Good morning, ladies and gentlemen, and welcome to the audio conference call that will review Embraer's second quarter 2016 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 instructions to participate will be given at that time. If you should require assistance during the call, please press the star key followed by one. As a reminder, this conference 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 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, anticipate, intends, expects, and similar words are intended to identify forward-looking statements. Embraer undertakes no obligations 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 may 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. Paulo Cesar de Souza e Silva, President and CEO, Mr. José Filippo, Chief Financial Officer and IRO, and Mr. Eduardo Couto, Director of Investor Relations. I would now like to hand the conference over to Mr. José Filippo.
Please go ahead, sir.
Okay. Thank you, and good morning, everybody, and thanks for joining our conference of the second quarter financial results. I'm going to go, as usual, through the presentation, then I'll pass to Paulo Cesar for his remarks. After that, we'll be ready for the questions. Starting the presentation on page three, with the corporate highlights. Early this month, we participated in the 2016 Farnborough Airshow, where we had a chance to debut our E190, E2, and the KC-390 in the international market. Together with that, we were able to have the first-time display of the Legacy 500, Super Tucano, and defense systems in the same trade airshow. In terms of commercial activity, we were able to announce the commitment for 25 E-Jets, the current generation and the E2 version. Next page four. Regarding highlights for commercial aviation, we delivered 26 E-Jets in the second quarter of 2016.
Regarding new operators, TAP from Portugal became a new E-Jet operator. As far as orders activity, we had several recent announcements. Japan Airlines ordered for an additional E190. Nordic Aviation Capital ordered for four E190. Kalstar Aviation from Indonesia ordered for up to 10 E190-E2, and Arkia from Israel, letter of intent for up to 10 E195-E2. In relation to the E2 development of the program, we had the second prototype join the flight test campaign, and now we have over 50 hours of flight tests. Next page five. Moving into the Executive Jets highlights. We had a delivery of 26 jets in the second quarter, broken by 23 light jets and 3 large jets, which included the delivery of the first Phenom 100 to Etihad Flight College.
In terms of commercial activity, we announced that Across from Mexico had an order for 23 jets, being eight Legacy 500, eight Phenom 300, and seven Phenom 100. AirSprint ordered for up to 12 Legacy 450. Air Hamburg, the purchase agreement for an additional Legacy 650. Regarding production activity, we started in our Melbourne facility, the first assembly line of the Legacy 450, 500. Next page six. Highlights of Defense and Security business. Starting with the KC-390 program. Two important information. First, that the flight campaign reached over 400 hours with now 2 prototypes. Also, that the KC-390 were able to do a demo tour in Europe and Middle East after the Farnborough show. Very important to the commercial phase of the program, Embraer and Boeing signed an agreement on global marketing and support for that product.
An update on the LAS program for the U.S. Air Force. We delivered the aircraft number 19 out of 20. Finalizing the highlights of Defense in relation to the other Embraer Defense programs, Visiona advanced with the satellite tests for the Brazilian client. Okay. Next page, finalizing the highlights. Before entering in the financial results, two important information. First, the update on the SEC and DOJ investigation, and in page eight, we have been reporting this matter since 2011, and in May 2015, we informed that we start the negotiations with the authorities for a potential settlement. Now, we are announcing that the negotiations have significantly progressed. Due to that, we are recognizing a loss contingency charge of $200 million. It is important to say that the final settlement is likely to include a deferred prosecution agreement and imposition of independent monitoring.
It's also worth to mention that negotiations with the U.S. authorities are ongoing and subject to change. Next page. The second important update before the financial results is the 2016 outlook revision. Page 10. Due to more difficult conditions in the business jet industry this year, we are reducing expected deliveries by 10 aircraft for 2016. We now expect the range of 105 to 135 deliveries in Executive Jets, broken by 70 to 80 light jets and 35 to 45 large jets, resulting in lower revenues to the range of $1.61 billion-$1.75 billion, from $1.75 billion to $1.9 billion. We are also reducing the other revenues by $50 million. In this page, we show the changes in our estimates. It's also important to highlight that the reduction on the margins, EBIT and EBITDA, and the lower free cash flow generation driven by higher inventory levels and lower profitability.
