customer support infrastructure was increased to support such fleet growth. Additionally, selling expenses were affected by the increase in revenues and product mix in 2012.

Research. Research expenses decreased 9.4%, to US$77.3 million in 2012, from US$85.3 million in 2011. This decrease is mainly explained
by the reduced level of research activity related to the development of the second generation of E-Jets aircraft.

Other
operating (expense) income, net. Other operating expense, net decreased to net other operating expense of US$42.8 million in 2012 from net other operating expense of US$219.7 million in 2011. This expense in 2012 is mainly due to the expense of
US$37.4 million in renegotiated financing arrangement expenses in connection with the restructuring of Chautauqua Airlines Inc., an airline operator controlled by Republic Airways Holdings. This expense for Chautauqua was lower than the provision of
financial guarantees obligation made for AMR in 2011, which totaled US$241.9 million.

Equity in loss of associates. Equity
in loss of associates improved, at positive US$1.2 million in 2012, from US$0.3 million in 2011.

Operating Profit Before Financial Income
(Expense)

As a result of the foregoing factors, our consolidated operating profit increased 92.3%, to US$611.9 million in 2012, from
US$318.2 million in 2011. Our operating margin increased to 9.9% in 2012 from 5.5% in 2011.

As mentioned above regarding cost of sales
and services and operating income (expense), the operating profit by segment for 2012 for the Commercial Aviation, Executive Jets, Defense and Security and Other Related Businesses segments was US$438.4 million, US$39.5 million, US$114.8 million and
US$19.2 million, respectively. In 2011, the operating profits for these segments was US$157.1 million, US$55.2 million, US$82.0 million and US$23.9 million, respectively. See Note 39 to our audited consolidated financial statements for operating
profit by segment.

Financial income (expense), net

Financial expense, net, decreased by 92.5% to a net financial expense of US$6.8 million in 2012, compared to net financial expense of US$90.5
million in 2011, primarily due to the absence of US$75.6 million of non-recurring expenses in connection with the provision of residual value guarantee obligations for the AMR Corporation, which was recorded in 2011, and a reversal of US$35.4
million in 2012 resulting from there being no observed impact on the value of regional aircraft in the secondary market, as we had predicted when we made the initial provision in 2011.



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Foreign exchange gain (loss), net

Foreign exchange gain, net decreased to US$8.7 million in 2012 from a net foreign exchange gain of US$20.1 million in 2011, reflecting net
foreign exchange rate changes on monetary assets and liabilities denominated in other currencies which are translated into our functional currency, the U.S. dollar.

Profit Before Taxes on Income

As a
result of the foregoing factors, profit before taxes on income increased 147.7%, to US$613.8 million in 2012, from US$247.8 million in 2011.

Income
tax benefit (expense)

Income taxes represented an expense of US$265.2 million in 2012, compared to an expense of US$127.4 million in
2011, mainly as a result of the effects of foreign exchange changes on our nonmonetary assets.

Our effective tax rate decreased to 43.2%
in 2012, compared to an effective tax rate of 51.4% of our profit before taxes on income in 2011, due to higher income before taxes in 2012 as well as the tax on profits of our overseas subsidiaries. In 2012, the impact of the exchange rate
variation on the unrealized tax base of non-monetary assets (inventory, property, plant and equipment and intangible assets) at year-end was lower when compared to 2011.

Net Income

As a result of the foregoing
factors, our net income after taxes increased 189.5% to US$348.6 million in 2012 from US$120.4 million in 2011. As a percent of revenue, net income after taxes increased to 5.7% in 2012 from 2.1% in 2011.

Accounting Pronouncements Not Yet Adopted

For a description of recently issued accounting pronouncements, see Note 4 to our consolidated financial statements contained in Item 18.
Financial Statements. We prepared our consolidated financial statements as of and for the year ended December 31, 2013 in accordance with IFRS, as issued by the IASB.



|5B. | Liquidity and Capital Resources
|--- | -------------------------------

Overview

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

As of the date of this annual report, we believe that our traditional sources of funds are sufficient to meet our foreseeable working capital
requirements, including to (1) continue to improve the EMBRAER 170/190 jet family, the Phenom 100, the Phenom 300 and the Lineage 1000 executive jets, (2) further develop our new Legacy 450/500 executive jets, (3) further develop the
E2 jet family, (4) make other planned capital expenditures and (5) pay dividends and interest on shareholders equity. At this point, our access to liquidity sources has not been materially impacted by the current credit environment,
and we do not expect that such access will be materially impacted in the near future. However, there can be no assurance that our traditional sources of funds, or that the cost or availability of our credit facilities or future borrowing sources,
will not be materially impacted by the ongoing market disruptions.



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

Net Cash Generated by Operating Activities and Working Capital

2013

In 2013, net
cash generated by operating activities was US$564.6 million, compared to net cash generated by operating activities of US$693.0 million in 2012. The decrease in the inflow of cash generated by operating activities in 2013 is primarily a result of
financial investments we made, which are short-term investments with maturity greater than three months that we expect to use in our regular operations, and the reversal of financial guarantees, which were significantly higher in 2013 compared to
2012.

We had working capital of US$2,875.1 million at December 31, 2013 and US$2,570 million at December 31, 2012. Our working
capital increased in 2013 primarily as a result of an increase in our financial investments and a decrease in our short-term loans and financing.

2012

In 2012, net
cash generated by operating activities was US$693 million, compared to net cash generated by operating activities of US$480.1 million in 2011. The increase in the inflow of cash generated by operating activities in 2012 is primarily a result of
higher net income in 2012 and relatively consistent balances of current asset and current liability accounts in 2011 and 2012.

We had
working capital of US$2,570 million at December 31, 2012 and US$2,325.5 million at December 31, 2011. Our working capital increased in 2012 as a result of an increase in cash flow from operating activities in 2012.

2011

In 2011, net
cash generated by operating activities was US$480.1 million, compared to net cash generated by operating activities of US$873.8 million in 2010. The decrease in the inflow of cash generated by operating activities in 2011 is primarily a result of
lower net income and changes in financial assets of US$124.3 million.

We had working capital of US$2,325.5 million at December 31,
2011 and US$2,594.1 million at December 31, 2010. Our working capital needs decreased in 2011, as a result of an increase in loans and financing coupled with an increase in non-recourse and recourse debt.

Net Cash Used in Investing Activities

2013

In 2013, net
cash used in investing activities was US$764.0 million, compared to net cash used in investing activities of US$617.3 million in 2012.

Net cash used in investing activities in 2013 increased as a result of higher additions to intangibles and property, plant and equipment when
compared to 2012. We also spent US$17.3 million in the acquisition of all the non-controlling interests in our subsidiary Atech Negócios em Tecnologia S.A. in Brazil and in 2012 we spent US$17.4 million in the acquisition of a non-controlling
interest in our subsidiary Airholding SGPS S.A. in Portugal. See Note 14.1 to our audited consolidated financial statements.



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2012

In 2012, net cash used in investing activities was US$617.3 million, compared to net cash used in investing activities of US$602.0 million in
2011.

Net cash used in investing activities remained fairly constant between 2011 and 2012, primarily as a result of consistent
investment in capital expenditure and product development during the two years.

2011

In 2011, net cash used in investing activities was US$602.0 million, compared to net cash used in investing activities of US$288.3 million in
2010.

We experienced an outflow of cash to investing activities in 2011, mainly as a result of an increase in investments in intangible
assets and property, plant and equipment.

Net Cash Generated by Financing Activities and Total Debt

2013

In 2013, net
cash generated by financing activities was US$192.5 million, compared to net cash generated by financing activities of US$422.3 million in 2012. During 2013, we raised new financings of US$890.8 million compared to new borrowings of US$1,692.6
million in 2012. Furthermore, we also repaid US$650.2 million of our indebtedness in 2013 compared to debt repayments in the aggregate amount of US$1,225.3 million in 2012. In 2013, we distributed US$71.4 million in interest on shareholders
equity or dividends compared to US$59.5 million in 2012. In 2013, like in 2012, we did not spend any amounts in connection with share buyback programs.

At December 31, 2013, we had total debt of US$2,194.3 million under our financing arrangements described below, 96.4% of which was
long-term debt and 3.6% of which consisted of short-term debt. In comparison, we had total debt of US$2,066.5million at December 31, 2012, consisting of 83.7% of long-term debt and 16.3% of which consisted of short-term debt. Our total debt
increased in 2013 in comparison with 2012.

2012

In 2012, net cash generated by financing activities was US$422.3 million, compared to net cash used in financing activities of US$96.4 million
in 2011. During 2012, we raised new financings of US$1,692.6 million compared to new borrowings of US$2,362.5 million in 2011. Furthermore, we also repaid US$1,225.3 million of our indebtedness in 2012 compared to debt repayments in the aggregate
amount of US$2,082.7 million in 2011. In 2012, we distributed US$59.5 million in interest on shareholders equity or dividends compared to US$183.4 million in 2011. In 2012, like in 2011, we did not spend any amounts in connection with share
buyback programs.

At December 31, 2012, we had total debt of US$2,066.5 million under our financing arrangements described below,
83.7% of which was long-term debt and 16.3% of which consisted of short-term debt. In comparison, we had total debt of US$1,658.1 million at December 31, 2011, consisting of 84.8% of long-term debt and 15.2% of which consisted of short-term
debt. Our total debt increased in 2012 in comparison with 2011, largely due to the issuance of US$500 million of bonds in June 2012.

2011

In 2011, net
cash generated by financing activities was US$96.4 million, compared to net cash used in financing activities of US$802.2 million in 2010. During 2011, we raised new financings of US$2,362.5 million compared to new borrowings of US$942.8 million in
2010. Furthermore, we also repaid US$2,082.7 million of our indebtedness in 2011 compared to debt repayments in the aggregate amount of US$1,583.4 million in 2010. In 2011, we distributed US$183.4 million in interest on shareholders equity or
dividends compared to US$161.6 million in 2010. In 2011, like in 2010, we did not spend any amounts in connection with share buyback programs.

At December 31, 2011, we had total debt of US$1,658.1 million under our financing arrangements described below, 84.8% of which was
long-term debt and 15.2% of which consisted of short-term debt. In



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comparison, we had total debt of US$1,434.8 million at December 31, 2010, consisting of 94.9% of long-term debt. Our total debt increased in 2011 in comparison with 2010, largely due to an
increase in expenditures related to research and product development coupled with capital expenditures.

Credit Facilities and Lines of Credit

Long-term Facilities

In October
2006, our wholly owned finance subsidiary, Embraer Overseas Limited, or Embraer Overseas, issued US$400 million 6.375% guaranteed notes due 2017 and, as of December 31, 2013, US$238.0 million was outstanding (US$6.5 million in the short-term),
including principal and accrued interest. Interest will be paid semiannually. The notes are unconditionally guaranteed by us. The notes have been listed on the Luxembourg Stock Exchange. On March 30, 2007, we and Embraer Overseas commenced an
exchange offer to exchange the notes for new notes registered with the SEC. The exchange offer was successfully completed as of May 18, 2007 and, as a consequence, US$376.3 million or approximately 95% of the notes were registered. The
indenture under which the notes were issued contains customary covenants and restrictions such as limitation on liens, consolidation, merger or transfer of assets. By December 31, 2013, Embraer had repurchased and canceled 19,908 (5.0%) of
these bonds, totaling US$15.2 million, with a face value of US$19.9 million. These bonds were purchased by Embraer Overseas through open market transactions. As described below, in September 2013 we completed an exchange offer in which US$146.4
million in principal amount of our guaranteed notes due 2017 were exchanged for our guaranteed notes due 2023.

In November
2006, December 2007 and October 2008, we entered into certain credit facilities in the aggregate amount of US$60.0 million with the FINEP to support the research and development expenses of the Phenom 100 and Phenom 300 aircraft, which were
totally disbursed in 2008. The facility bears interest at TJLP plus 5.0% per annum and is fully secured by a pledge of certain machines and equipment and by a bank standby letter of credit. The credit facility is repayable from December 2008 to
September 2015. As of December 31, 2013, we had outstanding US$6.1 million under our credit facilities with the FINEP, of which US$3.5 million is due in the short-term, including principal and accrued interest. The FINEP credit facilities are
denominated in reais, and amounts appearing herein have been converted into U.S. dollars, our functional currency, for purposes of preparing our IFRS consolidated financial statements.

In October 2009, Embraer Overseas issued US$500 million 6.375% guaranteed notes due 2020 and, as of December 31, 2013, US$162.5 million
was outstanding (US$2.4 million in the short-term), including principal and accrued interest. Interest will be paid semiannually. The notes are unconditionally guaranteed by us. As described below, in September 2013 we completed an exchange offer in
which US$337.2 million in principal amount of our guaranteed notes due 2020 were exchanged for our guaranteed notes due 2023. In connection with the exchange offer, we received the requisite consents from holders of our guaranteed notes due 2020 to
eliminate substantially all the restrictive covenants, certain events of default and related provisions contained in the indenture under which the notes were issued, and we delisted our guaranteed notes due 2020 from the New York Stock Exchange.

In March 2011, we entered into certain credit facilities with the FINEP in the aggregate amount of US$58.1 million, to support the
research and development expenses of the Legacy 500 aircraft, all of which were totally disbursed in 2011. The facility bears interest at 3.5% per annum and is fully secured by a pledge of certain machines and equipment and by a bank standby
letter of credit. The credit facility is repayable from May 2013 to April 2018. As of December 31, 2013, we had US$34.8 million outstanding under our credit facilities with the FINEP, of which US$8.1 million is due in the short-term, including
principal and accrued interest. The FINEP credit facilities are denominated in reais, and amounts appearing herein have been converted into U.S. dollars, our functional currency, for purposes of preparing our IFRS consolidated financial
statements.

In March 2011, we entered into certain credit facilities with the BNDES in the aggregate amount of US$227.6 million,
to support the research and development expenses of the Legacy 500 aircraft, including conceptual study and project and development, which were partially disbursed in 2012. The facility bears interest at TJLP plus 1.92% and 3.5% to 4.5% per
annum and is fully secured by a pledge of certain machines and equipment and by a bank standby letter of credit. The credit facility is repayable from May 2013 to April 2018. As of December 31, 2013, we had US$165.2 million outstanding under
our credit facilities with the BNDES, of which US$38.4 million is due in the short-term, including principal and accrued interest. The BNDES credit facilities are denominated in reais, and amounts appearing herein have been converted into U.S.
dollars, our functional currency, for purposes of preparing our IFRS consolidated financial statements.



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In March 2012, we signed a contract for a non-reimbursable revolving credit line with four
financial institutions of the Brazilian market in the total aggregate amount of R$1 billion, equivalent to US$489 million, with maturity on March 8, 2015. Each institution committed R$250 million, and we may disburse up to the total amount
between March 9, 2012 and February 7, 2015. This working capital credit facility will bear interest on the disbursed outstanding principal amount at a rate per annum equal to the CDI (Brazilian federal government rate) plus
1.30% per annum. The maintenance costs will be included in our financial results.

In June 2012, we issued US$500
million 5.150% notes due 2022 and, as of December 31, 2013, US$498.9 million was outstanding (US$1.1 million in the short-term), including principal and accrued interest. Interest will be paid semiannually. The notes are our unsecured and
unsubordinated obligations. The notes have been registered with the SEC and listed on the New York Stock Exchange. The indenture under which the notes were issued contains customary covenants and restrictions such as limitation on liens,
consolidation, merger or transfer of assets.

In February 2013, we signed contracts in the form of export credit notes with five
Brazilian financial institutions in the total aggregate amount of R$712.0 million, equivalent to US$303.9 million, maturing in February 2016. This facility bears interest at 5.5% per annum. As of December 31, 2013, we had US$294.7 million
total outstanding, of which US$1.4 million is due in the short-term, including principal and accrued interest. The export credit notes are denominated in reais, and amounts appearing herein have been converted into U.S. dollars, our
functional currency, for purposes of preparing our IFRS financial statements.

In March and April 2013, we signed credit
agreements in the form of BNDES pre-shipment export credit lines (BNDES PSI  Subprograma Exportação de Pré-embarque) with four Brazilian financial institutions in the total aggregate amount of R$200.0 million,
equivalent to US$85.4 million, with maturity in March and April of 2016. These facilities bear interest at 5.5% per annum. As of December 31, 2013, we had US$86.2 million total outstanding, of which US$0.8 million is due in the short-term,
including principal and accrued interest. This facilities are denominated in reais, and amounts appearing herein have been converted into U.S. dollars, our functional currency, for purposes of preparing our IFRS financial statements.

In August 2013, we signed a credit facility with the FINEP in the amount of R$303.9 million, equivalent to US$129.8 million,
to support the research and development expenses of the Legacy 450 aircraft, of which US$26.8 million were disbursed in 2013. The facility bears interest at 3.5% per annum and is fully secured by a bank guarantee. The final maturity is in
September 2023. As of December 31, 2013, we had US$26.8 million outstanding under this credit facility with the FINEP, of which US$0.05 million is due in the short-term, including principal and accrued interest. The FINEP credit facilities are
denominated in reais, and amounts appearing herein have been converted into U.S. dollars, our functional currency, for purposes of preparing our IFRS financial statements.

In September 2013, we completed an exchange offer in which US$146.4 million in principal amount of our guaranteed notes with maturity in 2017
and US$337.2 million in principal amount of our guaranteed notes with maturity in 2020 were exchanged for approximately US$540.5 million in principal amount of notes issued by Embraer Overseas, with maturity in 2023. The notes due in 2023 are
unconditionally guaranteed by us and were issued pursuant to exemptions from SEC registration pursuant to Regulation S and Rule 144A under the Securities Act. The notes due in 2023 are subject to a registration rights agreement, pursuant to which we
have agreed to exchange the notes within 270 days of their issuance for notes with the same terms and conditions which are registered with the SEC. As of December 31, 2013, a total of US$490.0 million under our notes due 2023 was outstanding,
of which US$8.9 million was due in the short-term, including principal and accrued interest.

We may from time to time seek to retire or
purchase our outstanding debt, including our guaranteed notes due 2017, 2020, 2022 and 2023, through cash purchases and/or exchanges for other securities, in open market purchases, privately negotiated transactions or otherwise. Such repurchases or
exchanges, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material, and notes repurchased may be cancelled or resold, but will only be resold
in compliance with applicable requirements or exemptions under the relevant securities laws.



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In December 2013, we signed a contract with BNDES to support project development in the total
aggregate amount of R$1.4 billion, equivalent to US$598 million. As of December 31, 2013 there was no amount disbursed under this contract.

We have various other long-term loans and credit agreements with aggregate outstanding borrowings of US$190.4 million at December 31,
2013. See Note 20 to our audited consolidated financial statements for further information on these financing arrangements.

Some of our
long-term financing agreements include customary covenants and restrictions, including those that require us to maintain: (1) a maximum leverage ratio, calculated as net debt to earnings before interest, taxes, depreciation and amortization, or
EBITDA, of 3.5:1 and (2) a minimum net debt service coverage ratio, calculated as EBITDA to financial expenses, of 2.25:1. Other restrictions included in our long-term financings include negative pledge covenants and restrictions on significant
changes in control, sales of substantially all of our assets, dividend payments during events of default and certain transactions with our affiliates. As of December 31, 2013, we were in compliance with all restrictive covenants contained in
our financing agreements.

At December 31, 2013, US$331.6 million of our total debt was secured by a combination of mortgages on
certain of our real estate, liens on certain of our machinery and equipment and by a bank standby letter of credit.

Short-term Facilities

We have various short-term loans and credit agreements with aggregate outstanding borrowings of US$0.1 million at December 31, 2013.
See Note 20to our audited consolidated financial statements for further information on our short-term financing arrangements.



|5C. | Research and Development, Patents and Licenses, etc.
|--- | ----------------------------------------------------

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

Research expenses totaled US$74.7 million in 2013 and US$77.3 million in 2012. This decrease in research expenses in 2013 is a result of a
smaller number of research projects that entered into their experimental stages in 2012, thereby demanding less research resources.

In
2014, we expect to invest approximately US$80 million in our research activities.

For information on our capital expenditures, comprising
investments in development and property, plant and equipment, see Item 4B. Information on the CompanyHistory and Development of the CompanyCapital Expenditures (Property, Plant and Equipment and Development).

Intellectual Property

Our
intellectual property, which includes utility patents, design patents, trade secrets, know-how and trademarks, is important to our business. We hold trademarks over our name and symbol and the names of our products, some of which are registered and
some of which are in the process of registration in a number of countries, including Brazil, the United States, Canada, Singapore, Hong Kong, China, European Union and Japan. At December 31, 2013, we had more than 450 trademarks. Our trademarks
are generally renewed at the end of their validity period, which usually runs from ten years from the date of application for registration. We do not believe that the loss of any of our trademarks would have a material impact on our business or
results of operations.

We develop our intellectual property in our research, development and production process. Under the agreements we
have with some of our suppliers and risk-sharing partners, they grant us access to information and technology necessary to better develop, manufacture and market our products.



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We aim to protect our intellectual property rights resulting from investments in technical
research and development.

We hold granted patents and patent applications relating to our manufacturing technology. Currently, we hold
granted patents and patent applications from the appropriate registries in Brazil, the United States, the European Union, Russia, Japan, India and China in connection with the various technologies of our products. We require that our suppliers and
risk-sharing partners respect the intellectual property rights of third parties, and we believe that we have the necessary intellectual property rights to conduct our business and operations.

We filed 227 patent applications between 2009 and 2013. We were granted 91 patents between 2009 and 2013.

Innovation

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

We view a focus on innovation as key to the competitiveness and sustainability of our business. For this reason, we created an innovation and
knowledge management area to reinforce our initiatives. The area is responsible for the promotion of innovative ideas aimed at the development of new businesses, products, technologies, services and processes. Our Innovation Policy and our
Innovation Management Model contain the bases and requirements, respectively, related to our innovation processes.

Our Innova program, or
Innova, is the principal tool created by our innovation and knowledge management area to promote innovation within Embraer. The program makes channels and spaces which promote the development and implementation of innovations available, such as the
prototype laboratories in São José dos Campos and Gavião Peixoto, and the Innova Spaces, in São José dos Campos, Fort Lauderdale and Melbourne.

Innova acts on the fronts of spontaneous innovation, stimulated innovation and recognition. On the spontaneous innovation front, the Green
Light program evaluates innovative proposals presented voluntarily by employees. If approved, the proposing employees are granted time and resources to develop the projects. In 2013, eight innovative projects were selected, and the first two
projects have already been implemented. For 2014, there are fifteen projects under evaluation.

In order to promote innovation, we have
also created the Innova Challenge, by which challenges are submitted to our employees to be solved in a collaborative environment. In 2013, 12 challenges were launched, resulting in 539 new ideas. Since then, 24 prototypes entered into the final
stage of implementation for 7 innovation projects, with two already implemented.

We established Innova on Demand, in which the area of
innovation advises a specific business unit of our company to enhance its initiatives and improve its results. Two thousand twenty-six new ideas were presented and 15 turned into innovation projects, with two projects having already been
implemented.

In 2013, we implemented the Innovation Recognition Program. Under this program, all successfully implemented innovations
must be acknowledged and celebrated. Also in 2013, 235 employees were recognized for their 95 innovations in both spontaneous and encouraged innovations. In addition, nine management groups in the categories of manufacturing, engineering and main
office were acknowledged as the most favorable environments for innovation in the company.

Of our net revenues in 2013, 34% came from
innovations developed between 2009 and 2013. We implemented 12,430 innovations in 2013.

Embraer received the National Innovation Award,
sponsored by CNI, Sebrae and the Competitive Brazil Movement, in the category of Technological Innovation Projects. The winning project was Ahead-PRO, a system of preventive monitoring for aircraft, created with the purpose of providing, at all
times, an updated view of the condition in which the aircrafts components are operating. We believe the implementation of the innovative project impacted our competitiveness, increasing our rates of customer satisfaction. The system is
available for the E-Jets and Phenoms.



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|5D. | Trend Information
|--- | -----------------

The following table summarizes our order book for the Commercial
Aviation segment at December 31, 2013. Our total firm order backlog at that date, including executive jets and defense aircraft, was US$18.2 billion.



|                    |  |            |     |  |         |  |     |            |  |  |                   |  |  |  |     | 
|------------------- |  | ---------- | --- |  | ------- |  | --- | ---------- |  |  | ----------------- |  |  |  | --- | 
|Commercial Aviation |  | FirmOrders |     |  | Options |  |     | Deliveries |  |  | Firm OrderBacklog | 
|EMB 120 Brasília    |  |            | 352 |  |         |  |    |            |  |  | 352               |  |  |  |    | 
|ERJ 135             |  |            | 108 |  |         |  |    |            |  |  | 108               |  |  |  |    | 
|ERJ 140             |  |            | 74  |  |         |  |    |            |  |  | 74                |  |  |  |    | 
|ERJ 145             |  |            | 708 |  |         |  |    |            |  |  | 708               |  |  |  |    | 
|EMBRAER 170         |  |            | 188 |  |         |  | 26  |            |  |  | 187               |  |  |  | 1   | 
|EMBRAER 175         |  |            | 375 |  |         |  | 472 |            |  |  | 187               |  |  |  | 188 | 
|EMBRAER 190         |  |            | 569 |  |         |  | 169 |            |  |  | 496               |  |  |  | 73  | 
|EMBRAER 195         |  |            | 145 |  |         |  | 22  |            |  |  | 128               |  |  |  | 17  | 
|EMBRAER 175 - E2    |  |            | 100 |  |         |  | 100 |            |  |  |                  |  |  |  | 100 | 
|EMBRAER 190 - E2    |  |            | 25  |  |         |  | 25  |            |  |  |                  |  |  |  | 25  | 
|EMBRAER 195 - E2    |  |            | 25  |  |         |  | 25  |            |  |  |                  |  |  |  | 25  | 

The following tables set forth our Commercial Aviation order book at December 31, 2013 by aircraft type,
customer and country.

ERJ 135:



|                                    |  |            |     |  |           |  |     |                   |  |  |   | 
|----------------------------------- |  | ---------- | --- |  | --------- |  | --- | ----------------- |  |  | - | 
|Customer                            |  | FirmOrders |     |  | Delivered |  |     | Firm OrderBacklog | 
|American Eagle (USA)                |  |            | 40  |  |           |  | 40  |                   |  |  |  | 
|British Midland (UK)                |  |            | 3   |  |           |  | 3   |                   |  |  |  | 
|City Airline AB (Sweden)            |  |            | 2   |  |           |  | 2   |                   |  |  |  | 
|ExpressJet (USA)                    |  |            | 30  |  |           |  | 30  |                   |  |  |  | 
|Flandair (France)                   |  |            | 3   |  |           |  | 3   |                   |  |  |  | 
|Jet Magic (Ireland)                 |  |            | 1   |  |           |  | 1   |                   |  |  |  | 
|Luxair (Luxembourg)                 |  |            | 2   |  |           |  | 2   |                   |  |  |  | 
|Pan Européenne (France)             |  |            | 1   |  |           |  | 1   |                   |  |  |  | 
|Proteus (France)                    |  |            | 3   |  |           |  | 3   |                   |  |  |  | 
|Regional Airlines (France)          |  |            | 3   |  |           |  | 3   |                   |  |  |  | 
|Republic Airways (USA)              |  |            | 15  |  |           |  | 15  |                   |  |  |  | 
|South Africa Airlink (South Africa) |  |            | 5   |  |           |  | 5   |                   |  |  |  | 
|Total                               |  |            | 108 |  |           |  | 108 |                   |  |  |  | 

ERJ 140:



|                       |  |            |    |  |           |  |    |                   |  |  |   | 
|---------------------- |  | ---------- | -- |  | --------- |  | -- | ----------------- |  |  | - | 
|Customer               |  | FirmOrders |    |  | Delivered |  |    | Firm OrderBacklog | 
|American Eagle (USA)   |  |            | 59 |  |           |  | 59 |                   |  |  |  | 
|Republic Airways (USA) |  |            | 15 |  |           |  | 15 |                   |  |  |  | 
|Total                  |  |            | 74 |  |           |  | 74 |                   |  |  |  | 



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ERJ 145:



|                               |  |            |     |  |           |  |     |                   |  |  |   | 
|------------------------------ |  | ---------- | --- |  | --------- |  | --- | ----------------- |  |  | - | 
|Customer                       |  | FirmOrders |     |  | Delivered |  |     | Firm OrderBacklog | 
|Aerolitoral (Mexico)           |  |            | 5   |  |           |  | 5   |                   |  |  |  | 
|Air Caraibes (Guadalupe)       |  |            | 2   |  |           |  | 2   |                   |  |  |  | 
|Alitalia (Italy)               |  |            | 14  |  |           |  | 14  |                   |  |  |  | 
|American Eagle (USA)           |  |            | 118 |  |           |  | 118 |                   |  |  |  | 
|Axon (Greece)                  |  |            | 3   |  |           |  | 3   |                   |  |  |  | 
|British Midland (UK)           |  |            | 9   |  |           |  | 9   |                   |  |  |  | 
|British Regional Airlines (UK) |  |            | 23  |  |           |  | 23  |                   |  |  |  | 
|Brymon (UK)                    |  |            | 7   |  |           |  | 7   |                   |  |  |  | 
|China Southern (China)         |  |            | 6   |  |           |  | 6   |                   |  |  |  | 
|China Eastern Jiangsu (China)  |  |            | 5   |  |           |  | 5   |                   |  |  |  | 
|China Eastern Wuhan (China)    |  |            | 5   |  |           |  | 5   |                   |  |  |  | 
|Cirrus (Germany)               |  |            | 1   |  |           |  | 1   |                   |  |  |  | 
|ExpressJet (USA)               |  |            | 245 |  |           |  | 245 |                   |  |  |  | 
|ERA (Spain)                    |  |            | 2   |  |           |  | 2   |                   |  |  |  | 
|Flandre Air (France)           |  |            | 5   |  |           |  | 5   |                   |  |  |  | 
|GECAS (PB Air - Thailand)      |  |            | 2   |  |           |  | 2   |                   |  |  |  | 
|HNA Group (China)              |  |            | 25  |  |           |  | 25  |                   |  |  |  | 
|KLM EXEL (Holland)             |  |            | 2   |  |           |  | 2   |                   |  |  |  | 
|Lot Polish (Poland)            |  |            | 14  |  |           |  | 14  |                   |  |  |  | 
|Luxair (Luxembourg)            |  |            | 9   |  |           |  | 9   |                   |  |  |  | 
|Mesa (USA)                     |  |            | 36  |  |           |  | 36  |                   |  |  |  | 
|Nigeria (Nigeria)(1)           |  |            | 1   |  |           |  | 1   |                   |  |  |  | 
|Portugalia (Portugal)          |  |            | 8   |  |           |  | 8   |                   |  |  |  | 
|Proteus (France)               |  |            | 8   |  |           |  | 8   |                   |  |  |  | 
|Regional (France)              |  |            | 15  |  |           |  | 15  |                   |  |  |  | 
|Republic Airways (USA)         |  |            | 60  |  |           |  | 60  |                   |  |  |  | 
|Rheintalflug (Austria)         |  |            | 3   |  |           |  | 3   |                   |  |  |  | 
|Rio Sul (Brazil)               |  |            | 16  |  |           |  | 16  |                   |  |  |  | 
|Satena (Colombia)(1)           |  |            | 3   |  |           |  | 3   |                   |  |  |  | 
|Sichuan (China)                |  |            | 5   |  |           |  | 5   |                   |  |  |  | 
|Skyways (Sweden)               |  |            | 4   |  |           |  | 4   |                   |  |  |  | 
|Swiss (Switzerland)            |  |            | 25  |  |           |  | 25  |                   |  |  |  | 
|Transtates (USA)               |  |            | 22  |  |           |  | 22  |                   |  |  |  | 
|Total                          |  |            | 708 |  |           |  | 708 |                   |  |  |  | 



|(1) | Aircraft delivered by Embraer Defense & Security.
|--- | -------------------------------------------------

EMBRAER 170:



|                     |  |            |    |  |           |  |    |                   |  |  |   | 
|-------------------- |  | ---------- | -- |  | --------- |  | -- | ----------------- |  |  | - | 
|Customer             |  | FirmOrders |    |  | Delivered |  |    | Firm OrderBacklog | 
|Airnorth (Australia) |  |            | 1  |  |           |  | 1  |                   |  |  |  | 
|Alitalia (Italy)     |  |            | 6  |  |           |  | 6  |                   |  |  |  | 
|BA CityFlyer (UK)    |  |            | 6  |  |           |  | 6  |                   |  |  |  | 
|Cirrus (Germany)     |  |            | 1  |  |           |  | 1  |                   |  |  |  | 
|ECC (Ireland)(1)     |  |            | 6  |  |           |  | 6  |                   |  |  |  | 
|Egypt Air (Egypt)    |  |            | 12 |  |           |  | 12 |                   |  |  |  | 
|Finnair (Finland)    |  |            | 10 |  |           |  | 10 |                   |  |  |  | 
|Gecas (USA)          |  |            | 9  |  |           |  | 9  |                   |  |  |  | 
|JAL (Japan)          |  |            | 15 |  |           |  | 14 |                   |  |  | 1 | 
|Jetscape (USA)       |  |            | 1  |  |           |  | 1  |                   |  |  |  | 
|Lot Polish (Poland)  |  |            | 6  |  |           |  | 6  |                   |  |  |  | 
|Petro Air (Libya)    |  |            | 2  |  |           |  | 2  |                   |  |  |  | 
|Regional (France)    |  |            | 10 |  |           |  | 10 |                   |  |  |  | 



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|                                      |  |            |     |  |           |  |     |                   |  |  |   | 
|------------------------------------- |  | ---------- | --- |  | --------- |  | --- | ----------------- |  |  | - | 
|Customer                              |  | FirmOrders |     |  | Delivered |  |     | Firm OrderBacklog | 
|Republic Airline (USA)                |  |            | 48  |  |           |  | 48  |                   |  |  |  | 
|Satena (Colombia)(2)                  |  |            | 1   |  |           |  | 1   |                   |  |  |  | 
|Saudi Arabian Airlines (Saudi Arabia) |  |            | 15  |  |           |  | 15  |                   |  |  |  | 
|Sirte Oil (Libya)                     |  |            | 1   |  |           |  | 1   |                   |  |  |  | 
|Suzuyo (Japan)                        |  |            | 2   |  |           |  | 2   |                   |  |  |  | 
|TAME (Ecuador)(2)                     |  |            | 2   |  |           |  | 2   |                   |  |  |  | 
|US Airways (USA)                      |  |            | 28  |  |           |  | 28  |                   |  |  |  | 
|Virgin Australia (Australia)          |  |            | 6   |  |           |  | 6   |                   |  |  |  | 
|Total                                 |  |            | 188 |  |           |  | 187 |                   |  |  | 1 | 



|(1) | The customer is Embraers ECC Leasing, which delivered one aircraft to Cirrus, two to Gulf Air, two to Paramount and one to Satena (delivered by Embraer Defense & Security).
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Aircraft delivered by Embraer Defense & Security.
|--- | -------------------------------------------------

EMBRAER 175:



|                         |  |            |     |  |           |  |     |                   |  |  |     | 
|------------------------ |  | ---------- | --- |  | --------- |  | --- | ----------------- |  |  | --- | 
|Customer                 |  | FirmOrders |     |  | Delivered |  |     | Firm OrderBacklog | 
|Air Canada (Canada)      |  |            | 15  |  |           |  | 15  |                   |  |  |    | 
|Aldus (Ireland)          |  |            | 5   |  |           |  |    |                   |  |  | 5   | 
|ECC Leasing (Ireland)(1) |  |            | 1   |  |           |  | 1   |                   |  |  |    | 
|Air Lease (USA)          |  |            | 8   |  |           |  | 8   |                   |  |  |    | 
|Alitalia (Italy)         |  |            | 2   |  |           |  | 2   |                   |  |  |    | 
|American Airlines (USA)  |  |            | 60  |  |           |  |    |                   |  |  | 60  | 
|CIT (USA)                |  |            | 4   |  |           |  | 4   |                   |  |  |    | 
|Flybe (UK)               |  |            | 35  |  |           |  | 11  |                   |  |  | 24  | 
|Gecas (USA)              |  |            | 5   |  |           |  | 5   |                   |  |  |    | 
|Jetscape (USA)           |  |            | 4   |  |           |  | 4   |                   |  |  |    | 
|Lot Polish (Poland)      |  |            | 12  |  |           |  | 12  |                   |  |  |    | 
|Northwest Airlines (USA) |  |            | 36  |  |           |  | 36  |                   |  |  |    | 
|Oman Airlines            |  |            | 5   |  |           |  | 5   |                   |  |  |    | 
|Republic Airlines (USA)  |  |            | 101 |  |           |  | 73  |                   |  |  | 28  | 
|Royal Jordanian (Jordan) |  |            | 2   |  |           |  | 2   |                   |  |  |    | 
|TRIP (Brazil)            |  |            | 5   |  |           |  | 5   |                   |  |  |    | 
|United Airlines (USA)    |  |            | 30  |  |           |  |    |                   |  |  | 30  | 
|Skywest (USA)            |  |            | 40  |  |           |  |    |                   |  |  | 40  | 
|Suzuyo (Japan)           |  |            | 5   |  |           |  | 4   |                   |  |  | 1   | 
|Total                    |  |            | 375 |  |           |  | 187 |                   |  |  | 188 | 



|(1) | The customer is Embraers ECC Leasing, which delivered one aircraft to Air Caraibes.
|--- | ------------------------------------------------------------------------------------

EMBRAER 190:



|                          |  |            |    |  |           |  |    |                   |  |  |    | 
|------------------------- |  | ---------- | -- |  | --------- |  | -- | ----------------- |  |  | -- | 
|Customer                  |  | FirmOrders |    |  | Delivered |  |    | Firm OrderBacklog | 
|Aero Republica (Colombia) |  |            | 5  |  |           |  | 5  |                   |  |  |   | 
|Aeromexico (Mexico)       |  |            | 12 |  |           |  | 12 |                   |  |  |   | 
|Aldus (Ireland)           |  |            | 15 |  |           |  |   |                   |  |  | 15 | 
|Air Astana (Kazakhstan)   |  |            | 2  |  |           |  | 2  |                   |  |  |   | 
|Air Canada (Canada)       |  |            | 45 |  |           |  | 45 |                   |  |  |   | 
|Air Caraibes (Guadalupe)  |  |            | 1  |  |           |  | 1  |                   |  |  |   | 
|Air Costa (India)         |  |            | 1  |  |           |  |   |                   |  |  | 1  | 
|Air Lease (USA)           |  |            | 23 |  |           |  | 23 |                   |  |  |   | 
|Air Moldova (Moldova)     |  |            | 1  |  |           |  |   |                   |  |  | 1  | 



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|                             |  |            |     |  |           |  |     |                   |  |  |    | 
|---------------------------- |  | ---------- | --- |  | --------- |  | --- | ----------------- |  |  | -- | 
|Customer                     |  | FirmOrders |     |  | Delivered |  |     | Firm OrderBacklog | 
|Augsburg (Germany)           |  |            | 2   |  |           |  | 2   |                   |  |  |   | 
|Austral (Argentina).         |  |            | 22  |  |           |  | 22  |                   |  |  |   | 
|AZAL (Azerbaijan)            |  |            | 4   |  |           |  | 4   |                   |  |  |   | 
|Azul (Brazil)                |  |            | 5   |  |           |  | 5   |                   |  |  |   | 
|BA CityFlyer (UK)            |  |            | 9   |  |           |  | 8   |                   |  |  | 1  | 
|BOC Aviation (Singapore)     |  |            | 14  |  |           |  | 6   |                   |  |  | 8  | 
|Conviasa (Venezuela)         |  |            | 13  |  |           |  | 13  |                   |  |  |   | 
|China Southern (China)       |  |            | 20  |  |           |  | 20  |                   |  |  |   | 
|CIT (USA)                    |  |            | 7   |  |           |  | 2   |                   |  |  | 5  | 
|Copa (Panama)                |  |            | 15  |  |           |  | 15  |                   |  |  |   | 
|Dniproavia (Ukraine)         |  |            | 5   |  |           |  | 5   |                   |  |  |   | 
|ECC (Ireland)(1)             |  |            | 1   |  |           |  | 1   |                   |  |  |   | 
|Finnair (Finland)            |  |            | 12  |  |           |  | 12  |                   |  |  |   | 
|Gecas (USA)                  |  |            | 27  |  |           |  | 26  |                   |  |  | 1  | 
|Hainan (China)               |  |            | 50  |  |           |  | 50  |                   |  |  |   | 
|Hebei (China)                |  |            | 7   |  |           |  | 5   |                   |  |  | 2  | 
|JetBlue (USA)                |  |            | 88  |  |           |  | 64  |                   |  |  | 24 | 
|Jetscape (USA)               |  |            | 7   |  |           |  | 7   |                   |  |  |   | 
|Kenya Airways (Kenya)        |  |            | 10  |  |           |  | 10  |                   |  |  |   | 
|KLM (Holland)                |  |            | 22  |  |           |  | 22  |                   |  |  |   | 
|Kunpeng (China)              |  |            | 5   |  |           |  | 5   |                   |  |  |   | 
|LAM (Republic of Mozambique) |  |            | 3   |  |           |  | 2   |                   |  |  | 1  | 
|Lufthansa (Germany)          |  |            | 9   |  |           |  | 9   |                   |  |  |   | 
|M1 Travel (Lebanon)          |  |            | 8   |  |           |  | 8   |                   |  |  |   | 
|NAS Air (Saudi Arabia)       |  |            | 10  |  |           |  | 3   |                   |  |  | 7  | 
|NIKI (Austria)               |  |            | 7   |  |           |  | 7   |                   |  |  |   | 
|Regional (France)            |  |            | 10  |  |           |  | 10  |                   |  |  |   | 
|Republic (USA)               |  |            | 2   |  |           |  | 2   |                   |  |  |   | 
|Taca (El Salvador)           |  |            | 11  |  |           |  | 11  |                   |  |  |   | 
|TAME (Ecuador)(2)            |  |            | 3   |  |           |  | 3   |                   |  |  |   | 
|Trip (Brazil)                |  |            | 3   |  |           |  | 3   |                   |  |  |   | 
|US Airways (USA)             |  |            | 25  |  |           |  | 25  |                   |  |  |   | 
|Virgin Blue (Australia)      |  |            | 18  |  |           |  | 18  |                   |  |  |   | 
|Virgin Nigeria (Nigeria)     |  |            | 2   |  |           |  | 2   |                   |  |  |   | 
|Undisclosed                  |  |            | 8   |  |           |  |    |                   |  |  | 8  | 
|Total                        |  |            | 569 |  |           |  | 496 |                   |  |  | 73 | 



|(1) | The customer is Embraers ECC Leasing, which delivered one aircraft to Jet Blue (USA).
|--- | --------------------------------------------------------------------------------------

|(2) | Aircraft delivered by Embraer Defense & Security.
|--- | -------------------------------------------------



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EMBRAER 195:



|                            |  |            |     |  |           |  |     |                   |  |  |    | 
|--------------------------- |  | ---------- | --- |  | --------- |  | --- | ----------------- |  |  | -- | 
|Customer                    |  | FirmOrders |     |  | Delivered |  |     | Firm OrderBacklog | 
|Aurigny (Guernsey)          |  |            | 1   |  |           |  |    |                   |  |  | 1  | 
|Azul (Brazil)               |  |            | 59  |  |           |  | 45  |                   |  |  | 14 | 
|Belavia (Belarus)           |  |            | 2   |  |           |  |    |                   |  |  | 2  | 
|BOC Aviation (Singapore)    |  |            | 1   |  |           |  | 1   |                   |  |  |   | 
|Flybe (UK)                  |  |            | 14  |  |           |  | 14  |                   |  |  |   | 
|GECAS (USA)                 |  |            | 12  |  |           |  | 12  |                   |  |  |   | 
|Globalia (Spanish)          |  |            | 12  |  |           |  | 12  |                   |  |  |   | 
|Jetscape (USA)              |  |            | 2   |  |           |  | 2   |                   |  |  |   | 
|LOT Polish (Poland)         |  |            | 4   |  |           |  | 4   |                   |  |  |   | 
|Lufthansa (Germany)         |  |            | 34  |  |           |  | 34  |                   |  |  |   | 
|Montenegro (Montenegro)     |  |            | 1   |  |           |  | 1   |                   |  |  |   | 
|Royal Jordanian (Jordanian) |  |            | 2   |  |           |  | 2   |                   |  |  |   | 
|Trip (Brazil)               |  |            | 1   |  |           |  | 1   |                   |  |  |   | 
|Total                       |  |            | 145 |  |           |  | 128 |                   |  |  | 17 | 

EMBRAER 175  E2:



|              |  |            |     |  |           |  |   |                   |  |  |     | 
|------------- |  | ---------- | --- |  | --------- |  | - | ----------------- |  |  | --- | 
|Customer      |  | FirmOrders |     |  | Delivered |  |   | Firm OrderBacklog | 
|Skywest (USA) |  |            | 100 |  |           |  |  |                   |  |  | 100 | 
|Total         |  |            | 100 |  |           |  |  |                   |  |  | 100 | 

EMBRAER 190 E2:



|           |  |            |    |  |           |  |   |                   |  |  |    | 
|---------- |  | ---------- | -- |  | --------- |  | - | ----------------- |  |  | -- | 
|Customer   |  | FirmOrders |    |  | Delivered |  |   | Firm OrderBacklog | 
|ILFC (USA) |  |            | 25 |  |           |  |  |                   |  |  | 25 | 
|Total      |  |            | 25 |  |           |  |  |                   |  |  | 25 | 

EMBRAER 195 E2:



|           |  |            |    |  |           |  |   |                   |  |  |    | 
|---------- |  | ---------- | -- |  | --------- |  | - | ----------------- |  |  | -- | 
|Customer   |  | FirmOrders |    |  | Delivered |  |   | Firm OrderBacklog | 
|ILFC (USA) |  |            | 25 |  |           |  |  |                   |  |  | 25 | 
|Total      |  |            | 25 |  |           |  |  |                   |  |  | 25 | 

For additional information regarding trends in our business, see Item 4C. Information on the
CompanyBusiness OverviewBusiness Strategies and Item 5A. Operating and Financial Review and ProspectsOperating ResultsCurrent Conditions and Future Trends in the Commercial Airline Industry and Executive Jet
Market. For risks affecting our business, see Item 3D. Key InformationRisk Factors.



|5E. | Off-Balance Sheet Arrangements
|--- | ------------------------------

In the normal course of our business, we enter into
certain off-balance sheet arrangements, including guarantees, trade-in obligations, financial and residual value guarantees, product warranty commitments and operating leases. We also have a number of swap transactions that are described in
Item 11. Quantitative and Qualitative Disclosures about Market Risk.

As of December 31, 2011, as a result of our
customer American Airlines filing for creditor protection under Chapter 11, we recorded a provision of US$317.5 million to cover losses estimated in relation to our financial guarantee obligations to the vendor for 216 aircraft (ERJ 135, ERJ 140 and
ERJ 145 models). During 2012, until the court approved the proposed bankruptcy terms, we made payments of US$59.7 million as a guarantee advance, which were presented as a reduction (disposals) to the provision established in 2011. The proposal for
the restructuring of American Airlines was filed on September 8, 2012 with the court, which approved the conditions proposed in the negotiations. As a result of the approval and formalization of the agreements between the parties, we



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recognized the assets acquired and the obligations assumed in relation to the operation in the amount of US$149.6 million. The remaining balance for the additional provision for guarantee
obligations was US$211.9 million as of December 31, 2012. On November 29, 2013 the U.S. court approved the merger between U.S. Airways and American Airlines and its bankruptcy filing was finalized. Consequently, through this event, our
obligation on financial guarantees by AMRs creditor has been completed and part of the amount paid as advance financial guarantees to such creditor of US$71.4 million was returned to us and the remaining provision of US$111.9 million was
reversed against the operating result. The residual value guarantees were finalized along with American Airlines in exchange for concessions from contractual receivables and the amount of US$58.6 million was transferred from provisions to accounts
payable in 2013. There was no remaining balance for the additional provision as of December 31, 2013.

See also Note 37 to our
audited consolidated financial statements for additional information on our off-balance sheet arrangements. In addition, see Item 3D. Key InformationRisk FactorsRisks Relating to EmbraerSome of our aircraft sales may be
subject to financial and residual value guarantees and trade-in options that may require us to make significant cash disbursements in the future.

Trade-in Obligations

In connection with
the signing of purchase agreements for new aircraft, we may provide trade-in options to our customers. These options provide a customer with the right to trade-in existing aircraft upon the purchase and acceptance of a new aircraft. Under
contractual obligations with our customers, our obligation to receive their aircraft as trade-ins arises only to the extent they accept the delivery of certain of our new aircraft. The trade-in price for commercial aircraft is determined in the
manner discussed under Item 5A.Operating ResultsCritical Accounting EstimatesGuarantees and Trade-In Rights. In 2012, we have not accepted aircraft for trade-in pursuant to the 1 trade-in option we had in 2011 (since
such trade-in option was cancelled in 2012). In 2013, we accepted 15 aircraft, with a total value of US$118.1 million, for trade-in pursuant to trade-in options signed in 2012, with respect to 7 aircraft, and 2013, with respect to 16 aircraft. As a
result, we are currently subject to trade-in options relating to 8 aircraft directly tied to contractual obligations with 6 customers and subject to such customers actually taking delivery of certain new aircraft. See Note 37 to our audited
consolidated financial statements for further information on our trade-in options.

We continue to monitor all trade-in commitments to
anticipate any adverse economic impact they may have on our financial condition. Based on our current evaluation and on third-parties appraisals, we believe that any aircraft accepted in connection with trade-in commitments may be sold or leased in
the market without significant profits or losses. See Item 5A.Operating ResultsCritical Accounting EstimatesGuarantees and Trade-In Rights.

We may be required to accept trade-ins at prices that are slightly above the then-market price of the aircraft, which would result in
financial loss for us when we resell the aircraft. We continuously monitor all trade-in commitments in order to anticipate any adverse economic impact. Based on our current evaluation and third-party independent appraisals, we believe that any
aircraft accepted under trade-in may be sold or leased in the market without significant losses.

Guarantees

Financial guarantees are triggered if customers do not perform their obligation to service the debt during the term of the financing under the
relevant financing arrangements. Financial guarantees provide credit support to the guaranteed party to mitigate default-related losses. The underlying assets collateralize these guarantees. The value of the underlying assets may be adversely
affected by an economic or industry downturn. Upon an event of default, we are usually the agent for the guaranteed party for the refurbishment and remarketing of the underlying asset. We may be entitled to a fee for such remarketing services.
Typically a claim under the guarantee shall be made only upon surrender of the underlying asset for remarketing.

Residual value
guarantees provide a third party with a specific guaranteed asset value at the end of the financing agreement. In the event of a decrease in market value of the underlying asset, we shall bear the difference between the specific guaranteed amount
and the actual fair market value. Our exposure is mitigated by the fact that, in order to benefit from the guarantee, the guaranteed party has to make the underlying assets meet stringent specific return conditions.



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



|                                                                     |  |                 |        |   |                   |  |        |      |  |  |        |   |  |      |         |   |  |  |         |  
|-------------------------------------------------------------------- |  | --------------- | ------ | - | ----------------- |  | ------ | ---- |  |  | ------ | - |  | ---- | ------- | - |  |  | ------- | -
|                                                                     |  | At December 31, |       
|                                                                     |  | 2013            |        |   | 2012              |  |        | 2011 |  |  | 2010   |   |  | 2009 |        
|Description                                                          |  |                 |        |   | (in US$ millions) | 
|Maximum financial guarantees                                         |  |                 | 545.5  |   |                   |  | 374.2  |      |  |  | 471.6  |   |  |      | 1,133.9 |   |  |  | 1,248.4 |  
|Maximum residual value guarantees                                    |  |                 | 359.9  |   |                   |  | 372.7  |      |  |  | 542.2  |   |  |      | 743.4   |   |  |  | 770.8   |  
|Mutually exclusive exposure(1)                                       |  |                 | (94.7  | ) |                   |  | (115.0 | )    |  |  | (209.8 | ) |  |      | (393.9  | ) |  |  | (393.9  | )
|Provisions and liabilities recorded(2)                               |  |                 | (155.3 | ) |                   |  | (114.0 | )    |  |  | (121.2 | ) |  |      | (143.2  | ) |  |  | (154.1  | )
|Off-balance sheet exposure                                           |  |                 | 655.4  |   |                   |  | 517.9  |      |  |  | 682.8  |   |  |      | 1,340.2 |   |  |  | 1,471.2 |  
|Estimated proceeds from performance guarantees and underlying assets |  |                 | 907.8  |   |                   |  | 656.7  |      |  |  | 896.5  |   |  |      | 1,255.9 |   |  |  | 1,478.4 |  



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

|(2) | Represents the sum of our financial and residual value guarantees (see Note 25 to our audited consolidated financial statements).
|--- | ---------------------------------------------------------------------------------------------------------------------------------

As discussed in Note 11 to our audited consolidated financial statements, as of December 31, 2013, 2012, 2011, 2010 and 2009, we
maintained escrow deposits in the total amount of US$261.4 million, US$275.8 million, US$268.4 million, US$263.6 million and US$308.9 million, respectively, in favor of third parties for whom we have provided financial and residual value guarantees
in connection with certain aircraft sales financing structures.

Financial and Residual Value Guarantees

We have guaranteed the financial performance of a portion of the financing for, and the residual value of, some of our aircraft which have
already been delivered. Financial guarantees are provided to financing parties to support a portion of the payment obligations of purchasers of our aircraft under their financing arrangements to mitigate default-related losses. These guarantees are
collateralized by the financed aircraft.

Assuming all customers supported by financial guarantees defaulted on their aircraft financing
arrangements, and also assuming we were required to pay the full aggregate amount of outstanding financial and residual value guarantees and were not able to remarket any of the aircraft to offset our obligations, our maximum unrecorded exposure
under these guarantees (less provisions and liabilities) would have been US$655.4 million as of December 31, 2013. For further discussion of these off-balance sheet arrangements, see Note 37 to our audited consolidated financial statements.

At December 31, 2013, we had US$261.4 million deposited in an escrow account as collateral for the financing of certain aircraft
sold where we serve as secondary guarantor. If the initial guarantor of the debt (an unrelated third party) is required to pay the lender, the initial guarantor will be entitled to the amount in the escrow account. The amount is returned in the form
of cash to us at maturity of the financing contracts (until 2021) if the aircraft purchaser does not default on the loan. The interest on the escrow account is added to the principal and recognized by us as financial income.

We allocated the deposits from the escrow account to 14-year structured notes with the depositary bank in order to earn a better interest
rate. This yield enhancement was obtained through a credit default swap (CDS) transaction, which provides the right of early redemption of the note in case of a credit event by us. Upon such a



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credit event, the note may be redeemed by the holder at the greater of the notes market value or its original face amount, which would result in a loss to us of all interest accrued on such
note to date. Credit events include obligation and payment defaults under the terms of the guarantees above specified thresholds, events related to the restructuring of the obligations above a specified threshold, bankruptcy and a repudiation of
and/or moratorium on the obligations above a specified threshold.

Residual value guarantees typically ensure that, at the 15th year as of the delivery date, the relevant aircraft will have a residual market value of a percentage of the original sale price. More recently, residual value guarantees have been issued to ensure
a residual market value for the 10th year following delivery of the aircraft. Most of our residual value guarantees are subject to a limitation (a cap) and, therefore, on average our
guaranteed residual value is 17% of the original sale price. In the event of a decrease in the market value of the underlying aircraft and an exercise by the purchaser of the residual value guarantee, we will bear the difference, if any, between the
guaranteed residual value and the market value of the aircraft at the time of exercise. Our exposure is mitigated by the fact that the guaranteed party, in order to benefit from the guarantee, must make the aircraft meet specific return conditions.
See Note 11 to our audited consolidated financial statements.

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

Operating Leases

A significant part of the risks and benefits of ownership are assumed by the lessor and are classified as operating leases. Payments made for
operating leases are amortized to the statement of income on the straight-line method over the contract period. Our parent company operating leases refer to telephone and computer equipment, and those relating to our subsidiaries in the United
States relate to non-cancelable operating leases of land and equipment. These leases expire at various dates through 2020. For more information on our operating leases, see Note 37 to our audited consolidated financial statements.



|5F. | Tabular Disclosure of Contractual Obligations
|--- | ---------------------------------------------

The following table and discussion
provide additional disclosure regarding our material contractual obligations and commercial commitments as of December 31, 2013:



|                               |  |                   |         |  |                 |  |         |             |  |  |             |  |  |                  |       |  |  |  |         | 
|------------------------------ |  | ----------------- | ------- |  | --------------- |  | ------- | ----------- |  |  | ----------- |  |  | ---------------- | ----- |  |  |  | ------- | 
|                               |  | Total             |         |  | Less than1 year |  |         | 1  3 years |  |  | 3  5 years |  |  | More than5 years |      
|Contractual Obligations        |  | (in US$ millions) |        
|Loans and interest             |  |                   | 3,003.8 |  |                 |  | 176.6   |             |  |  | 1,167.4     |  |  |                  | 182.9 |  |  |  | 1,476.9 | 
|Pension fund                   |  |                   | 157.9   |  |                 |  | 15.8    |             |  |  | 31.6        |  |  |                  | 31.6  |  |  |  | 78.9    | 
|Capital lease obligations      |  |                   | 0.8     |  |                 |  | 0.5     |             |  |  | 0.3         |  |  |                  |      |  |  |  |        | 
|Operating leases               |  |                   | 56.1    |  |                 |  | 15.8    |             |  |  | 10.7        |  |  |                  | 12.1  |  |  |  | 17.5    | 
|Non-recourse and recourse debt |  |                   | 400.2   |  |                 |  | 12.1    |             |  |  | 317.3       |  |  |                  | 27.5  |  |  |  | 43.3    | 
|Customer advances              |  |                   | 1000.7  |  |                 |  | 875.9   |             |  |  | 108.8       |  |  |                  | 8.7   |  |  |  | 7.3     | 
|Contribution from suppliers    |  |                   | 33.6    |  |                 |  | 33.6    |             |  |  |            |  |  |                  |      |  |  |  |        | 
|Suppliers                      |  |                   | 1,013.6 |  |                 |  | 1,013.6 |             |  |  |            |  |  |                  |      |  |  |  |        | 
|Financial guarantees           |  |                   | 293.5   |  |                 |  | 35.1    |             |  |  | 26.2        |  |  |                  | 23.2  |  |  |  | 209.0   | 
|Other liabilities              |  |                   | 355.2   |  |                 |  | 19.3    |             |  |  | 105.7       |  |  |                  | 149.8 |  |  |  | 80.4    | 
|Total                          |  |                   | 6,315.4 |  |                 |  | 2,198.3 |             |  |  | 1,768.0     |  |  |                  | 435.8 |  |  |  | 1,913.3 | 

The above table shows the sum of the outstanding principal and anticipated interest due at maturity date. For
the fixed rate loans, the interest expenses were calculated based on the rate established in each debt contract. For the floating rate loans, the interest expenses were calculated based on a market forecast for each period (LIBOR 6m  12m),
dated on December 31, 2013. This floating rate exposure is managed through derivatives operations. See Item 11. Quantitative and Qualitative Disclosures About Market Risk.



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The above table does not reflect contractual commitments related to trade-in options and
financial and residual value guarantees discussed in Item 5E.Off-Balance Sheet Arrangements above. See Item 3D. Key InformationRisk FactorsRisks Relating to Embraer Some of our aircraft sales may be subject
to financial and residual value guarantees and trade-in options that may require us to make significant cash disbursements in the future.

Purchase obligations consist of trade accounts payable and insurance payables.

Other liabilities include taxes and payroll charges payable in the total amount of US$348.7 million at December 31, 2013. The above table
does not reflect any information about our derivative instruments, which are discussed more fully in Item 11. Quantitative and Qualitative Disclosures About Market Risk.



|5G. | Safe Harbor
|--- | -----------

See Special Note Regarding Forward-Looking Statements.



|ITEM 6. | DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
|------- | ------------------------------------------



|6A. | Directors and Senior Management
|--- | -------------------------------

We are managed by our Conselho de
Administração, or Board of Directors, composed of 11 members, and our Diretoria, or Executive Officers, composed of at least four and at the most 11 members (each an Executive Officer). We have a permanent Conselho
Fiscal, which is composed of three to five members and an equal number of alternates.

There are no family relationships among
the members of our Board of Directors and/or our Executive Officers.

Board of Directors

Our Board of Directors ordinarily meets eight times a year and extraordinarily when called by the Chairman or by the majority of members of the
Board. It has responsibility, among other things, for establishing our general business policies and for electing our Executive Officers and supervising their management.

Our Board of Directors is appointed by our shareholders for a two-year term, reelection being permitted, having three reserved seats as
follows: (1) one acting member to be appointed by the Brazilian federal government, as holder of the golden share, and (2) two acting members to be appointed by our employees. The remaining eight directors are elected in
accordance with the slate voting or cumulative voting rules contained in our bylaws. See Item 10B. Additional InformationMemorandum and Articles of AssociationBoard of DirectorsElection of Board of Directors for a
detailed description of the rules and procedures regarding the nomination and election of our Board members. There is no mandatory retirement age for our Directors.

Under the rules of the Novo Mercado, the members of our Board of Directors have agreed to comply with the Novo Mercado
Listing Rules and with the rules of the São Paulo Stock Exchange Arbitration Chamber before taking office, and for such purpose have executed a Statement of Consent from the Directors (Termo de Anuência dos Administradores).

Set forth below are the names, ages, positions, the year first elected and brief biographical descriptions of the members of our
Board of Directors elected at our annual shareholders meeting held on April 25, 2013:



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|                                 |  |     |  |                                    |  |                           
|-------------------------------- |  | --- |  | ---------------------------------- |  | --------------------------
|Name                             |  | Age |  | Position                           |  | Year First Electedto Board
|Alexandre Gonçalves Silva        |  | 68  |  | Chairman of the Board of Directors |  | 2011                      
|Sérgio Eraldo de Salles Pinto    |  | 49  |  | Member of the Board of Directors   |  | 2009                      
|Antonio Franciscangelis Neto     |  | 60  |  | Member of the Board of Directors   |  | 2013                      
|Arno Hugo Augustin Filho         |  | 53  |  | Member of the Board of Directors   |  | 2012                      
|Ernani de Almeida Ribeiro Junior |  | 47  |  | Member of the Board of Directors   |  | 2013                      
|Israel Vainboim                  |  | 69  |  | Member of the Board of Directors   |  | 2009                      
|João Cox Neto                    |  | 50  |  | Member of the Board of Directors   |  | 2011                      
|Josué Christiano Gomes da Silva  |  | 50  |  | Member of the Board of Directors   |  | 2011                      
|Paulo Roberto de Oliveira        |  | 49  |  | Member of the Board of Directors   |  | 2013                      
|Samir Zraick                     |  | 72  |  | Member of the Board of Directors   |  | 2006                      
|Vitor Paulo Camargo Gonçalves    |  | 57  |  | Member of the Board of Directors   |  | 2011                      

Alexandre Gonçalves Silva. Mr. Silva holds a BS in Mechanical Engineering from PUC Rio de
Janeiro. In his 40-year career, he occupied positions in several areas, including 22 as CEO. Mr. Silva was CEO of GE in Brazil from 2001 to 2007 and since then, Mr. Silva has occupied positions on boards of directors of various companies.
Currently, Mr. Silva is Chairman of our Board of Directors and an independent board member at Fibria Celulose, Alupar, Tecsis and Nitroquímica. Mr. Silva is a Pro-Bono Director of AMCHAM Brazil and the Foundation of Maria
Cecilia Souto Vidigal, Senior Advisor of the Global Infrastructure Partners in New York and Board member of the American Chamber of Commerce since 2003. Mr. Silva is an independent member of the Board of Directors of Embraer.

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

Antonio Franciscangelis Neto.Mr. Franciscangelis is currently Secretary of Economy and Finance of the Brazilian Air Force. Among
other positions held, Mr. Franciscangelis was Head of Office of the Brazilian Air Force Commander, Commander of 2nd / 5th Aviation Group; Head of Office of the Brazilian Air Forces COMDABRA; Assistant of the Deputy Chief of the General
Staff of the Armed Forces; Commander of Anapolis Air Base; Assistant of the Defense and Aeronautics Attaché at United States and Canada; Chief of the Brazilian Air Force Commission in Washington, DC; Chief of the 2nd, 1st and 6th
Subchefias of EMAER; Commander of the Air Force Instruction and Adaptation Center and Commander of the Brazilian Aerospace Defense Command. Among the main academic courses completed by Mr. Franciscangelis are the Aviator Officers
Formation Course - AFA; Officers Improvement Course - EAOAR; Graduation in Command and General Staff Course - ECEMAR; Politics and Aerospace Strategy Course; Recycling in Economics and Finance Course (SEFA); Management Business Administration (MBA)
at Getúlio Vargas Foundation FGV- RJ; Mirage F 103 Fighter Pilot and Air Defense Course; Fighter Leadership Course; and the Brazilian Institute of Corporate Governance (IBGC) Course to board members.

Arno Hugo Augustin Filho.Mr. Arno Augustin graduated in Economics from the School of Economics of the Federal University of Rio
Grande do Sul in 1983. Mr. Augustin is Secretary of the Brazilian Federal Treasury since 2007. During 2003 and 2004, Mr. Augustin occupied the positions of Assistant Executive Secretary of the Ministry of Finance, and Chairman of the
Boards of Directors of Caixa Econômica Federal and Banco da Amazônia S.A.  BASA. From 1999 to 2003, Mr. Augustin acted as State Secretary of Finance of Rio Grande do Sul and as Chairman of the Board of Directors of Banrisul.
From 1985 to 1998, Mr. Augustin held the following position, among others: Secretary of Finance of the Municipality of Porto Alegre, Economic Advisor to the Mayor.



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Ernani de Almeida Ribeiro Junior. Mr. Ernani de Almeida Ribeiro Junior has an
undergraduate degree in business administration from the Nogueira da Gama College, with an MBA in Business Administration from Fundação Getúlio Vargas, and graduate degrees in Business Management from Fundação Dom
Cabral and in Marketing and Foreign Trade at INPG. He has been our employee since 1986, and currently holds the position of advisor and coordinator of the Boa Idéia Program, which creates incentives for our employees to suggest
improvements in our business processes, in our Brazilian business units since 2000. He was an alternate member of the Board of Directors of Embraer from April 2011 to April 2013.

IsraelVainboim. Currently, Mr. Vainboim is a member of the Board of Directors of Itaú Unibanco Banco Múltiplo S.A.,
member of the Board of Directors of Cia. Iochpe-Maxion, member of the Decision-making Council of MAM (Museu de Arte Moderna de São Paulo), Chairman of the Fiscal Council of Albert Einstein Hospital in São Paulo, member of the Board of
the House of Culture of Israel in São Paulo, member of the Board of the alumni association of the Federal University of Rio de Janeiro, member of the International Advisory Council of General Atlantic Partners, located in New York, USA and of
the Business Administration School of the University of Stanford. Mr. Vainboim has served Unibanco since 1969. Mr. Vainboim was also the President of Unibanco from 1988 to 1992 and member of its Board of Directors until 2008.
Mr. Vainboim was president of Unibanco Holdings S.A. from 1994 to 2007, Chairman of the Board of Directors and the President of the Audit Committee of Unibanco Holdings S.A. from 2007 to February 2009. He was first elected to the Board of
Directors of Embraer in April, 2009 and he is an independent member. Mr. Vainboim earned an undergraduate degree in Mechanical Engineering from the Federal University of Rio de Janeiro and holds an MBA from Stanford University.

João Cox Neto. Mr. Cox has a degree in economics from the Federal University of Bahia and extended his postgraduate studies
in economics at the Université du Québec à Montréal and the PSCs Oxford University. Mr. Cox speaks Portuguese, English, French and Spanish. Cox heads Cox Investments & Advisory, a boutique investment
firm providing M&A, financing and consulting services as well as holding interests in private equity funds. He was also a member of the Board of Directors of companies in various countries (Brazil, Argentina, Netherlands and Israel), and acted
as advisor for the CRSFN - Appeals Council of the National Financial System, the Board of Directors of ABRASCA (Brazilian Association of Listed Companies) and IBRI (Brazilian Institute of Investor Relations). Cox currently serves on the board of
directors of Estácio de Sá S.A. Since April 1999 he has been deeply involved with the telecommunications industry, as President, CEO or vice president. From 2006 to 2010, he served Claro, the second largest mobile operator in Brazil,
as President, CEO or Vice-President. From April 1999 to August 2004 he served as Vice-President Finance and Investor Relations of Telemig Celular Participações and Tele Norte Celular Participações, a position that he
shared with the position of CEO of Telemig Celular and Amazonia Celular. In 2005 he served as Vice-Chairman of the Board of Directors of Cellcom, the largest mobile operator in Israel. Cox maintains ties with the universities where he taught for
several years at the undergraduate and graduate levels. Mr. Cox is an independent member of the Board of Directors of Embraer, also acting as a member of the Human Resources Committee and the Strategy Committee.

Josué Christiano Gomes da Silva.Mr. Gomes da Silva is currently President of the Companhia de Tecidos Norte de Minas
 Coteminas, leader in the bed and bath segment, with plants in many countries of the American continent. He is founder and chairman of the Board of Directors of Cantagalo General Grains S.A., a company involved in production, marketing and
logistics of grain, and member of the Board of Directors of Embraer. He served as member of the Board of the Institute for Studies in Industrial Development  IEDI, having chaired the institute from 2005 to 2009, President Emeritus and Member
of the Supreme Council of the Association of the Textile and Clothing Industry  ABIT, having chaired the organization from 2005 to 2007, Third Vice-President of the Federation of Industries of the State of São Paulo  FIESP,
Vice-Chairman of the Business Council of Latin America  CEAL, Member of the Brazil-US CEOs Forum, Member of the Corporate Council Owen School at Vanderbilt University, President of the International Textile Manufactures Federation  ITMF,
and Member of the Board of Visitors of the Institute of Cancer of São Paulo Octavio Frias de Oliveira  ICESP. Mr. Josué has a degree in Civil Engineering from the Federal University of Minas Gerais, Bachelor of Law from Law
School at Milton Campos. He won the Gold Medal (Founder Medal) at Vanderbilt University  United States, where he concluded his Master degree in Business Administration  MBA.



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Paulo Roberto de Oliveira.Mr. Paulo Roberto de Oliveira has a degree in mechanical
engineering with specialization in project management and MBA in business management. He has been an employee of our company since 1987 and has performed several duties, such as expert analyst of planning, including as adviser to Vice President of
Engineering, Technology Development and Strategic Planning. He is currently responsible for the planning of new products in its early stages. Mr. Oliveira is Chairman of the Board of CIEMB  Clube de Investimento dos Empregados da Embraer,
being appointed as its representative on the Board of Directors of Embraer.

Samir Zraick. Mr. Zraick was chief
financial officer of CVRD, and head of its U.S. affiliate from 1971 to 1986, being responsible for the financial formulation of Carajás Project. After this, he was a member of the Board of Directors of CVRD during the year of 2000 and served
as a Special Advisor and member of CVRDs Strategic Committee from 2001 to 2004. He served as Finance and Development Director of Caemi Mineração e Metalurgia S.A. from 1986 to 1998. He was a member of the Board of Directors and
Chairman of the Marketing Committee of Quebec Cartier Mining, in Montreal, Quebec, from 1990 to 1999. He served as a Board Member of Canico Resources in Vancouver, British Columbia, from July 2004 to March 2006. Mr. Zraick is currently an
independent member of the Board of Directors of the companies MMX Mineração e Metálicas, S.A. and CCX Carvão da Colombia S.A. He was first elected in March, 2006 to the Board of Directors of Embraer and he is an
independent member.

Vitor Paulo Camargo Gonçalves. Mr. Vitor Gonçalves is Director of Planning of Previ,
elected to serve until May 2014. He joined the Bank of Brazil in 1976 and has served with Previ as Director of Participation, Deliberative Officer and Audit Committee. He is member of the Board of Directors of Embraer S.A., having served as Board
member in Paranapanema S.A., Petroflex S.A., Invepar S.A and Kepler Weber S.A. He is a member of the Board of ABRAPP  Brazilian Association of Pension Funds, as the representative of Previ, President of the ICSS and member of the Board of the
National Association of Officials of the Bank of Brazil  ANABB. He holds an undergraduate degree in Business Administration from Mackenzie University, and has graduate degrees in Business Management from Fundação Getúlio
Vargas (RJ), with specialization in business management from Fundação Dom Cabral (MG) and IBMEC (RJ); in corporate governance from IBMEC (RJ) and IBGC  Brazilian Institute of Corporate Governance; and in management of pension
funds from the Wharton School in Philadelphia (USA). Mr. Gonçalves is an independent member of the Board of Directors of Embraer.

Committees

Three committees were formed
to assist the Board of Directors in its duties and responsibilities:



| |  |  | Strategies Committee: which may have up to five members, but has no executive power. The primary purpose of the Strategies Committee is to assist the Board of Directors in its functions. The members of our Board
of Directors and Board of Executive Officers may serve on this committee. The Strategies Committees responsibilities include aiding the Board of Directors in the formulation of our strategic plan. The current members of the Strategies
Committee are Israel Vainboim (coordinator), Alexandre Gonçalves Silva, Josué Christiano Gomes da Silva and João Cox Neto.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Audit and Risks Committee: See Item 6C.Board PracticesAudit and Risks Committee below.
| | - |  | ------------------------------------------------------------------------------------------



| |  |  | Human Resources Committee: which has up to five members appointed by our Board of Directors. The members of the Human Resources Committee may be members of our Board of Directors or our Executive Officers. Its
purpose is to assist the Board of Directors in connection with human resources issues which include appointing and removing Executive Officers from office and designating their duties as provided by the bylaws, compensation and human relations
policy, transferring of our resources to employee associations, charity and recreational entities, the private security fund and foundation. The current members of the Human Resources Committee are Vitor Paulo Camargo Gonçalves (coordinator),
João Cox Neto, Alexandre Gonçalves da Silva and Sérgio Eraldo de Salles Pinto.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Conselho Fiscal: See Item 6C.Board PracticesAudit and Risks CommitteeConselho Fiscal below.
| | - |  | ------------------------------------------------------------------------------------------------



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In the event an Executive Officer serves on the Strategies Committee and the Human Resources
Committee, he will only be entitled to receive the compensation corresponding to the higher paying position. The Directors appointed to serve on such Committees and on the Audit and Risks Committee may combine the compensation for each position so
held.

Executive Officers

Our
Executive Officers are responsible for our day-to-day management. The Executive Officers have individual responsibilities established by our bylaws and by the Board of Directors.

The terms of office for members of our Board of Directors and for our Executive Officers is two years, with each Executive Officer eligible
for reelection.

The vote of at least nine members of our Board of Directors is necessary to remove an Executive Officer.

Our bylaws forbid any Executive Officer from also serving at the same time as a member of our Board of Directors. Our bylaws contain a
provision that our CEO will participate in meetings of the Board of Directors, but shall not vote on resolutions of the Board of Directors.

Our Executive Officers have agreed to comply with the Novo Mercado Listing Rules and to the rules of the São Paulo Stock
Exchange Arbitration Chamber before taking office and for such purpose have executed a Statement of Consent from Senior Managers (Termo de Anuência dos Administradores).

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



|                                 |  |     |  |                                                                                  |  |                   
|-------------------------------- |  | --- |  | -------------------------------------------------------------------------------- |  | ------------------
|Name                             |  | Age |  | Position                                                                         |  | Year First Elected
|Frederico Pinheiro Fleury Curado |  | 52  |  | President and Chief Executive Officer                                            |  | 1995              
|Mauro Kern Junior                |  | 53  |  | Executive Vice President  Engineering and Technology                            |  | 2007              
|Paulo Cesar de Souza e Silva     |  | 58  |  | Executive Vice President  Commercial Aviation                                   |  | 2010              
|Artur Aparecido V. Coutinho      |  | 65  |  | Chief Operating Officer                                                          |  | 2005              
|Jackson Medeiros de F. Schneider |  | 49  |  | Executive Vice President  Personnel, Institutional Relations and Sustainability |  | 2012              
|José Antonio de Almeida Filippo  |  | 53  |  | Executive Vice President  Chief Financial and Investor Relations Officer        |  | 2012              
|Marco Tulio Pellegrini           |  | 55  |  | Executive Vice President of Executive Jets Market                                |  | 2013              
|Terena Penteado Rodrigues        |  | 40  |  | Executive Vice President  General Counsel                                       |  | 2013              

Frederico Pinheiro Fleury Curado.Mr. Curado has been an Executive Officer of Embraer S.A. since
1995, and President and Chief Executive Officer since 2007. He has a degree in Mechanical Aeronautical Engineering from ITA  Instituto Tecnológico de Aeronáutica and an M.B.A. from the University of São Paulo. Besides his
activities at Embraer, he is the Chairman of the Brazilian Chapter of the Brazil-US Business Council, a member of Brazils National Council for Industrial Development and an executive board member of the International Chamber of Commerce. He is
also an independent board member at Transocean Ltd (NYSE:RIG). Mr. Curado has been awarded the Medal for Aeronautical Merit by the Brazilian Government and the Medal for Merit by the Brazilian Association of Military Engineering

Mauro Kern Junior. In April 2011, Mr. Kern was appointed Embraers Executive Vice-President for Engineering and Technology.
He joined Embraer in 1982 as a Mechanical Systems Engineer and served for 13 years in several technical and managerial positions. In 1999, Mr. Kern joined the Embraer 170/190 program as its Chief Engineer and Program Manager. In April 2007, he
was appointed Embraers Executive Vice-President for the Airline Market. Mr. Kern holds a Bachelors degree in Engineering from the University of Rio Grande do Sul.

Paulo Cesar de Souza e Silva. Mr. Silva joined the company in 1997 and spent 13 years focusing and developing Embraers
Customer Financing strategies. Since April 2010 he has been the President & CEO of



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Embraer Commercial Aviation. As Embraers representative at Aviation Working Group, an international industry organization dedicated to developing initiatives to foster and facilitate
advanced aviation financing, Mr. Silva contributed to the development and implementation of the Cape Town Treaty and the Aircraft Sector Understanding (ASU), which regulates the terms and conditions for Export Credit Agencies support. Both are
key instruments to the airlines gaining access to efficient aircraft financing. Prior to joining Embraer, Mr. Silva held many executive positions within the international bank industry. He holds a bachelors degree in economics from
Mackenzie University (Sao Paulo  Brazil) and a MBA earned in Switzerland.

Artur Aparecido V. Coutinho.In 2010,
Mr. Coutinho was appointed Embraers Executive Vice-President and Chief Operating Officer. In 2005, he was appointed our Executive Vice-President for Procurement and Industrial Operations and had been acting in that capacity until being
elected as our Chief Operating Officer. From January 2003 to March 2005, Mr. Coutinho was Embraers Vice-President responsible for marketing, sales and customer support activities in North America. From February 2000 to December 2002, he
was our Vice-President for Customer Service. Prior to that, Mr. Coutinho held several different positions at Embraer in the areas of marketing, training and quality control.

Jackson Medeiros F. Schneider. Mr. Schneider is Chief Executive Officer of Embraer Defense & Security and previously he
held the position of Executive Vice President of People, Institutional Relations, and Sustainability of Embraer. He has a Law degree from the University of Brasilia  UNB, and an MBA from the Business School of São Paulo. He began his
career in the Ministry of Justice (Brazilian Government). In the private sector, he was Deputy Director of Corporate Affairs of Unilever and Vice President of Human Resources, Legal Relations and Corporate Affairs of Mercedes Benz Brazil. In
addition, Mr. Schneider was President of ANFAVEA (Brazilian Vehicle Manufacturer Association) and ABIPLA (Brazilian Association of Manufacturers of Cleaning Products, and Related Items), as well as a member of the Board of Tax Council of the
Ministry of Economy and Finance, among other assignments. He is currently Vice President of the FIESP (State of São Paulo industry federation), and Board member of organizations including the Biennial Foundation of São Paulo, the
Ayrton Senna Institute, the AACD (association to support disabled children) and The Economic and Social Development Council of the President of the Republic of Brazil, among others.

José Antonio de Almeida Filippo. On June 2012, Mr. José Antonio de Almeida Filippo was elected CFO and Investor
Relations Executive Vice-President of Embraer. Mr. Filippo started his career at Gafisa Imobiliária, in which he held the position of CFO and Administrative Director. From 1995 to 2000 he held the Corporate Financial Manager position at
Reynolds Aluminum - Latasa. From 2000 to 2004, he held the position of CFO of Latin America at Ingersoll-Rand Company. From June 2004 to 2010 he held the position of CFO and Investors Relations Vice-President at CPFL Energia. On March 2010, he held
the position of CFO of Companhia Brasileira de Distribuição (Grupo Pão de Açucar), before joining Embraer. Mr. Filippo has a degree in Civil Engineering from the Federal University of Rio de Janeiro in 1983, with
postgraduate studies in Finance at the Catholic University of Rio de Janeiro and IBMEC  Brazilian Institute of Capital Markets. He also participated in the Program Development and Management at the Harvard Business School in 1999.

Marco Tulio Pellegrini. Mr. Pellegrini has been in the aerospace industry for 25 years. Most of his career has been spent at
Embraer where in April 2011 he was appointed Senior Vice President Operations and COO, Executive Jets. Before assuming Executive Jets operations, Mr. Pellegrini was Embraers VP of New Programs  Airline Market. He has previously
acted as Vice President, Production and Industrial Strategy, responsible for manufacturing, manufacturing engineering, tooling and industrial architecture. Before that he acted as Vice President of Market Intelligence for Executive Jets, responsible
for product strategies, sales support, market assessment, marketing and competitive analysis for business aviation. He previously acted as Sr. Manager for Industrial Planning, responsible for industrial architecture and site selection for new
Embraer facilities. Before joining Embraer, Mr. Pellegrini spent part of his career at Vasp, a major Brazilian airline, working as Sr. Manager for Quality Assurance. His experience includes a year-long training program at McDonnell
Douglas Long Beach facility in the R&D and production liaison areas. Mr. Pellegrini holds a Master degree of Science in Mechanical Engineering. After graduating Mr. Pellegrini began his career at an automobile parts manufacturer,
as a Manufacturing Engineer.

Terena Penteado Rodrigues holds a LL.B. from the University of São Paulo Law School and
an LL.M. from the Georgetown University Law Center (Washington, DC). She joined Embraer in 2004 as Legal Advisor, becoming Associate General Counsel for industry/regulatory and later for sales/aftermarket. She became Senior



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Vice President, General Counsel & Compliance in 2012, and since April 2013 she is the Executive Vice President, General Counsel. Before Embraer, she worked as Senior Legal Counsel at
United Technologies Corporation (Hartford, CT), and as an International Associate at Wilmer, Cutler & Pickering (Washington, DC).



|6B. | Compensation
|--- | ------------

Overview

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

For the fiscal year ended December 31, 2013, the aggregate compensation (including benefits in kind granted) that we paid to
members of the Board of Directors, the Audit and Risks Committee, the Conselho Fiscal and the Executive Officers for services in all capacities was US$18.9 million: US$2.8 million to members of the Board of Directors, US$0.4 million to
members of the Conselho Fiscal and US$15.7 million to the Executive Officers.

For the fiscal year ended December 31,
2013, members of our committees of the Board of Directors, including our Audit and Risks Committee, received an aggregate additional compensation of US$0.7 million, which is included in the US$18.9 million compensation mentioned above.

In addition, in 2013, we contributed US$0.3 million for the payment of pension benefits to our Executive Officers. Members of our Board
of Directors and Conselho Fiscal do not receive such benefits. The board members, Conselho Fiscal members and Executive Officers did not receive any compensation (including benefits in kind) from any of our subsidiaries. At
December 31, 2013, none of the board members, Conselho Fiscal members or Executive Officers had any financial or other interests in any transaction involving us which was not in the ordinary course of our business.

In addition, on December 31, 2013, our board members and Executive Officers owned an aggregate of 434,298 common shares.

Stock Option Plan

At a special
shareholders meeting held on April 17, 1998, our controlling shareholders approved a stock option plan for management and employees, including those of our subsidiaries, subject to restrictions based on continuous employment with us for
at least two years. The five-year term for the granting of options under the plan expired on May 31, 2003.

Under the terms of the
plan, we were authorized to grant options to purchase up to 25,000,000 common shares over the five-year period from the date of the first grant. As of the end of this five-year period, we had granted options for an aggregate of 20,237,894 common
shares, including 662,894 options granted in connection with our share dividend in 2002, at a weighted average exercise price of R$6.17 per share. The options granted to each employee vest as follows: 30% after three years from the date granted, an
additional 30% after four years and the remaining 40% after five years. Employees may exercise their options for up to seven years from the date they are granted. At December 31, 2008, 17,892,239 of the total options granted had been exercised.
Of the total number of options granted, options to purchase an aggregate of 7,799,470 common shares have been granted to our Executive Officers at a weighted average exercise price of R$4.57 per share, of which 7,057,105 were exercised during the
period from June 1, 2001 through December 31, 2008. No options under this plan were exercised in 2010.

