About Embraer

Embraer S.A. manufactures and sells jets. The company manufactures jets with up to 150 seats. Its focus is to achieve customer satisfaction with a range of products and services addressing the commercial airline, executive jets and defense and security markets. The company has developed a customer-centric technology-driven portfolio of commercial aviation products and services that allows it to build long-term relationships with its clients in the commercial aviation, executive jets and defense and security markets. The company grows from a government-controlled company that developed and produced products for the Brazilian Armed Forces to a publicly held company that produces aircraft for and provides related services to commercial and executive aviation, as well as for defense and security purposes. Providing high quality customer support is a key element of the company’s customer focus and is critical to its ability to maintain customers with whom it has a long-term relationship. Strategy The key elements of the company’s strategy are to market its commercial aircraft; maintain the market leadership of its commercial jets up to 150 seats; develop innovative and sustainable solutions; strengthen its position in the executive aviation market; provide complete and integrated solutions to the customers of its Defense & Security segment; continue to pursue niche market opportunities in the defense and security market; expanding its international sales, while continuing its partnership with the Brazilian Armed Forces in its Defense & Security segment; and focus on customer satisfaction through established and respected services and support solutions Segments The company operate through Commercial Aviation, Defense & Security, Executive Aviation, Services & Support, and Other segments. Commercial Aviation segment The company designs, develops and manufactures a variety of commercial aircraft. Products ERJ Jet Family The company developed the ERJ family, its 37-50-passenger twin jet-powered regional jet, introduced in 1996, to address the growing demand among regional airlines for medium-range, jet-powered aircraft. Until the launch of the EMBRAER 170/190 Jet Family, the ERJ was the company’s most important product, achieving great results and being responsible for consolidating its presence in the United States regional market. As of December 31, 2022, 330 ERJ aircraft remained in service around the world. EMBRAER 170/190 Jet Family The EMBRAER 170/190 jet family provides the company’s customers four aircraft models in the regional passenger jet range. The EMBRAER 170 is a 66-78 seat jet and the EMBRAER 175 is a 76-88 seat jet, while the EMBRAER 190 is a 98-114 seat jet and the EMBRAER 195 is a 100-124 seat jet. The EMBRAER 170 was certified by the Brazilian Aviation Authority, the FAA, the Joint Aviation Authority of Europe (the former advisory organization that made certification recommendations to non-European Union national authorities), or the JAA, and the EASA in February 2004, and deliveries of the EMBRAER 170 began in March 2004. The EMBRAER 175 was certified by the Brazilian Aviation Authority in December 2004, by the EASA in January 2005 and by the FAA in August 2006. The EMBRAER 190 was certified by the Brazilian Aviation Authority in August 2005, by the FAA in September 2005 and by the EASA in June 2006. The EMBRAER 195 was certified by the Brazilian Aviation Authority in June 2006, by the EASA in July 2006 and by the FAA in June 2007. The company 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 the company’s development expenses and shortened its development period. All of the aircraft models of this family are powered by engines manufactured by General Electric Aircraft Engines and contain state-of-the-art avionics manufactured by Honeywell International Inc. (Aerospace). The EMBRAER 170/190 jet family’s principal features are: Performance: All four jets in the EMBRAER 170/190 jet family have a maximum cruising speed of Mach .82. The EMBRAER 170 and the EMBRAER 175 with all passengers on board have maximum ranges of 1,800 and 1,750 nautical miles, respectively, and each is available in the advanced-range version, with maximum ranges of 2,150 and 2,250 nautical miles, respectively. The EMBRAER 190 and EMBRAER 195 with all passengers on board have maximum ranges of 1,850 and 1,600 nautical miles, respectively, and each is available in the advanced-range version with maximum ranges of 2,450 and 2,300 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: The company has enhanced passenger safety and comfort in the EMBRAER 170/190 jet family. The aircraft’s double-bubble design enables a four-abreast cabin, a wide aisle, greater interior space and headroom, and a larger baggage compartment than the regional jets of its competitors, including those regional jets that are in the development stage. On September 29, 2022, the company reached a new milestone on the E-Jet program, the delivery of the 1700th serial number production aircraft. The Aircastle leased E195- E2 was handed over to KLM Cityhopper at a ceremony at Embraer’s facility in São Jose dos Campos. As of December 31, 2022, the EMBRAER 170/190 jet family has 90 orders in backlog and more than 1,650 aircraft have already been delivered to customers worldwide. E-Jets E2Family In June 2013, the company launched the second generation of its E-Jets family of commercial aircraft, named the E-Jets E2, comprising three new aircraft, the E175-E2, E190-E2, and E195-E2. The E190-E2 and E195-E2 entered service in April of 2018 and September of 2019, respectively. The launch of the E2 advances the company’s vision of offering leading-edge commercial aircraft with a capacity for 70 to 150 seats, seamless mainline comfort, and performance for flexible and efficient utilization by regional, low-cost and network carriers. The company’s strategy is to offer all the benefits of a new design, but with the reliability of an updated platform and commonality with generation E-Jets. In a typical single-class layout, the E175-E2 was extended by one seat row, compared to the generation E175, and will seat up to 90 passengers, while the E190-E2 is the same size as the E190, with up to 114 seats. The E195-E2, compared to the E195, has grown by three seat rows and will accommodate up to 132 seats in a typical single class configuration or up to 144 seats in a high-density configuration. In June 2015, two years after the launch of the program, the company began to assemble the first of the E-Jets E2 family, an E190-E2, at its factory in São Jose dos Campos. In November 2015, the Pratt &Whitney PW1900G PurePower Geared Turbofan (GTF) engine for the Embraer E190-E2 and E195-E2 aircraft successfully completed its first flight initiating the engine’s flight test program. In February 2016, in a ceremony held at the company’s plant in São Jose dos Campos, it presented the E190-E2, which made its first flight