We had the revision on the free cash flow generation for the year, from -$100 million to -$400 million. Next page, we will detail our new guidance. So now, in page 11, we now expect total revenues in the range of $5.8 billion to $6.2 billion. When we break this by business unit, in Commercial Aviation, there was no change. Deliveries in the range of 105 to 110 E-Jets, and revenues from $3.45 billion to $3.65 billion. This would represent 59% of the revenues consolidated of Embraer 2016. In terms of Executive Jets, as already adjusted, deliveries from 70 to 80 light jets, 35 to 45 large jets, and the net revenues in the range of $1.6 billion to $1.75 billion, which would represent 28% of the revenues of the company. In terms of Defense and Security, net revenues unchanged in the range of $0.7 billion to $0.75 billion.
To sum up the total revenues, other revenues of $50 million, representing 1% of the total revenues. Next page 12, in terms of EBIT and EBITDA, the EBIT range from $405 million to $500 million, the margin from 7% to 8%, and EBITDA from the range of $735 million to $840 million, with margin from 12.7% to 13.5%. In terms of free cash flow, as already anticipated, the expected result of less than $400 million. Finalizing the outlook for 2016, we are maintaining our total expected investments of $650 million, broken by $50 million in research, $325 million in development, and $275 million in CapEx. We move to the financial results for the second quarter 2016 in the year. Starting at page 14, our firm backlog, it was unchanged compared to the end of March, in the total of $21.9 billion.
Page 15, as far as aircraft deliveries, from the left, we delivered 36 aircraft in Commercial Aviation to the total of 47 to date. June, actually, in the end of the second quarter, June 2016. In the right side of the sheet, we have the delivery of 36 Executive Jets in the second quarter, broken by 23 light jets and three large jets, and accumulated of 35 light jets and 14 large jets in the year. In the bottom of the page, our outlook for 2016, already adjusted, Executive Jets from 35 to 45 large, and 70 to 80 light jets, and maintaining the E-Jets Commercial from 105 to 110 deliveries. Moving to next page 16. We reported net revenues of $1.36 billion in the second quarter, with accumulated of $2.67 billion in 2016. Next slide 17. Breaking revenues by segment.
The top right, Commercial Aviation, reported $867 million in the second quarter, accumulated of $1.57 billion in the year. Going right down, in terms of Defense, a total of $210 million in the second quarter, accumulated of $0.4 billion in the year. Moving down left, bottom left, the Executive Jets reported revenues of $293 million in the second quarter, with accumulated in the semester of $0.69 billion. Next page 18, regarding SG&A expenses. We had a total of $147 million in the second quarter, similar to the same period figures in the second quarter of 2015. Accumulated, $287 million in the year. Next page 19. As far as operating results, we reported negative operating result of $137 million in the second quarter, but excluding the $200 million provision, the operating results would be positive in $73 million.
The recurring EBIT margin was 5.3% in the second quarter, broken by EBIT margin by business of 10.7% in commercial aviation, 2.4% in defense, and negative 8.5% in business jets. Accumulated total EBIT margin was 5.9% in 2016. In page 20, regarding EBITDA, we have the recurring EBITDA of $152 million in the second quarter, with an EBIT margin of 11% in the quarter. In 2016, EBIT reached $320 million, with a 12% margin, without extraordinary charges of $200 million. Page 21, we reported net loss of $99 million in the second quarter, which would be a positive $101 million excluding the $200 million provision. Accumulated in the year, we have the recurring $205 million, and with the charges, the reported one of $4 million as of June 2016.
In page 22, in terms of investment, we had the total of $245 million in the year, broken by $17 million research, $139 million in development, and $89 million in CapEx. We are maintaining our estimate of $650 million for the full year investments. In page 23, as far as free cash flow, we reported a negative free cash flow of $439 million in the second quarter, and accumulated consumption of $655 million in 2016. The use of $200 million in operating activities was due mainly to higher inventories. As we already indicated, we are now estimating the consumption of no more than $400 million in 2016. Next page, in finalizing the presentation, our capital structure. The total debt of $3.7 billion, with an average maturity of 5.7 years.
As a consequence of the accumulated negative cash generation in the first half of the year, we reported a net debt of $613 million in June 30th. With that, we finalize the presentation, and before we start the Q&A section, I would like to turn to Paulo César for his remarks. Thank you.