At a special
shareholders meeting held on April 19, 2010, our shareholders approved a second stock option plan for management and employees, including those of our subsidiaries, subject to their continuous employment with us for at least two years.
Our Board of Directors may choose employees and members of management who will be eligible to receive stock options, which are to be awarded free of charge. Nevertheless, in extraordinary circumstances our Board of Directors may grant stock options
to persons employed with us for less than two years with a view to hiring and retaining strategic personnel. Our Board of Directors may also determine the terms of the



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stock option contracts. This second stock option plan has an indefinite period of duration and may be terminated at any time by our Board of Directors, after which no new options may be granted.
However, options granted prior to the termination of the plan will not be affected and may be exercised subject to the terms and conditions of the plan and respective stock option contract. Under the terms of this second stock option plan, we are
authorized to grant options to purchase up to 1.5% of our common shares, and the options vest as follows: 20% after one year following the date the options were granted; 30% after two years following the date the options were granted; and 50% after
three years following the date the options were granted. As of December 31, 2012, 6,510,000 options had been granted on April 30, 2010, at an exercise price of R$10.19 per share, 6,345,000 options had been granted on January 18, 2011,
at exercise prices of R$12.05 per share, 150,000 options had been granted on March 16, 2011, at exercise prices of R$12.89 per share, 4,860,000 options had been granted on January 23, 2012, at an exercise price of R$11.50 per share,
4,494,000 options had been granted on March 20, 2013, at exercise prices of R$15.71 per share, 584,400 options had been granted on April 25, 2013, at exercise prices of R$16.81 per share, and our Executive Officers owned vested options to
purchase an aggregate of 7,190,500 shares of our common stock at a weighted average exercise price of R$13.03 per share as of December 31, 2013.

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

At a special shareholders meeting held on April 25, 2013, our shareholders approved a stock option plan for members of our Board of
Directors. Under this plan, each member of our Board, upon taking office, receives stock options equal to 30% of his total remuneration for serving on our Board. The total number of shares subject to stock options under this plan, together with the
other stock option plans described above, may not exceed 1.5% of our total capital stock. Stock options under this plan may be exercised during a period of four to six years after they are granted. In the event a Board members term ends for
any reason other than the members abandoning his office, he may exercise a portion of the options which is proportional to the period for which he has served. A Board member who abandons his office loses his stock options granted under this
plan.

Employee Profit Sharing Plan

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

For the 2013, 2012, 2011, 2010 and 2009 fiscal years, we distributed US$57.2 million, US$36.1 million, US$33.4 million, US$41.3 million and
US$33.7 million, respectively, to our employees under our profit sharing plan.

Short-Term Variable Compensation Policy

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



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Long-Term Incentive Plan

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

Defined Contribution Pension
Plan

We sponsor a defined contribution pension plan for employees, the participation in which is optional. The plan is managed by
EMBRAER PREV  Sociedade de Previdência Complementar. Contributions made by us to this plan in the years ended December 31, 2013, 2012, 2011, 2010 and 2009 were US$28.1 million, US$27.4 million, US$28.4 million, US$22.8 million and
US$16.0 million, respectively. For more information on our post-retirement benefits, see Note 27 to our audited consolidated financial statements.

We amended our healthcare plan for retired employees, considered a post-employment benefit. Under this healthcare plan, our employees who
retire 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 our retired
employees is insufficient to cover the medical plan expenses, which would represent exposure for us.

Actuarial studies are made annually
to identify the future exposure to be recorded as a provision. The provision recorded was US$57 million on December 31, 2012 and US$68.5 million on December 31, 2013. As of December 31, 2011, we had recorded no provision.

EAH sponsors a post-retirement healthcare plan, which was amended in 2007 and employees hired as of that date do not qualify for this plan.
The estimated pension and post-retirement healthcare costs for the beneficiaries and their dependents are recorded as a provision using the accrual method, based on actuarial studies. The provision recorded was US$4.4 million on December 31,
2012 and US$2.5 million on December 31, 2013.

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



|6C. | Board Practices
|--- | ---------------

Our Board of Directors is appointed for a two-year term. See Item
6A.Directors and Senior ManagementBoard of Directors.

The Executive Officers are elected by the Board of Directors. Our
current Executive Officers were elected on April 25, 2013, with a term of office until the meeting of our Board of Directors to be held following the annual general meeting of our shareholders in April 2015 to approve our financial statements
for the fiscal year ended December 31, 2014.

The members of our Board of Directors and our Executive Officers have a uniform
two-year term and are eligible for reelection. A vote of at least nine members of our Board of Directors is necessary to remove an Executive Officer. See Item 6A.Directors and Senior ManagementExecutive Officers.

None of our Directors is party to an employment agreement providing for benefits upon termination of term. All of our Executive Officers are
party to a service agreement setting forth the rights and obligations of the Executive Officers. If we terminate a service agreement with any of our Executive Officers, we will be required to pay a termination benefit to such Executive Officer
equivalent to 50% of his/her remaining annual compensation, provided that a minimum of six monthly wages of the annual compensation is paid.

Audit and
Risks Committee

Our Audit and Risks Committee may have up to five members and has no executive power. The primary purpose of the Audit
and Risks Committee is to assist the Board of Directors in its functions. The members of our



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Board of Directors may serve on the committee. The Audit and Risks Committees responsibilities include validation and submission to the Board of Directors of guidelines for risk policy,
verification of risk management policy compliance, supervision of activities performed by our independent auditors and monitoring the quality and integrity of internal controls and financial statements. Embraers statutory Audit and Risks
Committee is composed of independent members of our Board of Directors. Because foreign private issuers are subject to local legislation which may prohibit the full Board of Directors from delegating certain responsibilities to the audit
committee, pursuant to Rule 10A-3, audit committees of foreign private issuers may be granted responsibilities, which may include advisory powers, with respect to such matters to the extent permitted by law. Due to certain restrictions imposed by
the Brazilian Corporate Law, our Audit and Risks Committee, unlike a U.S. audit committee, only has an advisory role and may only make recommendations for adoption by the full Board of Directors, which is responsible for the ultimate
vote and final decision. For example, our Audit and Risks Committee makes recommendations regarding the appointment of auditing firms, which are subject to a vote of the board of directors. Our Audit and Risks Committee complies with Brazilian legal
requirements (including for independent directors, as defined by Brazilian law).

Set forth below are the names, ages, the
year first elected and positions of the members of our Audit and Risks Committee elected at our annual shareholders meeting held on April 25, 2013.



|                              |  |     |  |                                  |  |                   
|----------------------------- |  | --- |  | -------------------------------- |  | ------------------
|Name                          |  | Age |  | Position                         |  | Year First Elected
|Sergio Eraldo de Salles Pinto |  | 49  |  | Coordinator and Effective member |  | 2011              
|Israel Vainboim               |  | 69  |  | Effective member                 |  | 2011              
|Samir Zraick                  |  | 72  |  | Effective member                 |  | 2011              
|Vitor Paulo Camargo Gonçalves |  | 57  |  | Effective member                 |  | 2011              

Conselho Fiscal

Under the Brazilian Corporate Law, the Conselho Fiscal is a corporate body independent of management and a companys
external auditors. The Conselho Fiscal has not typically been equivalent to or comparable with a U.S. audit committee; its primary responsibility has been to monitor managements activities, review the financial statements, and report
its findings to the shareholders. In our case, our statutory Audit and Risks Committee, established in accordance with the Novo Mercado Listing Rules, will serve as our equivalent of a U.S. audit committee. See Item 6A.Directors
and Senior Management Committees.

Under the Brazilian Corporate Law, the Conselho Fiscal may not contain
members who are members of the Board of Directors or the executive committee, or who are our employees or employees of a controlled company or of a company of this group, or a spouse or relative of any member of our management. In addition, the
Brazilian Corporate Law requires that Conselho Fiscal members receive a remuneration of at least 10% of the average amount paid to each Executive Officer. The Brazilian Corporate Law requires a Conselho Fiscal to be composed of a
minimum of three and a maximum of five members and their respective alternates. Under the rules of the Novo Mercado, the members of the Conselho Fiscal have agreed to comply with the Novo Mercado Listing Rules and to the rules
of the São Paulo Stock Exchange Arbitration Chamber before taking office and for such purpose have executed a Statement of Consent from of the Conselho Fiscal.

Our Conselho Fiscal is composed of three to five members who are elected at the annual shareholders meeting, with terms
lasting until the next annual shareholders meeting after their election. Under the Brazilian Corporate Law, in the event a company acquires control of another company, minority shareholders that in the aggregate hold at least 10% of the voting
shares also have the right to elect separately one member of the Conselho Fiscal. Such provision will not be applicable to us as long as we are subject to widespread control. Set forth below are the names, ages, the year first elected and
positions of the members of our Conselho Fiscal and respective alternates, elected at our annual shareholders meeting held on April 25, 2013.



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|                              |  |     |  |                  |  |                   
|----------------------------- |  | --- |  | ---------------- |  | ------------------
|Name                          |  | Age |  | Position         |  | Year First Elected
|Ivan Mendes do Carmo(1)       |  | 51  |  | Effective member |  | 2008              
|Tarcísio Luiz Silva Fontenele |  | 51  |  | Alternate        |  | 2001              
|José Mauro Laxe Vilela        |  | 66  |  | Effective member |  | 2011              
|Wanderley Fernandes da Silva  |  | 40  |  | Alternate        |  | 2011              
|Taiki Hirashima               |  | 73  |  | Effective member |  | 2004              
|Carla Alessandra Trematore    |  | 38  |  | Alternate        |  | 2013              
|Eduardo Coutinho Guerra(2)    |  | 47  |  | Effective member |  | 2007              
|Marcus Pereira Aucélio        |  | 47  |  | Alternate        |  | 2013              
|Nelson de Menezes Filho       |  | 57  |  | Effective member |  | 2013              
|Josiane Angieuski Vaz         |  | 50  |  | Alternate        |  | 2013              



|(1) | President of the Conselho Fiscal.
|--- | ---------------------------------

|(2) | Vice-President of the Conselho Fiscal.
|--- | --------------------------------------



|6D. | Employees
|--- | ---------

The table below sets forth the number of our employees by category as of the
dates indicated, which number includes the employees of our consolidated joint ventures and subsidiaries OGMA, HEAI, ECTS, Atech, Bradar, Harpia, Visiona and Savis:



|                                    |  |                 |        |  |      |  |        |      |  |  |        |  |  |      |        |  |  |  |        | 
|----------------------------------- |  | --------------- | ------ |  | ---- |  | ------ | ---- |  |  | ------ |  |  | ---- | ------ |  |  |  | ------ | 
|                                    |  | At December 31, |       
|                                    |  | 2013            |        |  | 2012 |  |        | 2011 |  |  | 2010   |  |  | 2009 |       
|Production Process                  |  |                 | 6,628  |  |      |  | 6,558  |      |  |  | 6,950  |  |  |      | 8,541  |  |  |  | 8,704  | 
|Research and Development            |  |                 | 5,914  |  |      |  | 5,245  |      |  |  | 4,463  |  |  |      | 3,373  |  |  |  | 2,401  | 
|Customer Support                    |  |                 | 3,737  |  |      |  | 3,269  |      |  |  | 3,035  |  |  |      | 3,026  |  |  |  | 2,928  | 
|Administrative  Production Support |  |                 | 2,067  |  |      |  | 2,367  |      |  |  | 2,218  |  |  |      | 2,453  |  |  |  | 2,088  | 
|Administrative  Corporate          |  |                 | 3,302  |  |      |  | 2,711  |      |  |  | 2,600  |  |  |      | 1,491  |  |  |  | 2,507  | 
|                                    |  |                 |        |  |      |  |        |      |  |  |        |  |  |      |        |  |  |  |        | 
|Total                               |  |                 | 21,648 |  |      |  | 20,150 |      |  |  | 19,266 |  |  |      | 18,884 |  |  |  | 18,628 | 
|                                    |  |                 |        |  |      |  |        |      |  |  |        |  |  |      |        |  |  |  |        | 

Approximately 82.0% of our workforce is employed in Brazil. Most of our technical staff is trained at
leading Brazilian engineering schools, including ITA, located in São José dos Campos. A small percentage of our employees belong to one of two labor unions: the Sindicato dos Metalúrgicos (Union of Metallurgical Workers)
and the Sindicato dos Engenheiros do Estado de São Paulo (Union of Engineers of the State of São Paulo). Overall, union membership as a percentage of total workforce has declined significantly in past years. At December 31,
2000, approximately 74.1% of our employees were not affiliated with any unions, compared to 92.1% at December 31, 2013. We believe that relations with our employees are good.

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



|6E. | Share Ownership
|--- | ---------------

At December 31, 2013, our board members and Executive Officers
owned an aggregate of 434,298 of our common shares. None of the officers or directors individually owns more than 1% of the outstanding common shares.

As of December 31, 2013, our Executive Officers owned options to purchase an aggregate of 7,190,500 shares of our common stock at a
weighted average exercise price of R$13.03 per share.

See Item 6B.CompensationStock Option Plan for a description
of our stock option plan applicable to our management and employees, including those of our subsidiaries.



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|ITEM 7. | MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
|------- | -------------------------------------------------



|7A. | Major Shareholders
|--- | ------------------

Shareholders

We have total authorized capital of 1,000,000,000 shares, with a total aggregate of 740,465,044 common shares, including one special
golden share held by the Brazilian federal government, issued and outstanding as of February 28, 2013. The golden share provides the Brazilian federal government with veto rights in certain specific circumstances. In addition,
non-Brazilian shareholders may have their voting rights restricted in certain specific circumstances. See Item 10B. Additional InformationMemorandum and Articles of AssociationDescription of Capital StockVoting Rights of
Shares.

The following table sets forth share ownership information for each significant shareholder that beneficially owns our
equity securities and sets forth the aggregate shareholdings on the São Paulo Stock Exchange and the New York Stock Exchange at December 31, 2013:



|                                              |  |               |             |  |     |  |        | 
|--------------------------------------------- |  | ------------- | ----------- |  | --- |  | ------ | 
|                                              |  | Common Shares |            
|                                              |  | Shares        |             |  | (%) | 
|Oppenheimer Funds(1)                          |  |               | 76,874,823  |  |     |  | 10.38  | 
|PREVI(2)                                      |  |               | 57,938,103  |  |     |  | 7.82   | 
|Baillie Gifford & Co.(3)                      |  |               | 40,625,008  |  |     |  | 5.49   | 
|BNDESPAR(4)                                   |  |               | 39,762,489  |  |     |  | 5.37   | 
|Thornburg Investment Management(5)            |  |               | 39,552,236  |  |     |  | 5.34   | 
|União Federal/Brazilian federal government(6) |  |               | 1           |  |     |  |       | 
|Shares in company treasury                    |  |               | 9,460,001   |  |     |  | 1.28   | 
|Others                                        |  |               | 476,252,383 |  |     |  | 64.32  | 
|                                              |  |               |             |  |     |  |        | 
|Total                                         |  |               | 740,465,044 |  |     |  | 100.00 | 
|                                              |  |               |             |  |     |  |        | 



|(1) | Oppenheimer Funds is one of the largest asset management companies in the United States, and its controlled affiliates offer a broad range of products and services to individuals, corporations and institutions,
including mutual funds, separately managed accounts, investment management for institutions, hedge fund products, qualified retirement plans and subadvisory investment-management services.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Banco do Brasil Employee Pension Fund, or PREVI, was founded in 1904 as a pension fund for the employees of Banco do Brasil S.A., which is controlled by the Brazilian federal government.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Baillie Gifford & Co., also known as Baillie Gifford International, L.L.C., is an Edinburgh, Scotland-based independent investment management firm. The firm is 100% owned by its senior partners. The firm
manages the Baillie Gifford series of funds in addition to other funds and caters to individuals and institutions.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | BNDESPAR is a wholly-owned subsidiary of Banco Nacional de Desenvolvimento Econômico e SocialBNDES, the government-owned national development bank of Brazil.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------

|(5) | Thornburg Investment Management is an employee-owned investment management company based in Santa Fe, New Mexico, with assets under management of over US$60 billion (as of December 31, 2013). The firm manages the
Thornburg series of mutual funds in addition to other funds for select institutions and individuals.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(6) | The Brazilian federal government holds our golden share.
|--- | ----------------------------------------------------------

Other than as discussed
in Item 4B. Information on the CompanyHistory and Development of the Company, there have been no significant changes in percentage ownership by any major shareholder in the past three years.

On December 31, 2013, we had approximately 48,000 holders of common shares, including common shares in the form of ADSs. According to the
most accurate information available to us, on December 31, 2013, an aggregate of 94,047,433 common shares in the form of ADSs were held by 151 record holders, including DTC in the United States.



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|7B. | Related Party Transactions
|--- | --------------------------

The Brazilian Federal Government

The Brazilian federal government, through its direct and indirect stakes in us and its ownership of our golden share, is one
of our major shareholders. The issuance of the golden share was a requirement of the regulations governing our privatization in 1994 and grants the Brazilian federal government veto rights over certain military-related programs and
corporate actions (such as transfers of control and changes in our name, logo and corporate purposes). See Item 10B. Additional InformationMemorandum and Articles of AssociationDescription of Capital StockVoting Rights of
SharesGolden Share. As of February 28, 2013, in addition to the golden share, the Brazilian federal government owned an indirect 5.37% stake in us through the BNDESPAR, a wholly-owned subsidiary of the Banco Nacional
do Desenvolvimento Econômico e Social (the Brazilian Development Bank), which, in turn, is controlled by the Brazilian federal government. As a result, for the purposes of this Form 20-Fs disclosure requirements, we consider
transactions between Embraer and the Brazilian federal government or its agencies as falling within the definition of related party transactions.

The Brazilian government plays an important role in our business activities, including as:



| |  |  | a major customer of our defense products (through the Brazilian Air Force);
| | - |  | ---------------------------------------------------------------------------



| |  |  | a source for research debt financing through technology development institutions such as the 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).
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------

See Item 5B. Operating and Financial Review and ProspectsLiquidity and Capital ResourcesCredit Facilities and Lines of
Credit, Item 4C. Information on the CompanyBusiness OverviewAircraft Financing Arrangements, Item 3D. Key InformationRisk FactorsRisks Relating to EmbraerAny decrease in Brazilian federal
government-sponsored customer financing, or increase in government-sponsored financing that benefits our competitors, may decrease the cost competitiveness of our aircraft and Item 3D. Key InformationRisk FactorsRisks
Relating to EmbraerThe Brazilian federal government may reduce funds available to our customers under government-sponsored financing programs. For more information regarding our related party transactions, see Note 15 to our audited
consolidated financial statements.

A Major Customer (Brazilian Federal Government)

The Brazilian federal government, principally through the Brazilian Air Force, has been a significant customer of Embraer since its inception.
For the year ended December 31, 2013, the Brazilian federal government, principally through the Brazilian Air Force, accounted for 71%, or US$852 million, of the revenue of our Defense & Security segment. In addition, as of
December 31, 2013, the Brazilian Air Force owed us US$158.4 million in trade account receivables and had a credit against us of US$210.3 million in customer advances. We expect to continue to be the primary source of new aircraft and spare
parts and services for the Brazilian federal government. For a description of our transactions with the Brazilian federal government, see Item 4C. Information on the CompanyBusiness OverviewDefense & Security
Business.

Financing Source

BNDES

We are borrowers under a number of credit facilities from the BNDES, the sole parent of BNDESPAR, one of our significant direct
shareholders and an affiliate of the Brazilian Federal Government. As of December 31, 2013, we had a total outstanding balance of loans borrowed from the BNDES in the aggregate amount of US$255.2 million. For further information on the amounts,
maturity dates and interest rates of the principal loans we have with the BNDES, see Item 5B. Operating and Financial Review and ProspectsLiquidity and Capital ResourcesCredit Facilities and Lines of Credit.



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FINEP

We maintain credit facilities with the FINEP, which as of December 31, 2013 had a total outstanding balance of US$67.7 million. These
loans were extended to us primarily to fund research and development expenses of the Phenom 100 and 300 aircraft and the Legacy 500 aircraft. For further information on the amounts, maturity dates and interest rates of the principal loans we have
with the FINEP, see Item 5B. Operating and Financial Review and ProspectsLiquidity and Capital ResourcesCredit Facilities and Lines of Credit.

Banco do Brasil

Banco do Brasil is a
publicly-listed, state-owned bank controlled by the Brazilian federal government. As of December 31, 2013, we maintained outstanding non-recourse and recourse debt with Banco do Brasil in the total amount of US$311.6 million, which is recorded
as a non-current liability on our statement of financial position. In addition, we maintained outstanding Export Credit Notes with Banco do Brasil in the total amount of US$85.4 million. For further information on the amounts, maturity dates and
interest rates of the principal loans we have with Banco do Brasil, see Item 5B. Operating and Financial Review and ProspectsLiquidity and Capital ResourcesCredit Facilities and Lines of Credit.

Caixa Econômica Federal

Caixa
Econômica Federal is a state-owned bank controlled by the Brazilian federal government. As of December 31, 2013 we maintained outstanding Export Credit Notes with Caixa Econômica Federal in the total amount of US$42.8 million. For
further information on the amounts, maturity dates and interest rates of the principal loans we have with Caixa Econômica Federal, see Item 5B. Operating and Financial Review and ProspectsLiquidity and Capital ResourcesCredit
Facilities and Lines of Credit.

Customer Financing by the BNDES

The Brazilian federal government has been an important source of export financing for our customers through the BNDES-exim program, managed by
the BNDES. Beginning in the second half of 2007, the BNDES started providing financing to our customers on financial terms and conditions which complied with the Aircraft Sector Understanding of the OECD. Brazil has been joined by Canada, the United
States and the European Union, among others, at the OECD, as a participant in the Sector Understanding on Export Credits for Civil Aircraft that aims to assure a level-playing field among the airframe manufacturers and
encourages manufacturers and airlines to focus on price and quality rather than on financial packages provided under government support (see Item 4C. Information on the CompanyBusiness OverviewAircraft Financing
Arrangements).

A Service Provider (Banco do Brasil)

At December 31, 2013, we maintained cash and cash equivalents of US$497.6 million with Banco do Brasil and several of its affiliates. At
that date, we also had deposited with Banco do Brasil an amount of US$311.6 million in cash and cash equivalents, which served as collateral for a loan extended by Banco do Brasil to one of our subsidiaries. Banco do Brasil has been a provider of
regular commercial banking and asset management services to us for many decades. These services include maintaining our checking account and managing exclusive investment funds in which we are the sole investor.



|7C. | Interests of Experts and Counsel
|--- | --------------------------------

Not applicable.



|ITEM 8. | FINANCIAL INFORMATION
|------- | ---------------------



|8A. | Consolidated Statements and Other Financial Information
|--- | -------------------------------------------------------

See Item 3A. Key
InformationSelected Financial Data.



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Legal Proceedings

Labor Lawsuits. We are defendants in individual labor lawsuits, for which we are awaiting the decision of the Brazilian labor
courts. Due to the immaterial amount involved in these legal proceedings, we do not believe that any liabilities related to these individual labor lawsuits would have a material adverse effect on our financial condition or results of operations. See
Note 26 to our audited consolidated financial statements for a further discussion of our labor lawsuits.

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

Interest on the total amount of unpaid taxes and payroll
charges accrues monthly based on the Selic rate, the key lending rate of the Central Bank, and we make an accrual to the interest income (expenses), net item of our statements of income. As of December 31, 2013, there was a US$232.0 million
provision recorded as a liability (taxes and payroll charges) on our statement of financial position in connection with litigation contingencies that we classify as representing probable losses to us. See Item 3D. Key InformationRisk
FactorsRisks Relating to EmbraerWe may have to make significant payments as a result of unfavorable outcomes of pending challenges to various taxes and payroll charges and Note 23 and Note 26 to our audited consolidated financial
statements for a further discussion of these challenges.

SEC/DOJ Investigation. We received a subpoena from the SEC in
September, 2010, which inquired about certain operations concerning sales of aircraft abroad. In response to this SEC-issued subpoena and associated inquiries into the possibility of non-compliance with the FCPA, we retained outside counsel to
conduct an internal investigation on transactions carried out in three specific countries.

Since then, in response to
additional information, we have voluntarily expanded the scope of the internal investigation to include sales in additional countries and have reported on those matters to the SEC and the DOJ. The internal investigation and related government
inquiries concerning these matters remain ongoing. We will continue to respond to any additional information and cooperate with the SEC, DOJ and other relevant authorities, as circumstances warrant. We, with the support of our outside counsel, have
concluded that it is still not possible to estimate the duration, scope or results of the internal investigation or related inquiries by relevant authorities. In the event that the authorities take action against us with respect to these or any
related matters that may arise in the future, or we enter into an agreement to settle such matters, we may be required to pay substantial fines and/or to incur other sanctions or liabilities. We, based upon the opinion of our outside counsel,
believe that there is no basis for estimating reserves or quantifying any possible contingency at this time.

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

Our management does not believe that any of our proceedings, if adversely determined, would materially or adversely affect our business,
financial condition or results of operations. See Note 23 and Note 26 to our audited financial statements.

Dividends and Dividend Policy

Amounts Available for Distribution

At each annual shareholders meeting, the Board of Directors is required to recommend how net profits for the preceding fiscal year are to
be allocated. For purposes of the Brazilian Corporate Law, net profits are defined as net income after income taxes and social contribution taxes for such fiscal year, net of any accumulated losses from prior fiscal years and any amounts allocated
to employees and managements participation in our profits, determined under Brazilian GAAP. In accordance with the Brazilian Corporate Law and our bylaws, the amounts available for dividend distribution are the amounts determined under
Brazilian GAAP in our parent company financial statements. Such amount for distribution is equal to our net income after taxes less any amounts allocated from such net income after taxes to:



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| |  |  | the legal reserve;
| | - |  | ------------------



| |  |  | a contingency reserve for anticipated losses; and
| | - |  | -------------------------------------------------



| |  |  | an unrealized revenue reserve.
| | - |  | ------------------------------

For further information on amounts available for
distributions, see Note 29 to our audited consolidated financial statements.

We are required to maintain a legal reserve, to which we
must allocate 5% of net profits for each fiscal year until the amount for such reserve equals 20% of our paid-in capital. However, we are not required to make any allocations to our legal reserve in respect of any fiscal year in which it, when added
to our other established capital reserves, exceeds 30% of our capital. Net losses, if any, may be charged against the legal reserve. The balance of our legal reserve was US$165.3 million, which was equal to 11.5% of our paid-in capital at
December 31, 2013.

The Brazilian Corporate Law also provides for two additional, discretionary allocations of net profits that are
subject to approval by the shareholders at the annual meeting. First, a percentage of net profits may be allocated to a contingency reserve for anticipated losses that are deemed probable in future years. Any amount so allocated in a prior year must
be either reversed in the fiscal year in which the loss was anticipated if such loss does not in fact occur, or written off in the event that the anticipated loss occurs. Second, if the amount of unrealized revenue exceeds the sum of:



| |  |  | the legal reserve;
| | - |  | ------------------



| |  |  | the investment and working capital reserve;
| | - |  | -------------------------------------------



| |  |  | retained earnings; and
| | - |  | ----------------------



| |  |  | the contingency reserve for anticipated losses,
| | - |  | -----------------------------------------------

Such excess amount may be allocated to an
unrealized revenue reserve. Under the Brazilian Corporate Law, unrealized revenue is defined as the sum of:



| |  |  | price-level restatement of statement of financial position accounts;
| | - |  | --------------------------------------------------------------------



| |  |  | the share of equity earnings of affiliated companies; and
| | - |  | ---------------------------------------------------------



| |  |  | profits from installment sales to be received after the end of the next succeeding fiscal year.
| | - |  | -----------------------------------------------------------------------------------------------

According to our bylaws and subject to shareholder approval, our Board of Directors may allocate to an investment and working capital reserve
up to 75% of our parent company adjusted net income after taxes under Brazilian GAAP. The reserve may not exceed 80% of our capital. The purpose of the investment and working capital reserve is to make investments in fixed assets or increase our
working capital. This reserve may also be used to amortize our debts. We may also grant a participation in our net income to our management and employees. However, the allocation to the investment and working capital reserve or the participation of
our management and employees cannot reduce the mandatory distributable amount (discussed below). Otherwise, the amount in excess of our capital must be used to increase our capital or be distributed as a cash dividend. The balance of the investment
and working capital reserve may be used:



| |  |  | in the deduction of accumulated losses, whenever necessary;
| | - |  | -----------------------------------------------------------



| |  |  | in the distribution of dividends, at any time;
| | - |  | ----------------------------------------------



| |  |  | in the redemption, withdrawal, purchase or open market repurchase of shares, as authorized by law; and
| | - |  | ------------------------------------------------------------------------------------------------------



| |  |  | to increase our capital, including by means of an issuance of new shares.
| | - |  | -------------------------------------------------------------------------



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The amounts available for distribution may be further increased by a reversion of the contingency
reserve for anticipated losses constituted in prior years but not realized, or further increased or reduced as a result of the allocations of revenues to or from the unrealized revenue reserve. The amounts available for distribution are determined
on the basis of financial statements prepared in accordance with the Brazilian Corporate Law method. We have no such contingency reserve.

At December 31, 2013, unappropriated retained earnings of R$2,943.6 million (equivalent to US$2,000.1 million) were recorded in our
statutory parent company books under Brazilian GAAP. At December 31, 2013, such amounts are net of minimum dividends and interest on shareholders equity paid or payable, as determined by the Brazilian Corporate Law. For further
information, see Note 29 to our audited consolidated financial statements.

Mandatory Distribution

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

Payment of Dividends

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

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

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



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

History of Dividend and Interest on Shareholders Equity
Payments and Dividend Policy

Law No. 9,249, dated December 26, 1995, as amended, provides for distribution of
interest on shareholders equity as an alternative form of payment to shareholders and treats those payments as a deductible expense for purposes of calculating Brazilian corporate income tax and social contribution on net profits. These
distributions may be paid in cash. Such interest is limited to the daily pro rata variation of the TJLP and cannot exceed the greater of:



| |  |  | 50% of net income (after the deduction of social contribution on net profits, but before taking into account the provision for corporate income tax and the amounts attributable to shareholders as net interest on
shareholders equity) for the period in respect of which the payment is made; or
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | 50% of the sum of retained profits and profit reserves as of the beginning of the period in respect of which the payment is made.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------

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

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

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



|                       |  |                                        |  |                              |       |  |                      |  |      | 
|---------------------- |  | -------------------------------------- |  | ---------------------------- | ----- |  | -------------------- |  | ---- | 
|Date of approval       |  | Period in which profits were generated |  | Total amount of Distribution |      
|                       |  |                                        |  | (in R$ millions)             |       |  | (in US$ millions)(1) | 
|March 9, 2007(2)       |  | First quarter of 2007                  |  |                              | 43.4  |  |                      |  | 21.2 | 
|June 11, 2007(2)       |  | Second quarter of 2007                 |  |                              | 50.0  |  |                      |  | 26.0 | 
|September 14, 2007(2)  |  | Third quarter of 2007                  |  |                              | 149.6 |  |                      |  | 81.4 | 
|December 7, 2007(2)    |  | Fourth quarter of 2007                 |  |                              | 82.8  |  |                      |  | 46.7 | 
|March 7, 2008(1)       |  | Full year of 2007                      |  |                              | 123.0 |  |                      |  | 69.4 | 
|March 7, 2008(2)       |  | First quarter of 2008                  |  |                              | 65.9  |  |                      |  | 37.7 | 
|June 13, 2008(2)       |  | Second quarter of 2008                 |  |                              | 65.4  |  |                      |  | 40.7 | 
|September 12, 2008(2)  |  | Third quarter of 2008                  |  |                              | 92.9  |  |                      |  | 48.5 | 
|December 11, 2009(2)   |  | Fourth quarter of 2009                 |  |                              | 173.7 |  |                      |  | 99.8 | 
|April 19, 2010(3)      |  | Full year of 2009                      |  |                              | 55.2  |  |                      |  | 31.7 | 
|June 10, 2010(2)       |  | First quarter of 2010                  |  |                              | 34.5  |  |                      |  | 19.2 | 
|September 16, 2010(2)  |  | Third quarter of 2010                  |  |                              | 21.7  |  |                      |  | 12.8 | 
|December 9, 2010(2)(4) |  | Fourth quarter of 2010                 |  |                              | 144.7 |  |                      |  | 86.9 | 
|March 16, 2011(3)      |  | First quarter of 2011                  |  |                              | 43.4  |  |                      |  | 26.7 | 



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|                       |  |                                        |  |                              |      |  |                      |  |      | 
|---------------------- |  | -------------------------------------- |  | ---------------------------- | ---- |  | -------------------- |  | ---- | 
|Date of approval       |  | Period in which profits were generated |  | Total amount of Distribution |     
|                       |  |                                        |  | (in R$ millions)             |      |  | (in US$ millions)(1) | 
|June 9, 2011(3)        |  | Second quarter of 2011                 |  |                              | 72.4 |  |                      |  | 46.4 | 
|September 4, 2011(3)   |  | Third quarter of 2011                  |  |                              | 65.1 |  |                      |  | 35.1 | 
|June 14, 2012(2)       |  | First semester of 2012                 |  |                              | 65.3 |  |                      |  | 32.3 | 
|September 13, 2012(2)  |  | Third quarter of 2012                  |  |                              | 50.8 |  |                      |  | 25.0 | 
|December 6, 2012(2)(5) |  | Fourth quarter of 2012                 |  |                              | 36.3 |  |                      |  | 17.8 | 
|April 25, 2013(3)      |  | Full year of 2012                      |  |                              | 30.1 |  |                      |  | 15.0 | 
|March 11, 2013(2)      |  | First quarter of 2013                  |  |                              | 29.1 |  |                      |  | 14.4 | 
|June 13, 2013(2)       |  | Second quarter of 2013                 |  |                              | 29.1 |  |                      |  | 13.2 | 
|September 12 ,2013(2)  |  | Third quarter of 2013                  |  |                              | 29.2 |  |                      |  | 13.1 | 
|December 5, 2013(2)(6) |  | Fourth quarter of 2013                 |  |                              | 65.8 |  |                      |  | 28.1 | 
|April 16, 2014(3)(7)   |  | Full year of 2013                      |  |                              | 49.0 |  |                      |  | 20.9 | 



|(1) | Translated from nominal reais into U.S. dollars at the selling exchange rates in effect on the last date of the month in which the dividends were approved.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Represents interest on shareholders equity.
|--- | --------------------------------------------

|(3) | Represents dividend payments.
|--- | -----------------------------

|(4) | Amount declared in 2010 but paid in 2011.
|--- | -----------------------------------------

|(5) | Amount declared in 2012 but paid in 2013.
|--- | -----------------------------------------

|(6) | Amount declared in 2013 but paid in 2014.
|--- | -----------------------------------------

|(7) | Proposal pending shareholder approval.
|--- | --------------------------------------

In 2013, we distributed US$83.8 million in interest on
shareholders equity or/and dividends in connection with profits generated in the year ended December 31, 2013. Our Board of Directors declared interest on shareholders equity with respect to profits generated during the first half
of 2013, the third quarter of 2013 and the fourth quarter of 2013 (see Item 8A. Financial InformationMandatory Distribution).

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



|8B. | Significant Changes
|--- | -------------------

No significant changes or events have occurred after the close of
the statement of financial position date at December 31, 2013, other than the events already described in this annual report.



|ITEM 9. | THE OFFER AND LISTING
|------- | ---------------------



|9A. | Offer and Listing Details
|--- | -------------------------

Our ADSs are listed on the New York Stock Exchange, or NYSE,
under the symbol ERJ. In addition, our common shares are traded on the São Paulo Stock Exchange under the symbol EMBR3. Each ADS represents four common shares.

The reported high and low closing prices in U.S. dollars for the ADSs on the NYSE for the periods indicated are set forth in the following
table. Trading prices for the ADSs until June 2, 2006 are for the former Embraer ADSs, each of which represented four preferred shares of former Embraer. Our ADSs began trading on the NYSE on June 5, 2006, with each ADS representing four
common shares issued by us.



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|                  |  |                               |       |  |     |  |       | 
|----------------- |  | ----------------------------- | ----- |  | --- |  | ----- | 
|                  |  | Price in U.S. dollars per ADS |      
|                  |  | High                          |       |  | Low | 
|2009              |  |                               |       |  |     |  |       | 
|Year              |  |                               | 24.65 |  |     |  | 9.75  | 
|2010              |  |                               |       |  |     |  |       | 
|Year              |  |                               | 31.25 |  |     |  | 20.01 | 
|2011              |  |                               |       |  |     |  |       | 
|Year              |  |                               | 35.27 |  |     |  | 21.40 | 
|2012              |  |                               |       |  |     |  |       | 
|First quarter     |  |                               | 32.28 |  |     |  | 25.99 | 
|Second quarter    |  |                               | 35.29 |  |     |  | 24.91 | 
|Third quarter     |  |                               | 28.40 |  |     |  | 23.06 | 
|Fourth quarter    |  |                               | 28.51 |  |     |  | 24.65 | 
|Year              |  |                               | 35.29 |  |     |  | 23.06 | 
|2013              |  |                               |       |  |     |  |       | 
|First quarter     |  |                               | 35.67 |  |     |  | 26.80 | 
|Second quarter    |  |                               | 38.58 |  |     |  | 32.35 | 
|Third quarter     |  |                               | 39.22 |  |     |  | 31.74 | 
|Fourth quarter    |  |                               | 35.33 |  |     |  | 29.36 | 
|Year              |  |                               | 39.22 |  |     |  | 26.80 | 
|Month ended:      |  |                               |       |  |     |  |       | 
|October 31, 2013  |  |                               | 35.33 |  |     |  | 29.39 | 
|November 30, 2013 |  |                               | 31.93 |  |     |  | 29.39 | 
|December 31, 2013 |  |                               | 32.30 |  |     |  | 29.36 | 
|January 31, 2014  |  |                               | 34.50 |  |     |  | 30.69 | 
|February 28, 2014 |  |                               | 36.48 |  |     |  | 29.86 | 

The tables below set forth, for the periods indicated, the reported high and low closing prices in
nominal reais for the common shares on the São Paulo Stock Exchange. Trading prices for the common shares until June 2, 2006 are for the former Embraer common shares. Our common shares began trading on the Novo Mercado
segment of the São Paulo Stock Exchange on June 5, 2006.



|               |  |                             |       |  |     |  |       | 
|-------------- |  | --------------------------- | ----- |  | --- |  | ----- | 
|               |  | Nominalreaispercommon share |      
|               |  | High                        |       |  | Low | 
|2009:          |  |                             |       |  |     |  |       | 
|Year-end       |  |                             | 11.07 |  |     |  | 5.80  | 
|2010:          |  |                             |       |  |     |  |       | 
|Year-end       |  |                             | 12.84 |  |     |  | 9.21  | 
|2011:          |  |                             |       |  |     |  |       | 
|First quarter  |  |                             | 14.30 |  |     |  | 11.90 | 
|Second quarter |  |                             | 13.13 |  |     |  | 11.75 | 
|Third quarter  |  |                             | 12.05 |  |     |  | 8.54  | 
|Fourth quarter |  |                             | 12.49 |  |     |  | 10.53 | 
|Year           |  |                             | 14.30 |  |     |  | 8.54  | 
|2012           |  |                             |       |  |     |  |       | 
|First quarter  |  |                             | 14.64 |  |     |  | 11.74 | 
|Second quarter |  |                             | 16.53 |  |     |  | 12.86 | 
|Third quarter  |  |                             | 14.34 |  |     |  | 11.87 | 
|Fourth quarter |  |                             | 14.52 |  |     |  | 12.77 | 
|Year           |  |                             | 16.53 |  |     |  | 11.74 | 



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|                  |  |                             |       |  |     |  |       | 
|----------------- |  | --------------------------- | ----- |  | --- |  | ----- | 
|                  |  | Nominalreaispercommon share |      
|                  |  | High                        |       |  | Low | 
|2013              |  |                             |       |  |     |  |       | 
|First quarter     |  |                             | 18.00 |  |     |  | 13.77 | 
|Second quarter    |  |                             | 21.25 |  |     |  | 16.01 | 
|Third quarter     |  |                             | 21.70 |  |     |  | 17.82 | 
|Fourth quarter    |  |                             | 19.05 |  |     |  | 16.35 | 
|Year              |  |                             | 21.70 |  |     |  | 13.77 | 
|Month ended:      |  |                             |       |  |     |  |       | 
|October 31, 2013  |  |                             | 19.05 |  |     |  | 16.35 | 
|November 30, 2013 |  |                             | 18.18 |  |     |  | 16.53 | 
|December 31, 2013 |  |                             | 18.89 |  |     |  | 17.22 | 
|January 31, 2014  |  |                             | 20.30 |  |     |  | 18.39 | 
|February 28, 2014 |  |                             | 21.15 |  |     |  | 18.27 | 

On December 31, 2013, we had approximately 48,000 holders of common shares, including common shares in
the form of ADSs. On December 31, 2013, an aggregate of 94,047,433 common shares, including common shares in the form of ADSs, were held by 151 record holders, including DTC in the United States.

On February 28, 2014, the closing sale price for our common shares on the São Paulo Stock Exchange was R$ 20.95, which is
equivalent to US$35.91 per ADS. On the same date, the closing sale price for our ADSs on the NYSE was US$35.90. The ADSs are issued under a deposit agreement and JPMorgan Chase Bank serves as depositary under that agreement.



|9B. | Plan of Distribution
|--- | --------------------

Not applicable.



|9C. | Markets
|--- | -------

Trading on the São Paulo Stock Exchange

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

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

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

The São Paulo Stock Exchange is less liquid than the NYSE and other major exchanges in the world. The São Paulo Stock Exchange
had an aggregate market capitalization of approximately R$2.41 trillion, equivalent to US$1.02 trillion at December 31, 2013. In comparison, the NYSE had a market capitalization of approximately US$17.9 trillion at the same date. Although any
of the outstanding shares of a listed company may trade on the São Paulo Stock Exchange, in most cases less than one-half of the listed shares are actually available for trading by the public, the remainder being held by small groups of
controlling persons, by governmental entities or by one principal shareholder. At December 31, 2013, we accounted for approximately 0.58% of the market capitalization of all listed companies on the São Paulo Stock Exchange.



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There is also significantly greater concentration in the Brazilian securities markets than in the
NYSE or other major exchanges. During the one-year period ended December 31, 2013, the ten largest companies listed on the São Paulo Stock Exchange represented approximately 39.1% of the total market capitalization of all listed
companies.

Trading on the São Paulo Stock Exchange by non-residents of Brazil is subject to limitations under Brazilian foreign
investment legislation.

Novo Mercado Corporate Governance Practices

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

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

To become a Level 2 (Nível 2) company, in addition to the obligations imposed by current Brazilian law, an
issuer must agree to (a) comply with all of the listing requirements for Level 1 companies, (b) grant tag-along rights for all shareholders in connection with a transfer of control of the company, offering the same price paid per share for
controlling block common shares and 80% of the price paid per share of controlling block preferred shares, (c) grant voting rights to holders of preferred shares in connection with certain corporate restructurings and related party
transactions, such as (1) any transformation of the company into another corporate form, (2) any merger, consolidation or spin-off of the company, (3) approval of any transactions between the company and its controlling shareholder,
including parties related to the controlling shareholder, (4) approval of any valuation of assets to be delivered to the company in payment for shares issued in a capital increase, (5) appointment of an expert firm to ascertain the fair
value of the company in connection with any deregistration and delisting tender offer, and (6) any changes to these voting rights, (d) have a Board of Directors composed of at least five members, of which 20% must be independent directors,
with a term limited to two years, (e) prepare annual financial statements in English, including cash flow statements, in accordance with international accounting standards, such as U.S. GAAP or IFRS, (f) if it elects to delist from the
Level 2 segment, hold a tender offer by the companys controlling shareholder (the minimum price of the shares to be offered will be determined by an appraisal process), and (g) adhere exclusively to the rules of the São Paulo Stock
Exchange Arbitration Chamber for resolution of disputes between the company and its investors.

To be listed on the Novo
Mercado, an issuer must meet all of the requirements described above, in addition to (a) issuing only voting shares and (b) granting tag-along rights for all shareholders in connection with a transfer of control of the company,
offering the same price paid per share for controlling block common shares. Our shares are listed on the Novo Mercado segment.

Regulation of Brazilian Securities Markets

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



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Under the Brazilian Corporate Law, a corporation is either public (companhia
aberta), like us, or closely held (companhia fechada). All public companies, including us, are registered with the CVM and are subject to reporting requirements. Our shares are listed and traded on the Novo Mercado segment of the
São Paulo Stock Exchange and may be traded privately subject to limitations.

We have the option to ask that trading in our
securities on the São Paulo Stock Exchange be suspended in anticipation of a material announcement. Trading may also be suspended on the initiative of the São Paulo Stock Exchange or the CVM, among other reasons, based on or due to a
belief that a company has provided inadequate information regarding a material event or has provided inadequate responses to the inquiries by the CVM or the São Paulo Stock Exchange.

Trading on the São Paulo Stock Exchange by non-residents of Brazil is subject to limitations under Brazilian foreign investment and tax
legislation. The Brazilian custodian for our common shares and the depositary for our ADSs have obtained an electronic certificate of registration from the Central Bank to remit U.S. dollars abroad for payments of dividends, any other cash
distributions, or upon the disposition of the shares and sales proceeds thereto. In the event that a holder of ADSs exchanges ADSs for common shares, the holder will be entitled to continue to rely on the depositarys electronic certificate of
registration for five business days after the exchange. Thereafter, the holder may not be able to obtain and remit U.S. dollars abroad upon the disposition of the common shares, or distributions relating to the common shares, unless the holder
obtains a new electronic certificate of registration or registers its investment in the common shares under Resolution No. 2,689.

Disclosure
Requirements

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

These requirements include provisions that:



| |  |  | establish the concept of a material fact that gives rise to reporting requirements. Material facts include decisions made by the controlling shareholders, resolutions of the general meeting of shareholders and of
management of the company, or any other facts related to the companys business (whether occurring within the company or otherwise somehow related thereto) that may influence the price of its publicly traded securities, or the decision of
investors to trade such securities or to exercise any of such securities underlying rights;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | specify examples of facts that are considered to be material, which include, among others, the execution of shareholders agreements providing for the transfer of control, the entry or withdrawal of shareholders
that maintain any managing, financial, technological or administrative function with or contribution to the company, and any corporate restructuring undertaken among related companies;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | oblige the investor relations officer, controlling shareholders, other officers, directors, members of the audit committee and other advisory boards to disclose material facts;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | require simultaneous disclosure of material facts to all markets in which the corporations securities are admitted for trading;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------



| |  |  | require the acquirer of a controlling stake in a corporation to publish material facts, including its intentions as to whether or not to de-list the corporations shares, within one year;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | establish rules regarding disclosure requirements in the acquisition and disposal of a material stockholding stake; and
| | - |  | -----------------------------------------------------------------------------------------------------------------------



| |  |  | restrict the use of insider information.
| | - |  | ----------------------------------------



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|9D. | Selling Shareholders
|--- | --------------------

Not applicable.



|9E. | Dilution
|--- | --------

Not applicable.



|9F. | Expenses of the Issue
|--- | ---------------------

Not applicable.



|ITEM 10. | ADDITIONAL INFORMATION
|-------- | ----------------------



|10A. | Share Capital
|---- | -------------

Not applicable.



|10B. | Memorandum and Articles of Association
|---- | --------------------------------------

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

Corporate
Purpose

We are a joint stock company with a principal place of business and jurisdiction in the city of São José dos
Campos, São Paulo, Brazil, governed mainly by our bylaws and the Brazilian Corporate Law. Our corporate purpose, as stated in our bylaws, is to (1) design, build and market aircraft and aerospace materials and related accessories,
components and equipment, according to the highest standards of technology and quality, (2) perform and carry out technical activities related to the manufacturing and servicing of aerospace materials, (3) contribute to the training of
technical personnel as necessary for the aerospace industry, (4) engage in other technological, manufacturing and business activities in connection with the aerospace industry, and to provide services therefore, (5) design, build and trade
equipment, materials, systems, software, accessories and components for the defense, security and energy industries, as well as to perform and carry out technical activities related to such manufacturing and maintenance activities, according to the
highest standards of technology and quality, and (6) perform other technological, manufacturing and trade activities and services related to the defense, security and energy industries.

Description of Capital Stock

General

As of December 31, 2013, our capital stock consisted of a total of 731,005,042 outstanding common shares, without par value, including
9,460,001 common shares held in treasury and one special class of common share known as the golden share, held by the Brazilian federal government. Our bylaws authorize the Board of Directors to increase the capital stock up to
1,000,000,000 common shares without seeking specific shareholder approval. All our outstanding shares are fully paid. Our shareholders must approve at a shareholders meeting any capital increase that exceeds the above-referenced authorized
amounts. Our shareholders are not liable for further capital calls. Their liability is limited to the amount of any portion of our capital which they have subscribed but not fully paid in.

Share Buyback

Pursuant to our
bylaws, our Board of Directors approved on December 7, 2007 a share buyback program for our common shares, in compliance with Instrução CVM No. 10/80, for the purpose of adding value to our shareholders through the management
of our capital structure. We were authorized to buy back up to an aggregate of 16,800,000 common shares, representing approximately 2.3% of our outstanding capital, which totaled 740,465,044 common shares outstanding. The acquisition of the shares
was made on the São Paulo Stock Exchange and the



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common shares bought back will be kept in treasury form, and the treasury shares would not have any political or economic rights. The program was terminated on March 31, 2008. A total of
16,800,000 shares were purchased at an average price of R$19.06 per share. See Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers.

On January 23, 2012, our Board of Directors approved a new share buyback program for our common shares, in compliance with
Instrução CVM No. 10/80, for the purpose of backing our second and third stock option plans, to be launched in 2012 and 2013, respectively. We were authorized to buy back up to an aggregate of 1,065,000 common shares, representing
approximately 0.15% of our outstanding capital, which totaled 740,465,044 common shares outstanding. No shares have been acquired by us under this program. The acquisition of the shares will be made on the São Paulo Stock Exchange, and may
not be superior to 30% of the average daily volume of shares traded, and the common shares bought back will be kept in treasury, with no political or economic rights. The program will last for one year as of the date of approval.

Common Shares

Each common
share entitles the holder thereof to one vote at our annual and special shareholders meetings. Pursuant to our bylaws and the São Paulo Stock Exchange listing agreement in connection with the listing of our shares on the Novo
Mercado, we cannot issue shares without voting rights or with restricted voting rights.

The Brazilian Corporate Law and
our bylaws require that all our shareholders meetings be called by publication of a notice in the Diário Oficial do Estado de São Paulo (official government publication of the State of São Paulo), and in a newspaper
of general circulation in the city in which our principal place of business is located, currently the O Valein São José dos Campos, at least 30 days prior to the meeting, and in another newspaper of general circulation in
São Paulo, where the São Paulo Stock Exchange is located, currently the Valor Econômico. The quorum to hold general meetings of our shareholders at first call is the presence of shareholders representing 35% of the common
shares; at second call the meetings can be held with the presence of shareholders representing 25% of the common shares; and at third call the meeting can be held with the presence of any number of shareholders.

According to our by-laws, in order to attend a shareholders meeting, a shareholder must show the ownership of the shares it intends to
vote by showing an identification document and a proof of share ownership. Our shareholders may be represented at shareholders meetings by (1) a proxy, issued within a one-year period prior to the meeting, (2) one of our directors or
officers, (3) a lawyer or (4) a financial institution. Investment funds must be represented by their administrator.

According
to the Brazilian Corporate Law, the common shares are entitled to dividends in proportion to their share of the amount available for distribution. See Item 8A. Financial InformationConsolidated Statements and Other Financial
InformationDividends and Dividend Policy for a more complete description of payment of dividends on our shares. In addition, upon any liquidation of the company, the common shares are entitled to return of capital in proportion to their
share of our net worth.

According to the Brazilian Corporate Law, neither our bylaws nor actions taken at a shareholders meeting
may deprive a shareholder of the following rights:



| |  |  | the right to participate in the distribution of profits;
| | - |  | --------------------------------------------------------



| |  |  | the right to participate equally and proportionally in any remaining residual assets in the event of liquidation of the company;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------



| |  |  | preemptive rights in the event of issuance of shares, convertible debentures or warrants, except in some specific circumstances under Brazilian law described in Item 10D.Preemptive Rights;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the right to supervise our management in accordance with Article 109 of the Brazilian Corporate Law; and
| | - |  | --------------------------------------------------------------------------------------------------------



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| |  |  | the right to appraisal rights in the cases specified in the Brazilian Corporate Law, which are described in Item 10D.Redemption and Right of Withdrawal.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------

Golden Share

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

Voting Rights of Shares

Each share of common stock is generally empowered with one vote at general meetings of our shareholders. Pursuant to our bylaws and the
São Paulo Stock Exchange listing agreement in connection with the listing of our shares on the Novo Mercado, we cannot issue shares without voting rights or with restricted voting rights.

Limitations on the Voting Rights of Certain Holders of Common Shares

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

For purposes of our bylaws, two or more of our shareholders are considered to be a group of shareholders if:



| |  |  | they are parties in a voting agreement;
| | - |  | ---------------------------------------



| |  |  | one of them is, directly or indirectly, a controlling shareholder or controlling parent company of the other, or the others;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------



| |  |  | they are companies directly or indirectly controlled by the same person/entity, or group of persons/entities, which may or may not be shareholders; or
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | they are companies, associations, foundations, cooperatives and trusts, investment funds or portfolios, universalities of rights or any other forms of organization or undertaking (a) with the same administrators or
managers, or further (b) whose administrators or managers are companies that are directly or indirectly controlled by the same person/entity, or group of persons/entities, which may or may not be shareholders.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

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

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



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



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Limitation on the Voting Rights of Non-Brazilian Shareholders

In accordance with the edital (invitation to bid) issued by the Brazilian federal government in connection with the privatization
of Embraer in 1994, voting participation of non-Brazilian holders of Embraer common shares was limited to 40% of Embraer common shares.

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

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

For purposes of our bylaws, the following are considered to be Brazilian shareholders:



| |  |  | Brazilian individuals, whether native or naturalized, resident in Brazil or abroad;
| | - |  | -----------------------------------------------------------------------------------



| |  |  | legal private entities organized under the laws of Brazil that have their administrative head offices in Brazil and (a) do not have a foreign controlling parent company, unless the parent company meets the
requirements of clause (b) of this item, and (b) are controlled, directly or indirectly, by one or more Brazilian individuals, whether native or naturalized, resident in Brazil or abroad; and
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | investment funds or clubs organized under the laws of Brazil that have their administrative head office in Brazil and whose managers and/or quotaholders holding the majority of their quotas are persons/entities referred
to above.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

For purposes of our bylaws, non-Brazilian shareholders are considered to be persons or legal entities, investment funds or clubs
and any other entities not composed of Brazilian shareholders and that cannot evidence that they satisfy the requirements to be considered Brazilian shareholders.

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



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



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



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

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

Example 1

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



|                  |  |                   |     |  |                                              |  |     |                                                    |  |  |                |  |  |                         |     |     |  |  |      | 
|----------------- |  | ----------------- | --- |  | -------------------------------------------- |  | --- | -------------------------------------------------- |  |  | -------------- |  |  | ----------------------- | --- | --- |  |  | ---- | 
|Shareholder       |  | % SharesAttending |     |  | Effective % ofVotes After 5%Vote Restriction |  |     | Effective % of VotesAfter Non-BrazilianRestriction |  |  | % ofValidVotes |  |  | Vote Ratio(Votes/Share) |    
|Brazilian A       |  |                   | 5   |  |                                              |  | 5   |                                                    |  |  | 5              |  |  |                         | 5   |     |  |  | 1.00 | 
|Brazilian B       |  |                   | 5   |  |                                              |  | 5   |                                                    |  |  | 5              |  |  |                         | 5   |     |  |  | 1.00 | 
|Brazilian C       |  |                   | 5   |  |                                              |  | 5   |                                                    |  |  | 5              |  |  |                         | 5   |     |  |  | 1.00 | 
|Brazilian D       |  |                   | 5   |  |                                              |  | 5   |                                                    |  |  | 5              |  |  |                         | 5   |     |  |  | 1.00 | 
|Brazilian E       |  |                   | 5   |  |                                              |  | 5   |                                                    |  |  | 5              |  |  |                         | 5   |     |  |  | 1.00 | 
|Brazilian F       |  |                   | 5   |  |                                              |  | 5   |                                                    |  |  | 5              |  |  |                         | 5   |     |  |  | 1.00 | 
|Brazilian G       |  |                   | 5   |  |                                              |  | 5   |                                                    |  |  | 5              |  |  |                         | 5   |     |  |  | 1.00 | 
|Brazilian H       |  |                   | 5   |  |                                              |  | 5   |                                                    |  |  | 5              |  |  |                         | 5   |     |  |  | 1.00 | 
|Brazilian I       |  |                   | 5   |  |                                              |  | 5   |                                                    |  |  | 5              |  |  |                         | 5   |     |  |  | 1.00 | 
|Brazilian J       |  |                   | 5   |  |                                              |  | 5   |                                                    |  |  | 5              |  |  |                         | 5   |     |  |  | 1.00 | 
|Brazilian K       |  |                   | 5   |  |                                              |  | 5   |                                                    |  |  | 5              |  |  |                         | 5   |     |  |  | 1.00 | 
|Brazilian L       |  |                   | 5   |  |                                              |  | 5   |                                                    |  |  | 5              |  |  |                         | 5   |     |  |  | 1.00 | 
|                  |  |                   |     |  |                                              |  |     |                                                    |  |  |                |  |  |                         |     |     |  |  |      | 
|Total Brazilians  |  |                   | 60  |  |                                              |  | 60  |                                                    |  |  | 60             |  |  |                         | 60  |     |  |  | 1.00 | 
|Non-Brazilians(1) |  |                   | 40  |  |                                              |  | 40  |                                                    |  |  | 40             |  |  |                         | 40  | (2) |  |  | 1.00 | 
|                  |  |                   |     |  |                                              |  |     |                                                    |  |  |                |  |  |                         |     |     |  |  |      | 
|Total             |  |                   | 100 |  |                                              |  | 100 |                                                    |  |  | 100            |  |  |                         | 100 |     |  |  | 1.00 | 
|                  |  |                   |     |  |                                              |  |     |                                                    |  |  |                |  |  |                         |     |     |  |  |      | 



|(1) | Assumes that no individual non-Brazilian shareholder holds more than 5% of our capital. If a non-Brazilian shareholder holds more than 5% of our capital, such shareholder will also be subject to the 5% voting
restriction on such holding.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Two-thirds of 60 (total votes of the Brazilian shareholders after application of the 5% voting restriction) equals 40 votes.
|--- | ----------------------------------------------------------------------------------------------------------------------------



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Example 2

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



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



|(1) | Assumes that no individual non-Brazilian shareholder holds more than 5% of our capital. If a non-Brazilian shareholder holds more than 5% of our capital, such shareholder will also be subject to the 5% voting
restriction on such holding.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Two-thirds of 35 (total votes of the Brazilian shareholders after application of the 5% voting restriction) equals 23 votes.
|--- | ----------------------------------------------------------------------------------------------------------------------------

Example 3

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



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



|(1) | Assumes that no individual non-Brazilian shareholder (except Non-Brazilian A) holds more than 5% of our capital. If a non-Brazilian shareholder holds more than 5% of our capital, such shareholder will also be subject to
the 5% voting restriction on such holding.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Two-thirds of 30 (total votes of the Brazilian shareholders after application of the 5% voting restriction) equals 20 votes, proportionally divided between Non-Brazilian A and the other non-Brazilians.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Example 4

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



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



|(1) | Assumes that no individual non-Brazilian shareholder (except Non-Brazilian A) holds more than 5% of our capital. If a non-Brazilian shareholder holds more than 5% of our capital, such shareholder will also be subject to
the 5% voting restriction on such holding.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Two-thirds of 25 (total votes of the Brazilian shareholders after application of the 5% voting restriction) equals 16.7 votes.
|--- | ------------------------------------------------------------------------------------------------------------------------------

Shareholders Agreement

In
connection with the merger of former Embraer with and into Embraer approved on March 31, 2006, Cia. Bozano, PREVI and SISTEL, the former controlling shareholders of former Embraer, terminated the shareholders agreement governing matters
relating to their equity ownership of former Embraer, and relinquished voting control over former Embraer in favor of all Embraer shareholders. As of the implementation of the merger, Cia. Bozano, PREVI and SISTEL no longer have the ability to
control the outcome of matters submitted to a vote of Embraer shareholders. Our bylaws prohibit any shareholder or group of shareholders from exercising voting control over us.

Golden Share

The golden share is held by
the Federative Republic of Brazil. The golden share is entitled to the same voting rights as the holders of common shares. In addition, the golden share entitles the holder thereof to veto rights over the following corporate actions:



| |  |  | change of our name and corporate purpose;
| | - |  | -----------------------------------------



| |  |  | modification and/or application of our logo;
| | - |  | --------------------------------------------



| |  |  | creation and/or alteration of military programs (whether or not involving Brazil);
| | - |  | ----------------------------------------------------------------------------------



| |  |  | development of third party skills in technology for military programs;
| | - |  | ----------------------------------------------------------------------



| |  |  | discontinuance of the supply of spare parts and replacement parts for military aircraft;
| | - |  | ----------------------------------------------------------------------------------------



| |  |  | transfer of our control;
| | - |  | ------------------------



| |  |  | any amendments to the list of corporate actions over which the golden share carries veto rights, including the right of the Brazilian federal government to appoint one acting member to our Board of Directors and the
right of our employees to appoint two acting members to our Board of Directors, and to the rights conferred to the golden share; and
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | changes to certain provisions of our bylaws pertaining to voting restrictions, rights of the golden share and the mandatory tender offer requirements applicable to holders of 35% or more of our outstanding shares.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The matters listed above are subject to prior approval by our Board of Directors and the approval within 30 days of the
Brazilian federal government, as holder of the golden share. Such matters are also subject to prior notice to the Brazilian Ministry of Finance. In the absence of the approval of the Brazilian federal government within the 30-day period, the matter
will be deemed to have been approved by our Board of Directors.



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Disclosure of Significant Interest

Brazilian Requirements

Brazilian
law and our bylaws provide that all shareholders or groups of shareholders will be required to disclose, through notice to us and to the stock exchanges on which our securities are traded, the acquisition of shares that, together with those already
held by them, exceed 5% of our capital stock. A violation of this disclosure obligation could result in the suspension of rights, including voting rights, by a resolution of shareholders at a shareholders meeting.

Certain U.S. Legal Requirements

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

Form and Transfer

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

Transfers of
shares by a non-Brazilian shareholder are made in the same way and executed by that shareholders local agent on the shareholders behalf except that if the original investment was registered with the Central Bank pursuant to Resolution
No. 2,689, the foreign investor must also seek amendment, if necessary, through its local agent, of the electronic registration to reflect the new ownership.

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

Board of Directors

Under the
Brazilian Corporate Law, the members of a companys Board of Directors must be shareholders of the company. There is no requirement as to the number of shares an individual must own in order to act as a member of the Board of Directors.

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

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



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With respect to the borrowing powers of the Board of Directors, the Board of Directors has the
power to authorize the borrowing of funds, either in the form of bonds, notes, commercial papers or other instruments of regular use in the market. Other financing arrangements, including bank loans, may be entered into by us upon the joint
signatures of (1) two Executive Officers, (2) one officer and one attorney-in-fact, or (3) two attorneys-in-fact.

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

For a discussion of our Board of Directors, see Item 6A. Directors, Senior Management and EmployeesDirectors and Senior
ManagementBoard of Directors and Item 6C. Directors, Senior Management and EmployeesBoard Practices.

Election of
Board of Directors

The election of members of our Board of Directors, absent a request to adopt a cumulative voting system, will
be conducted under a system of slate voting whereby voting will be based on a slate of directors and no voting will be allowed on individual candidates. According to our bylaws, the current members of the board at the time of the election will
always be candidates as a slate for a new term of office. Our Board of Directors is appointed by our shareholders for a two-year term, having three reserved seats as follows: (1) one acting member to be appointed by the Brazilian federal
government, as holder of the golden share and (2) two acting members to be appointed by our employees. The remaining eight directors are elected in accordance with the slate voting or cumulative voting rules contained in our bylaws.
A person may participate in two or more different slates. Each shareholder may only vote on one slate and the slate that receives the highest number of votes shall be declared elected.

Any shareholder has a right to propose and submit other slates of members for election to the Board of Directors, other than the slate of
members provided according to our bylaws. Our bylaws also contain a provision whereby a shareholder that intends to appoint one or more members of the Board of Directors, other than the current members of the Board of Directors, must notify Embraer
in writing at least ten days prior to the general meeting at which the members of the Board of Directors will be elected, providing us with the name and resume of the candidate. In case we receive such a notification, we must disclose receipt and
the contents of such notification (1) immediately, electronically, to the CVM and the São Paulo Stock Exchange and (2) through a press release to our shareholders that must also be available on our website, within at least eight
days before the date of the general meeting.

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

Preemptive Rights

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



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

Redemption and Right of Withdrawal

According to our bylaws, our common shares will not be redeemable.

The Brazilian Corporate Law provides that, under limited circumstances, a shareholder has the right to withdraw his equity interest from the
company and to receive payment for the portion of shareholders equity attributable to his equity interest. This right of withdrawal may be exercised by our dissenting shareholders in the event that at least half of all voting shares
outstanding authorize us to:



| |  |  | reduce the mandatory distribution of dividends;
| | - |  | -----------------------------------------------



| |  |  | change our corporate purpose;
| | - |  | -----------------------------



| |  |  | merge into or consolidate with another company, subject to the conditions set forth in the Brazilian Corporate Law;
| | - |  | -------------------------------------------------------------------------------------------------------------------



| |  |  | transfer all of our shares to another company or receive shares of another company in order to make the company whose shares were transferred a wholly owned subsidiary of such other company, known as
incorporação de ações;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | acquire control of another company at a price which exceeds the limits set forth in the Brazilian Corporate Law;
| | - |  | ----------------------------------------------------------------------------------------------------------------



| |  |  | participate in a centralized group of companies as defined under the Brazilian Corporate Law and subject to the conditions set forth therein; or
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | conduct a spin-off that results in (a) a change of our corporate purposes, except if the assets and liabilities of the spun-off company are contributed to a company that is engaged in substantially the same
activities, (b) a reduction in the mandatory dividend or (c) any participation in a centralized group of companies, as defined under the Brazilian Corporate Law.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

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

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



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Mechanism to Promote Dispersed Ownership of Our Shares

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

The public tender offer must be (1) directed to all of our shareholders, (2) made through an auction
to take place on the São Paulo Stock Exchange, (3) launched at a set price calculated in accordance with the procedure set forth below, (4) paid upfront, in Brazilian currency, (5) made so as to assure equal treatment to all
shareholders, (6) irrevocable and not subject to any changes after publication of the bidding offer, and (6) based on a valuation report to be prepared in accordance with the rules set forth in our bylaws and in applicable CVM rules and
regulations.

The price to be offered for the shares in such public tender offer shall be calculated as follows:



| |  |  | Tender Offer Price = Value of the Share + Premium,
| | - |  | --------------------------------------------------

where:



| |  |  | Tender Offer Price corresponds to the acquisition price for each share issued by us in the public offering of shares provided hereunder.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Value of the Share corresponds to the greater of:
| | - |  | ---------------------------------------------------



| | (1) | the highest unit quotation obtained for the shares issued by us during the 12-month period prior to the tender offer among values recorded on any stock exchange on which the shares were traded;
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | the highest price paid by the Acquiring Shareholder, during the 36-month period prior to the tender offer, for a share or tranche of shares issued by us;
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------



| | (3) | the amount equivalent to 14.5 times our Consolidated Average EBITDA, as defined below, reduced by our net consolidated indebtedness, divided by the total number of shares issued by us; or
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (4) | the amount equivalent to 0.6 times the amount of our firm backlog orders, according to the last information disclosed by the latter, reduced by our net consolidated indebtedness, divided by the total number of shares
issued by us.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Premium corresponds to 50% of the Value of the Share.
| | - |  | -------------------------------------------------------



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| |  |  | Consolidated EBITDA is our consolidated operating profit before net financial expenses, income tax and social contribution, depreciation, depletion and amortization, as assessed based on the audited
statements for our most recent complete fiscal year.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Average Consolidated EBITDA is the arithmetic average of our consolidated EBITDA for the two most recent complete fiscal years.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------

The launch of a public tender offer does not preclude us or any of our shareholders from launching a competing public tender offer, in
accordance with applicable regulations.

Arbitration

Any disputes or controversies relating to the regulations of the Novo Mercado, our bylaws, the Brazilian Corporate Law, the rules
published by the CMN, the Central Bank, the CVM, any shareholders agreement filed at our headquarters, and other rules applicable to the Brazilian capital markets in general, must be submitted to arbitration conducted in accordance with the
rules of the São Paulo Stock Exchange Arbitration Chamber. According to Chapter 12 of such Rules, the parties may consensually agree to use another arbitration chamber or center to resolve their disputes. Any shareholder that becomes a holder
of shares representing our control must agree to comply with the rules of the São Paulo Stock Exchange Arbitration Chamber within 30 days of the acquisition of the shares. These provisions will not apply however, in the event of a dispute or
controversy related to a dispute or controversy deriving from the golden share.

Going Private Process

We may become a private company only if we or our controlling shareholders conduct a public tender offer to acquire all of our
outstanding shares subject to prior approval of the public offer by the Brazilian federal government, as holder of the golden share, and in accordance with the rules and regulations of the Brazilian Corporate Law and the CVM regulations and rules of
the Novo Mercado, if applicable. The minimum price offered for the shares in the public tender offer will correspond to the economic value of such shares, as determined by a valuation report issued by a specialized firm.

The valuation report must be prepared by a specialized and independent firm of recognized experience chosen by the shareholders representing
the majority of the outstanding shares (excluding, for such purposes, the shares held by the controlling shareholder, its partner and any dependents included in the income tax statement, should the controlling shareholders be an individual, treasury
shares, shares held by our affiliates and by other companies that are a part of our economic group, as well as blank votes) from a list of three institutions presented by our Board of Directors. All the expenses and costs incurred in connection with
the preparation of the valuation report must be paid for by the controlling shareholder.

Shareholders holding at least 10% of our
outstanding shares may require our management to call a special meeting of our shareholders to determine whether to perform another valuation using the same or a different valuation method. This request must be made within 15 days following the
disclosure of the price to be paid for the shares in the public offering. The shareholders who make such request, as well as those who vote in its favor, must reimburse us for any costs involved in preparing the new valuation, if the new valuation
price is not higher than the original valuation price. If the new valuation price is higher than the original valuation price, the public offering must be made at the higher price. If our shareholders determine to take us private and at that time we
are controlled by a shareholder holding less than 50% of our total capital stock or by a shareholder that is not a member of a group of shareholders (as defined in its bylaws), we must conduct the public tender offer, within the limits imposed by
law. In this case, we may only purchase shares from shareholders that have voted in favor of us becoming a private company after purchasing all shares from the other shareholders that did not vote in favor of such deliberation and that have accepted
the public tender offer.

Delisting from theNovo Mercado

At any time, we may delist our shares from the Novo Mercado, provided that shareholders representing the majority of our shares
approve the action and that at least 30 days written notice is given to the São Paulo Stock Exchange. The decision of the shareholders must specify if the delisting will occur because the securities will no longer be traded on
the Novo Mercado, or because we are going private. Our delisting from the Novo Mercado will not result in the loss of our registration as a public company on the São Paulo Stock Exchange.



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If we delist from the Novo Mercado, by decision taken at a shareholders
meeting, any controlling shareholder or group of controlling shareholders at the time, if any, must conduct a public offering for the acquisition of our outstanding shares, within a period of 90 days if we delist in order for its shares to be
tradable outside the Novo Mercado, or within a period of 120 days if we delist as a result of a corporate reorganization in which the surviving company is not listed on the Novo Mercado. The price per share shall be equivalent to the
economic value of those shares as determined in a valuation report prepared by a specialized and independent company of recognized experience, which will be chosen at a shareholders meeting from a list of three institutions presented by our
Board of Directors, by an absolute majority of the votes of the shareholders of our outstanding shares present at the meeting (excluding, for such purposes, the shares held by any controlling shareholder or group of shareholders at the time, if any,
its partners and dependents included in our income tax statement, should the controlling shareholder be an individual, treasury shares, shares held by our affiliates and by other companies that are a part of our economic group, as well as blank
votes). All the expenses and costs incurred in connection with the preparation of the valuation report must be paid by the controlling shareholder.

If we are subject to widespread control at the time of our delisting from the Novo Mercado, either for our shares to be traded
outside the Novo Mercado or as a result of a corporate reorganization, the shareholders that voted in favor of such deliberation must conduct a public tender offer for the acquisition of our shares.

Pursuant to our bylaws, we may also be delisted if the São Paulo Stock Exchange decides to suspend trading of our shares on the
Novo Mercado due to our non-compliance with the Novo Mercado Regulations. In this case, the Chairman of the Board of Directors must call a shareholders meeting, within two days of the determination by the São Paulo Stock
Exchange, in order to replace all members of our Board of Directors. If the Chairman of the Board of Directors does not call the shareholders meeting, any shareholder may do so. The new Board of Directors will be responsible for the compliance
with the requirements that resulted in the delisting.

Additionally, if we are delisted from the Novo Mercado
(1) because a decision taken at a general meeting of our shareholders resulted in non-compliance with the Novo Mercado Regulations, the public tender offer must be conducted by the shareholders that voted in favor of the deliberation, or
(2) as a result of our non-compliance with the Novo Mercado Regulations resulting from acts of our management, we must conduct the public tender offer in order to become a private company, within the limits imposed by law.

According to the Novo Mercado Regulations, in the event of a transfer of our shareholding control within 12 months following our
delisting from the Novo Mercado, the selling controlling shareholders and the acquirer must offer to acquire the remaining shares for the same price and terms offered to the selling controlling shareholders, adjusted for inflation.

If our shares are delisted from the Novo Mercado, we will not be permitted to have shares listed on the Novo
Mercado for a period of two years after the delisting date, unless there is a change in our control after our delisting from the Novo Mercado.

According to the Novo Mercado Regulations, the São Paulo Stock Exchange may issue complementary rules to regulate the
public offering in the event of delisting in case a company has dispersed ownership.

Sarbanes Oxley Act of 2002

We maintain controls and procedures designed to ensure that we are able to collect the information required to disclose in the report we file
with the SEC, and to process, summarize and disclose the information within the periods specified in the rules of the SEC. We have filed the relevant officer certifications under Section 404 of the U.S. Sarbanes Oxley Act of 2002 regarding
internal controls over financial reporting as Exhibits 12.1 and 12.2 to this annual report.



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|10C. | Material Contracts
|---- | ------------------

Issuance of US$400 million 6.375% Guaranteed Notes due 2017

In October 2006, our wholly owned finance subsidiary, Embraer Overseas, issued US$400 million 6.375% guaranteed notes due 2017 and, as of
December 31, 2013, US$238.0 million was outstanding (US$6.5 million in the short-term), including principal and accrued interest. Interest will be paid semiannually. The notes are unconditionally guaranteed by us. The notes are listed on the
Luxembourg Stock Exchange. On March 30, 2007, we and Embraer Overseas commenced an exchange offer to exchange the notes for new notes duly registered with the SEC. The exchange offer was concluded on May 18, 2007 and US$376.3 million, or
95% of the principal amount of unregistered notes were exchanged for registered notes. The indenture under which the notes were issued contains customary covenants and restrictions such as limitation on liens, consolidation, merger or transfer of
assets. As described below, in September 2013 we completed an exchange offer in which US$146.4 million in principal amount of our guaranteed notes due 2017 were exchanged for our guaranteed notes due 2023.

Issuance of US$500 million 6.375% Guaranteed Notes due 2020

In October 2009, Embraer Overseas issued US$500 million 6.375% guaranteed notes due 2020 and, as of December 31, 2013, US$162.5 million
was outstanding (US$2.4 million in the short-term), including principal and accrued interest. Interest will be paid semiannually. The notes are unconditionally guaranteed by us. The notes have been registered with the SEC and listed on the NYSE. As
described below, in September 2013 we completed an exchange offer in which US$337.2 million in principal amount of our guaranteed notes due 2020 were exchanged for our guaranteed notes due 2023. In connection with the exchange offer, we received the
requisite consents from holders of our guaranteed notes due 2020 to eliminate substantially all the restrictive covenants, certain events of default and related provisions contained in the indenture under which the notes were issued, and we delisted
our guaranteed notes due 2020 from the New York Stock Exchange.

Issuance of US$500 million 5.150% Notes due 2022

In June 2012, we issued US$500 million 5.150% notes due 2022 and, as of December 31, 2013, US$498.9 million was outstanding (US$1.1
million in the short-term), including principal and accrued interest. Interest will be paid semiannually. The notes are our unsecured and unsubordinated obligations. The notes have been registered with the SEC and listed on the NYSE. The indenture
under which the notes were issued contains customary covenants and restrictions such as limitation on liens, consolidation, merger or transfer of assets.

For more information on additional financing arrangements, see Item 5B. Operating and Financial Review and ProspectsLiquidity and
Capital ResourcesCredit Facilities and Lines of CreditLong-term Facilities.

Issuance of US$540.5 million 5.696% Guaranteed Notes due
2023

In September 2013, we completed an exchange offer in which US$146.4 million in principal value of our guaranteed notes with
maturity in 2017 and US$337.2 million in principal value of our guaranteed notes with maturity in 2020 were exchanged for approximately US$540.5 million in principal value of notes issued by Embraer Overseas, with maturity in 2023. As of
December 31, 2013, US$490.0 million of the notes due in 2023 was outstanding (US$8.9 million in the short-term), including principal and accrued interest. Interest will be paid semiannually. The notes due in 2023 are unconditionally guaranteed
by us and were issued exempt from registration with the SEC pursuant to Regulation S and Rule 144A under the Securities Act. The notes due in 2023 are subject to a registration rights agreement, pursuant to which we have agreed to exchange the notes
within 270 days of their issuance for notes with the same terms and conditions which are registered with the SEC. The indenture under which the notes were issued contains customary covenants and restrictions such as limitation on liens,
consolidation, merger or transfer of assets.



|10D. | Exchange Controls
|---- | -----------------

There are no restrictions on ownership of our common shares by
individuals or legal entities domiciled outside Brazil. However, the right to convert dividend payments and proceeds from the sale of common shares into foreign currency and to remit such amounts outside Brazil is subject to restrictions under
foreign investment legislation which generally requires, among other things, the registration of the relevant investment with the Central Bank.



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Pursuant to Brazilian law, investors may invest in the common shares under Resolution
No. 2,689 of January 26, 2000 of the CMN. The rules of Resolution No. 2,689 allow foreign investors to invest in almost all financial assets and to engage in almost all transactions available in the Brazilian financial and capital
markets, provided that some requirements are fulfilled. In accordance with Resolution No. 2,689, the definition of foreign investor includes individuals, legal entities, mutual funds and other collective investment entities domiciled or
headquartered abroad.

Pursuant to the rules, foreign investors must: (1) appoint at least one representative in Brazil with powers
to perform actions relating to the foreign investment; (2) complete the appropriate foreign investor registration form; (3) register as a foreign investor with the CVM; and (4) register the foreign investment with the Central Bank.

Securities and other financial assets held by foreign investors pursuant to Resolution No. 2,689 must be registered or maintained in
deposit accounts or under the custody of an entity duly licensed by the Central Bank or the CVM. In addition, securities trading is restricted to transactions carried out in the stock exchanges or organized over-the-counter markets licensed by the
CVM.

Under Resolution No. 2,689, foreign investors registered with the CVM may buy and sell shares on the São Paulo Stock
Exchange without obtaining a separate certificate of registration for each transaction. Investors under these regulations are also generally entitled to favorable tax treatment.

Annex V to Resolution No. 1,289, as amended, of the CMN, also known as the Annex V Regulations, provides for the issuance of depositary
receipts in foreign markets in respect of shares of Brazilian issuers.

In connection with the equity offerings of our common shares, an
electronic registration was issued in the name of the depositary with respect to the ADSs and is maintained by the custodian on behalf of the depositary. This electronic registration was carried out through the Central Bank Information
System-SISBACEN. Pursuant to the registration, the custodian and the depositary are able to convert dividends and other distributions with respect to the common shares represented by ADSs into foreign currency and remit the proceeds outside Brazil.
In the event that a holder of ADSs exchanges such ADSs for common shares, the holder will be entitled to continue to rely on the depositarys registration for five business days after the exchange. Thereafter, a holder must seek to obtain its
own electronic registration. Unless the common shares are held pursuant to Resolution No. 2,689 by a duly registered investor or a holder of common shares who applies for and obtains a new certificate of registration, that holder may not be
able to convert into foreign currency and remit outside Brazil the proceeds from the disposition of, or distributions with respect to, the common shares. In addition, if the foreign investor resides in a tax haven jurisdiction or is not
an investor registered under Resolution No. 2,689, the investor will be subject to less favorable Brazilian tax treatment than a holder of ADSs.

See Item 3D. Key InformationRisk FactorsRisks Relating our Common Shares and ADSsIf holders of ADSs exchange the ADSs
for common shares, they risk losing the ability to remit foreign currency abroad and Brazilian tax advantages and Item 10E. Additional InformationTaxationMaterial Brazilian Tax Consequences.



|10E. | Taxation
|---- | --------

The following discussion, subject to the limitations set forth below,
summarizes certain Brazilian and United States tax considerations relating to the ownership of our common shares or ADSs. This discussion does not purport to be a complete analysis of all tax considerations in those countries and does not address
tax treatment of shareholders under the laws of other countries. Shareholders who are resident in countries other than Brazil and the United States, along with shareholders that are resident in those two countries, are urged to consult with their
own tax advisors as to which countries tax laws could be relevant to them. This summary is based upon the tax laws of Brazil and the United States as in effect on the date of this annual report, which are subject to change, possibly with
retroactive effect, and to differing interpretations. Any change in such law may change the consequences described below.

Although there
presently is no income tax treaty between Brazil and the United States, the tax authorities of the two countries have had discussions that may culminate in such a treaty. No assurance can be given, however, as to if or when a treaty will enter into
force or how it will affect the U.S. holders of common shares or ADSs.



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Material Brazilian Tax Consequences

General. The following discussion summarizes the principal Brazilian tax consequences of the acquisition, ownership and disposition of
common shares or ADSs, as the case may be, by a holder that is not considered domiciled in Brazil (Non-Brazilian Holder), for purposes of Brazilian taxation.

Taxation of Dividends. Dividends, including stock dividends and other dividends paid in property, paid by us to the depositary in
respect of the ADSs, or to a Non-Brazilian Holder in respect of the common shares, are currently not subject to income withholding tax, provided that they are paid out of profits generated as of January 1, 1996 (or out of reserves derived
therefrom). We do not have retained earnings generated prior to January 1, 1996 (or reserves out of such earnings).

Taxation of Gains. According to Law No. 10,833, enacted on December 29, 2003, the sale or disposition of assets located in
Brazil, by a Non-Brazilian Holder, regardless of whether the sale or the disposition is made to another non-Brazilian resident or to a Brazilian resident, is subject to taxation in Brazil. Accordingly, on the disposition of the common shares, which
are considered assets located in Brazil, the Non-Brazilian Holder will be subject to income tax on the gains assessed, following the rules described below, regardless of whether the transactions are conducted in Brazil or abroad and with a Brazilian
resident or not. Regarding the ADSs, although the matter is not free from doubt, arguably the gains realized by a Non-Brazilian Holder on the disposition of ADSs to another non-Brazilian resident are not taxed in Brazil, based on the argument that
ADSs would not constitute assets located in Brazil for purposes of Law No. 10,833/03. However, we cannot assure you of how Brazilian courts would interpret the definition of assets located in Brazil in connection with the taxation of gains
realized by a Non-Brazilian Holder on the disposition of ADSs to another non-Brazilian resident. Thus, the gain on a disposition of ADSs by a Non-Brazilian Holder to a resident in Brazil (or even to a non-Brazilian resident in the event that courts
determine that ADSs would constitute assets located in Brazil) may be subject to income tax in Brazil according to the rules described below for ADSs or those applicable to the disposition of common shares, when applicable.

As a general rule, gains assessed are the positive difference between the amount in reais realized on the sale of exchange of
the security and its acquisition cost measured in reais (without correction for inflation).

Under Brazilian law, income tax
rules on such gains can vary depending on the domicile of the Non-Brazilian Holder, the type of registration of the investment by the Non-Brazilian Holder with the Central Bank and how the disposition is carried out, as described below.

