Good morning, ladies and gentlemen, and welcome to the audio conference call that will review Embraer’s Second Quarter 2013 Results. Thank you for standing by. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instruction to participate will be given at that time. (Operator instructions) As a reminder, this conference call is being recorded and webcasted at ri.embraer.com.br. This conference call includes forward-looking statements, or statements about events or circumstances, which have not occurred. Embraer has based these forward-looking statements largely on its current expectations and projections about future events and financial trends affecting the business and its future financial performance. These forward-looking statements are subjected to risks and uncertainties and assumptions, including, among other things, general economic, political, and business conditions in Brazil and in other markets where the Company is present. The words believe, may, will, estimate, continue, anticipate, intend, expect, and similar words are intended to identify forward-looking statements. Embraer undertakes no obligation to update publicly or revise any forward-looking statements because of new information, future events, or other factors. In light of these risks and uncertainties, the forward-looking events and circumstances discussed on this conference call might not occur. The Company’s actual results could differ substantially from those anticipated in the forward-looking statements. Participants on today’s conference call are Mr. Frederico Curado, President and CEO; Mr. Jose Filippo, Chief Financial Officer and IRO; Ms. Elaine Funo, Director, Tax Accounting; Andre Gualda, Controller and Mr. Luciano Froes, Director of Investor Relations. I would now like to turn the conference over to Mr. Frederico Curado. Please go ahead, sir.

Thank you and good morning, all. This quarter came very much in line with our planning as far as the operation with the company. As everybody is aware we did have a strong devaluation of Brazil’s currency during this quarter and that’s in accordance with ISRS that creates the needs for a prevision on income tax related to our non-monetary assets. Which is the non-cash advance of that turned to all of our operating profits and to enhance loss in the quarter. And then Filippo here obviously our full years plan of course business affecting more details during our conference. So I’ll ask Filippo to go through our presentation and later on I’ll be back with the rest of the team for Q&A. Thank you.

Okay. Thank you, Fred. We’ll go through the presentation and then we’ll open for the questions. So starting on page 3, with the corporate highlights we have this quarter one important milestone in the company’s history was the launch of the E2 E-Jet program following the early this year announcements of contacting major suppliers so we’re able to launch and during the inquiries are slow in June. And we’ll go to some highlights of the commercial things of these aircraft in the commercial base. So here is this important milestone and then the launch followed by an important upgrade that we just did in terms of returning posts, credit rating, the rating from triple B minus to triple B. With the highlights for the recent commercial orders the business certification and rationale seasonality. This was an important recognition with the neutral trend. Important for also for corporate highlights the Embraer’s recent recognition from major magazines and institutions we were awarded by the company of the year from Brazilian magazine. As well as maintaining our position in the one of the best companies to work in Latin American fold a great place to work. As well as awarding from the Brazilian National Conference in the CME CNI National Innovation Award. Next page in terms of highlights in Commercial Aviation business. We delivered in the quarter 22 aircraft. Improving quantity compared to the first quarter and we have currently year-to-date with 39 aircraft delivered. And important also orders for the current generation of the E-Jet the United Alliance order of 30 aircrafts with a launch for additional 40. Also we had the (inaudible) revenues we have an order for seven together with SkyWest we signed a 40 E-175 jet plus 60 with consumables and also options for additional 100. This is expected…

(Operator Instructions) Our first quarter comes from Joe Nadolb with JPMorgan. Please go ahead with your question. Joe Nadolb – JPMorgan: Thanks good morning.

Good morning Joe. Joe Nadolb – JPMorgan: My first question is just on the income statement the other operating expense line I understand that you had liquidated to damage this last year that offset expense. But – you could have an $18 or $19 million expense each quarter so far this year what is the run rate their without items.

Joe what we had here of course you got the comparison for the previous year that we had a positive effect last year. But we had mainly here was the discontinuing some engineering projects. And also some adjustments in the improvement of using their freight. But basically we understand that this year what we have is like at the normal level of other expenses here basically these two items on this line. Joe Nadolb – JPMorgan: No in the first quarter you had a provision I think of $9 or $10 million in that line item. So my expectation was that the expense would come down quite a bit because of that provision going away is that not going to be the case going forward?