Thanks, Filippo. Good morning. Thank you for joining us in this call. This is my first call as a CEO of Embraer, and for me, it's an honor to take the leadership of this company. I'm very glad to assume this leadership in a moment that the company has a huge legacy, coming from Frederico Curado, the former CEO who took over in 2007 and started to make important investments in new products, setting the tone for the future. For those who attended the Farnborough this year, you could see the materialization of what I'm saying. For the first time, Embraer brought all the three business units with updated products. We had there the KC-390, the E190-E2, and the Legacy 500. All brand-new aircraft, brand-new programs. Representing total investment of about $5.5 billion in the last years.
I believe that we are in an excellent position to move forward and to maintain our position in the market. When we look at the performance of these, especially the KC-390 and the E2, I will start by the KC-390. Only around 100 hours after the flight test, flight campaign started. These aircraft flew to Farnborough, and have shown a very high level of maturity in these flights. After Farnborough, the KC-390 went to visit few countries, and it was also a spectacular flight performance. The same for the E2. 50 hours after the first flight, we brought the E2 to Farnborough, and also with the excellent flight, showing that both aircraft have a very level of maturity. We are set to go to the market and be successful with these two programs.
The Legacy 500 also is showing a lot of interest and is being considered already the best aircraft right in the category. The E2 family are the most efficient aircraft in the segment from 70 to 130 seats. The E2 also family, we have launched this program a little bit over three years, and we have accumulated so far almost 300 firm orders and more than 670 orders when we add also options in LOI. This is already a huge success in the market. I'm sure that Embraer is set for a bright future. There are good opportunities here for us to improve our margins.
I believe that, since we have now invested a lot in this program, as I said, we have to concentrate now in our cost side, in becoming more efficient and adjust the company in a way that we can deliver a better margin. I'm quite positive that there is a good room for that, and this is where one of my focus will be exactly on this. Talk about the markets a little bit, starting by business jets market. I think it is a soft market. The new guidance or the revision of the guidance that we are making today is in line with what the market is doing. Right? We are seeing the market in general reducing guidance by around 8%. Right? We are doing the same.
We do not want to fight against the market, we have to recognize that it is a soft market, we will no longer fight for a market share. I believe that we have to sustain our business and make it in a sustainable right business. It's not selling by selling, but it's selling in order to also make money and give a return to our shareholders. This is what we are looking for. Business jet may not recover for a while. Nobody knows, but no one expects that in the next two years or three years, this market will recover. We still have a lot of used aircraft in the market, around 11% of used aircraft inventory, when compared to the size of the fleet, right, total fleet. We have around 400 used aircraft in the market.
The forecast this year is for deliveries of around 650 aircraft only, coming down from the peak in 2008 of 1,200 aircraft. It is a different market, and we have to adjust to this new market. On the commercial aviation, we are very bullish, as I said. E2 is going very well. We are involved in many campaigns, a lot of interest in these aircraft. On defense, definitely, we have the KC-390, has a huge potential to boost the defense business. The show up of the KC-390 Farnborough, the level of interest that this aircraft has attracted, the agreement that we made with Boeing for marketing and after-sales support for the KC-390 on a global basis. The efficiency of this aircraft, the flexibility of this aircraft. I'm sure that the KC-390 will be a huge success.
We are very bullish on the defense, on the KC-390 going forward. Last but not least, a word about our provision. I think it's very important that we are getting to the end of this case. That's important for us. We will turn this page, and with that, we'll be looking again to develop our business and to further develop right Embraer. With that, I turn to you for your questions, please.
Thank you, ladies and gentlemen. If you wish to ask a question on today's conference, please press star followed by the number 1 on your telephone keypad and wait for your name to be announced. That's star and 1 on your telephone keypad if you wish to ask a question today. Thank you. Your first question comes from the line of Myles Walton. Your line is open. Please ask your question.
Thanks. Good morning. I was wondering if you could talk a bit about the cash flow guidance. BRL 50 million of that looks like lower profitability, but the other BRL 250 million of the negative revision to free cash flow, is that all inventory? Similarly, Filippo, what should we think about planning-wise for 2017 in terms of reversing that inventory?