The deposit of common shares in exchange for ADSs may be subject to Brazilian income tax on capital gains at the rate of 15% or 25%, in case
of a Non-Brazilian Holder located in a tax haven jurisdiction (as defined below), if the acquisition cost of the common shares is lower than (1) the average price per common share on a Brazilian stock exchange on which the greatest number of
such shares were sold on the day of deposit or (2) if no common shares were sold on that day, the average price on the Brazilian stock exchange on which the greatest number of common shares were sold in the 15 trading sessions immediately
preceding such deposit. In such case, the difference between the average price of the common shares, calculated as above, and the corresponding acquisition cost, will be considered a capital gain. There are arguments to support that such taxation is
not applicable in case of Non-Brazilian Holders registered under Resolution No. 2,689/00 (2,689 Holder) that are not Tax Haven Holders. The withdrawal of ADSs in exchange for common shares is not subject to Brazilian tax as far as
the regulatory rules in respect to the registration of the investment before the Central Bank are duly observed.

Gains assessed on the
disposition of common shares carried out on the Brazilian stock exchange (which includes the transactions carried out on the organized over-the-counter market):



| |  |  | are exempt from income tax when assessed by a Non-Brazilian Holder that is a 2,689 Holder and is not a Tax Haven Holder; or
| | - |  | ---------------------------------------------------------------------------------------------------------------------------



| |  |  | are subject to income tax at a rate of 15% in any other case, including the gains assessed by a Non-Brazilian Holder that (1) is not a 2,689 Holder; or (2) is a 2,689 Holder but a Tax Haven Holder. In these
cases, a withholding income tax of 0.005% on the sale value shall be applicable and can be later offset with the eventual income tax due on the capital gain.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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Any other gains assessed on a disposition of the common shares that is not carried out on
Brazilian stock exchanges are subject to income tax at a rate of 15%, except for Tax Haven Holders, which, in this case, are subject to income tax at a rate of 25%. In case the gains are related to transactions conducted on the Brazilian
non-organized over-the-counter market with intermediation, the withholding income tax of 0.005% on the sale value shall also be applicable and can be offset with the eventual income tax due on the capital gain.

In the case of a redemption of common shares or a capital reduction, the positive difference between the amount effectively received by the
Non-Brazilian Holder and the acquisition cost of the securities redeemed or returned, is treated as capital gain derived from sale or exchange of common shares carried out in a Brazilian stock exchange market and is therefore subject to income tax
at the rate of 15%, or 25%, in case of Tax Haven Holders.

Any exercise of preemptive rights relating to the common shares or ADSs will
not be subject to Brazilian taxation. Any gain on the sale or assignment of preemptive rights relating to our common shares by the depositary on behalf of holders of our ADSs or to Non-Brazilian Holders of common shares will be subject to Brazilian
income taxation according to the same rules applicable to the sale or disposition of these shares.

Taxation on Interest on
Shareholders Equity. Any payment of interest on shareholders equity (see Item 8A. Financial InformationConsolidated Statements and Other Financial InformationDividends and Dividend PolicyHistory of Dividend
and Interest on Shareholders Equity Payments and Dividend Policy) to Non-Brazilian Holders of ADSs or common shares is subject to Brazilian withholding income tax at the rate of 15% at the time Embraer records such liability, whether or
not the effective payment has been made at that time. In the case of Tax Haven Holders, the applicable rate of withholding income tax is 25%. For tax purposes, this interest is limited to the daily pro rata variation of the TJLP, as
determined by the Central Bank from time to time, and the amount of the deduction may not exceed the greater of:



| |  |  | 50% of net income (after the deduction of social contribution on net profits but before taking into account the provision for corporate income tax and the amounts attributable to shareholders as net interest on
shareholders equity) related to the period in respect of which the payment is made; and
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | 50% of the sum of retained profits and profit reserves as of the date of the beginning of the period in respect of which the payment is made.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------

The Brazilian Corporation Law establishes that interest attributed to shareholders equity can either be accounted for as part of the
mandatory dividend or not. In the event that the payment of such interest is accounted for as part of the mandatory dividend, we would be required to pay an additional amount to ensure that the net amount received by the shareholders, after the
income tax, plus the amount of declared dividends, is at least equal to the minimum mandatory dividend. The distribution of interest attributed to shareholders equity would be proposed by our Board of Directors and subject to subsequent
declaration by the shareholders at a general meeting.

Taxation on Foreign Exchange Transactions. Brazilian law imposes a Tax on
Foreign Exchange Transactions, or IOF/Exchange, due on the conversion of reais into foreign currency and on the conversion of foreign currency into reais. Currently, for most exchange transactions, the rate of IOF/Exchange is 0.38%.

However, on the inflow of resources into Brazil for investments carried out by Non-Brazilian Holders in the Brazilian financial and
capital markets, IOF/Exchange is assessed at a 1.5% rate, except for the rate of zero percent applicable to investments related to (a) variable yield instruments carried out in the stock, commodities and future exchanges; and (b) the
acquisition of shares in a public offering registered with the CVM, or for the underwriting of shares, provided, in both cases, that the issuer is authorized to trade its shares at the Brazilian stock exchange. The outflow of funds related to
investments carried out by Non-Brazilian Holders in the Brazilian financial and capital markets, as well as the remittance of dividends and interest on shareholders equity, are subject to IOF/Exchange at a zero percent rate.

In any case, the Brazilian federal government may increase the rate at any time, up to 25.0%. However, any increase in rates may only apply to
future transactions.

Tax on Transactions Involving Bonds and Securities. Brazilian law imposes a Tax on Transactions Involving
Bonds and Securities, or IOF/Bonds Tax, due on transactions involving bonds and securities, including



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those carried out on a Brazilian stock exchange. Although the rate of IOF/Bonds Tax applicable to transactions involving common shares is currently zero, the rate of the IOF/Bonds Tax applicable
to the transfer of shares with the sole purpose of enabling the issuance of ADSs is currently 1.5%. This rate is applied on the product of (1) the number of shares which are transferred, multiplied by (2) the closing price for those shares
on the date prior to the transfer or, if such closing price is not available on that date, the last available closing price for those shares. The Brazilian federal government may increase the rate of the IOF/Bonds Tax at any time by up to
1.5% per day of the transaction amount, but only in respect of future transactions.

Other Brazilian Taxes. There are no
Brazilian inheritance, gift or succession taxes applicable to the ownership, transfer or disposition of common shares or ADSs, except for gift and inheritance taxes which are levied by some states of Brazil on gifts made or inheritances bestowed by
Non-Brazilian Holders to individuals or entities resident or domiciled or residing within such state in Brazil. There are no Brazilian stamp, issue, registration or similar taxes or duties payable by holders of common shares or ADSs.

Material U.S. Federal Income Tax Consequences

The following discussion, subject to the limitations and conditions set forth herein, summarizes certain U.S. federal income tax consequences
of the purchase, ownership and disposition of Embraer common shares and ADSs. This discussion only applies to beneficial owners of Embraer common shares or ADSs that are U.S. Holders (as defined below) that hold common shares or ADSs of
Embraer as capital assets (generally for investment purposes). This discussion does not address all aspects of U.S. federal income taxation that may be applicable to a U.S. Holder, including Medicare contribution tax consequences, or the tax
consequences to U.S. Holders subject to special treatment under U.S. federal income tax law, including:



| |  |  | partnerships and other entities classified as partnerships for U.S. federal income tax purposes;
| | - |  | ------------------------------------------------------------------------------------------------



| |  |  | persons subject to the alternative minimum tax;
| | - |  | -----------------------------------------------



| |  |  | tax-exempt entities;
| | - |  | --------------------



| |  |  | dealers and traders in securities or foreign currencies;
| | - |  | --------------------------------------------------------



| |  |  | insurance companies;
| | - |  | --------------------



| |  |  | certain financial institutions;
| | - |  | -------------------------------



| |  |  | persons who own Embraer common shares or ADSs as part of an integrated investment, including a straddle, hedging or conversion transaction, comprising the Embraer common shares or ADSs and one or more other positions
for tax purposes;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | persons whose functional currency is not the U.S. dollar for U.S. federal income tax purposes;
| | - |  | ----------------------------------------------------------------------------------------------



| |  |  | persons who actually or constructively own 10% or more of Embraers voting stock;
| | - |  | ---------------------------------------------------------------------------------



| |  |  | persons who acquired Embraer common shares or ADSs pursuant to the exercise of any employee stock option or otherwise as compensation; and
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | persons holding Embraer common shares or ADSs in connection with a trade or business conducted outside the United States.
| | - |  | -------------------------------------------------------------------------------------------------------------------------

In addition, there is no discussion of state, local, or non-U.S. tax considerations of the purchase, ownership and disposition of Embraer
common shares or ADSs. The discussion is based upon the provisions of the Internal Revenue Code of 1986, as amended, or Code, its legislative history, existing final, temporary, and proposed U.S. Treasury regulations, rulings and other
pronouncements of the U.S. Internal Revenue Service, or IRS, and judicial decisions as of the date of this annual report. Such authorities may be repealed, revoked or modified (with possible retroactive effect) so as to result in U.S. federal income
tax consequences different from those discussed below.



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This discussion is also based in part on the representations of the depository and the assumption
that each obligation in the deposit agreement and any related agreement will be performed in accordance with its terms.

Shareholders
are urged to consult their own independent tax advisors concerning the U.S. federal income tax consequences of the ownership of Embraer common shares and ADSs in light of their particular situations, as well as any consequences arising under the
laws of any other taxing jurisdiction.

As used herein, the term U.S. Holder means a beneficial owner of Embraer common
shares or ADSs representing Embraer common shares that is (1) an individual who is a citizen or resident of the United States, (2) a corporation, or other entity taxable as a corporation, created or organized in or under the laws of the
United States, any State or the District of Columbia, (3) an estate the income of which is subject to U.S. federal income taxation regardless of its source or (4) a trust (X) that is subject to the supervision of a court within the
United States and the control of one or more U.S. persons as described in Section 7701(a)(30) of the Code or (Y) that has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person. Except where
specifically described below, this discussion assumes that we are not a passive foreign investment company, or PFIC, for U.S. federal income tax purposes.

If a partnership (or an entity treated as a partnership for U.S. federal income tax purposes) holds Embraer common shares or ADSs, the tax
treatment of such partnership and each partner will generally depend upon the status of the partner in such partnership. Partnerships that hold Embraer common shares or ADSs, and partners of a partnership holding such common shares or ADSs, are
urged to consult their own tax advisors regarding the consequences of the purchase, ownership and disposition of Embraer common shares or ADSs.

In general, for U.S. federal income tax purposes, a U.S. Holder who is a beneficial owner of an ADS will be treated as the owner of the
underlying Embraer common shares that are represented by such ADS. The U.S. Treasury has expressed concerns that parties to whom ADSs are pre-released before shares are delivered to the depositary, or intermediaries in the chain of ownership between
holders of ADSs and the issuer of the security underlying the ADSs, may be taking actions that are inconsistent with the claiming of foreign tax credits by holders of ADSs. Accordingly, the creditability of any Brazilian taxes could be affected by
actions taken by such parties or intermediaries. Deposits or withdrawals of underlying shares by U.S. Holders for ADSs will not be subject to U.S. federal income tax.

Distributions on Embraer Common Shares or ADSs

For U.S. federal income tax purposes, the gross amount of any distributions (including distributions of notional interest charges attributed to
shareholders equity) paid to U.S. Holders of Embraer common shares or ADSs (including Brazilian withholding taxes imposed on such distributions) will be treated as a dividend, to the extent paid out of current or accumulated earnings and
profits of Embraer and its predecessor as determined under U.S. federal income tax principles. Such a dividend will be includable in the gross income of a U.S. Holder as ordinary income on the date received by the U.S. Holder. To the extent that the
amount of any distribution exceeds Embraers current and accumulated earnings and profits for a taxable year (as determined under U.S. federal income tax principles), the distribution will first be treated as a tax-free return of capital to the
extent of a U.S. Holders adjusted tax basis in the Embraer common shares or ADSs, and thereafter as capital gain. Because we do not expect to maintain earnings and profits in accordance with U.S. federal income tax principles, U.S. Holders
should expect that a distribution will be treated as a dividend for U.S. federal income tax purposes.

Dividends paid by Embraer will not
be eligible for the dividends received deduction allowed to corporations under the Code.

The amount of any cash distribution paid
in reais will be included in a U.S. Holders gross income in an amount equal to the U.S. dollar value of the reais calculated by reference to the exchange rate in effect on the date the dividend is received by the U.S. Holder, in
the case of Embraer common shares, and by the depository, in the case of ADSs, regardless of whether the reais are converted into U.S. dollars. If the reais received as a dividend are not converted into U.S. dollars on the date of
receipt, a U.S. Holder will have a tax basis in the reais equal to their U.S. dollar value on the date of receipt. Any gain or loss realized on a subsequent conversion or other disposition of the reais will be treated as U.S. source
ordinary income or loss for U.S. federal income tax purposes.



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Subject to the discussion above regarding concerns expressed by the U.S. Treasury and a number of
other complex limitations and conditions, a U.S. Holder will be entitled to claim a U.S. foreign tax credit in respect of any Brazilian withholding taxes imposed on dividends received on Embraers common shares or ADSs. U.S. Holders who do not
elect to claim a credit for foreign taxes may instead claim a deduction in respect of such Brazilian withholding taxes. Dividends received with respect to the Embraer common shares or ADSs will be treated as foreign source income for U.S. federal
income tax purposes, and will be passive category income for purposes of calculating foreign tax credits in most cases, subject to various limitations. The rules relating to computing foreign tax credits or deducting foreign income taxes
are extremely complex, and U.S. Holders are urged to consult their own independent tax advisors regarding the availability of foreign tax credits with respect to any Brazilian withholding taxes in regards of dividends paid on Embraers common
shares or ADSs.

Subject to certain exceptions for short-term and hedged positions, the amount of dividends received by certain
non-corporate U.S. holders (including individuals) with respect to the Embraer common shares or ADSs may be eligible for a reduced rate of taxation if the dividends represent qualified dividend income. Dividends paid on the Embraer
common shares or ADSs will be treated as qualified dividend income if (1) the Embraer common shares or ADSs are readily tradable on an established securities market in the United States and (2) neither Embraer nor its predecessor was in
the year prior to the year in which the dividend was paid, and is not in the year in which the dividend is paid, a passive foreign investment company, or PFIC. Under guidance issued by the IRS, the ADSs of Embraer should qualify as readily tradable
on an established securities market in the United States so long as they are listed on the NYSE. In the case of Embraer common shares held directly by U.S. Holders and not underlying an ADS, it is not clear whether dividends paid with respect to
such shares will represent qualified dividend income. U.S. Holders holding Embraer common shares directly and not through an ADS are urged to consult their own independent tax advisors.

Based on its audited financial statements as well as relevant market and shareholder data, Embraer believes that it was not a PFIC for U.S.
federal income tax purposes with respect to its 2013 taxable year. In addition, based on Embraers audited or projected financial statements and current expectations regarding the value and nature of its assets, the sources and nature of its
income, and relevant market and shareholder data, Embraer does not anticipate becoming a PFIC for its 2014 taxable year. However, because this determination is based on the nature of Embraers income and assets from time to time, involves the
application of complex tax rules, and since Embraers view is not binding on the courts or the IRS, no assurances can be provided that Embraer (or its predecessor) will not be considered a PFIC for the current, or any past or future tax year.
The potential application of the PFIC rules is further discussed below.

Sale, Exchange or Other Taxable Disposition of Embraer Common Shares or
ADSs

A U.S. Holder will recognize taxable gain or loss on any sale, exchange or other taxable disposition of Embraer common shares
or ADSs in an amount equal to the difference between the amount realized on the sale, exchange or other taxable disposition and the U.S. Holders adjusted tax basis (determined in U.S. dollars) in the Embraer common shares or ADSs. Such gain or
loss will generally be capital gain or loss and will be long-term capital gain or loss if the Embraer common shares or ADSs have a holding period of more than one year. Certain non-corporate U.S. Holders (including individuals) may be eligible for
preferential rates of U.S. federal income tax in respect of long-term capital gains. The deductibility of capital losses is subject to limitations under the Code.

Any gain or loss recognized by a U.S. Holder from the sale, exchange or taxable disposition of Embraer common shares or ADSs generally will be
gain or loss from U.S. sources for U.S. foreign tax credit purposes. Consequently, if a Brazilian withholding tax or capital gains tax is imposed pursuant to a sale of Embraer common shares or ADSs, U.S. Holders who do not have sufficient foreign
source income might not be able to derive effective U.S. foreign tax credit benefit in respect of such Brazilian withholding tax or capital gains tax. The rules relating to foreign tax credits, including the amount of foreign income taxes that may
be claimed as a credit in any given year, are extremely complex and subject to limitations. U.S. Holders are urged to consult their own independent tax advisor regarding the application of the foreign tax credit rules to their particular
circumstances.

Deposits and withdrawals of Embraer common shares in exchange for ADSs will not result in the realization of gain or loss
for U.S. federal income tax purposes.



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Passive Foreign Investment Company Rules

If, during any taxable year of a non-U.S. corporation, 75% or more of the corporations gross income consists of certain types of
passive income, or the average value during a taxable year of the passive assets of the corporation (generally assets that generate passive income) is 50% or more of the average value of all the corporations assets, the
corporation will be treated as a PFIC under U.S. federal income tax law. If a corporation is treated as a PFIC, a U.S. Holder may be subject to increased tax liability upon the sale of its stock, or upon the receipt of certain dividends, unless such
U.S. Holder makes an election to be taxed currently on its pro rata portion of the corporations income, whether or not such income is distributed in the form of dividends, or otherwise makes a mark-to-market election with respect
to the corporations stock as permitted by the Code. Under recently issued temporary regulations, a U.S. Holder who owns common shares or ADSs in any year that Embraer is a PFIC in excess of certain de minimis amounts and fails to qualify for
certain other exemptions would be required to file IRS Form 8621 to report such holdings. In addition, as discussed above, a U.S. Holder would not be entitled to (if otherwise eligible for) the preferential reduced rate of tax payable on certain
dividend income. As stated above, although no assurances can be given, based on Embraers operations, projections and business plans and the other items discussed above, Embraer does not believe that it (or its predecessor) was or currently is
a PFIC, and does not expect to become a PFIC for subsequent taxable years.

U.S. Holders are urged to consult their own independent tax
advisors regarding the potential application of the PFIC rules and related reporting requirements to the common shares or ADSs and the availability and advisability of making an election to avoid the adverse tax consequences of the PFIC rules should
Embraer be considered a PFIC for any taxable year.

Information Reporting and Backup Withholding

In general, payments of dividends on Embraer common shares or ADSs, and payments of the proceeds of the sale, exchange or other disposition of
Embraer common shares or ADSs, paid within the United States or through certain U.S.-related financial intermediaries to a U.S. Holder may be subject to information reporting and backup withholding at a current maximum rate of 28% unless the U.S.
Holder (1) is a corporation or other exempt recipient or (2) in the case of backup withholding, provides an accurate taxpayer identification number and certifies that no loss of exemption from backup withholding has occurred. Backup
withholding is not an additional tax. The amount of any backup withholding from a payment to a U.S. Holder will be allowed as a refund or a credit against the U.S. Holders U.S. federal income tax liability, provided the required information is
timely provided to the IRS. A U.S. Holder generally may obtain a refund of any amounts withheld under the backup withholding rules that exceed its U.S. federal income tax liability by filing a timely refund claim with the IRS.

In addition, certain U.S. Holders are required to report to the IRS information relating to an interest in the shares or ADSs, subject to
exceptions (including an exception for shares or ADSs held in accounts maintained by certain financial institutions), by attaching a complete IRS Form 8938, Statement of Specified Foreign Financial Assets, with its tax return for each year in which
it held an interest in the shares or ADSs. U.S. Holders are urged to consult their own tax advisors regarding the effect, if any, of this information reporting requirement on their acquisition, ownership and disposition of the shares or ADSs.



|10F. | Dividends and Paying Agents
|---- | ---------------------------

Not applicable.



|10G. | Statements by Experts
|---- | ---------------------

Not applicable.



|10H. | Documents on Display
|---- | --------------------

We are subject to the periodic reporting and other informational
requirements of the Exchange Act. Accordingly, we are required to file reports and other information with the SEC. You may inspect and obtain copies, at prescribed rates, of reports and other information filed by us with the SEC at its Public
Reference Room maintained at 100 F Street, N.E., Washington, D.C. 20549. You may obtain information on the operation of the Public Reference Room by calling the SEC in the United States at 1-800-SEC-0330. You may also inspect and copy this material
at the offices of the New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005.



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We file our annual report on Form 20-F, including our financial statements, and other reports,
including our reports on Form 6-K, electronically with the SEC. These filings are available at www.sec.gov. We also file financial statements and other periodic reports electronically with the CVM at its website, www.cvm.gov.br. Copies of our annual
reports on Form 20-F and documents referred to in this annual report and our bylaws will be available for inspection upon request at our headquarters at Av. Brigadeiro Faria Lima, 2170, 12227-901 São José dos Campos, São Paulo
State, Brazil.



|10I. | Subsidiary Information
|---- | ----------------------

Not required.



|ITEM 11. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|-------- | ----------------------------------------------------------

We are exposed
to various market risks, primarily related to potential loss arising from adverse changes in interest rates and foreign currency exchange rates. We have established policies and procedures to manage sensitivity to interest rate and foreign currency
exchange rate risk. These procedures include the monitoring of our levels of exposure to each market risk, including an analysis based on forecast of future cash flows, the funding of variable rate assets with variable rate liabilities, and limiting
the amount of fixed rate assets which may be funded with floating rate liabilities. We may also use derivative financial instruments to mitigate the effects of interest rate fluctuations and to reduce our exposure to exchange rate risk. The
following sections address the significant market risks associated with our financial activities.

Interest Rate Risk

Our exposure to market risk for interest rate fluctuations principally relates to changes in the market interest rates of our U.S.
dollar-denominated and real-denominated monetary assets and liabilities, principally our short- and long-term debt obligations. Increases and decreases in prevailing interest rates generally translate into increases and decreases in interest
expense. Additionally, the fair values of interest rate-sensitive instruments are also affected by general market conditions.

Our short
and long-term debt obligations totaled US$2,194.3 million at December 31, 2013 and were denominated in U.S. dollars, Brazilian reais and Euros. Of the total amount of debt denominated in U.S. dollars (i.e., US$1,457.5 million),
approximately US$1,398.6 million was subject to fixed rates. The remaining floating rate U.S. dollar-denominated debt was indexed to six-month LIBOR. Of our US$660.3 million Brazilian real-denominated debt at December 31, 2013, US$68.8
million bears interest at a variable rate based on the TJLP, the long-term interest rate in Brazil, US$0.3 million bears interest at a variable rate based on the CDI, and US$591.1 million bears interest at a fixed rate of 4.97% per annum. The
TJLP was 5.0% per annum at December 31, 2013. Our Euro-denominated debt totaled US$76.5 million at fixed rate at December 31, 2013.

The table below provides information about our short-term debt obligations as of December 31, 2013 that are sensitive to changes in
interest rates and foreign currency exchange rates.



|                             |  |                                    |       |  |                         |  |      |                 |  |  |      | 
|---------------------------- |  | ---------------------------------- | ----- |  | ----------------------- |  | ---- | --------------- |  |  | ---- | 
|                             |  | Weighted AverageInterest Rate 2013 |       |  | Total AmountOutstanding |  |      | Total FairValue | 
|                             |  | (%)                                |       |  | (in US$ millions)       | 
|Short-Term Debt              |  |                                    |       |  |                         |  |      |                 |  |  |      | 
|U.S. dollars (fixed rate)    |  |                                    | 6.00  |  |                         |  | 19.5 |                 |  |  | 19.5 | 
|U.S. dollars (LIBOR indexed) |  |                                    | 1.25  |  |                         |  | 1.8  |                 |  |  | 1.8  | 
|Euro (fixed rate)            |  |                                    | 2.82  |  |                         |  | 3.2  |                 |  |  | 3.2  | 
|Euro (EURIBOR indexed)       |  |                                    |      |  |                         |  |     |                 |  |  |     | 
|Reais (fixed rate)           |  |                                    | 4.97  |  |                         |  | 35.1 |                 |  |  | 35.1 | 
|Reais (CDI indexed)          |  |                                    | 10.97 |  |                         |  | 0.2  |                 |  |  | 0.2  | 
|Reais (TJLP indexed)         |  |                                    | 6.31  |  |                         |  | 19.5 |                 |  |  | 19.5 | 
|                             |  |                                    |       |  |                         |  |      |                 |  |  |      | 
|Total short-term debt        |  |                                    |       |  |                         |  | 79.3 |                 |  |  | 79.3 | 
|                             |  |                                    |       |  |                         |  |      |                 |  |  |      | 



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The table below provides information about our long-term debt obligations as of December 31,
2013 that are sensitive to changes in interest rates and foreign currency exchange rates:



|                             |  |                                  |       |  |                        |  |         |      |  |  |      |  |  |      |       |  |      |  |       |                    |  |  |                |  |  |  |         |  |  |  |         | 
|---------------------------- |  | -------------------------------- | ----- |  | ---------------------- |  | ------- | ---- |  |  | ---- |  |  | ---- | ----- |  | ---- |  | ----- | ------------------ |  |  | -------------- |  |  |  | ------- |  |  |  | ------- | 
|                             |  | WeightedAverageInterest Rate2013 |       |  | TotalAmountOutstanding |  |         | 2015 |  |  | 2016 |  |  | 2017 |       |  | 2018 |  |       | 2019 andthereafter |  |  | TotalFairValue | 
|                             |  | (%)                              |       |  |                        |  |         |      |  |  |      |  |  |      |       |  |      |  |       |                    |  |  |                | 
|Long-Term Debt               |  |                                  |       |  |                        |  |         |      |  |  |      |  |  |      |       |  |      |  |       |                    |  |  |                |  |  |  |         |  |  |  |         | 
|U.S. dollars (fixed rate)    |  |                                  | 6.00  |  |                        |  | 1,379.1 |      |  |  | 0.5  |  |  |      | 1.4   |  |      |  | 233.2 |                    |  |  | 0.4            |  |  |  | 1,143.6 |  |  |  | 1,504.2 | 
|U.S. dollars (LIBOR indexed) |  |                                  | 1.25  |  |                        |  | 57.1    |      |  |  | 1.9  |  |  |      | 1.9   |  |      |  | 2.0   |                    |  |  | 2.0            |  |  |  | 49.3    |  |  |  | 57.1    | 
|Euro (fixed rate)            |  |                                  | 2.82  |  |                        |  | 73.4    |      |  |  | 7.6  |  |  |      | 36.9  |  |      |  | 17.3  |                    |  |  | 10.5           |  |  |  | 1.1     |  |  |  | 73.4    | 
|Euro (EURIBOR indexed)       |  |                                  |      |  |                        |  |        |      |  |  |     |  |  |      |      |  |      |  |      |                    |  |  |               |  |  |  |        |  |  |  |        | 
|Reais (fixed rate)           |  |                                  | 4.97  |  |                        |  | 556.1   |      |  |  | 32.4 |  |  |      | 455.0 |  |      |  | 36.1  |                    |  |  | 14.6           |  |  |  | 18.0    |  |  |  | 556.1   | 
|Reais (CDI indexed)          |  |                                  | 10.97 |  |                        |  | 0.1     |      |  |  | 0.1  |  |  |      |      |  |      |  |      |                    |  |  |               |  |  |  |        |  |  |  | 0.1     | 
|Reais (TJLP indexed)         |  |                                  | 6.31  |  |                        |  | 49.2    |      |  |  | 17.3 |  |  |      | 13.6  |  |      |  | 13.7  |                    |  |  | 4.6            |  |  |  |        |  |  |  | 49.2    | 
|Total long-term debt         |  |                                  |       |  |                        |  | 2,115.0 |      |  |  | 59.8 |  |  |      | 508.8 |  |      |  | 302.3 |                    |  |  | 32.1           |  |  |  | 1,212.0 |  |  |  | 2,240.1 | 

In order to manage our interest rate risk on our monetary liabilities, we have entered into a number of swaps,
which effectively convert US$381.1 million of our fixed interest rate, Brazilian real-denominated debt into floating interest rate, Brazilian real-denominated obligations and convert US$5.2 million of our floating interest rate, U.S.
dollar-denominated debt to fixed interest rate, U.S. dollar-denominated obligations.

The table below provides information about our
short-term debt obligations as of December 31, 2013, after considering the effects of the above mentioned derivative transactions:



|                             |  |                                    |      |  |                         |  |      |                  |  |  |      | 
|---------------------------- |  | ---------------------------------- | ---- |  | ----------------------- |  | ---- | ---------------- |  |  | ---- | 
|                             |  | Weighted AverageInterest Rate 2013 |      |  | Total AmountOutstanding |  |      | Total Fair Value | 
|                             |  | (%)                                |      |  | (in US$ millions)       | 
|Short-Term Debt              |  |                                    |      |  |                         |  |      |                  |  |  |      | 
|U.S. dollars (fixed rate)    |  |                                    | 6.00 |  |                         |  | 19.8 |                  |  |  | 19.8 | 
|U.S. dollars (LIBOR indexed) |  |                                    | 1.14 |  |                         |  | 1.5  |                  |  |  | 1.5  | 
|Euro (fixed rate)            |  |                                    | 2.82 |  |                         |  | 3.2  |                  |  |  | 3.2  | 
|Euro (EURIBOR indexed)       |  |                                    | 0.00 |  |                         |  |     |                  |  |  |     | 
|Reais (fixed rate)           |  |                                    | 4.01 |  |                         |  | 32.8 |                  |  |  | 32.8 | 
|Reais (CDI indexed)          |  |                                    | 7.35 |  |                         |  | 2.5  |                  |  |  | 2.5  | 
|Reais (TJLP indexed)         |  |                                    | 6.31 |  |                         |  | 19.5 |                  |  |  | 19.5 | 
|                             |  |                                    |      |  |                         |  |      |                  |  |  |      | 
|Total short-term debt        |  |                                    |      |  |                         |  | 79.3 |                  |  |  | 79.3 | 

The table below provides information about our long-term debt obligations as of December 31, 2013, after
considering the effects of the above mentioned derivative transactions:



|                             |  |                                  |      |  |                        |  |         |      |  |  |      |  |  |      |       |  |      |  |       |                    |  |  |                |  |  |  |         |  |  |  |         | 
|---------------------------- |  | -------------------------------- | ---- |  | ---------------------- |  | ------- | ---- |  |  | ---- |  |  | ---- | ----- |  | ---- |  | ----- | ------------------ |  |  | -------------- |  |  |  | ------- |  |  |  | ------- | 
|                             |  | WeightedAverageInterest Rate2013 |      |  | TotalAmountOutstanding |  |         | 2015 |  |  | 2016 |  |  | 2017 |       |  | 2018 |  |       | 2019 andthereafter |  |  | TotalFairValue | 
|                             |  | (%)                              |      |  | (in US$ millions)      | 
|Long-Term Debt               |  |                                  |      |  |                        |  |         |      |  |  |      |  |  |      |       |  |      |  |       |                    |  |  |                |  |  |  |         |  |  |  |         | 
|U.S. dollars (fixed rate)    |  |                                  | 6.00 |  |                        |  | 1,384.0 |      |  |  | 0.9  |  |  |      | 1.8   |  |      |  | 233.7 |                    |  |  | 0.8            |  |  |  | 1,146.8 |  |  |  | 1,509.1 | 
|U.S. dollars (LIBOR indexed) |  |                                  | 1.14 |  |                        |  | 52.3    |      |  |  | 1.5  |  |  |      | 1.5   |  |      |  | 1.6   |                    |  |  | 1.6            |  |  |  | 46.1    |  |  |  | 52.3    | 
|Euro (fixed rate)            |  |                                  | 2.82 |  |                        |  | 73.4    |      |  |  | 7.6  |  |  |      | 36.9  |  |      |  | 17.3  |                    |  |  | 10.5           |  |  |  | 1.1     |  |  |  | 73.4    | 
|Euro (EURIBOR indexed)       |  |                                  |     |  |                        |  |        |      |  |  |     |  |  |      |      |  |      |  |      |                    |  |  |               |  |  |  |        |  |  |  |        | 
|Reais (fixed rate)           |  |                                  | 4.01 |  |                        |  | 177.3   |      |  |  | 32.4 |  |  |      | 76.2  |  |      |  | 36.1  |                    |  |  | 14.6           |  |  |  | 18.0    |  |  |  | 177.3   | 
|Reais (CDI indexed)          |  |                                  | 7.35 |  |                        |  | 378.8   |      |  |  | 0.1  |  |  |      | 378.7 |  |      |  |      |                    |  |  |               |  |  |  |        |  |  |  | 378.8   | 
|Reais (TJLP indexed)         |  |                                  | 6.31 |  |                        |  | 49.2    |      |  |  | 17.3 |  |  |      | 13.6  |  |      |  | 13.7  |                    |  |  | 4.6            |  |  |  |        |  |  |  | 49.2    | 
|                             |  |                                  |      |  |                        |  |         |      |  |  |      |  |  |      |       |  |      |  |       |                    |  |  |                |  |  |  |         |  |  |  |         | 
|Total long-term debt         |  |                                  |      |  |                        |  | 2,115.0 |      |  |  | 59.8 |  |  |      | 508.7 |  |      |  | 302.4 |                    |  |  | 32.1           |  |  |  | 1,212.0 |  |  |  | 2,240.1 | 



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Foreign Exchange Rate Risk

In managing our foreign currency risk, we focus on balancing our non-U.S. dollar-denominated assets against our non-U.S. dollar-denominated
liabilities plus shareholders equity in relation to our forecasts of future cash flows. Beyond the foreign currency exposure related to our debt obligations as summarized above, we also have other assets and liabilities denominated in
currencies other than the U.S. dollar. These monetary assets and liabilities are primarily cash and cash equivalents, financial assets, accounts receivable and payable, deferred income taxes, dividends and certain other assets and liabilities and
are primarily denominated in Brazilian reais. The effects on such assets and liabilities of the appreciation or devaluation of other foreign currencies against the U.S. dollar result in foreign exchange gains (losses) recognized as interest
income (expense), net. The translation gains and losses arising from the remeasurement of our financial statements to U.S. dollars are recognized on our Statement of Income as foreign exchange gain (loss), net.

Complementing our strategy to mitigate foreign exchange rate risks, we have contracted certain financial hedges in order to reduce our 2014
cash flow exposure. Our cash flow exposure comes as a result of the fact that approximately 10% of our net revenues and 25% of our total costs are denominated in reais. Having more real denominated costs than revenues generates such
exposure. Approximately 55% of our real exposure is protected in case the U.S. dollar depreciates below R$2.00 to the U.S. dollar.

The table below provides information about our assets and liabilities exposed to foreign currency risk as of December 31, 2013, as well
as the derivative transactions outstanding at the same date:



|                                                    |  |                        |         |  |                                        |      |         |  |      |  |       |      |  |  |       |  |  |            |      |  |                |  |      |  |  |  |      |  |  |  |         | 
|--------------------------------------------------- |  | ---------------------- | ------- |  | -------------------------------------- | ---- | ------- |  | ---- |  | ----- | ---- |  |  | ----- |  |  | ---------- | ---- |  | -------------- |  | ---- |  |  |  | ---- |  |  |  | ------- | 
|                                                    |  | TotalOutstandingAmount |         |  | Outstanding Amount by Year of Maturity |     
|                                                    |  |                        | 2014    |  |                                        | 2015 |         |  | 2016 |  |       | 2017 |  |  | 2018  |  |  | Thereafter |      |  | TotalFairValue | 
|                                                    |  | (in US$ millions)      |        
|ASSETS                                              |  |                        |         |  |                                        |      |         |  |      |  |       |      |  |  |       |  |  |            |      |  |                |  |      |  |  |  |      |  |  |  |         | 
|Cash and cash equivalents and financial investments |  |                        |         |  |                                        |      |         |  |      |  |       |      |  |  |       |  |  |            |      |  |                |  |      |  |  |  |      |  |  |  |         | 
|In reais                                            |  |                        | 1,269.7 |  |                                        |      | 1,269.7 |  |      |  |      |      |  |  |      |  |  |            |     |  |                |  |     |  |  |  |     |  |  |  | 1,269.7 | 
|In Euro                                             |  |                        | 21.4    |  |                                        |      | 21.4    |  |      |  |      |      |  |  |      |  |  |            |     |  |                |  |     |  |  |  |     |  |  |  | 21.4    | 
|In Other Currencies                                 |  |                        | 38.7    |  |                                        |      | 38.7    |  |      |  |      |      |  |  |      |  |  |            |     |  |                |  |     |  |  |  |     |  |  |  | 38.7    | 
|Trade accounts receivable                           |  |                        |         |  |                                        |      |         |  |      |  |       |      |  |  |       |  |  |            |      |  |                |  |      |  |  |  |      |  |  |  |         | 
|In reais                                            |  |                        | 43.1    |  |                                        |      | 43.1    |  |      |  |      |      |  |  |      |  |  |            |     |  |                |  |     |  |  |  |     |  |  |  | 43.1    | 
|In Euro                                             |  |                        | 144.3   |  |                                        |      | 144.3   |  |      |  |      |      |  |  |      |  |  |            |     |  |                |  |     |  |  |  |     |  |  |  | 144.3   | 
|In Other Currencies                                 |  |                        | 1.0     |  |                                        |      | 1.0     |  |      |  |      |      |  |  |      |  |  |            |     |  |                |  |     |  |  |  |     |  |  |  | 1.0     | 
|Deferred income tax assets                          |  |                        |         |  |                                        |      |         |  |      |  |       |      |  |  |       |  |  |            |      |  |                |  |      |  |  |  |      |  |  |  |         | 
|In Euro                                             |  |                        | 7.5     |  |                                        |      | 0.7     |  |      |  | 0.7   |      |  |  | 0.7   |  |  |            | 0.6  |  |                |  | 0.7  |  |  |  | 4.1  |  |  |  | 7.5     | 
|In Other Currencies                                 |  |                        | 1.0     |  |                                        |      | 0.1     |  |      |  | 0.1   |      |  |  | 0.1   |  |  |            | 0.1  |  |                |  | 0.1  |  |  |  | 0.5  |  |  |  | 1.0     | 
|Other assets                                        |  |                        |         |  |                                        |      |         |  |      |  |       |      |  |  |       |  |  |            |      | 
|In reais                                            |  |                        | 345.7   |  |                                        |      | 200.1   |  |      |  | 145.6 |      |  |  |      |  |  |            |     |  |                |  |     |  |  |  |     |  |  |  | 345.7   | 
|In Euro                                             |  |                        | 30.1    |  |                                        |      | 28.5    |  |      |  | 1.6   |      |  |  |      |  |  |            |     |  |                |  |     |  |  |  |     |  |  |  | 30.1    | 
|In Other Currencies                                 |  |                        | 11.5    |  |                                        |      | 11.5    |  |      |  |      |      |  |  |      |  |  |            |     |  |                |  |     |  |  |  |     |  |  |  | 11.5    | 
|Total Assets in reais                               |  |                        | 1,658.5 |  |                                        |      | 1,512.9 |  |      |  | 145.6 |      |  |  |      |  |  |            |     |  |                |  |     |  |  |  |     |  |  |  | 1,658.5 | 
|Total Assets in Euro                                |  |                        | 203.3   |  |                                        |      | 194.9   |  |      |  | 2.3   |      |  |  | 0.7   |  |  |            | 0.6  |  |                |  | 0.7  |  |  |  | 4.1  |  |  |  | 203.3   | 
|Total Assets in Other Currencies                    |  |                        | 52.2    |  |                                        |      | 51.3    |  |      |  | 0.1   |      |  |  | 0.1   |  |  |            | 0.1  |  |                |  | 0.1  |  |  |  | 0.5  |  |  |  | 52.2    | 
|LIABILITIES                                         |  |                        |         |  |                                        |      |         |  |      |  |       |      |  |  |       |  |  |            |      |  |                |  |      |  |  |  |      |  |  |  |         | 
|Loans                                               |  |                        |         |  |                                        |      |         |  |      |  |       |      |  |  |       |  |  |            |      |  |                |  |      |  |  |  |      |  |  |  |         | 
|In reais                                            |  |                        | 660.3   |  |                                        |      | 54.8    |  |      |  | 49.8  |      |  |  | 468.7 |  |  |            | 49.8 |  |                |  | 19.2 |  |  |  | 18.0 |  |  |  | 660.3   | 
|In Euro                                             |  |                        | 76.5    |  |                                        |      | 3.2     |  |      |  | 7.6   |      |  |  | 36.8  |  |  |            | 17.3 |  |                |  | 10.5 |  |  |  | 1.1  |  |  |  | 76.5    | 
|Accounts payable to suppliers                       |  |                        |         |  |                                        |      |         |  |      |  |       |      |  |  |       |  |  |            |      | 
|In reais                                            |  |                        | 84.2    |  |                                        |      | 84.2    |  |      |  |      |      |  |  |      |  |  |            |     |  |                |  |     |  |  |  |     |  |  |  | 84.2    | 
|In Euro                                             |  |                        | 110.6   |  |                                        |      | 110.6   |  |      |  |      |      |  |  |      |  |  |            |     |  |                |  |     |  |  |  |     |  |  |  | 110.6   | 
|In Other Currencies                                 |  |                        | 3.3     |  |                                        |      | 3.3     |  |      |  |      |      |  |  |      |  |  |            |     |  |                |  |     |  |  |  |     |  |  |  | 3.3     | 
|Customer advances                                   |  |                        |         |  |                                        |      |         |  |      |  |       |      |  |  |       |  |  |            |      |  |                |  |      |  |  |  |      |  |  |  |         | 
|In reais                                            |  |                        | 278.2   |  |                                        |      | 278.2   |  |      |  |      |      |  |  |      |  |  |            |     |  |                |  |     |  |  |  |     |  |  |  | 278.2   | 
|Other accounts payable & accrued liabilities        |  |                        |         |  |                                        |      |         |  |      |  |       |      |  |  |       |  |  |            |      |  |                |  |      |  |  |  |      |  |  |  |         | 
|In reais                                            |  |                        | 720.3   |  |                                        |      | 556.4   |  |      |  | 163.9 |      |  |  |      |  |  |            |     |  |                |  |     |  |  |  |     |  |  |  | 720.3   | 
|In Euro                                             |  |                        | 60.0    |  |                                        |      | 58.6    |  |      |  | 1.4   |      |  |  |      |  |  |            |     |  |                |  |     |  |  |  |     |  |  |  | 60.0    | 
|In Other Currencies                                 |  |                        | 3.7     |  |                                        |      | 3.7     |  |      |  |      |      |  |  |      |  |  |            |     |  |                |  |     |  |  |  |     |  |  |  | 3.7     | 
|Taxes and payroll charges payable                   |  |                        |         |  |                                        |      |         |  |      |  |       |      |  |  |       |  |  |            |      | 
|In reais                                            |  |                        | 339.8   |  |                                        |      | 243.6   |  |      |  | 67.9  |      |  |  | 28.3  |  |  |            |     |  |                |  |     |  |  |  |     |  |  |  | 339.8   | 
|In Euro                                             |  |                        | 8.5     |  |                                        |      | 8.5     |  |      |  |      |      |  |  |      |  |  |            |     |  |                |  |     |  |  |  |     |  |  |  | 8.5     | 
|Accrued taxes on income                             |  |                        |         |  |                                        |      |         |  |      |  |       |      |  |  |       |  |  |            |      | 



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|                                      |  |                        |         |   |                                        |      |         |  |      |  |        |      |  |  |        |   |  |            |       |   |                |  |       |   |  |  |        |   |  |  |         |  
|------------------------------------- |  | ---------------------- | ------- | - | -------------------------------------- | ---- | ------- |  | ---- |  | ------ | ---- |  |  | ------ | - |  | ---------- | ----- | - | -------------- |  | ----- | - |  |  | ------ | - |  |  | ------- | -
|                                      |  | TotalOutstandingAmount |         |   | Outstanding Amount by Year of Maturity |     
|                                      |  |                        | 2014    |   |                                        | 2015 |         |  | 2016 |  |        | 2017 |  |  | 2018   |   |  | Thereafter |       |   | TotalFairValue | 
|                                      |  | (in US$ millions)      |        
|In reais                              |  |                        | 1.6     |   |                                        |      | 1.6     |  |      |  |       |      |  |  |       |   |  |            |      |   |                |  |      |   |  |  |       |   |  |  | 1.6     |  
|In Euro                               |  |                        | 8.5     |   |                                        |      | 8.5     |  |      |  |       |      |  |  |       |   |  |            |      |   |                |  |      |   |  |  |       |   |  |  | 8.5     |  
|In Other Currencies                   |  |                        | 2.1     |   |                                        |      | 2.1     |  |      |  |       |      |  |  |       |   |  |            |      |   |                |  |      |   |  |  |       |   |  |  | 2.1     |  
|Deferred income tax liabilities       |  |                        |         |   |                                        |      |         |  |      |  |        |      |  |  |        |   |  |            |       |   |                |  |       |   |  |  |        |   |  |  |         |  
|In reais                              |  |                        | 183.7   |   |                                        |      | 16.8    |  |      |  | 16.6   |      |  |  | 16.6   |   |  |            | 15.8  |   |                |  | 17.0  |   |  |  | 100.9  |   |  |  | 183.7   |  
|In Other Currencies                   |  |                        | 0.4     |   |                                        |      | 0.2     |  |      |  |       |      |  |  |       |   |  |            |      |   |                |  |      |   |  |  | 0.2    |   |  |  | 0.4     |  
|Accrued dividends                     |  |                        |         |   |                                        |      |         |  |      |  |        |      |  |  |        |   |  |            |       |   |                |  |       |   |  |  |        |   |  |  |         |  
|In reais                              |  |                        | 45.7    |   |                                        |      | 45.7    |  |      |  |       |      |  |  |       |   |  |            |      |   |                |  |      |   |  |  |       |   |  |  | 45.7    |  
|Contingencies                         |  |                        |         |   |                                        |      |         |  |      |  |        |      |  |  |        |   |  |            |       |   |                |  |       |   |  |  |        |   |  |  |         |  
|In reais                              |  |                        | 40.7    |   |                                        |      | 4.1     |  |      |  | 4.1    |      |  |  | 4.1    |   |  |            | 4.1   |   |                |  | 4.1   |   |  |  | 20.2   |   |  |  | 40.7    |  
|In Euro                               |  |                        | 1.0     |   |                                        |      | 0.1     |  |      |  | 0.1    |      |  |  | 0.1    |   |  |            | 0.1   |   |                |  | 0.1   |   |  |  | 0.5    |   |  |  | 1.0     |  
|Total liabilities in reais            |  |                        | 2,354.5 |   |                                        |      | 1,285.4 |  |      |  | 302.3  |      |  |  | 517.7  |   |  |            | 69.7  |   |                |  | 40.3  |   |  |  | 139.1  |   |  |  | 2,354.5 |  
|Total liabilities in Euro             |  |                        | 265.1   |   |                                        |      | 189.5   |  |      |  | 9.1    |      |  |  | 36.9   |   |  |            | 17.4  |   |                |  | 10.6  |   |  |  | 1.6    |   |  |  | 265.1   |  
|Total liabilities in Other Currencies |  |                        | 9.1     |   |                                        |      | 9.1     |  |      |  |       |      |  |  |       |   |  |            |      |   |                |  |      |   |  |  |       |   |  |  | 9.1     |  
|Total exposure in reais               |  |                        | (696.0  | ) |                                        |      | 227.5   |  |      |  | (156.7 | )    |  |  | (517.7 | ) |  |            | (69.7 | ) |                |  | (40.3 | ) |  |  | (139.1 | ) |  |  | (696.0  | )
|Total exposure in Euro                |  |                        | (61.8   | ) |                                        |      | 5.4     |  |      |  | (6.8   | )    |  |  | (36.2  | ) |  |            | (16.8 | ) |                |  | (9.9  | ) |  |  | 2.5    |   |  |  | (61.8   | )
|Total exposure in Other Currencies    |  |                        | 43.1    |   |                                        |      | 42.2    |  |      |  | 0.1    |      |  |  | 0.1    |   |  |            | 0.1   |   |                |  | 0.1   |   |  |  | 0.5    |   |  |  | 43.1    |  
|DERIVATIVE INSTRUMENTS(1)             |  |                        |         |   |                                        |      |         |  |      |  |        |      |  |  |        |   |  |            |       |   |                |  |       |   |  |  |        |   |  |  |         |  
|Net exposure in assets/liabilities    |  |                        |         |   |                                        |      |         |  |      |  |        |      |  |  |        |   |  |            |       |   |                |  |       |   |  |  |        |   |  |  |         |  
|In reais                              |  |                        | (696.0  | ) |                                        |      | 227.5   |  |      |  | (156.7 | )    |  |  | (517.7 | ) |  |            | (69.7 | ) |                |  | (40.3 | ) |  |  | (139.1 | ) |  |  | (696.0  | )
|In Euro                               |  |                        | (61.8   | ) |                                        |      | 5.4     |  |      |  | (6.8   | )    |  |  | (36.2  | ) |  |            | (16.8 | ) |                |  | (9.9  | ) |  |  | 2.5    |   |  |  | (61.8   | )
|In Other Currencies                   |  |                        | 43.1    |   |                                        |      | 42.2    |  |      |  | 0.1    |      |  |  | 0.1    |   |  |            | 0.1   |   |                |  | 0.1   |   |  |  | 0.5    |   |  |  | 43.1    |  





|(1) | No foreign currency derivatives were outstanding as of December 31, 2013.
|--- | -------------------------------------------------------------------------

Credit Risk

We may incur losses if counterparties to our various contracts do not pay amounts that are owed to us. In that regard, our primary credit risk
derives from the sales of aircraft, spare parts and related services to customers, including the financial obligations related to those sales in the cases where we provide guarantees for the benefit of the providers of finance to the aircraft
purchases of our customers. We are also exposed to the credit risk of the counterparties to our financial derivative contracts.

Financial
instruments which may potentially subject us to credit risk concentration include (1) cash and cash equivalents, (2) trade and other accounts receivable, (3) customer commercial financing, (4) advances to suppliers and
(5) financial derivative contracts. We seek to limit our credit risk associated with cash and cash equivalents by placing the investments we make with those instruments with investment grade-rated institutions in short-term securities and
mutual funds. With respect to trade accounts receivable and customer commercial financing, we seek to limit our credit risk by performing ongoing credit evaluations. All such customers are currently meeting their commitments with us, are operating
within the established credit limits that we assign to them and are considered by management to represent an acceptable credit risk level to us. Advances to suppliers are made only to select, long-standing suppliers. The financial condition of those
suppliers is analyzed on an ongoing basis with a view to limiting credit risk. We address credit risk related to derivative instruments by restricting the counterparties of such derivatives to major financial institutions.

We may also have credit risk related to the sale of aircraft during the period in which their purchasers are finalizing the financing
arrangements for their aircraft purchases from us. In order to try to minimize these risks, customer credit analyses are continuously monitored and we work closely with financial institutions to facilitate customer aircraft financing.



|ITEM 12. | DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
|-------- | ------------------------------------------------------



|12A. | Debt Securities
|---- | ---------------

Not applicable.



|12B. | Warrants and Rights
|---- | -------------------

Not applicable.



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|12C. | Other Securities
|---- | ----------------

Not applicable.



|12D. | American Depositary Shares
|---- | --------------------------

Depositary Fees and Charges

American Depositary Receipt, or ADR, holders will be charged a fee for each issuance of ADSs, including issuances resulting from distributions
of shares, rights and other property, and for each surrender of ADSs in exchange for deposited securities. The fee in each case is US$5.00 for each 100 ADSs (or any portion thereof) issued or surrendered.

The following additional charges shall be incurred by ADR holders, by any party depositing or withdrawing shares or by any party surrendering
ADRs or to whom ADRs are issued (including, without limitation, issuance pursuant to a stock dividend or stock split declared by us or an exchange of stock regarding the ADRs or the deposited securities or a distribution of ADRs), whichever is
applicable:



| |  |  | to the extent not prohibited by the rules of any stock exchange or interdealer quotation system upon which the ADSs are traded, a fee of US$1.50 per ADR or ADRs for transfers of certificated or direct registration ADRs;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | to the extent not prohibited by the rules of any stock exchange or interdealer quotation system upon which the ADSs are traded, a fee of US$0.02 or less per ADS (or portion thereof) for any cash distribution made
pursuant to the deposit agreement governing our ADSs;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | to the extent not prohibited by the rules of any stock exchange or interdealer quotation system upon which the ADSs are traded, a fee of US$0.02 per ADS (or portion thereof) per year for services performed, by the
depositary in administering our ADR program (which fee shall be assessed against holders of ADRs as of the record date set by the depositary not more than once each calendar year and shall be payable in the manner described in the next succeeding
provision);
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | any other charge payable by any of the depositary, any of the depositarys agents, including, without limitation, the custodian, or the agents of the depositarys agents in connection with the servicing of our
common shares or other deposited securities (which charge shall be assessed against registered holders of our ADRs as of the record date or dates set by the depositary and shall be payable at the sole discretion of the depositary by billing such
registered holders or by deducting such charge from one or more cash dividends or other cash distributions);
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | a fee for the distribution of securities (or the sale of securities in connection with a distribution), such fee being in an amount equal to the fee for the execution and delivery of ADSs which would have been charged
as a result of the deposit of such securities (treating all such securities as if they were shares) but which securities or the net cash proceeds from the sale thereof are instead distributed by the depositary to those holders entitled thereto;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | stock transfer or other taxes and other governmental charges;
| | - |  | -------------------------------------------------------------



| |  |  | cable, telex and facsimile transmission and delivery charges incurred at the request of ADR holders;
| | - |  | ----------------------------------------------------------------------------------------------------



| |  |  | transfer or registration fees for the registration of transfer of deposited securities on any applicable register in connection with the deposit or withdrawal of deposited securities;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | expenses of the depositary in connection with the conversion of foreign currency into U.S. dollars; and
| | - |  | -------------------------------------------------------------------------------------------------------



| |  |  | such fees and expenses as are incurred by the depositary (including, without limitation, expenses incurred in connection with compliance with foreign exchange control regulations or any law or regulation relating to
foreign investment) in delivery of deposited securities or otherwise in connection with the depositarys or its custodians compliance with applicable law, rule or regulation.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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We will pay all other charges and expenses of the depositary and any agent of the depositary
(except the Brazilian custodian of our common shares) pursuant to agreements from time to time between us and the depositary. The fees described above may be amended from time to time.

Only in the case of fees owed to the depositary in connection with cash distributions payable to ADS holders is JPMorgan Chase Bank, the
depositary for our ADR program, entitled to collect those fees by offsetting them against the referred cash distributions payable to holders of our ADRs. In all other cases, JPMorgan Chase Bank will not offset fees owed to it against distributions
payable to ADR holders.

Depositary Payments for the Year December 31, 2013

In 2013, JPMorgan Chase Bank paid US$0.4 million in connection with investor relations related expenses of Embraer incurred in 2013 that are
eligible for reimbursement from JPMorgan Chase Bank under our contractual arrangements with that entity.

PART II



|ITEM 13. | DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
|-------- | -----------------------------------------------

No matters to report.



|ITEM 14. | MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
|-------- | ----------------------------------------------------------------------------

Material
Modifications to the Rights of Security Holders

Not applicable.

Use of Proceeds

Not applicable.



|ITEM 15. | CONTROLS AND PROCEDURES
|-------- | -----------------------

Disclosure Controls and Procedures

Disclosure controls and procedures refers to the controls and other procedures adopted by us that are designed to ensure that information
required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SECs rules and forms, and that such information required to
be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as
appropriate to allow timely decisions regarding required disclosures.

Our President and CEO, Frederico Pinheiro Fleury Curado, and our
executive vice-president and chief financial and investor relations officer, José Antonio de Almeida Filippo, after evaluating, together with management, the effectiveness of the design and operation of our disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of December 31, 2013, the end of the period covered by this annual report, concluded that, as of such date, our disclosure control and procedures were effective to ensure information
required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SECs rules and forms, and were effective in ensuring that such
information is accumulated and communicated to our management, including our CEO and chief financial officer, as appropriate to allow timely decisions regarding required disclosures.



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Managements Annual Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f)
and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is a process designed to provide reasonable assurance to our management and Board of Directors regarding the reliability of financial reporting and the preparation
of our financial statements for external purposes in accordance with generally accepted accounting principles.

Because of its inherent
limitations, internal control over financial reporting may not prevent or detect misstatements. Effective internal control over financial reporting cannot, and does not, provide absolute assurance of achieving our control objectives. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2013. In making this
assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal ControlIntegrated Framework (1992). Based on this assessment, our management concluded that, as
of December 31, 2013, our internal control over financial reporting was effective based on those criteria.

Attestation Report of the Registered
Public Accounting Firm

The effectiveness of our internal control over financial reporting as of December 31, 2013 has been
audited by KPMG Auditores Independentes, an independent registered public accounting firm, as stated in their report which appears herein on page F-2.

Changes in Internal Control over Financial Reporting

Our risks and internal controls department periodically evaluates our internal controls for the main cycles, documenting the processes used in
each cycle, identifying opportunities and suggesting improvements for the existing control mechanisms. There was no change in our internal controls over financial reporting that occurred during the period covered by this annual report that has
materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

ITEM 16.A AUDIT COMMITTEE FINANCIAL EXPERT

Our Board of Directors has determined that Mr. Sergio Eraldo de Salles Pinto, an effective member of our statutory Audit and Risks
Committee is an audit committee financial expert as defined by current SEC rules. For a discussion of the role of our Audit and Risks Committee, see Item 6C. Directors, Senior Management and EmployeesBoard
PracticesAudit and Risks Committee.

ITEM 16.B CODE OF ETHICS

Our Board of Directors has adopted a Code of Ethics and Conduct applicable to our directors, officers and employees worldwide, including our
principal executive officer, principal financial officer and controller. A copy of our Code of Ethics and Conduct has been filed as Exhibit 11.1 to this annual report.



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|ITEM 16.C | PRINCIPAL ACCOUNTANT FEES AND SERVICES
|--------- | --------------------------------------

The following table sets forth by category of
service the total fees for services performed by KPMG Auditores Independentes during the fiscal years ended December 31, 2013 and 2012:



|                                       |  |                         |       |  |      |  |       | 
|-------------------------------------- |  | ----------------------- | ----- |  | ---- |  | ----- | 
|Principal accountant fees and services |  | Year ended December 31, |      
|                                       |  | 2013                    |       |  | 2012 | 
|                                       |  | (in US$ thousands)      |      
|Audit Fees                             |  |                         | 3,095 |  |      |  | 2,394 | 
|Audit-Related Fees                     |  |                         | 89    |  |      |  | 17    | 
|Tax Fees                               |  |                         | 162   |  |      |  | 272   | 
|                                       |  |                         |       |  |      |  |       | 
|All Other Fees                         |  |                         | 10    |  |      |  | 2     | 
|                                       |  |                         |       |  |      |  |       | 
|Total                                  |  |                         | 3,356 |  |      |  | 2,685 | 
|                                       |  |                         |       |  |      |  |       | 

Audit Fees

Audit fees consisted of the aggregate fees in connection with (1) the audit of our annual financial statements and quarterly limited
reviews under Brazilian GAAP, which are published in Brazil, (2) our annual consolidated statements under IFRS and (3) statutory audits of our subsidiaries.

Audit-Related Fees

Audit-related fees
consisted mainly of the aggregate fees billed in 2013 in connection with services related to regulatory compliance by certain of our subsidiaries.

Tax
Fees

Tax fees in 2013 consisted of the aggregate fees billed by KPMG Auditores Independentes in connection with tax compliance for some of our
subsidiaries.

All Other Fees

All
other audit fees refers to miscellaneous permitted services rendered by KPMG Auditores Independentes in 2013 and 2012.

Pre-Approval Policies and
Procedures

Our Board of Directors approves all audit and audit-related services provided by KPMG Auditores Independentes. Any services
provided by KPMG Auditores Independentes that are not specifically included within the scope of the audit must be pre-approved by our Audit and Risks Committee in advance of any engagement. Pursuant to Rule 2-01 of Regulation S-X, audit committees
are permitted to approve certain fees for audit-related services, tax services and other services pursuant to a de minimis exception prior to the completion of an audit engagement. In 2013, 2012, 2011, 2010 and 2009, none of the fees paid to
KPMG Auditores Independentes and PricewaterhouseCoopers Auditores Independentes were approved pursuant to the de minimis exception.



|ITEM 16.D | EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
|--------- | ----------------------------------------------------------

None.



|ITEM 16.E | PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
|--------- | ----------------------------------------------------------------------

The following
table shows the results of our last share buyback program which was completed on March 31, 2008 for a total purchase price of US$183.7 million.



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|                     |  |                                     |           |  |                                 |  |       |                                                                          |  |  |                                                                   |  |  |  |            | 
|-------------------- |  | ----------------------------------- | --------- |  | ------------------------------- |  | ----- | ------------------------------------------------------------------------ |  |  | ----------------------------------------------------------------- |  |  |  | ---------- | 
|                     |  | Total Number ofShares Purchased (1) |           |  | Average PricePaid per Share (2) |  |       | Total Number of Shares Purchasedas Part of PubliclyAnnounced Program (3) |  |  | Maximum Numberof Shares that MayYet Be PurchasedUnder the Program | 
|                     |  |                                     |           |  | (in R$)                         |  |       |                                                                          |  |  |                                                                   | 
|December 19-20, 2007 |  |                                     | 70,000    |  |                                 |  | 11.21 |                                                                          |  |  | 70,000                                                            |  |  |  | 16,730,000 | 
|January 2-31, 2008   |  |                                     | 7,602,100 |  |                                 |  | 9.93  |                                                                          |  |  | 7,602,100                                                         |  |  |  | 9,127,900  | 
|February 1-29, 2008  |  |                                     | 5,604,500 |  |                                 |  | 11.98 |                                                                          |  |  | 5,604,500                                                         |  |  |  | 3,523,400  | 
|March 3-31, 2008     |  |                                     | 3,523,400 |  |                                 |  | 11.44 |                                                                          |  |  | 3,523,400                                                         |  |  |  |           | 



|(1) | All shares were purchased through a publicly announced program, in open-market transactions on the São Paulo Stock Exchange.
|--- | ----------------------------------------------------------------------------------------------------------------------------

|(2) | Translated from nominal reais into U.S. dollars at the selling exchange rate in effect on each date on which purchases were made.
|--- | ---------------------------------------------------------------------------------------------------------------------------------

|(3) | The share buyback program was approved by our Board of Directors on December 7, 2007, in compliance with Instrução CVM No. 10/80. We were authorized to buy back up to an aggregate of 16,800,000
common shares, representing approximately 2.3% of our outstanding capital, which totaled 740,465,044 common shares outstanding. The program was terminated on March 31, 2008. A total of 16,800,000 shares were purchased at an average price of
U$10.93 per share.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

On January 23, 2012, our Board of Directors approved a new share buyback program for our common
shares, in compliance with Instrução CVM No. 10/80, for the purpose of backing our second and third stock option plans, to be launched in 2012 and 2013, respectively. We were authorized to buy back up to an aggregate of 1,065,000
common shares, representing approximately 0.15% of our outstanding capital, which totaled 740,465,044 common shares outstanding. No shares have been acquired by us under this program. The acquisition of the shares will be made on the São
Paulo Stock Exchange, and may not be superior to 30% of the average daily volume of shares traded, and the common shares bought back will be kept in treasury, with no political or economic rights. The program will last for one year as of the date of
approval.



|ITEM 16.F | CHANGE IN REGISTRANTS CERTIFYING ACCOUNTANT
|--------- | --------------------------------------------

Not applicable.



|ITEM 16.G | CORPORATE GOVERNANCE
|--------- | --------------------

We are subject to NYSE corporate governance listing standards. As
a foreign private issuer, the standards applicable to us are considerably different than the standards applied to U.S. listed companies. Under the NYSE rules, we are required only to: (1) have an audit committee or audit board, pursuant to an
applicable exemption available to foreign private issuers, that meets certain requirements, as discussed below, (2) provide prompt certification by our CEO of any material non-compliance with any corporate governance rules and (3) provide
a brief description of the significant differences between our corporate governance practices and the NYSE corporate governance practice required to be followed by U.S. listed companies. The discussion of the significant differences between our
corporate governance practices and those required of U.S. listed companies follows below.

Majority of Independent Directors

The NYSE rules require that a majority of the Board must consist of independent Directors. Independence is defined by various criteria,
including the absence of a material relationship between the director and the listed company, which independence must be affirmatively determined by the Board of Directors. Likewise, the Novo Mercado Listing Rules requires that at least 20%
of the members of the Board of Directors of a company listed on the Novo Mercado segment of the São Paulo Stock Exchange be independent. Independence of Board members in accordance with the Novo Mercado Listing Rules is defined
by criteria similar to those set forth in the NYSE rules. However, under the Novo Mercado Listing Rules and Brazilian law, neither our Board of Directors nor our management is required to test the independence of Directors before their
election to the Board.



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With the exception of Mr. Antonio Franciscangelis Neto (the representative of the Brazilian
federal government, through the governments ownership of the golden share), Messrs. Ernani de Almeida Ribeiro Junior, Paulo Roberto de Oliveira (both representatives of our employees) and Arno Hugo Augustin Filho, all the current
members of our Board of Directors have declared that they are independent for purposes of the Novo Mercado Listing Rules. While our Directors meet the qualification requirements of the Brazilian Corporate Law, the CVM requirements and the
Novo Mercado Listing Rules, our Board of Directors has not determined whether our Directors are considered independent under the NYSE test for Director independence.

The Brazilian Corporate Law and our bylaws require that our Directors be elected by our shareholders at a general shareholders meeting.
The election of members of our Board of Directors, absent a request to adopt a cumulative voting system, will be conducted under a system of slate voting whereby voting will be based on a slate of Directors and no voting will be allowed on
individual candidates. According to our bylaws, the Board of Directors will nominate a slate for the subsequent term of office. Our Board of Directors is appointed by our shareholders for a two-year term, having three reserved seats as follows:
(1) one acting member to be appointed by the Brazilian federal government, as holder of the golden share and (2) two acting members to be appointed by our employees. The remaining eight Directors are elected in accordance with
the slate voting or cumulative voting rules contained in our bylaws. A person may participate in two or more different slates. Each shareholder may only vote on one slate and the slate that receives the highest number of votes shall be declared
elected. See Item 10B. Additional InformationMemorandum and Articles of AssociationBoard of DirectorsElection of Board of Directors.

Executive Sessions

NYSE rules require
that the non-management directors must meet at regularly scheduled executive sessions without management. The Brazilian Corporate Law does not have a similar provision. According to the Brazilian Corporate Law, up to one-third of the members of the
Board of Directors can be elected from management. The remaining non-management directors are not expressly empowered to serve as a check on management and there is no requirement that those directors meet regularly without management. As a result,
the non-management directors on our board do not typically meet in executive session.

Nominating/Corporate Governance Committee

NYSE rules require that listed companies have a Nominating/Corporate Governance Committee composed entirely of independent directors and
governed by a written charter addressing the committees required purpose and detailing its required responsibilities, which include, among other things, identifying and selecting qualified board member nominees and developing a set of
corporate governance principles applicable to the company. We are not required under applicable Brazilian law to have a Nominating Committee/Corporate Governance Committee, and accordingly, to date, have not established such a committee. The
directors are elected by our shareholders at a general shareholders meeting. Our corporate governance practices are adopted by the entire board.

Compensation Committee

NYSE rules
require that listed companies have a Compensation Committee composed entirely of independent directors and governed by a written charter addressing the committees required purpose and detailing its required responsibilities, which include,
among other things, reviewing corporate goals relevant to CEO compensation, evaluating CEO performance and approving CEO compensation levels and recommending to the board non-CEO compensation, incentive-compensation and equity-based plans. We are
not required under applicable Brazilian law to have a Compensation Committee. Under the Brazilian Corporate Law, the total amount available for compensation of our directors and Executive Officers and for profit-sharing payments to our Executive
Officers is established by our shareholders at the annual general meeting. The Board of Directors is then responsible for determining the individual compensation and profit sharing of each Executive Officer, as well as the compensation of our board
and committee members. In making such determinations, the board reviews the performance of the Executive Officers, including the performance of our CEO.



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Audit Committee

NYSE rules require that listed companies have an audit committee that (1) is composed of a minimum of three independent directors who are
all financially literate, (2) meets the SEC rules regarding audit committees for listed companies, (3) has at least one member who has accounting or financial management expertise and (4) is governed by a written charter addressing
the committees required purpose and detailing its required responsibilities. We have an Audit and Risks Committee which meets the requirements of Rule 10A-3 under the U.S. Securities Exchange Act of 1934. We do not claim an exemption from the
listing standards for audit committees.

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

Shareholder Approval of Equity Compensation Plans

NYSE rules require that shareholders be given the opportunity to vote on all equity compensation plans and material revisions thereto, with
limited exceptions. Under the Brazilian Corporate Law, shareholders must approve all stock option plans. In addition, any issuance of new shares that exceeds our authorized share capital is subject to shareholder approval.

Corporate Governance Guidelines

NYSE
rules require that listed companies adopt and disclose corporate governance guidelines. In addition to being subject to the Novo Mercado Regulations that include rules on corporate governance, we have not adopted any formal corporate
governance guidelines. We have adopted and observe a disclosure policy, our Policy on Publicizing Acts or Relevant Facts, which requires the public disclosure of all relevant information pursuant to guidelines set forth by the CVM, as well as an
insider trading policy, our Policy on Securities Transactions, which, among other things, establishes black-out periods and requires insiders to inform management of all transactions involving our securities.

Code of Business Conduct and Ethics

NYSE
rules require that listed companies adopt and disclose a code of business conduct and ethics for directors, officers and employees, and promptly disclose any waivers of the code for directors or Executive Officers. Applicable Brazilian law does not
have a similar requirement. However, in April 2004, we adopted a Code of Ethics and Conduct applicable to our officers, directors and employees worldwide, including at the subsidiary level. We believe this code substantially addresses the matters
required to be addressed pursuant to the NYSE rules. A copy of our Code of Ethics and Conduct has been filed as Exhibit 11.1 to this annual report. For a further discussion of our Code of Ethics and Conduct, see Item 16.B Code of Ethics.

Internal Audit Function

NYSE rules
require that listed companies maintain an internal audit function to provide management and the audit committee with ongoing assessments of the companys risk management processes and system of internal control. Our internal audit reports to
the Audit and Risks Committee, and risk management and internal control report to the Chief Financial Officer, respectively, assuring the necessary independence and competence to assess the design of our internal control over financial reporting, as
well as to test its effectiveness as required by Section 404 of the Sarbanes-Oxley Act of 2002.



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|ITEM 16.H | MINE SAFETY DISCLOSURE
|--------- | ----------------------

Not applicable.

PART III



|ITEM 17. | FINANCIAL STATEMENTS
|-------- | --------------------

We have responded to Item 18 in lieu of
responding to this item.



|ITEM 18. | FINANCIAL STATEMENTS
|-------- | --------------------

Our audited consolidated financial statements,
together with the Independent Registered Public Accounting Firm thereon, are filed as part of this annual report and are located following the signature page hereof.



|ITEM 19. | EXHIBITS
|-------- | --------



|              |  |                                                                                                                                                                                                                                                                                                                                                                                                                   
|------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|ExhibitNumber |  | Description                                                                                                                                                                                                                                                                                                                                                                                                       
|              | 
|1.1           |  | Bylaws of Embraer approved at the Annual and Special Shareholders Meeting held on March 8, 2013, incorporated herein by reference from Form 6-K furnished on March 11, 2013. (English translation).                                                                                                                                                                                                              
|              | 
|2.1           |  | Form of Amended and Restated Deposit Agreement among Embraer S.A., JP Morgan Chase Bank, N.A., as depositary, and the Holders from time to time of American Depositary Shares issued thereunder, including the Form of American
Depositary Receipts, incorporated herein by reference from Exhibit 9(a)(2) to Embraers Registration Statement No. 333-133162.                                                    
|              | 
|2.2           |  | Indenture, dated as of October 25, 2006, among Embraer Overseas Limited, Embraer-Empresa Brasileira de Aeronáutica S.A., The Bank of New York, as Trustee, Registrar, Transfer Agent, and Principal Paying Agent, and The Bank of
New York (Luxembourg) S.A., as Luxembourg Paying Agent and Transfer Agent, incorporated herein by reference from Exhibit 4.1 to Embraers Registration Statement No. 333-141629.
|              | 
|2.3           |  | Indenture, dated October 8, 2009, among Embraer Overseas Limited, Embraer-Empresa Brasileira de Aeronáutica S.A. and The Bank of New York, Mellon, as Trustee, incorporated herein by reference from Exhibit 4.1 to
Embraers Registration Statements Nos. 333-162103 and 333-162103-1.                                                                                                                           
|              | 
|2.4           |  | First Supplemental Indenture, dated October 8, 2009, among Embraer Overseas Limited, Embraer-Empresa Brasileira de Aeronáutica S.A. and The Bank of New York Mellon, as Trustee, incorporated herein by reference from Exhibit
4.2 to Embraers Registration Statements Nos. 333-162103 and 333-162103-1.                                                                                                         
|              | 
|2.5           |  | Second Supplemental Indenture, dated as of September 16, 2013, among Embraer Overseas Limited, Embraer S.A., formerly known as Empresa Brasileira de Aeronáutica S.A. and The Bank of New York Mellon.                                                                                                                                                                                                            
|              | 
|2.6           |  | Indenture, dated June 15, 2012, among Embraer S.A. and The Bank of New York, Mellon, as Trustee, incorporated herein by reference from Exhibit 4.1 to Embraers Registration Statement No. 333-182039.                                                                                                                                                                                                            
|              | 
|2.7           |  | First Supplemental Indenture, dated June 15, 2012, among Embraer S.A. and The Bank of New York, Mellon, as Trustee, incorporated herein by reference from Exhibit 4.2 to Embraers Registration Statement No. 333-182039.                                                                                                                                                                                         
|              | 
|2.8           |  | Indenture, dated as of September 16, 2013, among Embraer Overseas Limited, Embraer S.A. and The Bank of New York Mellon, as Trustee, Registrar, Transfer Agent, and Principal Paying Agent.                                                                                                                                                                                                                       
|              | 
|2.9           |  | Registration Rights Agreement, dated as of September 16, 2013, among Embraer Overseas Limited, Embraer S.A. and Citigroup Global Markets Inc., Deutsche Bank Securities Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated,
as representatives of the initial purchasers.                                                                                                                                



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|              |  |                                                                                                                                                                                                                                                                                                                                                        
|------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|ExhibitNumber |  | Description                                                                                                                                                                                                                                                                                                                                            
|              | 
|2.10          |  | The registrant hereby agrees to furnish to the SEC, upon request, copies of instruments defining the rights of holders of long-term debt of the registrant and its consolidated subsidiaries and for any of its unconsolidated
subsidiaries for which financial statements are required to be filed.                                                   
|              | 
|4.1           |  | Protocol of Merger and Justification of Embraer-Empresa Brasileira de Aeronáutica S.A. with and into Rio Han Empreendimentos e Participações S.A., dated as of January 19, 2006, and exhibits thereto, or Merger
Agreement (English translation), incorporated herein by reference from Exhibit 2.1 to Embraers Registration Statement No. 333-132289.
|              | 
|4.2           |  | Lease Agreement, as amended, between Howard County and Embraer Aircraft Corporation, dated as of April 21, 1998, incorporated herein by reference from Exhibit 10.6 to Embraers Registration Statement No. 333-12220.                                                                                                                                 
|              | 
|4.3           |  | Lease Agreement, as amended, between the Paris Airport and Embraer, dated as of January 1, 1999, together with an English translation, incorporated herein by reference from Exhibit 10.6 to Embraers Registration Statement No.
333-12220.                                                                                                           
|              | 
|8.1           |  | List of Embraers subsidiaries.                                                                                                                                                                                                                                                                                                                        
|              | 
|11.1          |  | Code of Ethics and Conduct, incorporated herein by reference from Exhibit 11.1 to Embraers Annual Report on Form 20-F for the fiscal year ended December 31, 2003.                                                                                                                                                                                    
|              | 
|12.1          |  | Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer.                                                                                                                                                                                                                                                                                     
|              | 
|12.2          |  | Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer.                                                                                                                                                                                                                                                                                     
|              | 
|13.1          |  | Section 1350 Certification of Chief Executive Officer.                                                                                                                                                                                                                                                                                                 
|              | 
|13.2          |  | Section 1350 Certification of Chief Financial Officer.                                                                                                                                                                                                                                                                                                 



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SIGNATURES

The Registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the
undersigned to sign this annual report on its behalf.



|                     |  |              |  |                                                   
|-------------------- |  | ------------ |  | --------------------------------------------------
|                     |  | EMBRAER S.A.
|                     |  |             
|Date: March 20, 2014 |  | By:          |  | /s/ FREDERICO PINHEIRO FLEURY CURADO              
|                     |  | Name:        |  | Frederico Pinheiro Fleury Curado                  
|                     |  | Title:       |  | President and Chief Executive Officer             
|                     |  |             
|Date: March 20, 2014 |  | By:          |  | /s/ JOSÉ ANTONIO DE ALMEIDA FILIPPO               
|                     |  | Name:        |  | José Antonio de Almeida Filippo                   
|                     |  | Title:       |  | Executive Vice - President                        
|                     |  |              |  | and Chief Financial and Investor Relations Officer



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INDEX TO FINANCIAL STATEMENTS



|                                                                                                     |  |      |    | 
|---------------------------------------------------------------------------------------------------- |  | ---- | -- | 
|                                                                                                     |  | Page |   
|                                                                                                     | 
|Index to Financial Statements                                                                        |  |      | 1  | 
|                                                                                                     | 
|Consolidated Statements of Financial Position as of December 31, 2013 and 2012 and January 1,
2012   |  |      | 5  | 
|                                                                                                     | 
|Consolidated Statements of Income for the Years Ended December 31, 2013, 2012 and 2011               |  |      | 7  | 
|                                                                                                     | 
|Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2013, 2012 and
2011 |  |      | 8  | 
|                                                                                                     | 
|Consolidated Statements of Shareholders Equity for the Years Ended December 31, 2013, 2012 and
2011 |  |      | 9  | 
|                                                                                                     | 
|Consolidated Statements of Cash Flows for the Years Ended December 31, 2013, 2012 and 2011           |  |      | 10 | 
|                                                                                                     | 
|Notes to Consolidated Financial Statements                                                           |  |      | 11 | 



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Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders

Embraer S.A.

We have audited the accompanying consolidated statement of financial position of Embraer S.A. and subsidiaries (the Company) as of
December 31, 2013 and 2012, and the related consolidated statements of income, comprehensive income, shareholders equity, and cash flows for each of the years in the two-year period ended December 31, 2013. We also have audited
Embraer S.A.s internal control over financial reporting as of December 31, 2013, based on criteria established in Internal Control  Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the
Treadway Commission (COSO). The Companys management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal
control over financial reporting, included in the accompanying Managements Annual Report on Internal Control over Financial Reporting under item 15 of the Companys Form 20-F. Our responsibility is to express an opinion on these
consolidated financial statements and an opinion on the Companys internal control over financial reporting based on our audits.

We conducted
our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free
of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial
reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the
assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

A companys internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companys internal control over financial reporting includes those policies and procedures that
(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors
of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companys assets that could have a material effect on the financial statements.



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Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may
deteriorate.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial
position of Embraer S.A. and subsidiaries as of December 31, 2013 and 2012, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2013, in conformity with International
Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB). Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31,
2013, based on criteria established in Internal Control  Integrated Framework (1992)issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

As discussed in Note 2.2.1, the Company changed the manner in which it accounts for joint arrangements under IFRS 11 - Joint Arrangements in 2013, which
included disclosure of the January 1, 2012 statement of financial position.

São José dos Campos - Brazil

March 20, 2014

/s/ KPMG Auditores Independentes



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##### Table of Contents

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders

Embraer S.A.

In our opinion, the consolidated statements of income, of comprehensive income, of shareholders equity and of cash flows for the year ended
December 31, 2011 present fairly, in all material respects, the results of operations and cash flows of Embraer S.A. and its subsidiaries for the year ended December 31, 2011, in conformity with International Financial Reporting Standards
as issued by the International Accounting Standards Board. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted
our audit of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

As
discussed in Note 2.2.1 to the consolidated financial statements, the Company changed the manner in which it accounted for joint arrangements under IFRS 11 - Joint Arrangements.

Campinas - Brazil

April 13,
2012, except for the effects of adopting IFRS 11  Joint Arrangements as discussed in Note 2.2.1 to the consolidated financial statements as to which the date is March 20, 2014

/s/ PricewaterhouseCoopers

Auditores Independentes



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Embraer S.A.

Consolidated Statements of Financial Position

as of December 31, 2013, 2012 and January 01, 2012

In millions of U.S. dollars



|                                   |  |      |    |  |            |  |          |             |  |  |             |  |  |  |         | 
|---------------------------------- |  | ---- | -- |  | ---------- |  | -------- | ----------- |  |  | ----------- |  |  |  | ------- | 
|                                   |  | Note |    |  | 12.31.2013 |  |          | 12.31.2012  |  |  | 01.01.2012  | 
|                                   |  |      |    |  |            |  |          | (Restated)* |  |  | (Restated)* | 
|ASSETS                             |  |      |    |  |            |  |          |             |  |  |             |  |  |  |         | 
|CURRENT                            |  |      |    |  |            |  |          |             |  |  |             |  |  |  |         | 
|Cash and cash equivalents          |  |      | 5  |  |            |  | 1,683.7  |             |  |  | 1,797.0     |  |  |  | 1,347.8 | 
|Financial investments              |  |      | 6  |  |            |  | 939.9    |             |  |  | 578.2       |  |  |  | 753.6   | 
|Trade accounts receivable, net     |  |      | 7  |  |            |  | 572.2    |             |  |  | 525.6       |  |  |  | 503.4   | 
|Derivative financial instruments   |  |      | 8  |  |            |  | 14.6     |             |  |  | 11.2        |  |  |  | 8.2     | 
|Customer and commercial financing  |  |      | 9  |  |            |  | 9.6      |             |  |  | 22.7        |  |  |  | 12.0    | 
|Collateralized accounts receivable |  |      | 10 |  |            |  | 10.5     |             |  |  | 13.0        |  |  |  | 14.9    | 
|Inventories                        |  |      | 12 |  |            |  | 2,287.3  |             |  |  | 2,156.9     |  |  |  | 2,283.4 | 
|Other assets                       |  |      | 13 |  |            |  | 250.0    |             |  |  | 254.1       |  |  |  | 240.6   | 
|                                   |  |      |    |  |            |  |          |             |  |  |             |  |  |  |         | 
|                                   |  |      |    |  |            |  | 5,767.8  |             |  |  | 5,358.7     |  |  |  | 5,163.9 | 
|                                   |  |      |    |  |            |  |          |             |  |  |             |  |  |  |         | 
|NON-CURRENT                        |  |      |    |  |            |  |          |             |  |  |             |  |  |  |         | 
|Financial investments              |  |      | 6  |  |            |  | 45.4     |             |  |  | 51.3        |  |  |  | 54.7    | 
|Trade accounts receivable          |  |      | 7  |  |            |  | 6.5      |             |  |  | 9.9         |  |  |  | 0.2     | 
|Derivative financial instruments   |  |      | 8  |  |            |  | 15.8     |             |  |  | 24.8        |  |  |  | 22.7    | 
|Customer and commercial financing  |  |      | 9  |  |            |  | 64.1     |             |  |  | 86.9        |  |  |  | 90.2    | 
|Collateralized accounts receivable |  |      | 10 |  |            |  | 415.4    |             |  |  | 413.0       |  |  |  | 472.7   | 
|Guarantee deposits                 |  |      | 11 |  |            |  | 574.7    |             |  |  | 581.5       |  |  |  | 471.3   | 
|Deferred income tax                |  |      | 24 |  |            |  | 8.5      |             |  |  | 12.9        |  |  |  | 65.7    | 
|Inventories                        |  |      | 12 |  |            |  |         |             |  |  |            |  |  |  | 4.2     | 
|Other assets                       |  |      | 13 |  |            |  | 141.9    |             |  |  | 241.1       |  |  |  | 239.6   | 
|                                   |  |      |    |  |            |  |          |             |  |  |             |  |  |  |         | 
|                                   |  |      |    |  |            |  | 1,272.3  |             |  |  | 1,421.4     |  |  |  | 1,421.3 | 
|Investments                        |  |      |    |  |            |  |         |             |  |  | 3.6         |  |  |  | 4.8     | 
|Property, plant and equipment, net |  |      | 16 |  |            |  | 1,993.3  |             |  |  | 1,738.4     |  |  |  | 1,450.4 | 
|Intangible assets                  |  |      | 17 |  |            |  | 1,109.1  |             |  |  | 958.8       |  |  |  | 808.3   | 
|                                   |  |      |    |  |            |  |          |             |  |  |             |  |  |  |         | 
|                                   |  |      |    |  |            |  | 4,374.7  |             |  |  | 4,122.2     |  |  |  | 3,684.8 | 
|                                   |  |      |    |  |            |  |          |             |  |  |             |  |  |  |         | 
|TOTAL ASSETS                       |  |      |    |  |            |  | 10,142.5 |             |  |  | 9,480.9     |  |  |  | 8,848.7 | 
|                                   |  |      |    |  |            |  |          |             |  |  |             |  |  |  |         | 



|* | See note 2.2.1 for the discussion relating to the adjustments.
|- | --------------------------------------------------------------

The accompanying notes are an integral part of
these consolidated financial statements.