in May 2016. In March 2017, in a ceremony held at the company’s plant in São Jose dos Campos, it presented the second model of the E2 generation. In March 2017, the company announced that Azul, the largest operator of the generation E195s in the world, would be the launch operator of the E195-E2. On February 28, 2018, the company received a Type Certificate from the National Civil Aviation Agency, the FAA and EASA for the E190-E2, the first member of the E-Jets E2 family of commercial aircraft. It was the first time that an aircraft program with the level of complexity of the E2 received a type certificate from three major worldwide certification authorities simultaneously. On April 4, 2018, in a ceremony held in São Jose dos Campos, the company celebrated the delivery of the first aircraft E190-E2 aircraft to Widerøe, the largest regional airline of Scandinavia. The aircraft entered into service in the same month and performed a sold-out flight between Bergen and Tromsø in Norway. In April 2019, the E195-E2 received simultaneous approval and was certified by the Brazilian Aviation Authority, the FAA and EASA. On September 12, 2019, in a ceremony held at the company’s plant in São Jose dos Campos, it delivered the first E195-E2, the largest of the three members of the E-Jets E2 family of commercial aircraft. The recipients were AerCap, the world’s largest aircraft leasing company, and Azul Linhas Aereas Brasileiras S.A., or Azul, which is the global launch operator for the E195-E2. On December 12, 2019, the Embraer E175-E2 made its inaugural flight from the company’s facility in São Jose dos Campos. On February 18, 2022, the company announced a three-year pause on the development of the E175-E2 jet which is expected to entry into service between 2027 and 2028. On March 7, 2022, the comopany announced the launch of the E190F and E195F Passenger to Freight Conversions (P2F), designed to meet the changing demands of e-commerce and modern trade that require fast deliveries and decentralized operations. The full freighter conversion is available for all pre-owned E190 and E195 aircraft, with entry into service expected in early 2024. On November 10, 2022, the Embraer E190-E2 was granted the Type Certificate by the Civil Aviation Administration of China (CAAC). On December 15, 2022, the Embraer E195-E2 and E190-E2 were granted the Type Certification from Transport Canada Civil Aviation (TCCA), following certification from ANAC, the FAA (United States), and EASA (Europe) in 2019 and 2018 respectively. In December, 2022, the first five of 50 Embraer E195-E2 ordered by Canadian company Porter Airlines were delivered. Porter was the North America entry customer for Embraer’s E195-E2 and opened up operations in the region. As of December 31, 2022, the E-Jets E2 had 201 orders in backlog and 69 aircraft have already been delivered to customers worldwide. Operators include airlines in various regions, such as Azul Linhas Aereas (Latin America), Widerøe (Europe), Helvetic (Europe), KLM (Europe), Binter (Europe), Air Kiribati (Asia Pacific), Bevalia (CIS), Air Peace (Africa) and Congo Airways (Africa) and the most recent Porter Airlines (North America). Customers The company has a diverse, global customer base, and its major operators for commercial aircraft include some of the largest regional, low-cost and mainline airlines in the world. As of December 31, 2022, the company’s largest E-Jet customers by number of aircraft in service were SkyWest, Republic, Envoy Air, Azul, Mesa, KLM, JetBlue, Aeromexico, LOT Polish, Tianjin and Horizon Air. In addition, as of December 31, 2022, 88.9% of the company’s firm orders in backlog for the EMBRAER 170/190 jet family are from the airlines Republic Airlines and Horizon Air / Alaska . Moreover, the company’s E-Jets E2 family backlog mainly comprises orders from the companies Azul, AerCap, AirCastle, AirPeace, Porter, and Azorra which represent 83.1% of its E-Jets E2 family orders. The company generally sells its commercial aircraft pursuant to contracts with its customers on a fixed-price basis, adjusted by an escalation formula. The company’s contracts generally include an option for its customers to purchase additional aircraft at a fixed-price option, subject to the same escalation formula. In addition, the company’s contracts include a product support package to cover the entry into service of its aircraft, as well as a general warranty for such aircraft. Other provisions for specific aircraft performance and design requirements are negotiated with its customers. In addition, some of the company’s contracts contain cancellation provisions and trade-in options and financial and residual value guarantees. Sales and Marketing The company’s marketing strategy is based upon its assessments of the worldwide commercial airline market and of the needs of its customers. The company actively markets its aircraft to international airlines and regional affiliates of major global airlines through its regional offices in the United States, Europe and Asia. The company’s 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 its customers, it relies on relationship development, social media, and professional network. As a way to keep its customers informed and enhance awareness and brand recognition, the company participates at air shows and events, webinars and other forums. Besides São Jose dos Campos in Brazil, the company has regional sales offices in Amsterdam, Holland; Fort Lauderdale, Florida, United States; Beijing, China; and Singapore. Production, New Orders and Options The company typically begins taking orders and building a backlog two years before it begins producing a new aircraft model, aiming to receive a significant number of orders before it delivers the initial aircraft. Once an order is taken, the company reserves a place for that order on the production line, ensuring that it will maintain production sufficient to meet demand. Once a place is reserved on the production line, the company is able to give customers delivery dates for their orders. The company includes an order in backlog once it has received a firm commitment, represented by a signed contract. The company’s options generally provide its customers the right to purchase an aircraft at a fixed price and on a specified delivery date, subject to escalation provisions, under a purchase agreement. Once a customer decides to exercise an option, the company accounts for it as a firm order. Occasionally, it has extended the exercise date for its 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. Competition The company faces the strongest competition from the following aircraft: A220, former CSeries, 110 to 150-seat jets acquired by Airbus from Bombardier, which entered into service in 2016; ARJ21, a 90-seat regional jet produced by the Commercial Aircraft Corporation of China, or COMAC; SSJ100, a 103-seat regional jet produced by JSC Sukhoi Company; SpaceJet, a 76 