UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 20-F

OR

For the fiscal year ended December 31, 20192020

OR

OR

Commission filenumber 001-15102

EMBRAER S.A.

(Exact name of Registrant as specified in its charter)

EMBRAER Inc.

(Translation of Registrant’s name into English)

Federative Republic of Brazil

(Jurisdiction of incorporation)

Avenida Dra. Ruth Cardoso, 8501, 30th floor (part),

Pinheiros, São Paulo, SP,05425-070, Brasil

(Address of principal executive offices)

Antonio Carlos Garcia

Head of Investor Relations

(55) 11 3040 6874

Investor relations department, (55) 11 3040 6874, investor.relations@embraer.com.br

(Name, Telephone,E-mail and/or facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act

Securities registered or to be registered pursuant to Section 12(g) of the Act

None.

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act

Title of each class

6.375% Guaranteed Notes due 2020 of Embraer Overseas Ltd. Guaranteed by Embraer S.A.None.

Number of outstanding shares of each of the issuer’s classes of capital or common stock as of December 31, 2019:2020:

736,078,625736,143,105 common shares, without par value

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  ☒    No  ☐

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.    Yes  ☐    No  ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 ofRegulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, anon-accelerated filer, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer” and “emerging growth company” inRule 12b-2 of the Exchange Act.

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act.  ☐

† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.   ☒

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.    Item 17  ☐    Item 18  ☐

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined inRule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒

TABLE OF CONTENTS

PART I

i

ii

INTRODUCTION

In this annual report, “Embraer,” “we,” “us,” “our” or the “Company” refer to Embraer S.A. and its consolidated subsidiaries. All references herein to the “real,,” “reais“reais”” or “R$” are to the Brazilianreal,, the official currency of Brazil. All references to “US$,” “dollars” or “U.S. dollars” are to United States dollars. All references to the “Brazilian government” are to the federal government of Brazil.

Presentation of Financial and Other Data

Financial Data

Our audited consolidated financial statements as of December 31, 20192020 and 20182019 and for the three years in the period ended December 31, 2019 (20192020 (2020 audited consolidated financial statements) are included in this annual report.

Our consolidated financial statements have been prepared in accordance with International Financial Reporting Standards, or IFRS, as issued by the International Accounting Standards Board, or IASB.

According to IFRS 5, in lightThe set of the approval of the then pending strategic partnership with The Boeing Company (“Boeing”), in ourannual consolidated financial statements as of and for the year ended December 31, 2020, 2019 we recorded and presented our Commercial Aviation business unit and related services in a single line item as discontinued operations in2018 includes the statementsfirst year of operations, and the balancesadoption of assets and liabilities were presented as held for sale in the statement of financial position. Our 2019 audited consolidated statement of operations retroactively presented this information for the years ended 2018 and 2017 for comparative purposes to account for the aforementioned events. On April 25, 2020, Boeing provided notice to Embraer communicating its decision to terminate the Master Transaction Agreement (as defined below) providing for the strategic partnership. In addition, Boeing terminated the Contribution Agreement (as defined below) that provided for a joint venture for theC-390 Millennium multi-mission transport aircraft. Embraer strongly believes that Boeing wrongfully terminated the Master Transaction Agreement and the Contribution Agreement. For additional information on the now terminated strategic partnership with Boeing and on the assets held for sale and discontinued operations as of December 31, 2019, see Notes 4 and 40 to our 2019 audited consolidated financial statements included elsewhere in this annual report.

standards IFRS 16 – Leases, which became effective on January 1, 2019. IFRS 16 establishes the principles for the recognition, measurement, and disclosure of leases and requires lessees to recognize a single accounting model in the statements of financial position. The lessor’s accounting in IFRS 16 remains substantially unchanged in relation to IAS 17. Lessors will continue to classify between operating or finance leases, using principles similar to the former standard and, therefore, IFRS 16 has no impact on leases where we are the lessor. We adopted the modified retrospective model. Under this approach, the financial information comparative to prior periods is not being restated and remains as previously reported in accordance with IAS 17.

