Good afternoon, ladies and gentlemen and welcome to the audio conference call that will review Embraer’s Third Quarter 2015 Results. Thank you for standing by. This conference call is being held during the Embraer Day in New York with the presence of investors and market analysts. At this time, the company will present its third quarter 2015 results. Afterwards, we will conduct a question-and-answer session and instructions to participate will be given at that time. [Operator Instructions] As a reminder, this conference is being recorded and webcasted at www.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 subject to risks, 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, continues, anticipates, intends, expects 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. José Filippo, Chief Financial Officer and IRO; Mr. Eduardo Couto, Director of Investor Relations. I’ll now like to turn the conference over to Mr. José Filippo. Please go ahead, sir. José Filippo: Okay, thank you and good afternoon. And thanks for joining the Embraer third quarter 2015 earnings results. As…

Certainly, thank you. Our first question comes from the line of Darryl Genovesi from UBS. Please go ahead.

Hi, guys thanks for the time. Filippo, on the adjusted net income number that you provided, we are just backing out the deferred tax impact. It’s actually above the pre-tax income. So I guess that would imply a tax gain in the quarter. Is that a cash gain and is that something that sustainable for some reason? José Filippo: Basically, like - this is we have to take all the assets the not known monetary assets and they are referred in dollar terms. So when we take the Brazilian real, we have a gain - non-cash gain and we have to record income tax of that gain. This is a non-cash, deferred and the assumption is that those inventory returning to final good and sometime this would be sold and then the profitable comes. So that’s why actually it’s an anticipation of that, but this not a cash item, it’s just like a non-current income tax. I don’t know this exactly.

Well I guess what I am saying is that you know the adjusted number that you provide the $71.5 million compares to $59 million pre-tax on the income statement in your release. And so I guess I am just trying to reconcile why the adjusted number is higher than the - why the adjusted net income number is higher than the unadjusted profit before tax number? José Filippo: What we did is, only the adjustments for the deferred tax is just like a corporation to help be able to see without that effect, which we have the current income tax, which was early recorded that adjusted piece related to the deferred piece actually.

Okay. And then also can you quantify the adjustment at the defense business?

Can you repeat there?

Sure, you had in your press release you talked about a cost based revision for certain contracts and defense and security segment due to the negative impact of foreign exchange variation. Can you quantify that? José Filippo: Yes, it was $30 million in the third quarter accumulated $90 million in the year. The fact - the same effect of the currency, which we have to reset the contract and we make this adjustment every quarter when we have the evaluation normally; we used to do this every quarter. But one we had the evaluation like we had recently in recent quarters, this effect is higher. So for the third quarter it was $30 million and we have to accumulate in the three quarters of $90 million.

Great. Thanks very much.

Thank you. The following question comes from the line of Josh Milberg from Morgan Stanley. Please go ahead, sir.

Good afternoon everyone and thanks very much for the call. I had a couple questions on the commercial division. The first one is just if you could update us on how you’re seeing the 2016 outlook for deliveries and for mix. Also just what’s how is your visibility on next year and with the firm backlog as it stands is it reasonable to expect that we could have a similar level of deliveries next year? I don’t know what you can say maybe that’s not something you are ready to comment on?

Sure, glad to answer. We are totally sold out of course for 2015. So always of course customer finance things to be finished but we do not see any risk at this stage for the guidance that we have provided. So it looks really, really solid. Same thing probably for next year, I think as we mentioned in the last quarter, we felt comfortable, we are feeling increasingly comfortable with at least maintaining the current level of production revenues in that market. Of course, we can give them more color early next year. But with this recent sales last year I mean 2014 was a very strong year in sales and 2015 again so that really gives us a very comfortable position the years ahead.

Okay, that’s great. And the other thing is just with respect to your residual value guarantees and whether the level of provisioning we saw in the third quarter is what we could expect going forward. And also just if there is anything else relevant to highlight on that particular issue?

Yes, that’s an important question, thank you. Recently there has been a revision by all the appraisers, the whole industry. And in general there is a reduction of expected values over time, commercial airplanes in general. So it is possible that we have an impairment in the fourth quarter. We estimated this phase something in the range of $30 million, so it’s definitely which is possible and that would be - if that is confirmed will give downside risks to our guidance, but that’s still to be confirmed.

Okay, great. I appreciate that.

Okay, I would like to put on a hold the questions remote just to give the chance for people inside here to ask question.

Could you touch on the margins by segment and also in terms of the non-recurring FX charges in defense of about $90 million year-to-date, obviously presuming those don’t recur into next year. What’s the outlook for defense from here? We kind of bouncing around the bottom kind of in a breakeven situation and you obtain the cost to keep it there?