to 88-seat jet which was under development by Mitsubishi Aircraft Corporation, but had its development suspended in 2020 and officially cancelled in 2023; CRJ-700, CRJ-900 and CRJ-1000, 70-seat, 86-seat and 98-seat regional jets, respectively, formerly produced by Bombardier, acquired by Mitsubishi Heavy Industries (MHI); Dash 8-400, a 72-seat turboprop program from Bombardier acquired by Havilland Canada, which belongs to Viking Air; and ATR-72, a 68-seat turboprop produced by ATR Aircraft. The company is the leading manufacturer in the market for jets up to 150 seats in the world, with 29% market share in terms of accumulated deliveries, since 2004, according to Cirium. Executive Aviation segment The company designs, develops and manufactures a variety of executive jets within its Executive Aviation segment. The company’s portfolio of executive jets comprises the entry-level Phenom 100 EV, the light Phenom 300E the midsize Praetor 500 and the super-midsize Praetor 600. The company markets its executive jets to companies, including fractional ownership companies, charter and air-taxi companies, high-net-worth individuals and flight academies, including independent, commercial airline and military flight academies. The company’s Executive Aviation segment accounted for 27.4% of its revenue for the year ended December 31, 2022. In May 2005, the company launched the Phenom 100 and Phenom 300, which are executive jets in the entry-level and light jet categories, respectively. The Phenom 100 jet, which carries six to eight people, received the Brazilian Aviation Authority and FAA certification in December 2008, the same month of its entry into service. The Phenom 300 carries up to ten people and has a larger fuselage and wingspan and longer range than the Phenom 100. It received the Brazilian Aviation Authority and FAA certification and entered service one year after the Phenom 100. By the end of 2022, the Phenom 100 series fleet comprised nearly 400 aircraft distributed in 30 countries and the Phenom 300 fleet comprised over 700 jets distributed in 60 countries. Focused on constant improvement, the company launched the Phenom 100EV and the Phenom 300E in 2016 and 2017, respectively. In 2020, the company introduced the new Phenom 300E, featuring enhancements in performance, comfort and on-board technology. The new Phenom 300E is the only in-production single-pilot jet to reach Mach 0.80, offering a quieter cabin and upgrades to its avionics suite. These features include predictive windshear and a runway overrun awareness and alerting system, which are its exclusive intellectual property and the first technology of its kind to be developed and certified in business aviation. The model was already granted its certification by the Brazilian Aviation Authority, EASA and the FAA. In August 2020, the company announced the Phenom 300MED, a unique medical evacuation (MEDEVAC) transportation solution suitable to Phenom 300 model series, which is also available for retrofit, through a partnership with the companies umlaut and Aerolite AG (Aerolite). Embraer and umlaut have jointly developed and certified a new supplemental type certificate (STC) utilizing Aerolite equipment in 2021 and 2022. Aircraft STC is available for national aviation agencies such as EASA (Europe), FAA (United States) and ANAC (Brazil). Designed as an ideal solution for both civil and government applications, the MEDEVAC solution will be installed exclusively by Embraer’s award-winning Services & Support organization, ensuring the highest quality, reliability, and service experience, direct from the manufacturer. In November 2020, Embraer and Porsche announced that they have collaborated to create a limited-edition, limited-quantity Embraer Phenom 300E aircraft and Porsche 911 Turbo S-car pairing called Duet. Embraer and Porsche ceased Duet offering in 2022. In May 2006, the company launched the Lineage 1000, an ultra-large executive jet based on the EMBRAER 190 commercial jet platform. The Lineage 1000 is configured to accommodate up to 19 passengers in a total cabin area of 750 square feet (70 square meters). The Lineage 1000 was certified by the Brazilian Aviation Authority in December 2008 and by the FAA in January 2009 and entered service in the first half of 2009. Continued investments in the Lineage 1000 resulted in the introduction of the Lineage 1000E, in 2013, enhancing the customer experience by extending its range capability and offering new interior amenities. In 2019, the company successfully implemented the sunset strategy of the Lineage 1000E. As of December 31, 2022, the Lineage 1000 fleet incuded 26 units distributed in 11 countries. In April 2008, the company formally launched two new programs in the medium cabin category, the medium-cabin jet Legacy 450 , with a 2,575 nautical mile range and a capacity for up to nine passengers, and the supermidsize jet Legacy 500 , with a 3,125 nautical mile range and a capacity for up to 12 passengers. The Legacy 500 was certified by the Brazilian Aviation Authority and the FAA in 2014, the same year that it entered service. The Legacy 450 was certified by the Brazilian Aviation Authority and the FAA in August 2015 and by the EASA in September 2015. In November of the same year, the company announced an increase of the Legacy 450’s range in 2,900 nautical miles, and it entered service in December. In November 2017, the company introduced the best-in-class 5,800-foot cabin altitude for the Legacy 450/500 jets, which further enhanced customer experience. These two aircraft programs have helped strengthen the company’s position in the market and establish its portfolio as one of the broadest in the executive aviation industry. Both the Legacy 450 and 500 had their final deliveries to customers in 2020. In October 2009, the company introduced the Legacy 650 jet, a large jet based on the Legacy 600 platform, with a longer range for up to 14 passengers. The Legacy 650 received the Brazilian Aviation Authority and FAA certification in October 2010 and February 2011, respectively, and entered service in November 2010. The latest evolution of the aircraft that started the company’s Executive Aviation segment is the Legacy 650E, which introduces auto-throttle and interior enhancements, in addition to a ten-year warranty, which set a new industry standard for performance and reliability. In 2019, the company successfully implemented the Legacy 650 series sunset strategy. As of December 31, 2022, the Legacy 650 fleet comprised 109 units distributed in 31 countries. In October 2018, the company launched the new Praetor 500 and Praetor 600, the most disruptive and technologically advanced midsize and super-midsize jets, respectively, introducing unprecedented range into their categories. The Praetor 600 is the farthest-flying super-midsize business jet, which allows nonstop flights between London and New York. The Praetor 500 is the fastest midsize aircraft, capable