Investor Presentaiton

strategic structures. Both compose the Tepro Consortium, in charge of implementing the Integrated Border Monitoring System (Sisfron, in Portuguese) in Brazil. Sisfron comprises a border area of 800 km in the state of Mato Grosso do Sul. By 2016, 70% of the project had already been executed. Visiona Tecnologia Espacial is a joint venture formed between Embraer and Telebras with the objective of acting in the integration of the sys- tem of Strategic Defense and Communications Geostationary Satellite (SGDC, in Portuguese) of the Brazilian Government. Scheduled to be launched at French Guiana in the first semester of 2017, the SGDC aims to meet the country's satellite communications needs, including the National Program (PNBL) and a broad spectrum of strategies. The Gripen Design Development Network (GDDN) in Gavião Peixoto, Brazil, also began operations this year, established for the devel- opment of the Gripen NG in Brazil, in partnership with the Swedish company SAAB. Embraer Defense & Security and SAAB will conduct the full development of the two-seat version of the fighter. Between 2019 and 2024, 36 Gripen NG fighters will be delivered to the Bra- zilian Air Force (FAB, in Portuguese). [G4-13| Gold Medal in Defense & Security In 2016, Rio de Janeiro hosted the Olympic and Paralympic Games, and nearly 2.5 million people passed through Tom Jobim International Airport. Embraer Defense & Security companies - Atech, Visiona Tecnologia Espacial, Savis and Bradar - worked in partnership with the Brazilian Government and contributed to the above-average safety compliance indices, as measured by the Ministry of Transportation. - Atech which incorporated the activities of Embraer Systems in 2016 - offered the Integrated Air Traffic Management System (SIGMA, in Portuguese), which provides airspace usage planning, and the Advanced Air Traffic Information Management System and Reports of Operational Interest (SAGITARIO, in Portuguese), which simplifies airspace management, previously planned with SIGMA. Visiona, in partnership with five other companies, carried out a monitoring pilot project by capturing high and very high resolution images, even under adverse climatic conditions. During the football matches held in Brasília, the nation's capital, with the support of Savis and Bradar, the army relied on a 4G/LTE (700MHz) mobile broadband network with a more reliable connection, without oscillations or interference. In Rio de Janeiro, the company also made available the Airborne Monitoring Sensor Based on Radio-Frequency Emission (SABER M60, in Portuguese), which assisted the Brazilian Aerospace Defense System (SISDABRA, in Portuguese) in protecting the Games' governmental and sports facilities. Agricultural Aviation Embraer's Ipanema aircraft is the leader in the Brazilian agricultural aviation market, with 75% market share and more than 1,300 units sold. The product has been manufactured for 50 years, without interruption, focusing on market trends and customer needs. This is the world's first airplane to be certified to fly with 100% ethanol for fuel. Learn more at www.embraeragricola.com.br KC-390: THE LARGEST AIRCRAFT DESIGNED AND MANUFACTURED IN BRAZIL KC-390 A-29 SUPER TUCANO SPECIAL MISSIONS INTELLIGENCE SURVEILLANCE AND RECONNAISSANCE (ISR) Tucano SERVICES AND SUPPORT: - Maintenance and repair of aircraft - Modernization of aircraft - Unmanned aerial vehicles -Training and Operation Support System (TOSS) - Security systems/C41 (command, control, communication, computing and intelligence) -Air traffic control systems Remote sensing - Aerial surveillance radar -Satellites - Development and integration of complex systems for segments other than aviation and defense Learn more at www.embraerds.com In the coming years, the unit will maintain in- vestments in these projects in order to grow sales volume and customer base, increase financial results, portfolio diversity, and expan- sion of international presence. Research, innovation and development Being at the forefront of technology is a fundamental condition for Embraer, whose strategy is based on continuous learning and the ability to innovate. - The manufacturing plants house engineer- ing and product development teams the largest of which is in São José dos Cam- pos, Brazil, which concentrates more than 4,000 professionals in these activities, 240 of whom are in pre-competitive R&D. In addition, the company maintains three engineering and technology centers: in Belo Horizonte (MG, Brazil), Melbourne (Florida, USA) and in the District of Évora (Portugal). Embraer protects the intellectual property generated by its research and development investments. Throughout the year, consider- ing the portfolios of invention patents and in- dustrial design, the company filed 609 patent applications and had 314 patents granted. The company also allocates resources for in- novation through the Aerospace Participation Investment Fund (FIP, in Portuguese), creat- ed in 2014 with the Brazilian Development Bank (BNDES, in Portuguese), the Funding Authority for Studies and Projects (FINEP, in Portuguese), and the State of São Paulo de- velopment agency Desenvolve SP. In 2016, in- vestments were made in five companies in the space, defense and cyber security segments, for which R$44.27 million were allocated. Incremental innovation, in addition to oc- curring vigorously within P3E (see page 21), is stimulated among employees by the Good Idea and the Innova programs. Good Idea is a program of suggestions for the development of routine activities with more efficiency. Throughout its history, the program has received contributions from 13,000 people and, in 2016, recorded 11,650 implementations of initiatives. The Innova Program stimulates the culture of innovation and provides spaces for the consolidation of ideas. The main initiative today is Green Light, which brings a startup environment into the company by offering financial support and up to 100% paid time off for employees to develop their projects. This year, 28 projects were awarded funding for 76 people. Innova underwent a review and, starting in 2017, the program also assumes the role of catalyzing exponential technolo- gies and identifying disruptive opportunities for the business. With this goal, the company will begin immersion into the innovation hubs of the Silicon Valley and of Boston, USA. In addition to these initiatives, employees also meet annually for the Embraer Seminar on Technology and Innovation (SETI, in Portuguese), a conference that presents the main technological advances being developed, which can be strengthened through integration of the different departments of the company. Regarding product sustainability, the program for the Integrated De- velopment of Environmentally Sustainable Products (DIPAS, in Por- tuguese), coordinated by the Engineering department, leads studies and actions to insert Design for Environment (DfE) strategies into the company. Through this initiative, the use of restricted material is managed with consideration for current and future environmen- tal legislation, technological alternatives to these materials are developed, and studies are conducted with respect to the product life cycle. There is also extensive interaction with the departments responsible for the creation of technologies aimed at reducing fuel consumption, carbon dioxide (CO2) emissions, noise, maintenance costs, and increasing operational efficiency, as well as pilot and passenger comfort. Since the aircraft's operation is the longest stage in its life cycle, exceeding 15 years of activity, reducing fuel consumption and, consequently, energy, has a direct impact on the product's environmental performance. Additionally, fuel costs are the main expense in aircraft operation, which is why manufac- turers are always seeking design options that promote efficiency, thereby meeting both environmental and market requirements. |G4-DMA: Products and services, G4-EN7, G4-EN27| United by the common good |G4-EN27| In 2016, Embraer and Boeing conducted tests on an E170 aircraft, which received a series of technologies to reduce environmental impact and increase aircraft efficiency and performance, such as a system for measuring air data; special paint to lessen the accumulation of ice and insects; aerodynamic modifications to reduce noise on takeoff and landing; and a bio-fuel blend, produced in Brazil, with 10% bio-kerosene and 90% fossil kerosene. This initiative is part of the partnership between these companies in the context of the Boeing eco- Demonstrator program, which, without precedent, unites the efforts of two of the world's leading aircraft manufacturers for the benefit of the environment and of the aerospace industry.