<SEC-DOCUMENT>0001193125-18-211656.txt : 20180815
<SEC-HEADER>0001193125-18-211656.hdr.sgml : 20180815
<ACCEPTANCE-DATETIME>20180702181458
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0001193125-18-211656
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20180702

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			EMBRAER S.A.
		CENTRAL INDEX KEY:			0001355444
		STANDARD INDUSTRIAL CLASSIFICATION:	AIRCRAFT [3721]
		IRS NUMBER:				000000000

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		AV. BRIGADEIRO FARIA LIMA 2170
		CITY:			SAO JOSE DOS CAMPOS
		STATE:			D5
		ZIP:			12227901
		BUSINESS PHONE:		551239274404

	MAIL ADDRESS:	
		STREET 1:		AV. BRIGADEIRO FARIA LIMA 2170
		CITY:			SAO JOSE DOS CAMPOS
		STATE:			D5
		ZIP:			12227901

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	Embraer - Empresa Brasileira de Aeronautica S.A.
		DATE OF NAME CHANGE:	20070329

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	Embraer - Empresa Brasileira de Aeron?utica S.A.
		DATE OF NAME CHANGE:	20070329

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	EMPRESA BRASILEIRA DE AERONAUTICA S.A.
		DATE OF NAME CHANGE:	20060403
</SEC-HEADER>
<DOCUMENT>
<TYPE>CORRESP
<SEQUENCE>1
<FILENAME>filename1.htm
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<HTML><HEAD>
<TITLE>CORRESP</TITLE>
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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="right"><B>Privileged&nbsp;&amp; Confidential </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="right"><B>Attorney-Client Communication </B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="right"><B>Confidential </B></P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">July&nbsp;2,
2018 </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">U.S. Securities and Exchange Commission </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Attn: Amy
Guedes or Doug Jones </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Office of Transportation and Leisure, Division of Corporate Finance </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">100 F Street, NE </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Washington, DC 20549 </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Re:&nbsp;&nbsp;&nbsp;&nbsp;Embraer S.A. </B></P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B><FONT
STYLE="white-space:nowrap">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20-F</FONT> for Fiscal Year Ended December&nbsp;31, 2017 </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Filed March&nbsp;23, 2018 </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;File <FONT STYLE="white-space:nowrap">No.&nbsp;001-15102</FONT> </B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Dear Ms.&nbsp;Guedes and Mr.&nbsp;Jones: </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">We are submitting
this letter on behalf of Embraer S.A. (together with its subsidiaries, the &#147;<B>Company</B>&#148;) in response to a letter received June&nbsp;5, 2018 from the Office of Transportation and Leisure, Division of Corporate Finance, of the Securities
and Exchange Commission (&#147;<B>OTL</B>&#148;) in relation to the Company&#146;s <FONT STYLE="white-space:nowrap">20-F</FONT> for the fiscal year ended on December&nbsp;31, 2017 (the &#147;<B>OTL Letter</B>&#148;). The numbered paragraphs below
correspond to the numbered comments in the OTL Letter, with each of OTL&#146;s comments presented in bold and italics below.</P> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><B>1.</B></TD>
<TD ALIGN="left" VALIGN="top"><B></B><B><I>Net cash of operating activities increased significantly to $757.3&nbsp;million in 2017 from a cash outflow of $20.5&nbsp;million in 2016, and 2016 decreased significantly from a cash inflow of
$862.5&nbsp;million in 2015. Please provide a more robust analysis of these changes and quantify factors cited. Your analysis should address the material drivers underlying factors cited and clearly explain how actual operating cash is impacted by