of reaching Europe from the west coast of the U.S. with a single stop. The Praetor 600 was certified and entered service in June of 2019 and in December of 2019, respectively. The Praetor 500 is the successor of the Legacy 450 in the midsize class as the Praetor 600 is for the Legacy 500 in the super midsize class. In 2020, the company announced a series of breakthrough cabin enhancements for the Praetor 500 and Praetor 600. In addition to the lowest cabin internal atmospheric pressure in the class (equivalent to an altitude of 5,800 feet) and 100% fresh air capability, Embraer is offering the HEPA filter as a standard feature on all Praetor aircraft and announced the certification of a new electric lavatory pocket door. In 2020, the company announced the completion of the first European conversion of a Legacy 450 to a Praetor 500. The conversion was performed at the Embraer Executive Aviation Service Center at Le Bourget International Airport, in Paris, France. As of December 31, 2022, the Praetor 500 fleet included 42 units distributed in five countries and Praetor 600 fleet accumulated 69 units in 13 countries. As of December 31, 2022, the company had delivered more than 1,650 executive jets and its fleet had served over 1,000 customers in more than 65 countries. Competition Phenom 100EV and Phenom 300E competitors in the entry-level and light jet categories include Textron, Honda and Pilatus. In the medium cabin category, the Praetor 600 compete with Textron, Dassault and Gulfstream aircraft, while the Praetor 500 compete largely with aircraft produced by Textron. Continuing Internationalization In October 2014, the company announced the opening of its Legacy 500 and Legacy 450 assembly complex in Melbourne, Florida, more than doubling the size of its campus at Melbourne International Airport. Since then, the company has continued to expand its footprint into the complex, with delivery centers, assembly hangars, and paint and flight preparation facilities. As of December 31, 2022, the company’s Melbourne campus had a constructed area of approximately 484,000 square feet. Defense & Security segment The company conceives, designs, develops, manufactures and supports a wide range of integrated solutions for the defense and security market. The company’s products include training, advanced training aircraft, aerial surveillance platforms, military transport aircraft, government transport aircraft and command, control, communications, computer, intelligence, surveillance and reconnaissance systems, border surveillance and security, and cybersecurity. The company offers a complete portfolio of customer services, ranging from maintenance and material solutions to complete Contractor Logistical Support programs. Using its commercial platforms and executive jets, the company also offers a comprehensive range of aircraft dedicated to transportation of authorities, medical evacuation and general transportation missions for the defense and security market. As of December 31, 2022, the company had sold more than 1,400 defense aircraft, including government transport aircraft, to more than 60 armed forces and operators worldwide. The company is also the leading supplier of defense aircraft to the Brazilian Air Force based on the total number of aircraft in its fleet. Products Military Transport – C-390 Millennium After its rebranding in 2019, the company’s multi-mission aircraft C-390 Millennium maintained its features, per the certifications by ANAC and the Military Aviation Certification Authorities (the Department of Aeronautical Science and Technology, or DCTA, and the Industrial Development and Coordination Institute, or IFI). The C-390 Millennium is a multi-role military transport aircraft developed to set higher standards in its class. The C-390 Millennium is efficient for cargo and troop transport, aerial resupply and humanitarian missions, among other uses, as well as for uses in adverse situations, evacuations, firefighting and aerial refueling (KC-390 Millennium version). Designed with modern engineering solutions, this new aircraft is an innovation in military transport aviation. The C-390 Millennium features flexibility, strength, mobility, easy maintenance and advanced technology. In 2019, Embraer delivered the first two KC-390 Millennium multi-mission transport aircraft (the “K” denotes that these C-390 aircraft will also have aerial refueling capabilities) to the Brazilian Air Force. In addition, the Portuguese government signed the first export contract of KC-390 Millennium aircraft, including the acquisition of five aircraft and one flight simulator, together with a 12-year contract of services to support the fleet. The first delivery is planned for 2023, and the aircraft will be used for military transport. In 2020, Embraer delivered the third and fourth KC-390 Millennium multi-mission transport aircraft to the Brazilian Air Force. Since the beginning of the COVID-19 pandemic, the Brazilian Air Force has operated the KC-390 in logistics transport operations, carrying essential supplies to combat the pandemic in Brazil. Furthermore, in November 2020, the company entered into an export agreement with the Hungarian government for the acquisition of two aircraft in its KC-390 Millennium version, with the capacity to carry out in-flight refueling missions. During 2021, the Brazilian Air Force had four KC-390 Millennium multi-mission transport aircraft operating in logistics transport operations. The development of the version of the KC-390 Millennium, tailored for Portugal, advanced as expected, and the version of the KC-390 Millennium intended for Hungary also showed significant progress in its development. In 2022, the Brazilian Air Force took delivery of its fifth KC-390 Millennium. As of December 31, 2022, the fleet had accomplished approximately 8,000 flight hours and around 6,000 flight cycles. In June 2022, the Ministry of Defense of The Netherlands announced the decision to acquire five C-390 Millennium aircraft to substitute its fleet of C-130H Hercules. As of the date of this annual report, the procurement process is under the proposal analysis phase. In February 2022, the company and the Brazilian Air Force engaged in negotiations, which resulted, among other matters, in the reduction of the total number of KC-390 Millennium aircraft to be delivered under the terms of the agreement from 28 to 22. In October 2022, the company and the Brazilian government engaged in further negotiations which resulted, among other matters, in the reduction of the total number of KC-390 Millennium aircraft to be delivered under the terms of the Contracts from 22 to 19, with no possibility of unilateral reductions. Deliveries related to these aircraft are scheduled to occur by 2034. Close Air Support and Advanced Training – A-29 Super Tucano The A-29 Super Tucano is an aircraft equipped for close air support and counter-insurgency scenarios, containing