Yes, just to give the EBIT margin breakdown by business. We had third quarter commercial aviation 12%, Business Jets around 5% and defense and security negative 11%. So the consolidated margin was 6.6%. José Filippo: Yes, the defense Myles as we said, this impact of the exchange rate are negative there. We have to do this every quarter and this is not a first time we do in this year, because we saw that the currency in Brazil has been losing especially with higher rates. But if that come stays stable in the fourth quarter, we shouldn’t see this in the next quarter. This is too much exposed to this effect so this is basically the reason why the defense business had negative margin.

If I may add Myles, so got your question completely. That business was hit by two major I would say trucks, we ran over by two major trucks this year are impacted by the currency 50%, that’s specifically the Brazilian dominated revenues 50% evaluation in the year, 28% alone in the last quarter. So that goes from the topline and of course everything downwards. But also the financial problems with our main customer in defense which is the Brazilian government, which they have cash issue. So that impacted our cash flow and also our revenue. So 2015, I think a good way to look at, what happened is an adjustments. I think we are now at a different level. There is a step function downwards as part of the size of the programs at KC-390 as we have already developed has been delayed by a year. They had some other programs and also they have been well adapted to the new reality of the ability of the government to pay us on time, maybe not planning to fund those programs on our own. So we preferred to adjust it to the capacity of the real capacity in terms date. So, it’s a year of transition. I think Jose will go into more details in his presentation, but I think he did a great job in rapidly adjusting the business to the new reality. What I expect for next year in defense is something of a similar level as part of activity. Maybe some upsides of course there is increasing activity in exports, but certainly a return to profitability hopefully to the levels where we were before, so that's the kind of a macro-vision. Or by the way if I may add just anticipating maybe a question about the KC-390 I heard some question about, well why did you take so long between the first and the second flight and the answer is that well that coincide with that of course there is whole commercial discussion about the new phase of the program so what’s strategically what we decided was - the two things. One, to go and do all the ground test in the airplane agilities and other was to have a full layout of the airplane to the state-of-the-art to large engineering design. So that we will significantly increase the efficiency of our flight test campaign. So from now on we are going to see the airplane is flying much, much more than in the last several months.

And it looks like the fourth quarter, there is going to be a really strong cash flow quarter for you to hit your guidance? Can you talk about the puts and takes there, is that lower development expense because of the real or you expecting cash advances or other puts and takes that they are going to lead to fairly strong quarter year-over-year? José Filippo: In some quarter of course due to the seasonality of the business brings this has a fourth quarter as the strong quarter, but regarding investments, that’s correct to your point. We had early this year contributions from department that reduce some of this. We don’t expect to see that mostly now in the end of the year. Also engineering was the major piece of investment and until then now we are entering the phase of more certification and other test that brings more or like dollar denominated cost so we expect to see this increasing, but that are not probably to meet the levels that we expected before. I think we end up the year with the better position in terms of cash consumption without attracting any of the schedule. The program is on schedule completely as expected and going forward that’s what we expect.

I think to your point we will see a reduction in inventories so that’s been on the cash and the activity of course all the income from the delivery so is that two-fold, more delivers cash inflow and reduction in inventories. I think that’s a major contribution for the cash flow in the fourth quarter.

Great, this is Derek Spronck at RBC. Have you changed your hedging policy at all?

No, we do hedge, all the balance sheet is hedged all the time, our cash flow hedging position around the policy still established and we do this every year. So we are now in the process of contracting the 2016 hedging for the cash flow position. So we didn’t change our hedging position.

If the reais stays at current levels with the defense division going forward on a quarterly basis than be producing positive gross margins. José Filippo: Yes, it tend to be positive, because most of the effect was the adjustment on the currency so as we have the problem stabilize in terms of currency impact it tends to be a profitable and returning margins.

Okay, and just one more quickly. Your reduction in SG&A, could you break that out between how much of it was FX related versus the cost controls that you’ve implemented?

I don’t think we have this number available at this point, we can make some - we would inform you later. José Filippo: Yes, one thing I think we can say now is that when we control that’s currency, increase in reais and we are below budgets in both currencies so we are also being linier in reais, it’s not 100% currency, that much you can say. Do you have specific cost reduction programs that you are implementing? You bet.