No, no that provision that we had was related to labor – labor disputes. This is its only here we are not expected to see any of these going forward. Joe Nadolb – JPMorgan: Right now I understand that I’m just trying to get, understand the normal level of that line because you had provision in the first quarter it went away but the expense did not go down. So is the normal level $10 million or $20 per quarter.

Joe this Luciano if I may add here so also in the first quarter you have still to back to Filippo’s point as well a higher level cancellation fees roughly around $6 million or so of more CapEx beat again some of that belt of the provision is taken away by that lower cancellation in the second quarter. Number one, number two going forward this is an expense line so typically you will see in that low double-digit digit range, mid-teen’s range let’s say for the – for expenses going forward. So for modeling purposes that’s what I would say you should be. Joe Nadolb – JPMorgan: Okay, okay that’s helpful. Then second question any update on the corporate jet businesses on demand in general and then also on the certification process for the legacy 500 how’s that going?

Joe this is Fred on the certification we’re about half of the campaign through so we – we feel very comfortable about our target of entering to (inaudible) by mid next year of the Legacy 500 and one year after that for that the 450 which we’re already in assembling the first products line. So we don’t track no showstopper in our force we learned a lot with all the slide by wire problems which made this of course delay this program by year. So no revenue, we feel much more comfortable where we are. And so far the company is going well the airplane is just flying well. The all dynamic configuration serves pretty much confront and we’re optimistic about the primary results of not only certification but the success of this product in the market. It will be in our point of view another, another income if you will. As far as the market we see on the low end that’s in the Phenom category its being the same story over and that (inaudible) dispute in market we are competing relatively well there. We feel comfortable about meeting our guidance numbers there. We see some softening on the upper range and the Legacy 550 markets on this higher end business jet market. So we also have challenges there at this stage what I would say that we’re currently doing more towards the lower end of our guidance than a higher end. But we we’re still confident that there can be down number so it’s important to say that if you compare where we are vis-à-vis last year we’re actually little bit better than we were last year. Although we do have challenges which and these are our numbers and we’re working hard to do that. Joe Nadolb – JPMorgan: Right just on the softening you’re seeing in the 650 category is that do you think that’s competitive because there’s new aircraft coming into the market or do you think that is just the market overall that’s getting weaker.

Good question I think it’s a – it maybe a preliminary but we see a market softening not competitive. But its early, it’s a bit early to tell but some signs of – not talking about of course the growth the 650 all we have that’s very resilient but this upper mid-sized segment large cabin in our point of view it’s kind of a minority early symptoms of maybe some softening all together. Joe Nadolb – JPMorgan: And geographically is that outside of the U.S. mostly in?

I would not know Joe we can give you any results business jet guys – Joe Nadolb – JPMorgan: Alright. Thank you.

Our next question comes with Peter Skibitski with Drexel Hamilton. Please go ahead with your question. Peter Skibitski – Drexel Hamilton: Good morning guys. I just want to – on the spike in research this quarter you mentioned that was sort of the due to the E2 introduction or launch. I just wanted – and I know you can’t research the guidance and tax for the year at $100 million but should we expect the research line to climb meaningfully now that if you are assuming into expenses will now be capitalized per IFRS?

Hi Peter. You’re correct the expenses tend to be capitalized but they were not that high so it was just like starting some of these current expenses so has it increased now is going to be capitalized, so it’s not going to something that we already experiencing too much, it’s going to be changing the line in terms of being capitalized, so it depends, investment impact would be the projection because of these effects Peter Skibitski – Drexel Hamilton: I see I understand, okay. So just in terms of the margin ramp the rest of the year, should we assume margin rate is, margin expense sequentially in the third quarter and then we get another larger spike in the fourth quarter is that kind of the profile that you are anticipating.

