third annual analyst & investor meeting - corporate market

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

Contents

• Our Forecast Method

• Scenario

• Market Overview

• Legacy in the market

• Legacy Product

Market Forecast Methodology

• Determine External Scenario

• Examine Internal Scenario

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

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

• Analyze Results and Make Forecast for Inclusion in Action Plan

Scenario Overview

Ø Corporate Aviation Market has been strong and robust one

Ø Main drivers

- Fractional/ownership demand/expansion

- Globalization

- Security issues

- New models with more performance and comfort

- Airline service insatisfaction

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

Scenario Overview

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

new program launches and competitors movements in business expansion

Ø Business aviation historical data demonstrates that this sector has important

participation in economy rebound

Market share by manufacturerWorldwide Corporate Jet Fleet

USA:

MEXICO:

BRASIL:

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

444 (4%)

377 (3%)

1,240 (11%)

365 (3%)

63 (1%)

222 (2%)Brasil: 279

Mexico: 416

USA & Canada: 8.710

Total Market Forecast10 Years period (2003-2012) forecast

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

Embraer Teal Honeywell Rolls Royce(est)

Forecast Average

Average: 750 per yearAverage: 750 per year

M arket O v ervie wM arket O v ervie w

Market SegmentationMarket Segmentation

Lears and Citations

$10.0 - 13.0M

$5.0 - 7.0M

$13.0 - 20.0M

$20.0 - 30.0M ChallengerG IV-SP

Lear 55/60Hawker 800; Citation VII

Supermidsize

Midsize

S m all

Large

Falcon 50

$2.4 - 5.0M

$12 - 13.0M

$6.0 - 7.0M

$9 – 10 M

$16.0 - 22.0M

$24.0 - 32.0M

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

• Challenger 604• Falcon 900• G 400

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

• Hawker 800 XP • G100• Lear 60 • Sovereign

• Lear 45 • Excel

$20.4M

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

$ 33 - 45.0M

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

• Beechjet 400A • Lear 31 • Bravo

Global

Ultra-Long Range

Large

Supermidsize

MidsizeMidlightLight

Entry

20021993

Lears and Citations

$10.0 - 13.0M

$5.0 - 7.0M

$13.0 - 20.0M

$20.0 - 30.0M ChallengerG IV-SP

Lear 55/60Hawker 800; Citation VII

M arket O v ervie wM arket O v ervie w

Source: Business and Commercial Aviation May 2001

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

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

Horizon 757/ 21.4 110 / 3.11 3,245 17.3

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

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

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

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

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

Best ValueBest Value

Supermidsize Segment Forecast

100120140160180200

Supermidsize segment forecast Embraer

0

50

100

150

200

250

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

Average:163 per yearAverage:163 per year

Large Segment Forecast

Average: 96 per year

Large segment forecast Embraer

0

20

40

60

80

100

120

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

Source: AIN

Market share by manufacturerProjected Supermidsize/Large Market Share by Manufacturer

Source: Embraer Corporate Jets

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

17%

23%

23%

10%

10%

17%

CessnaRaytheonEmbraer (over 240 A/C)General DynamicsBombardierDassault

Legacy OrderbookLegacy Orderbook

Legacy Worldwide Aircraft Orders

USA - Executive 34 35 69

USA - Shuttle 32 56 88

Europe - Executive 2 - 2

Latin America - Executive 5 - 5

Total 73 91 164

Current as of September 2 0 0 2

Corporate Aircraft Fa milyCorporate Aircraft Fa mily

• Engine – A1/3

• No Winglets

• Range – 1730 – 1830 nm

• 16-37 Passengers

• Engine – A1E

• Winglets

• Range - 3100 NM

• 10-18 Passengers

Executive Version

Shuttle Versions

Executive VersionExecutive Version

C o m p arisonsC o m p arisons

1 0 2 0 3 0 4 0 5 0ft

m 3 6 9 12 15

Challenger 300

2 5‘(7.62 m)

2 3‘ 8”(7.22 m)

Horizon

G 2 0 0 2 4‘ 6”(7.46 m)

Super MidsizeFloor Plan Comparison

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

42’6”(12.94m)


Horizon

Challenger 300

G200

W idth Height A isle Recess

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

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

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

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

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

1 0 2 0 3 0 4 0 5 0ft

m 3 6 9 12 15


Challenger 604 25’6”(7 . 7 7 m)

G 4 0 041’(12.5 m)

LargeFloor Plan Comparison

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

42’6”(12.94m)


W idth Height A isle Recess

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

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

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

Challenger 604

G400

MidsizeCross Section Comparison

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

Interior Configuration Interior Configuration


Galley


First Seating Area


Second Seating Area


Third Seating Area


Lavatory

PerformancePerformance

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


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


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


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

Aircraft ReliabilityAircraft Reliability

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

- Minimum downtime for inspections

- Ease of maintenance

- High reliability

12 Operational Legacy

Over 600 planes of the same family flying across the globe

Aircraft Availability – Over 99%

Proven Aircraft Maturity

Product Enhance m e ntsProduct Enhance m e nts

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

• Increased Thrust – 7%

• Improved Fuel Efficiency

• Improved Field Performance

• Improved Time to Climb

This New Engine Provides:

0

20

40

60

80

1 0 0

1 2 0

Takeoff Sideline A p p roach

Noi

se Lev

el (EPNd

B)

Cumulative

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

Legacy Noise Levels

Stage IIIStage III

Stage III

0

50

1 0 0

1 5 0

2 0 0

2 5 0

3 0 0Stage IV

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

Airframe Aerodynamic Improvements

Engine New A1E Engine

Avionics New EICAS Software Version

APU Model 500R

Interior New Options

Exterior Paint Best Warranty in the Industry

Product Enhance m e ntsProduct Enhance m e nts

Product Improvements

Progra m Enhance m e ntProgra m Enhance m e nt

Sales & Design Center

Aircraft CertificationAircraft Certification

Certification Completed

• FAA – September 2002

• JAA – July 2002

• CTA – December 2001

Legacy Market OutlookLegacy Market Outlook

10 year objectives:

• Produce & deliver 240Legacys

• Annually deliver between 24and 30 aircraft

• Average 10% Market shareof the supermidsize/large category

10 year objectives:

• Produce & deliver 240Legacys

• Annually deliver between 24and 30 aircraft

• Average 10% Market shareof the supermidsize/large category

Price - Executive Configuration $20,425,000*

* January 2002 Economic Conditions

Ideal balance between capability, cost, performance & price

Legacy ShuttleLegacy Shuttle

Seating Configurations

19 Seats at 19 Seats at 37 in Pitch37 in Pitch



Interior ConfigurationInterior Configuration

Low Density Version

Interior ConfigurationInterior Configuration

High Density Version


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

Range – Shuttle (Low Density Version)

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


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

* January 2002 Economic Conditions

Making good business sense

Changing expectations of what a business jet should be

third annual analyst & investor meeting - corporate market

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