Business Context and Reporting Period
This Form 6-K filing by Embraer S.A. covers the month of June 2015. The report details a strategic commercial agreement announced on June 15, 2015, at the Paris Air Show, focusing on the company's E-Jet E2 program.
Key Financial Metrics and Order Activity
The filing does not provide specific revenue, profit, cash flow, margin, debt, or liquidity figures for the period. The primary financial metric disclosed is the expansion of the order backlog:
- Firm Order: 25 E-Jet E2 aircraft (15 E190-E2s and 10 E195-E2s).
- Purchase Rights: Additional 25 rights (15 E190-E2s and 10 E195-E2s), bringing the total potential order to 50 aircraft.
- Updated E-Jet E2 Backlog: 267 firm orders plus 373 options and purchase rights.
- Transaction Timing: Included in the 2015 second-quarter backlog.
Material Changes and Outlook
The material change is the addition of the Aircastle Holding Corporation Limited order to the backlog. Management commentary highlights the following:
- Delivery Schedule: Deliveries to Aircastle are scheduled to begin in 2018 for the E190-E2 and 2019 for the E195-E2, at a rate of roughly seven units per year through 2021.
- Program Milestones: The first E-Jet E2 (E190-E2) is planned for delivery in the first semester of 2018. The E195-E2 is scheduled to enter service in 2019, and the E175-E2 in 2020.
- Strategic Positioning: The order reinforces Embraer's leadership in the 70 to 130-seat segment and demonstrates strong market potential among leasing companies.
Risks and Contingencies
The filing includes a standard disclaimer regarding forward-looking statements. Risks include:
- General economic, political, and trade conditions in Brazil and global markets.
- Expectations of industry trends and the company's investment plans.
- Capacity to develop and deliver products on agreed dates.
- Existing and future governmental regulations.
Embraer notes that actual results may differ substantially from expectations due to these uncertainties.
Investor Verification Checklist
- Verify the inclusion of the 25-firm-order backlog in the official Q2 2015 financial results.
- Monitor the 2018 delivery timeline for the E190-E2 to ensure alignment with the Aircastle contract.
- Track the conversion rate of the 25 purchase rights into firm orders.
- Review subsequent filings for updates on the E195-E2 and E175-E2 service entry dates (2019 and 2020).