Yes. Hi, Pete, so I would say roughly speaking of course probably going to be more backend motive so Q4 particularly, we don’t see margins pressure in Q3 necessarily but again the spike more turning more towards the backend of the year really in Q4, Peter Skibitski – Drexel Hamilton: Understand, okay, thanks. And then I guess may be the last one given the commercial order flow in the quarter, I know you kept the guidance for this year in terms of commercial deliveries intact, for the record have you start your delivery rates for commercial you have for 2014, you have view the profile there and then may be in 2015 as well, 2015 sold out at this point, can you give us some color on that.

I mean we are the best region we have at this stage is a stable production rates for the next few years, 2015 of course a little bit out so there may be some upside there if you have like 18 months to select ramp future, it can be deliverable in 2015 so talking about 2014 and I think most likely scenario like stale production rate bit different mix of course because there will be more contains of 175 rather than 190s due to this campaign in United States but that’s the best we can see now. Peter Skibitski – Drexel Hamilton: Okay, thanks very much.

Thank you.

Our next question comes from Kiran Kotwal, with Deutsche Bank Securities, Inc. Please go ahead with your question.

Kiran, your line is open, could you transfer your mute button Kiran Kotwal – Deutsche Bank Securities, Inc.: Good morning, could you hear me now?

Yeah, we can hear you. Kiran Kotwal – Deutsche Bank Securities, Inc.: Great, thank you. So I guess my first question along the line of US (inaudible) here within the US is that helping you with sales campaigns in other countries and in which you may be some more traction there on that product.

We expect so, of course the cycles in defense business are pretty long and of course you also aware we are very early stage the LES so we will not see aircrafts actually been physically built in just here say another six to eight months. As I think with the deliver aircraft to the US air force and of course the aircraft going to service, our expectation is yes this seal of credibility on the product will help us out, it’s somewhat subjective and we have been – we don’t see like a short- term immediately action but I think it’s very strong endorsement for the program in the mid and long run. Kiran Kotwal – Deutsche Bank Securities, Inc.: Great, and if I were just ask one more Fred on the numbers here, you talked about the stable production rate next year in 2014 and you also said there are going to be more 170s and obviously a lot of those are from the US ad campaigns here, does that mean that margins are going to have a bit of tough time next year just based on all those different things.

Well, on the pricing side obviously we will have pressure coming from of course a smaller aircraft so the top line is a smaller on each unit and as we all know large campaigns they put pressure on our pricing and on the cost side we are working very hard such cost to maintain our margin stands obviously some tailoring are important such as the currency evaluation in Brazil, so the guidance we talked about margins but on the pricing side for sure it’s going to be a challenge because of the nature of the mix on the aircraft Kiran Kotwal – Deutsche Bank Securities, Inc.: Great, thank you very much.

Our next question comes from Noah Poponak with Goldman Sachs. Please go ahead with your question. Noah Poponak – Goldman Sachs: Hi, good morning everybody.

Good morning, Noah. Noah Poponak – Goldman Sachs: Fred, I wanted to go back to the business debt market and I know you already asked about it but hoping a little bit more color in the slog or the late end of things I mean your main competitor has taken production down 20%-25% from where they basically started this year and you are essentially not changing, it is a pretty big variant, do you feel like you are taking share back or just the market is so volatile that it’s almost random or is it something else.

No, I think definitely more we are taking some share, let’s keep in mind that this year probably the first year where we do not have beach craft delivering aircraft in that segment and I think it’s fair to say that we are probably taking most of that let say anti space, we had little bit study 1C (inaudible) in first half in our guidance between 80 and 90 so yeah it’s little below 40%. We have a very busy first quarter and again last year we were – the outlook for the year was even more challenging than that this year. So I am not underestimating the challenges but we still believe and strongly believe it is global again more may be probably towards the lower end of the guidance and the fact is clearly 303, 100 is clearly the best in class in, and its great success, so it is the aircraft which is leading the sale in the segment with staging most of the market status segment, so I think it’s very due to the quality of 303, 200, 100 as well but it is smaller market demand so 300 is really the driver here. Noah Poponak – Goldman Sachs: Okay, and then on your larger aircraft or the super mid I know you are just asked how which geographies you are seeing a little bit more softness and you couldn’t you sort of hard to tell but what makes you say you are seeing that, is that just a quarter towards softness on your aircraft specifically or you are looking at market wide pricing activity or inventory level or what drives to say you are seeing some softness there.