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Embraer S.A.

Consolidated Statements of Financial Position

as ofDecember31, 2013, 2012 and January 01, 2012

In millions of U.S. dollars



|                                            |  |      |      |  |            |  |          |             |  |  |             |   |  |  |         |  
|------------------------------------------- |  | ---- | ---- |  | ---------- |  | -------- | ----------- |  |  | ----------- | - |  |  | ------- | -
|                                            |  | Note |      |  | 12.31.2013 |  |          | 12.31.2012  |  |  | 01.01.2012  |  
|                                            |  |      |      |  |            |  |          | (Restated)* |  |  | (Restated)* |  
|LIABILITIES                                 |  |      |      |  |            |  |          |             |  |  |             |   |  |  |         |  
|CURRENT                                     |  |      |      |  |            |  |          |             |  |  |             |   |  |  |         |  
|Trade accounts payable                      |  |      | 19   |  |            |  | 1,013.6  |             |  |  | 758.7       |   |  |  | 829.2   |  
|Loans and financing                         |  |      | 20   |  |            |  | 79.3     |             |  |  | 336.3       |   |  |  | 251.8   |  
|Non-recourse and recourse debt              |  |      | 10   |  |            |  | 12.1     |             |  |  | 11.9        |   |  |  | 312.8   |  
|Other payables                              |  |      | 21   |  |            |  | 304.8    |             |  |  | 277.2       |   |  |  | 260.8   |  
|Contribution from suppliers                 |  |      |      |  |            |  | 33.6     |             |  |  | 0.9         |   |  |  | 0.9     |  
|Advances from customers                     |  |      | 22   |  |            |  | 875.9    |             |  |  | 899.2       |   |  |  | 854.0   |  
|Derivative financial instruments            |  |      | 8    |  |            |  | 13.7     |             |  |  | 0.9         |   |  |  | 1.0     |  
|Taxes and payroll charges payable           |  |      | 23   |  |            |  | 133.1    |             |  |  | 65.1        |   |  |  | 89.0    |  
|Income tax and social contribution          |  |      |      |  |            |  | 18.8     |             |  |  | 63.6        |   |  |  | 11.2    |  
|Financial guarantee and residual value      |  |      | 25   |  |            |  | 90.0     |             |  |  | 114.1       |   |  |  |        |  
|Dividends payable                           |  |      | 29.8 |  |            |  | 45.7     |             |  |  | 30.4        |   |  |  | 0.1     |  
|Unearned income                             |  |      |      |  |            |  | 173.6    |             |  |  | 133.7       |   |  |  | 131.1   |  
|Provisions                                  |  |      | 26.1 |  |            |  | 98.5     |             |  |  | 96.7        |   |  |  | 96.5    |  
|                                            |  |      |      |  |            |  |          |             |  |  |             |   |  |  |         |  
|                                            |  |      |      |  |            |  | 2,892.7  |             |  |  | 2,788.7     |   |  |  | 2,838.4 |  
|                                            |  |      |      |  |            |  |          |             |  |  |             |   |  |  |         |  
|NON-CURRENT                                 |  |      |      |  |            |  |          |             |  |  |             |   |  |  |         |  
|Loans and financing                         |  |      | 20   |  |            |  | 2,115.0  |             |  |  | 1,730.2     |   |  |  | 1,406.3 |  
|Non-recourse and recourse debt              |  |      | 10   |  |            |  | 388.1    |             |  |  | 388.3       |   |  |  | 149.8   |  
|Other payables                              |  |      | 21   |  |            |  | 88.3     |             |  |  | 11.1        |   |  |  | 14.0    |  
|Contribution from suppliers                 |  |      |      |  |            |  |         |             |  |  |            |   |  |  | 1.0     |  
|Advances from customers                     |  |      | 22   |  |            |  | 131.1    |             |  |  | 100.4       |   |  |  | 214.0   |  
|Derivative financial instruments            |  |      | 8    |  |            |  |         |             |  |  |            |   |  |  | 0.2     |  
|Taxes and payroll charges payable           |  |      | 23   |  |            |  | 215.6    |             |  |  | 350.0       |   |  |  | 386.8   |  
|Deferred income tax and social contribution |  |      | 24   |  |            |  | 209.2    |             |  |  | 26.5        |   |  |  | 22.8    |  
|Financial guarantee and residual value      |  |      | 25   |  |            |  | 203.5    |             |  |  | 470.3       |   |  |  | 494.9   |  
|Unearned income                             |  |      |      |  |            |  | 101.1    |             |  |  | 108.2       |   |  |  | 84.0    |  
|Provisions                                  |  |      | 26.1 |  |            |  | 165.7    |             |  |  | 156.9       |   |  |  | 118.7   |  
|                                            |  |      |      |  |            |  |          |             |  |  |             |   |  |  |         |  
|                                            |  |      |      |  |            |  | 3,617.6  |             |  |  | 3,341.9     |   |  |  | 2,892.5 |  
|                                            |  |      |      |  |            |  |          |             |  |  |             |   |  |  |         |  
|TOTAL LIABILITIES                           |  |      |      |  |            |  | 6,510.3  |             |  |  | 6,130.6     |   |  |  | 5,730.9 |  
|                                            |  |      |      |  |            |  |          |             |  |  |             |   |  |  |         |  
|SHAREHOLDERS EQUITY                        |  |      |      |  |            |  |          |             |  |  |             |   |  |  |         |  
|Capital                                     |  |      | 29   |  |            |  | 1,438.0  |             |  |  | 1,438.0     |   |  |  | 1,438.0 |  
|Treasury shares                             |  |      | 29   |  |            |  | (103.8   | )           |  |  | (154.2      | ) |  |  | (183.7  | )
|Revenue reserves                            |  |      |      |  |            |  | 2,205.2  |             |  |  | 1,980.3     |   |  |  | 1,737.3 |  
|Share-based remuneration                    |  |      | 30   |  |            |  | 27.8     |             |  |  | 21.0        |   |  |  | 13.1    |  
|Cumulative translation adjustments          |  |      |      |  |            |  | (33.9    | )           |  |  | (26.8       | ) |  |  | 2.6     |  
|                                            |  |      |      |  |            |  |          |             |  |  |             |   |  |  |         |  
|                                            |  |      |      |  |            |  | 3,533.3  |             |  |  | 3,258.3     |   |  |  | 3,007.3 |  
|                                            |  |      |      |  |            |  |          |             |  |  |             |   |  |  |         |  
|Non-controlling interest                    |  |      |      |  |            |  | 98.9     |             |  |  | 92.0        |   |  |  | 110.5   |  
|                                            |  |      |      |  |            |  |          |             |  |  |             |   |  |  |         |  
|TOTAL SHAREHOLDERS EQUITY                  |  |      |      |  |            |  | 3,632.2  |             |  |  | 3,350.3     |   |  |  | 3,117.8 |  
|                                            |  |      |      |  |            |  |          |             |  |  |             |   |  |  |         |  
|TOTAL LIABILITIES AND SHAREHOLDERS EQUITY  |  |      |      |  |            |  | 10,142.5 |             |  |  | 9,480.9     |   |  |  | 8,848.7 |  
|                                            |  |      |      |  |            |  |          |             |  |  |             |   |  |  |         |  



|* | See note 2.2.1 for the discussion relating to the adjustments.
|- | --------------------------------------------------------------

The accompanying notes are an integral part of
these consolidated financial statements.



F-6



---

##### Table of Contents

EmbraerS.A.

Consolidated Statements of Income

Years Ended

(In millions of U.S.
dollars, except weighted average shares and earnings per share)



|                                                 |  |      |      |  |            |  |          |             |  |  |             |   |  |  |          |  
|------------------------------------------------ |  | ---- | ---- |  | ---------- |  | -------- | ----------- |  |  | ----------- | - |  |  | -------- | -
|                                                 |  | Note |      |  | 12.31.2013 |  |          | 12.31.2012  |  |  | 12.31.2011  |  
|                                                 |  |      |      |  |            |  |          | (Restated)* |  |  | (Restated)* |  
|REVENUE                                          |  |      |      |  |            |  | 6,235.0  |             |  |  | 6,167.0     |   |  |  | 5,790.9  |  
|Cost of sales and services                       |  |      |      |  |            |  | (4,818.9 | )           |  |  | (4,676.6    | ) |  |  | (4,488.1 | )
|                                                 |  |      |      |  |            |  |          |             |  |  |             |   |  |  |          |  
|GROSS PROFIT                                     |  |      |      |  |            |  | 1,416.1  |             |  |  | 1,490.4     |   |  |  | 1,302.8  |  
|OPERATING INCOME (EXPENSE)                       |  |      |      |  |            |  |          |             |  |  |             |   |  |  |          |  
|Administrative                                   |  |      |      |  |            |  | (210.5   | )           |  |  | (279.2      | ) |  |  | (261.3   | )
|Selling                                          |  |      |      |  |            |  | (454.4   | )           |  |  | (480.4      | ) |  |  | (418.6   | )
|Research                                         |  |      |      |  |            |  | (74.7    | )           |  |  | (77.3       | ) |  |  | (85.3    | )
|Other operating income (expense), net            |  |      | 33   |  |            |  | 36.9     |             |  |  | (42.8       | ) |  |  | (219.7   | )
|Equity in income of associates                   |  |      |      |  |            |  |         |             |  |  | 1.2         |   |  |  | 0.3      |  
|                                                 |  |      |      |  |            |  |          |             |  |  |             |   |  |  |          |  
|OPERATING PROFIT BEFORE FINANCIAL INCOME         |  |      |      |  |            |  | 713.4    |             |  |  | 611.9       |   |  |  | 318.2    |  
|Financial expense, net                           |  |      | 35   |  |            |  | (96.4    | )           |  |  | (6.8        | ) |  |  | (90.5    | )
|Foreign exchange gain (loss), net                |  |      | 36   |  |            |  | (14.6    | )           |  |  | 8.7         |   |  |  | 20.1     |  
|                                                 |  |      |      |  |            |  |          |             |  |  |             |   |  |  |          |  
|PROFIT BEFORE TAXES ON INCOME                    |  |      |      |  |            |  | 602.4    |             |  |  | 613.8       |   |  |  | 247.8    |  
|Income tax expense                               |  |      | 24.2 |  |            |  | (256.4   | )           |  |  | (265.2      | ) |  |  | (127.4   | )
|                                                 |  |      |      |  |            |  |          |             |  |  |             |   |  |  |          |  
|NET INCOME FOR THE YEAR                          |  |      |      |  |            |  | 346.0    |             |  |  | 348.6       |   |  |  | 120.4    |  
|                                                 |  |      |      |  |            |  |          |             |  |  |             |   |  |  |          |  
|Attributable to:                                 |  |      |      |  |            |  |          |             |  |  |             |   |  |  |          |  
|Owners of Embraer                                |  |      |      |  |            |  | 342.0    |             |  |  | 347.8       |   |  |  | 111.6    |  
|Non-controlling interest                         |  |      |      |  |            |  | 4.0      |             |  |  | 0.8         |   |  |  | 8.8      |  
|Weighted average number of shares (in thousands) |  |      |      |  |            |  |          |             |  |  |             |   |  |  |          |  
|Basic                                            |  |      | 31   |  |            |  | 729,001  |             |  |  | 725,023     |   |  |  | 723,667  |  
|Diluted                                          |  |      | 31   |  |            |  | 733,796  |             |  |  | 727,731     |   |  |  | 724,847  |  
|Earnings per share-basic in US$                  |  |      | 31   |  |            |  | 0.4691   |             |  |  | 0.4797      |   |  |  | 0.1542   |  
|Earnings per share-diluted in US$                |  |      | 31   |  |            |  | 0.4661   |             |  |  | 0.4780      |   |  |  | 0.1540   |  



|* | See note 2.2.1 for the discussion relating to the adjustments.
|- | --------------------------------------------------------------

The accompanying notes are an integral part of
these consolidated financial statements.



F-7



---

##### Table of Contents

EmbraerS.A.

Consolidated Statements of Comprehensive Income

Years Ended

(In millions of U.S.
dollars)



|                                                     |  |            |       |   |             |  |       |             |  |  |       |  
|---------------------------------------------------- |  | ---------- | ----- | - | ----------- |  | ----- | ----------- |  |  | ----- | -
|                                                     |  | 12.31.2013 |       |   | 12.31.2012  |  |       | 12.31.2011  | 
|                                                     |  |            |       |   | (Restated)* |  |       | (Restated)* | 
|Net income for the year                              |  |            | 346.0 |   |             |  | 348.6 |             |  |  | 120.4 |  
|Actuarial loss on post employment benefit obligation |  |            | (7.4  | ) |             |  | (37.4 | )           |  |  |      |  
|Translation adjustments - subisidiaries              |  |            | 9.0   |   |             |  | 6.1   |             |  |  | (8.8  | )
|Put options of minority interest                     |  |            | 1.1   |   |             |  |      |             |  |  |      |  
|Financial instruments available for sale             |  |            | (0.9  | ) |             |  |      |             |  |  | (0.9  | )
|                                                     |  |            |       |   |             |  |       |             |  |  |       |  
|Other comprehensive income, net of tax effects (i)   |  |            | 1.8   |   |             |  | (31.3 | )           |  |  | (9.7  | )
|                                                     |  |            |       |   |             |  |       |             |  |  |       |  
|Total of comprehensive income                        |  |            | 347.8 |   |             |  | 317.3 |             |  |  | 110.7 |  
|                                                     |  |            |       |   |             |  |       |             |  |  |       |  
|Attributable to:                                     |  |            |       |   |             |  |       |             |  |  |       |  
|Owners of Embraer                                    |  |            | 344.4 |   |             |  | 312.8 |             |  |  | 103.3 |  
|Non-controlling interest                             |  |            | 3.4   |   |             |  | 4.5   |             |  |  | 7.4   |  
|                                                     |  |            |       |   |             |  |       |             |  |  |       |  
|                                                     |  |            | 347.8 |   |             |  | 317.3 |             |  |  | 110.7 |  
|                                                     |  |            |       |   |             |  |       |             |  |  |       |  



|(i) | presented items above are net of deferred income tax.
|--- | -----------------------------------------------------



|* | See note 2.2.1 for the discussion relating to the adjustments.
|- | --------------------------------------------------------------

The accompanying notes are an integral part of
these consolidated financial statements.



F-8



---

##### Table of Contents

Embraer S.A.

Consolidated Statements of Shareholders Equity

Years Ended

(In millions of U.S.
dollars)



|                                                                      |  |      |      |  |         |  |         |                |  |  |                         |   |  |                   |      |  |                  |  |      |                             |  |  |                                |  |  |                  |       |   |                                                  |  |         |                                                        |  |  |                                 |   |  |                                      |      |   |                         |  |       |                         |  |  |                          |   |  |  |      |   |  |  |         |   |  |  |       |   |  |  |         |  
|--------------------------------------------------------------------- |  | ---- | ---- |  | ------- |  | ------- | -------------- |  |  | ----------------------- | - |  | ----------------- | ---- |  | ---------------- |  | ---- | --------------------------- |  |  | ------------------------------ |  |  | ---------------- | ----- | - | ------------------------------------------------ |  | ------- | ------------------------------------------------------ |  |  | ------------------------------- | - |  | ------------------------------------ | ---- | - | ----------------------- |  | ----- | ----------------------- |  |  | ------------------------ | - |  |  | ---- | - |  |  | ------- | - |  |  | ----- | - |  |  | ------- | -
|                                                                      |  |      |      |  |         |  |         |                |  |  |                         |   |  |                   |      |  |                  |  |      |                             |  |  |                                |  |  |                  |       |   | Accumulated other comprehensive (loss) income    |  |         |                                                        |  |  |                                 |   |  |                                      |     
|                                                                      |  |      |      |  |         |  |         |                |  |  |                         |   |  | Revenue reserves  |      |  |                  |  |      |                             |  |  |                                |  |  |                  |       |  
|                                                                      |  | Note |      |  | Capital |  |         | Treasuryshares |  |  | Share-basedremuneration |   |  | Investmentsubsidy |      |  | Statutoryreserve |  |      | Additionalproposeddividends |  |  | Forinvestmentandworkingcapital |  |  | Retainedearnings |       |   | Result intransactionswith noncontrollinginterest |  |         | Actuarialgain (loss)on postemploymentbenefitobligation |  |  | Cumulativetranslationadjustment |   |  | Othercumulativetranslationadjustment |      |   | Totalshareholdersequity |  |       | Non-controllinginterest |  |  | Totalshareholdersequity |  
|At December 31, 2010                                                  |  |      |      |  |         |  | 1,438.0 |                |  |  | (183.7                  | ) |  |                   | 3.4  |  |                  |  | 26.1 |                             |  |  | 127.4                          |  |  |                  | 27.2  |   |                                                  |  | 1,579.1 |                                                        |  |  |                                |   |  |                                      |     |   |                         |  | 0.7   |                         |  |  | 10.2                     |   |  |  |     |   |  |  | 3,028.4 |   |  |  | 103.1 |   |  |  | 3,131.5 |  
|                                                                      |  |      |      |  |         |  |         |                |  |  |                         |   |  |                   |      |  |                  |  |      |                             |  |  |                                |  |  |                  |       |   |                                                  |  |         |                                                        |  |  |                                 |   |  |                                      |      |   |                         |  |       |                         |  |  |                          |   |  |  |      |   |  |  |         |   |  |  |       |   |  |  |         |  
|Net income for the year                                               |  |      |      |  |         |  |        |                |  |  |                        |   |  |                   |     |  |                  |  |     |                             |  |  |                               |  |  |                  |      |   |                                                  |  |        |                                                        |  |  | 111.6                           |   |  |                                      |     |   |                         |  |      |                         |  |  |                         |   |  |  |     |   |  |  | 111.6   |   |  |  | 8.8   |   |  |  | 120.4   |  
|Translation adjustments - subsidiaries                                |  |      |      |  |         |  |        |                |  |  |                        |   |  |                   |     |  |                  |  |     |                             |  |  |                               |  |  |                  |      |   |                                                  |  |        |                                                        |  |  |                                |   |  |                                      |     |   |                         |  |      |                         |  |  | (7.4                     | ) |  |  |     |   |  |  | (7.4    | ) |  |  | (1.4  | ) |  |  | (8.8    | )
|Financial instruments                                                 |  |      |      |  |         |  |        |                |  |  |                        |   |  |                   |     |  |                  |  |     |                             |  |  |                               |  |  |                  |      |   |                                                  |  |        |                                                        |  |  |                                |   |  |                                      |     |   |                         |  |      |                         |  |  | (0.9                     | ) |  |  |     |   |  |  | (0.9    | ) |  |  |      |   |  |  | (0.9    | )
|                                                                      |  |      |      |  |         |  |         |                |  |  |                         |   |  |                   |      |  |                  |  |      |                             |  |  |                                |  |  |                  |      |   |                                                  |  |         |                                                        |  |  |                                 |   |  |                                      |      |   |                         |  |       |                         |  |  |                          |   |  |  |      |   |  |  |         |   |  |  |       |   |  |  |         |  
|                                                                      |  |      |      |  |         |  |         |                |  |  |                         |   |  |                   |      |  |                  |  |      |                             |  |  |                                |  |  |                  |       |   |                                                  |  |         |                                                        |  |  |                                 |   |  |                                      |      |   |                         |  |       |                         |  |  |                          |   |  |  |      |   |  |  |         |   |  |  |       |   |  |  |         |  
|Total comprehensive income                                            |  |      |      |  |         |  |        |                |  |  |                        |   |  |                   |     |  |                  |  |     |                             |  |  |                               |  |  |                  |      |   |                                                  |  |        |                                                        |  |  | 111.6                           |   |  |                                      |     |   |                         |  |      |                         |  |  | (8.3                     | ) |  |  |     |   |  |  | 103.3   |   |  |  | 7.4   |   |  |  | 110.7   |  
|Share-based remuneration                                              |  |      |      |  |         |  |        |                |  |  |                        |   |  |                   | 9.7  |  |                  |  |     |                             |  |  |                               |  |  |                  |      |   |                                                  |  |        |                                                        |  |  |                                |   |  |                                      |     |   |                         |  |      |                         |  |  |                         |   |  |  |     |   |  |  | 9.7     |   |  |  |      |   |  |  | 9.7     |  
|Allocation of profits:                                                |  |      |      |  |         |  |         |                |  |  |                         |   |  |                   |      |  |                  |  |      |                             |  |  |                                |  |  |                  |       |   |                                                  |  |         |                                                        |  |  |                                 |   |  |                                      |      |   |                         |  |       |                         |  |  |                          |   |  |  |      |   |  |  |         |   |  |  |       |   |  |  |         |  
|Investment in subsidy                                                 |  |      |      |  |         |  |        |                |  |  |                        |   |  |                   |     |  |                  |  | 6.5  |                             |  |  |                               |  |  |                  |      |   |                                                  |  |        |                                                        |  |  | (6.5                            | ) |  |                                      |     |   |                         |  |      |                         |  |  |                         |   |  |  |     |   |  |  | 0.0     |   |  |  |      |   |  |  | 0.0     |  
|Legal reserve                                                         |  |      |      |  |         |  |        |                |  |  |                        |   |  |                   |     |  |                  |  |     |                             |  |  | 4.2                            |  |  |                  |      |   |                                                  |  |        |                                                        |  |  | (4.2                            | ) |  |                                      |     |   |                         |  |      |                         |  |  |                         |   |  |  |     |   |  |  |        |   |  |  |      |   |  |  |        |  
|Interest on own capital (R$ 0.25 per share)                           |  |      |      |  |         |  |        |                |  |  |                        |   |  |                   |     |  |                  |  |     |                             |  |  |                               |  |  |                  | (27.2 | ) |                                                  |  |        |                                                        |  |  | (106.9                          | ) |  |                                      |     |   |                         |  |      |                         |  |  |                         |   |  |  |     |   |  |  | (134.1  | ) |  |  |      |   |  |  | (134.1  | )
|Reserve for investments and working capital (practice adjustment)     |  |      |      |  |         |  |        |                |  |  |                        |   |  |                   |     |  |                  |  |     |                             |  |  |                               |  |  |                  |      |   |                                                  |  | (6.0    | )                                                      |  |  | 6.0                             |   |  |                                      |     |   |                         |  |      |                         |  |  |                         |   |  |  |     |   |  |  |        |   |  |  |      |   |  |  |        |  
|                                                                      |  |      |      |  |         |  |         |                |  |  |                         |   |  |                   |      |  |                  |  |      |                             |  |  |                                |  |  |                  |       |   |                                                  |  |         |                                                        |  |  |                                 |   |  |                                      |      |   |                         |  |       |                         |  |  |                          |   |  |  |      |   |  |  |         |   |  |  |       |   |  |  |         |  
|At December 31, 2011 (Restated)*                                      |  |      |      |  |         |  | 1,438.0 |                |  |  | (183.7                  | ) |  |                   | 13.1 |  |                  |  | 32.6 |                             |  |  | 131.6                          |  |  |                  |      |   |                                                  |  | 1,573.1 |                                                        |  |  |                                |   |  |                                      |     |   |                         |  | 0.7   |                         |  |  | 1.9                      |   |  |  |     |   |  |  | 3,007.3 |   |  |  | 110.5 |   |  |  | 3,117.8 |  
|                                                                      |  |      |      |  |         |  |         |                |  |  |                         |   |  |                   |      |  |                  |  |      |                             |  |  |                                |  |  |                  |       |   |                                                  |  |         |                                                        |  |  |                                 |   |  |                                      |      |   |                         |  |       |                         |  |  |                          |   |  |  |      |   |  |  |         |   |  |  |       |   |  |  |         |  
|Net income for the year                                               |  |      |      |  |         |  |        |                |  |  |                        |   |  |                   |     |  |                  |  |     |                             |  |  |                               |  |  |                  |      |   |                                                  |  |        |                                                        |  |  | 347.8                           |   |  |                                      |     |   |                         |  |      |                         |  |  |                         |   |  |  |     |   |  |  | 347.8   |   |  |  | 0.8   |   |  |  | 348.6   |  
|Actuarial loss on post employment benefit obligation                  |  |      |      |  |         |  |        |                |  |  |                        |   |  |                   |     |  |                  |  |     |                             |  |  |                               |  |  |                  |      |   |                                                  |  |        |                                                        |  |  |                                |   |  |                                      |     |   |                         |  | (37.4 | )                       |  |  |                         |   |  |  |     |   |  |  | (37.4   | ) |  |  |      |   |  |  | (37.4   | )
|Translation adjustments - subsidiaries                                |  |      |      |  |         |  |        |                |  |  |                        |   |  |                   |     |  |                  |  |     |                             |  |  |                               |  |  |                  |      |   |                                                  |  |        |                                                        |  |  |                                |   |  |                                      |     |   |                         |  |      |                         |  |  | 2.4                      |   |  |  |     |   |  |  | 2.4     |   |  |  | 3.7   |   |  |  | 6.1     |  
|                                                                      |  |      |      |  |         |  |         |                |  |  |                         |   |  |                   |      |  |                  |  |      |                             |  |  |                                |  |  |                  |       |   |                                                  |  |         |                                                        |  |  |                                 |   |  |                                      |      |   |                         |  |       |                         |  |  |                         |   |  |  |      |   |  |  |         |   |  |  |       |   |  |  |         |  
|                                                                      |  |      |      |  |         |  |         |                |  |  |                         |   |  |                   |      |  |                  |  |      |                             |  |  |                                |  |  |                  |       |   |                                                  |  |         |                                                        |  |  |                                 |   |  |                                      |      |   |                         |  |       |                         |  |  |                          |   |  |  |      |   |  |  |         |   |  |  |       |   |  |  |         |  
|Total comprehensive income                                            |  |      |      |  |         |  |        |                |  |  |                        |   |  |                   |     |  |                  |  |     |                             |  |  |                               |  |  |                  |      |   |                                                  |  |        |                                                        |  |  | 347.8                           |   |  |                                      |     |   |                         |  | (37.4 | )                       |  |  | 2.4                      |   |  |  |     |   |  |  | 312.8   |   |  |  | 4.5   |   |  |  | 317.3   |  
|Share-based remuneration                                              |  |      |      |  |         |  |        |                |  |  |                        |   |  |                   | 7.9  |  |                  |  |     |                             |  |  |                               |  |  |                  |      |   |                                                  |  |        |                                                        |  |  |                                |   |  |                                      |     |   |                         |  |      |                         |  |  |                         |   |  |  |     |   |  |  | 7.9     |   |  |  |      |   |  |  | 7.9     |  
|Stock options grants exercised                                        |  |      |      |  |         |  |        |                |  |  | 29.5                    |   |  |                   |     |  |                  |  |     |                             |  |  |                               |  |  |                  |      |   |                                                  |  |        |                                                        |  |  | (15.0                           | ) |  |                                      |     |   |                         |  |      |                         |  |  |                         |   |  |  |     |   |  |  | 14.5    |   |  |  |      |   |  |  | 14.5    |  
|Acquisition of non controlling interest                               |  |      |      |  |         |  |        |                |  |  |                        |   |  |                   |     |  |                  |  |     |                             |  |  |                               |  |  |                  |      |   |                                                  |  |        |                                                        |  |  |                                |   |  |                                      | 5.6  |   |                         |  |      |                         |  |  |                         |   |  |  |     |   |  |  | 5.6     |   |  |  | (23.0 | ) |  |  | (17.4   | )
|Allocation of profits:                                                |  |      |      |  |         |  |         |                |  |  |                         |   |  |                   |      |  |                  |  |      |                             |  |  |                                |  |  |                  |       |   |                                                  |  |         |                                                        |  |  |                                 |   |  |                                      |      |   |                         |  |       |                         |  |  |                          |   |  |  |      |   |  |  |         |   |  |  |       |   |  |  |         |  
|Investment in subsidy                                                 |  |      |      |  |         |  |        |                |  |  |                        |   |  |                   |     |  |                  |  | 4.3  |                             |  |  |                               |  |  |                  |      |   |                                                  |  |        |                                                        |  |  | (4.3                            | ) |  |                                      |     |   |                         |  |      |                         |  |  |                         |   |  |  |     |   |  |  |        |   |  |  |      |   |  |  |        |  
|Legal reserve                                                         |  |      |      |  |         |  |        |                |  |  |                        |   |  |                   |     |  |                  |  |     |                             |  |  | 17.1                           |  |  |                  |      |   |                                                  |  |        |                                                        |  |  | (17.1                           | ) |  |                                      |     |   |                         |  |      |                         |  |  |                         |   |  |  |     |   |  |  |        |   |  |  |      |   |  |  |        |  
|Interest on own capital (R$ 0.04 per share)                           |  |      |      |  |         |  |        |                |  |  |                        |   |  |                   |     |  |                  |  |     |                             |  |  |                               |  |  |                  |      |   |                                                  |  |        |                                                        |  |  | (75.1                           | ) |  |                                      |     |   |                         |  |      |                         |  |  |                         |   |  |  |     |   |  |  | (75.1   | ) |  |  |      |   |  |  | (75.1   | )
|Dividends                                                             |  |      |      |  |         |  |        |                |  |  |                        |   |  |                   |     |  |                  |  |     |                             |  |  |                               |  |  |                  |      |   |                                                  |  |        |                                                        |  |  | (14.7                           | ) |  |                                      |     |   |                         |  |      |                         |  |  |                         |   |  |  |     |   |  |  | (14.7   | ) |  |  |      |   |  |  | (14.7   | )
|Reserve for investments and working capital (net income for the year) |  |      |      |  |         |  |        |                |  |  |                        |   |  |                   |     |  |                  |  |     |                             |  |  |                               |  |  |                  |      |   |                                                  |  | 221.6   |                                                        |  |  | (221.6                          | ) |  |                                      |     |   |                         |  |      |                         |  |  |                         |   |  |  |     |   |  |  |        |   |  |  |      |   |  |  |        |  
|                                                                      |  |      |      |  |         |  |         |                |  |  |                         |   |  |                   |      |  |                  |  |      |                             |  |  |                                |  |  |                  |       |   |                                                  |  |         |                                                        |  |  |                                 |   |  |                                      |      |   |                         |  |       |                         |  |  |                          |   |  |  |      |   |  |  |         |   |  |  |       |   |  |  |         |  
|At December 31, 2012 (Restated)*                                      |  |      |      |  |         |  | 1,438.0 |                |  |  | (154.2                  | ) |  |                   | 21.0 |  |                  |  | 36.9 |                             |  |  | 148.7                          |  |  |                  |      |   |                                                  |  | 1,794.7 |                                                        |  |  |                                |   |  |                                      | 5.6  |   |                         |  | (36.7 | )                       |  |  | 4.3                      |   |  |  |     |   |  |  | 3,258.3 |   |  |  | 92.0  |   |  |  | 3,350.3 |  
|                                                                      |  |      |      |  |         |  |         |                |  |  |                         |   |  |                   |      |  |                  |  |      |                             |  |  |                                |  |  |                  |       |   |                                                  |  |         |                                                        |  |  |                                 |   |  |                                      |      |   |                         |  |       |                         |  |  |                          |   |  |  |      |   |  |  |         |   |  |  |       |   |  |  |         |  
|Net income for the year                                               |  |      |      |  |         |  |        |                |  |  |                        |   |  |                   |     |  |                  |  |     |                             |  |  |                               |  |  |                  |      |   |                                                  |  |        |                                                        |  |  | 342.0                           |   |  |                                      |     |   |                         |  |      |                         |  |  |                         |   |  |  |     |   |  |  | 342.0   |   |  |  | 4.0   |   |  |  | 346.0   |  
|Actuarial loss on post employment benefit obligation                  |  |      |      |  |         |  |        |                |  |  |                        |   |  |                   |     |  |                  |  |     |                             |  |  |                               |  |  |                  |      |   |                                                  |  |        |                                                        |  |  |                                |   |  |                                      |     |   |                         |  | (7.4  | )                       |  |  |                         |   |  |  |     |   |  |  | (7.4    | ) |  |  |      |   |  |  | (7.4    | )
|Translation adjustments                                               |  |      |      |  |         |  |        |                |  |  |                        |   |  |                   |     |  |                  |  |     |                             |  |  |                               |  |  |                  |      |   |                                                  |  |        |                                                        |  |  |                                |   |  |                                      |     |   |                         |  |      |                         |  |  | 9.9                      |   |  |  |     |   |  |  | 9.9     |   |  |  | (0.9  | ) |  |  | 9.0     |  
|PUT options of non-controlling interest                               |  |      |      |  |         |  |        |                |  |  |                        |   |  |                   |     |  |                  |  |     |                             |  |  |                               |  |  |                  |      |   |                                                  |  |        |                                                        |  |  |                                |   |  |                                      |     |   |                         |  |      |                         |  |  |                         |   |  |  | 1.1  |   |  |  | 1.1     |   |  |  |      |   |  |  | 1.1     |  
|Financial instruments available for sale                              |  |      |      |  |         |  |        |                |  |  |                        |   |  |                   |     |  |                  |  |     |                             |  |  |                               |  |  |                  |      |   |                                                  |  |        |                                                        |  |  |                                |   |  |                                      |     |   |                         |  |      |                         |  |  |                         |   |  |  | (0.9 | ) |  |  | (0.9    | ) |  |  |      |   |  |  | (0.9    | )
|                                                                      |  |      |      |  |         |  |         |                |  |  |                         |   |  |                   |      |  |                  |  |      |                             |  |  |                                |  |  |                  |       |   |                                                  |  |         |                                                        |  |  |                                 |   |  |                                      |      |   |                         |  |       |                         |  |  |                          |   |  |  |      |   |  |  |         |   |  |  |       |   |  |  |         |  
|Total comprehensive income                                            |  |      |      |  |         |  |        |                |  |  |                        |   |  |                   |     |  |                  |  |     |                             |  |  |                               |  |  |                  |      |   |                                                  |  |        |                                                        |  |  | 342.0                           |   |  |                                      |     |   |                         |  | (7.4  | )                       |  |  | 9.9                      |   |  |  | 0.2  |   |  |  | 344.7   |   |  |  | 3.1   |   |  |  | 347.8   |  
|Share-based remuneration                                              |  |      |      |  |         |  |        |                |  |  |                        |   |  |                   | 6.8  |  |                  |  |     |                             |  |  |                               |  |  |                  |      |   |                                                  |  |        |                                                        |  |  |                                |   |  |                                      |     |   |                         |  |      |                         |  |  |                         |   |  |  |     |   |  |  | 6.8     |   |  |  |      |   |  |  | 6.8     |  
|Stock options grants exercised                                        |  |      |      |  |         |  |        |                |  |  | 50.4                    |   |  |                   |     |  |                  |  |     |                             |  |  |                               |  |  |                  |      |   |                                                  |  |        |                                                        |  |  | (27.1                           | ) |  |                                      |     |   |                         |  |      |                         |  |  |                         |   |  |  |     |   |  |  | 23.3    |   |  |  |      |   |  |  | 23.3    |  
|Acquisition of non controlling interest                               |  |      |      |  |         |  |        |                |  |  |                        |   |  |                   |     |  |                  |  |     |                             |  |  |                               |  |  |                  |      |   |                                                  |  |        |                                                        |  |  |                                |   |  |                                      | (9.8 | ) |                         |  |      |                         |  |  |                         |   |  |  |     |   |  |  | (9.8    | ) |  |  | 3.5   |   |  |  | (6.3    | )
|Allocation of profits:                                                |  |      |      |  |         |  |         |                |  |  |                         |   |  |                   |      |  |                  |  |      |                             |  |  |                                |  |  |                  |       |   |                                                  |  |         |                                                        |  |  |                                 |   |  |                                      |      |   |                         |  |       |                         |  |  |                          |   |  |  |      |   |  |  |         |   |  |  |       |   |  |  |         |  
|Investment in subsidy                                                 |  |      |      |  |         |  |        |                |  |  |                        |   |  |                   |     |  |                  |  | 3.2  |                             |  |  |                               |  |  |                  |      |   |                                                  |  |        |                                                        |  |  | (3.2                            | ) |  |                                      |     |   |                         |  |      |                         |  |  |                         |   |  |  |     |   |  |  |        |   |  |  |      |   |  |  |        |  
|Legal reserve                                                         |  |      |      |  |         |  |        |                |  |  |                        |   |  |                   |     |  |                  |  |     |                             |  |  | 16.6                           |  |  |                  |      |   |                                                  |  |        |                                                        |  |  | (16.6                           | ) |  |                                      |     |   |                         |  |      |                         |  |  |                         |   |  |  |     |   |  |  |        |   |  |  |      |   |  |  |        |  
|Interest on own capital (R$ 0.07 per share)                           |  |      | 29.6 |  |         |  |        |                |  |  |                        |   |  |                   |     |  |                  |  |     |                             |  |  |                               |  |  |                  |      |   |                                                  |  |        |                                                        |  |  | (68.8                           | ) |  |                                      |     |   |                         |  |      |                         |  |  |                         |   |  |  |     |   |  |  | (68.8   | ) |  |  |      |   |  |  | (68.8   | )
|Dividends                                                             |  |      | 29.7 |  |         |  |        |                |  |  |                        |   |  |                   |     |  |                  |  |     |                             |  |  |                               |  |  |                  |      |   |                                                  |  |        |                                                        |  |  | (20.9                           | ) |  |                                      |     |   |                         |  |      |                         |  |  |                         |   |  |  |     |   |  |  | (20.9   | ) |  |  |      |   |  |  | (20.9   | )
|Reserve for investments and working capital (net income for the year) |  |      |      |  |         |  |        |                |  |  |                        |   |  |                   |     |  |                  |  |     |                             |  |  |                               |  |  |                  |      |   |                                                  |  | 205.4   |                                                        |  |  | (205.4                          | ) |  |                                      |     |   |                         |  |      |                         |  |  |                         |   |  |  |     |   |  |  |        |   |  |  |      |   |  |  |        |  
|                                                                      |  |      |      |  |         |  |         |                |  |  |                         |   |  |                   |      |  |                  |  |      |                             |  |  |                                |  |  |                  |       |   |                                                  |  |         |                                                        |  |  |                                 |   |  |                                      |      |   |                         |  |       |                         |  |  |                          |   |  |  |      |   |  |  |         |   |  |  |       |   |  |  |         |  
|At December 31, 2013                                                  |  |      |      |  |         |  | 1,438.0 |                |  |  | (103.8                  | ) |  |                   | 27.8 |  |                  |  | 40.1 |                             |  |  | 165.3                          |  |  |                  |      |   |                                                  |  | 2,000.1 |                                                        |  |  |                                |   |  |                                      | (4.2 | ) |                         |  | (44.1 | )                       |  |  | 14.2                     |   |  |  | 0.2  |   |  |  | 3,533.6 |   |  |  | 98.6  |   |  |  | 3,632.2 |  
|                                                                      |  |      |      |  |         |  |         |                |  |  |                         |   |  |                   |      |  |                  |  |      |                             |  |  |                                |  |  |                  |       |   |                                                  |  |         |                                                        |  |  |                                 |   |  |                                      |      |   |                         |  |       |                         |  |  |                          |   |  |  |      |   |  |  |         |   |  |  |       |   |  |  |         |  



|* | See note 2.2.1 for the discussion relating to the adjustments.
|- | --------------------------------------------------------------

The accompanying notes are an integral part of
these consolidated financial statements.



F-9



---

##### Table of Contents

Embraer S.A.

Consolidated Statements of Cash Flows

Years Ended

(In millions of U.S.
dollars)



|                                                              |  |      |      |  |            |  |         |             |  |  |             |   |  |  |          |  
|------------------------------------------------------------- |  | ---- | ---- |  | ---------- |  | ------- | ----------- |  |  | ----------- | - |  |  | -------- | -
|                                                              |  | Note |      |  | 12.31.2013 |  |         | 12.31.2012  |  |  | 12.31.2011  |  
|                                                              |  |      |      |  |            |  |         | (Restated)* |  |  | (Restated)* |  
|Operating activities                                          |  |      |      |  |            |  |         |             |  |  |             |   |  |  |          |  
|Net income                                                    |  |      |      |  |            |  | 346.0   |             |  |  | 348.6       |   |  |  | 120.4    |  
|Adjustment to net income for items not affecting cash         |  |      |      |  |            |  |         |             |  |  |             |   |  |  |          |  
|Depreciation                                                  |  |      | 16   |  |            |  | 145.8   |             |  |  | 139.9       |   |  |  | 109.3    |  
|Amortization                                                  |  |      | 17   |  |            |  | 144.8   |             |  |  | 138.9       |   |  |  | 129.5    |  
|Contribution from suppliers                                   |  |      |      |  |            |  | (26.0   | )           |  |  | (31.8       | ) |  |  | (29.8    | )
|Allowance (reversal) for inventory obsolescence               |  |      |      |  |            |  | 13.4    |             |  |  | 9.2         |   |  |  | (12.8    | )
|Inventory and PPE provision for adjustment to market value    |  |      |      |  |            |  | 28.6    |             |  |  | 39.3        |   |  |  | 5.3      |  
|Provision for doubtful accounts                               |  |      |      |  |            |  | (4.8    | )           |  |  | 11.4        |   |  |  | 4.4      |  
|Deferred income tax and social contribution                   |  |      | 24.2 |  |            |  | 192.6   |             |  |  | 75.3        |   |  |  | 85.5     |  
|Accrued interest                                              |  |      |      |  |            |  | (2.4    | )           |  |  | (5.5        | ) |  |  | 1.7      |  
|Equity in the losses (gain) of associates                     |  |      |      |  |            |  | 3.6     |             |  |  | (1.2        | ) |  |  | 0.3      |  
|Share-based remuneration                                      |  |      |      |  |            |  | 6.8     |             |  |  | 7.9         |   |  |  | 9.7      |  
|Foreign exchange gain (loss), net                             |  |      |      |  |            |  | 1.9     |             |  |  | 4.5         |   |  |  | (13.1    | )
|Residual value guarantee                                      |  |      | 25   |  |            |  | 21.3    |             |  |  | 14.0        |   |  |  | 34.4     |  
|Other                                                         |  |      |      |  |            |  | 0.3     |             |  |  | 0.9         |   |  |  | (10.7    | )
|Changes in assets:                                            |  |      |      |  |            |  |         |             |  |  |             |   |  |  |          |  
|Financial investments                                         |  |      |      |  |            |  | (443.7  | )           |  |  | 160.0       |   |  |  | (124.3   | )
|Derivative financial instruments                              |  |      |      |  |            |  | 18.4    |             |  |  | (5.4        | ) |  |  | (9.7     | )
|Collateralized accounts receivable and accounts receivable    |  |      |      |  |            |  | (40.0   | )           |  |  | 10.8        |   |  |  | (126.3   | )
|Customer and commercial financing                             |  |      |      |  |            |  | 35.9    |             |  |  | (7.3        | ) |  |  | (31.8    | )
|Inventories                                                   |  |      |      |  |            |  | (157.2  | )           |  |  | 70.1        |   |  |  | (97.9    | )
|Other assets                                                  |  |      |      |  |            |  | 60.1    |             |  |  | (162.0      | ) |  |  | (0.1     | )
|Changes in liabilities:                                       |  |      |      |  |            |  |         |             |  |  |             |   |  |  |          |  
|Trade accounts payable                                        |  |      |      |  |            |  | 258.4   |             |  |  | (72.2       | ) |  |  | 83.8     |  
|Non-recourse and recourse debt                                |  |      |      |  |            |  |        |             |  |  | (62.4       | ) |  |  | (7.7     | )
|Other payables                                                |  |      |      |  |            |  | 125.7   |             |  |  | 140.5       |   |  |  | (24.9    | )
|Contribution from suppliers                                   |  |      |      |  |            |  | 84.5    |             |  |  | 1.0         |   |  |  | 70.0     |  
|Advances from customers                                       |  |      |      |  |            |  | 50.4    |             |  |  | (48.2       | ) |  |  | 85.7     |  
|Taxes and payroll charges payable                             |  |      |      |  |            |  | (62.5   | )           |  |  | 23.5        |   |  |  | (1.2     | )
|Financial guarantees                                          |  |      |      |  |            |  | (312.2  | )           |  |  | (8.6        | ) |  |  | 241.0    |  
|Other provisions                                              |  |      |      |  |            |  | 42.0    |             |  |  | (125.0      | ) |  |  | (4.3     | )
|Unearned income                                               |  |      |      |  |            |  | 32.9    |             |  |  | 26.8        |   |  |  | (6.3     | )
|                                                              |  |      |      |  |            |  |         |             |  |  |             |   |  |  |          |  
|Net cash generated by operating activities                    |  |      |      |  |            |  | 564.6   |             |  |  | 693.0       |   |  |  | 480.1    |  
|                                                              |  |      |      |  |            |  |         |             |  |  |             |   |  |  |          |  
|Investing activities                                          |  |      |      |  |            |  |         |             |  |  |             |   |  |  |          |  
|Acquisition to property, plant and equipment                  |  |      | 16   |  |            |  | (437.6  | )           |  |  | (328.0      | ) |  |  | (334.3   | )
|Proceeds from sale of property, plant and equipment           |  |      |      |  |            |  | 0.2     |             |  |  | 1.3         |   |  |  | 0.3      |  
|Additions to intangible assets                                |  |      | 17   |  |            |  | (316.6  | )           |  |  | (252.4      | ) |  |  | (217.4   | )
|Investments in associates                                     |  |      | 14   |  |            |  |        |             |  |  | 2.5         |   |  |  | (3.0     | )
|Business acquisitions, net of cash acquired                   |  |      | 38.2 |  |            |  | 2.5     |             |  |  | (6.2        | ) |  |  | (51.4    | )
|Acquisition of non controlling interest                       |  |      |      |  |            |  | (17.3   | )           |  |  | (17.4       | ) |  |  |         |  
|Proceeds from held to maturity securities                     |  |      |      |  |            |  | 4.8     |             |  |  | (17.1       | ) |  |  | 3.8      |  
|                                                              |  |      |      |  |            |  |         |             |  |  |             |   |  |  |          |  
|Net cash used in investing activities                         |  |      |      |  |            |  | (764.0  | )           |  |  | (617.3      | ) |  |  | (602.0   | )
|                                                              |  |      |      |  |            |  |         |             |  |  |             |   |  |  |          |  
|Financing activities                                          |  |      |      |  |            |  |         |             |  |  |             |   |  |  |          |  
|Repayment of borrowings                                       |  |      |      |  |            |  | (650.2  | )           |  |  | (1,225.3    | ) |  |  | (2,082.7 | )
|Proceeds from borrowings                                      |  |      |      |  |            |  | 890.8   |             |  |  | 1,692.6     |   |  |  | 2,362.5  |  
|Dividends and interest on own capital                         |  |      |      |  |            |  | (71.4   | )           |  |  | (59.5       | ) |  |  | (183.4   | )
|Proceeds from stock options exercised                         |  |      |      |  |            |  | 23.3    |             |  |  | 14.5        |   |  |  |         |  
|                                                              |  |      |      |  |            |  |         |             |  |  |             |   |  |  |          |  
|Net cash generated by financing activities                    |  |      |      |  |            |  | 192.5   |             |  |  | 422.3       |   |  |  | 96.4     |  
|                                                              |  |      |      |  |            |  |         |             |  |  |             |   |  |  |          |  
|Increase (decrease) in cash and cash equivalents              |  |      |      |  |            |  | (6.9    | )           |  |  | 498.0       |   |  |  | (25.5    | )
|Effects of exchange rate changes on cash and cash equivalents |  |      |      |  |            |  | (106.4  | )           |  |  | (48.8       | ) |  |  | (19.8    | )
|Cash and cash equivalents at the beginning of the year        |  |      |      |  |            |  | 1,797.0 |             |  |  | 1,347.8     |   |  |  | 1,393.1  |  
|                                                              |  |      |      |  |            |  |         |             |  |  |             |   |  |  |          |  
|Cash and cash equivalents at the end of the year              |  |      |      |  |            |  | 1,683.7 |             |  |  | 1,797.0     |   |  |  | 1,347.8  |  
|                                                              |  |      |      |  |            |  |         |             |  |  |             |   |  |  |          |  



|* | See note 2.2.1 for the discussion relating to the adjustments.
|- | --------------------------------------------------------------

The accompanying notes are an integral part of
these consolidated financial statements.



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##### Table of Contents

EmbraerS.A.

Notes to the Consolidated Financial Statements

In millions of U.S. dollars, unless otherwise stated





|1. | Operations
|-- | ----------

Embraer S.A. (the Embraer 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) | The development, production and sale of jet and turboprop aircraft for civil and defense aviation, aircraft for agricultural use, structural components, mechanical and hydraulic systems, aviation services and technical
activities related to the production and maintenance of aerospace material;
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (ii) | The design, construction and sale of equipment, materials, systems, software, accessories and components to the defense, security and energy industries and the promotion or performance of technical activities related to
production and maintenance, to achieve the highest technological and quality standards;
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (iii) | The performance of other technological, industrial, commercial and service activities related to the defense, security and energy industries; and
| | ----- | -------------------------------------------------------------------------------------------------------------------------------------------------



| | (iv) | Contribution to the development of technical professionals necessary to the aerospace industry.
| | ---- | -----------------------------------------------------------------------------------------------

The Companys shares are listed on the enhanced corporate governance segment of the Stock Exchange in Brazil
(BM&FBOVESPA), known 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.

The Company has consolidated wholly-owned entities, jointly controlled entities and commercial representation offices, located in Brazil, the
United States of America (the U.S.), France, Spain, Portugal, Netherlands, Ireland, United Kingdom, China and Singapore.

These
consolidated financial statements were approved by the Board of Directors of the Company on February 25, 2014.



|2. | Presentation of the Financial Statements and Accounting Practices
|-- | -----------------------------------------------------------------



| | 2.1.1 | Presentation and preparation of the financial statements
| | ----- | --------------------------------------------------------

The consolidated financial
statements have been prepared in conformity with International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) which includes (i) IFRS, (ii) the International
Accounting Standard (IAS), and (iii) the International Financial Reporting Interpretations Committee (IFRIC) or its predecessor, the Standing Interpretations Committee (SIC).

As of January 1, 2013, the Company adopted IFRS 10 - Consolidated Financial Statements, IFRS 11 - Joint Arrangements (Note 2.2.1) and IFRS
12  Disclosure of Interests in Other Entities (Note 14.5). As determined by the new IFRS pronouncements, the effects should be reflected at the beginning of the earliest period presented. Thus, the comparative figures presented in these
consolidated financial statements have been adjusted relative to those previously reported.



| | 2.1.2 | Basis of preparation
| | ----- | --------------------

These consolidated financial statements were prepared under the
historical cost convention except when the item requires different criteria and adjusted to reflect assets and liabilities measured at fair value through profit or loss or marked to market when available for sale.

The preparation of financial statements in conformity with IFRS requires the use of certain critical



F-11



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##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





accounting estimates. It also requires management of the Company to exercise its judgment in the process of applying the Companys accounting policies. These consolidated financial
statements include accounting estimates for certain assets, liabilities and other transactions.

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



| | 2.1.3 | Consolidation
| | ----- | -------------

The consolidated financial statements include the balances of
December 31, 2013 financial statements of the Company and all subsidiaries that Embraer, directly or indirectly has control, special purpose entities SPEs for which the Company has control, and exclusive investment funds. Jointly
controlled entities (joint ventures) are not consolidated and are presented as Investments and accounted for by the equity method. The joint operations are proporcional consolidated, as follows:

ELEB - Equipamentos Ltda. - ELEB - a wholly-owned subsidiary located in São José dos Campos, which produces
and sells precision hydraulic and mechanical equipment for the aviation industry, mainly for Embraer aircraft.

Embraer Aircraft
Holding Inc. - EAH - a wholly-owned subsidiary, located in Fort Lauderdale, United States, responsible for corporate and institutional activities. It also has the following wholly-owned subsidiaries also located in the United States:



| |  |  | Embraer Aircraft Customer Services, Inc. - EACS  located in Fort Lauderdale, United States of America, sells spare parts and provides product support to customers in the United States, Canada and the
Caribbean.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Embraer Aircraft Maintenance Services Inc. - EAMS  located in Delaware, with its operational base in Nashville, United States of America, provides maintenance services for aircraft and components.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Embraer Training Services - ETS - located in Dallas, United States, is responsible for corporate and institutional activities and has a 51% subsidiary, Embraer CAE Training Services - ECTS, also
located in Dallas, which provides training for pilots, mechanics and crew.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Embraer Executive Jet Services, LLC - EEJS - located in Delaware, provides after sales support services and maintenance services for executive aircraft.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Embraer Services Inc. - ESI  located in Delaware, with its operational base in Fort Lauderdale, United States of America, which provides support in the United States for the defense and commercial
market programs.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Embraer Executive Aircraft, Inc. - EEA - located in Delaware, has its operational base in Melbourne, Florida, United States where it provides final assembly and delivery of the Phenom executive jet.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Embraer Engineering & Technology Center USA, Inc. - EETC  located in Delaware, incorporated on April 27, 2012, provides engineering services related to aircraft research and development.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Aero Seating Technologies LLC. - AST - a subsidiary in which EAH holds 85.5% of the capital, is domiciled in San Gabriel, United States of America and its core activity is the production and maintenance of
aircraft seats.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Embraer Defense and Security Incorporated - EDSI - established in February 2013, is domiciled in Jacksonville Florida in the United States, and shall be the basis to attend the LAS (Light Air Support)
program that will provide aircraft A-29 Super Tucano for the U.S. Air Force.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Embraer Australia PTY Ltd. -
EAL - a wholly-owned subsidiary - located in Melbourne, Australia, which provided after-sales support services to customers in the Australasian and Asian regions. The company is currently inactive.



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##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





Embraer Aviation Europe SAS - EAE - a wholly-owned subsidiary - located in
Villepinte, France, is responsible for corporate and institutional activities and has the following wholly-owned subsidiaries:



| |  |  | Embraer Aviation International SAS - EAI - located in Villepinte - sells parts and provides after sales support services in Europe, Africa and the Middle East.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Embraer Europe SARL - EES - located in Villepinte - provides sales representation for the Company in Europe, Africa and the Middle East.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------

Embraer Credit Ltd. - ECL - a wholly-owned subsidiary - located in Delaware, which provides support for sales operations.

Embraer GPX Ltda - GPX  a subsidiary with 99.9% of its capital is held by Embraer, located in Gavião
Peixoto, State of São Paulo, provides specialized aircraft maintenance services.

Embraer Overseas Limited - EOS
- a wholly-owned subsidiary - located in the Cayman Islands, B.W.I., with the sole objective of carrying out financial transactions, including raising and investing funds, and provides intercompany loans for Embraer companies.

Embraer Representation LLC - ERL - a wholly-owned subsidiary - located in Delaware - provides commercial and institutional
representation for the Company.

Embraer Spain Holding Co. SL - ESH - a wholly-owned subsidiary - located in Spain -
coordinates investments in subsidiaries abroad, including those focused on activities that support the sale of aircraft and management of assets derived from these operations. ESHs operations are carried out by the following subsidiaries:



| |  |  | ECC Investment Switzerland AG, a wholly-owned subsidiary, located in Switzerland, holds 100% of the capital of the following:
| | - |  | -----------------------------------------------------------------------------------------------------------------------------



| |  |  | ECC Insurance & Financial Co. Ltd.  ECC Insurance - located in the Cayman Islands, is an in-house insurance company providing cover for the financial guarantees offered to customers and/or
financing agents involved in structuring the sales of Embraer aircraft.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Embraer Finance Ltd. - EFL - located in the Cayman Islands, assists customers in obtaining third-party financing, as well as providing support for some of the Companys purchase and sale transactions.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Harbin Embraer Aircraft Industry Company Ltd. HEAI  a subsidiary consolidated by Embraer, in which Embraer Spain Holding Co. SL holds 51% of the capital, is based in the town of Harbin, China. Having
started operations in 2002, with the objective of manufacturing aircraft to meet the demands of the Chinese air transport market, its activities has been dedicated to the manufacture of Legacy 600/650 executive jets since signing an agreement with
the leaders of the Chinese Government the first delivery is scheduled take place in the 1st quarter 2014.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Embraer Netherlands B.V.  ENL - a wholly-owned subsidiary - located in Netherlands, has as its main objective the
coordination of investments in subsidiaries abroad, including those intended to support the marketing activities of aircraft and asset management from these operations. The activities of ENL are affected by its subsidiaries:



| |  |  | Embraer Asia Pacific PTE. Ltd. - EAP - a wholly-owned subsidiary - located in Singapore which provide with the objective of providing after-sales support services in Asia.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Airholding SGPS, S.A. - a wholly-owned subsidiary - located in Portugal. Its main activity is its 65% participation in the voting capital of OGMA - Indústria Aeronáutica de Portugal S.A., a Portuguese
aviation maintenance and production company. The remaining 35% of the voting capital is held by Empresa Portuguesa de Defesa - EMPORDEF.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-13



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##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





| |  |  | ECC Leasing Co. Ltd.  ECC Leasing  a wholly-owned subsidiary - located in Dublin, Ireland, leases and sells used aircraft.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------



| |  |  | EMBRAER CAE Training Services Ltd. - ECUK  a subsidiary in which ENL holds 51% of the capital, located in Burges Hill, United Kingdom, provides training for pilots, mechanics and crew.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | EMBRAER Portugal - SGPS S.A. - a wholly-owned subsidiary located in Evora, Portugal, coordinates investments and economic activities in the following wholly-owned subsidiaries as following:
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Embraer-Portugal Estruturas Metalicas S.A. - located in Evora, Portugal, manufactures, assembles, maintains and sells parts, components and metal sets and carries out other technological, industrial, commercial and
service activities related to the metal products industry.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Embraer-Portugal Estruturas em Compositos S.A. - located in Evora, Portugal manufactures, assembles and sells structures based on parts and sets in composite materials and carries out other technological, industrial,
commercial and service activities related to the composite, non-metal products manufacturing industry.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Embraer (China) Aircraft Technical Services Co., Ltd  ECA, a wholly-owned subsidiary located in Beijing, China, provides after-sales support services, maintenance services and sells parts to customers
in the China.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | EZ Air Interior Limited. EZ - joint venture owned by Embraer Netherlands and Zodiac Aerospace (50% each) - located in Ireland, with the objective of manufacturing cabin interiors of the EMBRAER 170/190 jet
family and will be jointly operated with a factory located in México. In the 3rd quarter of 2013 began operations with the first shipment of its production for Embraer.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

ECC do Brasil Cia. de Seguros - ECC  a wholly-owned subsidiary - located in Porto Alegre, in the state of Rio Grande
do Sul, Brazil, it was registered with the Private Insurance Agency - SUSEP and its objective was to deal solely with export credit insurance. Given the fact that it has never operated and that it is no longer part of the Companys strategy,
Embraers Board of Directors approved its closure and in December 2013 SUSEP approved the cancelation of its authorization to operate as an insurance company. As it has never operated as an insurance company, its discontinuation will cause no
significant impact on the Companys results.

Indústria Aeronáutica Neiva Ltda. - Neiva  a
wholly-owned subsidiary located in Botucatu, State of São Paulo, Brazil, sells agricultural aircraft and related parts and components.

Embraer Defesa e Segurança Participações S.A. EDSP  a wholly-owned subsidiary, located in
São José dos Campos, state of São Paulo, Brazil, coordinates the investments in the Defense and Security segment and holds interests in the following companies:



| |  |  | Orbisat Indústria S.A. Orbisat  of which 90% of its capital is held by Embraer Defesa e Segurança Participações S.A. - located in São José dos Campos, state of
São Paulo, Brazil, develops technology for remote sensing and builds air, sea and land surveillance radars. In 2013 the Company announced the change of its corporate name to Bradar Indústria S.A. at the moment meets the formal
processes to accomplish this change.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Orbisat Aerolevantamento Ltda - a subsidiary established in February 2013, located in São José dos Campos, State of São Paulo, with the participation of Orbisat Indústria S.A. in 25% of its
capital, it aims at providing aerial survey service (mapping areas based on advanced technology onboard aircraft) and remote sensing.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Atech Negócios em Tecnologias S.A. - Atech was initially a joint venture and became a subsidiary of Embraer Defesa &
Segurança Participações S.A. in February 2013 (note 14) and a
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-14



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##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





| | wholly owned subsidiary in November 2013, with ownership of 100% of its shares. Located in São Paulo, it develops strategic solutions for command, control, communications, computers and
intelligence and provides specialized consulting services and technical and logistics support in all of the following project phases: conceptualization, specification, development, integration, implementation management, installation, testing,
maintenance and training.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Harpia Sistemas S.A. - Harpia - located in Brasilia, Distrito Federal, Brazil, is an entity controlled by Embraer Defesa e Segurança Participações S.A., which hold interests of 51%, 40%
interests are hold by AEL Sistemas (a subsidiary of Elbit Systems Lts. Of Israel), and 9% interests are hold by Avibrás Divisão Aérea e Naval S.A.. Its main activity is the development, construction, sale, maintenance,
modernization and after-sales services of unmanned aerial vehicles (UAVs). Harpia Sistemas S.A. will also focus on marketing, development, systems integration, manufacturing, sales and after-sales support of simulators and
modernization of avionics systems, by the 3rd quarter was in pre-operating stage and had its first revenue in 4th quarter 2013.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Visiona Tecnologia Espacial S.A. - Visiona  located in São José dos Campos, State of São Paulo, Brasil, and fully consolidated subsidiary of Embraer, in which Embraer Defesa e
Segurança Participações S.A. and Telebrás hold interests of 51% and 49%, respectively. It will initially act integration and delivery of the Geostationary Satellite System Defense Communication (SGDC) of the Brazilian
Government, with the aim of serving the satellite communication needs of the federal government, including the National Broadband Program and a wide spectrum of strategic defense transmissions.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Visiona International B.V. (International Visiona)  wholly owned subsidiary of Visiona Brazil, located in Amsterdam in Netherlands, was established in 2013 and will also work on integrating and providing of the
SGDC  Brazilian Government system.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | SAVIS Tecnologia e Sistemas S.A. - SAVIS  incorporated in June 2012 and based in Campinas, State of São Paulo, is a wholly owned subsidiary of Embraer Defesa e Segurança. Its objective is
to operate with the Brazilian government in the defense and security market.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Special Purpose Companies -
SPEs - the Company organizes some of its aircraft sale financing transactions through SPEs, in which the Company has no direct or indirect interest. Although it has no equity interests, the Company controls all operations of the SPEs
or takes a majority share of their risks and rewards, therefore the SPEs are consolidated in the financial statements of the Parent Company (Embraer S.A.). The consolidated SPEs are: PM Limited, Refine Inc., RS Limited, River One Ltd. and Table Inc.
Other SPEs in which Embraer has no control or continuous involvement were not consolidated, based on technical analyses made by Management. Other structures involving SPEs may be used. Although it does not control their operations, the Company
analyzes potential risks presented by the SPEs and discloses them, if significant. Apart from the SPEs mentioned, Embraer has no significant risks attributed to other structured operations involving SPEs.

Consortium Tepro  a consortium formed in October 2012 by Savis Tecnologia e Sistemas S.A. and OrbiSat Indústria S.A.,
companies controlled by Embraer Defesa e Segurança Participações S.A., signed a contract with the Brazilian Army in November 2012 for 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 Orbisat. Operations started in the first quarter of 2013.

Exclusive Investment Funds - in connection with its business strategies, the Company has investments in exclusive funds, which are
consolidated in the financial statements. The balances of marketable securities and investments maintained through these funds are recorded in cash and cash equivalents or financial investments, based on the original maturities of the securities and
the fund investment strategies, which take into account immediate liquidity (Note 5 and 6).



F-15



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##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





| | 2.1.4 | Interest in other entities
| | ----- | --------------------------

Interest in other entities is not consolidated in the
consolidated financial statements. As of December 31, 2013, these comprise AEL Sistemas SA - AEL, domiciled in Porto Alegre, Brazil, in which Embraer Defesa e Segurança Participações S.A. has a 25% interest.
AEL ́s main activities are research, development, manufacture and sales of electronic components: electronic equipment used in aviation and software programs. Despite its 25% interest, Embraer Defesa e Segurança
Participações S.A. does not have significant influence in AEL, and, therefore, the investment is classified as a non-current financial instrument asset, measured at fair value, and the changes in valuation are recognized in other
comprehensive income and presented in shareholders equity.



| | 2.2 | Summary of significant accounting policies
| | --- | ------------------------------------------

The accounting policies adopted by the
Company were changed only by the adoption of IFRS 10, 11 and 12 from those disclosed in the consolidated financial statements as of December 31, 2012.

The adoption of the accounting pronouncements IAS 19 Employee Benefits, IFRS 13 Fair Value Measurement, IAS 1 Presentation of Financial
Statements and IFRS 7 Financial Instruments: Disclosures, with mandatory application from 1 January 2013, did not no affect and / or impact the financial statements previously presented, thus the comparative periods have not been adjusted due
to the application of these new pronouncements.



| | 2.2.1 | Changes for Adoption of IFRS 10, 11 and 12
| | ----- | ------------------------------------------



| | a) | IFRS 10 - Consolidated Financial Statements
| | -- | -------------------------------------------

With an effective date since
January 1, 2013, IFRS 10 expands the concept of control taking into account the power and the returns that a participant has about an investment. In this context, a scenario of shareholding voting rights is analyzed together with the
substantive rights that give power over the relevant activities of the investee. The subsidiary is fully consolidated from the date on which control is transferred to the Company and transactions with non-controlling interests as transactions with
equity owners of the Group are presented within equity as participation of non- controlling interest. There were no changes in the Companys accounting policies with the adoption of IFRS 10.



| | b) | IFRS 11 - Joint Arrangements
| | -- | ----------------------------

Applicable from January 1, 2013, IFRS 11 -
Joint Arrangements provides more realistic reflections of joint arrangements by focusing on the rights and obligations of the arrangement, rather than its legal form providing two types of joint arrangements: (i) joint operations -
that usually occurs when an operator has rights to the assets and contractual obligations and hence accounts for its share of the assets, liabilities, revenues and expenses (proportional consolidation) and (ii) joint venture - occurs when an
operator has rights to the net assets of the contracts and accounts for the investment by the equity method. In this case the proportional consolidation is no longer permitted.

Although the change did not have a material impact on the consolidated financial statements, the comparative figures for the year ended
December 31, 2012 for comparative purposes, no longer reflect the proportionate consolidation of the Companys jointly controlled entities, EZ Air Interior Limited and Atech Negócios em Tecnologias S.A.. The Company acquired Atech
on February 2013, (Note 14), and started fully consolidating its results in the financial statements.

After its operations had started in
the 3rd quarter of 2013, and due to the type of business relationship with the Company, EZ Air Interior Limited was determined to be a jointly controlled operation, which allowed it to be proportionally consolidated in the 2013 financial statements
of the Company.



F-16



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##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





| | c) | Restatement of values for comparative purposes
| | -- | ----------------------------------------------

By retrospective application of IFRS 11,
and in line with IAS 26 1/CPC - Presentation of Financial Statements, the Company is restating comparatives for the financial position on December 31, 2012 ends, and the financial position at January 1 2012 to represent the beginning of
the period of retrospective application of that IFRS.

Also for comparative purposes the Company is restating the other statements and
related notes for the periods ended December 31, 2012 and December 31, 2011 which in addition to the effects of the retrospective application of IFRS 11, were also reclassified amounts previously presented in other lines.

Below are the effects on the consolidated financial statements originally issued by the Company and the consolidated financial statements
adjusted to the application of IFRS 11 presented for comparative purposes:

Statement of Financial Position:



|                                           |  |                                         |         |  |                    |  |      |                                           |  |  |         | 
|------------------------------------------ |  | --------------------------------------- | ------- |  | ------------------ |  | ---- | ----------------------------------------- |  |  | ------- | 
|                                           |  | At January 01, 2012                     |        
|                                           |  | Statement ofFinancial Positionpublished |         |  | IFRS 11adjustments |  |      | Statement ofFinancial Positionas Restated | 
|Current assets                             |  |                                         | 5,169.4 |  |                    |  | (5.5 | )                                         |  |  | 5,163.9 | 
|Investments                                |  |                                         | 2.8     |  |                    |  | 2.0  |                                           |  |  | 4.8     | 
|Non current assets                         |  |                                         | 3,686.1 |  |                    |  | (6.1 | )                                         |  |  | 3,680.0 | 
|                                           |  |                                         |         |  |                    |  |      |                                           |  |  |         | 
|Total Assets                               |  |                                         | 8,858.3 |  |                    |  | (9.6 | )                                         |  |  | 8,848.7 | 
|                                           |  |                                         |         |  |                    |  |      |                                           |  |  |         | 
|Current liabilities                        |  |                                         | 2,841.7 |  |                    |  | (3.3 | )                                         |  |  | 2,838.4 | 
|Non current liabilities                    |  |                                         | 2,898.8 |  |                    |  | (6.3 | )                                         |  |  | 2,892.5 | 
|Shareholders Equity                       |  |                                         | 3,117.8 |  |                    |  |     |                                           |  |  | 3,117.8 | 
|                                           |  |                                         |         |  |                    |  |      |                                           |  |  |         | 
|Total Liabilities and Shareholders equity |  |                                         | 8,858.3 |  |                    |  | (9.6 | )                                         |  |  | 8,848.7 | 
|                                           |  |                                         |         |  |                    |  |      |                                           |  |  |         | 



|                                           |  |                                         |         |  |                    |  |      |                                           |  |  |         | 
|------------------------------------------ |  | --------------------------------------- | ------- |  | ------------------ |  | ---- | ----------------------------------------- |  |  | ------- | 
|                                           |  | At December 31, 2012                    |        
|                                           |  | Statement ofFinancial Positionpublished |         |  | IFRS 11adjustments |  |      | Statement ofFinancial Positionas Restated | 
|Current assets                             |  |                                         | 5,365.9 |  |                    |  | (7.2 | )                                         |  |  | 5,358.7 | 
|Investments                                |  |                                         |        |  |                    |  | 3.6  |                                           |  |  | 3.6     | 
|Non current assets                         |  |                                         | 4,124.5 |  |                    |  | (5.9 | )                                         |  |  | 4,118.6 | 
|                                           |  |                                         |         |  |                    |  |      |                                           |  |  |         | 
|Total Assets                               |  |                                         | 9,490.4 |  |                    |  | (9.5 | )                                         |  |  | 9,480.9 | 
|                                           |  |                                         |         |  |                    |  |      |                                           |  |  |         | 
|Current liabilities                        |  |                                         | 2,792.4 |  |                    |  | (3.7 | )                                         |  |  | 2,788.7 | 
|Non current liabilities                    |  |                                         | 3,347.7 |  |                    |  | (5.8 | )                                         |  |  | 3,341.9 | 
|Shareholders Equity                       |  |                                         | 3,350.3 |  |                    |  |     |                                           |  |  | 3,350.3 | 
|                                           |  |                                         |         |  |                    |  |      |                                           |  |  |         | 
|Total Liabilities and Shareholders equity |  |                                         | 9,490.4 |  |                    |  | (9.5 | )                                         |  |  | 9,480.9 | 
|                                           |  |                                         |         |  |                    |  |      |                                           |  |  |         | 



F-17



---

##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





Statements of income:



|                                       |  |                              |         |   |                    |  |       |                                |  |  |         |  
|-------------------------------------- |  | ---------------------------- | ------- | - | ------------------ |  | ----- | ------------------------------ |  |  | ------- | -
|                                       |  | At December 31, 2011         |        
|                                       |  | Statement of Incomepublished |         |   | IFRS 11adjustments |  |       | Statement ofIncome as restated | 
|Revenue                                |  |                              | 5,803.0 |   |                    |  | (12.1 | )                              |  |  | 5,790.9 |  
|Gross Profit                           |  |                              | 1,307.1 |   |                    |  | (4.3  | )                              |  |  | 1,302.8 |  
|Operating income (expenses)            |  |                              | (988.6  | ) |                    |  | 3.7   |                                |  |  | (984.9  | )
|Equity in gain or losses of associates |  |                              | (0.3    | ) |                    |  | 0.6   |                                |  |  | 0.3     |  
|Operating income                       |  |                              | 318.2   |   |                    |  |      |                                |  |  | 318.2   |  
|Financial results                      |  |                              | (70.7   | ) |                    |  | 0.3   |                                |  |  | (70.4   | )
|Profit before taxes on income          |  |                              | 247.5   |   |                    |  | 0.3   |                                |  |  | 247.8   |  
|Income tax (expense) income            |  |                              | (127.1  | ) |                    |  | (0.3  | )                              |  |  | (127.4  | )
|                                       |  |                              |         |   |                    |  |       |                                |  |  |         |  
|Net income                             |  |                              | 120.4   |   |                    |  |      |                                |  |  | 120.4   |  
|                                       |  |                              |         |   |                    |  |       |                                |  |  |         |  
|Atributable to:                        |  |                              |         |   |                    |  |       |                                |  |  |         |  
|Owners of Embraer                      |  |                              | 111.6   |   |                    |  |      |                                |  |  | 111.6   |  
|Noncontrolling interest                |  |                              | 8.8     |   |                    |  |      |                                |  |  | 8.8     |  



|                                       |  |                              |         |   |                    |  |       |                                |  |  |         |  
|-------------------------------------- |  | ---------------------------- | ------- | - | ------------------ |  | ----- | ------------------------------ |  |  | ------- | -
|                                       |  | At December 31, 2012         |        
|                                       |  | Statement of Incomepublished |         |   | IFRS 11adjustments |  |       | Statement ofIncome as restated | 
|Revenue                                |  |                              | 6,177.9 |   |                    |  | (10.9 | )                              |  |  | 6,167.0 |  
|Gross Profit                           |  |                              | 1,495.0 |   |                    |  | (4.6  | )                              |  |  | 1,490.4 |  
|Operating income (expenses)            |  |                              | (882.7  | ) |                    |  | 3.0   |                                |  |  | (879.7  | )
|Equity in gain or losses of associates |  |                              | (0.2    | ) |                    |  | 1.4   |                                |  |  | 1.2     |  
|Operating income                       |  |                              | 612.1   |   |                    |  | (0.2  | )                              |  |  | 611.9   |  
|Financial results                      |  |                              | 2.0     |   |                    |  | (0.1  | )                              |  |  | 1.9     |  
|Profit before taxes on income          |  |                              | 614.1   |   |                    |  | (0.3  | )                              |  |  | 613.8   |  
|Income tax (expense) income            |  |                              | (265.5  | ) |                    |  | 0.3   |                                |  |  | (265.2  | )
|                                       |  |                              |         |   |                    |  |       |                                |  |  |         |  
|Net income                             |  |                              | 348.6   |   |                    |  |      |                                |  |  | 348.6   |  
|                                       |  |                              |         |   |                    |  |       |                                |  |  |         |  
|Atributable to:                        |  |                              |         |   |                    |  |       |                                |  |  |         |  
|Owners of Embraer                      |  |                              | 347.8   |   |                    |  |      |                                |  |  | 347.8   |  
|Noncontrolling interest                |  |                              | 0.8     |   |                    |  |      |                                |  |  | 0.8     |  



F-18



---

##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





Statements of Cash Flows:



|                                                              |  |                      |         |   |                    |  |      |                       |  |  |                      |   |  |  |         |  
|------------------------------------------------------------- |  | -------------------- | ------- | - | ------------------ |  | ---- | --------------------- |  |  | -------------------- | - |  |  | ------- | -
|                                                              |  | At December 31, 2011 |        
|                                                              |  | Cash Flowpublished   |         |   | IFRS 11adjustments |  |      | Reclassifications (i) |  |  | Cash Flow asrestated |  
|Net income                                                    |  |                      | 120.4   |   |                    |  |     |                       |  |  |                     |   |  |  | 120.4   |  
|Adjustment to net income for items not affecting cash         |  |                      | 343.5   |   |                    |  |      |                       |  |  | (29.7                | ) |  |  | 313.7   |  
|Changes in assets and liabilities:                            |  |                      | 16.3    |   |                    |  |     |                       |  |  | 29.7                 |   |  |  | 46.0    |  
|Net cash used in operating activities                         |  |                      | 480.2   |   |                    |  |     |                       |  |  |                     |   |  |  | 480.1   |  
|Net cash used in investing activities                         |  |                      | (602.0  | ) |                    |  |     |                       |  |  |                     |   |  |  | (602.0  | )
|Net cash generated by financing activities                    |  |                      | 96.4    |   |                    |  |     |                       |  |  |                     |   |  |  | 96.4    |  
|                                                              |  |                      |         |   |                    |  |      |                       |  |  |                      |   |  |  |         |  
|Increase in cash and cash equivalents                         |  |                      | (25.4   | ) |                    |  |     |                       |  |  |                     |   |  |  | (25.5   | )
|Cash and cash equivalents at the beginning of the year        |  |                      | 1,393.1 |   |                    |  |     |                       |  |  |                     |   |  |  | 1,393.1 |  
|Effects of exchange rate changes on cash and cash equivalents |  |                      | (17.6   | ) |                    |  | (2.3 | )                     |  |  |                     |   |  |  | (19.8   | )
|                                                              |  |                      |         |   |                    |  |      |                       |  |  |                      |   |  |  |         |  
|Cash and cash equivalents at the end of the year              |  |                      | 1,350.2 |   |                    |  | (2.3 | )                     |  |  |                     |   |  |  | 1,347.8 |  
|                                                              |  |                      |         |   |                    |  |      |                       |  |  |                      |   |  |  |         |  



|                                                              |  |                      |         |   |                    |  |      |                       |  |  |                      |   |  |  |         |  
|------------------------------------------------------------- |  | -------------------- | ------- | - | ------------------ |  | ---- | --------------------- |  |  | -------------------- | - |  |  | ------- | -
|                                                              |  | At December 31, 2012 |        
|                                                              |  | Cash Flowpublished   |         |   | IFRS 11adjustments |  |      | Reclassifications (i) |  |  | Cash Flow asrestated |  
|Net income                                                    |  |                      | 348.6   |   |                    |  |     |                       |  |  |                     |   |  |  | 348.6   |  
|Adjustment to net income for items not affecting cash         |  |                      | 432.0   |   |                    |  | 2.6  |                       |  |  | (31.8                | ) |  |  | 402.8   |  
|Changes in assets and liabilities:                            |  |                      | (85.6   | ) |                    |  | (4.6 | )                     |  |  | 31.8                 |   |  |  | (58.4   | )
|Net cash used in operating activities                         |  |                      | 695.0   |   |                    |  | (2.0 | )                     |  |  |                     |   |  |  | 693.0   |  
|Net cash used in investing activities                         |  |                      | (600.0  | ) |                    |  | 0.1  |                       |  |  | (17.4                | ) |  |  | (617.3  | )
|Net cash generated by financing activities                    |  |                      | 405.0   |   |                    |  |      |                       |  |  | 17.4                 |   |  |  | 422.3   |  
|                                                              |  |                      |         |   |                    |  |      |                       |  |  |                      |   |  |  |         |  
|Increase in cash and cash equivalents                         |  |                      | 500.0   |   |                    |  | (1.9 | )                     |  |  |                     |   |  |  | 498.0   |  
|Cash and cash equivalents at the beginning of the year        |  |                      | 1,350.2 |   |                    |  | (2.3 | )                     |  |  |                     |   |  |  | 1,347.8 |  
|Effects of exchange rate changes on cash and cash equivalents |  |                      | (49.0   | ) |                    |  | 0.1  |                       |  |  |                     |   |  |  | (48.8   | )
|                                                              |  |                      |         |   |                    |  |      |                       |  |  |                      |   |  |  |         |  
|Cash and cash equivalents at the beginning of the year        |  |                      | 1,801.2 |   |                    |  | (4.2 | )                     |  |  |                     |   |  |  | 1,797.0 |  
|                                                              |  |                      |         |   |                    |  |      |                       |  |  |                      |   |  |  |         |  



| | (i) | Reclassifications for comparative purposes, where US$ 31.8 in 2012 and US$ 29.7 in 2011 refer to the contribution of partners previously presented as a liability now deduced change in the amortization of intangible
assets and US$ 17.4 in 2012 related to the change in participation in subsidiaries and associates previously presented in Financing activities now presented in Investing activities.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | d) | IFRS 12 - Disclosure of Interests in Other Entities
| | -- | ---------------------------------------------------

Applicable from January 1,
2013, IFRS 12 - Disclosure of Interests in Other Entities requires an entity to disclose information that enables users of financial statements (a) to understand: the composition of the group; and (ii) the interest that
non-controlling interests have in the groups activities and cash flows; and (b) to evaluate: (i) the nature and the effect of significant restrictions on its ability to access and use assets of the group, and settle liabilities of
the group; (ii) the nature of, and changes in, the risks associated with its interests in consolidated structured entities; (iii) the consequences of changes in the parents ownership interest in a subsidiary that do not result in a
loss of control; and (iv) the consequences of losing control of a subsidiary during the reporting period.

Disclosures required by
IFRS 12 are presented in Note 14.2. of this financial information.



| | 2.2.2 | Subsidiaries
| | ----- | ------------

Subsidiaries are all entities (including SPEs) whose financial and
operating policies can be directed by the Company and in which it normally holds more than half of the voting shares. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing
whether the Company controls another entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Company.



F-19



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##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





Transactions with non-controlling interests that do not result in loss of control are
accounted for as equity transactions  that is, as transactions with the owners in their capacity as owners. The difference between fair value of any consideration paid and the relevant share acquired of the carrying value of net assets of the
subsidiary is recorded in equity. Gains or losses on disposals to non-controlling interests are also recorded in equity.



| | 2.2.3 | Acquisition of new subsidiaries
| | ----- | -------------------------------

The purchase method is used to account for acquisition
of new subsidiaries. The cost of an acquisition is measured as the fair value of the assets received, equity instruments issued and liabilities incurred or assumed at the acquisition date. The acquisition-related costs are recognized as expenses in
the period in which the costs are incurred and the services received. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date,
irrespective of the extent of any non-controlling interest. The excess of the cost of acquisition over the fair value of the Companys share of the identifiable net assets acquired is recorded as goodwill. If the cost of acquisition is less
than the fair value of the net assets of the subsidiary acquired, the difference is recognized directly in the statement of income.

If the
business combination is achieved in stages, any non-controlling equity interest previously held in the acquirees capital is remeasured to fair value at the acquisition date with gain or loss recognized in the income statement.

The accounting policies of the subsidiaries are consistent with the policies adopted by the Company.



| | 2.2.4 | Consortia
| | ----- | ---------

The activities of a Consortium and their registration in its accounting
records are governed by specific regulations. There is not a specific vehicle established of this operation, as based on its caractheristics it is considered as a joint operation. Although there are mandatory accounting controls, applicable to the
consortia, the entries are posted in the accounts of the members of consortia in accordance with the proportion of the consortia attributed to each one. Such accounts of the members, which are subsidiaries of Embraer are consolidated financial
statements of the Company.



| | 2.2.5 | Functional and presentation currency
| | ----- | ------------------------------------

After analyzing Embraers operations and
businesses, particularly in relation to the factors involved in determining its functional currency, Management concluded that the Companys functional currency is the US dollar (US$ or dollar). This conclusion was based
on an analysis of the following indicators:



| |  |  | Currency that most influences sales prices of goods and services;
| | - |  | -----------------------------------------------------------------



| |  |  | Currency of the country whose competitive forces and regulations most determine the sales price of its goods and services;
| | - |  | --------------------------------------------------------------------------------------------------------------------------



| |  |  | Currency that most influences labor, materials and other costs of providing goods or services;
| | - |  | ----------------------------------------------------------------------------------------------



| |  |  | Currency in which the funds for financial operations are largely obtained; and
| | - |  | ------------------------------------------------------------------------------



| |  |  | Currency in which revenue from operations is usually accumulated.
| | - |  | -----------------------------------------------------------------



| | 2.2.6 | Transactions in foreign currencies
| | ----- | ----------------------------------

Transactions in currencies other than the functional
currency are translated to the functional currency, using the exchange rates in effect on the date of the transactions or measurement, on which the items are re-measured. Foreign exchange gains and losses resulting from translation using the closing
rate at the end of the year, relating to monetary assets and liabilities that are due or payable in currencies other than the functional currency, are recognized in the statement of income.



| | 2.2.7 | Translation of subsidiaries financial statements
| | ----- | -------------------------------------------------

For subsidiaries whose
functional currency is a currency other than the US dollar, asset and liability accounts are translated into the Companys reporting currency using exchange rates in effect at the date



F-20



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##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





of the statement of financial position, and income and expense items are translated using period average exchange rates. The resulting translation adjustments are reported in a separate component
of shareholders equity, as cumulative translation adjustment.



| | 2.2.8 | Financial Instruments
| | ----- | ---------------------



| | a) | Financial assets
| | -- | ----------------

The Company classifies its financial assets among the following
categories: (i) measured at fair value through profit or loss, including assets held for trading (ii) available for sale, (iii) held to maturity and (iv) loans and receivables. The classification depends on the purpose for which
the financial assets were acquired. Management decides on the classification of its financial assets at initial recognition.

Regular
purchases and sales of financial assets are recognized on the trade datethe date on which the Company commits to purchase or sell the asset.