them if not apparent. Please note that merely citing changes in working capital items and other items identified in the statement of cash flows may not provide a sufficient basis to understand how operating cash between comparative periods changed.
Refer to section III.D of Release <FONT STYLE="white-space:nowrap">No.&nbsp;33-6835,</FONT> section IV.B.1 of Release <FONT STYLE="white-space:nowrap">No.&nbsp;33-8350</FONT> and section 501.04 of the staff&#146;s Codification of Financial Reporting
Releases for guidance.</I></B><B> </B></TD></TR></TABLE> <P STYLE="margin-top:6pt; margin-bottom:0pt; margin-left:8%; font-size:10pt; font-family:Times New Roman">The Company proposes to adjust its disclosure in future filings with a more robust
analysis of changes to cash flows in a format as follows: </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; margin-left:8%; font-size:10pt; font-family:Times New Roman"><B><I>Changes in cash flow from 2016 to 2017 </I></B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; margin-left:8%; font-size:10pt; font-family:Times New Roman">In 2017, net cash generated by operating activities was US$757.3&nbsp;million in 2017, compared to net cash used by operating activities of
US$20.5&nbsp;million in 2016. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; margin-left:8%; font-size:10pt; font-family:Times New Roman">The increase in cash flow from operating activities in 2017 is primarily a result of the following factors:
</P> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="8%">&nbsp;</TD>
<TD WIDTH="5%" VALIGN="top" ALIGN="left">(i)</TD>
<TD ALIGN="left" VALIGN="top">a US$226.2&nbsp;million improvement in net income (adjusted by the change in deferred income tax and social contribution) due in large part to lower negative <FONT STYLE="white-space:nowrap">non-recurring</FONT> cash
impacts in 2017 versus 2016; </TD></TR></TABLE> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="8%">&nbsp;</TD>
<TD WIDTH="5%" VALIGN="top" ALIGN="left">(ii)</TD>
<TD ALIGN="left" VALIGN="top">a US$404.9&nbsp;million source of cash from declines in inventories in 2017 as compared to a US$136.9&nbsp;million use of cash in inventories in 2016, yielding an improvement of US$541.8&nbsp;million in operating cash
flow, as we significantly reduced inventories of used and finished aircraft during 2017 due to management&#146;s increased efforts in 2017 to reduce the number of aircraft held for sale <FONT STYLE="white-space:nowrap">(trade-ins</FONT> and finished
products); and </TD></TR></TABLE> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="8%">&nbsp;</TD>
<TD WIDTH="5%" VALIGN="top" ALIGN="left">(iii)</TD>
<TD ALIGN="left" VALIGN="top">to a lesser extent, a US$65.2&nbsp;million source of cash from an increase in advances from customers in 2017 as compared to a US$97.9&nbsp;million use of cash in advances from customers in 2016. These positive factors
were partially offset by&nbsp;higher accounts receivable, due mostly to extended payment cycles on certain contracts in the Defense&nbsp;&amp;&nbsp;Security&nbsp;segment. </TD></TR></TABLE>
<P STYLE="margin-top:6pt; margin-bottom:0pt; margin-left:8%; font-size:10pt; font-family:Times New Roman">We had adjusted working capital (defined as total current assets less cash and equivalents and financial investment minus total current
liabilities less loans and financing) of US$1,021.6&nbsp;million as of December&nbsp;31, 2017 and US$1,094.1&nbsp;million as of December&nbsp;31, 2016. Our adjusted working capital decreased in 2017 primarily as a result of the aforementioned
factors described in the explanation for the variation in cash flow from operating activities above. </P> <P STYLE="font-size:12pt; margin-top:0pt; margin-bottom:0pt">&nbsp;</P>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">1 </P>