integrated sensors, datalink, cockpit protection and multiple payload configurations. The A-29 Super Tucano is also a full-fledged tactical trainer due to its handling features, and state of the art avionics systems. Since its entry into service in 2004, a total of more than 260 units have been sold to 16 different countries by the end of 2022. The company has been acting as a subcontractor for the United States Government (USG), and has delivered to Sierra Nevada Corporation (SNC), a USG prime contractor, 47 A-29 Super Tucano aircraft to different countries. In 2021, the company delivered nine aircraft to SNC, three of them for the AFSOC (Air Force Special Operations Command) Program of the United States Air Force, and six through the Foreign Military Sales program to the Nigeria Air Force Program. In addition, through the company’s Gavião Peixoto unit, it delivered five more aircraft to an undisclosed customer, together with advanced training systems, mission planning and debriefing stations, optional equipment and logistics package. In 2022, the company entered into a new sales contract of A-29 Super Tucano aircraft to an undisclosed customer. Fighter –F-39 Gripen Program In July 2014, the company entered into an agreement with Saab AB (Saab) to collaborate in a joint management program for the F-X2 Project, called F-39 Gripen Program, pursuant to the selection of the Gripen NG as Brazil’s next generation fighter jet. Under this agreement, the company has performed a material role in the overall program, and it has also taken an extensive share of work in systems development, integration, flight testing, final assembly and aircraft deliveries of both the single and the two-seat version of the state-of-the-art Gripen NG aircraft for the Brazilian Air Force. In 2022, multiple milestones in the F-39 Gripen development Program have been accomplished, such as Embraer’s support to the delivery of the first two aircraft assembled in Sweden to the Brazilian Air Force; and the set-up procedures of the F-39 Gripen final assembly line in Brazil, planned to start in 2023. Special Transport Aircraft In 2021, the company has entered an agreement with Aerodata AG for the sale of a Praetor 600 jet to be converted into an aircraft to fulfill a variety of different in-flight inspection missions. In 2022, this aircraft was completed and delivered to Aerodata for integration of mission equipment and systems. Modernization Programs The company offers military aircraft modernization services and has three ongoing programs under contract, two of them with the Brazilian Air Force and one with the Brazilian Navy. The A-1M modernization program focuses on modernizing the AM-X aircraft, which is an aircraft developed by the company and sold to the Brazilian Air Force approximately 20 years ago, and the platform naturally became technologically outdated overtime. From 2013 through 2021, the company delivered 11 modernized aircraft and the program was completed with the Verification Plan by the Brazilian Air Force in 2021.In 2022, Embraer completed some remaining milestones in the program, after the final aircraft delivery the year before, and started demobilizing the production line and testing equipment, expected to be completed by 2023. The other program with the Brazilian Air Force relates to the modernization of five E-99M Airborne Early Warning and Control (AEW&C) aircraft. The agreement also accounts for six mission planning and analysis stations, which will be employed for training and crew development. In 2020, the first two units were delivered and, in 2022, the company delivered the fourth modernized aircraft to Brazilian Air Force. The last aircraft is planned to be delivered in 2023. The modernization program with the Brazilian Navy is the upgrade of A-4 Skyhawk fighter jets (AF-1 per the Brazilian Navy´s Designation), with the purpose of incorporating new technology, including new avionics, radar, power generation and independent oxygen generating systems. By 2021, six out of seven modernized AF-1 (AF-1B) fighter jets were delivered to the Brazilian Navy. In 2022, the company delivered its last modernized AF-1, as well as the fixed-base simulator AATD (Advanced Aircraft Training Device) to the Brazilian Navy. Radars and Land Systems Programs The company’s portfolio of capabilities with respect to radars and land systems includes the development, integration, project management, sourcing, manufacturing, implementation, deployment and life cycle support of radars and land systems for multiple applications, including low-altitude air defense, surface surveillance, air traffic control, identification friend or foe (IFF), medium-range air defense, surveillance and early warning, monitoring and protection of borders, protection of critical infrastructures, among others. The company’s products include both fixed, modular, and transportable solutions. The company’s line comprises a comprehensive range of products, namely the SENTIR M20 ground surveillance radar, the SABER M60 short-range air defense radar, the S200R air traffic control and air defense radar, the SABER M200 VIGILANTE medium-range air defense radar, among other integrated solutions. In 2020, the company entered into an agreement with the Brazilian Army for the supply of two SABER M60 v2 radars to support its anti-aircraft artillery units. These radars have been timely delivered in 2022 and complemented more than 30 other SABER M60 radars delivered to the Brazilian Army in prior years. Also in 2022, the company entered into an agreement with the Brazilian Army for the supply of four additional SABER M60 v2 radars. In 2022, the company signed a contract with the Brazilian Army for the development of a counter battery radar, which will count on the same knowledge and technology applied to the SABER M200 radars. In 2022, the Brazilian Army completed the first phase of its Integrated Border Monitoring System (SISFRON) program, which largely strengthened the presence and the action of the Brazilian Armed Forces along the western borders of Mato Grosso and Mato Grosso do Sul states. Further to the development of the program, the company entered into a new agreement with the same customer for the development and implementation of the second phase of the SISFRON program, which will add operational capabilities and expand the coverage of Brazilian western borders monitoring and protection system. Principal Defense & Security Subsidiaries and Joint Ventures Atech Since 2013, Atech has worked in many strategic projects for the Brazilian Government, including the company’s nuclear-electric generation laboratory (LABGENE program, which has the purpose of developing a protection and control system for the nuclear reactors) and the Brazilian air defense systems. It is also responsible for the development, implementation and modernization of the Brazilian air traffic control centers. The LABGENE program continued to advance, and