35.

Responsibilities and Commitments

35.1.

Trade-ins

The Company has offered 8 aircraft trade-in options. Trade-in transactions are directly tied to contractual obligations with the customer and the purchase of new aircraft. Exercise of the trade-in option is tied to compliance by the customer with all the contractual clauses. These options establish that the price of the asset given in payment may be put towards the purchase price of a new and more up-to-date aircraft model produced by the Company. The Company continuously monitors all trade-in commitments in order to anticipate any adverse economic impact.

35.2.

Leases

Operating leases refer to buildings, machinery, vehicles and computer equipment. At December 31, 2018 the amounts recognized totaled US$ 7.3, at December 31, 2017 US$ 11.0 and at December 31, 2016 US$ 15.6. These leases expire at various dates through 2044.

The following table shows the payment schedule for the Company’s operating leases at December 31, 2018:


Year
2019			5.4
2020			4.5
2021			4.0
2022			3.5
After 2022			14.7

Total			32.1

35.3.

Financial Guarantees

The table below provides quantitative data on the financial guarantees provided by the Company to third parties. The maximum potential payments (off balance sheet exposure) represent the worst-case scenario and do not necessarily reflect the results expected by the Company. Estimated proceeds from performance guarantees and underlying assets represent the anticipated values of assets the Company could liquidate or receive from other parties to offset its payments under guarantees.


	12.31.2018			12.31.2017

Maximum financial guarantees		66.6			107.7
Maximum residual value guarantees		253.1			267.4
Mutually exclusive exposure (i)		(26.9	)		(29.0	)
Provisions and liabilities recorded		(137.0	)		(126.0	)

Off-balance sheet exposure		155.8			220.1

Estimated proceeds from financial guarantees and underlying assets		177.6			266.9

(i)

When an underlying asset is covered by mutually exclusive financial and residual value guarantees, the residual value guarantee may only be exercised if the financial guarantee has expired without having been exercised. On the other hand, if the financial guarantee is exercised, the residual value guarantee is automatically terminated.

This exposure is reduced by the fact that, to benefit from the guarantee, the counterparty must ensure that the aircraft complies with rigid conditions for its return.

35.4.

Insurance cover

The Company contracts different types of insurance policies to protect assets in the event of any accident that might cause significant losses. Policies are also contracted for risks subject to compulsory insurance, either legally or contractually.

The Company and its subsidiaries have civil liability insurance for their operations in Brazil and abroad, with coverage and conditions that management considers appropriate to the risks involved.

To cover substantial damage to assets and loss of earnings of its operations in Brazil and abroad, the Company has insured an amount of US$ 7.7 billion.