We recently our side a stronger demand last year on the for example on China than we are seeing this year. The US was too in the labor activity particular case in the US is more us than be the market so we have to capture little bit more market share in the United States that’s we probably underperforming compared to our sales in other regions and but there are some reports that of course we follow specialize with the people who are tracking the market and again I do not have this specifics with me but all reports they suggest there is some softening there. Talking about broadly Noah, if you look at the control panel everything looks good, there are some clouds ahead in the worldwide economic horizon we think and we see that so the question is how this turbulence we were how far it is from where we are, they are going to happen or not so the softening of China, Brazil is going down for sure, Europe now stabilizing so I think there is an overall macro economical I’d say concern or at least awareness that there are some maybe some bumps ahead. And the executive jet segments is very, very [sustentative] to that. So reception there creates an immediate reaction but having said all that we have, we have a challenge there we have delivered 10 airplanes out of that kind of a change I would say best realize our major challenge is to find another 15 aircraft to be delivered being again fast forward with high activity and this favors to stimulated to your book. Noah Poponak – Goldman Sachs: I appreciate the market color thanks.

Thank you.

Our next question comes from Myles Walton of Deutsche Bank. Please go ahead with your question. Myles Walton – Deutsche Bank: Thanks good morning. Hey Fred on a high level can you talk more about the defense environment particularly in Latin America and particularly on some of the larger contracts that are relevant to you. Is there a slowdown in contracting activities there, any type of pullback from some of the larger initiatives that they have started with respected to [Tucson and Fiscot]. And also on to [fixed cost] and the FX program could you give us a timeline of what do you see today?

That’s true, sure Myles. We are I mean we have accumulated a strong backlog so we, we have a strong execution of challenge in our programs. And your questions is more towards the more the new programs. I think it is undeniable that the deal has now some budget challenges in the country. You may or may not have read about just on the recent cut on 2013’s budget. And would be my extreme imagine that those goods and what are accounts for ‘14 will not affect the fast budget. So we feel on one side comfortable that the existing programs will be cast and would be maintained at their presence of course and that of course we have the stronger execution challenge. It’s I think it’s a last evidenced what’s going to happen to the new large defense contract in Brazil. So see to get it’s in our (inaudible) strategy it’s also a large dollar amount but not a pressure on the budget so at this stage – it’s hard to predict whether or not that’s going to happen but I think it’s less likely than it was a few months ago and our SGSM project of outlook for the (inaudible). FX, the FX tool its well falls in the same, in the same basket but it’s hard to, it’s hard to maybe it’s a more it can be different because there is an operational means for the Brazilian air force I mean we just have to sometime in the future they have to renew their fighter fleets which is – So I’m not sure the FX can be all analyzed through this spectrum of budget but also strategically for the Brazil (inaudible) fast. So maybe that’s the best reason I can give at this rate (inaudible). Myles Walton – Deutsche Bank: Okay and then one quick one I think net jets was a big contributor this year to differencing your business deliveries (inaudible) competition as you look to next year is that buyers profile deliveries a headwind or tailwind or neutral?

No I don’t see jets as far as quantities has been that much relevant this year. Next year I think you have probably I mean (inaudible) as far as I remember we could have more delivered next year than this year for net jets. Myles Walton – Deutsche Bank: Okay great thanks again.

Thank you.

Our next question comes from Ron Epstein with Merrill Lynch. Please go ahead with your question. Ronald Epstein – Bank of America Merrill Lynch: Yeah hey good morning. So – just a follow-up on (inaudible) question at a broader sense given all their recent (inaudible) have you seen any, any impact at all in terms of your labor force or impact on the business maybe just broadly speaking.