Yes, Myles, good morning. Actually, it's exactly what you mentioned. The increase of the consumption of cash this year is pretty much related to the inventory. As you know, production is already set in terms of supply chain for this year. We try to make some possible adjustments, but we expect to end up with some higher level of inventories, which will be the most impact in the consumption this year. Of course, we expect to, in this strategy, really discipline in terms of the way we approach the executive market in terms of sales. We expect to be maybe what's possible next year without entering the price. That definitely we can have an adjustment in terms of production for next year that we, using the inventory that we end up this year potentially, that we will be reverting part of that next year if possible.
That's how we assess this.
How much of a delivery cut next year? I mean, that's a pretty big implied delivery cut next year that would take place on business jets if that's the case. I guess as a placeholder, are you looking for business jets to be down 10% next year or more?
No, I think it's too early to say. The projection for next year is going to be done sometime soon in the future. However, I think that we do not work in a reduction. This reduction probably we plan to have to be flat for next year. That's the first. Not a continuous reduction. That's not what we are working on.
Can you comment, Paulo, maybe on the Legacy 450? I don't think it's been delivered here in the first half. When does that start to pick back up in terms of deliveries and what's the obstacle?
We will start delivering the second half now. It's all good. We are in good shape to start to deliver the 450. We are very bullish, as you know, on the 450, 500. Two quite great products, and I'm sure that the market will recognize the 450 as much as being recognized, the 500, as being the two best aircraft in the category.
The last one, Eduardo, could you give the segments margin or margin by segments for EBITDA?
Yes, Myles. I can give to you. For the second quarter, commercial was 10.7%, defense 2.4%, and executive minus 8.5%.
Okay. Thank you.
Thank you. Your next question comes from the line of Cai Von Rumohr. Your line is open. Please ask your question.
Yes. Thank you very much. Could you maybe give us a little bit of color by model? We're hearing from one of your competitors that you're bringing the price of a 500 down to compete with the Latitude and that the 450 is really not selling well. Thanks.
Cai, I believe the pressures on the business jet units are huge. As I mentioned, we are seeing a soft market and our competitors have adopted any strategy that is to discount the price of their products. We are following this, of course, that we have to be responsible and also give our answer right to the market. However, we hope that going forward now with more discipline in our sides and not looking at market share only and also adjusting our internal costs, especially in the unit. We believe that we'll be able to get back to the margins that we need to make this business sustainable.
Just a quick follow-up. If you're going to carry some inventory over to next year, I assume it's business jets. What is the impact going to be of presumably having to discount to move some of that inventory and the adverse overhead of kind of cutting production rates down even more? What can you do to kind of offset that to sustain the profitability or at least to minimize the profit downside in biz jets? Thanks so much.
The carryover on the inventory on the business jet unit is already reflected in the guidance that we gave on cash flow. Right, on free cash flow this year, coming from $100 to $400 negative, so it's already there. Next year, we will adjust the production of the business jet unit for the new levels that we are going to, let's say, forecast for next year. There will be a carryover for next year.
Thank you very much.
Sure.
Thank you. Your next question comes from the line of Alexandre Falcao. Your line is open. Please ask your question. Alexandre Falcao, your line is now open to ask your question. Please go ahead.
Okay. I'm sorry. Thank you. My question is regarding defense. We're expecting, because of the FX, a bigger reversion on defense. I just wanted to know if you guys could walk us through what happened there. Is this just a part of the reversion of all the provisions that you did last year? That we shouldn't expect any bigger improvements in the margin at front? Thank you.
Okay, Alexandre. I don't think it's going to be a major impact in defense. There is, of course, as we already indicated last year, the exchange rate impacts that the contract of defense. As we have less to go in terms of the contract, this effect tends to be lower. However, of course, we are seeing that those negative impacts that we had last year, they're no longer happening. This is important to confirm that this is the impact there. You saw a positive. I think the defense tends to be in a way that we already indicated to you recently in the mid-single digit. That's something that we could work for this year.
I don't think it's going to be necessarily major impacts there, but it's going to be something positive, of course, but not in a big impact because of the stage of the development of the contracts that are affected by the exchange rates.