<p Style='page-break-before:always'>
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 <P STYLE="margin-top:0pt; margin-bottom:0pt; margin-left:8%; font-size:10pt; font-family:Times New Roman"><B><I>Changes in cash flow from 2015 to 2016 </I></B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; margin-left:8%; font-size:10pt; font-family:Times New Roman">In 2016, net cash used by operating activities was US$20.5&nbsp;million in 2016, compared to net cash generated by operating activities of
US$862.5&nbsp;million in 2015. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; margin-left:8%; font-size:10pt; font-family:Times New Roman">The decrease in cash flow from operating activities in 2016 is primarily a result of: </P>
<P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="8%">&nbsp;</TD>
<TD WIDTH="5%" VALIGN="top" ALIGN="left">(i)</TD>
<TD ALIGN="left" VALIGN="top">a US$195.7&nbsp;million decline in net income (adjusted by the change in deferred income tax and social contribution) due to higher negative <FONT STYLE="white-space:nowrap">non-recurring</FONT> cash impacts in 2016
(US$248.2&nbsp;million in <FONT STYLE="white-space:nowrap">non-recurring</FONT> cash charges related mostly to payments related to the finalization of the FCPA investigation, including the payment of US$200.0&nbsp;million in disgorgement and
penalties); </TD></TR></TABLE> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TR style = "page-break-inside:avoid">
<TD WIDTH="8%">&nbsp;</TD>
<TD WIDTH="5%" VALIGN="top" ALIGN="left">(ii)</TD>
<TD ALIGN="left" VALIGN="top">a US$136.9&nbsp;million use of cash from an increase in inventories in 2016 due to an increase in used executive jets inventory due to the weakening market conditions in the segment in 2016, as compared to a
US$137.2&nbsp;million source of cash from inventories in 2015; and </TD></TR></TABLE> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="8%">&nbsp;</TD>
<TD WIDTH="5%" VALIGN="top" ALIGN="left">(iii)</TD>
<TD ALIGN="left" VALIGN="top">a US$307.7&nbsp;million increase in short-term financial investments in 2016 as a part of our normal cash management strategy, as compared to a US$70.4&nbsp;million increase in short-term financial investments in 2015.
These negative factors were partially offset by a US$156.0&nbsp;million reduction in accounts receivable balance in 2016, when compared to 2015, a year with an unusually high levels of accounts receivables for the Company due to delays in payments
by certain customers. </TD></TR></TABLE> <P STYLE="margin-top:6pt; margin-bottom:0pt; margin-left:8%; font-size:10pt; font-family:Times New Roman">We had adjusted working capital of US$1,094.1&nbsp;million as of December&nbsp;31, 2016 and
US$762.5&nbsp;million as of December&nbsp;31, 2015. Our adjusted working capital (defined as total current assets less cash and equivalents and financial investment minus total current liabilities less loans and financing) increased in 2016
primarily as a result of the aforementioned factors described in the explanation for the variation in cash flow from operating activities above. </P> <P STYLE="font-size:18pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="4%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><B>2.</B></TD>
<TD ALIGN="left" VALIGN="top"><B></B><B><I>You state on pages 71 and 72 of the <FONT STYLE="white-space:nowrap">20-F,</FONT> respectively, that you delivered 12 Embraer 170 aircraft to Egypt Air and 10 Embraer 190 aircraft to Kenya Airways. The
Egypt Air website offers flights serving Sudan on Embraer 170 aircraft; the Kenya Airways website offers flights serving Sudan on Embraer 190 aircraft. Additionally, you state on page 28 that your regional unit in Amsterdam supports customers
located in Africa and the Middle East, regions that include Sudan and Syria. As you know, Sudan and Syria are designated by the Department of State as state sponsors of terrorism, and are subject to U.S. economic sanctions and/or export controls.
Please describe to us the nature and extent of any past, current, and anticipated contacts with Sudan and Syria since your letter to us dated December&nbsp;11, 2015, including contacts with their governments, whether through subsidiaries,
affiliates, partners, customers, joint ventures or other direct or indirect arrangements. Please also discuss the materiality of those contacts, in quantitative terms and in terms of qualitative factors that a reasonable investor would deem
important in making an investment decision. Tell us the approximate dollar amounts of revenues, assets and liabilities associated with those countries for the last three fiscal years and the subsequent interim period. Address for us the potential
impact of the investor sentiment evidenced by divestment and similar initiatives that have been directed toward companies that have operations associated with U.S.-designated state sponsors of terrorism</I></B><B>. </B></TD></TR></TABLE>
<P STYLE="margin-top:6pt; margin-bottom:0pt; margin-left:8%; font-size:10pt; font-family:Times New Roman">The Company does not have any current contacts and has not had any past contacts, before or after the letter we sent you on December&nbsp;11,
2015, whether direct or indirect, with Sudan or Syria, and does not plan to engage in any direct or indirect contacts with Sudan or Syria in the future.</P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; margin-left:8%; font-size:10pt; font-family:Times New Roman">The Company does not provide any services, products, information or technology to Sudan or Syria and has no agreements, commercial
arrangements, or other contacts with the governments of Sudan, Syria or entities owned or controlled by, or any entities or individuals acting on behalf of, the governments of Sudan or Syria. </P>
<P STYLE="margin-top:18pt; margin-bottom:0pt; margin-left:8%; font-size:10pt; font-family:Times New Roman"><B><I>Relationship with Kenya Airways and Egypt Air </I></B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; margin-left:8%; font-size:10pt; font-family:Times New Roman">Regarding the relationship with Kenya Airways (&#147;<B>Kenya Airways</B>&#148;) and EgyptAir (&#147;<B>Egypt Air</B>&#148;), the Company has
delivered an aggregate of ten Embraer 190 aircraft to Kenya Airways, from 2012 until 2013, and twelve Embraer 170 aircraft to Egypt Air, from 2007 until 2009, (the &#147;<B>Sold</B> <B>Aircraft</B>&#148;) pursuant to certain Purchase Agreements,
dated as of August, 2011 and August, 2006, respectively, (the &#147;<B>Purchase Agreements</B>&#148;).&nbsp;As of the date hereof, the Company has no more orders or deliveries to be made pursuant to the Purchase Agreements. </P>
<P STYLE="font-size:6pt; margin-top:0pt; margin-bottom:0pt">&nbsp;</P>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">2 </P>