completed the factory acceptance tests (FAT) in 2022, as well as the integration of the data control system (DCS). In 2022, Atech entered into new agreements with the Brazilian Air Force, and a new agreement with the Brazilian Navy to implement the Advanced System for Managing Air Traffic Information and Operational Interest Reports (Sistema Avançado de Gerenciamento de Informações de Tráfego Aereo e Relatório de Interesse Operacional, or SAGITARIO), which is located at the Naval Air Base in São Pedro d’Aldeia. Atech also delivered the new version of the Electronic Flight Bag app (FPL BR – EFB), and completed the conceptual phase of the Urban Air Traffic Mobility system (UATM) for EVE Air Mobility. In 2022, Atech has satisfactorily completed several relevant deployments with respect to its various products and services, including the completion of important milestones related to the F-X2 Gripen program and the Tamandare Class Frigates Program. Also, in 2022, Atech received the Pro-Ethics Seal promoted by CGU and the Ethos Institute and was considered, for the fourth consecutive year, as a great company to work for the GPTW institute. In 2022, Atech had also a distinct presence at Locked Shields, the world’s largest cybersecurity defense exercise, according to the NATO, and took part in the Guardião Cibernetico 4.0 exercise. In the C3I systems area, Atech successfully finalized the integration tests of the command, control, communications and intelligence center in Mauritania. Visiona Tecnologia Espacial S.A. Embraer and Telecomunicações Brasileiras S.A., or Telebras, formed Visiona Tecnologia Espacial S.A., or Visiona, of which Embraer holds a 51% stake and Telebras 49%. Through this joint venture, Visiona became the prime contractor for the Brazilian Strategic and Defense Communications Geostationary Satellite (SGDC), with responsibility for the system integration. In 2022, the VCUB-1 Nano Satellite program advanced to the environmental and integration tests, the last phase before the actual launch, which is expected to take place in 2023. With respect to the remote sensing services, Visiona entered into an agreement with a non-disclosed customer that is a market leader in agricultural insurance. Visiona also won a public bid carried out by FINEP (a Brazilian Government research and innovation fund) to develop the technology of a small-size and high-resolution satellite, and will lead a group of five companies and five science & technology institutes from the main space technology hubs in Brazil. Tempest Security Intelligence Tempest Security Intelligence, or Tempest, is the largest cybersecurity company in Brazil, providing complete solutions for business protection in the digital world. The portfolio of products and services provided by Tempest is aligned with the framework of the National Institute of Standards and Technology (NIST), a non-regulatory government agency linked to the Technology Administration of the United States Department of Commerce. With more than 450 professionals and offices in Recife, São Paulo and London, Tempest has ensured the protection of more than 500 companies of all sizes and industries providing a portfolio with more than 70 solutions which include consulting, digital identity, managed security and integration services. In 2020, the company became the majority shareholder of Tempest, which in 2021 broke its revenue records, registering a 40% growth compared to 2020. In 2022, Tempest launched the Prospero Suite, a new integrated management platform dedicated to cybersecurity services and solutions. The platform, which was being used by 61 customers as of December 31, 2022, provides support and analysis for its users’ at all levels, including operational processes, such as data management and consumption, and also strategic decisions. In 2022, Tempest also developed the Allow-Me Bio, which is an identity monitoring tool that represents an evolution of facial biometrics that includes behavior analysis expertise. Created on the security by design concept, it guarantees security without impacting the user experience. Águas Azuis Águas Azuis is a consortium between Embraer, Atech and Thyssenkrupp Marine Systems that was selected as the preferred supplier to build four new Tamandare Class Frigates for the Brazilian Navy. In 2022, Águas Azuis started the construction of the first frigate. The program in advancing and its first delivery is scheduled for 2025. Competition The company’s military aircraft faces competition from various manufacturers in different countries in each market segment. The A-29 Super Tucano competes in the advanced training market with the Textron AT-6 (United States), L3 Harris’ SkyWard (United States), Textron Scorpion (United States), Leonardo M-345 (Italy), Aero Vodochody L-159 (Czech Republic), among others. In the flight training market, it competes with the Pilatus PC-21 (Switzerland), Textron T-6A/B (United States), Aero Vodochody L-39NG (Czech Republic), among others. In the military transportation segment, the C-390 Millennium operates in the medium airlift segment in the 20-ton category. Its main competitor is the Lockheed Martin C-130J (United States). Due to the multi-mission design of the C-390 Millennium, including medical evacuation, search & rescue, firefighting, air-to-air refueling, transport of troops and aerial resupply, the company expects specific competition in each segment: Airbus A400M and Kawasaki C-2, in the air-to-air refueling segment;, Airbus C-295 search and rescue segment, Leonardo C-27J in the passenger aircraft convertible into troop transportation aircraft segment, Ilyushin IL-76 in the firefighting aircraft segment, as well as C-130J, which is its biggest competitor in all of these categories. In the VIP transportation segment, which comprises the aircraft that will be used by government officials and authorities, the company’s business jets face competition from the main manufacturers of business jets, such as Textron and Gulfstream in the United States, Bombardier in Canada, and Dassault in France. Services & Support segment On December 20, 2016, the company announced the creation of Embraer Services & Support, a focused on services and customer support, which brings together capabilities that were previously allocated to each business segment and is responsible for developing solutions in support of current and new products and services, as well as for managing the associated processes and resources. Embraer Services & Support is a segment focused on providing parts, flight hour solutions, maintenance, training, and engineering products and services for Embraer operators in the Commercial, Executive, Defense & Security segments. Accompanied with OGMA, Embraer’s subsidiary in Portugal, which provides agnostic services, and Embraer CAE Training Services (ECTS). With a network of over 76 owned and authorized service centers spread around the world, contact centers dedicated