Business Context and Reporting Period
This Form 6-K filing by Embraer S.A. covers the period ending December 29, 2014. The report details a specific corporate development within the Embraer Executive Jets segment, focusing on a new agreement with NetJets Inc., a Berkshire Hathaway company and global leader in private aviation.
Key Financial Metrics
The filing does not provide comprehensive financial statements, revenue, profit, cash flow, margins, debt, or liquidity metrics for the reporting period. The only specific financial figure disclosed relates to the new order:
- New Order Value: US$89.55 million (at current list prices) for 10 Signature Series Phenom 300 aircraft.
- Backlog Impact: The value will be included in the fourth quarter of 2014 backlog.
- Total Deal Potential: The original October 2010 agreement (50 firm orders + 75 options) may exceed US$1 billion if all options are exercised.
Material Changes
The primary material change is the conversion of 10 purchase options into firm orders by NetJets. This action increases the firm order count for the Phenom 300 Signature Series. As of the filing date, Embraer had already delivered 36 Signature Series Phenom 300s to NetJets.
Outlook, Management Commentary, and Risks
Management Commentary: Marco Túlio Pellegrini, President & CEO of Embraer Executive Jets, stated that the addition reaffirms the success of the Signature Series Phenom 300 and the relationship with NetJets. He noted the aircraft has become the most delivered business aircraft in the fractional and corporate markets. NetJets Senior Vice President Chuck Suma described the aircraft as the fastest selling in their fleet.
Delivery Schedule: Deliveries of the 10 additional aircraft are scheduled to begin in January 2016.
Risks and Contingencies: The filing includes a standard disclaimer regarding forward-looking statements. Risks include general economic, political, and trade conditions in Brazil and other markets, industry trends, investment plans, capacity to deliver products on agreed dates, and governmental regulations. Actual results may differ substantially from expectations.
Investor Verification Checklist
- Verify the impact of the US$89.55 million order on the Q4 2014 backlog figures in the next quarterly report.
- Monitor the delivery schedule for the 10 aircraft, with the first expected in January 2016.
- Track the total number of Phenom 300 deliveries to NetJets to confirm the "most delivered business aircraft" claim.
- Review future filings for the exercise status of the remaining options in the original 2010 NetJets agreement.