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 <P STYLE="margin-top:0pt; margin-bottom:0pt; margin-left:8%; font-size:10pt; font-family:Times New Roman">As is the case in the vast majority of sales of Embraer aircraft, the Company has also entered
into Flyembraer.com agreements with Kenya Airways and Egypt Air, dated as of August&nbsp;1, 2014 and September&nbsp;13, 2012, respectively (the&nbsp;&#147;<B>Flyembraer Agreements</B>&#148;), pursuant to which the Company grants access to a website
that provides maintenance and&nbsp;support services to Kenya Airways and Egypt Air for an indefinite term. The Flyembraer Agreements allow only the employees of Kenya Airways and Egypt Air to have access to the website in line with the
Company&#146;s standard business&nbsp;practice. </P> <P STYLE="margin-top:6pt; margin-bottom:0pt; margin-left:8%; font-size:10pt; font-family:Times New Roman">Furthermore, a subsidiary of the Company (the &#147;<B>Subsidiary</B>&#148;) has entered
into an Embraer Authorized Service Center Agreement, dated as of January&nbsp;1, 2015, with Kenya Airways, as amended (the &#147;<B>Authorized Services Agreement</B>&#148;), pursuant to which the Subsidiary authorizes Kenya Airways to provide
selected maintenance services on certain Embraer aircraft in Kenya Airways&#146; maintenance center, until January&nbsp;1, 2020, and a Support Agreement with Egypt Air, dated as of July&nbsp;18, 2007, as amended (the &#147;<B>Support
Agreement</B>&#148;), pursuant to which the Subsidiary provides support to the operation of certain Embraer aircraft, until January&nbsp;31, 2022. </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; margin-left:8%; font-size:10pt; font-family:Times New Roman">Finally, Kenya Airways has entered into a Service Agreement with the Subsidiary dated as of July&nbsp;3, 2015 (the &#147;<B>Supplemental
Service Agreement</B>&#148;) and into a Service Agreement with the Company dated as of April&nbsp;25, 2018 (the &#147;<B>Service Agreement</B>&#148;) pursuant to which the Subsidiary and the Company have provided certain services to Kenya Airways
related to modification of certain of the Sold Aircraft, respectively. The Supplemental Service Agreement expired as of May&nbsp;1, 2016.<B><I> </I></B> </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; margin-left:8%; font-size:10pt; font-family:Times New Roman">The Flyembraer Agreements, the Authorized Services Agreement, the Support Agreement and the Service Agreement are the only currently effective
agreements entered into by the Company (or any Company subsidiary) with Kenya Airways or Egypt Air.</P> <P STYLE="margin-top:6pt; margin-bottom:0pt; margin-left:8%; font-size:10pt; font-family:Times New Roman">In accordance with standard Company
business practices, including &#147;know your customer&#148; background checks, the Purchase Agreements, the Authorized Services Agreement, the Support Agreement, the Supplemental Service Agreement and the Service Agreement include contractual
provisions requiring Kenya Airways and Egypt Air to comply with U.S. exports controls in connection with any operation or use of the Embraer aircraft, or of any products, technology or software provided by the Company, as applicable.&nbsp;The
Company is not aware of any operation of any of the Sold Aircraft by Kenya Airways or Egypt Air in violation of U.S. export controls. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; margin-left:8%; font-size:10pt; font-family:Times New Roman">The
Company understands that one or more of the Sold Aircraft may have operated, or are operating or may be operating, to and from Sudan or Syria by Kenya Airways or Egypt Air, but has no reason to believe that Kenya Airways or Egypt Air has conducted,
is conducting or will conduct any such operations in a manner that would constitute a violation of applicable U.S. export controls.&nbsp;Moreover, as neither the Company nor Kenya Airways nor Egypt Air is a U.S. person, any such operation would not
constitute a violation of U.S. economic sanctions against Sudan or Syria. </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; margin-left:8%; font-size:10pt; font-family:Times New Roman"><B><I>Regional Unit in Amsterdam </I></B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; margin-left:8%; font-size:10pt; font-family:Times New Roman">For the purpose of full disclosure, we clarify that our regional unit in Amsterdam provides administrative support to our regional unit in
France, which provides customer service and support to the following countries located in Africa and Asia: (i)&nbsp;Azerbaijan; (ii)&nbsp;Burkina Faso; (iii)&nbsp;Egypt; (iii)&nbsp;Israel; (iii)&nbsp;Kazakhstan; (iv) Kenya; (v)&nbsp;Mauritania;
(vi)&nbsp;Mozambique; (vii)&nbsp;Namibia; (viii)&nbsp;Oman; (ix)&nbsp;South Africa; and (x)&nbsp;Tanzania. </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; margin-left:8%; font-size:10pt; font-family:Times New Roman"><B><I>Materiality of Contracts
with Kenya Airways and Egypt Airways </I></B></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; margin-left:8%; font-size:10pt; font-family:Times New Roman">The Company&#146;s annual consolidated revenues from Kenya Airways accounted for
approximately 0.02% of the Company&#146;s total annual consolidated revenues in 2015, 0.02% of the Company&#146;s total annual consolidated revenues in 2016, 0.04% of the Company&#146;s total annual consolidated revenues in 2017 and 0.04% of the
Company&#146;s total annual consolidated revenues for 2018 until May 2018.</P> <P STYLE="margin-top:6pt; margin-bottom:0pt; margin-left:8%; font-size:10pt; font-family:Times New Roman">The Company&#146;s annual consolidated revenues from Egypt Air
accounted for approximately 0.02% of the Company&#146;s total annual consolidated revenues in 2015, 0.02% of the Company&#146;s total annual consolidated revenues in 2016, 0.02% of the Company&#146;s total annual consolidated revenues in 2017 and
less than 0.01% of the Company&#146;s total annual consolidated revenues for 2018 until May 2018. </P> <P STYLE="margin-top:6pt; margin-bottom:0pt; margin-left:8%; font-size:10pt; font-family:Times New Roman">With regard to revenue data provided
above, we respectfully note that the Company cannot evaluate how much of the revenues from Kenya Airways or from Egypt Air may be related to their respective operations of any Sold Aircraft to or from Sudan or Syria. </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; margin-left:8%; font-size:10pt; font-family:Times New Roman">As the revenues derived from the Kenya Airways and Egypt Air relationships represent immaterial amounts of the Company&#146;s consolidated
revenues, the Company does not believe that its dealings with Kenya Airways or with Egypt Air would give rise to a material investment risk for its security holders or have a material adverse impact on investor sentiment. </P>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">3 </P>