to each market, and a team with more than 4,300 employees overseeing support of over 4,580 Embraer Commercial, Executive and Defense aircraft as well as other original equipment manufacturers, or OEMs, aircraft, engines and radars. In January 2022, Embraer and AVIAN Inventory Management, LLC (AVIAN), together with York Aerospace Solutions III (YAS), as AVIAN’s sole capital partner, entered into an agreement for purchasing, marketing and distribution of spare parts of Embraer commercial and business jet aircraft. Designed to promote accessibility and speed to market, AVIAN’s distribution center will deliver unparalleled product availability to all aircraft operators and maintenance and repair stations around the world providing a one-stop, go-to access point. In March 2022, the company also announced its entrance in the air freight market with the launch of the E190F and E195F Passenger to Freight Conversions (P2F). The E-Jets freighters are designed to meet the changing demands of e-commerce and modern trade that require fast deliveries and decentralized operations. Embraer is offering the unbeatable cargo economics and flexibility that rightsized jets provide. The full freighter conversion is available for all pre-owned E190 and E195 aircraft. The company launched, in 2022, new hangars at its service center located in Sorocaba, state of São Paulo, doubling its useful area from 20,000 m² to 40,000 m². As of December 31, 2022, the Sorocaba service center had four hangars, three of which are dedicated to maintenance, repair, and component overhaul (MRO) services and one to support fixed-base operator (FBO) operations. Services & Support related to the Commercial Aviation The company is working on further developing its portfolio of services for its Commercial Aviation customers, which comprises the following areas field support, which provides convenient, accessible, on-site or remote assistance for all operational and technical issues in order to maximize customer performance; technical support, which serves technical needs through analytics, engineering expertise, and real-time fleet monitoring; flight operations, which supports the efficiency and safety of airline operations through tailored solutions, consulting, supervision and training resources; aircraft modification, which provides execution and coordination of system upgrades for improved fleet performance and cabin modifications for enhanced onboard amenities; materials, which ensures parts availability and materials management for both scheduled and unscheduled maintenance; maintenance, which provides optimized maintenance solutions based on best practices for efficiency and safety; training, which prepares flight crew, maintenance technicians and operations personnel for the highest levels of competence; and digital solutions, which deploys the internet as the core communication channel for 24 hours a day, seven days a week collaboration and information exchange. The company has a worldwide presence, with five regional units strategically positioned around the globe in order to provide it with greater agility in understanding the needs and desires of its customers and respecting the cultural diversity of the different regions where its customers are based. In São Jose dos Campos, the company also offers various services, such as Customer Care Center, providing an integrated solution of technical and spare parts support available 24 hours a day, seven days a week; spare parts planning and material engineering; technical support; flight operations support; maintenance support engineering; maintenance Repair and Overhaul, or MRO, network management strategy and policy; business development support; technical publications development; and technical services, such as maintenance training, Digital Solutions, engineering services, pilot services and aircraft modifications. Beyond parts fulfillment and simple rental plans, the company also provides innovative programs for material planning, logistics, and acquisitions, such as its Flight-Hour Pool Program; Parts Consignment Program; Embraer Collaborative Inventory Plan; Embraer Parts Exchange Program; and Customer Stock Optimization. The company has a full flight simulator located at the Embraer Training Center in Johannesburg, South Africa, supporting its fleet growth in the African market. The company’s MRO network includes facilities in Nashville, La Vergne, and Macon, United States, where it has Embraer Aircraft Maintenance Services, a dedicated service center for commercial aviation. The company also counts on Embraer Service Center in Gavião Peixoto, state of São Paulo, Brazil and OGMA (Indústria Aeronáutica de Portugal S.A), an Embraer subsidiary in Alverca, Portugal, which are dedicated to provide maintenance services to both commercial and defense customers. The company’s MRO network supporting its commercial aviation aircraft fleet is also expanding with its third-party maintenance service centers. The company constantly monitors customer satisfaction levels and keep open communication channels with them to understand customer needs and define the most appropriate actions for the continuous improvement of its support. Services & Support related to the Executive Aviation The company’s executive jets customer fleet has expanded globally and has a strong presence in major markets. Between 2008 and 2010, the company added seven owned service centers to support its executive and defense aircraft in Fort Lauderdale, Florida, United States: Melbourne, Florida, United States; Mesa, Arizona, United States; Bradley, Connecticut, United States; Le Bourget, France; Gavião Peixoto and Sorocaba, São Paulo, Brazil. The company has also improved its services and support structure to enhance its customers’ experience. To measure its customers’ satisfaction, the company implemented the Customer Experience Program, supported by a marketing tool that measures customer satisfaction based on the customer’s experience. The score and feedbacks received allow the company to be more responsive on developing initiatives and well as predict their needs. The company’s Customer Care Center has a team of specialists dedicated to support all Embraer Executive Aviation and offers complete and timely assistance for their operational, technical and maintenance needs. In 2022, the company and FlightSafety International announced that FlightSafety would offer a new full-flight simulator (FFS) for the Praetor 500 and Praetor 600 jets to meet the growing demand for these models’ training. The simulator, which is the third for the Praetor 500 and Praetor 600 established by FlightSafety International, will be located in Orlando, Florida to serve the growing fleet of over 200 aircraft in the Praetor platform. These operations will begin in the second quarter of 2023. Services & Support related to the Defense & Security Industry The Services & Support segment provides solutions to several