In general not at all we the protests in Brazil they were against last year with the (inaudible) of overall social issues such as healthcare, such as transportation, security and large urban transportation and it’s more like towards criticizing politicians and legal parties and I would say the main institutions. Companies in general there were not affected by that and in particularly in Embraer we felt absolutely affect in that regard. Ronald Epstein – Bank of America Merrill Lynch: Okay. And maybe it wasn’t back aerospace stuff now when we think about now and the rest of the year how are they campaigns going when you think of everybody knows that there is an act to form with ego right now but what else is going on around the world when we think about campaigns either you know the updated current generation 170’s and 190’s and then the E2 family?

Ron as you know there was a strong concentration of orders announced in Paris something around 1000 we got 1100 aircraft something of that order of magnitude most of those airplanes were in metal body and regional aircraft. So there is a natural hangover of the post ferries so I don’t think we should expect major orders announced by anybody in the very short term. You asked is there probably this is the brightest prospect for the industry at this stage and over the profit of the airlines there this year because we projected around $4.5 for the prior consolidation the positive consolidation outcome in the industries realization towards the personnel bringing out opportunities for us – we’re just adding the first wave of how to renew the regional fleet. Let me talk about Europe, relative to giving the network carriers had a very hard time as you know for the best reflecting volume for the natural carriers for the flight carrier there’s the classic one. We are on site the income opportunities on the eastern part of Europe the recent substitution Russia for the 190, 195 hoping that possibility there for the region and in that region I think we have something like eight plus meter of this settle to nine but the run rate customers. So we have some extension there. With some activity growing it’s been quite for a while some night’s resumption of discussions. As we could kind of favor but we have – maybe just matching one example we are initiating the business model try outs with the couple of 190 (inaudible) which the short term lease from one of our last source replicate is that it’s almost like as I said the play out that the business models so that hopefully opens up a…

Sure. We have, I mean we are in the middle of the massive delivery of drawings, release of drawings from engineering to production. So we are, I do not have specific numbers but we are pretty much on schedule as far as the production of drawings. It’s important to say that the way we have set up the program we are releasing let’s say the most complicated parts. I am talking about for example spars and rigs and rigs also for both wings and through the [largest], so it’s going pretty much as planned. We probably will start building a prototype, I would say around early next year, for – maybe we’ll start even, maybe later this year or next year and everything tells us that flight, the first flight is doable before the year-end of 2014, before 18 months from now approximately. So as far as the cash flow, the government is also on schedule so we have no delays in payments. And as I told Noah, we expect the existing programs to be protected by any business – I mean any budget restriction that might affect the defense business in Brazil. So I think if there are some constrains it will be more towards the new programs rather than any existing programs. Ronald Epstein – Bank of America Merrill Lynch: Great, super, thank you.

Thank you.

Our next question comes from Stephen Trent of Citi. Please go ahead with your question Connie Kaznikov – Citi: Good morning. It is Connie Kaznikov on the behalf of Stephen Trent.

Good morning Connie Kaznikov – Citi: Good morning. Just a couple questions now. When should we think of firm order as a firm order when the contract is signed and the customers prove they have the financing and they put on a deposit? We were just a little bit confused about some news that came out recently saying that Republic airways only recently received financing for that order that they got, that had announced in January. Was there something different about that announcement? Is the underlying – company’s still operating under bankruptcy protection?

I am not sure I understand you, you are talking about Republic or somebody else Connie Kaznikov – Citi: Republic airways.

Yeah, well they are not that… Connie Kaznikov – Citi: Excuse me

Well, we are absolutely following our procedure, since I mean since I have for the last at least 15 years, here the [multiple speakers] difference or this is – if you ask for Republic what was recently announced I am not sure I am answering question but what recently announced was that Republic assured financing for the 47 aircraft, but it is not confirmed. Commercially it was absolutely fine between Embraer and Republic since January or February when we announced it. Connie Kaznikov – Citi: Okay so they have put a deposit at that point on

Oh, yeah, absolutely. Okay, (inaudible) not a considered firm. Connie Kaznikov – Citi: Okay, thank you. And just one more follow up now over the long-term what expense do you think Embraer plans to continue acting as aircraft lessor do you believe that the driver behind KLM Cityhopper’s decision to lease, E-190 instead of purchasing them, what do you think? Is that something that you plan on kind of integrating in your model further or…?