Financial assets are initially recognized at fair value plus transaction costs for all financial assets not carried at fair value through
profit or loss. Financial assets carried at fair value through profit or loss are initially recognized at fair value, and transaction costs are expensed in the statement of income.

Financial assets are derecognized when the rights to receive cash flows from the investments have expired or have been transferred.
Derecognition occurs if the Company has transferred substantially all risks and rewards of the asset ownership.



| | b) | Classification and measurement
| | -- | ------------------------------



| | b.1) | Financial assets measured at fair value through profit or loss
| | ---- | --------------------------------------------------------------

Financial assets
measured at fair value through profit or loss are those held for active and frequent trading. The assets in this category are classified as current assets. Gains and losses resulting from differences in the fair value of financial assets measured at
fair value through profit or loss are presented in the statement of income in financial income in the period in which they occur.

The fair
values of publicly quoted investments are based on the current purchase and sale prices. In the case of financial assets without an active market or not publicly quoted, the Company uses valuation techniques to calculate the fair value. These
methods include comparison with recent transactions with third parties, reference to other substantially similar instruments, analysis of discounted cash flows and options pricing models that prioritize market information and minimize information
generated by Management.



| | b.2) | Financial assets available for sale
| | ---- | -----------------------------------

Financial assets available for sale are
non-derivative instruments classified in this category or that are not classified in any other category. They are included in non-current assets, unless Management intends to dispose of the investment within 12 months after the statement of
financial position date. Financial assets available for sale are recorded at fair value. The interest on securities available for sale, calculated by the effective interest rate method, is recorded in the statement of income as financial income
(expense). The portion corresponding to the change in fair value is posted directly to shareholders equity, in other comprehensive income, and realized through profit or loss on settlement when the loss is considered permanent (impairment).



| | b.3) | Investments held to maturity
| | ---- | ----------------------------

The investments in non-derivative instruments that the
Company has the ability and intention to hold until maturity are classified as investments held to maturity and are measured initially recorded at fair value, including cost of the transaction and subsequently at amortized cost.

The Company evaluates whether there is objective evidence that a financial asset or a group of financial assets is registered above its
recovery value. When applicable, a provision for devaluation is recognized.



F-21



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##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





| | b.4) | Loans and receivables
| | ---- | ---------------------

This category includes loans granted and receivables that are
non-derivative financial assets with fixed or determinable payments, not quoted in an active market. They are classified as current assets, except for those with maturities greater than 12 months after the end of the reporting period. These are
classified as non-current assets.

The Companys loans and receivables comprise loans to associates, trade accounts receivable,
customer financing and other accounts receivable.

The Company assesses at the end of each reporting period whether there is objective
evidence that a financial asset or group of financial assets is impaired. When applicable, a loss allowance is recorded.



| | 2.2.9 | Cash and cash equivalents
| | ----- | -------------------------

Cash and cash equivalents includes cash on hand, cash in
transit (amounts paid by our customers or debtors but at the reporting date was in the release process by intervening bank), bank deposits and highly liquid short-term investments, usually maturing within 90 days of the investment date, readily
convertible into a known amount of cash and subject to an insignificant risk of change in value. This classification includes repurchase agreements and Bank Deposit Certificates - CDBs with a daily liquidity index in the Clearing House for the
Custody and Financial Settlement of Securities - CETIP.

Amounts related to cash and cash equivalents, which, however, are not available
for use by the Company, are presented within other assets in the consolidated financial statements.



| | 2.2.10 | Financial Investments
| | ------ | ---------------------

Financial investments are those assets acquired by the Company,
principally for the purpose of selling in the short-term. Usually, this classification includes securities with original maturities over 90 days from the date of acquisition.



| | 2.2.11 | Trade accounts receivable
| | ------ | -------------------------

Trade accounts receivable are recognized initially at present
value and include revenues recorded using the percentage-of-completion of the project based on the methods of incurred costs or physical advancement, net of the respective customer advances. They are subsequently recorded at amortized cost using the
effective interest rate method, less allowance for doubtful accounts.

An allowance for doubtful accounts of trade receivable is recorded
when there is objective evidence that the Company will not be able to recover all the amounts owed by its customers. Significant financial difficulties of the debtor, probability of the debtor filing for bankruptcy or reorganization proceedings and
failure to pay or default are considered indicators that the trade receivables are impaired. The amount of the provision is the difference between the book value and the recoverable value. The book value of the asset is reduced by the amount of the
provision, and the amount of the loss is recorded in the statement of income as selling expenses. When a trade receivable is deemed totally unrecoverable, it is written off against a provision for trade receivables. Subsequent recovery of amounts
previously written off is registered in the statement of income, as selling expenses.

The present value calculation, where applicable, is
made on the date of the transaction based on an interest rate that reflects the timing and market conditions at the time.



| | 2.2.12 | Derivative financial instruments and hedge operations
| | ------ | -----------------------------------------------------

The Company uses derivative
instruments to protect its operations against the risk of fluctuations in foreign exchange and interest rates; they are not used for speculative purposes.



F-22



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##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





Gains and losses on derivative transactions are recorded monthly in profit or loss, taking
into account the realizable value of these instruments (market value). The provision for unearned gains and losses is recognized in the statement of financial position under derivative financial instruments, and the counterpart in profit and loss
under financial income (expense) net, (Note 35), except for operations to hedge exposures to changes in exchange rate or designated as hedge accounting.

Embedded derivatives are separated from their host contracts and are measured at their fair values as long as they meet the derivative
definition.



| | 2.2.13 | Hedge accounting
| | ------ | ----------------

Derivative transactions contracted to protect the company against
risks, accounted for differently, that seek to eliminate the effects of the volatility caused by such risks.

At the time of initial
designation of the hedge, the Company formally documents the relationship between hedging instruments and items that are hedged, including the risk management objectives and the strategy for conducting the transaction, together with the methods used
to evaluate the effectiveness of the relationship. The Company continually assesses the contract to conclude whether the instrument is highly effective in offsetting changes in fair value of the hedged items during the period for which
the hedge is designated, and whether the actual results of each hedge are within the range of effectiveness of 80% to 125%.

The Company
has derivative financial instruments designated as fair value hedge and cash flow hedges, as follows:



| | a) | Fair value hedges
| | -- | -----------------

Changes in the fair value of derivatives that are designated as
hedges are recorded in the statement of income, together with any changes in the fair value of the hedged asset or liability attributable to the hedged risk. The Company only uses fair value hedge accounting to hedge fixed interest risk on
borrowings.

If the hedge no longer meets the hedge accounting criteria, the fair value of the instrument continues to be recognized in the
statement of income and the fair value of the hedged item is treated as if it were not hedged and amortized to profit or loss over the period to maturity.



| | b) | Cash flow hedges
| | -- | ----------------

The Company uses hedge accounting for cash flow hedges in order to
protect itself from cash flow variations attributed to exchange rate variation risk related to a transaction that will likely affect the Companys results.

The effective portion of changes in the fair value of derivatives that are designated as cash flow hedges is recognized in shareholders
equity under other comprehensive income. The gain or loss related to the ineffective portion is recognized in profit or loss as financial income (expense).

Amounts accumulated in equity are reclassified to the statement of income in the periods when the hedged item affects profit or loss. However,
when the forecasted transaction that is hedged results in the recognition of a non-financial asset, the gains and losses previously deferred in equity are transferred from equity and included in the initial measurement of the cost of the asset.

When a cash flow hedge instrument is settled, or no longer meets the criteria for hedge accounting, any cumulative gain or loss in equity at
that time is realized against profit or loss. When the hedged transaction is no longer expected to occur, the gain or loss in equity is immediately transferred to profit or loss for the year under financial income (expense).



| | 2.2.14 | Customer and commercial financing
| | ------ | ---------------------------------

These relate to financing granted on the sale of
certain aircraft and are measured at the amortized cost, by the effective interest rate method.



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##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





The Company assesses at the end of each reporting period whether there is objective evidence
that the assets are recorded at an amount higher than their recoverable value (impairment). When applicable, a provision is recorded to reduce the value of this asset.



| | 2.2.15 | Collateralized accounts receivable and recourse and non-recourse debt
| | ------ | ---------------------------------------------------------------------

Certain Company
sales are made under structured financing arrangements whereby an SPE purchases the aircraft, pays the Company the purchase price on delivery or at the end of the structured sales financing period, and transfers the purchased aircraft to the final
customer. A financial institution finances the purchase of the aircraft by an SPE. In such cases, the Company offers financial guarantees and/or residual value guarantees in favor of the institution and continues to have obligations to be fulfilled
until the end of the transaction. In accordance with these characteristics, the Company recognizes the assets and liabilities related to the SPEs on its consolidated financial stetaments, which are written down as the financing is paid off and the
financial guarantee eliminated.

The assets are classified in the financial statements under collateralized accounts receivable and the
obligations assumed are classified under recourse and non-recourse debt.

The amount is classified as recourse when the Company bears the
risk and as non-recourse in relation to the part of the transaction not tied to any obligations on the part of the Company.



| | 2.2.16 | Inventories
| | ------ | -----------

Inventories, including spare parts and aircrafts, are valued and stated at
acquisition or production cost. In all cases the net realizable value is calculated considering the lower of cost or market value. Except for used aircraft, the cost of sales is calculated using the weighted average cost.

Inventories of work in process and finished goods comprise raw materials, direct labor, and general production costs and, when applicable, are
reduced to net realizable value after deduction for costs, taxes and selling expenses.

Inventories of the Company, in almost their
entirety are presented in current assets, except in cases where it is expected to be consumed in the production in a period exceeding twelve months.

The Company records a valuation allowance when items are determined to be obsolete or are held in quantities that are in excess of projected
usage based on Managements estimate of net realizable values. Allowances are utilized if inventories are sold or written-off. Inventories in transit are stated at accumulated cost of each item.



| | 2.2.17 | Income tax and social contribution
| | ------ | ----------------------------------

Tax expense for the period comprises current and
deferred income tax. Tax is recorded in the statements of income, except to the extent that it relates to items recognized in other comprehensive income or directly in shareholders equity in which case the tax is also recognized in
shareholders equity.

The current income tax charge is calculated at the nominal rate applicable in each country, which is
approximately 34% in the case of the Brazilian operations and is composed of income tax of 25% and social contribution on net income of 9%.

Deferred income tax is recognized on temporary differences arising between the tax bases of assets and liabilities and their accounting values
in the consolidated financial statements.

Deferred tax assets are recorded on income tax and social contribution losses, and on temporary
differences between the book and tax bases of assets and liabilities, when it is probable that future taxable income will be sufficient to recover these tax credits. This assessment is based on projections of future results of operations prepared
and supported by internal assumptions and on future economic scenarios and are, accordingly, subject to change.



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##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





There is no expiration date for tax loss carryforwards from the Brazilian operations; however
offset is limited to 30% annual taxable income.

Transitional tax regime (Regime Tributário de
Transição RTT)

In line with the Transitional Tax Regime (RTT) from 2009, since the
application of international accounting standards on its 2008 financial statements, the Company has been calculating its income tax and social contribution on net income based on the accounting practices until December 31, 2007.

The RTT will be in force until a law regulating the tax effects arising from the adoption of the new Brazilian accounting principles come into
effect.

On November 11, 2013, the Brazilian Internal Revenue, issued the Provisional Measure no 627, by changing federal tax
laws relating to Tax Corporate Income , Social Contribution on Net Income, the Contribution to PIS/PASEP, Contribution to Social Security Financing  COFINS and revoked the Transitional Tax Regime  RTT, introduced by Law 1941 of
May 27, 2009. This Provisional Measure provides for the taxation of the legal entity located in Brazil and among others, recognizes the effects of the application of international standards giving the respective treatment in the calculation of
Income Tax and Social Contribution on Net Income.

Valid from January 2015, the Provisional Measure permits early adoption as of January
2014. Management is assessing early adoption of Provisional Measure and does not expect it will have significant effects on its financial statements.



| | 2.2.18 | Investments
| | ------ | -----------

Investments in associates are recorded and valued in the consolidated
financial statements using the equity method of accounting. The Companys participation in the results of associates is recorded in the income statement of the period as operating income (expense). In the case of exchange variations on foreign
investments in a different functional currency used by the Company, variations in the value of the investment caused solely by exchange variations are recorded in cumulative translation adjustments, in shareholders equity and only transferred
to income of the period at the time the investment is sold or written off as a loss.

For purposes of calculating the equity adjustment,
unrealized transactions between the Company and its investees are fully eliminated, as is also done for transactions between the subsidiaries. Unrealized losses are not eliminated since they are an indication of asset impairment.

When necessary, the accounting practices of the investees are adjusted to bring them in line with the Companys practices.

Investments in associated entities in which the Company has significant influence are presented within the Consolidated Investments in
affiliates in noncurrent assets (Note 14) and measured by the equity method.

Investments in jointly controlled entities are accounted for
under the equity method.



| | 2.2.19 | Property, plant and equipment
| | ------ | -----------------------------

Property, plant and equipment are recorded at purchase,
formation or construction cost, less accumulated depreciation and impairment losses.

Depreciation is calculated on the straight-line
method (except spare parts held in the Exchange Pool Program) based on their estimated useful lives. (Note 16) This considers the time over which the asset will provide a financial return for the Company, and is reviewed annually. Land is not
depreciated.



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##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





The Company estimates the residual value for certain aircraft and spare parts included in the
Exchange Pool Program. Other items of property, plant and equipment do not have residual value attributed by the Company since, due to the characteristics and use of these assets, it is unusual to dispose of large quantities of these assets and,
when this occurs, they are realized at insignificant values.

Subsequent costs are included in the book value of the asset or recorded as a
separate asset, as appropriate, only when it is likely that the item will yield future economic benefits and the cost of the item can be reliably measured. The book value of replacement items or parts is written off. All other repairs and
maintenance costs incurred are recorded in the statement of income.

Materials allocated to specific projects are capitalized in property,
plant and equipment in progress and subsequently transferred to the final property, plant and equipment accounts.

The gains and losses on
disposals are determined by comparing the amount received with the book value and are reported under other operating income (expenses), net in the statement of income.

The items comprising property, plant and equipment are summarized below:



| | a) | Land - mainly comprises areas on which the industrial, engineering and administrative buildings are located.
| | -- | ------------------------------------------------------------------------------------------------------------



| | b) | Buildings and land improvements -mainly plants, engineering departments and offices, and land improvements include parking lots, road systems and water and sewage networks.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | c) | Facilities -comprise auxiliary industrial facilities that directly or indirectly support the Companys industrial operations, as well as facilities of the engineering and administrative departments.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | d) | Machinery and equipment - machinery and other equipment directly or indirectly used in the manufacturing process.
| | -- | -----------------------------------------------------------------------------------------------------------------



| | e) | Furniture and fixtures - furniture and fixtures used in the production, engineering and administrative departments.
| | -- | -------------------------------------------------------------------------------------------------------------------



| | f) | Vehicles - mainly industrial vehicles and automobiles.
| | -- | ------------------------------------------------------



| | g) | Aircraft -mainly aircraft leased to airlines, and those used by the parent company to assist in testing new projects.
| | -- | ---------------------------------------------------------------------------------------------------------------------



| | h) | Computers and peripherals - technology equipment used mainly in the production process, engineering and administration.
| | -- | -----------------------------------------------------------------------------------------------------------------------



| | i) | Tooling - tools used in the production process of the Company.
| | -- | --------------------------------------------------------------



| | j) | Property, plant and equipment in progress- construction works to expand the manufacturing plants and aircraft maintenance centers.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------



| | k) | Spare parts pool -a spare parts pool for the exclusive use of customers who are included in the Exchange Pool Program and aircraft still under warranty. These spare parts are used for customer service, whereby
these customers are allowed to exchange a damaged component for one in working condition, as defined in the contract. These items are depreciated based on estimated useful lives of seven to ten years and an average residual value of 35%, which the
Company believes to be the approximate utilization time and realizable amount, respectively.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





| | 2.2.20 | Intangible assets
| | ------ | -----------------



| | a) | Research and development
| | -- | ------------------------

Research costs are recorded as an expense when they are
incurred. Costs of product development, including drawings, engineering designs and construction of prototypes, are recorded as intangible assets when it is probable that the projects will generate future benefits, taking into account their
commercial and technological feasibility, availability of technological and financial resources and only if the cost can be reliably measured. Development costs that do not meet these criteria are recorded in the statements of income as research
expenses, as they occur.

Capitalized development costs begin to be amortized from the moment that benefits begin to accrue (units
produced), based on the number of estimated aircraft sales for each project, and the amortized amounts are appropriated to production cost.

These estimates are reviewed on an annual basis or as required. In the case of inactive projects or those that are unlikely to be completed,
the deferred costs are written off or reduced to the recoverable amount.

Development costs previously recorded as an expense are not
subsequently capitalized as an asset.

The Company has agreements with certain key suppliers, here called partners. To ensure their
participation in research and development the Company receives cash contributions. The Company records these contributions when received as non-current liabilities. If the contractual milestones are not achieved the amounts are refunded to the
suppliers. As the milestones are completed these contributions are recorded as a reduction of development expenditures capitalized in intangible assets.



| | b) | Computer software
| | -- | -----------------

Software licenses are capitalized and amortized over their estimated
useful lives.

Costs associated with development or maintaining computer software programs are recognized as an expense as incurred.
Development costs that are directly attributable to identifiable and unique software, controlled by the Company and that are expected to generate benefits greater than costs for more than one year, are recorded in intangible assets and amortized
according to the number of aircraft.



| | c) | Intangible assets acquired in business combinations
| | -- | ---------------------------------------------------

Identified intangible assets
acquired under business combinations are recognized at fair value at the acquisition date.



| | c.1) | Goodwill -recorded in the consolidated financial statements as an intangible asset and is not subject to amortization, once that is achievable at the write-off of the investment, and its recoverability is tested
at least annually. If it is identified that goodwill will not be recovered in its entirety, an impairment charge is recorded in the statement of income. Recognized impairment losses on goodwill are not reversed.
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | c.2) | Trademarks -acquired in business combinations and are recognized at fair value at acquisition date. Trademarks have defined useful lives and are amortized on the straight-line method over their estimated useful
life.
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | c.3) | Product development -from business combinations when these represent significant value to the Company. Product development assets have a defined useful life and are amortized according to the estimated useful
life of the product.
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





| | c.4) | Non-compete agreements from business combinations as agreed with the sellers for a contractual period. These contracts are recorded at fair value at the acquisition date as an intangible asset and
amortized over the term of the contract.
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | c.5) | Firm orders - acquired in business combinations and represent orders or production orders awaiting execution, are recorded at fair value and amortized over the period of delivery specified in the contracts.
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 2.2.21 | Impairment
| | ------ | ----------

Property, plant and equipment and intangible assets, are reviewed for
impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

In such cases, the
recoverable value is determined. An impairment loss is recognized for the amount by which the assets carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an assets fair value less costs to sell and
value in use. For assessment purposes, assets are grouped in cash-generating units (CGUs) based on the similarity of the products and services produced and provided by the Company and the way in which it monitors and manages the cash flows
generated. The CGUs are determined on a corporate basis, irrespective of where the assets, goods and services are used, produced or provided.

Intangible assets under development and new business acquisitions are tested for impairment regardless of whether or not there is evidence of
impairment losses.

The recoverable amount of a CGU is determined based on its value in use calculations. These calculations use cash flow
projections, before income tax and social contribution, based on financial budgets approved by management for the corresponding expected lifecycle of each CGU, due to the characteristics of the Companys business and the investment period made
in fixed assets and intangible assets are high and the returns, from medium to long-term and the redirection of assets for new business is common.

Main assumptions used in value in use calculations:

In general, all the consideration set forth below, as well as the future cash flows of each CGU has its origin in the Strategic Plan of the
company defined and approved in the last quarter of each year.

a) Gross margin - the Administration projected inflows and outflows
based on past performance considering its expectations for the market development. These projections also consider the efficiencies planned for the product cycle;

b) Growth rates - the rates of growth were reflected in the flow of budgeted revenues by the Company, consistent with the forecasts
included in industry reports;

c) Discount Rates - a discount rate that reflects the expected return of investors at the time the
calculation is being made is utilized.

In the case there is an adjustment on account of non-recovery of assets allocated to a CGU, its
value is prorated depending on the net assets of the Group and recognized in all subsidiaries that operate for that CGU within other operating expenses.



| | 2.2.22 | Other current and non-current assets
| | ------ | ------------------------------------

Other current and non-current assets are stated at
cost or realizable value including, when applicable accrued income.



| | 2.2.23 | Loans and financing
| | ------ | -------------------

Loans and financing are recognized initially at fair value. Loans
and financing are subsequently carried at amortized cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognized in the statement of income over the period of the contract using the effective interest
method.



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##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





Fees paid on the establishment of loan facilities are recognized as transaction costs of the
loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the drawdown occurs. To the extent there is no evidence that it is probable that some or all of the facility will be
drawn down, the transaction costs are capitalized as a pre-payment for credit line availability services and amortized over the period of the facility to which it relates.

Loans and financing are registered as current liabilities, unless the Company has an unconditional right to defer the settlement of the
liability until at least 12 months after the date of the statement of financial position.



| | 2.2.24 | Leases
| | ------ | ------

The classification of a lease depends on whether an agreement is or contains a
lease, is based on the essence of the agreement and includes a determination as to whether (i) the fulfillment of the agreement depends on the use of one or more specific assets and (ii) the agreement assigns the right to use the asset.



| | a) | Aircraft leases
| | -- | ---------------

Aircraft leases classified as operating leases are recorded on the
statement of financial position as property, plant and equipment, and depreciated over their estimated useful lives. The rental income (net of any subsidy granted to the lessee) is recorded by the straight-line method over the lease period. Aircraft
leases classified as finance leases are derecognized as assets once the lease commences; the income and respective cost of sales are recorded at inception.



| | b) | Other leases
| | -- | ------------

Other leases in which the Company holds substantially all the risks and
benefits of ownership are classified as finance leases. Finance leases are recorded as a financed purchase, initially by recording a property, plant and equipment asset and a financial liability (lease). Property, plant and equipment assets
purchased as finance leases are depreciated at the rates in Note 16.

Other leases in which a significant part of the risks and benefits of
ownership are assumed by the lessor are classified as operating leases. Payments made for operating leases are amortized to the statement of income on the straight-line method over the contract period.



| | 2.2.25 | Borrowing costs
| | ------ | ---------------

Borrowing costs attributable to the acquisition, construction or
production of qualifying assets that will not be ready for use or sale for a considerable time are capitalized as part of the cost of the asset. Other borrowing costs are recognized as an expense in the period in which they are incurred. Borrowing
costs include interest and other fund raising costs incurred by the Company in connection with the loan resources.



| | 2.2.26 | Advances from customers
| | ------ | -----------------------

These refer basically to advances, mostly denominated in
dollars, received from customers prior to the delivery of the aircraft.



| | 2.2.27 | Financial guarantees and residual value guarantees
| | ------ | --------------------------------------------------

In certain cases, after a market
analysis, the Company grants financial or residual value guarantees (RVG) as part of the aircraft financing structure. The guaranteed residual value is based on the expected future fair value of the aircraft at the end of the funding.
Financial guarantees are granted to the lender over the term of such financing agent and are subject to a guaranteed maximum limit on the situation of non-payment of installments of funding by clients and / or operators.



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##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





Financial guarantees are calculated at the time of delivery of the aircraft and recognized as
a reduction in sales revenue against unearned income. The income is realized on a straight-line basis as sales revenue over the aircraft financing period and all the unearned income is recognized by the end of that period.

To cover the risk of losses on such guarantees, the Company may record an additional provision in the event of significant circumstances such
as a customer filing for Chapter 11, based on the estimated losses resulting from the exposure (Note 25).

In some cases, the Company holds
guarantees in the form of deposits in favor of third parties to whom financial and RVGs have been provided as part of aircraft financing structures (Note 11).



| | 2.2.28 | Dividends and interest on own capital
| | ------ | -------------------------------------

Under the bylaws, shareholders are entitled to
dividends or interest on own capital equivalent to 25% of net income for the year, adjusted in accordance with the bylaws. The calculation takes into account the interest on own capital net of withholding tax.

Proposed distributions of dividends to shareholders are recorded as a liability in the financial statements at the end of the year, pursuant to
the bylaws. Any amount over and above the minimum mandatory dividend is recognized in a specific account as additional dividends proposed in the revenue reserve in shareholders equity, pursuant to article 196 of Law 6404/76 until it is
approved by the shareholders, at which point the reserve is reversed against a liability in the consolidated financial statements.

Interest on own capital paid or provisioned is recorded as a financial expense for tax purposes. However, for purposes of these consolidated
financial statements, the amount is disclosed as distribution of net income for the year, and the gross amount is reclassified to shareholders equity, as the tax benefits arising from the distribution are included in the net income for the
year.



| | 2.2.29 | Unearned income
| | ------ | ---------------

This refers to commitments to supply spare parts, training, technical
representatives and other commitments established in sales contracts for aircraft already delivered, the income from which will be amortized when the service or product is delivered to the customer.

This also refers to deferred revenues of defense contracts for which the milestone of the contract has not been completed. Revenue is
recognized when the step is completed and the respective costs are recorded.

This account also includes the unearned income on the sale of
certain aircraft that, because of contractual obligations, are accounted for as operating leases.



| | 2.2.30 | Provisions, contingent assets and liabilities, legal obligations and judicial deposits
| | ------ | --------------------------------------------------------------------------------------

Provisions  provisions are recognized based on the judgment of the Companys Management and its legal counsel, the nature of the
lawsuits, legal precedent, complexity and court interpretations, whenever the loss is considered probable, when such loss would result in a probable outflow of resources to settle the obligations and when the amounts involved can be measured with a
reasonable degree of certainty. The amounts provided represent the Companys best estimate of the anticipated outflow of resources.

Contingent assets  are not recognized except when the Company concludes that the gain is virtually certain or has the right to real
guarantees or has received a favorable legal decision which cannot be appealed.

Contingent liabilities - classified as possible losses are
not recorded in the accounts, but merely disclosed in the financial statements. Where the probability of loss is classified as remote, neither provision nor disclosure is required, unless the Company considers disclosure relevant.



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##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





Legal obligations - result from tax liabilities which are being challenged as to their
legality or constitutionality. The related amounts are fully provided for.

Court-mandated escrow deposits - are recorded as other assets.



| | 2.2.31 | Employee benefits
| | ------ | -----------------



| | a) | Defined contribution
| | -- | --------------------

The Company provides defined contribution pension plans for its
employees. Since 2010, for the companies incorporated in Brazil, the plan has been managed by EMBRAER PREV - Sociedade de Previdência Complementar.



| | b) | Post-retirement healthcare benefits
| | -- | -----------------------------------

The Company and some of its subsidiaries provide
healthcare benefits to retirees.

The planned costs of offering post-retirement healthcare benefits and coverage for dependents are
recorded as a provision during the period of employment services based on actuarial studies conducted to identify future risk exposure whose premises are:



| |  |  | Discount rate - brings future benefit flows to present value and it is defined based on the ratio of Brazilian government securities;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Growth rate of medical costs - represents the increase in the value of medical care and is not applied linearly, as the companies historically tend to perform actions aimed at reducing the cost, or even change
the health plan provider;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Rate of morbidity (aging factor) - measures the increased use of health plans in light of the aging population;
| | - |  | ---------------------------------------------------------------------------------------------------------------



| |  |  | Mortality rate - uses the RP-2000 generational table provided by Society of Actuaries (SOA), which shows the rate of mortality by age and sex;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Probability of Retirement - estimate the probability of retirement by age group;
| | - |  | --------------------------------------------------------------------------------



| |  |  | Churn rate - uses the T-3 Table Service available at Society of Actuaries (SOA), which shows the average rate of termination of employees by age.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------

The Company recognizes changes in the provision of that plan through other comprehensive income in equity, net of taxes, to the extent that
there are changes in the plan and against profit or loss if a fluctuation in the costs of the current benefit plan occurs.

The cost of the
post-employment medical benefit plan is determined using the unit credit method and several actuarial assumptions, the most significant being: the discount rate and the trend growth rate of medical costs. This provision is reviewed annually at the
reporting date.



| | 2.2.32 | Product warranties
| | ------ | ------------------

Warranty expenses relating to aircraft and spare parts are
recognized at the moment of their delivery, based on the estimated amounts to be incurred. These estimates are based on historical factors that include warranty claims and the corresponding repair and replacement costs, the warranty given by the
suppliers and the contractual coverage period. The warranty coverage period is usually between three and five years.

In some cases, the
Company might be required by the aviation certification authorities to modify the product after delivery, due to upgrades or performance improvements. A provision is recorded for the estimated costs of these modifications when the new requirements
or improvements are demanded and known.



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##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





Certain sales contracts may contain clauses guaranteeing minimum aircraft performance levels
subsequent to delivery, based on predetermined operating targets. If the aircraft which is subject to such guarantees does not achieve the minimum performance indices after delivery, the Company may be obliged to reimburse its customers for the
increase in operating costs and services incurred, based on the criteria defined in the agreements. Losses relating to such performance guarantees are recognized when known or when, in Managements opinion, circumstances indicate that the
aircraft is unlikely to meet the minimum expected performance requirement.



| | 2.2.33 | Other current and non-current liabilities
| | ------ | -----------------------------------------

These are stated at known or estimated
amounts including, when applicable, accrued charges and foreign exchange gains/losses.



| | 2.2.34 | Share-based payment
| | ------ | -------------------

The Company operates an equity-settled, share-based compensation
plan for directors and employees. The objective is to retain and attract qualified personnel who effectively contribute to the Companys performance. The Company in return compensates its directors and employees through equity instruments
(options). The fair value of the employee services received in exchange for the grant of the options is recognized as an expense. The total amount to be expensed is determined by reference to the fair value of the options granted.

The total expense is recognized over the vesting period, which is the period over which all of the specified vesting conditions are to be
satisfied. Periodically, the Company revises its estimates of the number of options that are expected to vest. It recognizes the impact of revisions to original estimates prospectively.



| | 2.2.35 | Government grants
| | ------ | -----------------

Under Company policy, benefits received in the form of subsidies are
recognized against the expenses for which the resources were used.

Government research and development grants are recognized to the extent
that the resources are invested and the contractual milestones are met, as a reduction of research expenses.

Subsidies for acquisition of
fixed assets are recognized as a reduction of the acquisition cost to the extent that the contractual milestones are met and are recorded in the statement of income by calculating the depreciation, reducing the related expense.

Subsidies are recorded as reserve of subsidies for investment, in shareholders equity, pursuant to Brazilian legislation,
preventing them from being distributed to shareholders.



| | 2.2.36 | Earnings per share
| | ------ | ------------------

The Company presents its basic earnings per share and diluted
earnings per share in its consolidated financial statements. Basic earnings per common share is computed by dividing net income attributable to owners of Embraer available to common shareholders by the weighted average number of common shares
outstanding during the period.

Diluted earnings per share is computed similarly to basic earnings per share except that the weighted
average outstanding shares are increased to include the number of additional shares that would have been outstanding had the potentially dilutive shares attributable to stock options been issued during the respective periods, utilizing the treasury
stock method.



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##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





| | 2.2.37 | Revenue recognition
| | ------ | -------------------

Revenue comprises the fair value of the remuneration received or to
be received for the sale of products and services in the normal course of business. Revenue is presented net of taxes, returns, reductions and discounts, and in the consolidated financial statements, after eliminating intercompany sales.



| | a) | Revenue from aircrafts, spare parts and services
| | -- | ------------------------------------------------

Revenue from sales of commercial,
executive and other aircraft, spare parts and services are generally recognized at the time of delivery or shipment, when the risks and benefits are transferred to the customer and when all the conditions for recognition are met.

When the sale of aircraft does not meet the contractual obligations at the time of the delivery, related revenue is deferred and accounted for
as unearned income until the obligations are met.



| | b) | Revenue with multiple elements
| | -- | ------------------------------

Revenue from aircraft sales contracts involving the
supply of spare parts, training and technical representation. These revenues are recognized when the product or service is provided to the customer.



| | c) | Revenue from Exchange Pool Program
| | -- | ----------------------------------

Revenue from the Exchange Pool Program is recognized
during the period of the contract and consists of a fixed charge and a variable charge directly related to the hours effectively flown by the aircraft under the program.



| | d) | Revenue from construction contracts
| | -- | -----------------------------------

In the Defense & Security segment, some
operations consist of long-term contracts, and revenues are recognized by the Percentage-of-completion (POC) method, through incurred costs or physical advancement and also through recognition upon delivery or shipment. Some contracts contain
provisions for price adjustment based on pre-established index and these are recognized on an accrual basis. The adjustments of revenue recognition relating to sales of the Defense & Security segment contracts is performed based on
Managements best estimates as they become evident.



| | e) | Revenue from operating leases
| | -- | -----------------------------

The Company also recognizes the revenue from aircraft
rental as operating leases, proportional to the lease period, and records such revenues as income by segment. Revenue is allocated to its respective segments (Commercial Aviation, Executive Jets and Defense and Security).



| | 2.2.38 | Cost of sales and services
| | ------ | --------------------------

Cost of sales and services consists of the cost of the
aircraft, spare parts and services rendered, comprising:



| | a) | Material -substantially all material cost are covered by contracts with suppliers. Prices under these contracts are generally adjusted based on escalation formulas which reflect, in part, inflation in the United
States.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | b) | Labor  comprises salaries and related charges, primarily in Brazilian real.
| | -- | ----------------------------------------------------------------------------



| | c) | Depreciation - property, plant and equipment are depreciated over their useful lives, on a straight-line basis, from 5 to 48 years.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------



F-33



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##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





Depreciation of aircraft classified as operating leases is recorded in cost of sales and
services, from lease inception using the straight-line method over the estimated asset useful life less a residual value at the end of the lease term.



| | d) | Amortization Internally generated intangible assets are amortized in accordance with the estimated sales of the series of aircraft. Intangible assets acquired from third parties are amortized on
straight-line bases over their estimated useful lives.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | e) | Product warranties - The Company estimates and records a liability for guarantee obligations related to its products on the date of delivery of the aircraft, based on historical experience and recorded as cost of
goods sold.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | f) | Multiple elements arrangements- The Company enters into transactions that represent multiple-element arrangements, such as for providing training, technical assistance, spare parts and other concessions. These
costs are recognized when the product or service is provided to the customer.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 2.2.39 | Operating expenses and other income
| | ------ | -----------------------------------

Operating expenses are principally made up of sales
and marketing, administration, research, share in profit/loss of associates and other operating income (expenses).



| | 2.2.40 | Employee profit sharing plan
| | ------ | ----------------------------

The employee profit-sharing program is linked to the
Companys net income and to performance targets. Provisions are recorded on a monthly basis for the amounts determined proportionally to the salaries payable and classified in the statement of income in accordance to each employee receiving the
benefit. The employee profit sharing plan policy is described in (Note 34).



| | 2.2.41 | Financial income and expenses and foreign exchange gains/losses
| | ------ | ---------------------------------------------------------------

Financial income and
expenses principally comprise earnings on short-term investments, financial charges on loans, interest on contested taxes and contingencies (Note 26), as well as foreign exchange gains/losses (Note 36) on assets and liabilities expressed in
currencies other than the functional currency (dollar), on an accrual basis.

It is also recorded as financial revenue (expense) the change
in fair value of the residual value guarantees and the result with the provision and implementation of derivative financial instruments.

Financial income and expenses exclude borrowing costs attributable to acquisitions, buildings or the production of qualifying assets that
require a substantial period of time to be ready for use or sale which are capitalized as part of the cost of the asset.



| | 2.2.42 | Statement of cash flows
| | ------ | -----------------------

The statement of cash flows was prepared using the indirect
method.



| | 2.2.43 | Segment reporting
| | ------ | -----------------

Operating segment information is presented in a manner consistent
with the internal reports provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources among and assessing the performance of the operating segments and for making strategic
decisions, is the chief executive officer.



F-34



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##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





|3. | Critical accounting estimates
|-- | -----------------------------

The preparation of the financial statements in conformity with generally accepted accounting principles requires management
to make estimates and adopt assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities and the fair value of financial instruments and guarantees on the statement of financial position
dates and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from such estimates.

In
order to provide an understanding about how Management forms its judgments about future events, including the variables and assumptions underlying the estimates, and the sensitivity of those judgments to different variables and conditions, the
estimates and assumptions that may cause a risk of material adjustment to the carrying amounts of assets and liabilities are addressed below:



| | 3.1. | Sales and other operating revenues
| | ---- | ----------------------------------

The Company recognizes revenues from sales made by
the Commercial Aviation, Executive Jets, and Defense and Security businesses when benefits and risk of ownership are transferred to customers, which, in the case of aircraft, occurs when delivery is made, and, in the case of aviation services, when
the service is rendered.

The Company also recognizes rental revenue for leased aircraft, classified as operating leases on a straight-line
basis over the lease term and, when presenting information by operating segment, rental revenue is recorded in its respective operating segment.

In the Defense and Security segment, a significant portion of revenue is derived from long-term development contracts with the Brazilian and
foreign governments accounted for using the POC and the physical advancement method. These contracts contain provisions for price escalation based on a mix of indices related to raw material and labor cost. From time to time, the Company reassesses
the expected margins of certain construction contracts, adjusting revenue recognition based upon projected costs to completion. Use of the POC method requires the Company to estimate the total costs to be incurred on the contracts. Were the total
costs to be incurred to come in 10% below Managements estimates, the amount of revenue recognized in the year of 2013 would increase by US$ 195.6, and if the total costs were to come in by 10% above the estimate, the amount of revenue
recognized would decrease by US$ 210.5.

Revenue under Exchange Pool Programs is recognized monthly over the contract term and consists in
part of a fixed fee and in part a variable fee directly related to aircraft flying hours.

The Company enters into transactions that
represent multiple-element arrangements, such as training, technical assistance, spare parts and others concessions, which are included in the aircraft purchase price. Multiple-element arrangements are assessed to determine whether they can be
separated into more than one unit of accounting when all of the following criteria are met:



| |  |  | the delivered item has value to the client on a stand-alone basis; and
| | - |  | ----------------------------------------------------------------------



| |  |  | there is objective and reliable evidence of the fair value of the undelivered item.
| | - |  | -----------------------------------------------------------------------------------

If these
criteria are not met, the arrangement is accounted for as a single unit of accounting, which results in revenue being deferred until the earlier of when such criteria are met or when the last completed element is delivered. If these criteria are met
for each element and there is objective and reliable evidence of fair value for all units of accounting in an arrangement, the arrangement consideration is allocated to the separate units of accounting based on each units relative fair value.



| | 3.2. | Product warranties
| | ---- | ------------------

Generally, aircraft sales are accompanied by a standard warranty for
systems, accessories, equipment, parts and software manufactured by the Company and/or by the Companys risk-sharing partners and suppliers. The Company recognizes warranty expenses, as cost of sales and services, at the time of sale based on
the estimated warranty costs anticipated to be incurred. These estimates are based on a number of factors, including historical warranty claims and cost experience, the type and duration of the warranty coverage, volume and mix of aircraft sold and
in service and warranty coverage available from the related suppliers. Actual product warranty costs may have different patterns from past experience,



F-35



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##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





mainly when a new family of aircraft enters service, which could require the Company to increase the product warranty reserve. The warranty period is three years for spare parts and five years
for components that are a part of the aircraft when sold.



| | 3.3. | Financial guarantees
| | ---- | --------------------

The Company may offer financial guarantees related to aircraft
sold. The guarantee is granted at fair value at the time of delivery of the aircraft when it is supported by a financing agreement. The guarantee is recorded as a reduction in sales and an increase in deferred revenue. The deferred revenue is
amortized to the income statement over the period of the guarantee. The Company evaluates the creditworthiness of the obligor at aircraft delivery and discloses its maximum exposure under the guarantee as a contingent liability in Note 37 
Joint liabilities co-obligation, responsibilities and commitments. The Company monitors the obligors credit worthiness periodically and in the event of an official default (Chapter 11) or negotiation the exposure is recalculated based on the
best estimate when and if the payments become probable and can be estimated reliably, recognizing a provision according to IAS 37 - Provisions, Contingent Assets and Liabilities. If an agreement for the payment of this allowance is negotiated, the
default values are reclassified to accounts payable.



| | 3.4. | Residual value guarantees
| | ---- | -------------------------

The Company may offer residual value guarantees related to
sold aircraft. At the time of the offering the guarantees are evaluated by the fair value and are reviewed quarterly to reflect eventual loss due to the fair value of these commitments. The future fair value is estimated using aircraft assessments
of third parties, including information obtained from the selling or leasing of similar aircraft in the secondary market.



| | 3.5. | Residual interests in aircraft
| | ---- | ------------------------------

In structured financing arrangements, an entity
purchases an aircraft from the Company, pays the full purchase price on delivery or at the conclusion of the sales financing structure, and leases the related aircraft to the ultimate customer. A third-party financial institution facilitates the
financing of the aircraft and a portion of the credit risk remains with that third party.

Although it has no equity investee interests,
the Company controls the SPEs operations or takes a majority share of its risks and rewards. When the Company no longer holds control, the assets and liabilities related to the aircraft are deconsolidated from the Companys statement of
financial position.

The Company evaluates control characteristics over a SPEs principally based on a qualitative assessment. This
includes a review of the SPEs capital structure, contractual relationships and terms, nature of the SPEs operations and purpose, nature of the SPEs interests issued, and the Companys interests in the entity which either
create or absorb variability. The Company evaluates the design of a SPE and the related risks the entity and the variable interest holders are exposed to in evaluating consolidation. In a few cases, when it is unclear from a qualitative standpoint
if the Company has control over a SPE, it uses a quantitative analysis to calculate the probability-weighted expected losses and probability-weighted expected residual returns using cash flow and statistical risk measurement modeling.



| | 3.6. | Impairment
| | ---- | ----------

Non-current assets held for use are subject to impairment assessment if
facts and circumstances indicate that the carrying value is no longer recoverable based upon the higher of the discounted future cash flows of the asset or its net realizable value. The Companys cash-generating units (CGUs) have been defined
and are reviewed annually, in accordance with the aircraft families/platforms and other business conducted by the parent Company and other group companies. Similarly, the impairment test is performed at annual periods, at the end of each year,
except in the existence of any indicators of impairment that the Company may indentify through surveys answered by the managers of the respective CGU, which would oblige the Company to design a test of intermediate impairment. The impairment test
considers assumptions and estimates made by management in line with the Companys strategic plan, as well as a discount rate that reflects the expectations of shareholders.



F-36



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##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





Even if the discount rate used to discount to present value the estimated future cash flow of
all CGUs tested were 10% lower or 10% higher compared to the rate used by management, it would not result in any adjustments for non recovery of assets.



| | 3.7. | 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 that are mainly based on market conditions existing at the end of each reporting period.



| | 3.8. | Income taxes
| | ---- | ------------

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 such determination is made.

Because the majority of the Companys tax basis is in Brazilian real and its functional currency is
the dollar, the income tax expense line item is highly sensitive to the effects of changes in exchange rates particularly from changes in non-monetary assets.

Had the real devalued or appreciated by 10% against the dollar in relation to the actual exchange rate as of December 31, 2013, the
deferred income tax expense would have been higher or lower by approximately US$ 115.3.



| | 3.9. | Post-employment medical benefit plan
| | ---- | ------------------------------------

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.

Whereas these studies use actuarial assumptions such as discount rate growth rate of medical costs, morbidity rate (aging factor), mortality,
probability of retirement and churn rate, which are mostly determined based on statistical data, the definition of a reasonably possible change is very subjective. Therefore, an increase of 0.5% in the discount rate used in the actuarial calculation
of medical post-employment benefit plan granted by the Company would reduce its exposure on December 31, 2013 of US$ 7.2 and a decrease of 0.5% at the same rate would increase its exposure to US$ 8.4. For the growth rate of medical costs, an
increase of 1% in the actuarial calculation, the Companys exposure would increase by US$ 18.6 and a decrease of 1% at the same rate would decrease its exposure to US$ 32.4.

Medical plan post-employment benefit granted abroad are not relevant. Therefore sensitivity analysis is not presented.



|4. | Accounting pronouncements not yet adopted
|-- | -----------------------------------------

Standards and amendments to existing standards mentioned in this section have been published, but the implementation is not
mandatory for the year ended December 31, 2013, and the Company has not early adopted the amendments in this Financial Statement.

Follows the existing accounting pronouncements that are not yet effective and have not been adopted by the Company:



| |  |  | IFRS 9 - Financial instruments addresses the classification, measurement and recognition of financial assets and liabilities. IFRS 9
requires the classification of financial assets into two categories: at fair value and measured at amortized cost. The determination is made at initial recognition. The basis of
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-37



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##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





| | classification depends on the entitys business model and the contractual cash flow characteristics of the financial instruments. In relation to financial liabilities, the standard retains
most of the requirements established by IAS 39. The main change is that in cases where the fair value option is taken for financial liabilities, the portion of change in fair value due to credit risk of the entity itself is recorded in Other
comprehensive income and not in the income statement, unless otherwise it results in an accounting mismatch. The adoption of the first phase of IFRS 9 will cause effect on the classification and measurement of financial assets of the Company,
depending on the composition of the portfolio on the date of implementation. The Company will quantify the effect in conjunction with the other phases, when the final rule is issued, including all phases. The standard is applicable from
1 January 2015.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | IAS 32 - Financial Instruments: Presentation these reviews explain the meaning of currently has the legal right to compensation. The revisions also clarify the adoption of the offsetting criteria
in IAS 32 for settlement systems (such as systems of clearinghouses) that apply gross settlement mechanisms that are not simultaneous. These revisions will not have an impact on the financial position or performance of the Companys disclosures
are effective for annual periods beginning on or after January 1, 2014.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Amendments to IFRS 10 - Consolidated Financial Statements and SIC 12 - Consolidation - Special Purpose Entities and IAS 27 - Separate Financial Statements Investment Entities: Amendments to IFRS 10 show an
exception to the requirement to consolidate the subsidiaries of an investment entity. In terms of exception, an entity shall measure its investment interest in subsidiaries at fair value through profit or loss. The exception does not apply to
controlled entities providing investment related to the activities of the entity investment services. This review will not impact on the financial position or performance of the Company and the disclosures are effective for annual periods beginning
on or after January 1, 2014.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|5. | Cash and cash equivalents
|-- | -------------------------



|                          |  |            |         |  |            |  |         | 
|------------------------- |  | ---------- | ------- |  | ---------- |  | ------- | 
|                          |  | 12.31.2013 |         |  | 12.31.2012 | 
|                          |  |            |         |  | (Restated) | 
|Cash and banks            |  |            | 147.4   |  |            |  | 241.1   | 
|                          |  |            |         |  |            |  |         | 
|                          |  |            | 147.4   |  |            |  | 241.1   | 
|                          |  |            |         |  |            |  |         | 
|Cash equivalents          |  |            |         |  |            |  |         | 
|Repurchase agreements (i) |  |            | 85.2    |  |            |  | 67.5    | 
|Private securities (ii)   |  |            | 618.0   |  |            |  | 498.3   | 
|Fixed deposits (iii)      |  |            | 772.3   |  |            |  | 843.8   | 
|Investment funds (iv)     |  |            | 60.8    |  |            |  | 146.3   | 
|                          |  |            |         |  |            |  |         | 
|                          |  |            | 1,536.3 |  |            |  | 1,555.9 | 
|                          |  |            |         |  |            |  |         | 
|                          |  |            | 1,683.7 |  |            |  | 1,797.0 | 
|                          |  |            |         |  |            |  |         | 



| | (i) | Repurchase agreements related to the purchase of assets, mainly government securities, with the commitment to repurchase at a rate previously established by the parties, generally with a one-day term.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (ii) | Investment in Bank Deposit Certificates - CDBs, issued by Brazilian financial institutions, with original maturities of 90 days or less for which there are no penalties on remuneration.
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (iii) | Fixed term deposits with highly-rated financial institutions with original maturities of 90 days or less.
| | ----- | ---------------------------------------------------------------------------------------------------------

| | (iv) | Money Market Funds in dollars with daily liquidity and a constant net asset value in conformity with the standards of the SEC. The investment portfolio is comprised of securities issued by premium institutions abroad.
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The weighted average interest rate on December 31, 2013, for cash equivalents in reais and in dollars were 8.16% p.a.
and 1.13% p.a. (8.55% p.a. and 1.22% p.a. on December 31, 2012), respectively.



F-38



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##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





|6. | Financial investments
|-- | ---------------------



|                      |  |                                                    |       |  |                       |  |      |                   |  |  |       |  |  |                                                    |       |  |                 |  |       |                   |  |  |       |  |  |  |      |  |  |  |       | 
|--------------------- |  | -------------------------------------------------- | ----- |  | --------------------- |  | ---- | ----------------- |  |  | ----- |  |  | -------------------------------------------------- | ----- |  | --------------- |  | ----- | ----------------- |  |  | ----- |  |  |  | ---- |  |  |  | ----- | 
|                      |  | 12.31.2013                                         |       |  | 12.31.2012 (Restated) | 
|                      |  | Assets measured atfair value throughprofit or loss |       |  | Held tomaturity       |  |      | Availablefor sale |  |  | Total |  |  | Assets measured atfair value throughprofit or loss |       |  | Held tomaturity |  |       | Availablefor sale |  |  | Total | 
|Financial instruments |  |                                                    |       |  |                       |  |      |                   |  |  |       |  |  |                                                    |       |  |                 |  |       |                   |  |  |       |  |  |  |      |  |  |  |       | 
|Public securities     |  |                                                    | 140.7 |  |                       |  |     |                   |  |  |      |  |  |                                                    | 140.7 |  |                 |  | 298.8 |                   |  |  |      |  |  |  |     |  |  |  | 298.8 | 
|Private securities    |  |                                                    | 381.9 |  |                       |  |     |                   |  |  | 25.1  |  |  |                                                    | 407.0 |  |                 |  | 79.4  |                   |  |  |      |  |  |  | 22.3 |  |  |  | 101.7 | 
|Money market funds    |  |                                                    | 266.2 |  |                       |  |     |                   |  |  |      |  |  |                                                    | 266.2 |  |                 |  | 30.0  |                   |  |  |      |  |  |  |     |  |  |  | 30.0  | 
|Investment funds      |  |                                                    | 123.4 |  |                       |  |     |                   |  |  |      |  |  |                                                    | 123.4 |  |                 |  | 143.7 |                   |  |  |      |  |  |  |     |  |  |  | 143.7 | 
|Public securities(i)  |  |                                                    |      |  |                       |  | 3.4  |                   |  |  |      |  |  |                                                    | 3.4   |  |                 |  |      |                   |  |  | 7.4   |  |  |  |     |  |  |  | 7.4   | 
|Other                 |  |                                                    | 0.4   |  |                       |  | 41.6 |                   |  |  | 2.6   |  |  |                                                    | 44.6  |  |                 |  | 0.3   |                   |  |  | 40.0  |  |  |  | 7.6  |  |  |  | 47.9  | 
|                      |  |                                                    |       |  |                       |  |      |                   |  |  |       |  |  |                                                    |       |  |                 |  |       |                   |  |  |       |  |  |  |      |  |  |  |       | 
|                      |  |                                                    | 912.6 |  |                       |  | 45.0 |                   |  |  | 27.7  |  |  |                                                    | 985.3 |  |                 |  | 552.2 |                   |  |  | 47.4  |  |  |  | 29.9 |  |  |  | 629.5 | 
|                      |  |                                                    |       |  |                       |  |      |                   |  |  |       |  |  |                                                    |       |  |                 |  |       |                   |  |  |       |  |  |  |      |  |  |  |       | 
|Current portion       |  |                                                    | 912.6 |  |                       |  | 2.2  |                   |  |  | 25.1  |  |  |                                                    | 939.9 |  |                 |  | 552.2 |                   |  |  | 3.7   |  |  |  | 22.3 |  |  |  | 578.2 | 
|Non-current           |  |                                                    |      |  |                       |  | 42.8 |                   |  |  | 2.6   |  |  |                                                    | 45.4  |  |                 |  |      |                   |  |  | 43.7  |  |  |  | 7.6  |  |  |  | 51.3  | 



| | (i) | Securities classified as held to maturity are notes receivable composed of Brazilian government securities (NTNs - Notas do Tesouro Nacional), denominated in US dollars and acquired by the Company from its
customers as an adjustment of the interest rates payable by the Export Financing Program (Proex), between the 11th and 15th year after the sale of the respective aircraft, recognized at present value, since the Company intends and has the ability to
hold them in its portfolio until maturity.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

On December 31, 2013, the financial investments comprise of treasury shares
and securities of exclusive investment funds. The portfolios of the exclusive investment funds in Brazil were mainly comprised of highly liquid federal government securities and securities issued by Brazilian financial institutions, measured at
their realizable values. The funds are exclusively for the benefit of the Company and are managed by third parties who charge a monthly fee. The investments are marked to market daily and changes in fair value are reflected in the income statement,
as the Company classifies these investments as assets measured at fair value through profit or loss.

On December 31, 2013, the
financial investments abroad comprised private securities, fixed term deposits and exclusive investment funds, and consist of securities issued by international institutions and by highly-rated corporations with high liquidity, measured at their
realizable values. The investments are marked to market daily and changes in fair value are reflected in the income statement, as the Company classifies these investments as assets measured at fair value through profit or loss.

These investment funds have no significant financial obligations. The financial obligations are restricted to the asset management and custody
fees, audit fees and similar expenses, which are already accounted for based on the value of each asset in the portfolio. No Company assets were used as collateral for these obligations and the fund creditors have no right of recourse against the
general credit of the Company.



|7. | Trade accounts receivable, net
|-- | ------------------------------



|                                |  |            |       |   |            |  |       |  
|------------------------------- |  | ---------- | ----- | - | ---------- |  | ----- | -
|                                |  | 12.31.2013 |       |   | 12.31.2012 | 
|                                |  |            |       |   | (Restated) | 
|Foreign customers               |  |            | 437.2 |   |            |  | 406.1 |  
|Brazilian Air Force             |  |            | 161.8 |   |            |  | 149.2 |  
|Domestic customers              |  |            | 26.8  |   |            |  | 32.1  |  
|                                |  |            |       |   |            |  |       |  
|                                |  |            | 625.8 |   |            |  | 587.4 |  
|                                |  |            |       |   |            |  |       |  
|Allowance for doubtful accounts |  |            | (47.1 | ) |            |  | (51.9 | )
|                                |  |            |       |   |            |  |       |  
|                                |  |            | 578.7 |   |            |  | 535.5 |  
|                                |  |            |       |   |            |  |       |  
|Current portion                 |  |            | 572.2 |   |            |  | 525.6 |  
|Non-current portion             |  |            | 6.5   |   |            |  | 9.9   |  

Unbilled accounts receivables recognized under the POC method for Defense and Security segment totaled US$
208.9 at December 31, 2013 and revenues recorded in 2013 were US$ 657.9. Costs related to construction contracts using the POC method totaled US$ 540.4 in 2013.



F-39



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##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





At December 31, 2013, the accounts receivable of US$ 499.1 (US$ 452.1 at
December 31, 2012) were current and not past due.

For the period presented, there was accounts receivable overdue, but not impaired
related to independent customers with no recent history or expectation of default. The analysis of past due accounts receivable is presented below:



|                    |  |            |      |  |            |  |      | 
|------------------- |  | ---------- | ---- |  | ---------- |  | ---- | 
|                    |  | 12.31.2013 |      |  | 12.31.2012 | 
|                    |  |            |      |  | (Restated) | 
|Up to 90 days       |  |            | 56.3 |  |            |  | 57.4 | 
|From 91 to 180 days |  |            | 9.7  |  |            |  | 16.8 | 
|More than 180 days  |  |            | 13.6 |  |            |  | 9.2  | 
|                    |  |            |      |  |            |  |      | 
|                    |  |            | 79.6 |  |            |  | 83.4 | 
|                    |  |            |      |  |            |  |      | 

The net amount of accounts receivable denominated in the following currencies is:



|             |  |            |       |  |            |  |       | 
|------------ |  | ---------- | ----- |  | ---------- |  | ----- | 
|             |  | 12.31.2013 |       |  | 12.31.2012 | 
|             |  |            |       |  | (Restated) | 
|U.S. dollars |  |            | 390.3 |  |            |  | 502.3 | 
|Euros        |  |            | 144.3 |  |            |  | 1.5   | 
|Reais        |  |            | 43.1  |  |            |  | 31.7  | 
|Other        |  |            | 1.0   |  |            |  |      | 
|             |  |            |       |  |            |  |       | 
|             |  |            | 578.7 |  |            |  | 535.5 | 
|             |  |            |       |  |            |  |       | 

The changes to the allowance for doubtful accounts are summarized as follows:



|                           |  |            |      |   |            |  |      |            |  |  |      |  
|-------------------------- |  | ---------- | ---- | - | ---------- |  | ---- | ---------- |  |  | ---- | -
|                           |  | 12.31.2013 |      |   | 12.31.2012 |  |      | 12.31.2011 | 
|                           |  |            |      |   | (Restated) |  |      | (Restated) | 
|Beginning balance          |  |            | 51.9 |   |            |  | 40.3 |            |  |  | 36.9 |  
|Foreign exchange variation |  |            |     |   |            |  | 0.2  |            |  |  | (1.0 | )
|Additions                  |  |            | 1.1  |   |            |  | 15.1 |            |  |  | 5.7  |  
|Reversal                   |  |            | (3.5 | ) |            |  | (1.4 | )          |  |  | (0.9 | )
|Disposals                  |  |            | (2.4 | ) |            |  | (2.3 | )          |  |  | (0.4 | )
|                           |  |            |      |   |            |  |      |            |  |  |      |  
|Ending balance             |  |            | 47.1 |   |            |  | 51.9 |            |  |  | 40.3 |  
|                           |  |            |      |   |            |  |      |            |  |  |      |  



|8. | 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 December 31, 2013, the Company had derivative financial instruments such as
interest swaps, cash flow hedges and options.

Swaps are contracted to exchange a floating rate loan to a fixed rate loan or to exchange
cash flows in dollars to cash flows in reais, or vice versa. They are valued at the future flow 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 hedging operations are contracted to protect highly probable salary and healthcare expense flows
denominated in reais from exchange rate variations. The expense flows are expected to occur on a monthly basis beginning in January 2013 and ending in December 2014. Financial instruments normally used by the Company for this type of transaction
mode is zero-cost collar, which consists of the buying of Put Options and selling of Call Options contracted with the same counterparty and with zero net premium. The fair value of these instruments is determined by the pricing model observable
market (through information providers) and widely used by market participants to measure similar instruments. When the closing rate of dollar is between the values of exercise of Put and Call, the fair value reflects the extrinsic value of the
option, i.e., the value that is directly connected to the time remaining to maturity.



F-40



---

##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





During 2013 there was no gain or loss recognized on the maturity of derivative instruments
since during the year the exchange rate was between the Put and Call values. Thus no value was recorded in the income statement, except the extrinsic value of transactions maturing in 2014.

The option exchange operations are contracted with the purpose of protecting the flows of exchange risks. Their fair values are calculated
using observable market pricing models.

As of December 31, 2013, the Company did not have any derivative contracts subject to margin
calls.

The table below shows the breakdown of derivative financial instruments for the Company.



|                                                  |  |               |  |                              |  |                 |      |  |            |  |      |            |  |  |      |  
|------------------------------------------------- |  | ------------- |  | ---------------------------- |  | --------------- | ---- |  | ---------- |  | ---- | ---------- |  |  | ---- | -
|Purpose                                           |  | Risk          |  | Counterparty                 |  | Settlement date |      |  | 12.31.2013 |  |      | 12.31.2012 | 
|                                                  |  |               |  |                              |  |                 |      |  |            |  |      | (Restated) | 
|Recourse and non-recourse debt (i)                |  | Interest rate |  | Natixis                      |  |                 | 2022 |  |            |  | 21.4 |            |  |  | 30.7 |  
|Export financing (ii)                             |  | Interest rate |  | Bradesco                     |  |                 | 2013 |  |            |  |     |            |  |  | 0.9  |  
|                                                  |  |               |  | Goldman Sachs                |  |                 | 2013 |  |            |  |     |            |  |  | 0.9  |  
|                                                  |  |               |  | ItauBBA                      |  |                 | 2016 |  |            |  | (3.2 | )          |  |  |     |  
|                                                  |  |               |  | Votorantim                   |  |                 | 2016 |  |            |  | (2.8 | )          |  |  |     |  
|                                                  |  |               |  | Citi                         |  |                 | 2016 |  |            |  | (1.7 | )          |  |  |     |  
|                                                  |  |               |  | Santander                    |  |                 | 2016 |  |            |  | (2.3 | )          |  |  |     |  
|                                                  |  |               |  | HSBC                         |  |                 | 2016 |  |            |  | (0.7 | )          |  |  |     |  
|                                                  |  |               |  | Societe Generale             |  |                 | 2016 |  |            |  | (0.8 | )          |  |  |     |  
|                                                  |  |               |  | Bradesco                     |  |                 | 2016 |  |            |  | (0.8 | )          |  |  |     |  
|Stock options (iii)                               |  | Object price  |  | Republic AirwaysHoldings Inc |  |                 | 2015 |  |            |  | 8.8  |            |  |  | 3.4  |  
|Acquisition of property, plant and equipment (iv) |  | Interest rate |  | Compass Bank                 |  |                 | 2024 |  |            |  | (0.4 | )          |  |  | (0.7 | )
|Brazilian Real expenses (v)                       |  | Exchange rate |  | ItauBBA                      |  |                 | 2013 |  |            |  |     |            |  |  | (0.1 | )
|                                                  |  |               |  | ItauBBA                      |  |                 | 2014 |  |            |  | (0.3 | )          |  |  |     |  
|                                                  |  |               |  | Deutsche                     |  |                 | 2014 |  |            |  | (0.4 | )          |  |  |     |  
|                                                  |  |               |  | Citibank                     |  |                 | 2014 |  |            |  | (0.1 | )          |  |  |     |  
|Other assets                                      |  | Cupom USD Pre |  | JP Morgan                    |  |                 | 2012 |  |            |  |     |            |  |  |     |  
|                                                  |  |               |  |                              |  |                 |      |  |            |  |      |            |  |  |      |  
|                                                  |  |               |  |                              |  |                 |      |  |            |  | 16.7 |            |  |  | 35.1 |  
|                                                  |  |               |  |                              |  |                 |      |  |            |  |      |            |  |  |      |  



| | i. | Derivative financial instruments (swap), not qualifying for as hedge accounting and contracted by the Company and have effectively converted the amount of R$ 326.6 million (US$ 139.4) for recourse and non-recourse
debt, from a fixed interest rate of 6.20% p.a., into a floating rate equivalent to LIBOR + 1.21% p.a.;
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | ii. | Derivative financial instruments in the form of swap that converted a debt in the form of export in the amount of R$ 887.0 million equivalent to US$ 378.6, from a fixed interest rate of 5.50% p.a. to an average
rate equivalent floating to 64.53% p.a. CDI (Interbank Deposit Certificate);
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | iii. | Derivative financial instruments related to in convertible option into shares (embedded derivative), received as part of a negotiation regarding the restructuring of a subsidiary of Republic Airways Holdings Inc.;
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | iv. | Derivative financial instruments (swap), not qualifying for hedge accounting, relating to a transaction in the amount of R$ 12.3 million (US$ 5.2) which converted financing transactions subject to floating interest
rate of LIBOR 1 month + 2.44% p.a. at fixed interest rate of 5.23% p.a.; and
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | v. | Derivative financial instruments in the form zero-cost collar, designated as a cash flow hedge in the amount of R$ 1,068.2 million equivalent to US$ 534.1, made buying PUT with an exercise price of US$ 2.00 and
sales CALL with an average price of R$ 3.50.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-41



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##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





On December 31, 2013 and December 31, 2012, the fair value of derivative financial
instruments was presented in the Statement Financial Position as shown below:



|                |  |            |       |   |            |  |      |  
|--------------- |  | ---------- | ----- | - | ---------- |  | ---- | -
|                |  | 12.31.2013 |       |   | 12.31.2012 | 
|                |  |            |       |   | (Restated) | 
|Assets          |  |            |       |   |            |  |      |  
|Current portion |  |            | 14.6  |   |            |  | 11.2 |  
|Non-current     |  |            | 15.8  |   |            |  | 24.8 |  
|Liabilities     |  |            |       |   |            |  |      |  
|Current portion |  |            | (13.7 | ) |            |  | (0.9 | )
|Non-current     |  |            |      |   |            |  |     |  
|                |  |            |       |   |            |  |      |  
|Total           |  |            | 16.7  |   |            |  | 35.1 |  
|                |  |            |       |   |            |  |      |  



|9. | Customer and commercial financing
|-- | ---------------------------------

Customer and commercial financing refer to the partial financing of certain sales of new aircraft by the Company, at average
interest rates at December 31, 2013, of 5.08% p.a. (December 31, 2012  4.90% p.a.) , secured by the aircraft covered by the financing and at present value when applicable. The maturities are monthly, quarterly and half-yearly, classified
as follows:



|                    |  |            |      |  |            |  |       | 
|------------------- |  | ---------- | ---- |  | ---------- |  | ----- | 
|                    |  | 12.31.2013 |      |  | 12.31.2012 | 
|                    |  |            |      |  | (Restated) | 
|Current portion     |  |            | 9.6  |  |            |  | 22.7  | 
|Non-current portion |  |            | 64.1 |  |            |  | 86.9  | 
|                    |  |            |      |  |            |  |       | 
|                    |  |            | 73.7 |  |            |  | 109.6 | 
|                    |  |            |      |  |            |  |       | 

At December 31, 2013 and December 31, 2012, the total value of customer and commercial financing
were current and not past due.

At December 31, 2013, the long-term maturities of the financing of accounts receivable were as
follows:



|                |  |  |      | 
|--------------- |  |  | ---- | 
|Year            |  |  |     
|2015            |  |  | 18.7 | 
|2016            |  |  | 8.5  | 
|2017            |  |  | 7.5  | 
|2018            |  |  | 5.2  | 
|Thereafter 2018 |  |  | 24.2 | 
|                |  |  |      | 
|                |  |  | 64.1 | 
|                |  |  |      | 



|10. | Collateralized accounts receivable and recourse and non-recourse debt
|--- | ---------------------------------------------------------------------



| | 10.1. | Collateralized accounts receivable
| | ----- | ----------------------------------



|                                          |  |            |        |   |            |  |        |  
|----------------------------------------- |  | ---------- | ------ | - | ---------- |  | ------ | -
|                                          |  | 12.31.2013 |        |   | 12.31.2012 | 
|                                          |  |            |        |   | (Restated) | 
|Estimated residual value of leased assets |  |            | 303.2  |   |            |  | 303.2  |  
|Minimum lease payments receivable         |  |            | 258.3  |   |            |  | 276.3  |  
|Unearned income                           |  |            | (135.6 | ) |            |  | (153.5 | )
|                                          |  |            |        |   |            |  |        |  
|Investment in sales-type lease            |  |            | 425.9  |   |            |  | 426.0  |  
|                                          |  |            |        |   |            |  |        |  
|Current portion                           |  |            | 10.5   |   |            |  | 13.0   |  
|Non-current portion                       |  |            | 415.4  |   |            |  | 413.0  |  



F-42



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##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





At December 31, 2013, the maturities of the amounts classified as non-current assets are
as follows:



|                |  |  |       | 
|--------------- |  |  | ----- | 
|Year            |  |  |      
|2015            |  |  | 8.1   | 
|2016            |  |  | 8.7   | 
|2017            |  |  | 18.8  | 
|2018            |  |  | 34.2  | 
|Thereafter 2018 |  |  | 345.6 | 
|                |  |  |       | 
|                |  |  | 415.4 | 
|                |  |  |       | 



| | 10.2. | Recourse and non-recourse debt
| | ----- | ------------------------------



|                    |  |            |       |  |            |  |       | 
|------------------- |  | ---------- | ----- |  | ---------- |  | ----- | 
|                    |  | 12.31.2013 |       |  | 12.31.2012 | 
|                    |  |            |       |  | (Restated) | 
|Recourse Debt       |  |            | 364.7 |  |            |  | 361.6 | 
|Non Recourse Debt   |  |            | 35.5  |  |            |  | 38.6  | 
|                    |  |            |       |  |            |  |       | 
|                    |  |            | 400.2 |  |            |  | 400.2 | 
|                    |  |            |       |  |            |  |       | 
|Current portion     |  |            | 12.1  |  |            |  | 11.9  | 
|Non-current portion |  |            | 388.1 |  |            |  | 388.3 | 

At December 31, 2013, the maturities of the amounts classified as non-current liabilities were as
follows:



|                |  |  |       | 
|--------------- |  |  | ----- | 
|2015            |  |  | 317.3 | 
|2016            |  |  | 8.7   | 
|2017            |  |  | 18.8  | 
|2018            |  |  | 14.1  | 
|Thereafter 2018 |  |  | 29.2  | 
|                |  |  |       | 
|                |  |  | 388.1 | 
|                |  |  |       | 



|11. | Guarantee Deposits
|--- | ------------------



|                                |  |            |       |  |            |  |       | 
|------------------------------- |  | ---------- | ----- |  | ---------- |  | ----- | 
|                                |  | 12.31.2013 |       |  | 12.31.2012 | 
|                                |  |            |       |  | (Restated) | 
|Sales structure guarantees (i)  |  |            | 261.4 |  |            |  | 275.8 | 
|Sales financing guarantees (ii) |  |            | 311.7 |  |            |  | 303.6 | 
|Others                          |  |            | 1.6   |  |            |  | 2.1   | 
|                                |  |            |       |  |            |  |       | 
|                                |  |            | 574.7 |  |            |  | 581.5 | 
|                                |  |            |       |  |            |  |       | 
|Non-current                     |  |            | 574.7 |  |            |  | 581.5 | 



| | (i) | 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. The amount is returned in the form of cash to the Company at maturity of the financing contracts (until 2021) if the aircraft purchaser does not default on
the loan. The interest on the escrow account is added to the principal and recognized by the Company as financial income.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

In
2004, seeking to ensure profitability compatible with the term of the guarantee, the Company allocated the total amount at that time of US$ 123.4 from the deposits in escrow account to 14-year structured notes. This yield enhancement was obtained
through a credit default swap (CDS) transaction, which provides the right of early redemption of the note in case of a credit event by the Company. Upon such a credit event, the note may be redeemed by the holder at the greater of the notes
market value or its original face amount, which would result in a loss to us of all interest accrued on such note to date.



F-43



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##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





In the event of default, the maturity dates of these notes will be accelerated and the notes
would 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.

Credit events include obligation and payment defaults under the terms of the guarantees above specified thresholds, events related to the
restructuring of the obligations above a specified threshold, bankruptcy and a repudiation of and/or moratorium on the obligations above a specified threshold.



| | (ii) | Financial investments denominated in US dollars and held by third-party financial institutions as a pledge under a specific sale financing structure. These investments earn interest at the annual LIBOR rate.
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|12. | Inventories
|--- | -----------



|                                               |  |            |         |   |            |  |         |  
|---------------------------------------------- |  | ---------- | ------- | - | ---------- |  | ------- | -
|                                               |  | 12.31.2013 |         |   | 12.31.2012 | 
|                                               |  |            |         |   | (Restated) | 
|Raw materials                                  |  |            | 948.8   |   |            |  | 684.4   |  
|Work-in-process                                |  |            | 614.1   |   |            |  | 778.6   |  
|Spare parts                                    |  |            | 351.4   |   |            |  | 340.6   |  
|Inventory in transit                           |  |            | 217.4   |   |            |  | 156.1   |  
|Finished goods (i)                             |  |            | 197.3   |   |            |  | 258.6   |  
|Advances to suppliers                          |  |            | 70.6    |   |            |  | 45.9    |  
|Aircraft available for sales (ii)              |  |            | 36.1    |   |            |  | 46.8    |  
|Consumption materials                          |  |            | 31.6    |   |            |  | 28.9    |  
|Provision for adjustment to market value (iii) |  |            | (19.2   | ) |            |  | (33.7   | )
|Provision for obsolescence (iv)                |  |            | (160.8  | ) |            |  | (149.3  | )
|                                               |  |            |         |   |            |  |         |  
|                                               |  |            | 2,287.3 |   |            |  | 2,156.9 |  
|                                               |  |            |         |   |            |  |         |  
|Current portion                                |  |            | 2,287.3 |   |            |  | 2,156.9 |  



| | (i) | The following aircraft were held in inventory at:
| | --- | -------------------------------------------------



| |  |  | December 31, 2013: three Legacy 650, one Phenom 100, four Phenom 300, three Lineage and seven Ipanema; and
| | - |  | ----------------------------------------------------------------------------------------------------------



| |  |  | December 31, 2012: two EMBRAER 175, three Legacy 650, one Legacy 600, eight Phenom 100, six Phenom 300, two Lineage and three Ipanema.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------

Of the total aircraft inventories at December 31, 2013, four Ipanema sold through up to February 24, 2014.



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



| |  |  | December 31, 2013: One ERJ 145, one Legacy 600, one Legacy 650; and
| | - |  | -------------------------------------------------------------------



| |  |  | December 31, 2012: one ERJ 145, one EMBRAER 190, one Legacy 600.
| | - |  | ----------------------------------------------------------------



F-44



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##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





| | (iii) | Refers to the provision recorded for adjustments to the realizable value of used aircraft. Changes in market value were as follows:
| | ----- | -----------------------------------------------------------------------------------------------------------------------------------



|                      |  |            |        |   |            |  |        |            |  |  |        |  
|--------------------- |  | ---------- | ------ | - | ---------- |  | ------ | ---------- |  |  | ------ | -
|                      |  | 12.31.2013 |        |   | 12.31.2012 |  |        | 12.31.2011 | 
|                      |  |            |        |   | (Restated) |  |        | (Restated) | 
|Beginning balance     |  |            | (149.3 | ) |            |  | (140.1 | )          |  |  | (152.9 | )
|Additions             |  |            | (35.5  | ) |            |  | (39.4  | )          |  |  | (12.7  | )
|Disposals             |  |            | 21.0   |   |            |  | 26.3   |            |  |  | 22.3   |  
|Reversals             |  |            | 1.1    |   |            |  | 4.2    |            |  |  | 3.0    |  
|Foreign exchange loss |  |            | 1.9    |   |            |  | (0.3   | )          |  |  | 0.2    |  
|                      |  |            |        |   |            |  |        |            |  |  |        |  
|Ending balance        |  |            | (160.8 | ) |            |  | (149.3 | )          |  |  | (140.1 | )
|                      |  |            |        |   |            |  |        |            |  |  |        |  
|Current portion       |  |            | (160.8 | ) |            |  | (149.3 | )          |  |  | (140.1 | )



| | (iv) | A provision 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. Changes in market value were as follows:
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                  |  |            |       |   |            |  |       |            |  |  |       |  
|----------------- |  | ---------- | ----- | - | ---------- |  | ----- | ---------- |  |  | ----- | -
|                  |  | 12.31.2013 |       |   | 12.31.2012 |  |       | 12.31.2011 | 
|                  |  |            |       |   | (Restated) |  |       | (Restated) | 
|Beginning balance |  |            | (33.7 | ) |            |  | (63.7 | )          |  |  | (83.2 | )
|Additions         |  |            | (8.1  | ) |            |  | (1.2  | )          |  |  | (6.1  | )
|Disposals         |  |            | 22.0  |   |            |  | 31.2  |            |  |  | 22.2  |  
|Reversals         |  |            | 0.6   |   |            |  |      |            |  |  | 3.4   |  
|                  |  |            |       |   |            |  |       |            |  |  |       |  
|Ending balance    |  |            | (19.2 | ) |            |  | (33.7 | )          |  |  | (63.7 | )
|                  |  |            |       |   |            |  |       |            |  |  |       |  
|Current portion   |  |            | (19.2 | ) |            |  | (33.7 | )          |  |  | (63.7 | )



|13. | Other Assets
|--- | ------------



|                                    |  |            |       |  |            |  |       | 
|----------------------------------- |  | ---------- | ----- |  | ---------- |  | ----- | 
|                                    |  | 12.31.2013 |       |  | 12.31.2012 | 
|                                    |  |            |       |  | (Restated) | 
|Taxes recoverable (i)               |  |            | 200.1 |  |            |  | 143.3 | 
|Court-mandated escrow deposits (ii) |  |            | 86.0  |  |            |  | 179.2 | 
|Prepaid expenses                    |  |            | 36.3  |  |            |  | 25.6  | 
|Credit with suppliers (iii)         |  |            | 23.3  |  |            |  | 31.7  | 
|Advances to employees               |  |            | 6.1   |  |            |  | 14.1  | 
|Prepaid Insurance                   |  |            | 6.1   |  |            |  | 3.3   | 
|Advances for services rendered      |  |            | 5.3   |  |            |  | 4.2   | 
|Indemnity assets (iv)               |  |            | 3.6   |  |            |  | 7.2   | 
|Advances of commissions             |  |            | 3.9   |  |            |  |      | 
|Compulsory loan                     |  |            | 1.1   |  |            |  | 0.9   | 
|Collateral pledge                   |  |            | 1.0   |  |            |  | 1.0   | 
|Restricted cash                     |  |            | 0.4   |  |            |  |      | 
|Claims (v)                          |  |            |      |  |            |  | 66.7  | 
|Other                               |  |            | 18.7  |  |            |  | 18.0  | 
|                                    |  |            |       |  |            |  |       | 
|                                    |  |            | 391.9 |  |            |  | 495.2 | 
|                                    |  |            |       |  |            |  |       | 
|Current portion                     |  |            | 250.0 |  |            |  | 254.1 | 
|Non-current portion                 |  |            | 141.9 |  |            |  | 241.1 | 



| | (i) | Taxes recoverable
| | --- | -----------------



|                                                                               |  |            |       |  |            |  |       | 
|------------------------------------------------------------------------------ |  | ---------- | ----- |  | ---------- |  | ----- | 
|                                                                               |  | 12.31.2013 |       |  | 12.31.2012 | 
|                                                                               |  |            |       |  | (Restated) | 
|Income tax and contribution for social security on net income withheld         |  |            | 98.4  |  |            |  | 39.9  | 
|ICMS (State Value-added Tax) and IPI (Excise Tax)                              |  |            | 64.8  |  |            |  | 58.9  | 
|PIS (Social Integration Program) and COFINS (Contribution for Social Security) |  |            | 23.1  |  |            |  | 35.1  | 
|Others                                                                         |  |            | 13.8  |  |            |  | 9.4   | 
|                                                                               |  |            |       |  |            |  |       | 
|                                                                               |  |            | 200.1 |  |            |  | 143.3 | 
|                                                                               |  |            |       |  |            |  |       | 
|Current portion                                                                |  |            | 155.1 |  |            |  | 94.7  | 
|Non-current portion                                                            |  |            | 45.0  |  |            |  | 48.6  | 



F-45



---

##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





| | (ii) | Court-mandated escrow deposits relate to amounts deposited in connection with pending legal actions, substantially federal contributions totaling US$ 70.1. There is a corresponding accrual in the Companys
liabilities (Note 26).
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (iii) | Refers to rework carried out on products supplied by third parties, which will be reimbursed in accordance with contractual agreements.
| | ----- | ---------------------------------------------------------------------------------------------------------------------------------------

| | (iv) | Assets recorded in a business combination, when the Company has negotiated the right of offset from the sellers, for possible future liabilities.
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------

| | (v) | Claims received as a result of the court approval of the bankruptcy administration of American Airlines (Note 25).
| | --- | ------------------------------------------------------------------------------------------------------------------



|14. | Business Combination and acquisition of non controlling interest
|--- | ----------------------------------------------------------------



| | 14.1. | Business Combination
| | ----- | --------------------



| | 14.1.1 | Acquisition of Atechs control on February 1, 2013
| | ------ | --------------------------------------------------

On 1 April 2011,
through Embraer Defesa & Securança Participações S.A., the Company acquired 50% stake in Atech Negócios e Tecnologias S.A., which was treated as a jointly controlled business and therefore proportionately
consolidated in the financial statements of Company. At that time it was agreed between the parties the call option by Embraer Defesa & Segurança for buying 1% of the shares of the other shareholders exercisable from 1 February
2013. The acquisition of over 1% of the shares of Atech, earning one more vote in the investee board of directors, which associated the powers on its relevant activities, Embraer Defesa & Segurança would exercise control Atech.
Because it is an already exercisable option is a unilateral decision of the Company as of February 1, 2013 Atech became a subsidiary of the Company and therefore fully consolidated in its financial statements, and the non-controlling interest
measured at fair proportion to the non-controlling shareholders in the assets and liabilities acquired. The synergy from this alliance aims to ensure greater customer satisfaction in the long run through more comprehensive solutions in complex
systems.

There was no cash outflow for acquisition of the 1 % and although it is a previously jointly controlled investment, it is an
acquisition of control and therefore subject to the application of IFRS 3/CPC R1 15Business Combinations. This event was classified as a business combination achieved in steps performed without the transfer of consideration, so the acquisition
is revalued at fair value and recognized as goodwill against income for the year valuation. This revaluation was conducted by specialists of the Company using multiples of market and discounted cash-flow evaluation techniques.



F-46



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##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





The table below shows the financial position of Atech the date of acquisition of control and
the adjustment of goodwill:



|                                                                                   |  |                         |       |  
|---------------------------------------------------------------------------------- |  | ----------------------- | ----- | -
|                                                                                   |  | Assets and liabilities, |      
|                                                                                   |  | net as of 02.01.2013    |      
|Atechs equity position on February 1, 2013                                        |  |                         |       |  
|Cash and cash equivalents                                                          |  |                         | 4.6   |  
|Trade accounts receivable                                                          |  |                         | 6.3   |  
|Property, plant and equipment                                                      |  |                         | 0.2   |  
|Intangible                                                                         |  |                         | 0.2   |  
|Other assets                                                                       |  |                         | 3.0   |  
|Suppliers                                                                          |  |                         | (0.4  | )
|Advances from customers                                                            |  |                         | (5.6  | )
|Trade accounts payable                                                             |  |                         | (0.9  | )
|Other liabilities                                                                  |  |                         | (0.5  | )
|                                                                                   |  |                         |       |  
|Assets and liabilities, net at February 1, 2013                                    |  |                         | 6.9   |  
|Non-controlling                                                                    |  |                         | (3.5  | )
|Net contingent assets and liabilities identified in the acquisition of control (i) |  |                         | (0.2  | )
|                                                                                   |  |                         |       |  
|Participation at fair value on acquisition of control on 02/01/13                  |  |                         | 3.2   |  
|Fair value of the interest acquired on February 1, 2013                            |  |                         | (21.8 | )
|                                                                                   |  |                         |       |  
|Total goodwill for future profitability                                            |  |                         | (18.6 | )
|                                                                                   |  |                         |       |  
|Previous goodwill on initial acquisition                                           |  |                         | (19.7 | )
|                                                                                   |  |                         |       |  
|Adjustment of goodwill on acquisition of control                                   |  |                         | 1.1   |  
|                                                                                   |  |                         |       |  



| | (i) | Net amount of liabilities relating to labor and contingent assets related to forecasting reimbursements by vendors defined in the contract.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------

The goodwill of US$ 18.6 reflects the ability to develop products and services in the areas of command, control, computing, communications, and
intelligence (C4I). With respect to the goodwill based on future profitability and provided by tax legislation, the Company intends, exhausted the necessary conditions, to use it according to the law.

Net revenue and net income earned by Atech during the year 2013, amounted to US$ 28.3 and US$ 3.1 respectively, of which US$ 26.4 of net income
and US$ 2.8 of net income were generated between the date of acquisition and the year end.



| | 14.1.2 | Acquisition of non-controlling interest of Atech on August 15, 2013
| | ------ | -------------------------------------------------------------------

Additionally,
on August 15, 2013, Embraer Defesa & Segurança has signed a purchase agreement for 50% of the remaining shares of Atech Negócios e Tecnologias S.A. as part of its acquisition strategy.

The completion of the deal was subject to compliance with certain conditions which EERA completion period of 150 days from the signing of the
contract. These conditions were fulfilled and November 26, 2013 Atech became a wholly owned subsidiary of Embraer Defesa & Segurança. The acquisition of 50% of the remaining shares of Atech, Embraer Defesa &
Segurança and paid US$ 18.8, US$ 17.3 in cash and US$ 1.5 through the recognition of accounts payable, of which US$ 3.8 recognized as investment and US$ 14.9 recognized in equity as valuation adjustments to equity in line specifies
result in transactions with non-controlling shareholders within equity.



| | 14.1.3 | Acquisition of ASTs control on October 1, 2012
| | ------ | -----------------------------------------------

On August 4, 2011,
through its wholly-owned subsidiary Embraer Aircraft Holding Inc. (EAH), the Company acquired 36.7% of the capital of Aero Seating Technologies (AST) for US$ 3.0, which was treated as an investment in an associate in the financial statements as of
December 31, 2011. On October 1, 2012, EAH acquired a further 48.8% of the capital of AST for US$ 4.0, and now holds a controlling stake, with an 85.5% interest in its capital.