Yes, thank you Jose. So this year you got hot shot because of the big decline in the real in terms of your cost color, I think it’s around 340, can you tell us kind of preliminarily what kind of a range or cost on the cost color of the FX you would anticipate for next year or at least you approach to that issue? José Filippo: If we stay in this level of the currency, maybe it should see in a different way. We just keep on the 25% of the cost associated to the real denominated. So this is the benefit that we have, with part of this benefit of course goes into the deferred assets which is development of the programs and hard to go into the cost, but we have to take into account that to benefit from that, this cost as we go through the inventory and then when we deliver that we capture. There is a delay about two or three months to have full capture of this effect. But going forward maybe we should think that currency shouldn’t be increasing that much. We expect to see this more stable. What we saw this year was more a volatile approach from the currency. So we still put into benefit, because we are not increasing the costs. So we are keeping, retaining this in dollar terms of the piece of the real cost that we have.

If I may add Filippo. You are asking about the hedge. There is a labor cost– we already have a zero cost color in place for next year. José Filippo: We are starting to do and then what we have been doing so far is we have a cap of about R$ 6 and the floor about R$3.4, R$3.5, that’s working.

Terrific. Thank you.

Thank you. Good afternoon, gentlemen. Steve Trent from Citi. Just two questions for me if I may. I noticed in the quarter, if you look at covering and non-covering receivables. In 3Q there was a small sequential decline versus 2Q, which I thought was intriguing. And when you dig into that number is there any sense you can give us is to whether the flow from the Brazilian government was in line with your expectations or below or above or receivables turnover was much stronger at particular area than you had anticipated? José Filippo: Yes, what we’ve been - as Fred mentioned we already review that contract especially the [indiscernible] which was something that led us to increase this accounts receivables. We currently are experienced to the balanced situation where the expenses are the same what we - revenues are related to the payments so we’ve keep seeing that. The evaluation is primarily due to some exchange evaluation effect on some part of the local currency, but basically we are continuing to receive what will be in expense.

Okay. Got it, thank you. And just one other general question when you look at your campaigns for commercial aircraft and as the people are - other companies are showing up in these RFPs, what are you seeing in the competitive environment more of Mitsubishi and less of other competitors, if you can give us a sense or two what that looks like?

Sure, Steve. I’d be we glad to - if we separate into two different markets artificially in the regional like 785 - markets typically regional exceed their margins and the main line markets. So, well currently in every campaign that we have, we have ourselves, we see Mitsubishi and we see of course Bombardier there. We have been successful in especially faster the enhancements to our E175 which we introduced last year have been successfully in ceasing all the opportunities or almost all the opportunities which are there. So I think on that front if you are very comfortable and on the mainline side E190, E195, we have less of a concentrated demand with their several campaigns out there, we just mentioned two undisclosed orders, which are not the United States. And we finally add one that's one possible positive prospective of course it’s something, which is ways from being a reality but can happen is major airlines in the U.S. discuss with their pilots and possibly flying 100 seaters at main line levels. So if that happened of course that’s a plus to everything that we're doing. So between the E2, the E1, the E2 which is on time by the way absolutely on time you saw the picture and Paulo will go into details. The issue that we are covering from the 70 to 130 seat market pretty well and comfortable being the dominating player there.

Okay very helpful. Thank you.

Thank you. José Filippo: Let’s take the two rounds question here and so we will be ready to cut this part of the event and continue the presentation.

Thank you, I guess my question is on next year, on the commercial aviation segment, obviously you have the skyline pretty much filled up for the years you know where the pricing is going to be and real is going to be a tailwind here as well. Is it fair to assume we can see a decent increase in margins next year for the commercial aviation segment?

It was possible, we will see where the currency stay of course, let’s say it stays at level four that’s a tailwind for us. So everything we are doing is to keep, maybe if we go back probably two years ago when we said that we’re seeing at that time the mix of aircraft E190 and E195 versus E175 which historically depends to have a lower margin. We saw the mix changing significantly over the next several years, but we though it could have resilience in the holding maybe not exact same margin, but kind of a low double-digit margins and I think we demonstrated that in the last 18, 24 months. So this pretty much the story so yes, the exchange rate helps in that, yes, the valuation of larger contracts right now at the same configuration that helps more SKU, diluted more fixed costs so it’s a good momentum in that sense.

So there is nothing in the pricing that should be extremely worrisome for them.

No there is pricing pressure, we are seeing pricing pressure. There is one compared to in particular have been very, very aggressive in both commercial and Executive Jets segments and of course to say that this is really relevant, not sure I mean it is relevant so we have to react to that. And we have maybe - we are feeling that there is a little bit more in the Executive Jets segments. On the commercial we have been able to really sustain the value of the every products will differentiates itself and help us to sustain a healthier price and therefore the margin, but on the cost side relentless efforts.

Thank you.

That does conclude Embraer’s audio conference for today. Thank you very much for participation. Have a good day.