No, we are – that’s an important question. We have been focusing, clearly in expanding our customer base also through leasing companies. As you know leasing companies are fundamentally working with Boeing and Airbus airplanes only expect of course for some specific examples, but fundamentally the leasing industry works with Boeing and Airbus products. And we see that as a very important distribution channel and for the last two or three years we’ve been focusing a lot in expanding our customer base and opening up new lessors, not of course to have an enormous number of lessors but having some important ones, as we – as we have succeeded. So having a large customer base as we have now reached 67 customers, that attracts lessors. So down the road we see a combination of direct sales and the participation of lessors. So if you look at Boeing and Airbus they probably have something between 25%, 30%-35% of their backlog to lessors. We are not at that level. We are probably around 16% to 20%. We kind of see as a healthy strategy down the road. Connie Kaznikov – Citi: Thank you that was very helpful.

Thank you.

Our next question comes from Eduardo Couto with Morgan Stanley. Please go ahead with your question. Eduardo Couto – Morgan Stanley: Hi, good morning guys. Just one question from my side. On the currency side, we had this 10% depreciation on the P&L, since the beginning of the year. Can you give us some color on when can we start to see the weaker currency reading back from the results of the company, just some color on that.

Yeah Eduardo, good morning. Actually as you know the devaluation only affects the costs which is positive and it has to go, to follow the flow through the production and then to the delivery. So we expect to see that effect going forward, sometimes till this year definitely but not in the very short term. The rest of the time, as you know natural damage in the orders there’s a negative impact because of the accounting method, of the disclosed income tax. The benefit on the cost and the margin would come forward. So probably more towards the end of year. Eduardo Couto – Morgan Stanley: So we can say that’s your cost on the second quarter, they are pretty much based on like a two reais per dollar BRL?

Yeah, definitely. Eduardo Couto – Morgan Stanley: That’s great.

Yeah, it was a little bit more, no. At the

2.1 maybe, 2.25…

It was a little bit more, at the end of the first quarter we had more – so little more than two reais. But this level that we’re having today was not affecting the second quarter. Eduardo Couto – Morgan Stanley: Okay thank you.

Our next question comes from Bruno Amorim with Banco Santander. Please go ahead with your question. Bruno Amorim – Banco Santander: Yes, hi good morning. Just a follow-up on the previous question. The Brazilian real has depreciated significantly since the beginning of the year when you provided the market with an EBIT margin guidance of a margin between 9% and 9.5%. Don’t you see upside raise to this guidance given the move we saw in FX, thank you?

No Bruno actually we’re still maintaining the range. As we indicated there are some challenges of course in the business activity and so it’s part of the whole impact in the year. So the margin between 9% to 9.5% as we indicated that probably now we foresee more in the low end of the range. So the exchange rate will be part of this projection that we have. So we don’t see that as an upside risk at this moment, at least at this moment. Bruno Amorim – Banco Santander: Okay and could you please try to clarify what is the parts that is pressuring margins.

It’s more in the delivery chain. Bruno Amorim – Banco Santander: Okay.

On the revenue…

On the revenue side. Bruno Amorim – Banco Santander: Okay it’s more about number of deliveries or prices?

It’s more of volume delivered. Bruno Amorim – Banco Santander: Okay thank you very much.

I’m not showing any other questions in the queue. I should turn it back over for closing comments at this time.

Thank you all for your taking consideration and be interested to see you in the next earnings call. Thank you and have a nice day, have a nice weekend.

Thank you. This concludes today’s question and answer session. And this concludes Embraer’s conference call for today. Thank you very much for your participation and have a good day.