F-47



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##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





Since the acquisition was made in stages, the total amounts for the acquisition of 85.5% of
ASTs capital as of October 1, 2012 are shown below, as if the whole amount had been paid on that date.



|                                          |  |                         |      |  
|----------------------------------------- |  | ----------------------- | ---- | -
|                                          |  | Assets and liabilities, |     
|                                          |  | net as of 10.01.12      |     
|Aero Seating Technologies                 |  |                         |      |  
|Working capital, net                      |  |                         | 1.3  |  
|Intangible assets                         |  |                         | 7.1  |  
|Property, plant and equipament            |  |                         | 0.2  |  
|Loans                                     |  |                         | (1.5 | )
|Fair value of assets and liabilities, net |  |                         | 7.1  |  
|Noncontrolling interest (14.5%)           |  |                         | (0.9 | )
|Amount paid for 85.5% of the interest     |  |                         | (7.1 | )
|                                          |  |                         |      |  
|Goodwill                                  |  |                         | (0.9 | )
|                                          |  |                         |      |  

The measurement process, completed on December 31, 2012, identified intangible assets totaling US$ 7.1,
mainly related to the capacity to certify materials, parts and applications used in aircraft seats, based on an external report.

The
goodwill on this acquisition reflects ASTs ability to develop, certify and manufacture high-quality seats for executive aircraft in line with the Companys business expectations.

The fair value of the 36.7% interest in AST on the purchase date was US$ 3.0 and remeasurement of the participation resulted in a gain of US$
0.6.

The net income and the net loss recorded by AST in 2012 totaled US$ 2.9 and US$ (1.4) respectively. US$ 0.9 of the net income
and US$ (0.7) of the net loss were generated between the date control was obtained and the end of the year.



| | 14.2. | Interest in entities
| | ----- | --------------------



| | (i) | Wholly owned subsidiaries and special purpose entities
| | --- | ------------------------------------------------------

Subsidiaries, jointly controlled
entities and structured entities that the Company directly or indirectly has control, disclosed in the consolidated financial statements as of December 31, 2013, are consolidated into the Embraer group.

The Company does not have any contractual or legal restrictions to access assets or settle liabilities of the wholly owned subsidiaries of the
group.

These entities have risks inherent to the operations and the main ones are described below:



| |  |  | Economic Risks: are potential losses from fluctuations in market conditions (price of products, exchange rate and interest);
| | - |  | ----------------------------------------------------------------------------------------------------------------------------



| |  |  | Operational risk: are potential losses by the emergence of new technologies or failure of current processes;
| | - |  | ------------------------------------------------------------------------------------------------------------



| |  |  | Credit risk: are potential losses that may occur where the third party (customer) becomes unable to meet its obligations; and
| | - |  | -----------------------------------------------------------------------------------------------------------------------------



| |  |  | Liquidity risk: financial inability to cover financial obligations.
| | - |  | -------------------------------------------------------------------



F-48



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##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





| | (ii) | Subsidiaries with participation of non-controlling shareholders
| | ---- | ---------------------------------------------------------------

Group entities
described below have participation of non-controlling shareholders, but based on contractual agreements and analysis of IFRS, the Company has control and therefore to consolidate these entities:



|                                              |  |                         |  |               |      |   |                |  |      |  
|--------------------------------------------- |  | ----------------------- |  | ------------- | ---- | - | -------------- |  | ---- | -
|                                              |  |                         |  | Participation |      |   | Participation  | 
|Entity                                        |  | Country                 |  | Embraer Group |      |   | noncontrolling | 
|Orbisat Indústria S.A.                        |  | Brazil                  |  |               | 90.0 | % |                |  | 10.0 | %
|Aero Seating Technologies LLS                 |  | United States ofAmerica |  |               | 85.5 | % |                |  | 14.5 | %
|OGMA - Indústria Aeronática de Portugal S.A.  |  | Portugal                |  |               | 65.0 | % |                |  | 35.0 | %
|Harbin Embraer Aircraft Industry Company Ltd. |  | China                   |  |               | 51.0 | % |                |  | 49.0 | %
|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 ofAmerica |  |               | 51.0 | % |                |  | 49.0 | %
|Harpia Sistemas S.A                           |  | Brazil                  |  |               | 51.0 | % |                |  | 49.0 | %
|EZ Air Interior Limited                       |  | Ireland                 |  |               | 50.0 | % |                |  | 50.0 | %
|Orbisat Aerolevantamento Ltda.                |  | Brazil                  |  |               | 25.0 | % |                |  | 75.0 | %

Although the group Embraer has 51.0% of the entities: Harbin Embraer Aircraft Industry Company Ltd., Embraer
CAE Training Services Ltd., and Visiona Tecnologia Espacial S.A., the powers described in the contractual agreements demonstrate that the Board of Directors is composed in mostly by representatives from Embraer and direction of the relevant
activities of the entity are approved with the consent of those representatives.

The shareholder agreement of Orbisat Aerolevantamento
Ltda. assigns to Embraer S.A. an irrevocable option to purchase all of the shares of non-controlling interest. This option is exercisable at any time and can be transferred to any person, which determined the control group Orbisat Aerolevantamento
by Embraer, despite the shareholding of only 25% of its capital.

The equity interests held in these subsidiaries do not differ
substantially from the right proportion of votes held by Embraer Group.

Following is the summary of the financial position of the group
entities that have non-controlling interest:



|                         |  |            |       |  |            |  |       | 
|------------------------ |  | ---------- | ----- |  | ---------- |  | ----- | 
|                         |  | 12.31.2013 |       |  | 12.31.2012 | 
|Cash and cash equivalent |  |            | 87.1  |  |            |  | 89.0  | 
|Current assets           |  |            | 343.4 |  |            |  | 284.3 | 
|Non current assets       |  |            | 116.3 |  |            |  | 126.6 | 
|Current liabilities      |  |            | 161.1 |  |            |  | 116.2 | 
|Non current liabilities  |  |            | 51.8  |  |            |  | 61.5  | 
|Revenue                  |  |            | 257.9 |  |            |  | 241.5 | 
|Net income for the year  |  |            | 7.2   |  |            |  | 1.3   | 

Group subsidiaries with non-controlling interests are subject to the same risks described for the wholly owned
subsidiaries.



| | (iii) | Jointly controlled entity
| | ----- | -------------------------

The EZ Air Interior Limited is a joint operation between
group Embraer and Zodiac Aerospace and shares with the other member the joint administration of the relevant activities of the entity.

This joint operation has net assets and liabilities recognized in the consolidation in accordance with the rights and obligations assigned to
Embraer.



F-49



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##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





|                         |  |            |      |   |            |  |     | 
|------------------------ |  | ---------- | ---- | - | ---------- |  | --- | 
|                         |  | 12.31.2013 |      |   | 12.31.2012 | 
|Cash and cash equivalent |  |            | 2.3  |   |            |  | 0.9 | 
|Current assets           |  |            | 9.3  |   |            |  | 1.0 | 
|Non current assets       |  |            | 3.2  |   |            |  |    | 
|Current liabilities      |  |            | 11.2 |   |            |  | 0.9 | 
|Non current liabilities  |  |            | 2.0  |   |            |  |    | 
|Revenue                  |  |            | 4.4  |   |            |  |    | 
|Net income for the year  |  |            | (0.7 | ) |            |  |    | 



| | (iv) | Interest in other companies
| | ---- | ---------------------------

Interest in other companies in Embraer Group is represented
only by the participation of 25% of Embraer Defesa & Segurança in AEL Sistemas SA. Despite this interest, Embraer Group does not have significant influence on the management of this entity, and therefore the investment is measured as
a financial instrument in the consolidated financial statements at fair value.



|15. | Related Party Transactions
|--- | --------------------------



| | 15.1. | Related party transactions
| | ----- | --------------------------

The table below summarizes balances and transactions with
related parties outside the group and refers mainly to:



| |  |  | assets: (i) accounts receivable for spare parts, aircraft sales and product development, (ii) balances of financial investments; and (iii) bank deposits;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | liabilities: (i) purchase of aircraft components and spare parts, (ii) advances received on account of sales contracts; (iii) financing for research and product development at market rates (iv) loans
and financing; and (v) 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;
(iii) interest on financing for research and product development, import and export financing and advances on exchange contracts; and (iv) supplementary pension plan.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 15.1.1 | December 31, 2013
| | ------ | -----------------



|                                                             |  |         |       |  |             |  |       |           |  |  |             |  |  |         |       |  |         |  |       |   |  |  |       |  
|------------------------------------------------------------ |  | ------- | ----- |  | ----------- |  | ----- | --------- |  |  | ----------- |  |  | ------- | ----- |  | ------- |  | ----- | - |  |  | ----- | -
|                                                             |  | Current |       |  | Non-Current |  |       | Financial |  |  | Operating   | 
|                                                             |  | Assets  |       |  | Liabilities |  |       | Assets    |  |  | Liabilities |  |  | Results |       |  | Results | 
|Banco do Brasil S.A.                                         |  |         | 497.6 |  |             |  | 311.8 |           |  |  | 311.6       |  |  |         | 85.4  |  |         |  | 47.1  |   |  |  |      |  
|Banco Nacional de Desenvolvimento Econômico e Social  BNDES |  |         |      |  |             |  | 41.9  |           |  |  |            |  |  |         | 213.3 |  |         |  | (18.3 | ) |  |  |      |  
|Brazilian Air Force                                          |  |         | 158.4 |  |             |  | 210.3 |           |  |  |            |  |  |         |      |  |         |  |      |   |  |  | 130.3 |  
|Caixa Econômica Federal                                      |  |         | 197.6 |  |             |  | 0.1   |           |  |  |            |  |  |         | 42.7  |  |         |  | 7.9   |   |  |  |      |  
|Embraer Prev - Sociedade de Previdência Complementar         |  |         |      |  |             |  |      |           |  |  |            |  |  |         |      |  |         |  |      |   |  |  | (29.1 | )
|Empresa Portuguesa de Defesa  EMPORDEF                      |  |         |      |  |             |  |      |           |  |  |            |  |  |         | 6.9   |  |         |  |      |   |  |  |      |  
|Exército Brasileiro                                          |  |         | 5.7   |  |             |  |      |           |  |  |            |  |  |         |      |  |         |  |      |   |  |  | 5.7   |  
|Financiadora de Estudo e Projetos  FINEP                    |  |         |      |  |             |  | 11.6  |           |  |  |            |  |  |         | 56.1  |  |         |  | (1.7  | ) |  |  |      |  
|                                                             |  |         |       |  |             |  |       |           |  |  |             |  |  |         |       |  |         |  |       |   |  |  |       |  
|                                                             |  |         | 859.3 |  |             |  | 575.7 |           |  |  | 311.6       |  |  |         | 404.4 |  |         |  | 35.0  |   |  |  | 106.9 |  
|                                                             |  |         |       |  |             |  |       |           |  |  |             |  |  |         |       |  |         |  |       |   |  |  |       |  



| | 15.1.2 | December 31, 2012 (Restated)
| | ------ | ----------------------------



|                                                             |  |         |       |  |             |  |       |           |  |  |             |  |  |         |       |  |         |  |       |   |  |  |       |  
|------------------------------------------------------------ |  | ------- | ----- |  | ----------- |  | ----- | --------- |  |  | ----------- |  |  | ------- | ----- |  | ------- |  | ----- | - |  |  | ----- | -
|                                                             |  | Current |       |  | Non-Current |  |       | Financial |  |  | Operating   | 
|                                                             |  | Assets  |       |  | Liabilities |  |       | Assets    |  |  | Liabilities |  |  | Results |       |  | Results | 
|Banco do Brasil S.A.                                         |  |         | 644.4 |  |             |  |      |           |  |  | 303.6       |  |  |         | 303.6 |  |         |  | 37.0  |   |  |  |      |  
|Banco Nacional de Desenvolvimento Econômico e Social  BNDES |  |         |      |  |             |  | 255.1 |           |  |  |            |  |  |         | 184.1 |  |         |  | (27.6 | ) |  |  |      |  
|Brazilian Air Force                                          |  |         | 149.2 |  |             |  | 171.9 |           |  |  |            |  |  |         |      |  |         |  |      |   |  |  | 145.4 |  
|Embraer Prev - Sociedade de Previdência Complementar         |  |         |      |  |             |  |      |           |  |  |            |  |  |         |      |  |         |  |      |   |  |  | (27.6 | )
|Empresa Portuguesa de Defesa  EMPORDEF                      |  |         |      |  |             |  |      |           |  |  |            |  |  |         | 6.5   |  |         |  |      |   |  |  |      |  
|Ez Air Interior Limited                                      |  |         | 1.9   |  |             |  |      |           |  |  |            |  |  |         |      |  |         |  |      |   |  |  |      |  
|Financiadora de Estudo e Projetos  FINEP                    |  |         |      |  |             |  | 17.9  |           |  |  |            |  |  |         | 46.7  |  |         |  | (1.9  | ) |  |  |      |  
|                                                             |  |         |       |  |             |  |       |           |  |  |             |  |  |         |       |  |         |  |       |   |  |  |       |  
|                                                             |  |         | 795.4 |  |             |  | 444.9 |           |  |  | 303.6       |  |  |         | 540.9 |  |         |  | 7.5   |   |  |  | 117.8 |  
|                                                             |  |         |       |  |             |  |       |           |  |  |             |  |  |         |       |  |         |  |       |   |  |  |       |  



F-50



---

##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





| | 15.1.3 | December 31, 2011 (Restated)
| | ------ | ----------------------------



|                                                             |  |           |       |   |           |  |       |  
|------------------------------------------------------------ |  | --------- | ----- | - | --------- |  | ----- | -
|                                                             |  | Financial |       |   | Operating | 
|                                                             |  | Results   |       |   | Results   | 
|Aero Seating Technologies LLC (AST)                          |  |           |      |   |           |  |      |  
|Banco do Brasil S.A.                                         |  |           | 16.8  |   |           |  |      |  
|Banco Nacional de Desenvolvimento Econômico e Social  BNDES |  |           | (23.1 | ) |           |  |      |  
|Brazilian Air Force                                          |  |           |      |   |           |  | 213.0 |  
|Embraer Prev - Sociedade de Previdência Complementar         |  |           |      |   |           |  | (29.4 | )
|Financiadora de Estudo e Projetos  FINEP                    |  |           | (1.0  | ) |           |  |      |  
|                                                             |  |           |       |   |           |  |       |  
|                                                             |  |           | (7.3  | ) |           |  | 183.5 |  
|                                                             |  |           |       |   |           |  |       |  



| | 15.2. | Remuneration of key Management personnel:
| | ----- | -----------------------------------------



|                           |  |            |      |  |            |  |      |            |  |  |      | 
|-------------------------- |  | ---------- | ---- |  | ---------- |  | ---- | ---------- |  |  | ---- | 
|                           |  | 12.31.2013 |      |  | 12.31.2012 |  |      | 12.31.2011 | 
|Short-term benefits (i)    |  |            | 19.7 |  |            |  | 16.9 |            |  |  | 16.6 | 
|Stock option program       |  |            | 3.6  |  |            |  | 3.9  |            |  |  | 4.6  | 
|Labor contract termination |  |            | 0.5  |  |            |  |     |            |  |  | 0.4  | 
|                           |  |            |      |  |            |  |      |            |  |  |      | 
|Total remuneration         |  |            | 23.8 |  |            |  | 20.8 |            |  |  | 21.6 | 
|                           |  |            |      |  |            |  |      |            |  |  |      | 



| | (i) | Includes salaries and social security contributions.
| | --- | ----------------------------------------------------

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

In 2013 and 2012 and 2011, no post-retirement or long-term benefits were paid.



|16. | Property, Plant and Equipment
|--- | -----------------------------

The average annual rate of depreciation by asset class on December, 31, 2013 is as follows:



|                             |  |                     |      |  
|---------------------------- |  | ------------------- | ---- | -
|                             |  | Average useful life |     
|Class of assets              |  | (years)             |     
|Buildings and improvements   |  |                     | 4.6  | %
|Installations                |  |                     | 7.7  | %
|Machinery and equipament     |  |                     | 12.3 | %
|Furniture and fixtures       |  |                     | 14.4 | %
|Vehicles                     |  |                     | 22.7 | %
|Aircraft                     |  |                     | 12.4 | %
|Computers and peripherals    |  |                     | 34.3 | %
|Tooling                      |  |                     | 12.1 | %
|Other assets                 |  |                     | 0.0  | %
|Exchange pool program assets |  |                     | 8.4  | %



F-51



---

##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





|                                 |  |            |      |  |                           |  |        |               |  |  |                        |   |  |                      |        |   |          |  |       |              |  |  |                          |   |  |         |        |   |             |  |        |                           |  |  |                              |   |  |       |       |   |  |  |        |   |  |  |        |   |  |  |          |  
|-------------------------------- |  | ---------- | ---- |  | ------------------------- |  | ------ | ------------- |  |  | ---------------------- | - |  | -------------------- | ------ | - | -------- |  | ----- | ------------ |  |  | ------------------------ | - |  | ------- | ------ | - | ----------- |  | ------ | ------------------------- |  |  | ---------------------------- | - |  | ----- | ----- | - |  |  | ------ | - |  |  | ------ | - |  |  | -------- | -
|                                 |  | 12.31.2013 |     
|                                 |  | Land       |      |  | Buildings andimprovements |  |        | Installations |  |  | Machinery andequipment |   |  | Furnitureandfixtures |        |   | Vehicles |  |       | Aircraft (i) |  |  | Computers andperipherals |   |  | Tooling |        |   | Otherassets |  |        | Exchangepoolprogramassets |  |  | Construction inprogress (ii) |   |  | Total |      
|Cost                             |  |            |      |  |                           |  |        |               |  |  |                        |   |  |                      |        |   |          |  |       |              |  |  |                          |   |  |         |        |   |             |  |        |                           |  |  |                              |   |  |       |       |   |  |  |        |   |  |  |        |   |  |  |          |  
|At December 31, 2012 (Restated)  |  |            | 11.1 |  |                           |  | 443.0  |               |  |  | 127.8                  |   |  |                      | 512.1  |   |          |  | 54.4  |              |  |  | 15.6                     |   |  |         | 588.1  |   |             |  | 128.2  |                           |  |  | 327.6                        |   |  |       | 67.3  |   |  |  | 460.3  |   |  |  | 136.6  |   |  |  | 2,872.1  |  
|Additions                        |  |            |     |  |                           |  | 4.1    |               |  |  |                       |   |  |                      | 79.5   |   |          |  | 3.2   |              |  |  | 0.6                      |   |  |         | 61.5   |   |             |  | 18.8   |                           |  |  | 49.8                         |   |  |       | 11.3  |   |  |  | 85.6   |   |  |  | 127.0  |   |  |  | 441.4    |  
|Additions - business combination |  |            |     |  |                           |  |       |               |  |  |                       |   |  |                      |       |   |          |  |      |              |  |  |                         |   |  |         |       |   |             |  | 0.3    |                           |  |  |                             |   |  |       |      |   |  |  |       |   |  |  |       |   |  |  | 0.3      |  
|Disposals                        |  |            |     |  |                           |  |       |               |  |  | (0.1                   | ) |  |                      | (5.8   | ) |          |  | (1.0  | )            |  |  | (0.8                     | ) |  |         | (0.5   | ) |             |  | (1.6   | )                         |  |  |                             |   |  |       | (1.1  | ) |  |  | (0.8   | ) |  |  | (2.2   | ) |  |  | (13.9    | )
|Impairment                       |  |            |     |  |                           |  |       |               |  |  |                       |   |  |                      |       |   |          |  |      |              |  |  |                         |   |  |         | (14.1  | ) |             |  |       |                           |  |  |                             |   |  |       |      |   |  |  |       |   |  |  |       |   |  |  | (14.1    | )
|Reclassifications*               |  |            |     |  |                           |  | 72.0   |               |  |  | 6.5                    |   |  |                      | 56.6   |   |          |  | 2.3   |              |  |  | 0.3                      |   |  |         | (59.8  | ) |             |  | 0.1    |                           |  |  | 9.6                          |   |  |       | (43.0 | ) |  |  | 42.6   |   |  |  | (114.7 | ) |  |  | (27.5    | )
|Translation adjustments          |  |            |     |  |                           |  | 1.5    |               |  |  | (0.1                   | ) |  |                      | 4.2    |   |          |  | 0.9   |              |  |  | 0.2                      |   |  |         | (0.5   | ) |             |  | 1.8    |                           |  |  | 0.2                          |   |  |       | 1.3   |   |  |  | (10.8  | ) |  |  | 5.7    |   |  |  | 4.4      |  
|                                 |  |            |      |  |                           |  |        |               |  |  |                        |   |  |                      |        |   |          |  |       |              |  |  |                          |   |  |         |        |   |             |  |        |                           |  |  |                              |   |  |       |       |   |  |  |        |   |  |  |        |   |  |  |          |  
|At December 31, 2013             |  |            | 11.1 |  |                           |  | 520.6  |               |  |  | 134.1                  |   |  |                      | 646.6  |   |          |  | 59.8  |              |  |  | 15.9                     |   |  |         | 574.7  |   |             |  | 147.6  |                           |  |  | 387.2                        |   |  |       | 35.8  |   |  |  | 576.9  |   |  |  | 152.4  |   |  |  | 3,262.7  |  
|                                 |  |            |      |  |                           |  |        |               |  |  |                        |   |  |                      |        |   |          |  |       |              |  |  |                          |   |  |         |        |   |             |  |        |                           |  |  |                              |   |  |       |       |   |  |  |        |   |  |  |        |   |  |  |          |  
|Accumulated depreciation         |  |            |      |  |                           |  |        |               |  |  |                        |   |  |                      |        |   |          |  |       |              |  |  |                          |   |  |         |        |   |             |  |        |                           |  |  |                              |   |  |       |       |   |  |  |        |   |  |  |        |   |  |  |          |  
|At December 31, 2012 (Restated)  |  |            |     |  |                           |  | (137.9 | )             |  |  | (87.3                  | ) |  |                      | (309.8 | ) |          |  | (29.1 | )            |  |  | (11.3                    | ) |  |         | (155.3 | ) |             |  | (104.9 | )                         |  |  | (169.9                       | ) |  |       | (1.3  | ) |  |  | (126.9 | ) |  |  |       |   |  |  | (1,133.7 | )
|Depreciation                     |  |            |     |  |                           |  | (13.1  | )             |  |  | (3.0                   | ) |  |                      | (23.5  | ) |          |  | (3.4  | )            |  |  | (0.9                     | ) |  |         | (50.6  | ) |             |  | (7.4   | )                         |  |  | (18.0                        | ) |  |       |      |   |  |  | (25.9  | ) |  |  |       |   |  |  | (145.8   | )
|Disposals                        |  |            |     |  |                           |  |       |               |  |  | 0.1                    |   |  |                      | 4.8    |   |          |  | 0.9   |              |  |  | 0.8                      |   |  |         | 0.5    |   |             |  | 1.4    |                           |  |  |                             |   |  |       |      |   |  |  | 0.7    |   |  |  |       |   |  |  | 9.2      |  
|Reclassifications*               |  |            |     |  |                           |  |       |               |  |  |                       |   |  |                      | (0.3   | ) |          |  |      |              |  |  |                         |   |  |         | 13.8   |   |             |  | 0.5    |                           |  |  | (0.3                         | ) |  |       | 0.2   |   |  |  |       |   |  |  |       |   |  |  | 13.9     |  
|Translation adjustments          |  |            |     |  |                           |  | (0.3   | )             |  |  | 0.1                    |   |  |                      | (1.9   | ) |          |  | (0.3  | )            |  |  | (0.2                     | ) |  |         | 0.1    |   |             |  | (0.4   | )                         |  |  | (0.1                         | ) |  |       |      |   |  |  | (10.0  | ) |  |  |       |   |  |  | (13.0    | )
|                                 |  |            |      |  |                           |  |        |               |  |  |                        |   |  |                      |        |   |          |  |       |              |  |  |                          |   |  |         |        |   |             |  |        |                           |  |  |                              |   |  |       |       |   |  |  |        |   |  |  |        |   |  |  |          |  
|At December 31, 2013             |  |            |     |  |                           |  | (151.3 | )             |  |  | (90.1                  | ) |  |                      | (330.7 | ) |          |  | (31.9 | )            |  |  | (11.6                    | ) |  |         | (191.5 | ) |             |  | (110.8 | )                         |  |  | (188.3                       | ) |  |       | (1.1  | ) |  |  | (162.1 | ) |  |  |       |   |  |  | (1,269.4 | )
|                                 |  |            |      |  |                           |  |        |               |  |  |                        |   |  |                      |        |   |          |  |       |              |  |  |                          |   |  |         |        |   |             |  |        |                           |  |  |                              |   |  |       |       |   |  |  |        |   |  |  |        |   |  |  |          |  
|Net                              |  |            |      |  |                           |  |        |               |  |  |                        |   |  |                      |        |   |          |  |       |              |  |  |                          |   |  |         |        |   |             |  |        |                           |  |  |                              |   |  |       |       |   |  |  |        |   |  |  |        |   |  |  |          |  
|At December 31, 2012 (Restated)  |  |            | 11.1 |  |                           |  | 305.1  |               |  |  | 40.5                   |   |  |                      | 202.3  |   |          |  | 25.3  |              |  |  | 4.3                      |   |  |         | 432.8  |   |             |  | 23.3   |                           |  |  | 157.7                        |   |  |       | 66.0  |   |  |  | 333.4  |   |  |  | 136.6  |   |  |  | 1,738.4  |  
|At December 31, 2013             |  |            | 11.1 |  |                           |  | 369.3  |               |  |  | 44.0                   |   |  |                      | 315.9  |   |          |  | 27.9  |              |  |  | 4.3                      |   |  |         | 383.2  |   |             |  | 36.8   |                           |  |  | 198.9                        |   |  |       | 34.7  |   |  |  | 414.8  |   |  |  | 152.4  |   |  |  | 1,993.3  |  



|                                 |  |            |      |  |                           |  |        |               |  |  |                        |   |  |                      |        |   |          |  |       |              |  |  |                          |   |  |         |        |   |             |  |        |                           |  |  |                              |   |  |       |      |   |  |  |        |   |  |  |       |   |  |  |          |  
|-------------------------------- |  | ---------- | ---- |  | ------------------------- |  | ------ | ------------- |  |  | ---------------------- | - |  | -------------------- | ------ | - | -------- |  | ----- | ------------ |  |  | ------------------------ | - |  | ------- | ------ | - | ----------- |  | ------ | ------------------------- |  |  | ---------------------------- | - |  | ----- | ---- | - |  |  | ------ | - |  |  | ----- | - |  |  | -------- | -
|                                 |  | 12.31.2012 |     
|                                 |  | Land       |      |  | Buildings andimprovements |  |        | Installations |  |  | Machinery andequipment |   |  | Furnitureandfixtures |        |   | Vehicles |  |       | Aircraft (i) |  |  | Computers andperipherals |   |  | Tooling |        |   | Otherassets |  |        | Exchangepoolprogramassets |  |  | Construction inprogress (ii) |   |  | Total |     
|Cost                             |  |            |      |  |                           |  |        |               |  |  |                        |   |  |                      |        |   |          |  |       |              |  |  |                          |   |  |         |        |   |             |  |        |                           |  |  |                              |   |  |       |      |   |  |  |        |   |  |  |       |   |  |  |          |  
|At December 31, 2011 (Restated)  |  |            | 11.1 |  |                           |  | 428.4  |               |  |  | 125.4                  |   |  |                      | 480.1  |   |          |  | 47.8  |              |  |  | 14.0                     |   |  |         | 477.2  |   |             |  | 120.8  |                           |  |  | 305.6                        |   |  |       | 7.8  |   |  |  | 351.3  |   |  |  | 93.4  |   |  |  | 2,462.9  |  
|Additions                        |  |            |     |  |                           |  | 4.4    |               |  |  | 0.2                    |   |  |                      | 39.5   |   |          |  | 2.2   |              |  |  | 0.7                      |   |  |         | 140.4  |   |             |  | 19.6   |                           |  |  | 15.8                         |   |  |       | 62.4 |   |  |  | 63.9   |   |  |  | 63.1  |   |  |  | 412.2    |  
|Additions - business combination |  |            |     |  |                           |  |       |               |  |  |                       |   |  |                      | 0.1    |   |          |  |      |              |  |  |                         |   |  |         |       |   |             |  | 0.1    |                           |  |  |                             |   |  |       |     |   |  |  |       |   |  |  |      |   |  |  | 0.2      |  
|Disposals                        |  |            |     |  |                           |  | (1.1   | )             |  |  | (0.2                   | ) |  |                      | (11.2  | ) |          |  | (1.7  | )            |  |  | (0.2                     | ) |  |         |       |   |             |  | (2.6   | )                         |  |  |                             |   |  |       | (0.4 | ) |  |  | (3.5   | ) |  |  | (0.1  | ) |  |  | (21.0    | )
|Impairment                       |  |            |     |  |                           |  |       |               |  |  |                       |   |  |                      |       |   |          |  |      |              |  |  |                         |   |  |         | (9.3   | ) |             |  |       |                           |  |  |                             |   |  |       |     |   |  |  |       |   |  |  |      |   |  |  | (9.3     | )
|Reclassifications*               |  |            |     |  |                           |  | 15.5   |               |  |  | 2.5                    |   |  |                      | 3.1    |   |          |  | 5.6   |              |  |  | 1.0                      |   |  |         | (20.0  | ) |             |  | (10.2  | )                         |  |  | 6.1                          |   |  |       | (2.5 | ) |  |  | 43.4   |   |  |  | (21.1 | ) |  |  | 23.4     |  
|Translation adjustments          |  |            |     |  |                           |  | (4.2   | )             |  |  | (0.1                   | ) |  |                      | 0.5    |   |          |  | 0.5   |              |  |  | 0.1                      |   |  |         | (0.2   | ) |             |  | 0.5    |                           |  |  | 0.1                          |   |  |       |     |   |  |  | 5.2    |   |  |  | 1.3   |   |  |  | 3.7      |  
|                                 |  |            |      |  |                           |  |        |               |  |  |                        |   |  |                      |        |   |          |  |       |              |  |  |                          |   |  |         |        |   |             |  |        |                           |  |  |                              |   |  |       |      |   |  |  |        |   |  |  |       |   |  |  |          |  
|At December 31, 2012 (Restated)  |  |            | 11.1 |  |                           |  | 443.0  |               |  |  | 127.8                  |   |  |                      | 512.1  |   |          |  | 54.4  |              |  |  | 15.6                     |   |  |         | 588.1  |   |             |  | 128.2  |                           |  |  | 327.6                        |   |  |       | 67.3 |   |  |  | 460.3  |   |  |  | 136.6 |   |  |  | 2,872.1  |  
|                                 |  |            |      |  |                           |  |        |               |  |  |                        |   |  |                      |        |   |          |  |       |              |  |  |                          |   |  |         |        |   |             |  |        |                           |  |  |                              |   |  |       |      |   |  |  |        |   |  |  |       |   |  |  |          |  
|Accumulated depreciation         |  |            |      |  |                           |  |        |               |  |  |                        |   |  |                      |        |   |          |  |       |              |  |  |                          |   |  |         |        |   |             |  |        |                           |  |  |                              |   |  |       |      |   |  |  |        |   |  |  |       |   |  |  |          |  
|At December 31, 2011 (Restated)  |  |            |     |  |                           |  | (127.6 | )             |  |  | (85.0                  | ) |  |                      | (301.1 | ) |          |  | (27.7 | )            |  |  | (10.5                    | ) |  |         | (121.1 | ) |             |  | (102.1 | )                         |  |  | (146.0                       | ) |  |       | (1.2 | ) |  |  | (90.2  | ) |  |  |      |   |  |  | (1,012.5 | )
|Depreciation                     |  |            |     |  |                           |  | (10.8  | )             |  |  | (2.5                   | ) |  |                      | (23.5  | ) |          |  | (2.9  | )            |  |  | (0.8                     | ) |  |         | (35.8  | ) |             |  | (5.1   | )                         |  |  | (20.0                        | ) |  |       | (0.1 | ) |  |  | (38.4  | ) |  |  |      |   |  |  | (139.9   | )
|Disposals                        |  |            |     |  |                           |  | 0.7    |               |  |  | 0.2                    |   |  |                      | 10.4   |   |          |  | 1.6   |              |  |  | 0.1                      |   |  |         |       |   |             |  | 2.6    |                           |  |  |                             |   |  |       |     |   |  |  | 1.6    |   |  |  |      |   |  |  | 17.2     |  
|Reclassifications*               |  |            |     |  |                           |  | 0.2    |               |  |  | (0.1                   | ) |  |                      | (4.8   | ) |          |  |      |              |  |  |                         |   |  |         | (1.5   | ) |             |  |       |                           |  |  | 4.7                          |   |  |       |     |   |  |  |       |   |  |  |      |   |  |  | (1.5     | )
|Translation adjustments          |  |            |     |  |                           |  | (0.4   | )             |  |  | 0.1                    |   |  |                      | 9.2    |   |          |  | (0.1  | )            |  |  | (0.1                     | ) |  |         | 3.1    |   |             |  | (0.3   | )                         |  |  | (8.6                         | ) |  |       |     |   |  |  | 0.1    |   |  |  |      |   |  |  | 3.0      |  
|                                 |  |            |      |  |                           |  |        |               |  |  |                        |   |  |                      |        |   |          |  |       |              |  |  |                          |   |  |         |        |   |             |  |        |                           |  |  |                              |   |  |       |      |   |  |  |        |   |  |  |       |   |  |  |          |  
|At December 31, 2012 (Restated)  |  |            |     |  |                           |  | (137.9 | )             |  |  | (87.3                  | ) |  |                      | (309.8 | ) |          |  | (29.1 | )            |  |  | (11.3                    | ) |  |         | (155.3 | ) |             |  | (104.9 | )                         |  |  | (169.9                       | ) |  |       | (1.3 | ) |  |  | (126.9 | ) |  |  |      |   |  |  | (1,133.7 | )
|                                 |  |            |      |  |                           |  |        |               |  |  |                        |   |  |                      |        |   |          |  |       |              |  |  |                          |   |  |         |        |   |             |  |        |                           |  |  |                              |   |  |       |      |   |  |  |        |   |  |  |       |   |  |  |          |  
|Net                              |  |            |      |  |                           |  |        |               |  |  |                        |   |  |                      |        |   |          |  |       |              |  |  |                          |   |  |         |        |   |             |  |        |                           |  |  |                              |   |  |       |      |   |  |  |        |   |  |  |       |   |  |  |          |  
|At December 31, 2011 (Restated)  |  |            | 11.1 |  |                           |  | 300.8  |               |  |  | 40.4                   |   |  |                      | 179.0  |   |          |  | 20.1  |              |  |  | 3.5                      |   |  |         | 356.1  |   |             |  | 18.7   |                           |  |  | 159.6                        |   |  |       | 6.6  |   |  |  | 261.1  |   |  |  | 93.4  |   |  |  | 1,450.4  |  
|At December 31, 2012 (Restated)  |  |            | 11.1 |  |                           |  | 305.1  |               |  |  | 40.5                   |   |  |                      | 202.3  |   |          |  | 25.3  |              |  |  | 4.3                      |   |  |         | 432.8  |   |             |  | 23.3   |                           |  |  | 157.7                        |   |  |       | 66.0 |   |  |  | 333.4  |   |  |  | 136.6 |   |  |  | 1,738.4  |  



F-52



---

##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





|                                    |  |            |      |  |                           |  |        |               |  |  |                        |   |  |                      |        |   |          |  |       |              |  |  |                          |   |  |         |        |   |             |  |        |                           |  |  |                              |   |  |       |      |   |  |  |       |   |  |  |       |   |  |  |          |  
|----------------------------------- |  | ---------- | ---- |  | ------------------------- |  | ------ | ------------- |  |  | ---------------------- | - |  | -------------------- | ------ | - | -------- |  | ----- | ------------ |  |  | ------------------------ | - |  | ------- | ------ | - | ----------- |  | ------ | ------------------------- |  |  | ---------------------------- | - |  | ----- | ---- | - |  |  | ----- | - |  |  | ----- | - |  |  | -------- | -
|                                    |  | 12.31.2011 |     
|                                    |  | Land       |      |  | Buildings andimprovements |  |        | Installations |  |  | Machinery andequipment |   |  | Furnitureandfixtures |        |   | Vehicles |  |       | Aircraft (i) |  |  | Computers andperipherals |   |  | Tooling |        |   | Otherassets |  |        | Exchangepoolprogramassets |  |  | Construction inprogress (ii) |   |  | Total |     
|Cost                                |  |            |      |  |                           |  |        |               |  |  |                        |   |  |                      |        |   |          |  |       |              |  |  |                          |   |  |         |        |   |             |  |        |                           |  |  |                              |   |  |       |      |   |  |  |       |   |  |  |       |   |  |  |          |  
|At December 31, 2010                |  |            | 11.1 |  |                           |  | 394.4  |               |  |  | 124.9                  |   |  |                      | 438.7  |   |          |  | 44.9  |              |  |  | 13.2                     |   |  |         | 472.3  |   |             |  | 115.1  |                           |  |  | 274.3                        |   |  |       | 3.2  |   |  |  | 179.6 |   |  |  | 40.0  |   |  |  | 2,111.7  |  
|Additions                           |  |            |     |  |                           |  | 0.1    |               |  |  | 0.2                    |   |  |                      | 21.1   |   |          |  | 4.4   |              |  |  | 0.7                      |   |  |         | 66.7   |   |             |  | 18.0   |                           |  |  | 10.3                         |   |  |       | 10.3 |   |  |  | 105.4 |   |  |  | 97.1  |   |  |  | 334.3    |  
|Additions - business combination    |  |            |     |  |                           |  |       |               |  |  |                       |   |  |                      | 23.3   |   |          |  | 0.2   |              |  |  |                         |   |  |         | 3.3    |   |             |  | 1.3    |                           |  |  |                             |   |  |       | 0.1  |   |  |  |      |   |  |  | 0.4   |   |  |  | 28.6     |  
|Disposals                           |  |            |     |  |                           |  |       |               |  |  |                       |   |  |                      | (4.2   | ) |          |  | (1.0  | )            |  |  | (0.3                     | ) |  |         |       |   |             |  | (1.9   | )                         |  |  |                             |   |  |       |     |   |  |  |      |   |  |  |      |   |  |  | (7.4     | )
|Impairment                          |  |            |     |  |                           |  |       |               |  |  |                       |   |  |                      |       |   |          |  |      |              |  |  |                         |   |  |         | (2.6   | ) |             |  |       |                           |  |  |                             |   |  |       |     |   |  |  |      |   |  |  |      |   |  |  | (2.6     | )
|Reclassifications*                  |  |            |     |  |                           |  | 34.4   |               |  |  | 0.6                    |   |  |                      | 3.9    |   |          |  | 0.7   |              |  |  | 0.4                      |   |  |         | (62.0  | ) |             |  | (11.6  | )                         |  |  | 21.0                         |   |  |       | (5.7 | ) |  |  | 77.1  |   |  |  | (43.7 | ) |  |  | 15.1     |  
|Translation adjustments             |  |            |     |  |                           |  | (0.5   | )             |  |  | (0.3                   | ) |  |                      | (2.7   | ) |          |  | (1.4  | )            |  |  |                         |   |  |         | (0.5   | ) |             |  | (0.1   | )                         |  |  |                             |   |  |       | (0.1 | ) |  |  | (10.8 | ) |  |  | (0.4  | ) |  |  | (16.8    | )
|                                    |  |            |      |  |                           |  |        |               |  |  |                        |   |  |                      |        |   |          |  |       |              |  |  |                          |   |  |         |        |   |             |  |        |                           |  |  |                              |   |  |       |      |   |  |  |       |   |  |  |       |   |  |  |          |  
|At December 31, 2011 (Restated)     |  |            | 11.1 |  |                           |  | 428.4  |               |  |  | 125.4                  |   |  |                      | 480.1  |   |          |  | 47.8  |              |  |  | 14.0                     |   |  |         | 477.2  |   |             |  | 120.8  |                           |  |  | 305.6                        |   |  |       | 7.8  |   |  |  | 351.3 |   |  |  | 93.4  |   |  |  | 2,462.9  |  
|                                    |  |            |      |  |                           |  |        |               |  |  |                        |   |  |                      |        |   |          |  |       |              |  |  |                          |   |  |         |        |   |             |  |        |                           |  |  |                              |   |  |       |      |   |  |  |       |   |  |  |       |   |  |  |          |  
|Accumulated depreciation            |  |            |      |  |                           |  |        |               |  |  |                        |   |  |                      |        |   |          |  |       |              |  |  |                          |   |  |         |        |   |             |  |        |                           |  |  |                              |   |  |       |      |   |  |  |       |   |  |  |       |   |  |  |          |  
|At December 31, 2010                |  |            |     |  |                           |  | (117.6 | )             |  |  | (82.6                  | ) |  |                      | (278.5 | ) |          |  | (26.7 | )            |  |  | (10.3                    | ) |  |         | (91.0  | ) |             |  | (98.7  | )                         |  |  | (129.4                       | ) |  |       | (1.1 | ) |  |  | (74.8 | ) |  |  |      |   |  |  | (910.7   | )
|Depreciation                        |  |            |     |  |                           |  | (9.9   | )             |  |  | (2.4                   | ) |  |                      | (17.3  | ) |          |  | (1.8  | )            |  |  | (0.6                     | ) |  |         | (36.4  | ) |             |  | (4.3   | )                         |  |  | (16.6                        | ) |  |       | (0.1 | ) |  |  | (19.9 | ) |  |  |      |   |  |  | (109.3   | )
|Depreciation - business combination |  |            |     |  |                           |  |       |               |  |  |                       |   |  |                      | (14.4  | ) |          |  |      |              |  |  |                         |   |  |         |       |   |             |  | (0.7   | )                         |  |  |                             |   |  |       |     |   |  |  |      |   |  |  |      |   |  |  | (15.1    | )
|Disposals                           |  |            |     |  |                           |  |       |               |  |  |                       |   |  |                      | 4.0    |   |          |  | 0.6   |              |  |  | 0.3                      |   |  |         | 0.5    |   |             |  | 1.5    |                           |  |  |                             |   |  |       |     |   |  |  |      |   |  |  |      |   |  |  | 6.9      |  
|Reclassifications*                  |  |            |     |  |                           |  |       |               |  |  |                       |   |  |                      |       |   |          |  |      |              |  |  |                         |   |  |         | 5.9    |   |             |  |       |                           |  |  |                             |   |  |       |     |   |  |  |      |   |  |  |      |   |  |  | 5.9      |  
|Translation adjustments             |  |            |     |  |                           |  | (0.1   | )             |  |  |                       |   |  |                      | 5.1    |   |          |  | 0.2   |              |  |  | 0.1                      |   |  |         | (0.1   | ) |             |  | 0.1    |                           |  |  |                             |   |  |       |     |   |  |  | 4.5   |   |  |  |      |   |  |  | 9.8      |  
|                                    |  |            |      |  |                           |  |        |               |  |  |                        |   |  |                      |        |   |          |  |       |              |  |  |                          |   |  |         |        |   |             |  |        |                           |  |  |                              |   |  |       |      |   |  |  |       |   |  |  |       |   |  |  |          |  
|At December 31, 2011 (Restated)     |  |            |     |  |                           |  | (127.6 | )             |  |  | (85.0                  | ) |  |                      | (301.1 | ) |          |  | (27.7 | )            |  |  | (10.5                    | ) |  |         | (121.1 | ) |             |  | (102.1 | )                         |  |  | (146.0                       | ) |  |       | (1.2 | ) |  |  | (90.2 | ) |  |  |      |   |  |  | (1,012.5 | )
|                                    |  |            |      |  |                           |  |        |               |  |  |                        |   |  |                      |        |   |          |  |       |              |  |  |                          |   |  |         |        |   |             |  |        |                           |  |  |                              |   |  |       |      |   |  |  |       |   |  |  |       |   |  |  |          |  
|Net                                 |  |            |      |  |                           |  |        |               |  |  |                        |   |  |                      |        |   |          |  |       |              |  |  |                          |   |  |         |        |   |             |  |        |                           |  |  |                              |   |  |       |      |   |  |  |       |   |  |  |       |   |  |  |          |  
|At December 31, 2010                |  |            | 11.1 |  |                           |  | 276.8  |               |  |  | 42.3                   |   |  |                      | 160.2  |   |          |  | 18.2  |              |  |  | 2.9                      |   |  |         | 381.3  |   |             |  | 16.4   |                           |  |  | 144.9                        |   |  |       | 2.1  |   |  |  | 104.8 |   |  |  | 40.0  |   |  |  | 1,201.0  |  
|At December 31, 2011 (Restated)     |  |            | 11.1 |  |                           |  | 300.8  |               |  |  | 40.4                   |   |  |                      | 179.0  |   |          |  | 20.1  |              |  |  | 3.5                      |   |  |         | 356.1  |   |             |  | 18.7   |                           |  |  | 159.6                        |   |  |       | 6.6  |   |  |  | 261.1 |   |  |  | 93.4  |   |  |  | 1,450.4  |  



|* | Non-cash transactions. In the column Aircraft this amount relates to aircraft owned by Embraers subsidiary ECC Leasing. The balances relating to the aircraft were transferred between property plant and
equipment and inventory.
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(i) | The aircraft are used for testing, shuttle and operational leasing and are adjusted to the fair value, when applicable. The following aircraft are held:
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | December 31, 2013: 45 ERJ 135, 19 ERJ 145, seven EMBRAER 170, one EMBRAER 175, two EMBRAER 190, one Phenom 100, three Phenom 300, three Legacy 600, one 690B, and one EMB-810C; and
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | December 31, 2012: one EMB 120, 45 ERJ 135, 16 ERJ 145, eight EMBRAER 170, one EMBRAER 175, two EMBRAER 190, one Phenom 100, one Phenom 300, four Legacy 600, two 690B, and one EMB-810C.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(ii) | Refers mainly to construction projects to expand the manufacturing plants and aircraft maintenance centers.
|---- | -----------------------------------------------------------------------------------------------------------



F-53



---

##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





For the year ended December 31, 2013, depreciation expense of US$ 131.0 (US$ 106.1 and
US$ 77.4 in 2012 and 2011, respectively) were charged to cost of sales, US$ 7.7 (US$ 24.1 and US$ 21.3 in 2012 and 2011, respectively) to selling expenses and US$ 7.1 (US$ 9.7 and US$ 10.6 in 2012 and 2011, respectively) to administrative expenses.

There was no interest qualified to be capitalized for the year ended December 31. 2013.

At December 31, 2013, US$ 269.1 property, plant and equipment were pledged as collateral to loans and financing guarantees and labor
contingencies.



|17. | Intangible Assets
|--- | -----------------

Internally developed intangible assets relate to the costs incurred
in developing programs for each 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 reduce emissions, in addition to speeding up design and manufacture, while optimizing the use of resources.



|                                           |  |                      |         |   |                           |  |         |                    |  |  |       |   |  |             |      |  |          |  |      |          |  |  |        |   |  |       |      |   |  |  |      |   |  |  |          |  
|------------------------------------------ |  | -------------------- | ------- | - | ------------------------- |  | ------- | ------------------ |  |  | ----- | - |  | ----------- | ---- |  | -------- |  | ---- | -------- |  |  | ------ | - |  | ----- | ---- | - |  |  | ---- | - |  |  | -------- | -
|                                           |  | 12.31.2013           |        
|                                           |  | Internally developed |         |   | Acquired from third party |  |         |                    | 
|                                           |  | Commercial           |         |   | Executive                 |  |         | DefenseandSecurity |  |  | Other |   |  | Development |      |  | Software |  |      | Goodwill |  |  | Other  |   |  | Total |     
|Intangible cost                            |  |                      |         |   |                           |  |         |                    |  |  |       |   |  |             |      |  |          |  |      |          |  |  |        |   |  |       |      |   |  |  |      |   |  |  |          |  
|At December 31, 2012 (Restated)            |  |                      | 996.8   |   |                           |  | 845.8   |                    |  |  | 24.3  |   |  |             |     |  |          |  | 14.7 |          |  |  | 175.0  |   |  |       | 39.4 |   |  |  | 23.1 |   |  |  | 2,119.1  |  
|Additions                                  |  |                      | 98.8    |   |                           |  | 171.8   |                    |  |  |      |   |  |             | 11.8 |  |          |  |     |          |  |  | 34.3   |   |  |       | (1.1 | ) |  |  | 1.0  |   |  |  | 316.6    |  
|Additions - business combination           |  |                      |        |   |                           |  |        |                    |  |  |      |   |  |             |     |  |          |  | 2.9  |          |  |  |       |   |  |       |     |   |  |  |     |   |  |  | 2.9      |  
|Contributions from suppliers               |  |                      | (51.8   | ) |                           |  |        |                    |  |  |      |   |  |             |     |  |          |  |     |          |  |  |       |   |  |       |     |   |  |  |     |   |  |  | (51.8    | )
|Disposals                                  |  |                      |        |   |                           |  |        |                    |  |  |      |   |  |             |     |  |          |  |     |          |  |  | (3.1   | ) |  |       |     |   |  |  |     |   |  |  | (3.1     | )
|Reclassifications                          |  |                      |        |   |                           |  | 10.3    |                    |  |  |      |   |  |             |     |  |          |  |     |          |  |  |       |   |  |       |     |   |  |  |     |   |  |  | 10.3     |  
|Translation adjustments                    |  |                      |        |   |                           |  |        |                    |  |  |      |   |  |             |     |  |          |  | (2.6 | )        |  |  |       |   |  |       |     |   |  |  |     |   |  |  | (2.6     | )
|                                           |  |                      |         |   |                           |  |         |                    |  |  |       |   |  |             |      |  |          |  |      |          |  |  |        |   |  |       |      |   |  |  |      |   |  |  |          |  
|At December 31, 2013                       |  |                      | 1,043.8 |   |                           |  | 1,027.9 |                    |  |  | 24.3  |   |  |             | 11.8 |  |          |  | 15.0 |          |  |  | 206.2  |   |  |       | 38.3 |   |  |  | 24.1 |   |  |  | 2,391.4  |  
|                                           |  |                      |         |   |                           |  |         |                    |  |  |       |   |  |             |      |  |          |  |      |          |  |  |        |   |  |       |      |   |  |  |      |   |  |  |          |  
|Accumulated amortization                   |  |                      |         |   |                           |  |         |                    |  |  |       |   |  |             |      |  |          |  |      |          |  |  |        |   |  |       |      |   |  |  |      |   |  |  |          |  
|At December 31, 2012 (Restated)            |  |                      | (785.1  | ) |                           |  | (235.4  | )                  |  |  | (23.6 | ) |  |             |     |  |          |  | (2.4 | )        |  |  | (112.7 | ) |  |       |     |   |  |  | (1.1 | ) |  |  | (1,160.3 | )
|Amortization                               |  |                      | (59.9   | ) |                           |  | (67.4   | )                  |  |  | (0.8  | ) |  |             |     |  |          |  |     |          |  |  | (15.3  | ) |  |       |     |   |  |  | (1.4 | ) |  |  | (144.8   | )
|Additions - business combination           |  |                      |        |   |                           |  |        |                    |  |  |      |   |  |             |     |  |          |  | (2.9 | )        |  |  | (0.1   | ) |  |       |     |   |  |  |     |   |  |  | (3.0     | )
|Amortization of contribution from supplier |  |                      | 19.5    |   |                           |  | 6.6     |                    |  |  |      |   |  |             |     |  |          |  |     |          |  |  |       |   |  |       |     |   |  |  |     |   |  |  | 26.1     |  
|Disposals                                  |  |                      |        |   |                           |  |        |                    |  |  |      |   |  |             |     |  |          |  |     |          |  |  |       |   |  |       |     |   |  |  |     |   |  |  |         |  
|Reclassifications                          |  |                      |        |   |                           |  | (0.2    | )                  |  |  |      |   |  |             |     |  |          |  |     |          |  |  |       |   |  |       |     |   |  |  |     |   |  |  | (0.2     | )
|Translation adjustments                    |  |                      |        |   |                           |  |        |                    |  |  |      |   |  |             |     |  |          |  | (0.1 | )        |  |  |       |   |  |       |     |   |  |  |     |   |  |  | (0.1     | )
|                                           |  |                      |         |   |                           |  |         |                    |  |  |       |   |  |             |      |  |          |  |      |          |  |  |        |   |  |       |      |   |  |  |      |   |  |  |          |  
|At December 31, 2013                       |  |                      | (825.5  | ) |                           |  | (296.4  | )                  |  |  | (24.4 | ) |  |             |     |  |          |  | (5.4 | )        |  |  | (128.1 | ) |  |       |     |   |  |  | (2.5 | ) |  |  | (1,282.3 | )
|                                           |  |                      |         |   |                           |  |         |                    |  |  |       |   |  |             |      |  |          |  |      |          |  |  |        |   |  |       |      |   |  |  |      |   |  |  |          |  
|Intangible, net                            |  |                      |         |   |                           |  |         |                    |  |  |       |   |  |             |      |  |          |  |      |          |  |  |        |   |  |       |      |   |  |  |      |   |  |  |          |  
|At December 31, 2012 (Restated)            |  |                      | 211.7   |   |                           |  | 610.4   |                    |  |  | 0.7   |   |  |             |     |  |          |  | 12.3 |          |  |  | 62.3   |   |  |       | 39.4 |   |  |  | 22.0 |   |  |  | 958.8    |  
|At December 31, 2013                       |  |                      | 218.3   |   |                           |  | 731.5   |                    |  |  | (0.1  | ) |  |             | 11.8 |  |          |  | 9.6  |          |  |  | 78.1   |   |  |       | 38.3 |   |  |  | 21.6 |   |  |  | 1,109.1  |  



|                                           |  |                      |        |   |                           |  |        |                    |  |  |             |   |  |          |      |   |          |  |        |       |  |  |       |  |  |  |      |   |  |  |          |  
|------------------------------------------ |  | -------------------- | ------ | - | ------------------------- |  | ------ | ------------------ |  |  | ----------- | - |  | -------- | ---- | - | -------- |  | ------ | ----- |  |  | ----- |  |  |  | ---- | - |  |  | -------- | -
|                                           |  | 12.31.2012           |       
|                                           |  | Internally developed |        |   | Acquired from third party |  |        |                    | 
|                                           |  | Commercial           |        |   | Executive                 |  |        | DefenseandSecurity |  |  | Development |   |  | Software |      |   | Goodwill |  |        | Other |  |  | Total | 
|Intangible cost                            |  |                      |        |   |                           |  |        |                    |  |  |             |   |  |          |      |   |          |  |        |       |  |  |       |  |  |  |      |   |  |  |          |  
|At December 31, 2011 (Restated)            |  |                      | 974.1  |   |                           |  | 659.2  |                    |  |  | 26.0        |   |  |          | 14.7 |   |          |  | 143.7  |       |  |  | 38.5  |  |  |  | 6.2  |   |  |  | 1,862.4  |  
|Additions                                  |  |                      | 23.7   |   |                           |  | 186.6  |                    |  |  |            |   |  |          |     |   |          |  | 32.3   |       |  |  |      |  |  |  | 9.8  |   |  |  | 252.4    |  
|Contributions from suppliers               |  |                      | (1.0   | ) |                           |  |       |                    |  |  |            |   |  |          |     |   |          |  |       |       |  |  |      |  |  |  |     |   |  |  | (1.0     | )
|Additions - business combination           |  |                      |       |   |                           |  |       |                    |  |  |            |   |  |          |     |   |          |  |       |       |  |  | 0.9   |  |  |  | 7.1  |   |  |  | 8.0      |  
|Translation adjustments                    |  |                      |       |   |                           |  |       |                    |  |  | (1.7        | ) |  |          |     |   |          |  | (1.0   | )     |  |  |      |  |  |  |     |   |  |  | (2.7     | )
|                                           |  |                      |        |   |                           |  |        |                    |  |  |             |   |  |          |      |   |          |  |        |       |  |  |       |  |  |  |      |   |  |  |          |  
|At December 31, 2012 (Restated)            |  |                      | 996.8  |   |                           |  | 845.8  |                    |  |  | 24.3        |   |  |          | 14.7 |   |          |  | 175.0  |       |  |  | 39.4  |  |  |  | 23.1 |   |  |  | 2,119.1  |  
|                                           |  |                      |        |   |                           |  |        |                    |  |  |             |   |  |          |      |   |          |  |        |       |  |  |       |  |  |  |      |   |  |  |          |  
|Accumulated amortization                   |  |                      |        |   |                           |  |        |                    |  |  |             |   |  |          |      |   |          |  |        |       |  |  |       |  |  |  |      |   |  |  |          |  
|At December 31, 2011 (Restated)            |  |                      | (742.5 | ) |                           |  | (182.2 | )                  |  |  | (23.5       | ) |  |          | (1.5 | ) |          |  | (103.5 | )     |  |  |      |  |  |  | (0.9 | ) |  |  | (1,054.1 | )
|Amortization                               |  |                      | (66.6  | ) |                           |  | (61.0  | )                  |  |  | (0.1        | ) |  |          | (0.9 | ) |          |  | (10.1  | )     |  |  |      |  |  |  | (0.2 | ) |  |  | (138.9   | )
|Amortization of contribution from supplier |  |                      | 24.0   |   |                           |  | 7.8    |                    |  |  |            |   |  |          |     |   |          |  |       |       |  |  |      |  |  |  |     |   |  |  | 31.8     |  
|Translation adjustments                    |  |                      |       |   |                           |  |       |                    |  |  |            |   |  |          |     |   |          |  | 0.9    |       |  |  |      |  |  |  |     |   |  |  | 0.9      |  
|                                           |  |                      |        |   |                           |  |        |                    |  |  |             |   |  |          |      |   |          |  |        |       |  |  |       |  |  |  |      |   |  |  |          |  
|At December 31, 2012 (Restated)            |  |                      | (785.1 | ) |                           |  | (235.4 | )                  |  |  | (23.6       | ) |  |          | (2.4 | ) |          |  | (112.7 | )     |  |  |      |  |  |  | (1.1 | ) |  |  | (1,160.3 | )
|                                           |  |                      |        |   |                           |  |        |                    |  |  |             |   |  |          |      |   |          |  |        |       |  |  |       |  |  |  |      |   |  |  |          |  
|Intangible, net                            |  |                      |        |   |                           |  |        |                    |  |  |             |   |  |          |      |   |          |  |        |       |  |  |       |  |  |  |      |   |  |  |          |  
|At December 31, 2011 (Restated)            |  |                      | 231.6  |   |                           |  | 477.0  |                    |  |  | 2.5         |   |  |          | 13.2 |   |          |  | 40.2   |       |  |  | 38.5  |  |  |  | 5.3  |   |  |  | 808.3    |  
|At December 31, 2012 (Restated)            |  |                      | 211.7  |   |                           |  | 610.4  |                    |  |  | 0.7         |   |  |          | 12.3 |   |          |  | 62.3   |       |  |  | 39.4  |  |  |  | 22.0 |   |  |  | 958.8    |  



F-54



---

##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





|                                            |  |                      |        |   |                           |  |        |                    |  |  |             |   |  |          |      |   |          |  |        |       |  |  |       |  |  |  |      |   |  |  |          |  
|------------------------------------------- |  | -------------------- | ------ | - | ------------------------- |  | ------ | ------------------ |  |  | ----------- | - |  | -------- | ---- | - | -------- |  | ------ | ----- |  |  | ----- |  |  |  | ---- | - |  |  | -------- | -
|                                            |  | 12.31.2011           |       
|                                            |  | Internally developed |        |   | Acquired from third party |  |        |                    | 
|                                            |  | Commercial           |        |   | Executive                 |  |        | DefenseandSecurity |  |  | Development |   |  | Software |      |   | Goodwill |  |        | Other |  |  | Total | 
|Intangible cost                             |  |                      |        |   |                           |  |        |                    |  |  |             |   |  |          |      |   |          |  |        |       |  |  |       |  |  |  |      |   |  |  |          |  
|At December 31, 2010                        |  |                      | 959.8  |   |                           |  | 553.1  |                    |  |  | 25.1        |   |  |          |     |   |          |  | 130.6  |       |  |  |      |  |  |  | 3.5  |   |  |  | 1,672.1  |  
|Additions                                   |  |                      | 15.3   |   |                           |  | 190.9  |                    |  |  | 0.9         |   |  |          |     |   |          |  | 12.6   |       |  |  |      |  |  |  | (2.3 | ) |  |  | 217.4    |  
|Additions - business combination            |  |                      |       |   |                           |  |       |                    |  |  |            |   |  |          | 23.0 |   |          |  | 0.5    |       |  |  | 38.5  |  |  |  | 5.0  |   |  |  | 67.0     |  
|Contributions from suppliers                |  |                      | (1.0   | ) |                           |  | (84.8  | )                  |  |  |            |   |  |          |     |   |          |  |       |       |  |  |      |  |  |  |     |   |  |  | (85.8    | )
|Translation adjustments                     |  |                      |       |   |                           |  |       |                    |  |  |            |   |  |          | (8.3 | ) |          |  |       |       |  |  |      |  |  |  |     |   |  |  | (8.3     | )
|                                            |  |                      |        |   |                           |  |        |                    |  |  |             |   |  |          |      |   |          |  |        |       |  |  |       |  |  |  |      |   |  |  |          |  
|At December 31, 2011 (Restated)             |  |                      | 974.1  |   |                           |  | 659.2  |                    |  |  | 26.0        |   |  |          | 14.7 |   |          |  | 143.7  |       |  |  | 38.5  |  |  |  | 6.2  |   |  |  | 1,862.4  |  
|                                            |  |                      |        |   |                           |  |        |                    |  |  |             |   |  |          |      |   |          |  |        |       |  |  |       |  |  |  |      |   |  |  |          |  
|Acumulated amortization                     |  |                      |        |   |                           |  |        |                    |  |  |             |   |  |          |      |   |          |  |        |       |  |  |       |  |  |  |      |   |  |  |          |  
|At December 31, 2010                        |  |                      | (694.1 | ) |                           |  | (141.3 | )                  |  |  | (23.3       | ) |  |          |     |   |          |  | (95.4  | )     |  |  |      |  |  |  | (1.7 | ) |  |  | (955.8   | )
|Disposals                                   |  |                      | 0.1    |   |                           |  | 0.6    |                    |  |  |            |   |  |          |     |   |          |  |       |       |  |  |      |  |  |  |     |   |  |  | 0.7      |  
|Amortization                                |  |                      | (71.9  | ) |                           |  | (47.9  | )                  |  |  | (0.2        | ) |  |          | (1.7 | ) |          |  | (7.7   | )     |  |  |      |  |  |  | (0.1 | ) |  |  | (129.5   | )
|Amortization of contribution from suppliers |  |                      | 23.4   |   |                           |  | 6.4    |                    |  |  |            |   |  |          |     |   |          |  |       |       |  |  |      |  |  |  |     |   |  |  | 29.8     |  
|Translation adjustments                     |  |                      |       |   |                           |  |       |                    |  |  |            |   |  |          | 0.2  |   |          |  | (0.4   | )     |  |  |      |  |  |  | 0.9  |   |  |  | 0.7      |  
|                                            |  |                      |        |   |                           |  |        |                    |  |  |             |   |  |          |      |   |          |  |        |       |  |  |       |  |  |  |      |   |  |  |          |  
|At December 31, 2011 (Restated)             |  |                      | (742.5 | ) |                           |  | (182.2 | )                  |  |  | (23.5       | ) |  |          | (1.5 | ) |          |  | (103.5 | )     |  |  |      |  |  |  | (0.9 | ) |  |  | (1,054.1 | )
|                                            |  |                      |        |   |                           |  |        |                    |  |  |             |   |  |          |      |   |          |  |        |       |  |  |       |  |  |  |      |   |  |  |          |  
|Intangible, net                             |  |                      |        |   |                           |  |        |                    |  |  |             |   |  |          |      |   |          |  |        |       |  |  |       |  |  |  |      |   |  |  |          |  
|At December 31, 2010                        |  |                      | 265.7  |   |                           |  | 411.8  |                    |  |  | 1.8         |   |  |          |     |   |          |  | 35.2   |       |  |  |      |  |  |  | 1.8  |   |  |  | 716.3    |  
|At December 31, 2011 (Restated)             |  |                      | 231.6  |   |                           |  | 477.0  |                    |  |  | 2.5         |   |  |          | 13.2 |   |          |  | 40.2   |       |  |  | 38.5  |  |  |  | 5.3  |   |  |  | 808.3    |  

At December 31, 2013, the Company capitalized interest of US$ 8.2 in intangible assets.



|18. | Impairment test
|--- | ---------------

At December 31, 2013 and 2012, the Company performed an evaluation
of all of its cash-generating units (CGUs). No indication of impairment was identified. No impairment adjustment was necessary, except for aircraft (Note 16.2). The impairment losses were established for aircraft operating segments are
recognized in Commercial Aviation or Executive Aviation segments in proportion to the respective aircraft.

In the
case of intangible assets arising in the process of product development or acquisition of new businesses, the recovery test was performed for all CGU related, independent of indicators of loss. For these calculations, respective policy was applied
(Note 2.2.19) using a discount rate of 9.4% (expectation of return for investors) on the cash-flows presented in the Strategic Plan of the Company approved in the 4th quarter of 2013.

In the last quarter of 2011, the Company concluded the business combination of two subsidiaries: Orbisat Industria S.A. and Atech
Negócios em Tecnologias S.A. (Note 14 of December 31, 2011 financial statements) which resulted in amounts of goodwill based on future economic benefits. Because Atechs control was acquired on a step acquisition there was a slight
adjustment in 2013 to the Atechs goodwill (Note 14.1). At December 31, 2013 there were no impairment losses for those goodwill balances based on cash flow projections.

Additionally, these goodwill amounts were tested for impairment together with other property, plant and equipment and intangible amounts,
considering a group of several CGUs, as the assets were related to more than one CGU.



|19. | Trade accounts payable
|--- | ----------------------



|                   |  |            |         |  |            |  |       | 
|------------------ |  | ---------- | ------- |  | ---------- |  | ----- | 
|                   |  | 12.31.2013 |         |  | 12.31.2012 | 
|                   |  |            |         |  | (Restated) | 
|Foreign suppliers  |  |            | 640.8   |  |            |  | 384.6 | 
|Risk partners (i)  |  |            | 279.0   |  |            |  | 266.4 | 
|Domestic suppliers |  |            | 93.8    |  |            |  | 107.7 | 
|                   |  |            |         |  |            |  |       | 
|                   |  |            | 1,013.6 |  |            |  | 758.7 | 
|                   |  |            |         |  |            |  |       | 
|Current portion    |  |            | 1,013.6 |  |            |  | 758.7 | 



| | (i) | The Companys risk-sharing suppliers /partners develop and produce significant aircraft components, including engines, hydraulic components, avionics, wings, tail sections, interior parts, and fuselage parts, among
others. 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.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-55



---

##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





Once the risk-sharing suppliers/partners have been selected and the aircraft development and
production program has commenced, changing suppliers is more challenging. For example, in the case of engines, the aircraft is specially designed to accommodate a given component, which cannot be easily replaced by another supplier without incurring
delays and significant additional expense. This dependence makes the Company vulnerable to the performance, quality and financial position of its risk-sharing suppliers/partners.



|20. | Loans and Financing
|--- | -------------------



|                                       |  |          |  |                      |  |                      |  |          |      |  |            |  |         |            |  |  |         | 
|-------------------------------------- |  | -------- |  | -------------------- |  | -------------------- |  | -------- | ---- |  | ---------- |  | ------- | ---------- |  |  | ------- | 
|                                       |  |          |  | Contractual          |  | Effective            |  |          |      |  |            |  |         |            | 
|                                       |  | Currency |  | interest rate - %    |  | interest rate - %    |  | Maturity |      |  | 12.31.2013 |  |         | 12.31.2012 | 
|                                       |  |          |  |                      |  |                      |  |          |      |  |            |  |         | (Restated) | 
|Other currencies:                      |  |          |  |                      |  |                      |  |          |      |  |            |  |         |            |  |  |         | 
|Working capital                        |  | US$      |  | 5.15% a 6.38%        |  | 5.15% a 7.42%        |  |          | 2023 |  |            |  | 1,390.4 |            |  |  | 1,390.6 | 
|                                       |  | Euro     |  | 2.00% a 5.05%        |  | 2.00% a 5.05%        |  |          | 2020 |  |            |  | 76.4    |            |  |  | 69.3    | 
|Project development                    |  | US$      |  | 6.08%                |  | 6.08%                |  |          | 2015 |  |            |  | 0.5     |            |  |  | 0.8     | 
|Advances on foreign exchange contracts |  | US$      |  | 6.18%                |  | 6.18%                |  |          | 2013 |  |            |  |        |            |  |  | 30.7    | 
|                                       |  |          |  | 2.62%                |  | 2.62%                |  |          | 2030 |  |            |  |         |            |  |  |         | 
|Property, plant and equipment          |  | US$      |  |                      |  |                      |  |          |      |  |            |  | 66.4    |            |  |  | 68.4    | 
|                                       |  |          |  | Libor 1M + 2.44%     |  | Libor 1M + 2.44%     |  |          | 2035 |  |            |  |         |            |  |  |         | 
|                                       |  |          |  | Euribor 1M + 1.625%  |  | Euribor 1M + 1.625%  |  |          | 2014 |  |            |  |         |            |  |  |         | 
|                                       |  | Euro     |  |                      |  |                      |  |          |      |  |            |  | 0.1     |            |  |  | 0.4     | 
|Finance leasing                        |  |          |  | 1.98% a 2.50%;       |  | 1.98% a 2.50%;       |  |          | 2014 |  |            |  |         |            |  |  |         | 
|                                       |  | US$      |  | Libor 6M + 3.40%     |  | Libor 6M + 3.40%     |  |          | 2017 |  |            |  | 0.2     |            |  |  | 0.7     | 
|                                       |  |          |  |                      |  |                      |  |          |      |  |            |  |         |            |  |  |         | 
|                                       |  |          |  |                      |  |                      |  |          |      |  |            |  | 1,534.0 |            |  |  | 1,560.9 | 
|                                       |  |          |  |                      |  |                      |  |          |      |  |            |  |         |            |  |  |         | 
|In local currency:                     |  |          |  |                      |  |                      |  |          |      |  |            |  |         |            |  |  |         | 
|Export Financing                       |  | R$       |  | 5.50%                |  | 5.50%                |  |          | 2016 |  |            |  | 86.1    |            |  |  | 224.1   | 
|                                       |  |          |  | 3.50%                |  | 3.50%                |  |          | 2023 |  |            |  |         |            |  |  |         | 
|Project development                    |  | R$       |  |                      |  |                      |  |          |      |  |            |  | 236.3   |            |  |  | 280.8   | 
|                                       |  |          |  | TLPJ + 1.92% a 5.00% |  | TLPJ + 1.92% a 5.00% |  |          | 2018 |  |            |  |         |            |  |  |         | 
|Credit Note for Exportation            |  |          |  | 5.50%                |  | 5.50%                |  |          | 2016 |  |            |  | 337.5   |            |  |  |        | 
|                                       |  | R$       |  |                      |  |                      |  |          |      |  |            |  |         |            |  |  |         | 
|Finance leasing                        |  |          |  | CDI + 1.20%          |  | CDI + 1.20%          |  |          | 2015 |  |            |  | 0.4     |            |  |  | 0.7     | 
|                                       |  |          |  |                      |  |                      |  |          |      |  |            |  |         |            |  |  |         | 
|                                       |  | R$       |  |                      |  |                      |  |          |      |  |            |  | 660.3   |            |  |  | 505.6   | 
|                                       |  |          |  |                      |  |                      |  |          |      |  |            |  |         |            |  |  |         | 
|Total                                  |  |          |  |                      |  |                      |  |          |      |  |            |  | 2,194.3 |            |  |  | 2,066.5 | 
|Current portion                        |  |          |  |                      |  |                      |  |          |      |  |            |  | 79.3    |            |  |  | 336.3   | 
|                                       |  |          |  |                      |  |                      |  |          |      |  |            |  |         |            |  |  |         | 
|Non-current portion                    |  |          |  |                      |  |                      |  |          |      |  |            |  | 2,115.0 |            |  |  | 1,730.2 | 
|                                       |  |          |  |                      |  |                      |  |          |      |  |            |  |         |            |  |  |         | 

In October 2006, the Company ́s wholly-owned finance subsidiary Embraer Overseas Limited, which only
performs financial operations, issued US$ 400.0 in Guaranteed Notes at 6.375% p.a. due on January 24, 2017 in an offering subsequently registered with the SEC. In October 2009, Embraer Overseas Limited issued US$ 500.0 of 6.375%
p.a. guaranteed notes due on January 15, 2020. Because Overseas Limited is a wholly owned subsidiary of Embraer S.A., and exists to conduct financial operations, funding operations made by Embraer Overseas Limited are presented in the statement
of financial position of the Company.

Between the months of August and September 2013 Embraer S.A., through its subsidiary Embraer
Overseas Limited, made the exchange offer for existing bonds maturing in 2017 and 2020 for New Notes maturing in 2023. For titles of 2017 to the Exchange Offer resulted in US$ 146.4 aggregate principal amount of existing notes and US$
337.2 aggregate principal amount of 2020 Notes, representing approximately 54.95% of the Notes exchanged. The total of the Exchange Offer which considering the effects of the exchange price negotiations total issuance of New Notes closed
on approximately US$ 540.5 in principal at a rate of 5.696% and maturing to September 16, 2023 value.

On March 8, 2012, Embraer
S.A. signed a contract for R$ 1 billion non-reimbursable revolving credit line with four prime Brazilian financial institutions, equivalent to US$ 427.0, maturing on March 8, 2015. Each institution provided R$ 250.0 million under identical
conditions, allowing the Company to disburse the full amount or smaller amounts, between March 9, 2012 and February 7, 2015. The annual cost of the credit



F-56



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##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





line, when realized, will be the CDI + 1.30% a year. The maintenance costs will be included in the Companys financial results under financial expense.

The Company has the following unused amounts in these credit lines:



|                            |  |            |       |  |            |  |       | 
|--------------------------- |  | ---------- | ----- |  | ---------- |  | ----- | 
|                            |  | 12.31.2013 |       |  | 12.31.2012 | 
|                            |  |            |       |  | (Restated) | 
|Floating:                   |  |            |       |  |            |  |       | 
|Expiring within one year    |  |            |      |  |            |  |      | 
|Expiring more than one year |  |            | 426.9 |  |            |  | 489.4 | 
|                            |  |            |       |  |            |  |       | 
|                            |  |            | 426.9 |  |            |  | 489.4 | 
|                            |  |            |       |  |            |  |       | 

On June 15, 2012, Embraer S.A. raised funds by issuing guaranteed notes, maturing on June 15, 2022,
through an overseas offer of US$ 500 at a rate of 5.15% a year.

On February 2013, Embraer S.A. signed loans in the form of Export Credit
Notes for the purpose of applying in export activities and the production of goods for export in the accumulated amount of R$ 712.0 million equivalent to US$ 303.9 at a fixed rate of 5.50% p.a.

On March and April, 2013, Embraer S.A. contracted the funding line Programa BNDES de Sustentação do Investimento  BNDES
PSI  Subprograma Exportação de Pré-embarque in order to implement the activities of production for export in the total amount of R$ 200.0 million equivalent to US$ 85.4 at a fixed rate of 5.50% p.a.

In August 2013, Embraer S.A. contracted financing line from the Financier of Studies and Projects - FINEP for the purpose of use in research
and new product development program totaling approximately R$ 303.9 million equivalent to US$ 129.8 at a rate fixed 3.50% per annum.

In December 2013, Embraer S.A. signed a contract with BNDES for use in developments projects in the amount of approximately R$ 1.4 billion
equivalent to US$ 598. On December 31, 2013 there was no amount disbursed this line.

On December 31, 2013, the long-term
financing agreements will mature as follows:



|           |  |  |         | 
|---------- |  |  | ------- | 
|Year       |  |  |        
|2015       |  |  | 59.8    | 
|2016       |  |  | 508.8   | 
|2017       |  |  | 302.4   | 
|2018       |  |  | 32.1    | 
|After 2018 |  |  | 1,211.9 | 
|           |  |  |         | 
|           |  |  | 2,115.0 | 
|           |  |  |         | 



| | 20.1. | Currency analysis
| | ----- | -----------------

Total debt is denominated in the following currencies:



|               |  |            |         |  |            |  |         | 
|-------------- |  | ---------- | ------- |  | ---------- |  | ------- | 
|               |  | 12.31.2013 |         |  | 12.31.2012 | 
|               |  |            |         |  | (Restated) | 
|Loans          |  |            |         |  |            |  |         | 
|US dollar      |  |            | 1,457.5 |  |            |  | 1,491.2 | 
|Brazilian Real |  |            | 660.3   |  |            |  | 505.6   | 
|Euro           |  |            | 76.5    |  |            |  | 69.7    | 
|               |  |            |         |  |            |  |         | 
|               |  |            | 2,194.3 |  |            |  | 2,066.5 | 
|               |  |            |         |  |            |  |         | 



F-57



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##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





| | 20.2. | Capital lease obligations
| | ----- | -------------------------

The leasing operations are guaranteed by the assets under
lease and their breakdown by maturity is shown below:



|                                                          |  |            |      |   |            |  |      |  
|--------------------------------------------------------- |  | ---------- | ---- | - | ---------- |  | ---- | -
|                                                          |  | 12.31.2013 |      |   | 12.31.2012 | 
|                                                          |  |            |      |   | (Restated) | 
|Less than one year                                        |  |            | 0.6  |   |            |  | 1.2  |  
|More than one year and less than five years               |  |            | 0.3  |   |            |  | 0.9  |  
|                                                          |  |            |      |   |            |  |      |  
|                                                          |  |            | 0.9  |   |            |  | 2.1  |  
|Less -Implicit interest                                   |  |            | (0.2 | ) |            |  | (0.3 | )
|                                                          |  |            |      |   |            |  |      |  
|Capital lease obligation                                  |  |            | 0.7  |   |            |  | 1.8  |  
|                                                          |  |            |      |   |            |  |      |  
|The present value of capital lease obligation, following: |  |            |      |   |            |  |      |  
|Less than one year                                        |  |            | 0.4  |   |            |  | 1.1  |  
|More than one year and less than five years               |  |            | 0.3  |   |            |  | 0.7  |  
|                                                          |  |            |      |   |            |  |      |  
|                                                          |  |            | 0.7  |   |            |  | 1.8  |  
|                                                          |  |            |      |   |            |  |      |  



| | 20.3. | Interest and guarantees
| | ----- | -----------------------

On December 31, 2013, the loans denominated in Real (30%
of the total) are subject to fixed interest rates or interest based on the Brazilian Long-term Interest Rate (TJLP). The weighted average rate at December 31, 2013 was 6.17% p.a. (4.70% p.a. at December 31, 2012).

On December 31, 2013 the loans denominated in US dollar (66% of the total) are mainly subject to fixed interest rates. The weighted
average rate was 5.81% p.a. (6.09% p.a. at December 31, 2012). In addition, as at December 31, 2013, the Company had denominated loans in Euro (4% from total) that are subject to annual weighted interest rates of 2.82% p.a. (2.65% p.a. at
December 31, 2012).

The effective rates on the foreign currency financing, which includes the financial structuring costs incurred
and already paid, result in an average effective weighted rate equivalent to LIBOR + 3.81% p.a. as at December 31, 2013 (LIBOR + 4.98% p.a. at December 31, 2012).

Real estate, machinery, equipment, commercial pledges and bank guarantees totaling US$ 374.8 as at December 31, 2013 (US$ 429.7 at
December 31, 2012) were provided as collateral for loans.



| | 20.4. | 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 the EBITDA/net financial expense. Agreements also include customary restrictions on the creation of new encumbrances on assets, change of control of the Company, sale of assets and payment of dividends in
excess of the minimum mandatory dividend in the event of default on the financing, and transactions with affiliated companies. As at December 31, 2013, the Company was in compliance with all the restrictive clauses.



F-58



---

##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





|21. | Other payables
|--- | --------------



|                                            |  |            |       |  |            |  |       | 
|------------------------------------------- |  | ---------- | ----- |  | ---------- |  | ----- | 
|                                            |  | 12.31.2013 |       |  | 12.31.2012 | 
|                                            |  |            |       |  | (Restated) | 
|Contractual obligations (i)                 |  |            | 107.4 |  |            |  | 31.3  | 
|Provisions related to payroll (ii)          |  |            | 130.2 |  |            |  | 133.7 | 
|Other accounts payable (iii)                |  |            | 56.3  |  |            |  | 44.6  | 
|Commercial incentives                       |  |            | 18.5  |  |            |  | 22.1  | 
|Provision Employee Profit sharing (Note 34) |  |            | 57.2  |  |            |  | 36.1  | 
|Security deposit                            |  |            | 9.2   |  |            |  | 6.8   | 
|Insurance                                   |  |            | 6.3   |  |            |  | 6.2   | 
|Accrued materials (iv)                      |  |            | 5.9   |  |            |  | 5.6   | 
|Brazilian Air Force                         |  |            | 0.8   |  |            |  |      | 
|Non controlling interest option (v)         |  |            | 0.7   |  |            |  | 1.0   | 
|Financial credit                            |  |            | 0.6   |  |            |  | 0.9   | 
|                                            |  |            |       |  |            |  |       | 
|                                            |  |            | 393.1 |  |            |  | 288.3 | 
|                                            |  |            |       |  |            |  |       | 
|Current portion                             |  |            | 304.8 |  |            |  | 277.2 | 
|Non-current portion                         |  |            | 88.3  |  |            |  | 11.1  | 



| | (i) | Represents mainly amounts recorded to cover maintenance costs of aircraft under operating under lease agreements and contractual commitments in the sale of new aircraft or completeness of financial residual value
guarantees (Note 25.2).
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (ii) | Refers to the accrued vacation and related charges recorded in the consolidated financial statements under other payroll;
| | ---- | -------------------------------------------------------------------------------------------------------------------------

| | (iii) | Represents primarily expenses incurred at the statement of financial position date, with payments occurring within one month;
| | ----- | -----------------------------------------------------------------------------------------------------------------------------

| | (iv) | Represents accessories or components to be installed in aircraft already delivered, in accordance with the contracts; and
| | ---- | -------------------------------------------------------------------------------------------------------------------------

| | (v) | Refers to non-controlling (whose right to practice has not yet occurred) put options which may require some or all of the interest in the investees to be purchased by the Company.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|22. | Advances from customers
|--- | -----------------------



|                            |  |            |         |  |            |  |       | 
|--------------------------- |  | ---------- | ------- |  | ---------- |  | ----- | 
|                            |  | 12.31.2013 |         |  | 12.31.2012 | 
|                            |  |            |         |  | (Restated) | 
|Denominated in U.S. dollars |  |            | 728.8   |  |            |  | 870.3 | 
|Denominated in Reais        |  |            | 278.2   |  |            |  | 129.3 | 
|                            |  |            |         |  |            |  |       | 
|                            |  |            | 1,007.0 |  |            |  | 999.6 | 
|                            |  |            |         |  |            |  |       | 
|Current portion             |  |            | 875.9   |  |            |  | 899.2 | 
|Non-current portion         |  |            | 131.1   |  |            |  | 100.4 | 

The amount of advances from customers related to construction contracts using the POC method is US$ 309.6, on
December 31, 2013.



|23. | Taxes and payroll charges payable
|--- | ---------------------------------

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 on 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 administrative and judicial proceedings, the Company has obtained injunctions and similar measures to suspend collection or offset payment of taxes and social contributions and charges. Provisions
have been recorded for the amount of taxes not collected, as a result of preliminary legal decisions, and updated based on changes in the SELIC interest rate, pending a final and definitive decision.



F-59



---

##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





|                                                    |  |            |       |  |            |  |       | 
|--------------------------------------------------- |  | ---------- | ----- |  | ---------- |  | ----- | 
|                                                    |  | 12.31.2013 |       |  | 12.31.2012 | 
|                                                    |  |            |       |  | (Restated) | 
|Refinanced taxes (i)                                |  |            | 164.8 |  |            |  | 3.2   | 
|INSS (social security contribution) (ii)            |  |            | 122.6 |  |            |  | 129.0 | 
|IRRF (Income tax withholding income tax)            |  |            | 20.3  |  |            |  | 19.5  | 
|IPI (Manufacturing tax)                             |  |            | 13.0  |  |            |  | 6.5   | 
|FGTS (Government Employee Severance Indemnity Fund) |  |            | 7.1   |  |            |  | 7.1   | 
|PIS and COFINS (iii)                                |  |            | 6.4   |  |            |  | 5.0   | 
|Social contribution on net income (iv)              |  |            | 4.1   |  |            |  | 235.6 | 
|Other                                               |  |            | 10.4  |  |            |  | 9.2   | 
|                                                    |  |            |       |  |            |  |       | 
|                                                    |  |            | 348.7 |  |            |  | 415.1 | 
|                                                    |  |            |       |  |            |  |       | 
|Current portion                                     |  |            | 133.1 |  |            |  | 65.1  | 
|Non-current portion                                 |  |            | 215.6 |  |            |  | 350.0 | 



| | (i) | The Company judicially and administratively discussed the recognition of the constitutional immunity of social contribution tax on exports as well as the tax basis and tax rates on certain specific and remittances
abroad. With the reopening of installments program established by Law 11.941/2009, the Company decided to include these debts in this program.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The total amount of net debt included the value of the escrow deposit in December 2013 was US$ 169.6, paid in 30 months related to the
consolidation in November 2009, plus Selic period. The remaining amount at December 31, 2013 was US$ 163.9.



| | (ii) | This refers 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 rates since 1995, the liability
for which is suspended following a lower court decision in a civil suit. The amount involved is US$ 78.3 at December 31, 2013 (US$ 86.9 at December 31, 2012).
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The Company has also filed a declaratory action in ordinary proceedings, applying for advance relief, claiming waiver of the standards that
govern the Accident Prevention Factor (FAP) based on direct violation of article 10 of Law no 10666/2003, which establishes the tax calculation methodology.