Okay, perfect. Just one more follow-up question on commercial. Just wanted to know where you are in terms of the gap between the E1 and E2. Where do you see after these new orders, what do you see in terms of gap specifically for 2018, where we are right now, and how much more you need to feel comfortable for the transition? Thank you.
We are, in this regard, I think we are doing very well. We have 2017 in very good shape, and 2018, step by step, we are closing this gap. We still have, I would say, about 35%, maybe, for 2018. We are very much comfortable that we will also fulfill 2018. We still have two years right until there. Given the level of activity that we are seeing in the commercial side, we have the comfort that it's going to be okay. Beyond that, it's too early to say. These orders that we have recently announced, of course, they cause also for deliveries in 2019 and on.
Okay, perfect. Just to follow up on that, in terms of modeling, how much of the options you guys usually model that are converted specifically for the E1?
This is a tough question because, of course, the market is very dynamic, it depends on the moments of the market. Historically, a ballpark number of rate conversion is about 60%. This is more or less the number. It's not an exact number, but, as I said, ballpark number.
Perfect. Thank you.
Sure.
Thank you. Your next question comes from the line of Derek Spunk. Your line is open. Please ask your question.
Okay, thank you. Good morning. As you round out the development of the E2, it would seem like a natural progression for you to develop a large-cabin business aircraft. Is that still under consideration given the current environment in business aircraft? If not, what other areas or products do you find potentially interesting as a future development program?
Derek, a good question. We don't know yet whether or not we will be looking to a new business jet. I think we have to look at what we have done in the last years and monetize these investments before we can move forward and go into new investments, heavy investments. As I said at the beginning, I think we have excellent products now in the three business units, we have to make sure that we can consolidate these investments before we can plan for new investments in the future. Of course, there will be new products in the future, but at this moment now, I think our focus must be in consolidating these investments.
Okay. Would you have a couple opportunities in defense, perhaps, in maybe smaller programs or smaller investments that you're looking at?
No. No big investments in defense now. Of course, always enhancing, I'd say, a product, but no big investments. Our focus also on defense is to go more international, trying to diversify more the business in terms of geography. As mentioned before, the KC-390 is a terrific aircraft, and I'm sure that we will go more and more international in defense as well.
Okay, great. Just quickly on the commercial side. Can you comment on the pricing and order environment in the commercial, and any update on the potential scope clause changes in the U.S. to 100 seats? Finally, are you seeing any competition from the MRJ or the Superjet picking up?
MRJ, Superjet, not really, especially MRJ. I think they are still late in the program. Superjet, a little bit in Russia and the countries surrounding Russia. Of course, we have in Mexico, but other than that, so we are not seeing too much Superjet in the market. Scope clause in the U.S., I think, this will not happen anytime soon. I think there is still a long way to go until the scope clause may change from 76 to 100 seats. Of course, if this change will be very well-positioned, it seems that we have the most efficient aircraft right in the segment. We continue to sell very well, the 76 seats in the U.S., and we continue to follow the opportunities in that market for the 100 seat plus in the major airlines.
There might be opportunities there that we have to be very close to it, and that may happen maybe next year.
Okay. Are you seeing any signs of a little bit more rational pricing from your major competitor in the regional jet space?
Well, I think this is well known, what our competitor strategy is right now in the market. We are following this very closely. I think we have already been very vocal regarding this point. We want to make sure that our competitor will not use government money from the taxpayers in order to provide aircraft at below cost right in the market. I think this is very important to make this point, and every time that we believe that this is happening, we'll be vocal about that.
Well, as a taxpayer, I appreciate that. Okay, thanks, guys. Appreciate that.
Sure.
Thank you. Your next question comes from the line of Pete Skibitski. Your line is open. Please ask your question.
Good morning, guys. Paulo, congratulations.
Thank you.
Paulo, can you talk about the commercial order environment? Farnborough was fairly quiet, I apologize if this was asked, I got on the call late. How is the campaign environment in the second half of the year? Indeed, I've seen some mention of some potential large ones in India. Do you think you can get to a one times book to bill in commercial orders this year?