As a result of the initial application of the IFRS 16 on leases of land and buildings, facilities, machinery, vehicles and other equipment that we previously recorded as operating leases, we recognized:recognized in 2019:

In our 2020, 2019 2018 and 20172018 consolidated financial statements, gains or losses resulting from the remeasurement of the monetary items and from foreign currency transactions have been reported in the consolidated statement of income as a single line item as foreign exchange gain (loss), net.

For certain purposes, including providing reports to our Brazilian shareholders, filing financial statements with theComissão de Valores Mobiliários (Brazilian securities commission), or CVM, and determining dividend payments and other distributions and tax liabilities in Brazil, we have prepared, and will continue to be required to prepare, financial statements in accordance with Law No. 6,404 of December 15, 1976, as amended, or the Brazilian Corporate Law.

Other Data and Backlog

In this annual report:

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We calculate our backlog as the sum of the contract values of all firm orders (i) for any aircraft that have not yet been delivered, (ii) for services and support contracts for all business units, including repair services and spare parts contracts for a period of more than one year, and (iii) for services and technologies contracted and not yet performed in our Defense and Security business unit. A firm order is a firm commitment from a customer, represented by a signed contract. Options to acquire aircraft are not considered as part of our backlog.

Special Note Regarding Forward-Looking Statements

This annual report includes forward-looking statements, within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended, or the Exchange Act, principally in Items 3 through 5 and Item 11 of this annual report. We have based these forward-looking statements largely on our current expectations and projections about future events and industry and financial trends affecting our business. These forward-looking statements are subject to risks, uncertainties and assumptions, including, among other things:

The words “believe,” “may,” “will,” “forecast,” “estimate,” “plan,” “continue,” “anticipate,” “intend,” “expect” and similar words herein are intended to identify forward-looking statements. We undertake no obligation to update publicly or revise any forward-looking statements because of new

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The classification of a company’s operation as a discontinued operation is achieved through its disposal, or at the time the transaction meets the criteria of IFRS 5 to have its assets and liabilities classified as held for sale, whichever occurs earlier.

An asset or group of assets and liabilities is held for sale when it is expected that its carrying amount will be recovered mainly from the sale transaction rather than continuous use. This occurs if the asset is available for immediate sale under its current conditions, subject only to customary and usual terms for the conclusion of the transaction, when the sale transaction is defined as “highly probable” under the accounting standard.

Commercial Aviation Business Unit

According to IFRS 5, in light of the approval of the then pending strategic partnership with Boeing, our financial statements as of and for the year ended December 31, 2019 were prepared considering the designation, measurement and presentation of the assets, liabilities and results of the Commercial Aviation business unit and related services as assets held for sale and discontinued operations, pursuant to the terms of the Master Transaction Agreement. Accordingly, in our financial statements as of and for the year ended December 31, 2019, we recorded and presented our Commercial Aviation business unit and related services in a single line item as discontinued operations in the statements of operations, and the balances of assets and liabilities were presented as held for sale in the statement of financial position.

Our 2019 audited consolidated statement of operations retroactively presented this information for the years ended 2018 and 2017 for comparative purposes to account for the aforementioned events. The balances of assets and liabilities held for sale as of December 31, 2019, was US$5,174.6 million and US$4,984.0 million, respectively. The results of discontinued operations for the years ended December 31, 2019, 2018 and 2017 was a loss of US$111.8 million, a profit of US$90.1 million and a profit of US$403.3 million, respectively.

In addition, for comparative purposes of the financial data presented in Item 3 of this annual report, we have recast the statement of operations for the years ended December 31, 2016 and 2015 to account for the discontinued operations in all comparative periods. The recast financial data for the years ended December 31, 2016 and 2015 included herein are unaudited.