The advance relief was granted in March 2011, suspending the liability for the tax credit, and revoked in September 2012. The Company made the
court-mandated escrow deposit, in the terms of article 151 sub-item II, of the National Tax Code, maintaining the suspension of the FAP tax credit liability for 2010 and 2011 of US$ 10.2.

With regard to 2013 and 2012, the amounts involved are still suspended due to filing of an administrative appeal disputing the indices used in
the Accident Prevention Factor. The amount involved at December 31, 2013, is US$ 19.9, for which a provision has been recorded.

On
February, 2009, the Company filed a suit contesting the payment of social security on paid notice of dismissal. As a result of a lower court decision, the amounts relating to paid notices were excluded from the calculation base for the
employers social security contribution and a provision was recorded, pending a final successful outcome of the court case. The suit was judged in the Companys favor by the Federal Court of the 3rd Region and is awaiting judgment of the appeal filed by the Federal Government. The amount involved in the process is US$ 12.4 at December 31, 2013 (US$ 13.2 at December 31, 2012).



| | (iii) | This 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
no 11941/09, 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
PASEP calculation base. The amount involved in the suit is US$ 4.2.
| | ----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (iv) | The Company was seeking recognition of the constitutional immunity of social contribution on exports. Regarding social contribution on exports, the case was in the Supreme Court, awaiting the judgment of Extraordinary
Appeal, which was awarded suspensive effect in favor on the Company.
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-60



---

##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





In October 2013, the tax installment plan of Law 11.941/2009, was reopened, and after
evaluating the impact of amnesty on the values discussed, as well as considering the low chance of success, the Company joined in December 2013 the special stimulus installment program, sanctioned by Law 12.865/2013.

The total amount of debt, net of the judicial deposit in December 2013 was US$ 136.6, replacing the value of US$ 106.7, after application of
the listed tax stimulus in Article 3 of PGFN / RFB 07 of 10/15/2013, which was divided in 30 installments.

With respect to the litigation
issues mentioned above, the remaining provisions will be kept until there is a final outcome and no legal actions are applicable anymore.



|24. | Income Taxes
|--- | ------------

As the tax basis for the majority of the Companys assets and
liabilities are maintained in Real and the accounting basis are measured in US dollars (functional currency), the fluctuation in the exchange rate significantly impacts the tax basis and, in turn, the deferred income tax expense (benefit).

Based on expectation of future taxable income, the Company recorded deferred tax assets based on tax losses carryforward.

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.



| | 24.1. | Deferred taxes
| | ----- | --------------

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



|                                                                                          |  |            |        |   |            |  |       |            |  |  |       |  
|----------------------------------------------------------------------------------------- |  | ---------- | ------ | - | ---------- |  | ----- | ---------- |  |  | ----- | -
|                                                                                          |  | 12.31.2013 |        |   | 12.31.2012 |  |       | 12.31.2011 | 
|                                                                                          |  |            |        |   | (Restated) |  |       | (Restated) | 
|Temporarily non-deductible provisions                                                     |  |            | (117.9 | ) |            |  | (46.9 | )          |  |  | 72.7  |  
|Tax loss carryforwards                                                                    |  |            | 22.3   |   |            |  | 31.0  |            |  |  | 5.1   |  
|Differences between basis: account x tax                                                  |  |            |        |   |            |  |       |            |  |  |       |  
|Difference between tax basis (Real) and functional currency measurement basis (US dollar) |  |            | (123.7 | ) |            |  | (32.6 | )          |  |  | 29.9  |  
|Finance guarantee provision gain not realized and Health Insurance Provision              |  |            | 90.7   |   |            |  | 57.7  |            |  |  | 36.3  |  
|Effect of differences by fixed asset                                                      |  |            | (29.7  | ) |            |  | (25.8 | )          |  |  | (22.6 | )
|Other accounting differences                                                              |  |            | (42.4  | ) |            |  | 3.0   |            |  |  | (78.5 | )
|                                                                                          |  |            |        |   |            |  |       |            |  |  |       |  
|Deferred tax assets (liabilities), net                                                    |  |            | (200.7 | ) |            |  | (13.6 | )          |  |  | 42.9  |  
|                                                                                          |  |            |        |   |            |  |       |            |  |  |       |  
|Total deferred tax asset                                                                  |  |            | 8.5    |   |            |  | 12.9  |            |  |  | 65.7  |  
|Total deferred tax liability                                                              |  |            | (209.2 | ) |            |  | (26.5 | )          |  |  | (22.8 | )



F-61



---

##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





The change of deferred income tax that affected profit and loss was as follows:



|                                                                                          |  |              |        |   |               |  |       |       |  |  |        |  
|----------------------------------------------------------------------------------------- |  | ------------ | ------ | - | ------------- |  | ----- | ----- |  |  | ------ | -
|                                                                                          |  | From the     |        |   | Other         |  |       |       | 
|                                                                                          |  | statement of |        |   | comprehensive |  |       |       | 
|                                                                                          |  | income       |        |   | income        |  |       | Total | 
|At December 31, 2010                                                                      |  |              | 138.5  |   |               |  | (10.8 | )     |  |  | 127.7  |  
|                                                                                          |  |              |        |   |               |  |       |       |  |  |        |  
|Temporarily non-deductible provisions                                                     |  |              | 96.3   |   |               |  |      |       |  |  | 96.3   |  
|Tax loss carryforwards                                                                    |  |              | (5.4   | ) |               |  |      |       |  |  | (5.4   | )
|Differences between basis: account x tax                                                  |  |              |        |   |               |  |       |       |  |  |        |  
|Difference between tax basis (Real) and functional currency measurement basis (US dollar) |  |              | (130.9 | ) |               |  |      |       |  |  | (130.9 | )
|Finance Guarantee Provision Gain not realized and Health Insurance Provision              |  |              | (52.0  | ) |               |  |      |       |  |  | (52.0  | )
|Effect of differences by fixed asset                                                      |  |              | (6.7   | ) |               |  |      |       |  |  | (6.7   | )
|Other accounting differences                                                              |  |              | 13.2   |   |               |  | 0.7   |       |  |  | 13.9   |  
|At December 31, 2011 (Restated)                                                           |  |              | 53.0   |   |               |  | (10.1 | )     |  |  | 42.9   |  
|                                                                                          |  |              |        |   |               |  |       |       |  |  |        |  
|Temporarily non-deductible provisions                                                     |  |              | (119.6 | ) |               |  |      |       |  |  | (119.6 | )
|Tax loss carryforwards                                                                    |  |              | 25.9   |   |               |  |      |       |  |  | 25.9   |  
|Differences between basis: account x tax                                                  |  |              |        |   |               |  |       |       |  |  |        |  
|Difference between tax basis (Real) and functional currency measurement basis (US dollar) |  |              | (62.5  | ) |               |  |      |       |  |  | (62.5  | )
|Finance Guarantee Provision Gain not realized and Health Insurance Provision              |  |              | 21.5   |   |               |  |      |       |  |  | 21.5   |  
|Effect of differences by fixed asset                                                      |  |              | (3.3   | ) |               |  |      |       |  |  | (3.3   | )
|Other accounting differences                                                              |  |              | 62.7   |   |               |  | 18.8  |       |  |  | 81.5   |  
|At December 31, 2012 (Restated)                                                           |  |              | (22.3  | ) |               |  | 8.7   |       |  |  | (13.6  | )
|                                                                                          |  |              |        |   |               |  |       |       |  |  |        |  
|Temporarily non-deductible provisions                                                     |  |              | (77.0  | ) |               |  |      |       |  |  | (77.0  | )
|Tax loss carryforwards                                                                    |  |              | (4.7   | ) |               |  |      |       |  |  | (4.7   | )
|Differences between basis: account x tax                                                  |  |              |        |   |               |  |       |       |  |  |        |  
|Difference between tax basis (Real) and functional currency measurement basis (US dollar) |  |              | (91.1  | ) |               |  |      |       |  |  | (91.1  | )
|Finance guarantee provision gain not realized and Health Insurance Provision              |  |              | 36.0   |   |               |  | 4.4   |       |  |  | 40.4   |  
|Effect of differences by fixed asset                                                      |  |              | (7.2   | ) |               |  |      |       |  |  | (7.2   | )
|Other accounting differences                                                              |  |              | (48.6  | ) |               |  | 1.1   |       |  |  | (47.5  | )
|                                                                                          |  |              |        |   |               |  |       |       |  |  |        |  
|At December 31, 2013                                                                      |  |              | (214.9 | ) |               |  | 14.2  |       |  |  | (200.7 | )
|                                                                                          |  |              |        |   |               |  |       |       |  |  |        |  



| | 24.2. | Reconciliation of income tax expense
| | ----- | ------------------------------------



|                                                                                             |  |            |        |   |            |  |        |            |  |  |        |  
|-------------------------------------------------------------------------------------------- |  | ---------- | ------ | - | ---------- |  | ------ | ---------- |  |  | ------ | -
|                                                                                             |  | 12.31.2013 |        |   | 12.31.2012 |  |        | 12.31.2011 | 
|                                                                                             |  |            |        |   | (Restated) |  |        | (Restated) | 
|Profit before taxation                                                                       |  |            | 602.4  |   |            |  | 613.8  |            |  |  | 247.8  |  
|                                                                                             |  |            |        |   |            |  |        |            |  |  |        |  
|Income tax and social contribution expense at the nominal Brazilian composite tax rate - 34% |  |            | (204.8 | ) |            |  | (208.7 | )          |  |  | (84.3  | )
|                                                                                             |  |            |        |   |            |  |        |            |  |  |        |  
|Tax on profits of overseas subsidiaries                                                      |  |            | (8.5   | ) |            |  | 18.9   |            |  |  | (43.5  | )
|Difference between tax basis (Real) and functional currency measurement basis (US dollar)    |  |            | (91.1  | ) |            |  | (62.5  | )          |  |  | (130.9 | )
|Research and development tax incentives                                                      |  |            | 80.2   |   |            |  | 49.3   |            |  |  | 56.4   |  
|Interest on own capital                                                                      |  |            | 23.6   |   |            |  | 26.3   |            |  |  | 45.9   |  
|Gain or loss in subsidiary equity                                                            |  |            |       |   |            |  | (0.5   | )          |  |  |       |  
|Fiscal credits (recognized and non recognized) and tax rate                                  |  |            | (63.6  | ) |            |  | (60.2  | )          |  |  | (18.6  | )
|Other difference between IFRS and fiscal basis                                               |  |            | 6.7    |   |            |  | (22.0  | )          |  |  | 56.5   |  
|Other                                                                                        |  |            | 1.1    |   |            |  | (5.8   | )          |  |  | (8.9   | )
|                                                                                             |  |            |        |   |            |  |        |            |  |  |        |  
|Income tax and social contribution expense benefit as reported                               |  |            | (256.4 | ) |            |  | (265.2 | )          |  |  | (127.4 | )
|                                                                                             |  |            |        |   |            |  |        |            |  |  |        |  
|Current income tax and social contribution expense benefit as reported                       |  |            | (63.8  | ) |            |  | (189.9 | )          |  |  | (41.9  | )
|Deferred income tax and social contribution expense benefit as reported                      |  |            | (192.6 | ) |            |  | (75.3  | )          |  |  | (85.5  | )

The recognition of the values mentioned above resulted in an effective tax rate of 42.6% for December 31,
2013, (43.2% on December 31, 2012 and 51.4% on December 31, 2011).



|25. | Financial Guarantees and Residual Value Guarantees
|--- | --------------------------------------------------



|                                      |  |            |       |  |            |  |       | 
|------------------------------------- |  | ---------- | ----- |  | ---------- |  | ----- | 
|                                      |  | 12.31.2013 |       |  | 12.31.2012 | 
|                                      |  |            |       |  | (Restated) | 
|Accounts payable (i)                  |  |            | 138.2 |  |            |  | 258.5 | 
|Financial guarantee of residual value |  |            | 81.6  |  |            |  | 59.5  | 
|Financial guarantee                   |  |            | 73.7  |  |            |  | 54.5  | 
|Additional provision (i)              |  |            |      |  |            |  | 211.9 | 
|                                      |  |            |       |  |            |  |       | 
|                                      |  |            | 293.5 |  |            |  | 584.4 | 
|                                      |  |            |       |  |            |  |       | 
|Current portion                       |  |            | 90.0  |  |            |  | 114.1 | 
|Non-current portion                   |  |            | 203.5 |  |            |  | 470.3 | 



F-62



---

##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





Below is the activity of the financial guarantees and residual guarantees:



|                                |  |           |       |   |                |  |      |             |  |  |               |   |  |       |        |   |  |  |        |  
|------------------------------- |  | --------- | ----- | - | -------------- |  | ---- | ----------- |  |  | ------------- | - |  | ----- | ------ | - |  |  | ------ | -
|                                |  |           |       |   | Financial      |  |      |             |  |  |               |   |  |       |       
|                                |  | Financial |       |   | guarantee of   |  |      | Accounts    |  |  | Additional    |   |  |       |       
|                                |  | guarantee |       |   | residual value |  |      | payable (i) |  |  | provision (i) |   |  | Total |       
|At December 31, 2010            |  |           | 132.3 |   |                |  | 11.1 |             |  |  |              |   |  |       | 76.1   |   |  |  | 219.5  |  
|Additions                       |  |           |      |   |                |  |     |             |  |  |              |   |  |       | 362.8  |   |  |  | 362.8  |  
|Disposals                       |  |           |      |   |                |  |     |             |  |  |              |   |  |       | (23.2  | ) |  |  | (23.2  | )
|Reversals                       |  |           | (42.2 | ) |                |  |     |             |  |  |              |   |  |       | (42.0  | ) |  |  | (84.2  | )
|Reclassifications               |  |           |      |   |                |  |     |             |  |  | 56.2          |   |  |       | (56.2  | ) |  |  |       |  
|Market value                    |  |           |      |   |                |  | 34.4 |             |  |  |              |   |  |       |       |   |  |  | 34.4   |  
|Guarantee recognition           |  |           | (14.4 | ) |                |  |     |             |  |  |              |   |  |       |       |   |  |  | (14.4  | )
|                                |  |           |       |   |                |  |      |             |  |  |               |   |  |       |        |   |  |  |        |  
|At December 31, 2011 (Restated) |  |           | 75.7  |   |                |  | 45.5 |             |  |  | 56.2          |   |  |       | 317.5  |   |  |  | 494.9  |  
|                                |  |           |       |   |                |  |      |             |  |  |               |   |  |       |        |   |  |  |        |  
|Additions                       |  |           |      |   |                |  |     |             |  |  | 211.4         |   |  |       | 6.0    |   |  |  | 217.4  |  
|Disposals                       |  |           |      |   |                |  |     |             |  |  | (9.1          | ) |  |       | (59.6  | ) |  |  | (68.7  | )
|Reversals                       |  |           |      |   |                |  |     |             |  |  |              |   |  |       | (52.0  | ) |  |  | (52.0  | )
|Market value                    |  |           |      |   |                |  | 14.0 |             |  |  |              |   |  |       |       |   |  |  | 14.0   |  
|Guarantee recognition           |  |           | (21.2 | ) |                |  |     |             |  |  |              |   |  |       |       |   |  |  | (21.2  | )
|                                |  |           |       |   |                |  |      |             |  |  |               |   |  |       |        |   |  |  |        |  
|At December 31, 2012 (Restated) |  |           | 54.5  |   |                |  | 59.5 |             |  |  | 258.5         |   |  |       | 211.9  |   |  |  | 584.4  |  
|                                |  |           |       |   |                |  |      |             |  |  |               |   |  |       |        |   |  |  |        |  
|Additions                       |  |           | 30.6  |   |                |  | 0.8  |             |  |  | 3.8           |   |  |       | 6.7    |   |  |  | 41.9   |  
|Disposals                       |  |           |      |   |                |  |     |             |  |  | (121.4        | ) |  |       | (66.4  | ) |  |  | (187.8 | )
|Reversals                       |  |           |      |   |                |  |     |             |  |  | (2.7          | ) |  |       | (170.5 | ) |  |  | (173.2 | )
|Market value                    |  |           |      |   |                |  | 21.3 |             |  |  |              |   |  |       | 18.3   |   |  |  | 39.6   |  
|Guarantee recognition           |  |           | (11.4 | ) |                |  |     |             |  |  |              |   |  |       |       |   |  |  | (11.4  | )
|                                |  |           |       |   |                |  |      |             |  |  |               |   |  |       |        |   |  |  |        |  
|At December 31, 2013            |  |           | 73.7  |   |                |  | 81.6 |             |  |  | 138.2         |   |  |       |       |   |  |  | 293.5  |  
|                                |  |           |       |   |                |  |      |             |  |  |               |   |  |       |        |   |  |  |        |  

| | (i) | Accounts payable and additional provision:
| | --- | ------------------------------------------



| |  |  | Mesa  Refers to accounts payable recorded in relation to financial guarantees offered to the lender in transactions with the MESA AirGroup, which filed for creditor protection under Chapter 11 in 2011. The
financial guarantees in respect of 36 ERJ 145 aircraft acquired by Mesa were exercised and the Company made the respective payments. On December 31, 2013 the Company had no outstanding balance payable to the MESA AirGroup.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | American Airlines - Refers to liabilities assumed as a result of the bankruptcy filing (Chapter 11) of the customer American Airlines at the end of 2011 to cover losses related to its obligations with financial
guarantees and residual value guarantees offered to the banks for 216 aircraft (ERJ 135, ERJ 140 and ERJ 145). On November 29, 2013 the U.S. Court approved the merger between U.S Airways and American Airlines and its bankruptcy filing was
finalized. Consequently, through this event, the Companys obligation on financial guarantees by the financial agent has been completed and part of the amount paid as advance financial guarantees to the financing agent of US$ 71.4 was returned
to the Company and the remaining provision of US$ 111.9 was reversed against the operating result. The residual value guarantees were finalized along with American Airlines in exchange for concessions from contractual receivables (Note 21) and the
amount of US$ 58.6 was reversed in 2013. On December 31, 2013, the Company did not have any outstanding provision related American Airlines and the obligation assumed in accounts payable was US$ 82.5.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Chautauqua  Refers to the negotiation with Chautauqua Airlines Inc., a subsidiary of Republic Airways Holdings Inc., for restructuring of its financial operations. Chautauqua operates aircraft of the ERJ 145
family which were financed by loans or operating leases, at the time when Embraer provided financial guarantees for certain aircraft. The Company believes that the negotiation resulted in more favorable results for the parties, reducing the use of
the financial guarantees provided by Embraer. The agreements were signed on October 29, 2012 and the Company recognized its commitments to pay in its consolidated financial statements. As part of the negotiation the Company will make payments
to the financing agents over time and is entitled to acquire certain assets at the end of the financing period. The balance of accounts payable with Chautauqua Airlines Inc. on December 31, 2013 was US$ 55.7. The Company believes that the
negotiation results provided favorable results to the parties, reducing the use of financial guarantees originally granted by Embraer.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-63



---

##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





|26. | Provisions and contingent liabilities
|--- | -------------------------------------



| | 26.1. | Provisions
| | ----- | ----------



|                                           |  |            |       |  |            |  |       | 
|------------------------------------------ |  | ---------- | ----- |  | ---------- |  | ----- | 
|                                           |  | 12.31.2013 |       |  | 12.31.2012 | 
|                                           |  |            |       |  | (Restated) | 
|Product warranties (i)                     |  |            | 103.9 |  |            |  | 110.6 | 
|Post retirement benefits                   |  |            | 71.0  |  |            |  | 61.4  | 
|Provisions for labor, taxes and civil (ii) |  |            | 68.9  |  |            |  | 62.8  | 
|Environmental provision (iii)              |  |            | 5.3   |  |            |  |      | 
|Other (iv)                                 |  |            | 15.1  |  |            |  | 18.8  | 
|                                           |  |            |       |  |            |  |       | 
|                                           |  |            | 264.2 |  |            |  | 253.6 | 
|                                           |  |            |       |  |            |  |       | 
|Current portion                            |  |            | 98.5  |  |            |  | 96.7  | 
|Non-current portion                        |  |            | 165.7 |  |            |  | 156.9 | 



| | (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 follows in the chart below Note 26.1.1.
| | ---- | --------------------------------------------------------------------------------------------



| | (iii) | The Company maintains allowances for spending on research of soil and potential environmental recovery services.
| | ----- | ----------------------------------------------------------------------------------------------------------------



| | (iv) | Refers mainly to a contingent liability of US$ 11.4 recognized in other provisions in 2011 when the Company, through its subsidiary, Embraer Defesa & Segurança Participações, acquired the
jointly controlled entity Atech and the subsidiary Orbisat. This contingent liability at the time of the acquisition represented a present obligation and whose fair value was measured reliably. As a result of Atechs acquisition of control as
stated on Note 14.1, this liability was remeasured at fair value on February 1, 2013.
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 26.1.1 | Provision labor, tax and civil
| | ------ | ------------------------------



|                                   |  |            |      |  |            |  |      | 
|---------------------------------- |  | ---------- | ---- |  | ---------- |  | ---- | 
|                                   |  | 12.31.2013 |      |  | 12.31.2012 | 
|                                   |  |            |      |  | (Restated) | 
|Tax related                        |  |            |      |  |            |  |      | 
|PIS and COFINS (i)                 |  |            | 14.0 |  |            |  | 11.2 | 
|Social security contributions (ii) |  |            | 10.8 |  |            |  | 12.0 | 
|Third party contributions (iii)    |  |            | 8.7  |  |            |  | 9.5  | 
|FUNDAF (iv)                        |  |            | 5.1  |  |            |  | 7.3  | 
|ICMS (v)                           |  |            | 4.8  |  |            |  |     | 
|Import taxes (vi)                  |  |            | 2.4  |  |            |  | 2.7  | 
|CIDE (vii)                         |  |            | 1.7  |  |            |  | 1.9  | 
|Others                             |  |            | 0.6  |  |            |  | 5.3  | 
|                                   |  |            | 48.1 |  |            |  | 49.9 | 
|Labor related                      |  |            |      |  |            |  |      | 
|Plurimas 461/1379 (viii)           |  |            | 9.7  |  |            |  | 2.0  | 
|Reintegration (ix)                 |  |            | 2.3  |  |            |  | 4.7  | 
|Indemnity (x)                      |  |            | 1.6  |  |            |  | 2.1  | 
|Third parties                      |  |            | 0.2  |  |            |  | 0.2  | 
|Others                             |  |            | 4.8  |  |            |  | 2.7  | 
|                                   |  |            | 18.6 |  |            |  | 11.7 | 
|Civil related                      |  |            |      |  |            |  |      | 
|Indemnity (xi)                     |  |            | 2.2  |  |            |  | 1.2  | 
|                                   |  |            | 2.2  |  |            |  | 1.2  | 
|                                   |  |            |      |  |            |  |      | 
|                                   |  |            | 68.9 |  |            |  | 62.8 | 
|                                   |  |            |      |  |            |  |      | 
|Current portion                    |  |            | 27.2 |  |            |  | 19.5 | 
|Non-current portion                |  |            | 41.7 |  |            |  | 43.3 | 



F-64



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##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





| | (i) | The Company calculated credits on the corresponding contributions in certain operations and is awaiting the conclusion of the administrative suit to assess the appropriate legal measures.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (ii) | The Company was notified by the authorities for failing to withhold social security contributions from service providers. These lawsuits are at the 2nd court level. The Company was also ordered to pay additional
allowances for work environment risks. This lawsuit is at the 1st court level.
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (iii) | The Company is challenging the Social Security and Assistance Fund (Fundo da Previdência e Assistência Social  FPAS) classification, amended by a regulatory ruling, which resulted in an increase
in taxes on payroll.
| | ----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (iv) | In March 2005, an Assessment and Penalty Notice (AIIM) was filed against the Company, demanding payment of this contribution Fundo de Modernização da Administração Fazendária
(FUNDAF). As a result of this notification, the Company filed a tax debt annulment lawsuit at the 1st court level, which was partially judged in the Companys favor. The lawsuit is at the 2nd court level, for consideration of the Appeal and the
Voluntary Appeal.
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (v) | The Company has presented an appeal at administrative stage against an Infraction and Imposition of Penalty (Auto de Infração e Imposição de Multa - AIIM) issued by the State Revenue of
São Paulo. The Company does not agree with the fact that the Administrative Tax Authorities are charging ICMS (Imposto sobre Circulação de Mercadorias e Serviços) - tax on the distribution of goods, transportation,
and communication - a sort of Valued Added Tax - on services that, according to the Company, are not subject to that sort of taxation. The tax authorities have not yet decided on the appeal until this moment.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (vi) | The reference to import taxes is to an AIIM filed as a result of an alleged breach of the maximum period for complying with drawback. This process awaits analysis by the STJ. Another AIIM argues possible divergences in
fiscal classification of certain products, awaiting analysis in first instance of court.
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (vii) | Between January and September 2002, the Company paid the Economic Domain Intervention Contribution (CIDE) charged on royalties, technical services and technical assistance, without adjusting the calculation base. After
a first examination of this period and a favorable ruling at the administrative level with regard to the facts contested, the Federal Revenue Office ordered the Company to pay the difference on the adjusted calculation base charged during the above
period. On July 17, 2012, the Company was informed of a partially favorable decision by the lower level administrative court, recognizing the statute of limitations for the CIDE-Royalties tax debts for the period from January 1, 2002 to
February 28, 2002, and reversed part of the amount provisioned. A voluntary appeal was filed in the administrative suit with regard to the part judged to be groundless, and is under consideration by the Administrative Tax Appeals Council 
CARF.
| | ----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (viii) | Refers to claims for backdated salary increases and productivity payments, brought by former employees.
| | ------ | -------------------------------------------------------------------------------------------------------

| | (ix) | Suits brought by former employees claiming reinstatement with the Company for various reasons.
| | ---- | ----------------------------------------------------------------------------------------------

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

| | (xi) | Other indemnity claims brought by parties that had any kind of legal relationship with the Company.
| | ---- | ---------------------------------------------------------------------------------------------------

The tax, labor and civil provisions are recorded in accordance with the Companys accounting policy (see note 2.2.29 of the
December 31, 2013 consolidated financial statements), 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.
The Others line in each of the categories is generally comprised of individual lawsuits and operations that differ from the main categories and are sufficiently different and insignificant not to warrant individual categories.



F-65



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##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





Change in provision:



|                                |  |            |        |   |                 |  |      |              |  |  |               |   |  |       |      |   |       |  |       |   |  |  |        |  
|------------------------------- |  | ---------- | ------ | - | --------------- |  | ---- | ------------ |  |  | ------------- | - |  | ----- | ---- | - | ----- |  | ----- | - |  |  | ------ | -
|                                |  |            |        |   |                 |  |      | Provisions   |  |  |               |   |  |       |      |   |       | 
|                                |  | Product    |        |   | Post retirement |  |      | Labor, Taxes |  |  | Environmental |   |  | Other |      |   | Total | 
|                                |  | warranties |        |   | benefits        |  |      | and Civil    |  |  | provision     |   |  |       |      |   |       | 
|At December 31, 2010            |  |            | 128.7  |   |                 |  | 12.9 |              |  |  | 76.8          |   |  |       |     |   |       |  | 20.1  |   |  |  | 238.5  |  
|Additions                       |  |            | 387.0  |   |                 |  | 1.1  |              |  |  | 17.8          |   |  |       |     |   |       |  | 21.9  |   |  |  | 427.8  |  
|Interest                        |  |            |       |   |                 |  |     |              |  |  | 10.7          |   |  |       |     |   |       |  |      |   |  |  | 10.7   |  
|Used/payments                   |  |            | (75.5  | ) |                 |  | (9.6 | )            |  |  | (4.7          | ) |  |       |     |   |       |  | (15.3 | ) |  |  | (105.1 | )
|Reversals                       |  |            | (324.4 | ) |                 |  |     |              |  |  | (18.9         | ) |  |       |     |   |       |  |      |   |  |  | (343.3 | )
|Translation adjustments         |  |            |       |   |                 |  |     |              |  |  | (9.0          | ) |  |       |     |   |       |  | (4.4  | ) |  |  | (13.4  | )
|                                |  |            |        |   |                 |  |      |              |  |  |               |   |  |       |      |   |       |  |       |   |  |  |        |  
|At December 31, 2011 (Restated) |  |            | 115.8  |   |                 |  | 4.4  |              |  |  | 72.7          |   |  |       |     |   |       |  | 22.3  |   |  |  | 215.2  |  
|                                |  |            |        |   |                 |  |      |              |  |  |               |   |  |       |      |   |       |  |       |   |  |  |        |  
|Additions                       |  |            | 86.2   |   |                 |  | 57.0 |              |  |  | 21.0          |   |  |       |     |   |       |  | 24.6  |   |  |  | 188.8  |  
|Interest                        |  |            |       |   |                 |  |     |              |  |  | 3.4           |   |  |       |     |   |       |  |      |   |  |  | 3.4    |  
|Used/payments                   |  |            | (69.3  | ) |                 |  |     |              |  |  | (12.1         | ) |  |       |     |   |       |  | (26.1 | ) |  |  | (107.5 | )
|Reversals                       |  |            | (21.7  | ) |                 |  |     |              |  |  | (16.4         | ) |  |       |     |   |       |  |      |   |  |  | (38.1  | )
|Translation adjustments         |  |            | (0.4   | ) |                 |  |     |              |  |  | (5.8          | ) |  |       |     |   |       |  | (2.0  | ) |  |  | (8.2   | )
|                                |  |            |        |   |                 |  |      |              |  |  |               |   |  |       |      |   |       |  |       |   |  |  |        |  
|At December 31, 2012 (Restated) |  |            | 110.6  |   |                 |  | 61.4 |              |  |  | 62.8          |   |  |       |     |   |       |  | 18.8  |   |  |  | 253.6  |  
|                                |  |            |        |   |                 |  |      |              |  |  |               |   |  |       |      |   |       |  |       |   |  |  |        |  
|Additions                       |  |            | 98.0   |   |                 |  | 15.0 |              |  |  | 21.0          |   |  |       | 5.8  |   |       |  | 14.9  |   |  |  | 154.7  |  
|Interest                        |  |            |       |   |                 |  | 4.7  |              |  |  | 4.1           |   |  |       |     |   |       |  |      |   |  |  | 8.8    |  
|Used/payments                   |  |            | (68.5  | ) |                 |  | (3.1 | )            |  |  | (2.0          | ) |  |       |     |   |       |  |      |   |  |  | (73.6  | )
|Reversals                       |  |            | (35.1  | ) |                 |  |     |              |  |  | (9.6          | ) |  |       |     |   |       |  | (17.2 | ) |  |  | (61.9  | )
|Translation adjustments         |  |            | (1.1   | ) |                 |  | (7.0 | )            |  |  | (7.4          | ) |  |       | (0.5 | ) |       |  | (1.4  | ) |  |  | (17.4  | )
|                                |  |            |        |   |                 |  |      |              |  |  |               |   |  |       |      |   |       |  |       |   |  |  |        |  
|At December 31, 2013            |  |            | 103.9  |   |                 |  | 71.0 |              |  |  | 68.9          |   |  |       | 5.3  |   |       |  | 15.1  |   |  |  | 264.2  |  
|                                |  |            |        |   |                 |  |      |              |  |  |               |   |  |       |      |   |       |  |       |   |  |  |        |  



| | 26.2. | Contingent liabilities
| | ----- | ----------------------

Contingent liabilities are amounts classified as possible
losses, in accordance with the Companys accounting policy (see note 2.2.31), in the opinion of the Companys legal department, supported by its external counsel. When the contingent asset 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. Below is the description of all contingent liability that the Company has:



| |  |  | In response to tax assessment notices filed by the Brazilian Federal Revenue Authorities in December 2010 and September 2011, the Company is contesting the calculation base and the rates of taxes charged on certain
remittances abroad and also the accounting and recognition of an indemnity received in a contractual dissolution.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

With the
reopening of encouraged installments, debts were included in the Company challenged the tax base and tax rate levied on certain remittances abroad.

The total value of the tax assessment included in December 2013 was US$ 103.3, paid in 30 months, the final amount after discount, the value
subsisting US$ 62.9, related to the consolidation in December 2013, plus Selic period.

The administrative discussion regarding the tax
assessment which addresses the accounting and recognition of compensation in the Administrative Appeals Council goes on. The total amount as of December 31, 2013 is US$ 40.5.



| |  |  | We received a subpoena from the SEC in September 2010, which inquired about certain operations concerning sales of aircraft abroad. In response to this SEC-issued subpoena and associated inquiries into the possibility
of non-compliance with the U.S. Foreign Corrupt Practices Act, we retained outside counsel to conduct an internal investigation on transactions carried out in three specific countries.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Since then, in response to additional information, the Company has voluntarily expanded the scope of the internal investigation to include
sales in additional countries and has reported on those matters to the SEC and the U.S. Department of Justice, which are the responsible authorities. The investigation remains ongoing and we will continue to respond to any additional information, as
circumstances warrant. We, through our outside counsel, continue to cooperate fully with the SEC and the DOJ. The Company, with the support of our outside counsel, has concluded that it is still not possible to estimate the duration, scope or
results of the internal investigation or the governments review. In the event that the authorities take action against us or



F-66



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##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





| | the parties enter into an agreement to settle the matter, we may be required to pay substantial fines and/or to incur other sanctions. The Company, based upon the opinion of our outside counsel,
believes that there is no basis for estimating reserves or quantifying any possible contingency.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The Company has contingent liabilities amounting to US$ 13.9 related to labor suits.
| | - |  | ------------------------------------------------------------------------------------



|27. | Post-retirement benefits
|--- | ------------------------



|                                   |  |            |      |  |            |  |      | 
|---------------------------------- |  | ---------- | ---- |  | ---------- |  | ---- | 
|                                   |  | 12.31.2013 |      |  | 12.31.2012 | 
|                                   |  |            |      |  | (Restated) | 
|Medical benefits plan Brazil       |  |            | 68.5 |  |            |  | 57.0 | 
|Medical benefits plan subsidiaries |  |            | 2.5  |  |            |  | 4.4  | 
|                                   |  |            |      |  |            |  |      | 
|Post-retirement benefits           |  |            | 71.0 |  |            |  | 61.4 | 
|                                   |  |            |      |  |            |  |      | 



| | 27.1. | Defined contribution pension plan
| | ----- | ---------------------------------

The Company and certain subsidiaries sponsor a
defined contribution pension plan for their employees, in which participation is optional. Contributions by the Company and certain subsidiaries to the plan for the years ended December 31, 2013 and 2012 were US$ 28.1 and US$ 27.4,
respectively.



| | 27.2. | Post-retirement healthcare benefits provided by the Company in Brazil
| | ----- | ---------------------------------------------------------------------

The Company
amended its healthcare plan for retired employees, considered a post-employment benefit. Under this healthcare plan, employees who retire from the Company have the option of remaining in the plan, contributing the full amount charged by the
insurance company. However, due to certain rules for increases under Brazilian law, there could be times at which the contribution made by the retired employees is insufficient to cover the medical plan expenses, which would represent exposure for
the Company.

Actuarial studies are made annually to identify the future exposure to be recorded as a provision. The provision recorded at
December 31, 2013, was US$ 68.5 and December 31, 2012 was US$ 57.0.

The actuarial methods used comply with the generally
accepted actuarial methods in force, in accordance with the Projected Unit Credit method.

The rationale of this recognition is described
in the accounting policy (Note 2.2.28 - b). The amounts recognized in the statement of financial position were:



|                                              |  |            |       |   |            |  |      | 
|--------------------------------------------- |  | ---------- | ----- | - | ---------- |  | ---- | 
|                                              |  | 12.31.2013 |       |   | 12.31.2012 | 
|                                              |  |            |       |   | (Restated) | 
|Benefit obligation - beginning of year        |  |            | 57.0  |   |            |  |     | 
|Cost of service                               |  |            | 1.2   |   |            |  |     | 
|Interest on the value of the obligation       |  |            | 4.7   |   |            |  |     | 
|Actuarial losses from demographic assumptions |  |            | 59.6  |   |            |  | 57.0 | 
|Actuarial gains from financial assumptions    |  |            | (45.9 | ) |            |  |     | 
|Benefits paid directly by the company         |  |            | (0.9  | ) |            |  |     | 
|Transaction adjustments                       |  |            | (7.2  | ) |            |  |     | 
|                                              |  |            |       |   |            |  |      | 
|Benefit obligation - end of year              |  |            | 68.5  |   |            |  | 57.0 | 
|                                              |  |            |       |   |            |  |      | 

The main actuarial assumptions were as follows:



|                                         |  |            |      |   |            |  |      |  
|---------------------------------------- |  | ---------- | ---- | - | ---------- |  | ---- | -
|                                         |  | 12.31.2013 |      |   | 12.31.2012 | 
|                                         |  |            |      |   | (Restated) | 
|Discount rate                            |  |            | 11.5 | % |            |  | 9.5  | %
|Inflation                                |  |            | 4.8  | % |            |  | 5.2  | %
|Growth rate of medical costs (next year) |  |            | 11.0 | % |            |  | 11.2 | %
|Growth of (long term) medical cost rate  |  |            | 5.8  | % |            |  | 6.2  | %



F-67



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##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





| | 27.3. | Post-retirement healthcare benefits provided by subsidiaries
| | ----- | ------------------------------------------------------------

EAH sponsors a
post-retirement healthcare plan, which was amended in 2007 and employees hired as of that date do not qualify for this benefit. The estimated pension and post-retirement healthcare costs for the beneficiaries and their dependents are recorded as a
provision using the accrual method, based on actuarial studies.

The change in the post-retirement benefits for the years ended
December 31, 2013 and 2012 is summarized as follows:



|                                             |  |                               |      |   |            |  |      |  
|-------------------------------------------- |  | ----------------------------- | ---- | - | ---------- |  | ---- | -
|                                             |  | Other Post retirementBenefits |     
|                                             |  | 12.31.2013                    |      |   | 12.31.2012 | 
|                                             |  |                               |      |   | (Restated) | 
|Benefits Obligations - beginning of the year |  |                               | 4.9  |   |            |  | 4.9  |  
|Interest cost                                |  |                               | 0.3  |   |            |  | 0.3  |  
|Actuarial loss                               |  |                               | (1.0 | ) |            |  | (0.1 | )
|Benefits paid to participants                |  |                               | (0.2 | ) |            |  | (0.2 | )
|                                             |  |                               |      |   |            |  |      |  
|Benefits Obligations - end of year           |  |                               | 4.0  |   |            |  | 4.9  |  
|                                             |  |                               |      |   |            |  |      |  

The changes in plan assets for the years ended were as follows:



|                                                  |  |                               |      |   |            |  |      |  
|------------------------------------------------- |  | ----------------------------- | ---- | - | ---------- |  | ---- | -
|                                                  |  | Other Post retirementBenefits |     
|                                                  |  | 12.31.2013                    |      |   | 12.31.2012 | 
|                                                  |  |                               |      |   | (Restated) | 
|Fair value of plan assets - beginning of the year |  |                               | 1.1  |   |            |  | 1.1  |  
|Actual return on plan assets                      |  |                               | 0.3  |   |            |  | 0.1  |  
|Benefits paid to participants                     |  |                               | (0.2 | ) |            |  | (0.1 | )
|                                                  |  |                               |      |   |            |  |      |  
|Fair value of plan assets - end of year           |  |                               | 1.2  |   |            |  | 1.1  |  
|                                                  |  |                               |      |   |            |  |      |  

The fair value of the plan assets is measured based on Level 1 inputs in accordance with the accounting
standard for fair value measurements. There has been no change since the prior year in the valuation techniques and level of inputs. The net prepaid (accrued) benefit cost as of December 31, 2013 and 2012 are summarized as follows:



|                             |  |                               |      |   |            |  |      |  
|---------------------------- |  | ----------------------------- | ---- | - | ---------- |  | ---- | -
|                             |  | Other Post retirementBenefits |     
|                             |  | 12.31.2013                    |      |   | 12.31.2012 | 
|                             |  |                               |      |   | (Restated) | 
|Accrued cost - Funded status |  |                               | (2.5 | ) |            |  | (4.4 | )
|                             |  |                               |      |   |            |  |      |  
|                             |  |                               | (2.5 | ) |            |  | (4.4 | )
|                             |  |                               |      |   |            |  |      |  

The principal actuarial assumptions utilized was as follows:



|                               |  |                                   |      |   |            |  |      |  
|------------------------------ |  | --------------------------------- | ---- | - | ---------- |  | ---- | -
|                               |  | Other Post retirementBenefits (%) |     
|                               |  | 12.31.2013                        |      |   | 12.31.2012 | 
|                               |  |                                   |      |   | (Restated) | 
|Average discount rate          |  |                                   | 3.75 | % |            |  | 4.50 | %
|Net periodic benefit cost      |  |                                   | 4.75 | % |            |  | 3.75 | %
|Expected return on plan assets |  |                                   | 7.75 | % |            |  | 7.75 | %
|Rate of compensation increase  |  |                                   | 5.50 | % |            |  | 5.50 | %



F-68



---

##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





The components of net periodic benefit cost were as follows:



|                               |  |            |      |   |            |  |      |  
|------------------------------ |  | ---------- | ---- | - | ---------- |  | ---- | -
|                               |  | 12.31.2013 |      |   | 12.31.2012 | 
|                               |  |            |      |   | (Restated) | 
|Service cost                   |  |            | (0.1 | ) |            |  | (0.1 | )
|Interest cost                  |  |            | (0.2 | ) |            |  | (0.2 | )
|Expected return on plan assets |  |            | 0.1  |   |            |  | 0.1  |  
|                               |  |            |      |   |            |  |      |  
|Net periodic benefit           |  |            | (0.2 | ) |            |  | (0.2 | )
|                               |  |            |      |   |            |  |      |  
|Net benefit                    |  |            | (0.2 | ) |            |  | (0.2 | )
|                               |  |            |      |   |            |  |      |  

The net benefit cost (benefit) is included in selling expenses and in administrative expenses.

The composition of plan assets, was as follows:



|                                          |  |            |     |   |            |  |     |  
|----------------------------------------- |  | ---------- | --- | - | ---------- |  | --- | -
|                                          |  | 12.31.2013 |     |   | 12.31.2012 | 
|                                          |  |            |     |   | (Restated) | 
|Mutual funds invested primarily in stocks |  |            | 98  | % |            |  | 80  | %
|Mutual funds invested primarily in bonds  |  |            | 1   | % |            |  | 19  | %
|Other - cash                              |  |            | 1   | % |            |  | 1   | %
|                                          |  |            | 100 | % |            |  | 100 | %

The benefit payments, which reflect expected future service, are expected to be paid to participants under the
post-retirement medical plan as follows:



|            |  |                               |     | 
|----------- |  | ----------------------------- | --- | 
|Year        |  | Other benefitspost retirement |    
|2014        |  |                               | 0.2 | 
|2015        |  |                               | 0.2 | 
|2016        |  |                               | 0.2 | 
|2017        |  |                               | 0.2 | 
|2018        |  |                               | 0.3 | 
|2019 - 2023 |  |                               | 1.4 | 
|            |  |                               |     | 
|            |  |                               | 2.5 | 
|            |  |                               |     | 

For measurement purposes, an annual rate of increase in the per capita cost of covered health and dental care
benefits of 7% was assumed. The rate is expected to decrease to 5% in 2014. Assumed healthcare cost trend rates have a significant effect on the amounts reported for the postretirement healthcare plan. A one percentage point change in assumed
healthcare cost trend rates would not have material effects on the post-retirement benefit.



|28. | Financial Instruments
|--- | ---------------------



| | 28.1. | Financial instruments by category
| | ----- | ---------------------------------



|                                              |  |            |    |  |                      |  |         |                                            |  |  |                   |  |  |                            |      |  |                                      |  |      |       |  |  |         |  |  |  |         | 
|--------------------------------------------- |  | ---------- | -- |  | -------------------- |  | ------- | ------------------------------------------ |  |  | ----------------- |  |  | -------------------------- | ---- |  | ------------------------------------ |  | ---- | ----- |  |  | ------- |  |  |  | ------- | 
|                                              |  | 12.31.2013 |   
|                                              |  | Note       |    |  | Loans andreceivables |  |         | Measured atfair valuethrough profitor loss |  |  | Available forsale |  |  | Investmentsheld tomaturity |      |  | Liabilitiesmeasured atamortised cost |  |      | Total | 
|Assets                                        |  |            |    |  |                      |  |         |                                            |  |  |                   |  |  |                            |      |  |                                      |  |      |       |  |  |         |  |  |  |         | 
|Cash and cash equivalents                     |  |            | 5  |  |                      |  |        |                                            |  |  | 1,683.7           |  |  |                            |     |  |                                      |  |     |       |  |  |        |  |  |  | 1,683.7 | 
|Financial investments                         |  |            | 6  |  |                      |  |        |                                            |  |  | 912.6             |  |  |                            | 27.7 |  |                                      |  | 45.0 |       |  |  |        |  |  |  | 985.3   | 
|Collateralized accounts receivable            |  |            | 10 |  |                      |  | 425.9   |                                            |  |  |                  |  |  |                            |     |  |                                      |  |     |       |  |  |        |  |  |  | 425.9   | 
|Trade accounts receivable, net                |  |            | 7  |  |                      |  | 578.7   |                                            |  |  |                  |  |  |                            |     |  |                                      |  |     |       |  |  |        |  |  |  | 578.7   | 
|Customer and commercial financing             |  |            | 9  |  |                      |  | 73.7    |                                            |  |  |                  |  |  |                            |     |  |                                      |  |     |       |  |  |        |  |  |  | 73.7    | 
|Derivative financial instruments              |  |            | 8  |  |                      |  |        |                                            |  |  | 30.4              |  |  |                            |     |  |                                      |  |     |       |  |  |        |  |  |  | 30.4    | 
|                                              |  |            |    |  |                      |  |         |                                            |  |  |                   |  |  |                            |      |  |                                      |  |      |       |  |  |         |  |  |  |         | 
|                                              |  |            |    |  |                      |  | 1,078.3 |                                            |  |  | 2,626.7           |  |  |                            | 27.7 |  |                                      |  | 45.0 |       |  |  |        |  |  |  | 3,777.7 | 
|                                              |  |            |    |  |                      |  |         |                                            |  |  |                   |  |  |                            |      |  |                                      |  |      |       |  |  |         |  |  |  |         | 
|Liabilities                                   |  |            |    |  |                      |  |         |                                            |  |  |                   |  |  |                            |      |  |                                      |  |      |       |  |  |         |  |  |  |         | 
|Loans and financing                           |  |            | 20 |  |                      |  |        |                                            |  |  |                  |  |  |                            |     |  |                                      |  |     |       |  |  | 2,193.6 |  |  |  | 2,193.6 | 
|Trade accounts payable and others liabilities |  |            |    |  |                      |  |        |                                            |  |  |                  |  |  |                            |     |  |                                      |  |     |       |  |  | 1,806.9 |  |  |  | 1,806.9 | 
|Financial guarantee and of residual value     |  |            | 25 |  |                      |  |        |                                            |  |  | 81.6              |  |  |                            |     |  |                                      |  |     |       |  |  | 211.9   |  |  |  | 293.5   | 
|Capital lease                                 |  |            | 20 |  |                      |  |        |                                            |  |  |                  |  |  |                            |     |  |                                      |  |     |       |  |  | 0.7     |  |  |  | 0.7     | 
|Derivative financial instruments              |  |            | 8  |  |                      |  |        |                                            |  |  | 13.7              |  |  |                            |     |  |                                      |  |     |       |  |  |        |  |  |  | 13.7    | 
|                                              |  |            |    |  |                      |  |         |                                            |  |  |                   |  |  |                            |      |  |                                      |  |      |       |  |  |         |  |  |  |         | 
|                                              |  |            |    |  |                      |  |        |                                            |  |  | 95.3              |  |  |                            |     |  |                                      |  |     |       |  |  | 4,213.1 |  |  |  | 4,308.4 | 
|                                              |  |            |    |  |                      |  |         |                                            |  |  |                   |  |  |                            |      |  |                                      |  |      |       |  |  |         |  |  |  |         | 



F-69



---

##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





|                                              |  |                       |    |  |                      |  |         |                                            |  |  |                   |  |  |                            |      |  |                                      |  |      |       |  |  |         |  |  |  |         | 
|--------------------------------------------- |  | --------------------- | -- |  | -------------------- |  | ------- | ------------------------------------------ |  |  | ----------------- |  |  | -------------------------- | ---- |  | ------------------------------------ |  | ---- | ----- |  |  | ------- |  |  |  | ------- | 
|                                              |  | 12.31.2012 (Restated) |   
|                                              |  | Note                  |    |  | Loans andreceivables |  |         | Measured atfair valuethrough profitor loss |  |  | Available forsale |  |  | Investmentsheld tomaturity |      |  | Liabilitiesmeasured atamortised cost |  |      | Total | 
|Assets                                        |  |                       |    |  |                      |  |         |                                            |  |  |                   |  |  |                            |      |  |                                      |  |      |       |  |  |         |  |  |  |         | 
|Cash and cash equivalents                     |  |                       | 5  |  |                      |  |        |                                            |  |  | 1,797.0           |  |  |                            |     |  |                                      |  |     |       |  |  |        |  |  |  | 1,797.0 | 
|Financial investments                         |  |                       | 6  |  |                      |  |        |                                            |  |  | 552.2             |  |  |                            | 29.9 |  |                                      |  | 47.4 |       |  |  |        |  |  |  | 629.5   | 
|Collateralized accounts receivable            |  |                       | 10 |  |                      |  | 426.0   |                                            |  |  |                  |  |  |                            |     |  |                                      |  |     |       |  |  |        |  |  |  | 426.0   | 
|Trade accounts receivable, net                |  |                       | 7  |  |                      |  | 535.5   |                                            |  |  |                  |  |  |                            |     |  |                                      |  |     |       |  |  |        |  |  |  | 535.5   | 
|Customer and commercial financing             |  |                       | 9  |  |                      |  | 109.6   |                                            |  |  |                  |  |  |                            |     |  |                                      |  |     |       |  |  |        |  |  |  | 109.6   | 
|                                              |  |                       |    |  |                      |  |        
|Derivative financial instruments              |  |                       | 8  |  |                      |  |        |                                            |  |  | 36.0              |  |  |                            |     |  |                                      |  |     |       |  |  |        |  |  |  | 36.0    | 
|                                              |  |                       |    |  |                      |  |         |                                            |  |  |                   |  |  |                            |      |  |                                      |  |      |       |  |  |         |  |  |  |         | 
|                                              |  |                       |    |  |                      |  | 1,071.1 |                                            |  |  | 2,385.2           |  |  |                            | 29.9 |  |                                      |  | 47.4 |       |  |  |        |  |  |  | 3,533.6 | 
|                                              |  |                       |    |  |                      |  |         |                                            |  |  |                   |  |  |                            |      |  |                                      |  |      |       |  |  |         |  |  |  |         | 
|Liabilities                                   |  |                       |    |  |                      |  |         |                                            |  |  |                   |  |  |                            |      |  |                                      |  |      |       |  |  |         |  |  |  |         | 
|Loans and financing                           |  |                       | 20 |  |                      |  |        |                                            |  |  |                  |  |  |                            |     |  |                                      |  |     |       |  |  | 2,064.7 |  |  |  | 2,064.7 | 
|Trade accounts payable and others liabilities |  |                       |    |  |                      |  |        |                                            |  |  |                  |  |  |                            |     |  |                                      |  |     |       |  |  | 1,447.2 |  |  |  | 1,447.2 | 
|Financial guarantee and of residual value     |  |                       | 25 |  |                      |  |        |                                            |  |  | 99.7              |  |  |                            |     |  |                                      |  |     |       |  |  | 484.7   |  |  |  | 584.4   | 
|Capital lease                                 |  |                       | 20 |  |                      |  |        |                                            |  |  |                  |  |  |                            |     |  |                                      |  |     |       |  |  | 1.8     |  |  |  | 1.8     | 
|Derivative financial instruments              |  |                       | 8  |  |                      |  |        |                                            |  |  | 0.9               |  |  |                            |     |  |                                      |  |     |       |  |  |        |  |  |  | 0.9     | 
|                                              |  |                       |    |  |                      |  |         |                                            |  |  |                   |  |  |                            |      |  |                                      |  |      |       |  |  |         |  |  |  |         | 
|                                              |  |                       |    |  |                      |  |        |                                            |  |  | 100.6             |  |  |                            |     |  |                                      |  |     |       |  |  | 3,998.4 |  |  |  | 4,099.0 | 
|                                              |  |                       |    |  |                      |  |         |                                            |  |  |                   |  |  |                            |      |  |                                      |  |      |       |  |  |         |  |  |  |         | 



| | 28.2. | Fair value of financial instruments
| | ----- | -----------------------------------

The fair value of the Companys financial
assets and liabilities were determined using available market information and appropriate valuation methodologies. However, considerable judgment was required in interpreting market data to generate estimates of fair values. As a consequence,
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 book values of cash, cash equivalents, financial investments, accounts receivable, other financial assets and current
liabilities are approximately their fair values. The fair value of securities held to maturity is estimated by the discounted cash flow methodology. The fair value of non-current loans is based on the discounted 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 are available in active markets for identical assets or liabilities at the reporting period. Active markets are those in which transactions for the asset or liability occur in sufficient
frequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives and listed equities.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Level 2  pricing inputs are other than quoted prices in active markets included in level 1, which are either directly or indirectly observable
as of the reported date. However, they 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,
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-70



---

##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





| | can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. Instruments in this category include non-exchange traded
derivatives such as 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 sets forth by level within the fair value hierarchy the Companys financial assets and liabilities that were
accounted for at fair value on a recurring basis as of December 31, 2013. 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.



|                                              |  |                                                                                  |       |  |         |  |         |                                             |  |  |       |  |  |  |            |  |  |            |         |  |  |  |         |  |  |  |         | 
|--------------------------------------------- |  | -------------------------------------------------------------------------------- | ----- |  | ------- |  | ------- | ------------------------------------------- |  |  | ----- |  |  |  | ---------- |  |  | ---------- | ------- |  |  |  | ------- |  |  |  | ------- | 
|                                              |  | 12.31.2013                                                                       |      
|                                              |  | Fair value of financial instruments measured at fairvalue through profit or loss |       |  |         |  |         | Fair value of theother financialinstruments |  |  |       |  |  |  |           
|                                              |  | Level 1                                                                          |       |  | Level 2 |  |         | Level 3                                     |  |  | Total |  |  |  | Fair value |  |  | Book value |        
|Assets                                        |  |                                                                                  |       |  |         |  |         |                                             |  |  |       |  |  |  |            |  |  |            |         |  |  |  |         |  |  |  |         | 
|Cash and cash equivalents                     |  |                                                                                  | 261.6 |  |         |  | 1,422.1 |                                             |  |  |      |  |  |  | 1,683.7    |  |  |            |        |  |  |  | 1,683.7 |  |  |  | 1,683.7 | 
|Financial investments                         |  |                                                                                  | 140.7 |  |         |  | 771.9   |                                             |  |  |      |  |  |  | 912.6      |  |  |            | 72.7    |  |  |  | 985.3   |  |  |  | 985.3   | 
|Collateralized accounts receivable            |  |                                                                                  |      |  |         |  |        |                                             |  |  |      |  |  |  |           |  |  |            | 425.9   |  |  |  | 425.9   |  |  |  | 425.9   | 
|Trade accounts receivable, net                |  |                                                                                  |      |  |         |  |        |                                             |  |  |      |  |  |  |           |  |  |            | 578.7   |  |  |  | 578.7   |  |  |  | 578.7   | 
|Customer and commercial financing             |  |                                                                                  |      |  |         |  |        |                                             |  |  |      |  |  |  |           |  |  |            | 73.7    |  |  |  | 73.7    |  |  |  | 73.7    | 
|Derivative financial instruments              |  |                                                                                  |      |  |         |  | 30.4    |                                             |  |  |      |  |  |  | 30.4       |  |  |            |        |  |  |  | 30.4    |  |  |  | 30.4    | 
|                                              |  |                                                                                  |       |  |         |  |         |                                             |  |  |       |  |  |  |            |  |  |            |         |  |  |  |         |  |  |  |         | 
|                                              |  |                                                                                  | 402.3 |  |         |  | 2,224.4 |                                             |  |  |      |  |  |  | 2,626.7    |  |  |            | 1,151.0 |  |  |  | 3,777.7 |  |  |  | 3,777.7 | 
|                                              |  |                                                                                  |       |  |         |  |         |                                             |  |  |       |  |  |  |            |  |  |            |         |  |  |  |         |  |  |  |         | 
|Liabilities                                   |  |                                                                                  |       |  |         |  |         |                                             |  |  |       |  |  |  |            |  |  |            |         |  |  |  |         |  |  |  |         | 
|Loans and financing                           |  |                                                                                  |      |  |         |  |        |                                             |  |  |      |  |  |  |           |  |  |            | 2,193.6 |  |  |  | 2,299.3 |  |  |  | 2,193.6 | 
|Trade accounts payable and others liabilities |  |                                                                                  |      |  |         |  |        |                                             |  |  |      |  |  |  |           |  |  |            | 1,806.9 |  |  |  | 1,806.9 |  |  |  | 1,806.9 | 
|Financial guarantee and of residual value     |  |                                                                                  |      |  |         |  |        |                                             |  |  | 81.6  |  |  |  | 81.6       |  |  |            | 211.9   |  |  |  | 293.5   |  |  |  | 293.5   | 
|Capital lease                                 |  |                                                                                  |      |  |         |  |        |                                             |  |  |      |  |  |  |           |  |  |            | 0.7     |  |  |  | 0.7     |  |  |  | 0.7     | 
|Derivative financial instruments              |  |                                                                                  |      |  |         |  | 13.7    |                                             |  |  |      |  |  |  | 13.7       |  |  |            |        |  |  |  | 13.7    |  |  |  | 13.7    | 
|                                              |  |                                                                                  |       |  |         |  |         |                                             |  |  |       |  |  |  |            |  |  |            |         |  |  |  |         |  |  |  |         | 
|                                              |  |                                                                                  |      |  |         |  | 13.7    |                                             |  |  | 81.6  |  |  |  | 95.3       |  |  |            | 4,213.1 |  |  |  | 4,414.1 |  |  |  | 4,308.4 | 
|                                              |  |                                                                                  |       |  |         |  |         |                                             |  |  |       |  |  |  |            |  |  |            |         |  |  |  |         |  |  |  |         | 



|                                              |  |                                                      |       |  |         |  |         |                                             |  |  |       |  |  |  |            |  |  |            |         |  |  |  |         |  |  |  |         | 
|--------------------------------------------- |  | ---------------------------------------------------- | ----- |  | ------- |  | ------- | ------------------------------------------- |  |  | ----- |  |  |  | ---------- |  |  | ---------- | ------- |  |  |  | ------- |  |  |  | ------- | 
|                                              |  | 12.31.2012 (Restated)                                |      
|                                              |  | Fair value of financial instruments measured at fair |       |  |         |  |         | Fair value of theother financialinstruments |  |  |       |  |  |  |           
|                                              |  | value through profit or loss                         |       |  |         |  |         |                                             |  |  |       |  | 
|                                              |  | Level 1                                              |       |  | Level 2 |  |         | Level 3                                     |  |  | Total |  |  |  | Fair value |  |  | Book value |        
|Assets                                        |  |                                                      |       |  |         |  |         |                                             |  |  |       |  |  |  |            |  |  |            |         |  |  |  |         |  |  |  |         | 
|Cash and cash equivalents                     |  |                                                      | 454.7 |  |         |  | 1,342.3 |                                             |  |  |      |  |  |  | 1,797.0    |  |  |            |        |  |  |  | 1,797.0 |  |  |  | 1,797.0 | 
|Financial investments                         |  |                                                      | 334.8 |  |         |  | 217.4   |                                             |  |  |      |  |  |  | 552.2      |  |  |            | 77.3    |  |  |  | 629.5   |  |  |  | 629.5   | 
|Collateralized accounts receivable            |  |                                                      |      |  |         |  |        |                                             |  |  |      |  |  |  |           |  |  |            | 426.0   |  |  |  | 426.0   |  |  |  | 426.0   | 
|Trade accounts receivable, net                |  |                                                      |      |  |         |  |        |                                             |  |  |      |  |  |  |           |  |  |            | 535.5   |  |  |  | 535.5   |  |  |  | 535.5   | 
|Customer and commercial financing             |  |                                                      |      |  |         |  |        |                                             |  |  |      |  |  |  |           |  |  |            | 109.6   |  |  |  | 109.6   |  |  |  | 109.6   | 
|Derivative financial instruments              |  |                                                      |      |  |         |  | 36.0    |                                             |  |  |      |  |  |  | 36.0       |  |  |            |        |  |  |  | 36.0    |  |  |  | 36.0    | 
|                                              |  |                                                      |       |  |         |  |         |                                             |  |  |       |  |  |  |            |  |  |            |         |  |  |  |         |  |  |  |         | 
|                                              |  |                                                      | 789.5 |  |         |  | 1,595.7 |                                             |  |  |      |  |  |  | 2,385.2    |  |  |            | 1,148.4 |  |  |  | 3,533.6 |  |  |  | 3,533.6 | 
|                                              |  |                                                      |       |  |         |  |         |                                             |  |  |       |  |  |  |            |  |  |            |         |  |  |  |         |  |  |  |         | 
|Liabilities                                   |  |                                                      |       |  |         |  |         |                                             |  |  |       |  |  |  |            |  |  |            |         |  |  |  |         |  |  |  |         | 
|Loans and financing                           |  |                                                      |      |  |         |  |        |                                             |  |  |      |  |  |  |           |  |  |            | 2,064.7 |  |  |  | 2,250.5 |  |  |  | 2,064.7 | 
|Trade accounts payable and others liabilities |  |                                                      |      |  |         |  |        |                                             |  |  |      |  |  |  |           |  |  |            | 1,447.2 |  |  |  | 1,447.2 |  |  |  | 1,447.2 | 
|Financial guarantee and of residual value     |  |                                                      |      |  |         |  |        |                                             |  |  | 99.7  |  |  |  | 99.7       |  |  |            | 484.7   |  |  |  | 584.4   |  |  |  | 584.4   | 
|Capital lease                                 |  |                                                      |      |  |         |  |        |                                             |  |  |      |  |  |  |           |  |  |            | 1.8     |  |  |  | 1.8     |  |  |  | 1.8     | 
|Derivative financial instruments              |  |                                                      |      |  |         |  | 0.9     |                                             |  |  |      |  |  |  | 0.9        |  |  |            |        |  |  |  | 0.9     |  |  |  | 0.9     | 
|                                              |  |                                                      |       |  |         |  |         |                                             |  |  |       |  |  |  |            |  |  |            |         |  |  |  |         |  |  |  |         | 
|                                              |  |                                                      |      |  |         |  | 0.9     |                                             |  |  | 99.7  |  |  |  | 100.6      |  |  |            | 3,998.4 |  |  |  | 4,284.8 |  |  |  | 4,099.0 | 
|                                              |  |                                                      |       |  |         |  |         |                                             |  |  |       |  |  |  |            |  |  |            |         |  |  |  |         |  |  |  |         | 



F-71



---

##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





|                               |  |                                                                                    |       |  
|------------------------------ |  | ---------------------------------------------------------------------------------- | ----- | -
|                               |  | Fair value of liabilitiesmeasurement usingsignificant unobservableinputs (level 3) |      
|At December 31,2011 (Restated) |  |                                                                                    | 121.1 |  
|                               |  |                                                                                    |       |  
|Profits (losses) unrealized    |  |                                                                                    | (21.4 | )
|                               |  |                                                                                    |       |  
|At December 31,2012 (Restated) |  |                                                                                    | 99.7  |  
|                               |  |                                                                                    |       |  
|Profits (losses) unrealized    |  |                                                                                    | 1.2   |  
|Market value                   |  |                                                                                    | 39.3  |  
|Reversal                       |  |                                                                                    | (58.6 | )
|                               |  |                                                                                    |       |  
|At December 31,2013            |  |                                                                                    | 81.6  |  
|                               |  |                                                                                    |       |  



| | 28.3. | Financial risk management policy
| | ----- | --------------------------------

The Company has and follows a risk management policy
to direct transactions, which involves the diversification of transactions and counterparties. This 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 was established by the Executive Directors and submitted by to the Board of Directors, and provides for a Financial Management Committee. Under this policy, the market risks are mitigated when there is no
counterparty in the Companys operations and when it is considered necessary to support the corporate strategy. The Companys internal control procedures provide for a 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.



| | 28.3.1 | Capital risk management
| | ------ | -----------------------

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

The Company may review its dividends payment policy, pay back capital to the shareholders, issue new shares or sell assets in order to maintain
or adjust its capital structure (to reduce the financial indebtedness, for instance).

Liquidity and the leverage level are constantly
monitored in order to mitigate refinance risk and to maximize the return to the shareholders. The ratio between the liquidity and the return to the shareholders may be changed pursuant to the assessment of Management.

Accordingly, the Company has been able to maintain cash surpluses over the balance of financial indebtedness and to assure liquidity by
establishing and maintaining a standby credit line (see Note 20).

The capital management may be changed due to economy scenario
alterations or to strategic repositioning of the Company.

On December 31, 2013, cash and cash equivalents exceeded the Companys
financial indebtedness by US$ 429.3 (December 31, 2012 - US$ 308.7) resulting, on a net basis, in a leverage-free capital structure.



F-72



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##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





Of the total financial indebtedness as at December 31, 2013, 3.6% was short-term (16.3%
at December 31, 2012) and the average weighted term was equivalent to 6.3 years (5.8 years at December 31, 2012). The Companys own capital accounted for 35.8% as at December 31, 2013 and 35.3% of the total liabilities as at
December 31, 2012.



| | 28.3.2 | Credit risk
| | ------ | -----------

Credit risk is the risk of unfulfillment, by the counterparty, of an
obligation due to the Company represented in financial instruments, or receivables due from sales to customers, which leads to a financial loss. The Company is exposed to credit risk with respect to its operational activities, cash held in banks and
financial investments held in other institutions.



| |  |  | Financial investment
| | - |  | --------------------

The credit risk of cash and financial investment, which is
managed by the Financial Department, is managed according to the defined policy. The credit limit of the counterparties is reviewed on a daily basis in order to minimize the concentration risk and mitigate financial losses due to bankruptcy of the
counterparties. The Financial Management Committee assists the Financial Department in examining and reviewing operations done with counterparties.



| |  |  | Accounts receivable
| | - |  | -------------------

The Company may incur losses on amounts receivable from
sales of spare parts and services. To reduce this risk, customer credit analyses are made continuously. In relation to accounts receivable from aircraft sales, the Company may have credit risks 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 risk of
loss from doubtful accounts, the Company has recorded an allowance in an amount 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 investment (including cash) and
other financial assets held by the Company.



| | a) | Credit risk for counterparty with external assessment
| | -- | -----------------------------------------------------



|                                 |  |            |         |  |            |  |         | 
|-------------------------------- |  | ---------- | ------- |  | ---------- |  | ------- | 
|                                 |  | 12.31.2013 |         |  | 12.31.2012 | 
|                                 |  |            |         |  | (Restated) | 
|Cash and cash equivalents        |  |            | 1,683.7 |  |            |  | 1,797.0 | 
|Financial investments            |  |            | 985.3   |  |            |  | 629.5   | 
|Derivative financial instruments |  |            | 30.4    |  |            |  | 36.0    | 
|                                 |  |            |         |  |            |  |         | 
|Total                            |  |            | 2,699.4 |  |            |  | 2,462.5 | 
|                                 |  |            |         |  |            |  |         | 
|Based on external appraisal:     |  |            |         |  |            |  |         | 
|AAA                              |  |            | 1,344.6 |  |            |  | 1,511.5 | 
|AA                               |  |            | 123.4   |  |            |  | 222.8   | 
|A                                |  |            | 115.2   |  |            |  | 172.0   | 
|BBB                              |  |            | 1,082.4 |  |            |  | 530.6   | 
|N/A                              |  |            | 33.8    |  |            |  | 25.6    | 
|                                 |  |            |         |  |            |  |         | 
|Total                            |  |            | 2,699.4 |  |            |  | 2,462.5 | 
|                                 |  |            |         |  |            |  |         | 

N/A  Not available: no observable input to credit assessment



F-73



---

##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





| | b) | Credit risk for counterparties without external evaluation
| | -- | ----------------------------------------------------------



|                                   |  |            |         |  |            |  |         | 
|---------------------------------- |  | ---------- | ------- |  | ---------- |  | ------- | 
|                                   |  | 12.31.2013 |         |  | 12.31.2012 | 
|                                   |  |            |         |  | (Restated) | 
|Collateralized accounts receivable |  |            | 425.9   |  |            |  | 426.0   | 
|Trade accounts receivable, net     |  |            | 578.7   |  |            |  | 535.5   | 
|Customer and commercial financing  |  |            | 73.7    |  |            |  | 109.6   | 
|                                   |  |            |         |  |            |  |         | 
|Total                              |  |            | 1,078.3 |  |            |  | 1,071.1 | 
|                                   |  |            |         |  |            |  |         | 
|Based on internal appraisal:       |  |            |         |  |            |  |         | 
|Group 1                            |  |            | 9.8     |  |            |  | 23.6    | 
|Group 2                            |  |            | 79.5    |  |            |  | 83.4    | 
|Group 3                            |  |            | 989.0   |  |            |  | 964.1   | 
|                                   |  |            |         |  |            |  |         | 
|Total                              |  |            | 1,078.3 |  |            |  | 1,071.1 | 
|                                   |  |            |         |  |            |  |         | 



|                                                      |  | 
|----------------------------------------------------- |  | 
|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



| | 28.3.3 | 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.

To manage the liquidity
of cash in dollars and reais, Management has established projections and assumptions based on contracts for future disbursements and receipts, which are monitored daily by the Company. Accordingly, possible mismatches are detected well in advance
allowing the Company to adopt mitigation measures in advance, reducing the risk and financial cost.

The following table provides
additional information related to undiscounted contractual obligations and commercial commitments and their respective maturities:



|                                |  |           |         |  |                   |  |         |                   |  |  |                    |  |  |                     |       |  |  |  |         | 
|------------------------------- |  | --------- | ------- |  | ----------------- |  | ------- | ----------------- |  |  | ------------------ |  |  | ------------------- | ----- |  |  |  | ------- | 
|                                |  | Cash Flow |         |  | Less than oneyear |  |         | One to threeyears |  |  | Three to fiveyears |  |  | More thanfive years |      
|At December 31, 2013            |  |           |         |  |                   |  |         |                   |  |  |                    |  |  |                     |       |  |  |  |         | 
|Loans and financing             |  |           | 3,003.8 |  |                   |  | 176.6   |                   |  |  | 1,167.4            |  |  |                     | 182.9 |  |  |  | 1,476.9 | 
|Suppliers                       |  |           | 1,013.6 |  |                   |  | 1,013.6 |                   |  |  |                   |  |  |                     |      |  |  |  |        | 
|Recourse and non recourse debt  |  |           | 400.2   |  |                   |  | 12.1    |                   |  |  | 317.3              |  |  |                     | 27.5  |  |  |  | 43.3    | 
|Financial guarantees            |  |           | 293.5   |  |                   |  | 35.1    |                   |  |  | 26.2               |  |  |                     | 23.2  |  |  |  | 209.0   | 
|Other liabilities               |  |           | 355.2   |  |                   |  | 19.3    |                   |  |  | 105.7              |  |  |                     | 149.8 |  |  |  | 80.4    | 
|Capital lease                   |  |           | 0.8     |  |                   |  | 0.5     |                   |  |  | 0.3                |  |  |                     |      |  |  |  |        | 
|                                |  |           |         |  |                   |  |         |                   |  |  |                    |  |  |                     |       |  |  |  |         | 
|Total                           |  |           | 5,067.1 |  |                   |  | 1,257.2 |                   |  |  | 1,616.9            |  |  |                     | 383.4 |  |  |  | 1,809.6 | 
|                                |  |           |         |  |                   |  |         |                   |  |  |                    |  |  |                     |       |  |  |  |         | 
|At December 31, 2012 (Restated) |  |           |         |  |                   |  |         |                   |  |  |                    |  |  |                     |       |  |  |  |         | 
|Loans and financing             |  |           | 2,729.8 |  |                   |  | 418.5   |                   |  |  | 493.0              |  |  |                     | 677.8 |  |  |  | 1,140.5 | 
|Suppliers                       |  |           | 758.7   |  |                   |  | 758.7   |                   |  |  |                   |  |  |                     |      |  |  |  |        | 
|Recourse and non recourse debt  |  |           | 400.2   |  |                   |  | 11.9    |                   |  |  | 317.5              |  |  |                     | 27.5  |  |  |  | 43.3    | 
|Financial guarantees            |  |           | 584.4   |  |                   |  | 114.1   |                   |  |  | 189.7              |  |  |                     | 24.4  |  |  |  | 256.2   | 
|Other liabilities               |  |           | 276.2   |  |                   |  | 6.0     |                   |  |  | 70.8               |  |  |                     | 164.3 |  |  |  | 35.1    | 
|Capital lease                   |  |           | 2.1     |  |                   |  | 1.2     |                   |  |  | 0.9                |  |  |                     |      |  |  |  |        | 
|                                |  |           |         |  |                   |  |         |                   |  |  |                    |  |  |                     |       |  |  |  |         | 
|Total                           |  |           | 4,751.4 |  |                   |  | 1,310.4 |                   |  |  | 1,071.9            |  |  |                     | 894.0 |  |  |  | 1,475.1 | 
|                                |  |           |         |  |                   |  |         |                   |  |  |                    |  |  |                     |       |  |  |  |         | 

The above table shows the outstanding principal and anticipated interest due at maturity date. For the fixed
rate liabilities, the interest expenses were calculated based on the rate established in each debt contract. For the floating rate liabilities, the interest expenses were calculated based on a market forecast for each period (e.g. LIBOR
6m12m).



F-74



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##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





| | 28.3.4 | Market risk
| | ------ | -----------



| | a) | Interest rate risk
| | -- | ------------------

This risk arises from the possibility that the Company might incur
losses on account of interest rate fluctuations that increase the financial expense of liabilities and related to floating interest rates that reduce the assets income subject to floating interest rates and / or when the fluctuation in the
determination of fair value price of assets or liabilities that are marked to market by fixed rates.



| |  |  | 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.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

At
December 31, 2013, the Companys cash, cash equivalents, financial investments and loans and financing were indexed as follows:



|                                                 |  |           |         |  |            |  |       |        |  |  |         |  |  |        |       |   |   |  |         |  |  |  |        |  
|------------------------------------------------ |  | --------- | ------- |  | ---------- |  | ----- | ------ |  |  | ------- |  |  | ------ | ----- | - | - |  | ------- |  |  |  | ------ | -
|                                                 |  | Pre-fixed |         |  | Post-fixed |  |       | Total  | 
|                                                 |  | Amount    |         |  | %          |  |       | Amount |  |  | %       |  |  | Amount |       |   | % | 
|Without derivative effect                        |  |           |         |  |            |  |       |        |  |  |         |  |  |        |       |   |   |  |         |  |  |  |        |  
|Cash, cash equivalents and financial investments |  |           | 1,215.1 |  |            |  | 45.53 | %      |  |  | 1,453.9 |  |  |        | 54.47 | % |   |  | 2,669.0 |  |  |  | 100.00 | %
|Loans and financing                              |  |           | 2,066.2 |  |            |  | 94.16 | %      |  |  | 128.1   |  |  |        | 5.84  | % |   |  | 2,194.3 |  |  |  | 100.00 | %
|                                                 |  |           |        
|                                                 |  | Pre-fixed |         |  | Post-fixed |  |       | Total  | 
|                                                 |  | Amount    |         |  | %          |  |       | Amount |  |  | %       |  |  | Amount |       |   | % | 
|With derivative effect                           |  |           |         |  |            |  |       |        |  |  |         |  |  |        |       |   |   |  |         |  |  |  |        |  
|Cash, cash equivalents and financial investments |  |           | 1,215.1 |  |            |  | 45.53 | %      |  |  | 1,453.9 |  |  |        | 54.47 | % |   |  | 2,669.0 |  |  |  | 100.00 | %
|Loans and financing                              |  |           | 1,685.4 |  |            |  | 76.81 | %      |  |  | 508.9   |  |  |        | 23.19 | % |   |  | 2,194.3 |  |  |  | 100.00 | %

At December 31, 2013, the Companys cash, cash equivalents, financial investments and loans and
financing post -fixed were indexed as follows:



|                                           |  |                           |         |  |                        |  |        |        |  |  |         |  |  |  |        |  
|------------------------------------------ |  | ------------------------- | ------- |  | ---------------------- |  | ------ | ------ |  |  | ------- |  |  |  | ------ | -
|                                           |  | Without derivative effect |         |  | With derivative effect | 
|                                           |  | Amount                    |         |  | %                      |  |        | Amount |  |  | %       | 
|Cash equivalents and financial investments |  |                           | 1,453.9 |  |                        |  | 100.00 | %      |  |  | 1,453.9 |  |  |  | 100.00 | %
|CDI                                        |  |                           | 1,226.2 |  |                        |  | 84.34  | %      |  |  | 1,226.2 |  |  |  | 84.34  | %
|Libor                                      |  |                           | 227.7   |  |                        |  | 15.66  | %      |  |  | 227.7   |  |  |  | 15.66  | %
|Loans and financing                        |  |                           | 128.0   |  |                        |  | 100.00 | %      |  |  | 508.9   |  |  |  | 100.00 | %
|TJLP                                       |  |                           | 68.8    |  |                        |  | 53.75  | %      |  |  | 68.8    |  |  |  | 13.52  | %
|Libor                                      |  |                           | 58.8    |  |                        |  | 45.94  | %      |  |  | 54.5    |  |  |  | 10.71  | %
|CDI                                        |  |                           | 0.4     |  |                        |  | 0.31   | %      |  |  | 385.6   |  |  |  | 75.77  | %



| | b) | Foreign exchange rate risk
| | -- | --------------------------

The Companys functional currency is the US dollar.

Consequently, the Companys operations which are most exposed to foreign exchange gains/losses are those denominated in Real (labor
costs, local expenses, financial investments and loans and financing) as well as investments in subsidiaries in currencies other than the US dollar.



F-75



---

##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





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 when Real denominated.

The Company, in certain market conditions,
may protect itself against future expenses and revenues, denominated in foreign currency, to minimize future mismatches which lead to foreign currency gains/losses in the results.

Efforts to minimize the foreign exchange risk for rights and liabilities denominated in currencies other than the functional currency may
involve transactions with derivatives, such as swaps, exchange options and Non-Deliverable Forwards (NDF) (Note 8).



|                                                    |  |                         |         |   |                         |  |         |            |  |  |            |   |  |  |         |  
|--------------------------------------------------- |  | ----------------------- | ------- | - | ----------------------- |  | ------- | ---------- |  |  | ---------- | - |  |  | ------- | -
|                                                    |  | Without the effect of   |         |   | With the effect of      | 
|                                                    |  | derivative transactions |         |   | derivative transactions | 
|                                                    |  | 12.31.2013              |         |   | 12.31.2012              |  |         | 12.31.2013 |  |  | 12.31.2012 |  
|                                                    |  |                         |         |   | (Restated)              |  |         |            |  |  | (Restated) |  
|Loans and financing                                 |  |                         |         |   |                         |  |         |            |  |  |            |   |  |  |         |  
|Brazilian reais                                     |  |                         | 660.3   |   |                         |  | 505.6   |            |  |  | 660.3      |   |  |  | 505.6   |  
|U.S. dollars                                        |  |                         | 1,457.5 |   |                         |  | 1,491.2 |            |  |  | 1,457.5    |   |  |  | 1,491.2 |  
|Euro                                                |  |                         | 76.5    |   |                         |  | 69.7    |            |  |  | 76.5       |   |  |  | 69.7    |  
|                                                    |  |                         |         |   |                         |  |         |            |  |  |            |   |  |  |         |  
|                                                    |  |                         | 2,194.3 |   |                         |  | 2,066.5 |            |  |  | 2,194.3    |   |  |  | 2,066.5 |  
|                                                    |  |                         |         |   |                         |  |         |            |  |  |            |   |  |  |         |  
|Trade accounts payable                              |  |                         |         |   |                         |  |         |            |  |  |            |   |  |  |         |  
|Brazilian reais                                     |  |                         | 84.2    |   |                         |  | 84.1    |            |  |  | 84.2       |   |  |  | 84.1    |  
|U.S. dollars                                        |  |                         | 815.5   |   |                         |  | 618.0   |            |  |  | 815.5      |   |  |  | 618.0   |  
|Euro                                                |  |                         | 110.6   |   |                         |  | 52.1    |            |  |  | 110.6      |   |  |  | 52.1    |  
|Other currencies                                    |  |                         | 3.3     |   |                         |  | 4.5     |            |  |  | 3.3        |   |  |  | 4.5     |  
|                                                    |  |                         |         |   |                         |  |         |            |  |  |            |   |  |  |         |  
|                                                    |  |                         | 1,013.6 |   |                         |  | 758.7   |            |  |  | 1,013.6    |   |  |  | 758.7   |  
|                                                    |  |                         |         |   |                         |  |         |            |  |  |            |   |  |  |         |  
|Total (1)                                           |  |                         | 3,207.9 |   |                         |  | 2,825.2 |            |  |  | 3,207.9    |   |  |  | 2,825.2 |  
|                                                    |  |                         |         |   |                         |  |         |            |  |  |            |   |  |  |         |  
|Cash and cash equivalents and financial investments |  |                         |         |   |                         |  |         |            |  |  |            |   |  |  |         |  
|Brazilian reais                                     |  |                         | 1,269.7 |   |                         |  | 978.1   |            |  |  | 1,269.7    |   |  |  | 978.1   |  
|U.S. dollars                                        |  |                         | 1,339.3 |   |                         |  | 1,278.5 |            |  |  | 1,339.3    |   |  |  | 1,278.5 |  
|Euro                                                |  |                         | 21.4    |   |                         |  | 50.5    |            |  |  | 21.4       |   |  |  | 50.5    |  
|Other currencies                                    |  |                         | 38.6    |   |                         |  | 119.4   |            |  |  | 38.6       |   |  |  | 119.4   |  
|                                                    |  |                         |         |   |                         |  |         |            |  |  |            |   |  |  |         |  
|                                                    |  |                         | 2,669.0 |   |                         |  | 2,426.5 |            |  |  | 2,669.0    |   |  |  | 2,426.5 |  
|                                                    |  |                         |         |   |                         |  |         |            |  |  |            |   |  |  |         |  
|Trade accounts receivable:                          |  |                         |         |   |                         |  |         |            |  |  |            |   |  |  |         |  
|Brazilian reais                                     |  |                         | 43.1    |   |                         |  | 31.7    |            |  |  | 43.1       |   |  |  | 31.7    |  
|U.S. dollars                                        |  |                         | 390.3   |   |                         |  | 502.3   |            |  |  | 390.3      |   |  |  | 502.3   |  
|Euro                                                |  |                         | 144.3   |   |                         |  | 1.5     |            |  |  | 144.3      |   |  |  | 1.5     |  
|Other currencies                                    |  |                         | 1.0     |   |                         |  |        |            |  |  | 1.0        |   |  |  |        |  
|                                                    |  |                         |         |   |                         |  |         |            |  |  |            |   |  |  |         |  
|                                                    |  |                         | 578.7   |   |                         |  | 535.5   |            |  |  | 578.7      |   |  |  | 535.5   |  
|                                                    |  |                         |         |   |                         |  |         |            |  |  |            |   |  |  |         |  
|Total (2)                                           |  |                         | 3,247.7 |   |                         |  | 2,962.0 |            |  |  | 3,247.7    |   |  |  | 2,962.0 |  
|                                                    |  |                         |         |   |                         |  |         |            |  |  |            |   |  |  |         |  
|Net exposure (1 - 2):                               |  |                         |         |   |                         |  |         |            |  |  |            |   |  |  |         |  
|Brazilian reais                                     |  |                         | (568.3  | ) |                         |  | (420.1  | )          |  |  | (568.3     | ) |  |  | (420.1  | )
|U.S. dollars                                        |  |                         | 543.4   |   |                         |  | 328.4   |            |  |  | 543.4      |   |  |  | 328.4   |  
|Euro                                                |  |                         | 21.4    |   |                         |  | 69.8    |            |  |  | 21.4       |   |  |  | 69.8    |  
|Other currencies                                    |  |                         | (36.3   | ) |                         |  | (114.9  | )          |  |  | (36.3      | ) |  |  | (114.9  | )

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



| | 28.4 | Sensitivity analysis
| | ---- | --------------------

In order to present positive and negative variations of 25% and
50% in the risk variable considered, a sensitivity analysis of the financial instruments is presented below, including derivatives, describing the effects on the monetary and foreign exchange variations on the financial income and expense determined
on the balances recorded at December 31, 2013, in the event of the occurrence of such variations in the risk component.