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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Should you have additional questions or comments regarding the foregoing, please do not hesitate to contact the
undersigned at +55&nbsp;(11)&nbsp;3927-7702 or Dara Panahy at <FONT STYLE="white-space:nowrap">(202)&nbsp;835-7521.</FONT> </P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P><DIV ALIGN="right">
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<TD VALIGN="top" COLSPAN="3"> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Sincerely,</P> <P STYLE="font-size:12pt; margin-top:0pt; margin-bottom:1pt">&nbsp;</P></TD></TR>
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<TD VALIGN="bottom" STYLE=" BORDER-BOTTOM:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000">/s/ Tobias Stirnberg</TD></TR>
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<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom">Tobias Stirnberg</TD></TR>
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<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:9pt; font-family:Times New Roman">Milbank, Tweed, Hadley&nbsp;&amp; McCloy LLP</P>
<P STYLE="margin-top:0pt; margin-bottom:1pt; font-size:9pt; font-family:Times New Roman">Counsel for Embraer S.A.</P></TD></TR>
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<TD VALIGN="bottom">&nbsp;</TD>
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</TABLE></DIV> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">cc: </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Paulo C&eacute;sar de
Souza e Silva, </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">President&nbsp;&amp; CEO Embraer S.A. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Nelson Krahenbuhl Salgado, </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">CFO Embraer S.A. </P>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">4 </P>

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