I have to be very careful of what I say here, because I don't know if our competitors are on the line, right? I have to be careful. Anyway, I think in Farnborough we have announced important orders, not very large in number. However, important orders in the sense of newer lines, right, joining the E2 program, E1 E2 program, E-Jet program, also repeating orders. Going forward in the second half, we are involved in many campaigns. Again, not individual large orders, but diversified airlines and diversified regions of the world. This is very important to us. We are not seeing any big, very big campaign now, but many right campaigns, which brings important diversification to us.
Got it. Great. Just one follow-up. On the $200 million contingency, again, I might have missed this, but can you give us a sense of the timing on the cash impact of that? Is the cash payment going to be a similar order of magnitude, or is it likely to be less? Is that going to be a 2017 event? Can you give us any more color around that?
Not yet. This is a provision that we made now. We are still negotiating with the DOJ and the SEC, this is what we can inform now.
Okay. Understood. Thanks, guys.
Thank you.
Thank you. Your next question comes from the line of Victor Mizusaki. Your line is open. Please ask your question.
Hi, thank you. I have two questions. The first one, taking a look on your guidance for business jet sales and cash flow generation for this year. If it was from that production rate isn't changing, can we add basically 10 new business jets to your inventory, with an average price of $30 million? Is this number correct? The second question, can you give us an update on the negotiations with Republic Airways?
Yeah, I think that, Victor, in terms of the calculation you made for the inventories of the active jets, I think the number of aircraft is reasonable. However, the price seems to be a little bit higher than what we should expect. Maybe it's about there, but with a lower amount.
Regarding Republic, I can give you an update. I believe Republic Chapter 11 is moving well, by the sense of Republic being able to have agreements with the major airlines and major suppliers. Republic already reached an agreement with Delta, United, and now is negotiating the final stage, as far as I understand, with American Airlines. Regarding by air, we are in deep dialogue now, for the 24 aircraft that we have to deliver next year. We are postponing nine aircraft from this year to next year, as already announced. Therefore, next year, we'll have more deliveries. We basically will deliver next year approximately 20 aircraft and four in 2018. It's not yet 100% finalized, but this is the ballpark number. In this regard, it's going well. We are in the final stage of negotiations with Republic.
Okay. These nine aircraft that should be delivered this year, is this number incorporated in your guidance or this is something that maybe can change in the future?
No, the guidance is kept the same. We are not changing at all the guidance, we will meet our guidance in the commercial aviation.
Victor, it's Eduardo here. Just to be clear, as we shift some slots, we continue to see 105-110 deliveries this year, even if we don't deliver planes to Republic this year. That's the point.
Okay. Thank you.
Thank you. Your next question comes from the line of Josh Milberg. Your line is open. Please ask your question.
Good morning, everyone. Thanks for the call. You commented on the margin performance by division in the second quarter. I was just hoping you could give us a rough idea of what margin expectations are for the individual divisions, or what's embedded into your full-year guidance in that respect, and maybe also what you see as the biggest risk to that guidance now.
I think that the revision on the guidance was basically driven by the executive jets. I think we're comfortable about the other business, the way we started and initially guidance that was provided. As we said, commercial, like low double digit, of course, the defense in the mid-single, like I already mentioned. Executive is what we are already reviewing. It's going to be, again, probably a little bit less than originally. It will be targeting the mid-single digits, but probably lower than that. Towards that.
Okay. What FX assumption are you working with now?
We're working with the current situation, which is BRL 3.3 per USD.
Okay. That's very helpful. Then just moving a little bit away from the results, I was just hoping you could revisit the whole issue of any discussions by the Brazilian government on either removing or amending some of the tax breaks you get, either thinking about maybe the payroll tax benefits and the Lei do Bem.
Of course, there's been a lot of discussions on the tax, the fiscal situation of the Brazilian government. There's always a lot of talk about tax benefits that were given or some type of thing. I don't think that we have any specific benefit to that. I think Lei do Bem is something that covers investments in technology for the whole industry, which tends to be kept. We don't think there's a big risk of that to be changed. Basically, the adjustments that we already saw are the ones that we expected. We don't see major changes going forward for that situation.
Okay. Thank you very much.
Thank you. We have no further questions. This concludes today's question and answer session. That does conclude Embraer's audio conference for today. Thank you very much for your participation, and have a good day.