air forces and government entities through the company’s comprehensive portfolio. These solutions are tailored to the company’s customer needs and may include provision of material, training, maintenance, engineering and other aspects that will enhance fleet availability and mission readiness. The company’s support services may range from simple transactional sales to integrated support programs. The company assesses its customer capabilities and requirements in order to define the integrated solution that will keep the fleet operating in the most effective way. The multi-mission C-390 Millennium has a dedicated team to design and implement the most effective entry into service solution. The customer participates directly in the process, alongside the Embraer team, encompassing overall strategy, as well as specific details, assuring a reliable and smooth operation from the beginning of the process. As part of the integrated support program, the company also provides services to new and existing customers of its Super Tucano, which is an aircraft used by several air forces around the world. Additionally, the company also provides support aircraft services to passenger carriers from several government organizations. For instance, the company has support services designed to fulfill requirements, including sale of spare parts, maintenance, training and technical support, among others, relating to recent aircraft Phenom 100, Phenom 300, Legacy 450; older aircraft, including Legacy 600 and ERJ-145; and legacy aircraft, including Bandeirantes (EMB-110) and Brasília (EMB-120). Through the support services the company provides to its customers, it can complements commercial or business aircraft with equipment and sensors, thereby making its customers’ fleet available for different types of missions. The company provides a full range of services in different countries, often operating together with its customers’ teams in their own bases. In order to provide specific activities and comprehensive maintenance solutions, the company owns and operates maintenance, repair and overhaul, or MRO, service centers as follows: Alverca, Portugal, which the company refers to as OGMA, which became operational in March 2005 and provides services to its commercial aviation, executive aviation and defense and security customers; and Gavião Peixoto, in the state of São Paulo, Brazil, where the company has a dedicated service center for defense and security customers. These MRO service centers are adapting their capabilities for purposes of providing C-390 Millennium maintenance services. OGMA OGMA, an Embraer subsidiary located in Alverca, Portugal, combines the accumulated know-how as an aircraft manufacturer and maintenance service provider. It offers worldwide MRO services, for defense, commercial and executive aviation, as well for aircraft engines and components. Furthermore, OGMA plays an important role as a major aerostructures supplier of integrated solutions to OEMs and first tier suppliers. OGMA delivers assemblies and sub-assemblies of both metallic and composite materials. Embraer owns 65% of the voting capital of OGMA and the Portuguese State owns the remaining 35%. In 2020, OGMA entered into 12 new contracts to provide MRO services to defense and security and commercial aviation segments, and repair of maintenance components, such as those related to hydraulic, pneumatic, fuel, electrical and avionics systems. In 2021, OGMA had major achievements such as Pratt & Whitney signed agreement for PW GTF Engines, the Rolls-Royce AE 2100 Program: Delivery of the 1st Nacelle within the contracted TAT, and an agreement for OGMA Aeronautical Academy. In 2022, OGMA delivered the last F-16 to the Royal Netherlands Air Force Royal Netherlands Air Force (RNLAF); the second ERJ-175 for the Brazilian Federal Police; and also delivered C-130 for the Portuguese Air Force. The company also has highlights, such as the celebration of the delivery of the 100th Rolls-Royce AE 1107C engine, the implementation of the Safety Management System (SMS) in the organization and the Military Design Organization Approval (MDOA) certification granted to the company that gives it authority to design changes / repairs to military aircraft under AAN supervision. OGMA reached a historic milestone by becoming the first Authorized Maintenance Center certified by the Portuguese Aeronautical Authority to carry out heavy maintenance of commercial aircraft of the Embraer E-Jets E2 family in Europe, Middle East and Africa (EMEA). Other segments The company provides fuel systems, structural parts, and mechanical and hydraulic systems to Sikorsky Aircraft Corporation, a Lockheed Martin Company, for its production of helicopters. The company also manufactures general aviation propeller aircraft, also known as light aircraft, such as crop dusters. The company provides Sikorsky Corporation with the development and manufacture of landing gear, fuel systems and fuel tanks for the S-92 and H-92 Helibus helicopters. The company also has Ipanema in its Other segments pipeline, which is a crop duster aircraft developed pursuant to the specifications of the Brazilian Ministry of Agriculture. These aircraft are produced only on demand. As of December 31, 2022, the company had delivered a total of 1,541 of these aircraft, including 55 in 2022. The company’s Other segments also include services related to the development and certification of eVTOLs, including the creation of a maintenance and services network for eVTOLs and the creation of an air traffic management system for eVTOLs (urban air mobility, or UAM business). Aircraft Operating Lease Activities The company provides remarketing services to third parties looking to sell their Embraer manufactured aircraft. Suppliers Other suppliers and partners for the E-Jets E2 include 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). Suppliers Other suppliers and partners for the E-Jets E2 include 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). Seasonality The company has historically experienced seasonality in its results of operations and cash flow generation. This is mainly due to a traditionally higher number of deliveries in the fourth quarter (year ended December 2022), particularly in its Executive Aviation segment, which is in line with overall executive jet industry seasonality. The deliveries of executive jets in the fourth quarter generally constitute at least 35% to 45% of annual deliveries in its Executive Aviation segment. Regulation The company is subject to the regulation of aviation authorities in other countries, including the Federal Aviation Administration (FAA) in the United States and the European Union Aviation Safety Agency (EASA) for the European Union. History The company was founded in 1969. The company was incorporated in 1969. It was formerly known as Embraer – Empresa Brasileira de Aeronáutica S.A. and changed its name to Embraer S.A. in 2010.