EMBRAER S.A. MATERIAL FACT

Rhea-AI Summary

On October 21, 2022, Embraer announced updates regarding Contracts 002/DCTA-COPAC/2014 with the Brazilian Federal Government. Negotiations led to amendments reducing the total KC-390 Millennium aircraft delivery from 22 to 19. The new amendments include a revised delivery schedule and adjusted contractual clauses, ensuring cash flow and economic viability of the project. Embraer reaffirmed its commitment to the KC-390's export potential and its long-standing partnership with the Brazilian Air Force, emphasizing the aircraft's unique innovations.

Positive

• Amendments secure cash flow and project viability for the KC-390 Millennium.
• Revised delivery schedule distributes the impact of aircraft reduction over time.
• Commitment to export potential highlighted, with three European nations already selected.

Negative

• Reduction in aircraft delivery from 22 to 19 may impact future revenue projections.

SÃO JOSÉ DOS CAMPOS, Brazil, Oct. 21, 2022 /PRNewswire/ -- Embraer S.A. ("Embraer" or "Company")  (B3: EMBR3, NYSE: ERJ) hereby updates the information disclosed on November 12, 2021, February 09, 2022, May 23, 2022, and August 9, 2022, regarding Contracts 002/DCTA-COPAC/2014 and 10/DCTA-COPAC/2014, entered into in 2014 amongst the Brazilian Federal Government, Embraer and one of its subsidiaries ("Contracts").

Embraer and the Brazilian Air Force engaged in negotiations on this subject, conducting a new negotiation process, which resulted, among other matters, in the execution of amendments to the Contracts in order to (i) reduce from 22 to 19 the total number of KC-390 Millennium aircraft to be delivered under the terms of the Contracts, definitively ending the possibility of unilateral reductions pursuant to the law; (ii) redefine and reschedule the delivery schedule, in order to distribute over time the effect of the reduction in the number of aircraft; and (iii) adjust contractual clauses in order to maintain the respective economic and financial balance.

The execution of the amendments successfully concludes the negotiations between the parties regarding the Contracts. The amendments to the Contracts preserve the Company's cash flow, ensure the economic and financial viability of the KC-390 Millennium project and do not change and do not compromise the Company's guidance for 2022.

Embraer reinforces its commitment to the KC-390/C-390 Millennium project, next-generation multi-mission aircraft, as well as its belief in the export potential of this product, which brings unique innovations in its category, and which has already been selected by three European nations.

Finally, Embraer reiterates its role as a strategic partner of the Brazilian Air Force in the development and implementation technological solutions and products of high added value, a partnership established for over 50 years.

São José dos Campos, October 21, 2022.

Antonio Carlos Garcia
Executive Vice President and Investor Relations

 

View original content:https://www.prnewswire.com/news-releases/embraer-sa-material-fact-301656098.html

SOURCE Embraer S.A.

FAQ

What updates did Embraer announce on October 21, 2022, regarding contract negotiations?

Embraer updated that negotiations resulted in amendments reducing KC-390 aircraft delivery from 22 to 19, with a revised delivery schedule.

How does the amendment to the KC-390 contracts affect Embraer's financial outlook?

The amendments preserve cash flow and maintain the project's economic viability, ensuring the company's 2022 guidance remains unchanged.

What is the significance of the KC-390 Millennium aircraft for Embraer?

The KC-390 is a next-generation multi-mission aircraft with unique innovations and strong export potential, having been selected by three European countries.

How does the recent contract amendment impact the number of KC-390 aircraft deliveries?

The total number of KC-390 aircraft deliveries has been reduced from 22 to 19, concluding the possibility of unilateral reductions in accordance with the law.