On April 25, 2020, Boeing provided notice to Embraer communicating its decision to terminate the Master Transaction Agreement providing for the strategic partnership. In addition, Boeing terminated the Contribution Agreement that provided for a joint venture for theC-390 Millennium multi-mission transport aircraft. Embraer strongly believes that Boeing wrongfully terminated the Master Transaction Agreement and the Contribution Agreement. Starting on April 25, 2020 and as a result of the above, assets and liabilities previously presented as held for sale will be reclassified and measured as held for continuous use, as well as the results of operations previously reported as discontinued operations will be reported as continuing operations. For additional information on the now terminated strategic partnership with Boeing and on the assets held for sale and discontinued operations as of December 31, 2019, see Notes 4 and 40 to our 2019 audited consolidated financial statements included elsewhere in this annual report.

The reduction in the demand for travel combined with government-imposed travel restrictions is materially and adversely affecting the aerospace industry, causing some airlines to suspend, cancel or reduce flights. As a consequence, demand for new aircraft has declined as airlines are wary of theCOVID-19 air travel restrictions and its consequences. Our customers are now, due toCOVID-19, focused on preserving capital and avoiding purchasing aircraft, which will adversely and materially affect us.

Accordingly, we expect that 2020 will be a distinct year in terms of orders and deliveries due to the impacts of theCOVID-19 pandemic. The airline business has been adversely affected due toCOVID-19, and we will have to review our production chain in order to reflect the new and uncertain demand scenario. We have already implemented employee furloughs and workload reduction measures and, accordingly, we had to make adjustments to our production capacity. As a result ofCOVID-19, some of our customers rescheduled their aircraft deliveries carrying them over to 2021 and beyond, which has affected our 2020 projected deliveries. As of the date of this annual report, no cancellation has occurred. Although we cannot predict the full impact of theCOVID-19 pandemic in theshort-to-medium term to our business, we expect that customers will continue to postpone their scheduled aircraft deliveries and will cancel their orders.

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The following tables present a summary of our operational data as of the dates and for the periods indicated.

Other Data

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Risks Relating to Embraer

The outbreak of communicable diseases around the world, includingCOVID-19, may lead to higher volatility in the global capital markets and recessionary pressure on the global economy.economy, which could adversely and materially affect us.

The outbreak of communicable diseases on a global scale has affected investment sentiment and resultresulted in sporadic volatility in global capital markets and may have a recessionary effect on the global economy, including in Brazil.

The outbreak of the novel coronavirus, known asCOVID-19, was first identified in December 2019 in Wuhan, China, and has since spread globally. TheCOVID-19 outbreak has compelled governments around the world to adopt measures to contain the spread ofCOVID-19 by means such as lockdowns of cities, restrictions on travel and public transportation, business and store closures, and emergency quarantines, among others, and responsesothers. Other measures were taken by businessescompanies and individuals to reduce the risk of exposure to infection, including reduced travel, cancellation of meetings and events, and implementation ofwork-at-home policies, among others, which has caused significant disruptions to the global economy and normal business operations across a growing list of sectors and countries. ItThe COVID-19 pandemic adversely affected business confidence and consumer sentiment, and havehas been, and may continue to be, accompanied by significant volatility in financial and commodity markets. The spread ofCOVID-19, especially if the measures to curb the spread of the virus last for longer than expected, may have broader macro-economic implications, including reduced levels of economic growth and possibly a global recession, the effects of which could be felt well beyond the time the spread of infection is contained.

According to the International Air Transport Association (“IATA”), global commercial airline traffic volume in 2020 decreased by approximately 66%. IATA expects that traffic volume in 2021 will be 38% lower as compared to traffic volume in 2020. As of December 2020, 18% of the fleet with up to 100 seats and 36% of the fleet with 100-150 seats was in storage. As a result, we expect that traffic disruption and decreased demand affecting will continue to affect customers demand globally and may continue to materially and adversely affect our deliveries in 2021.