F-76



---

##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





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 hypotheses and/or methodologies could have a material effect on the
estimates presented below.



| | 28.4.1 | Methodology
| | ------ | -----------

Assuming that the balances remain constant, the Company calculated the
interest and exchange variation differential for each of the projected scenarios.

In the evaluation of the amounts exposed to interest
rate risk, only the financial statement risks were considered. The operations subject to prefixed interest rates were not included.

The
probable scenario is based on the Companys 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 statement of financial position 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 statement of financial position date.



| | 28.4.2 | Interest risk factor
| | ------ | --------------------



|                                           |  |             |  |                             |         |   |                                            |  |       |      |  |  |                  |   |  |      |       |   |      |  |       |   |  |  |       |  
|------------------------------------------ |  | ----------- |  | --------------------------- | ------- | - | ------------------------------------------ |  | ----- | ---- |  |  | ---------------- | - |  | ---- | ----- | - | ---- |  | ----- | - |  |  | ----- | -
|                                           |  |             |  |                             |         |   | Additional variations in book balances (*) | 
|                                           |  | Risk factor |  | Amountsexposed at12.31.2013 |         |   | -50%                                       |  |       | -25% |  |  | Probablescenario |   |  | +25% |       |   | +50% | 
|Cash equivalents and financial investments |  | CDI         |  |                             | 1,226.2 |   |                                            |  | (59.9 | )    |  |  | (29.9            | ) |  |      | 9.0   |   |      |  | 29.9  |   |  |  | 59.9  |  
|Loans and financing                        |  | CDI         |  |                             | 0.4     |   |                                            |  |      |      |  |  |                 |   |  |      |      |   |      |  |      |   |  |  |      |  
|                                           |  |             |  |                             |         |   |                                            |  |       |      |  |  |                  |   |  |      |       |   |      |  |       |   |  |  |       |  
|Net impact                                 |  | CDI         |  |                             | 1,225.8 |   |                                            |  | (59.9 | )    |  |  | (29.9            | ) |  |      | 9.0   |   |      |  | 29.9  |   |  |  | 59.9  |  
|Cash equivalents and financial investments |  | LIBOR       |  |                             | 227.7   |   |                                            |  | (0.3  | )    |  |  | (0.1             | ) |  |      | 0.1   |   |      |  | 0.1   |   |  |  | 0.3   |  
|Loans and financing                        |  | LIBOR       |  |                             | 58.8    |   |                                            |  | 0.1   |      |  |  |                 |   |  |      |      |   |      |  |      |   |  |  | (0.1  | )
|Net impact                                 |  | LIBOR       |  |                             | 168.9   |   |                                            |  | (0.2  | )    |  |  | (0.1             | ) |  |      | 0.1   |   |      |  | 0.1   |   |  |  | 0.2   |  
|                                           |  |             |  |                             |         |   |                                            |  |       |      |  |  |                  |   |  |      |       |   |      |  |       |   |  |  |       |  
|Loans and financing                        |  | TJLP        |  |                             | 68.8    |   |                                            |  | 1.7   |      |  |  | 0.9              |   |  |      |      |   |      |  | (0.9  | ) |  |  | (1.7  | )
|                                           |  |             |  |                             |         |   |                                            |  |       |      |  |  |                  |   |  |      |       |   |      |  |       |   |  |  |       |  
|Net impact                                 |  | TJLP        |  |                             | (68.8   | ) |                                            |  | 1.7   |      |  |  | 0.9              |   |  |      |      |   |      |  | (0.9  | ) |  |  | (1.7  | )
|Rates considered                           |  | CDI         |  |                             | 9.77    | % |                                            |  | 4.89  | %    |  |  | 7.33             | % |  |      | 10.50 | % |      |  | 12.21 | % |  |  | 14.66 | %
|Rates considered                           |  | LIBOR       |  |                             | 0.25    | % |                                            |  | 0.12  | %    |  |  | 0.18             | % |  |      | 0.27  | % |      |  | 0.31  | % |  |  | 0.37  | %
|Rates considered                           |  | TJLP        |  |                             | 5.00    | % |                                            |  | 2.50  | %    |  |  | 3.75             | % |  |      | 5.00  | % |      |  | 6.25  | % |  |  | 7.50  | %



| | (*) | The positive and negative variations of 25% and 50% were applied on the rates in effect at 12.31.2013
| | --- | -----------------------------------------------------------------------------------------------------



| | 28.4.3 | Foreign exchange risk factor
| | ------ | ----------------------------



|                                                 |  |             |  |                             |         |   |                                            |  |        |      |  |  |                  |   |  |      |        |   |      |  |        |   |  |  |        |  
|------------------------------------------------ |  | ----------- |  | --------------------------- | ------- | - | ------------------------------------------ |  | ------ | ---- |  |  | ---------------- | - |  | ---- | ------ | - | ---- |  | ------ | - |  |  | ------ | -
|                                                 |  |             |  |                             |         |   | Additional variations in book balances (*) | 
|                                                 |  | Risk factor |  | Amountsexposed at12.31.2013 |         |   | -50%                                       |  |        | -25% |  |  | Probablescenario |   |  | +25% |        |   | +50% | 
|Assets                                           |  |             |  |                             | 1,635.9 |   |                                            |  | 817.9  |      |  |  | 409.0            |   |  |      | (5.2   | ) |      |  | (409.0 | ) |  |  | (817.9 | )
|                                                 |  | BRL         |  |                             |         |   |                                            |  |        |      |  |  |                  |   |  |      |        |   |      |  |        |   |  |  |        |  
|Cash, cash equivalents and financial investments |  |             |  |                             | 1,269.8 |   |                                            |  | 634.8  |      |  |  | 317.5            |   |  |      | (4.0   | ) |      |  | (317.5 | ) |  |  | (634.8 | )
|Other assets                                     |  | BRL         |  |                             | 366.1   |   |                                            |  | 183.1  |      |  |  | 91.5             |   |  |      | (1.2   | ) |      |  | (91.5  | ) |  |  | (183.1 | )
|Liabilities                                      |  |             |  |                             | 1,698.1 |   |                                            |  | (849.2 | )    |  |  | (424.5           | ) |  |      | 5.4    |   |      |  | 424.5  |   |  |  | 849.2  |  
|Loans and financing                              |  | BRL         |  |                             | 660.3   |   |                                            |  | (330.3 | )    |  |  | (165.1           | ) |  |      | 2.1    |   |      |  | 165.1  |   |  |  | 330.3  |  
|Other liabilities                                |  | BRL         |  |                             | 1,037.8 |   |                                            |  | (518.9 | )    |  |  | (259.4           | ) |  |      | 3.3    |   |      |  | 259.4  |   |  |  | 518.9  |  
|                                                 |  |             |  |                             |         |   |                                            |  |        |      |  |  |                  |   |  |      |        |   |      |  |        |   |  |  |        |  
|Net impact                                       |  |             |  |                             | (62.2   | ) |                                            |  | (31.3  | )    |  |  | (15.5            | ) |  |      | 0.2    |   |      |  | 15.5   |   |  |  | 31.3   |  
|Exchange rate considered                         |  |             |  |                             | 2.3426  |   |                                            |  | 1.1713 |      |  |  | 1.7570           |   |  |      | 2.3500 |   |      |  | 2.9283 |   |  |  | 3.5139 |  



| | (*) | The positive and negative variations of 25% and 50% were applied on the rates in effect at 12.31.2013
| | --- | -----------------------------------------------------------------------------------------------------



F-77



---

##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





| | 28.4.4 | Derivative contracts
| | ------ | --------------------



|                              |  |               |  |                             |        |   |                                            |  |        |      |  |  |                  |   |  |      |        |   |      |  |        |   |  |  |        |  
|----------------------------- |  | ------------- |  | --------------------------- | ------ | - | ------------------------------------------ |  | ------ | ---- |  |  | ---------------- | - |  | ---- | ------ | - | ---- |  | ------ | - |  |  | ------ | -
|                              |  |               |  |                             |        |   | Additional variations in book balances (*) | 
|                              |  | Risk factor   |  | Amountsexposed at12.31.2013 |        |   | -50%                                       |  |        | -25% |  |  | Probablescenario |   |  | +25% |        |   | +50% | 
|Interest swap                 |  | LIBOR         |  |                             | 21.3   |   |                                            |  | 12.6   |      |  |  | 10.7             |   |  |      | (0.9   | ) |      |  | (2.3   | ) |  |  | (4.3   | )
|Interest swap                 |  | CDI           |  |                             | (12.4  | ) |                                            |  | 26.0   |      |  |  | 12.5             |   |  |      | (2.4   | ) |      |  | (11.5  | ) |  |  | (22.0  | )
|Hedge desifnated as cash flow |  | US$/R$        |  |                             | (0.9   | ) |                                            |  | 169.3  |      |  |  | 40.1             |   |  |      |       |   |      |  | (11.6  | ) |  |  | (64.8  | )
|Foreign Exchange option       |  | Object -price |  |                             | 8.8    |   |                                            |  | (7.1   | )    |  |  | (4.1             | ) |  |      |       |   |      |  | 4.9    |   |  |  | 10.4   |  
|                              |  |               |  |                             |        |   |                                            |  |        |      |  |  |                  |   |  |      |        |   |      |  |        |   |  |  |        |  
|Total                         |  |               |  |                             | 16.8   |   |                                            |  | 200.8  |      |  |  | 59.2             |   |  |      | (3.3   | ) |      |  | (20.5  | ) |  |  | (80.7  | )
|                              |  |               |  |                             |        |   |                                           
|Rate considered               |  | LIBOR         |  |                             | 0.25   | % |                                            |  | 0.12   | %    |  |  | 0.18             | % |  |      | 0.27   | % |      |  | 0.31   | % |  |  | 0.37   | %
|Rate considered               |  | CDI           |  |                             | 9.77   | % |                                            |  | 4.89   | %    |  |  | 7.33             | % |  |      | 10.50  | % |      |  | 12.21  | % |  |  | 14.66  | %
|Rate considered               |  | US$/R$        |  |                             | 2.3426 |   |                                            |  | 1.1713 |      |  |  | 1.7570           |   |  |      | 2.3500 |   |      |  | 2.9283 |   |  |  | 3.5139 |  
|Object -price considered      |  | Object -price |  |                             | 10.70  |   |                                            |  | 5.35   |      |  |  | 8.03             |   |  |      | 10.70  |   |      |  | 13.38  |   |  |  | 16.05  |  



| | (*) | The positive and negative variations of 25% and 50% were applied on the rates in effect at 12.31.2013
| | --- | -----------------------------------------------------------------------------------------------------



| | 28.4.5 | Residual Value Guarantees
| | ------ | -------------------------

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

Based on residual value guarantee contracts in force, the Company ascertains any changes in
values based on third party appraisals. The probable scenario is based on the Companys expectation of recording the provisions on a statistical basis, and the positive and negative variations of 25% and 50% have been applied to the third party
appraisals at the balance sheet date.



|                                      |  |                             |       |   |                                        |  |       |      |  |  |                  |  |  |      |     |  |      |  |       |   |  |  |       |  
|------------------------------------- |  | --------------------------- | ----- | - | -------------------------------------- |  | ----- | ---- |  |  | ---------------- |  |  | ---- | --- |  | ---- |  | ----- | - |  |  | ----- | -
|                                      |  |                             |       |   | Additional variations in book balances | 
|                                      |  | Amountsexposed at12.31.2013 |       |   | -50%                                   |  |       | -25% |  |  | Probablescenario |  |  | +25% |     |  | +50% | 
|Financial guarantee of residual value |  |                             | (81.6 | ) |                                        |  | 197.8 |      |  |  | 110.6            |  |  |      | 0.8 |  |      |  | (63.2 | ) |  |  | (74.5 | )
|                                      |  |                             |       |   |                                        |  |       |      |  |  |                  |  |  |      |     |  |      |  |       |   |  |  |       |  
|Total                                 |  |                             | (81.6 | ) |                                        |  | 197.8 |      |  |  | 110.6            |  |  |      | 0.8 |  |      |  | (63.2 | ) |  |  | (74.5 | )
|                                      |  |                             |       |   |                                        |  |       |      |  |  |                  |  |  |      |     |  |      |  |       |   |  |  |       |  

If a provision is considered to be insufficient to cover the probable execution of the guarantees, it is
increased to adjust it to the Companys exposure at the reporting period.



| | 28.4.6 | Derivative contracts that comprise exclusive Investment Funds
| | ------ | -------------------------------------------------------------

The Company maintains a
structure of exclusive funds, which it controls and which are consolidated in the financial statements.

These funds were set up with the
objective of outsourcing management of the Companys short-term financial investments. The managers contracted have discretion, within the restrictions established in the investment policy, to select the assets that will comprise the investment
portfolio.

All the funds are classified as multimarket and they may hold derivatives in their portfolio as a means of attaining the
proposed profitability objective. These derivatives relate exclusively to the positions taken by the funds themselves and are in no way connected with the Companys own derivatives used as a hedge to mitigate its risks exposures.

The following tables show the derivatives held by the funds at December 31, 2013, and the sensitivity analysis of the main risk factors to
which the instruments are exposed.

Certain statistical simplifications were made in isolating the variability of the risk factors in
question. Consequently, the actual results may differ from these estimates. The following estimates do not necessarily represent the amounts that might be determined in future financial statements. The use of different hypotheses and/or
methodologies could have a material effect on the estimates presented below.



F-78



---

##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





| | a) | Description of derivative instruments held by the exclusive investment funds
| | -- | ----------------------------------------------------------------------------



|                      |  |                 |     |  |          |  |            |                  |  |  |                             |  |  |  |       |  
|--------------------- |  | --------------- | --- |  | -------- |  | ---------- | ---------------- |  |  | --------------------------- |  |  |  | ----- | -
|Type                  |  | No of contracts |     |  | Due date |  |            | Unit marketprice |  |  | Referencevalue at12.31.2013 | 
|Purchase - Forward DI |  |                 | 62  |  |          |  | January-15 |                  |  |  | 38.6                        |  |  |  | (2.4  | )
|Purchase - Forward DI |  |                 | 236 |  |          |  | January-16 |                  |  |  | 34.3                        |  |  |  | (8.1  | )
|Purchase - Forward DI |  |                 | 9   |  |          |  | January-17 |                  |  |  | 30.2                        |  |  |  | (0.3  | )
|Purchase - Forward DI |  |                 | 1   |  |          |  | January-21 |                  |  |  | 18.1                        |  |  |  |      |  
|                      |  |                 |     |  |          |  |            |                  |  |  |                             |  |  |  |       |  
|Total                 |  |                 |     |  |          |  |            |                  |  |  |                             |  |  |  | (10.8 | )
|                      |  |                 |     |  |          |  |            |                  |  |  |                             |  |  |  |       |  



| | b) | Sensitivity analysis
| | -- | --------------------



|            |  |                                                 |       |   |      |  |      |      |  |  |                  |   |  |     |       |   |     |  |       |   |  |  |       |  
|----------- |  | ----------------------------------------------- | ----- | - | ---- |  | ---- | ---- |  |  | ---------------- | - |  | --- | ----- | - | --- |  | ----- | - |  |  | ----- | -
|            |  | Additional variations in the return of the fund |      
|Risk factor |  | Referencevalue at12.31.2013                     |       |   | -50% |  |      | -25% |  |  | ProbableScenario |   |  | 25% |       |   | 50% | 
|CDI         |  |                                                 | (10.8 | ) |      |  | (0.7 | )    |  |  | (0.2             | ) |  |     | 0.4   |   |     |  | 0.8   |   |  |  | 1.2   |  
|            |  |                                                 |       |   |      |  |      |      |  |  |                  |   |  |     |       |   |     |  |       |   |  |  |       |  
|Total       |  |                                                 | (10.8 | ) |      |  | (0.7 | )    |  |  | (0.2             | ) |  |     | 0.4   |   |     |  | 0.8   |   |  |  | 1.2   |  
|            |  |                                                 |       |   |      |  |      |      |  |  |                  |   |  |     |       |   |     |  |       |   |  |  |       |  
|Rates used  |  |                                                 |       |   |      |  |      |      |  |  |                  |   |  |     |       |   |     |  |       |   |  |  |       |  
|CDI         |  |                                                 | 9.77  | % |      |  | 4.89 | %    |  |  | 7.33             | % |  |     | 10.50 | % |     |  | 12.21 | % |  |  | 14.66 | %



|29. | Shareholders equity
|--- | --------------------



| | 29.1 | Capital
| | ---- | -------

The authorized capital is divided into 1,000,000,000 common shares. The
Companys subscribed and paid up capital at December 31, 2013 was US$1,438.0 and was comprised of 740,465,044 common shares, without par value, of which 9,496,000 shares were held in Treasury.



| | 29.2 | Brazilian Government Golden Share
| | ---- | ---------------------------------

The Federal Government holds one golden
share with the same voting rights as other holders of common shares but which grants it certain additional rights as established in article 9 of the Companys bylaws, including veto rights over decisions pertaining to the following
matters:

I - Change of the Companys name or its corporate objective;

II - Alteration and/or application of the Companys logo;

III - Creation and/or modification of military programs (whether or not the Federal Republic of Brazil is involved);

IV - Training third parties in technology for military programs;

V - Interruption of the supply of maintenance and spare parts for military aircraft;

VI - Transfer of control of the Companys stock control; and

VII - Any changes in (i) article 9 of the Companys bylaws, article 4, the main clause of art. 10, articles 11, 14 e 15, sub-item III
of art. 18, paragraphs 1 and 2 of art. 27, sub-item X of art. 33, sub-item XII of art. 39 or Chapter VII of the Companys bylaws, or (ii) the rights attributed by the bylaws to the special class share.



F-79



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##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





| | 29.3 | Treasury Shares
| | ---- | ---------------

Common shares acquired by April 4, 2008, using the sources from
the investment reserve and working capital. This operation was conducted in accordance with rules approved by the Statutory Board of Directors in a meeting held on December 7, 2007 and corresponds to 9,496,000 common shares and US$ 103.8
as of December 31, 2013. These shares lose voting and economic rights during the period in which they are held in Treasury.



|                                      |  |     |       |   |          |  |            |            |  |  |       | 
|------------------------------------- |  | --- | ----- | - | -------- |  | ---------- | ---------- |  |  | ----- | 
|                                      |  | USD |       |   | Quantity |  |            | Sharevalue | 
|In the beggining of the year          |  |     | 154.2 |   |          |  | 14,104,900 |            |  |  | 10.93 | 
|Used for share based compensation (i) |  |     | (50.4 | ) |          |  | (4,608,900 | )          |  |  | 10.93 | 
|                                      |  |     |       |   |          |  |            |            |  |  |       | 
|At December 31, 2013                  |  |     | 103.8 |   |          |  | 9,496,000  |            |  |  | 10.93 | 
|                                      |  |     |       |   |          |  |            |            |  |  |       | 



| | (i) | The beneficiaries of the shares used in the share-based compensation plan include the Statutory Board of Directors, Executive Directors and certain employees.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------

At December 31, 2013, the market value of the shares held in Treasury was US$ 76.4 (December 31, 2012 - US$ 100.5).



| | 29.4 | 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 part of the retained earnings derived from government subsidies received by the Company and is recognized in the statements of income in the same
line item of the realized investments.

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



| | 29.5 | Statutory reserve
| | ---- | -----------------

The statutory reserve is recorded annually as an appropriation of 5%
of the net income for the year. The reserve may not exceed 20% of capital, or 30% of capital and capital reserves.



| | 29.6 | Interest on own capital
| | ---- | -----------------------

Interest on capital is allocated to dividends and are approved
by the Statutory Board of Directors as follows. Interest on capital approved or paid during the quarterly periods are treated as an anticipation of the mandatory dividends, adjusted in the last quarter of the year to total a distribution of 25% of
annual income as provided in its statutes.



| |  |  | In meetings held on March 11, 2013, the Statutory Board of Directors approved the distribution of interest on own capital for the first quarter of 2013 in the amount of US$ 14.4, corresponding to US$ 0.02 per
share. The interest on own capital payment is subject to 15% of income tax. The payment was made on April 11, 2013.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | In meetings held on June 13, 2013, the Statutory Board of Directors approved the distribution of interest on own capital for the second quarter of 2013 in the amount of US$ 13.2, corresponding to US$ 0.02 per
share. The interest on own capital payment is subject to 15% of income tax. The payment was made on June 18, 2013.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | In meetings held on September 12, 2013, the Statutory Board of Directors approved the distribution of interest on own capital for the fourth quarter of 2013 in the amount of US$ 13.1, corresponding to US$
0.02 per share. The interest on own capital payment is subject to 15% of income tax. The payment was made on October 16, 2013.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-80



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##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





| |  |  | In meetings held on December 5, 2013, the Statutory Board of Directors approved the distribution of interest on own capital for the fourth quarter of 2013 in the amount of US$ 28.1, corresponding to US$
0.03 per share. The interest on own capital payment is subject to 15% of income tax. The payment was made on January 10, 2014.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 29.7 | Proposed dividends
| | ---- | ------------------

The determination of the annual dividends, subject to the approval
of the shareholders at the Annual General Meeting, is presented in reais as Brazilian Corporate Law establishes that all dividends are determined and paid based on real amounts in the legal books, as shown below:



|                                                                 |  |            |       |   |            |  |        |            |  |  |        |  
|---------------------------------------------------------------- |  | ---------- | ----- | - | ---------- |  | ------ | ---------- |  |  | ------ | -
|                                                                 |  | 12.31.2013 |       |   | 12.31.2012 |  |        | 12.31.2011 | 
|Net income for the year                                          |  |            | 777.7 |   |            |  | 697.8  |            |  |  | 156.3  |  
|Investment Subsidy                                               |  |            | (6.2  | ) |            |  | (8.0   | )          |  |  | (11.1  | )
|Legal Reserve                                                    |  |            | (38.9 | ) |            |  | (34.9  | )          |  |  | (7.8   | )
|                                                                 |  |            |       |   |            |  |        |            |  |  |        |  
|                                                                 |  |            | 732.6 |   |            |  | 654.9  |            |  |  | 137.4  |  
|                                                                 |  |            |       |   |            |  |        |            |  |  |        |  
|Minimun mandatory dividend (25%)                                 |  |            | 183.2 |   |            |  | 163.7  |            |  |  | 34.3   |  
|                                                                 |  |            |       |   |            |  |        |            |  |  |        |  
|Dividends:                                                       |  |            |       |   |            |  |        |            |  |  |        |  
|Interest on own capital, net of tax                              |  |            | 134.2 |   |            |  | 133.7  |            |  |  | 158.6  |  
|Proposed dividends                                               |  |            | 49.0  |   |            |  | 30.1   |            |  |  |       |  
|                                                                 |  |            |       |   |            |  |        |            |  |  |        |  
|Total stockholder remuneration                                   |  |            | 183.2 |   |            |  | 163.7  |            |  |  | 158.6  |  
|Payments of the year                                             |  |            | (76.6 | ) |            |  | (101.8 | )          |  |  | (158.5 | )
|Total shareholders remuneration of period                        |  |            | 106.6 |   |            |  | 61.9   |            |  |  |       |  
|Total shareholders remuneration of previous period               |  |            | 0.1   |   |            |  | 0.2    |            |  |  | 0.2    |  
|                                                                 |  |            |       |   |            |  |        |            |  |  |        |  
|Total shareholders remuneration - in millions of Brazilian reais |  |            | 106.7 |   |            |  | 62.2   |            |  |  | 0.2    |  
|                                                                 |  |            |       |   |            |  |        |            |  |  |        |  
|Total shareholders remuneration - in millions of US$             |  |            | 45.5  |   |            |  | 30.4   |            |  |  | 0.1    |  



| | 29.7.1 | Investment and working capital reserve
| | ------ | --------------------------------------

The purpose of this reserve is to shield funds
which might otherwise be subject to distribution and are earmarked for: (i) investments in property, plant and equipment, without detriment to retained earnings, pursuant to art. 196 of Law 6,404/76; and (ii) the Companys working
capital. The reserve may also be used to (i) redeem, reimburse or purchase shares of the Company and (ii) be distributed to the shareholders.



| | 29.7.2 | Other Comprehensive Income
| | ------ | --------------------------

Consists of the following adjustments:



| |  |  | Cumulative translation adjustment: foreign exchange gains/losses resulting from translation of the consolidated financial statements in the functional currency to the presentation currency (Real) and foreign exchange
gains/losses resulting from translation of the foreign subsidiaries financial statements, measured in the functional currency other than of the Company (dollar), to the functional currency; and
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Other comprehensive income: unrealized actuarial gains (losses) resulting from the healthcare plans sponsored by the Company and to fair value variation of financial instruments available for sale.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-81



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##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





|30. | Share-based compensation
|--- | ------------------------



| | 30.1. | Program for the granting of options to purchase shares to executive officers and employees
| | ----- | ------------------------------------------------------------------------------------------

The Extraordinary General Meeting of April 19, 2010 approved the Stock option grant program offered to directors and employees of the
Company and its subsidiaries who have been employed for at least two years. Vesting under the programs policy occurs at three moments: term (i) from 20% after the first year, (ii) from 30% after the second year (iii) from 50%
after the third year, always taking the date on which each stock option was granted.

The Extraordinary General Meeting of January 10,
2012 approved, by a majority of votes, the amendment of clauses 6.1 and 7.1 of the stock option grant plan, in respect of the terms and percentages for vesting and exercise of the stock option, which are now: I) 33% after the 3rd year, II) 33% after the 4th year and III) 34% after the 5th year, always taking the date on which each stock option was granted. This amendment
only applies to new grants.

The exercise price of each option is established on the grant date based on the weighted average of the shares
quoted in the last 60 trading sessions, and may be adjusted by up to 30% to eliminate the effects of any speculative trading. The participant will have a maximum period for exercise of option grants awarded for five years until 2011 and seven years
for the other, started from the date of grant. In either situation, from the Extraordinary General Meeting held on April 25, 2013, the condition for exercising the option, the employees need to be part of the Company on the date of
exercise was altered by setting a maximum six months from the termination of the employee for exercising. In death, cause of the exercise period is anticipated and options transferred to their successors.



| | 30.2. | Program for the granting of stock options to members of the Statutory Board of Directors
| | ----- | ----------------------------------------------------------------------------------------

At the Extraordinary General Meeting held on April 25, 2013, at the Company approved the Program for the granting of stock options
to members of the Statutory Board of Directors, exclusively for the members of the Statutory Board of Directors, which shall to receive part of their total compensation set to its mandate in the form of stock options. The acquisition of rights
exercise of all options will occur at the end of the fourth year and will have a maximum exercise period of six years, both from the grant date of each option. The other conditions of this program as setting the exercise price, option exercise,
delivery of shares, etc., are identical to the program for directors and employees.



| | 30.3. | Stock options granted
| | ----- | ---------------------

The fair value of the options granted is determined based on
model Black & Scholes pricing that takes into account the value of the underlying asset, strike price, time to elapse before exercising the option, the probability of the option being exercised, historical volatility based the daily closing
price of the shares over the last six months and interest rate weighted for the period of each lot based on the DI rate published by BM&FBOVESPA. Note that the time to elapse before exercising the option is defined as managements decision
and considers the end of the grace period for exercise of each lot of options. This assumption was adopted because management believes that the exercise of the option will occur at the end of each vesting period due to high liquidity and high
expected return for each share.



| |  |  | On April 30, 2010, call options were granted for 6,510,000 shares, with an exercise price of R$ 10.19 (US$ 5.89) per share. The fair value attributed to these options was based on the Black-Scholes pricing
model, whereby the value of each option was calculated at R$ 1.77 (US$ 1.02) for the portion that may be exercised as from the end of the first year, R$ 2.74 (US$ 1.58) for the portion that may be exercised as from the end of the second year and R$
3.44 (US$ 1.99) for the portion that may be exercised as from the end of the third year.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | On January 18, 2011, call options were granted for 6,345,000 shares and on March 16, 2011 additional call options for 150,000 shares were
granted, with an exercise price of R$ 12.05 (US$ 7,20) and R$ 12.89 (US$ 7.73) per share, respectively. The fair value attributed to the options was based on the Black-Scholes pricing model, whereby the value of each option granted on
January 18, 2011 was calculated at R$ 1.89 (US$ 1.02) for the portion that may be exercised as
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-82



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##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





| | from the end of the first year, R$ 2.88 (US$ 1.58) for the portion that may be exercised as from the end of the second year and R$ 3.62 (US$ 1.99) for the portion that may be exercised as from
the end of the third year. For the option granted on March 16, 2011 the calculated fair values were R$ 2.11 (US$ 1.02) for the portion that may be exercised as from the end of the first year, R$ 3.22 (US$ 1.58) for the portion that may be
exercised as from the end of the second year and R$ 4.08 (US$ 1.99) for the portion that may be exercised as from the end of the third year.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | On January 23, 2012, 4,860,000 options were granted to purchase shares at an exercise price of R$ 11.50 (US$ 6.56) per share. The fair value attributed to these options was determined using the standard
Black-Scholes pricing model and the value of each option was determined at R$ 3.51 (US$ 2.00) with early exercise rights at the end of the third year, R$ 4.00 (US$ 2.28) with early exercise rights at the end of fourth year and R$ 4.35 (US$2.48) with
early exercise rights at the end of the fifth year.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | On March 20, 2013, 4,494,000 options were granted to purchase shares at an exercise price of R$ 15.71 (US$ 7.91) per share. The fair value attributed to these options was determined using the standard
Black-Scholes pricing model and the value of each option was determined at R$ 4.47 (US$ 2.25) with early exercise rights at the end of the third year, R$ 5.29 (US$ 2.66) with early exercise rights at the end of fourth year and R$ 5.97 (US$ 3.00)
with early exercise rights at the end of the fifth year.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | On April 25, 2013, options were granted to purchase 584,400 shares to members of the Board of Directors, which was attributed to the exercise price of R$ 16.81 (US$ 8.36) per share. The fair value attributed
to these options was determined using the standard Black & Scholes pricing model and value of each option was determined at R$ 5.51 (US$ 2.74), with early exercise right at the end of the fourth year.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                           |  |                         |            |  |                                   |  |            |                                    |  |  |             |   |  |           |            |  |  |  |           |  |  |  |       |  |  |  |      | 
|-------------------------- |  | ----------------------- | ---------- |  | --------------------------------- |  | ---------- | ---------------------------------- |  |  | ----------- | - |  | --------- | ---------- |  |  |  | --------- |  |  |  | ----- |  |  |  | ---- | 
|                           |  | 12.31.2013              |            |  | WeightedaverageexercisePrice (R$) |  |            | WeightedaverageexercisePrice (US$) | 
|                           |  | in thousands of options |            |  |                                  
|                           |  | Grants                  |            |  | Exercised                         |  |            | Canceled (i)                       |  |  | Outstanding |   |  | Exercible |            |  | 
|Grants on April 30, 2010   |  |                         | 6,510,000  |  |                                   |  | (5,289,000 | )                                  |  |  | (528,000    | ) |  |           | 693,000    |  |  |  | 693,000   |  |  |  | 10.19 |  |  |  | 5.89 | 
|Grants on January 18, 2011 |  |                         | 6,345,000  |  |                                   |  | (1,885,000 | )                                  |  |  | (796,000    | ) |  |           | 3,664,000  |  |  |  | 889,500   |  |  |  | 12.05 |  |  |  | 7.20 | 
|Grants on March 16, 2011   |  |                         | 150,000    |  |                                   |  |           |                                    |  |  |            |   |  |           | 150,000    |  |  |  | 75,000    |  |  |  | 12.89 |  |  |  | 7.73 | 
|Grants on January 23, 2012 |  |                         | 4,860,000  |  |                                   |  | (130,000   | )                                  |  |  | (215,000    | ) |  |           | 4,515,000  |  |  |  |          |  |  |  | 11.50 |  |  |  | 6.56 | 
|Grants on March 20, 2013   |  |                         | 4,494,000  |  |                                   |  |           |                                    |  |  |            |   |  |           | 4,494,000  |  |  |  |          |  |  |  | 15.71 |  |  |  | 7.91 | 
|Grants on April 25, 2013   |  |                         | 584,400    |  |                                   |  |           |                                    |  |  |            |   |  |           | 584,400    |  |  |  |          |  |  |  | 16.81 |  |  |  | 7.93 | 
|                           |  |                         |            |  |                                   |  |            |                                    |  |  |             |   |  |           |            |  |  |  |           |  |  |  |       |  |  |  |      | 
|As of December 31, 2013    |  |                         | 22,943,400 |  |                                   |  | (7,304,000 | )                                  |  |  | (1,539,000  | ) |  |           | 14,100,400 |  |  |  | 1,657,500 |  |  |  |       |  |  |  |      | 
|                           |  |                         |            |  |                                   |  |            |                                    |  |  |             |   |  |           |            |  |  |  |           |  |  |  |       |  |  |  |      | 



|(i) | The cancellations refer to shares granted to members of the Board of Directors and employees who no longer work for the Company. As provide in Share-based compensation plan, as provided in program for
the granting of stock options, in case of dismissal of the participant, shall be canceled the option with regard to parcels whose right to exercise has not yet been acquired.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|31. | Earnings per Share
|--- | ------------------



| | 31.1. | Basic
| | ----- | -----

Basic earnings per common share were computed by dividing net income attributable
to Embraer available to shareholders by the weighted average number of shares during the period, excluding shares held in Treasury.



|                                                 |  |            |         |  |            |  |         |            |  |  |         | 
|------------------------------------------------ |  | ---------- | ------- |  | ---------- |  | ------- | ---------- |  |  | ------- | 
|                                                 |  | 12.31.2013 |         |  | 12.31.2012 |  |         | 12.31.2011 | 
|                                                 |  |            |         |  | (Restated) |  |         | (Restated) | 
|Net income attributable to owners of Embraer     |  |            | 342.0   |  |            |  | 347.8   |            |  |  | 111.6   | 
|Weighted average number of shares (in thousands) |  |            | 729,001 |  |            |  | 725,023 |            |  |  | 723,667 | 
|                                                 |  |            |         |  |            |  |         |            |  |  |         | 
|Basic earnings per share - U.S. dollars          |  |            | 0.4691  |  |            |  | 0.4797  |            |  |  | 0.1542  | 



F-83



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##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





| | 31.2. | Diluted
| | ----- | -------

Diluted earnings per share is calculated by adjusting the weighted average
number of 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 options to purchase shares in circulation. The number of shares calculated as
described above is compared with the number of shares issued assuming the exercise of options to purchase shares.



|                                                              |  |            |         |  |            |  |         |            |  |  |         | 
|------------------------------------------------------------- |  | ---------- | ------- |  | ---------- |  | ------- | ---------- |  |  | ------- | 
|                                                              |  | 12.31.2013 |         |  | 12.31.2012 |  |         | 12.31.2011 | 
|                                                              |  |            |         |  | (Restated) |  |         | (Restated) | 
|Net income attributable to owners of Embraer                  |  |            | 342.0   |  |            |  | 347.8   |            |  |  | 111.6   | 
|Weighted average number of shares (in thousands) - diluted    |  |            | 729,001 |  |            |  | 725,023 |            |  |  | 723,667 | 
|                                                              |  |            |         |  |            |  |         |            |  |  |         | 
|Dilution for the issuance of stock options (in thousands) (i) |  |            | 4,795   |  |            |  | 2,708   |            |  |  | 1,180   | 
|Weighted average number of shares (in thousands) - diluted    |  |            | 733,796 |  |            |  | 727,731 |            |  |  | 724,847 | 
|Diluted earnings per share - U.S. dollars                     |  |            | 0.4661  |  |            |  | 0.4780  |            |  |  | 0.1540  | 



| | (i) | Refers to the effect of potentially dilutive shares for the December 31, 2013.
| | --- | ------------------------------------------------------------------------------

At
December 31, 2013 and 2012, there were no anti-dilutive effects.



|32. | Revenue and (expenses) by nature
|--- | --------------------------------

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



|                                         |  |            |          |   |            |  |          |            |  |  |          |  
|---------------------------------------- |  | ---------- | -------- | - | ---------- |  | -------- | ---------- |  |  | -------- | -
|                                         |  | 12.31.2013 |          |   | 12.31.2012 |  |          | 12.31.2011 | 
|                                         |  |            |          |   | (Restated) |  |          | (Restated) | 
|As presented as statements of Income:    |  |            |          |   |            |  |          |            |  |  |          |  
|Revenue                                  |  |            | 6,235.0  |   |            |  | 6,167.0  |            |  |  | 5,790.9  |  
|Cost of sales and services               |  |            | (4,818.9 | ) |            |  | (4,676.6 | )          |  |  | (4,488.1 | )
|Administrative                           |  |            | (210.5   | ) |            |  | (279.2   | )          |  |  | (261.3   | )
|Selling                                  |  |            | (454.4   | ) |            |  | (480.4   | )          |  |  | (418.6   | )
|Research                                 |  |            | (74.7    | ) |            |  | (77.3    | )          |  |  | (85.3    | )
|Other income (expenses), net             |  |            | 36.9     |   |            |  | (42.8    | )          |  |  | (219.7   | )
|Equity in losses on associates           |  |            |         |   |            |  | 1.2      |            |  |  | 0.3      |  
|                                         |  |            |          |   |            |  |          |            |  |  |          |  
|Operating profit before financial income |  |            | 713.4    |   |            |  | 611.9    |            |  |  | 318.2    |  
|                                         |  |            |          |   |            |  |          |            |  |  |          |  
|Revenue (expenses) by nature:            |  |            |          |   |            |  |          |            |  |  |          |  
|Revenue from sales of goods              |  |            | 5,399.7  |   |            |  | 5,435.1  |            |  |  | 5,195.0  |  
|Revenue from sales of services           |  |            | 955.4    |   |            |  | 799.8    |            |  |  | 672.9    |  
|Sales deductions and tax on revenue      |  |            | (120.1   | ) |            |  | (67.9    | )          |  |  | (77.0    | )
|Material cost                            |  |            | (4,528.3 | ) |            |  | (4,397.8 | )          |  |  | (4,249.3 | )
|Depreciation                             |  |            | (145.8   | ) |            |  | (139.9   | )          |  |  | (109.3   | )
|Amortization                             |  |            | (144.8   | ) |            |  | (138.9   | )          |  |  | (129.5   | )
|Personnel expenses                       |  |            | (340.0   | ) |            |  | (369.4   | )          |  |  | (342.1   | )
|Selling expenses                         |  |            | (113.3   | ) |            |  | (138.3   | )          |  |  | (96.6    | )
|Other operating (expense) income         |  |            | (249.4   | ) |            |  | (370.8   | )          |  |  | (545.9   | )
|                                         |  |            |          |   |            |  |          |            |  |  |          |  
|Operating profit before financial income |  |            | 713.4    |   |            |  | 611.9    |            |  |  | 318.2    |  
|                                         |  |            |          |   |            |  |          |            |  |  |          |  



F-84



---

##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





|33. | Other operating income (expense), net
|--- | -------------------------------------



|                                               |  |            |       |   |            |  |       |            |  |  |        |  
|---------------------------------------------- |  | ---------- | ----- | - | ---------- |  | ----- | ---------- |  |  | ------ | -
|                                               |  | 12.31.2013 |       |   | 12.31.2012 |  |       | 12.31.2011 | 
|                                               |  |            |       |   | (Restated) |  |       | (Restated) | 
|Financial guarantee (i)                        |  |            | 152.7 |   |            |  | (24.7 | )          |  |  | (278.0 | )
|Contractual fines (ii)                         |  |            | 38.0  |   |            |  | 32.0  |            |  |  | 63.7   |  
|Royalties                                      |  |            | 11.5  |   |            |  | 8.9   |            |  |  | 7.5    |  
|Recovery of expenses                           |  |            | 11.0  |   |            |  | 10.8  |            |  |  | 8.9    |  
|Other sales                                    |  |            | 6.4   |   |            |  | 7.3   |            |  |  | 9.8    |  
|Restructuring expenses                         |  |            | (0.4  | ) |            |  | (0.4  | )          |  |  | (0.7   | )
|Aircraft maintenance third parties             |  |            | (1.0  | ) |            |  |      |            |  |  | (0.3   | )
|Aircraft maintenance and flights costs - fleet |  |            | (2.9  | ) |            |  | (4.7  | )          |  |  | (6.2   | )
|Pre operating expenses                         |  |            | (1.4  | ) |            |  | (11.5 | )          |  |  |       |  
|Gan on disposal of assets                      |  |            | (3.5  | ) |            |  |      |            |  |  |       |  
|Product modifications                          |  |            | (3.7  | ) |            |  | (4.4  | )          |  |  | (4.0   | )
|Flight safety standards                        |  |            | (3.8  | ) |            |  | (3.8  | )          |  |  | (4.1   | )
|Environmental provision                        |  |            | (5.3  | ) |            |  |      |            |  |  |       |  
|Corporate Projects                             |  |            | (11.4 | ) |            |  | (0.7  | )          |  |  |       |  
|Training and development                       |  |            | (14.1 | ) |            |  | (4.0  | )          |  |  | (1.0   | )
|Impairment of aircraft                         |  |            | (14.2 | ) |            |  | (9.5  | )          |  |  | (3.0   | )
|Provision for contingencies                    |  |            | (14.9 | ) |            |  | 12.0  |            |  |  | 6.5    |  
|Expenses system project                        |  |            | (17.6 | ) |            |  | (13.9 | )          |  |  | (8.0   | )
|Taxes on other outputs                         |  |            | (30.8 | ) |            |  | (20.9 | )          |  |  | (24.0  | )
|Refis Installments (tax recovery program)      |  |            | (37.0 | ) |            |  |      |            |  |  |       |  
|Other                                          |  |            | (20.7 | ) |            |  | (15.3 | )          |  |  | 13.2   |  
|                                               |  |            |       |   |            |  |       |            |  |  |        |  
|                                               |  |            | 36.9  |   |            |  | (42.8 | )          |  |  | (219.7 | )
|                                               |  |            |       |   |            |  |       |            |  |  |        |  



| | (i) | The amount related to adjustment of the estimate for the financial guarantee provisions as a result of the exposure cased by the current situation of our customers and commitment recognized in relation to negotiation of
the restructuring of the financial operations. In 2013 the American Airlines bankrupts filling was finalized and the obligation was reversal, as mentioned in Note 25.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (ii) | Mainly reflects contractual fines charged from customers due to contract cancellations, mostly in Executive Jets, as defined in the respective contracts.
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------



|34. | Employee profit sharing-plan
|--- | ----------------------------

The Company provides an employee profit sharing plan which
was approved by the Board of Directors in April 1996, as amended in December 2008, which allows the employees to participate in the Companys profit and is linked to a performance plan. A performance appraisal measures the results and the
attainment of specific goals against those established and agreed upon at the beginning of each year. Through 2009, the profit sharing expense was equivalent to 12.5% of net income for the year, determined in accordance with the then IFRS financial
statements.

Upon adoption of IFRS, the net income determined in accordance with IFRS and presented in Reais became the basis for the
profit sharing. Of the distributable amount, 50% is distributed in equal parts to all employees and 50% proportional to salaries.

In 2011,
exceptionally, the employee profit sharing amount was calculated disregarding the effects of the changes in the financial guarantee provisions.

The amounts recorded, Parent company and Consolidated, are shown in the financial statements in accounts payable (Note 21).



F-85



---

##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





|35. | Financial income (expense), net
|--- | -------------------------------



|                                                                |  |            |        |   |            |  |        |            |  |  |        |  
|--------------------------------------------------------------- |  | ---------- | ------ | - | ---------- |  | ------ | ---------- |  |  | ------ | -
|                                                                |  | 12.31.2013 |        |   | 12.31.2012 |  |        | 12.31.2011 | 
|                                                                |  |            |        |   | (Restated) |  |        | (Restated) | 
|Financial income:                                               |  |            |        |   |            |  |        |            |  |  |        |  
|Interest on cash and cash equivalents and financial investments |  |            | 106.1  |   |            |  | 93.2   |            |  |  | 133.8  |  
|Interest on receivables                                         |  |            | 31.9   |   |            |  | 26.6   |            |  |  | 25.9   |  
|Residual value guarantee                                        |  |            |       |   |            |  | 19.1   |            |  |  |       |  
|Gains on financial transactions                                 |  |            |       |   |            |  |       |            |  |  | 0.3    |  
|Other                                                           |  |            | 19.8   |   |            |  | 0.2    |            |  |  | 0.6    |  
|                                                                |  |            |        |   |            |  |        |            |  |  |        |  
|Total financial income                                          |  |            | 157.8  |   |            |  | 139.1  |            |  |  | 160.6  |  
|                                                                |  |            |        |   |            |  |        |            |  |  |        |  
|Financial expenses:                                             |  |            |        |   |            |  |        |            |  |  |        |  
|Interest on loans and financing                                 |  |            | (128.3 | ) |            |  | (113.3 | )          |  |  | (100.7 | )
|Residual value guarantee                                        |  |            | (79.7  | ) |            |  |       |            |  |  | (110.0 | )
|Interest on taxes, social charges and contributions             |  |            | (11.9  | ) |            |  | (10.8  | )          |  |  | (13.8  | )
|IOF - (Tax on financial transactions)                           |  |            | (3.5   | ) |            |  | (5.3   | )          |  |  | (3.1   | )
|Financial restructuring costs                                   |  |            | (1.9   | ) |            |  | (1.9   | )          |  |  | (10.4  | )
|Other                                                           |  |            | (34.2  | ) |            |  | (14.6  | )          |  |  | (13.1  | )
|                                                                |  |            |        |   |            |  |        |            |  |  |        |  
|Total financial expenses                                        |  |            | (259.5 | ) |            |  | (145.9 | )          |  |  | (251.1 | )
|                                                                |  |            |        |   |            |  |        |            |  |  |        |  
|Derivative instruments                                          |  |            | 5.3    |   |            |  |       |            |  |  |       |  
|                                                                |  |            |        |   |            |  |        |            |  |  |        |  
|Financial income (expenses), net                                |  |            | (96.4  | ) |            |  | (6.8   | )          |  |  | (90.5  | )
|                                                                |  |            |        |   |            |  |        |            |  |  |        |  



|36. | Foreign exchange gains (losses), net
|--- | ------------------------------------



|                                                         |  |            |        |   |            |  |        |            |  |  |        |  
|-------------------------------------------------------- |  | ---------- | ------ | - | ---------- |  | ------ | ---------- |  |  | ------ | -
|                                                         |  | 12.31.2013 |        |   | 12.31.2012 |  |        | 12.31.2011 | 
|                                                         |  |            |        |   | (Restated) |  |        | (Restated) | 
|Monetary and foreign exchange variations                 |  |            |        |   |            |  |        |            |  |  |        |  
|Assets :                                                 |  |            |        |   |            |  |        |            |  |  |        |  
|Cash and cash equivalents and financial investments      |  |            | (189.4 | ) |            |  | (84.8  | )          |  |  | (120.6 | )
|Tax credits                                              |  |            | (24.2  | ) |            |  | (16.6  | )          |  |  | (14.6  | )
|Trade accounts receivable                                |  |            | (8.0   | ) |            |  | (7.5   | )          |  |  | (17.0  | )
|Advances to suppliers                                    |  |            |       |   |            |  | (0.3   | )          |  |  | 2.1    |  
|Other                                                    |  |            | (30.4  | ) |            |  | (21.7  | )          |  |  | (23.0  | )
|                                                         |  |            |        |   |            |  |        |            |  |  |        |  
|                                                         |  |            | (252.0 | ) |            |  | (130.9 | )          |  |  | (173.1 | )
|                                                         |  |            |        |   |            |  |        |            |  |  |        |  
|Liabilities :                                            |  |            |        |   |            |  |        |            |  |  |        |  
|Loans and financing                                      |  |            | 109.9  |   |            |  | 53.2   |            |  |  | 76.5   |  
|Taxes and charges payable                                |  |            | 52.5   |   |            |  | 31.8   |            |  |  | 56.4   |  
|Advances from customers                                  |  |            | 48.6   |   |            |  | 20.2   |            |  |  | 12.7   |  
|Provisions                                               |  |            | 27.5   |   |            |  | 13.8   |            |  |  | 25.0   |  
|Suppliers                                                |  |            | 6.6    |   |            |  |       |            |  |  | 5.5    |  
|Provisions for contingencies                             |  |            | 4.6    |   |            |  | 2.9    |            |  |  | 7.5    |  
|Accounts payable                                         |  |            | (1.0   | ) |            |  | 5.9    |            |  |  | 4.3    |  
|Translation losses on conversion of foreign subsidiaries |  |            |       |   |            |  | 0.1    |            |  |  |       |  
|Deferred taxes                                           |  |            |       |   |            |  |       |            |  |  | 0.2    |  
|Other                                                    |  |            | 1.4    |   |            |  | (1.5   | )          |  |  | (1.9   | )
|                                                         |  |            |        |   |            |  |        |            |  |  |        |  
|                                                         |  |            | 250.1  |   |            |  | 126.4  |            |  |  | 186.2  |  
|                                                         |  |            |        |   |            |  |        |            |  |  |        |  
|Net monetary and foreign exchange variations             |  |            | (1.9   | ) |            |  | (4.5   | )          |  |  | 13.1   |  
|                                                         |  |            |        |   |            |  |        |            |  |  |        |  
|Derivative instruments                                   |  |            | (12.7  | ) |            |  | 13.2   |            |  |  | 7.0    |  
|                                                         |  |            |        |   |            |  |        |            |  |  |        |  
|Foreign exchange gain (loss), net                        |  |            | (14.6  | ) |            |  | 8.7    |            |  |  | 20.1   |  
|                                                         |  |            |        |   |            |  |        |            |  |  |        |  



|37. | Responsibilities and Commitments
|--- | --------------------------------



| | 37.1 | Trade-ins
| | ---- | ---------

The Company has offered seven 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 by the Company. The Company continuously monitors all trade-in commitments in order to anticipate any adverse economic
impact. Based on the current evaluation of the Company and third-party independent appraisals, the Company believes that any aircraft accepted under trade-in may be sold or leased in the market without significant losses.



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##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





| | 37.2 | Leases
| | ---- | ------

In the parent company the operating leases refer to telephone and computer
equipment and in the United States subsidiaries include non-cancelable operating leases of land and equipment. On December 31, 2013 the amounts recognized as expenses totaled US$ 19.4 and December 31, 2012 UD$ 16.5. These leases expire at
various dates through 2038.

At December 31, 2013, the Company has operating leases with payments scheduled as follows:



|           |  |  |      | 
|---------- |  |  | ---- | 
|Year       |  |  |     
|2014       |  |  | 15.8 | 
|2015       |  |  | 10.7 | 
|2016       |  |  | 7.0  | 
|2017       |  |  | 5.1  | 
|After 2017 |  |  | 17.5 | 
|           |  |  |      | 
|Total      |  |  | 56.1 | 
|           |  |  |      | 



| | 37.3 | 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.



|                                                                   |  |            |        |   |            |  |        |  
|------------------------------------------------------------------ |  | ---------- | ------ | - | ---------- |  | ------ | -
|                                                                   |  | 12.31.2013 |        |   | 12.31.2012 | 
|                                                                   |  |            |        |   | (Restated) | 
|Maximum financial guarantees                                       |  |            | 545.5  |   |            |  | 374.2  |  
|Maximum residual value guarantees                                  |  |            | 359.9  |   |            |  | 372.7  |  
|Mutually exclusive exposure (i)                                    |  |            | (94.7  | ) |            |  | (115.0 | )
|Provisions and liabilities recorded (Note 25)                      |  |            | (155.3 | ) |            |  | (114.0 | )
|                                                                   |  |            |        |   |            |  |        |  
|Off-balance sheet exposure                                         |  |            | 655.4  |   |            |  | 517.9  |  
|                                                                   |  |            |        |   |            |  |        |  
|Estimated proceeds from financial guarantees and underlying assets |  |            | 907.8  |   |            |  | 656.7  |  
|                                                                   |  |            |        |   |            |  |        |  



| | (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.



|38. | Supplemental Cash Flow information
|--- | ----------------------------------



| | 38.1 | Payments made during the year and transactions not affecting cash and cash equivalents
| | ---- | --------------------------------------------------------------------------------------



|                                                                                |  |            |       |   |            |  |       |            |  |  |       |  
|------------------------------------------------------------------------------- |  | ---------- | ----- | - | ---------- |  | ----- | ---------- |  |  | ----- | -
|                                                                                |  | 12.31.2013 |       |   | 12.31.2012 |  |       | 12.31.2011 | 
|                                                                                |  |            |       |   | (Restated) |  |       | (Restated) | 
|Payments made during the year :                                                 |  |            |       |   |            |  |       |            |  |  |       |  
|Interest                                                                        |  |            | 130.9 |   |            |  | 112.2 |            |  |  | 50.2  |  
|Income tax and social contribution                                              |  |            | 68.3  |   |            |  | 52.0  |            |  |  | 32.6  |  
|Non-cash financing and investing transactions                                   |  |            |       |   |            |  |       |            |  |  |       |  
|Disposals property, plant and equipment for providing for the sale of inventory |  |            | (42.1 | ) |            |  | (19.6 | )          |  |  | (52.3 | )
|Transfer of inventory to fixed assets                                           |  |            | 39.9  |   |            |  | 44.2  |            |  |  | 72.9  |  



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##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





| | 38.2 | Business combinations
| | ---- | ---------------------



|                                                                                   |  |                               |      |  
|---------------------------------------------------------------------------------- |  | ----------------------------- | ---- | -
|                                                                                   |  | Consolidatedon 12.31.2013 (i) |     
|Cash and cash equivalents                                                          |  |                               | 4.6  |  
|Trade accounts receivable                                                          |  |                               | 6.3  |  
|Property, plant and equipment                                                      |  |                               | 0.2  |  
|Intangible                                                                         |  |                               | 0.2  |  
|Other assets                                                                       |  |                               | 3.0  |  
|Suppliers                                                                          |  |                               | (0.4 | )
|Advances from customers                                                            |  |                               | (5.6 | )
|Trade accounts payable                                                             |  |                               | (0.9 | )
|Other liabilities                                                                  |  |                               | (0.5 | )
|                                                                                   |  |                               |      |  
|Assets and liabilities, net at February 1, 2013                                    |  |                               | 6.9  |  
|Non-controlling                                                                    |  |                               | (3.5 | )
|Net contingent assets and liabilities identified in the acquisition of control (i) |  |                               | (0.2 | )
|                                                                                   |  |                               |      |  
|Participation at fair value on acquisition of control on 02/01/13                  |  |                               | 3.2  |  
|Cash and cash equivalents                                                          |  |                               | (4.6 | )
|Adjustment of goodwill on acquisition of control (Note 14.4)                       |  |                               | (1.1 | )
|                                                                                   |  |                               |      |  
|Net effect of acquisitions on cash flow                                            |  |                               | (2.5 | )
|                                                                                   |  |                               |      |  



| | (i) | Refers to the acquisition of control of Atech Negócios em Tecnologias S.A through the option to purchase 1% of the shares of other shareholders exercisable from February 1, 2013 (Note 14).
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                                                 |  |                                |      |  
|------------------------------------------------ |  | ------------------------------ | ---- | -
|                                                 |  | Consolidated on12.31.2012 (ii) |     
|Cash and cash equivalents                        |  |                                | 0.8  |  
|Trade accounts receivable                        |  |                                | 0.1  |  
|Inventory                                        |  |                                | 0.9  |  
|Intangible assets                                |  |                                | 7.1  |  
|Property, plant and equipment                    |  |                                | 0.2  |  
|Other assets                                     |  |                                | 0.1  |  
|Loans and financing                              |  |                                | (1.5 | )
|Other liabilities                                |  |                                | (0.6 | )
|                                                 |  |                                |      |  
|Acquired assets and liabilities, net             |  |                                | 7.1  |  
|Non-controlling interest                         |  |                                | (0.9 | )
|                                                 |  |                                |      |  
|Assets and liabilities, net                      |  |                                | 6.2  |  
|Acquired goodwill                                |  |                                | 0.9  |  
|                                                 |  |                                |      |  
|                                                 |  |                                | 7.1  |  
|Contingent payments                              |  |                                |     |  
|                                                 |  |                                |      |  
|Amount paid for the interest                     |  |                                | 7.1  |  
|Cash and cash equivalents                        |  |                                | (0.9 | )
|                                                 |  |                                |      |  
|Net effect interest acquisition on the cash flow |  |                                | 6.2  |  
|                                                 |  |                                |      |  



| | (ii) | Refers to acquisition of an interest in AST, 85.5% of capital (Note 14).
| | ---- | ------------------------------------------------------------------------



|39. | Segment information
|--- | -------------------

Management defined the Companys operating segments based on
the reports used for strategic decision reviewed by the chief operating decision-maker.

The chief operating decision-maker analyzed the
business, dividing it geographically and in terms of markets for specific products. From a geographic perspective, Management considers the performance of the operations in Brazil, North America, Latin America, Asia Pacific, Europe and Others.



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##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





From a product perspective, the analysis considers the following market segments:



| | 39.1 | Commercial aviation business
| | ---- | ----------------------------

The Commercial Aviation business mainly involves the
development, production and sale of commercial jets and rendering of support services, particularly in the regional aviation segment and operating leasing of aircraft.



| |  |  | ERJ 145 family, comprising the ERJ 135, ERJ 140 and ERJ 145 jets, certified to operate with 37, 44 and 50 seats, respectively.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------



| |  |  | EMBRAER 170/190 family, comprising the EMBRAER 170, a 70-seat jet, EMBRAER 175, a 76-seat jet, EMBRAER 190, a 100-seat jet and the EMBRAER 195, a 108-seat jet. The EMBRAER 170 model has been operating commercially since
2004, the EMBRAER 175 and EMBRAER 190 models started commercial operations in 2006, and the EMBRAER 195 model in 2007.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | E-Jets E2, the second generation of the E-Jets family of commercial aircraft consists of three new aircraft - E175-E2 with capacity up to 88 seats, E190-E2 with seats up to 106 and E195-E2 reaching up to 132 seats. The
E190-E2 will enter service in the first half of 2018. The E195-E2 is scheduled to enter service in 2019 and E175-E2 in 2020.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 39.2 | Defense and security business
| | ---- | -----------------------------

The defense and security business operations mainly
involve research, development, production, modification and support for military defense and security aircraft, as well as a wide range of products and integrated solutions that include state-of-the-art radars, unmanned aerial systems (UAS), special
space systems (satellites) and advanced information and communications systems, such as Command, Control, Communications, Computer, Intelligence, Surveillance and Reconnaissance, or C4ISR systems.

The expansion and diversification of the portfolio, previously focused on military aircraft, was made possible by a strategy of partnerships
and acquisitions. One result of this diversification was the signing of an agreement for implementation of the first phase of the Integrated Frontier Monitoring System (SISFRON  Sistema Integrado de Monitoramento de Fronteiras) 
by the Tepro Consortium (set up by the subsidiaries Savis Tecnologia e Sistemas S.A. and Bradar Indústria S.A the new name of OrbiSat Indústria S.A.), which will involve monitoring of approximately 650 kilometers of the border between
Mato Grosso do Sul, Paraguay and Bolivia.

The Companys principal customer is currently the Brazilian Defense Ministry and, in
particular, the Brazilian Air Force, although the diversification of the portfolio has resulted in a corresponding diversification of customers: the Brazilian Army and Navy and the Communications Ministry, as well as a growing international presence
of our products and solutions.

The main products of the portfolio of Defense and Security are the following:



| |  |  | Super Tucano - a light attack aircraft, specially developed to operate in severe climates, be subjected to extremes of temperature and humidity, and equipped with sophisticated navigation and attack, training and flight
simulation systems. In 2013, the U.S. Air Force (USAF) announced the victory of the A-29 Super Tucano for the LAS (Light Air Support) program. The first 20 aircraft will be built in Jacksonville, Florida, USA, and supplied in partnership with Sierra
Nevada Corporation (SNC).
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | AMX - an advanced ground attack jet, developed and produced through a cooperation agreement between Brazil and Italy. Embraer was contracted by the Brazilian Air Force to modernize these aircraft, A-1 calls within the
client to a version named the A-1M.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | F-5BR Program - modernization of the F-5 jet fighters.
| | - |  | ------------------------------------------------------



| |  |  | The ISR family (Intelligence, Surveillance and Reconnaissance), based on the ERJ 145 platform,
| | - |  | ----------------------------------------------------------------------------------------------



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---

##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





| | includes the EMB 145 AEW&C - Airborne Early Warning and Control, EMB 145 AGS - Remote Sensing and Air to Ground Surveillance and P-99 - Maritime Patrol and Anti-submarine Warfare models.
Originally developed for the SIVAM program, different versions were ordered by the Greek, Mexican and, more recently, the Indian governments. Embraer was hired to modernize the aircraft E-99 of FAB.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | KC-390 - the scope of the KC-390 Program is to develop and produce two prototype aircraft for military transport and in-flight refueling.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Military Transport and Transportation of Authorities  based on the aircraft of the Commercial Aviation and Executive Jets platforms, the best example of which is the 190PR  based on the EMBRAER 170/190
platform, the objective is transportation of the President of the Republic of Brazil and members of his staff.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Radars  OrbiSat Indústria S.A. develops a state-of-the-art radar and sensing system for tree-covered land, the SABER M60, designed and developed for the Brazilian Army.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Command and Control  a combination of the expertise of Atech  Negócios em Tecnologias S.A. and Embraers investments in system development and integration, enables the Company to offer a suite of
Command and Control products, such as Air Traffic Control systems.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Unmanned aircraft - Harpia Sistemas, a joint venture between Embraer and AEL Sistemas (a subsidiary of the Israeli group Elbit), is involved in the marketing, development, systems integration, manufacture and after-sale
support of unmanned systems.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Satellites - Visiona Space Technology - Joint venture between Embraer and Telebras - was hired in 2013 to build and integrate the SGDC system.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------



| | 39.3 | Executive Jets business
| | ---- | -----------------------

The Executive Aviation market operations is constituted by
development, production and sale of executive jets as well as by providing support services and aircraft operational leasing to the following product lines:



| |  |  | Legacy 600 and Legacy 650 - executive jets in the Super Midsize and Large categories which started to be delivered in 2002 and 2010, respectively.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Legacy 450 and Legacy 500- executive jets in the Midsize and Midlight categories, respectively. Both models were launched in April 2008 and are currently in development.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Phenom - executive jets in the Entry Jet and Light Jet categories, respectivel. The first deliveries of Phenom 100 were made in 2008, and deliveries of Phenom 300, started in 2009.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Lineage 1000 - an ultra-large executive jet. Deliveries of this model started in 2009.
| | - |  | --------------------------------------------------------------------------------------



| | 39.4 | Other
| | ---- | -----

Operations in this segment relate to supply of structural parts and mechanical
and hydraulic systems, and production of agricultural crop-spraying aircraft.



F-90



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##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





| |  |  | Statement of income data by operating segment  year ended December 31, 2013:
| | - |  | -----------------------------------------------------------------------------



|                                                   |  |                    |          |   |                     |  |         |                   |  |  |          |   |  |             |       |   |       |  |        |   |  |  |          |  
|-------------------------------------------------- |  | ------------------ | -------- | - | ------------------- |  | ------- | ----------------- |  |  | -------- | - |  | ----------- | ----- | - | ----- |  | ------ | - |  |  | -------- | -
|                                                   |  | CommercialAviation |          |   | Defense andSecurity |  |         | ExecutiveAviation |  |  | Other    |   |  | Unallocated |       |   | Total | 
|Revenue                                            |  |                    | 3,307.0  |   |                     |  | 1,196.9 |                   |  |  | 1,644.5  |   |  |             | 86.6  |   |       |  |       |   |  |  | 6,235.0  |  
|Cost of sales and services                         |  |                    | (2,532.6 | ) |                     |  | (951.2  | )                 |  |  | (1,284.7 | ) |  |             | (50.4 | ) |       |  |       |   |  |  | (4,818.9 | )
|Gross profit                                       |  |                    | 774.4    |   |                     |  | 245.7   |                   |  |  | 359.8    |   |  |             | 36.2  |   |       |  |       |   |  |  | 1,416.1  |  
|Gross profit %                                     |  |                    | 23.4     | % |                     |  | 20.5    | %                 |  |  | 21.9     | % |  |             | 41.8  | % |       |  |        |   |  |  | 22.7     | %
|Operating income ( expense )                       |  |                    | (272.3   | ) |                     |  | (154.1  | )                 |  |  | (262.8   | ) |  |             | (13.5 | ) |       |  |       |   |  |  | (702.7   | )
|Operating profit before financial income (expense) |  |                    | 502.1    |   |                     |  | 91.6    |                   |  |  | 97.0     |   |  |             | 22.7  |   |       |  |       |   |  |  | 713.4    |  
|Financial income (expense), net                    |  |                    |          |   |                     |  |         |                   |  |  |          |   |  |             |       |   |       |  | (96.4  | ) |  |  | (96.4    | )
|Foreign exchange gain (loss), net                  |  |                    |          |   |                     |  |         |                   |  |  |          |   |  |             |       |   |       |  | (14.6  | ) |  |  | (14.6    | )
|Profit before taxes on income                      |  |                    |          |   |                     |  |         |                   |  |  |          |   |  |             |       |   |       |  |        |   |  |  | 602.4    |  
|Income tax expense                                 |  |                    |          |   |                     |  |         |                   |  |  |          |   |  |             |       |   |       |  | (256.4 | ) |  |  | (256.4   | )
|                                                   |  |                    |          |   |                     |  |         |                   |  |  |          |   |  |             |       |   |       |  |        |   |  |  |          |  
|Net income                                         |  |                    |          |   |                     |  |         |                   |  |  |          |   |  |             |       |   |       |  |        |   |  |  | 346.0    |  
|                                                   |  |                    |          |   |                     |  |         |                   |  |  |          |   |  |             |       |   |       |  |        |   |  |  |          |  



| |  |  | Revenue by geographic area  year ended December 31,2013:
| | - |  | ---------------------------------------------------------



|                             |  |                    |         |  |                     |  |         |                   |  |  |         |  |  |       |      |  |  |  |         | 
|---------------------------- |  | ------------------ | ------- |  | ------------------- |  | ------- | ----------------- |  |  | ------- |  |  | ----- | ---- |  |  |  | ------- | 
|                             |  | CommercialAviation |         |  | Defense andSecurity |  |         | ExecutiveAviation |  |  | Other   |  |  | Total |     
|North America                |  |                    | 1,089.4 |  |                     |  | 26.4    |                   |  |  | 632.2   |  |  |       | 59.7 |  |  |  | 1,807.7 | 
|Europe                       |  |                    | 916.4   |  |                     |  | 166.9   |                   |  |  | 290.6   |  |  |       |     |  |  |  | 1,373.9 | 
|Asia Pacific                 |  |                    | 546.3   |  |                     |  | 71.0    |                   |  |  | 336.6   |  |  |       |     |  |  |  | 953.9   | 
|Latin America, except Brazil |  |                    | 457.9   |  |                     |  | 16.3    |                   |  |  | 6.3     |  |  |       |     |  |  |  | 480.5   | 
|Brazil                       |  |                    | 103.5   |  |                     |  | 848.5   |                   |  |  | 357.7   |  |  |       | 26.9 |  |  |  | 1,336.6 | 
|Other                        |  |                    | 193.5   |  |                     |  | 67.8    |                   |  |  | 21.1    |  |  |       |     |  |  |  | 282.4   | 
|                             |  |                    |         |  |                     |  |         |                   |  |  |         |  |  |       |      |  |  |  |         | 
|Total                        |  |                    | 3,307.0 |  |                     |  | 1,196.9 |                   |  |  | 1,644.5 |  |  |       | 86.6 |  |  |  | 6,235.0 | 
|                             |  |                    |         |  |                     |  |         |                   |  |  |         |  |  |       |      |  |  |  |         | 



| |  |  | Assets by operating segment - year ended December 31, 2013:
| | - |  | -----------------------------------------------------------



|                              |  |                    |         |  |                     |  |       |                   |  |  |         |  |  |             |       |  |       |  |      |  |  |  |         | 
|----------------------------- |  | ------------------ | ------- |  | ------------------- |  | ----- | ----------------- |  |  | ------- |  |  | ----------- | ----- |  | ----- |  | ---- |  |  |  | ------- | 
|                              |  | CommercialAviation |         |  | Defense andSecurity |  |       | ExecutiveAviation |  |  | Other   |  |  | Unallocated |       |  | Total | 
|Trade accounts receivable     |  |                    | 142.0   |  |                     |  | 384.8 |                   |  |  | 33.0    |  |  |             | 18.9  |  |       |  |     |  |  |  | 578.7   | 
|Property, plant and equipment |  |                    | 885.5   |  |                     |  | 353.4 |                   |  |  | 718.5   |  |  |             | 35.9  |  |       |  |     |  |  |  | 1,993.3 | 
|Intangible assets             |  |                    | 218.2   |  |                     |  | 0.8   |                   |  |  | 731.4   |  |  |             | 80.5  |  |       |  | 78.2 |  |  |  | 1,109.1 | 
|                              |  |                    |         |  |                     |  |       |                   |  |  |         |  |  |             |       |  |       |  |      |  |  |  |         | 
|Total                         |  |                    | 1,245.7 |  |                     |  | 739.0 |                   |  |  | 1,482.9 |  |  |             | 135.3 |  |       |  | 78.2 |  |  |  | 3,681.1 | 
|                              |  |                    |         |  |                     |  |       |                   |  |  |         |  |  |             |       |  |       |  |      |  |  |  |         | 



| |  |  | Assets by geographic area - year ended December 31, 2013:
| | - |  | ---------------------------------------------------------



|                              |  |               |       |  |        |  |         |              |  |  |        |  |  |       |         |  |  |  |         | 
|----------------------------- |  | ------------- | ----- |  | ------ |  | ------- | ------------ |  |  | ------ |  |  | ----- | ------- |  |  |  | ------- | 
|                              |  | North America |       |  | Europe |  |         | Asia Pacific |  |  | Brazil |  |  | Total |        
|Trade accounts receivable     |  |               | 62.6  |  |        |  | 341.1   |              |  |  | 7.4    |  |  |       | 167.6   |  |  |  | 578.7   | 
|Property, plant and equipment |  |               | 335.6 |  |        |  | 732.1   |              |  |  | 58.2   |  |  |       | 867.4   |  |  |  | 1,993.3 | 
|Intangible assets             |  |               | 10.9  |  |        |  | 4.1     |              |  |  | 0.2    |  |  |       | 1,093.9 |  |  |  | 1,109.1 | 
|                              |  |               |       |  |        |  |         |              |  |  |        |  |  |       |         |  |  |  |         | 
|Total                         |  |               | 409.1 |  |        |  | 1,077.3 |              |  |  | 65.8   |  |  |       | 2,128.9 |  |  |  | 3,681.1 | 
|                              |  |               |       |  |        |  |         |              |  |  |        |  |  |       |         |  |  |  |         | 



| |  |  | Statement of income data by operating segment  year ended December 31, 2012 (Restated):
| | - |  | ----------------------------------------------------------------------------------------



|                                                   |  |                    |          |   |                     |  |         |                   |  |  |          |   |  |             |       |   |       |  |        |   |  |  |          |  
|-------------------------------------------------- |  | ------------------ | -------- | - | ------------------- |  | ------- | ----------------- |  |  | -------- | - |  | ----------- | ----- | - | ----- |  | ------ | - |  |  | -------- | -
|                                                   |  | CommercialAviation |          |   | Defense andSecurity |  |         | ExecutiveAviation |  |  | Other    |   |  | Unallocated |       |   | Total | 
|Revenue                                            |  |                    | 3,755.4  |   |                     |  | 1,045.2 |                   |  |  | 1,292.0  |   |  |             | 74.4  |   |       |  |       |   |  |  | 6,167.0  |  
|Cost of sales and services                         |  |                    | (2,809.3 | ) |                     |  | (785.5  | )                 |  |  | (1,035.8 | ) |  |             | (46.0 | ) |       |  |       |   |  |  | (4,676.6 | )
|Gross profit                                       |  |                    | 946.1    |   |                     |  | 259.7   |                   |  |  | 256.2    |   |  |             | 28.4  |   |       |  |       |   |  |  | 1,490.4  |  
|Gross profit %                                     |  |                    | 25.2     | % |                     |  | 24.8    | %                 |  |  | 19.8     | % |  |             | 38.2  | % |       |  |        |   |  |  | 24.2     | %
|Operating income ( expense )                       |  |                    | (507.7   | ) |                     |  | (144.9  | )                 |  |  | (216.7   | ) |  |             | (9.2  | ) |       |  |       |   |  |  | (878.5   | )
|Operating profit before financial income (expense) |  |                    | 438.4    |   |                     |  | 114.8   |                   |  |  | 39.5     |   |  |             | 19.2  |   |       |  |       |   |  |  | 611.9    |  
|Financial income (expense), net                    |  |                    |          |   |                     |  |         |                   |  |  |          |   |  |             |       |   |       |  | (6.8   | ) |  |  | (6.8     | )
|Foreign exchange gain (loss), net                  |  |                    |          |   |                     |  |         |                   |  |  |          |   |  |             |       |   |       |  | 8.7    |   |  |  | 8.7      |  
|Profit before taxes on income                      |  |                    |          |   |                     |  |         |                   |  |  |          |   |  |             |       |   |       |  |        |   |  |  | 613.8    |  
|Income tax expense                                 |  |                    |          |   |                     |  |         |                   |  |  |          |   |  |             |       |   |       |  | (265.2 | ) |  |  | (265.2   | )
|                                                   |  |                    |          |   |                     |  |         |                   |  |  |          |   |  |             |       |   |       |  |        |   |  |  |          |  
|Net income                                         |  |                    |          |   |                     |  |         |                   |  |  |          |   |  |             |       |   |       |  |        |   |  |  | 348.6    |  
|                                                   |  |                    |          |   |                     |  |         |                   |  |  |          |   |  |             |       |   |       |  |        |   |  |  |          |  



F-91



---

##### Table of Contents

Embraer S.A.

Notes to the Consolidated Financial Statements

In
millions of U.S. dollars, unless otherwise stated





| |  |  | Revenue by geographic area  year ended December 31,2012 (Restated):
| | - |  | --------------------------------------------------------------------



|                             |  |                    |         |  |                     |  |         |                   |  |  |         |  |  |       |      |  |  |  |         | 
|---------------------------- |  | ------------------ | ------- |  | ------------------- |  | ------- | ----------------- |  |  | ------- |  |  | ----- | ---- |  |  |  | ------- | 
|                             |  | CommercialAviation |         |  | Defense andSecurity |  |         | ExecutiveAviation |  |  | Other   |  |  | Total |     
|North America                |  |                    | 875.3   |  |                     |  | 20.0    |                   |  |  | 505.9   |  |  |       | 47.4 |  |  |  | 1,448.6 | 
|Europe                       |  |                    | 1,510.8 |  |                     |  | 178.4   |                   |  |  | 254.6   |  |  |       |     |  |  |  | 1,943.8 | 
|Asia Pacific                 |  |                    | 920.8   |  |                     |  | 79.5    |                   |  |  | 327.4   |  |  |       |     |  |  |  | 1,327.7 | 
|Latin America, except Brazil |  |                    | 144.6   |  |                     |  | 21.7    |                   |  |  | 43.3    |  |  |       | 0.4  |  |  |  | 210.0   | 
|Brazil                       |  |                    | 46.0    |  |                     |  | 648.5   |                   |  |  | 136.8   |  |  |       | 26.6 |  |  |  | 857.9   | 
|Other                        |  |                    | 257.9   |  |                     |  | 97.1    |                   |  |  | 24.0    |  |  |       |     |  |  |  | 379.0   | 
|                             |  |                    |         |  |                     |  |         |                   |  |  |         |  |  |       |      |  |  |  |         | 
|Total                        |  |                    | 3,755.4 |  |                     |  | 1,045.2 |                   |  |  | 1,292.0 |  |  |       | 74.4 |  |  |  | 6,167.0 | 
|                             |  |                    |         |  |                     |  |         |                   |  |  |         |  |  |       |      |  |  |  |         | 



| |  |  | Assets by operating segment - year ended December 31, 2012 (Restated):
| | - |  | ----------------------------------------------------------------------



|                              |  |                    |         |  |                     |  |       |                   |  |  |         |  |  |             |      |  |       |  |      |  |  |  |         | 
|----------------------------- |  | ------------------ | ------- |  | ------------------- |  | ----- | ----------------- |  |  | ------- |  |  | ----------- | ---- |  | ----- |  | ---- |  |  |  | ------- | 
|                              |  | CommercialAviation |         |  | Defense andSecurity |  |       | ExecutiveAviation |  |  | Other   |  |  | Unallocated |      |  | Total | 
|Trade accounts receivable     |  |                    | 107.2   |  |                     |  | 376.0 |                   |  |  | 40.7    |  |  |             | 11.6 |  |       |  |     |  |  |  | 535.5   | 
|Property, plant and equipment |  |                    | 928.7   |  |                     |  | 110.3 |                   |  |  | 691.1   |  |  |             | 8.3  |  |       |  |     |  |  |  | 1,738.4 | 
|Intangible assets             |  |                    | 211.9   |  |                     |  | 0.6   |                   |  |  | 674.0   |  |  |             | 9.9  |  |       |  | 62.4 |  |  |  | 958.8   | 
|                              |  |                    |         |  |                     |  |       |                   |  |  |         |  |  |             |      |  |       |  |      |  |  |  |         | 
|Total                         |  |                    | 1,247.8 |  |                     |  | 486.9 |                   |  |  | 1,405.8 |  |  |             | 29.8 |  |       |  | 62.4 |  |  |  | 3,232.7 | 
|                              |  |                    |         |  |                     |  |       |                   |  |  |         |  |  |             |      |  |       |  |      |  |  |  |         | 



| |  |  | Assets by geographic area - year ended December 31, 2012 (Restated):
| | - |  | --------------------------------------------------------------------



|                              |  |               |       |  |        |  |       |              |  |  |        |  |  |       |         |  |  |  |         | 
|----------------------------- |  | ------------- | ----- |  | ------ |  | ----- | ------------ |  |  | ------ |  |  | ----- | ------- |  |  |  | ------- | 
|                              |  | North America |       |  | Europe |  |       | Asia Pacific |  |  | Brazil |  |  | Total |        
|Trade accounts receivable     |  |               | 53.4  |  |        |  | 263.0 |              |  |  | 5.2    |  |  |       | 213.9   |  |  |  | 535.5   | 
|Property, plant and equipment |  |               | 283.8 |  |        |  | 710.1 |              |  |  | 54.3   |  |  |       | 690.2   |  |  |  | 1,738.4 | 
|Intangible assets             |  |               | 9.8   |  |        |  | 3.5   |              |  |  | 0.2    |  |  |       | 945.3   |  |  |  | 958.8   | 
|                              |  |               |       |  |        |  |       |              |  |  |        |  |  |       |         |  |  |  |         | 
|Total                         |  |               | 347.0 |  |        |  | 976.6 |              |  |  | 59.7   |  |  |       | 1,849.4 |  |  |  | 3,232.7 | 
|                              |  |               |       |  |        |  |       |              |  |  |        |  |  |       |         |  |  |  |         | 



| |  |  | Statement of income data by operating segmentyear ended December 31, 2011 (Restated):
| | - |  | --------------------------------------------------------------------------------------



|                                                   |  |                    |          |   |                     |  |        |                   |  |  |         |   |  |             |       |   |       |  |        |   |  |  |          |  
|-------------------------------------------------- |  | ------------------ | -------- | - | ------------------- |  | ------ | ----------------- |  |  | ------- | - |  | ----------- | ----- | - | ----- |  | ------ | - |  |  | -------- | -
|                                                   |  | CommercialAviation |          |   | Defense andSecurity |  |        | ExecutiveAviation |  |  | Other   |   |  | Unallocated |       |   | Total | 
|Revenue                                            |  |                    | 3,751.2  |   |                     |  | 839.9  |                   |  |  | 1,118.8 |   |  |             | 81.0  |   |       |  |       |   |  |  | 5,790.9  |  
|Cost of sales and services                         |  |                    | (2,921.8 | ) |                     |  | (636.8 | )                 |  |  | (888.8  | ) |  |             | (40.7 | ) |       |  |       |   |  |  | (4,488.1 | )
|Gross profit                                       |  |                    | 829.4    |   |                     |  | 203.1  |                   |  |  | 230.0   |   |  |             | 40.3  |   |       |  |       |   |  |  | 1,302.8  |  
|Gross profit %                                     |  |                    | 22.1     | % |                     |  | 24.2   | %                 |  |  | 20.6    | % |  |             | 49.8  | % |       |  |        |   |  |  | 22.5     | %
|Operating income ( expense )                       |  |                    | (672.3   | ) |                     |  | (121.1 | )                 |  |  | (174.8  | ) |  |             | (16.4 | ) |       |  |       |   |  |  | (984.6   | )
|Operating profit before financial income (expense) |  |                    | 157.1    |   |                     |  | 82.0   |                   |  |  | 55.2    |   |  |             | 23.9  |   |       |  |       |   |  |  | 318.2    |  
|Financial income (expense), net                    |  |                    |          |   |                     |  |        |                   |  |  |         |   |  |             |       |   |       |  | (90.5  | ) |  |  | (90.5    | )
|Foreign exchange gain (loss), net                  |  |                    |          |   |                     |  |        |                   |  |  |         |   |  |             |       |   |       |  | 20.1   |   |  |  | 20.1     |  
|Profit before taxes on income                      |  |                    |          |   |                     |  |        |                   |  |  |         |   |  |             |       |   |       |  |        |   |  |  | 247.8    |  
|Income tax expense                                 |  |                    |          |   |                     |  |        |                   |  |  |         |   |  |             |       |   |       |  | (127.4 | ) |  |  | (127.4   | )
|                                                   |  |                    |          |   |                     |  |        |                   |  |  |         |   |  |             |       |   |       |  |        |   |  |  |          |  
|Net income                                         |  |                    |          |   |                     |  |        |                   |  |  |         |   |  |             |       |   |       |  |        |   |  |  | 120.4    |  
|                                                   |  |                    |          |   |                     |  |        |                   |  |  |         |   |  |             |       |   |       |  |        |   |  |  |          |  



| |  |  | Revenue by geographic area  year ended December 31,2011 (Restated):
| | - |  | --------------------------------------------------------------------



|                             |  |                    |         |  |                     |  |       |                   |  |  |         |  |  |       |      |  |  |  |         | 
|---------------------------- |  | ------------------ | ------- |  | ------------------- |  | ----- | ----------------- |  |  | ------- |  |  | ----- | ---- |  |  |  | ------- | 
|                             |  | CommercialAviation |         |  | Defense andSecurity |  |       | ExecutiveAviation |  |  | Other   |  |  | Total |     
|North America                |  |                    | 739.1   |  |                     |  | 27.6  |                   |  |  | 360.8   |  |  |       | 55.5 |  |  |  | 1,183.0 | 
|Europe                       |  |                    | 1,013.8 |  |                     |  | 175.9 |                   |  |  | 281.1   |  |  |       |     |  |  |  | 1,470.8 | 
|Asia Pacific                 |  |                    | 1,041.5 |  |                     |  | 145.2 |                   |  |  | 155.0   |  |  |       |     |  |  |  | 1,341.7 | 
|Latin America, except Brazil |  |                    | 540.3   |  |                     |  | 15.6  |                   |  |  | 83.9    |  |  |       |     |  |  |  | 639.8   | 
|Brazil                       |  |                    | 294.9   |  |                     |  | 446.2 |                   |  |  | 210.5   |  |  |       | 25.5 |  |  |  | 977.1   | 
|Other                        |  |                    | 121.6   |  |                     |  | 29.4  |                   |  |  | 27.5    |  |  |       |     |  |  |  | 178.5   | 
|                             |  |                    |         |  |                     |  |       |                   |  |  |         |  |  |       |      |  |  |  |         | 
|Total                        |  |                    | 3,751.2 |  |                     |  | 839.9 |                   |  |  | 1,118.8 |  |  |       | 81.0 |  |  |  | 5,790.9 | 
|                             |  |                    |         |  |                     |  |       |                   |  |  |         |  |  |       |      |  |  |  |         | 



|40. | Insurance cover
|--- | ---------------

The Company contracts different types of insurance policies to protect
assets in the event of any accident which may cause significant damage. Policies are also contracted to the risks subject to compulsory insurance, either legally or contractually.

The Company and its subsidiaries have liability insurance for its operations in Brazil and abroad, with toppings and conditions that management
considers these appropriate to the risks involved.

To cover material damage for the assets and loss of earnings of its operations in
Brazil and abroad, the Company has ensured an amount of USD 6.3 billion.



F-92