The reduction in the demand for travel combined with government-imposed travel restrictions is materially and adversely affecting the aerospace industry, causing some airlines to suspend, cancel or reduce flights. As a consequence, demand for new aircraft has declined as airlines are wary of theCOVID-19 air travel restrictions and its consequences. Our customers are now, due to

We have been monitoring the impacts of the COVID-19 pandemic not only on the global economy but also on our workforce, operations, as well as on the supply and demand mechanics for our products and services. Since the beginning of the pandemic, we have adopted several initiatives focused on preserving capitalhealth and avoiding purchasing aircraft, which will adverselysafety of our employees. Our operations were interrupted for a few days to adjust our facilities and materially affect us.implement health and safety measures, including social distancing measures, remote work for some employees, reduction of working hours and wages, collective vacations and paid leaves.

Additionally, as a result of the COVID-19 pandemic, on March 17, 2020, our Brazilian corporate employees responsible for critical functions started to work from home and, on March 22, 2020, we decided to put our Brazilian employees that could not work remotely on paid leave until March 31, 2020. Until March 31, 2020, we were only carrying out essential activities at our facilities, including customer support, aircraft maintenance and manufacturing. On March 30, 2020, we further decided to put our Brazilian employees responsible fornon-critical functions on collective vacation from April 1 to April 9, 2020. During this temporary shutdown of our facilities, we implemented safety measures to adapt our facilities to the World

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In 2020, we have also implemented three voluntary dismissal programs for specific groups of employees in Brazil, with the participation of approximately 1,600 employees. On September 3, 2020, we announced a reduction in our workforce, dismissing approximately 900 employees. Considering both participation in the voluntary dismissal programs and non-voluntary dismissals, our workforce was reduced by approximately 2,500 employees in Brazil (approximately 12.5% of our total global workforce). The aggregate expenses in connection with this workforce reduction were approximately US$69.2 million in the year ended December 31, 2020. Our or other companies’ operations may be suspended again or remain suspended for a longer time. DueOn March 26, 2020, due to the uncertainty related to the spread ofCOVID-19, we have also suspended the projections relating to our expected results for 2020, last updated on November 12, 2019. Although,

We also adopted certain measures to preserve our cash flow, including reduction in working hours and pay cuts, extension of suppliers payment terms, extension of tax payment deadlines, negotiation of new bank credit facilities, and adjustments to the production chain.

As of the date of this annual report, only one of our executive jets customer cancelled its firm order as a result of the COVID-19 pandemic. Most of the delivery postponements attributed to the effects of the pandemic were already delivered in 2020. With respect to our Commercial Aviation business unit, some of our customers rescheduled aircraft deliveries for 2021, but no cancellation has occurred as of the date of this annual report,report. We have also granted interim financing for certain deliveries of commercial jets held during the third and fourth quarters of 2020.

The reduction in our workforce, as a result of the COVID-19 pandemic, along with the absence of easing of scope clauses negotiated between the pilots unions and the airlines, has slowed down the pace of certification activities for the E175-E2 aircraft. For additional information on the impacts of COVID-19, see “Item 5. Operating and Financial Review and Prospects—5A. Operating Results—Current Conditions and Trends in our Industry—COVID-19.”

With pending uncertainties regarding global vaccination and other virus variants, we cannot yet determine the full impact that COVID-19 pandemic will have experienced certainon our business and results of operation in the short-to-medium term. Customers may continue to postpone their scheduled aircraft deliveries and may cancel some of their orders. In addition, delays in payment cycles by significant customers may have an impact on our supply chain, production operationscash position and material impacts onworking capital.

To date, no fully effective vaccines or treatments have been developed and effective vaccines or treatments may not be discovered in time to protect against a further spread of the demand for our products, as well as a cancellationvirus. The effects of firm orders of our Executive Jets business unit and reschedules of our Commercial Aviation and Executive Jets business units aircraft deliveries, we expect thatthe COVID-19 will continue to disruptpandemic on our business operationswill depend on, among other factors, the ultimate geographic spread of the virus, the duration of the outbreak and will adverselythe extent and materially impact our resultsoverall economic effects of operations or thosethe governmental response to the pandemic. In addition, the effects of the COVID-19 pandemic may exacerbate the effects of the other companies or customers on which we depend.risk factors disclosed in this section of the annual report.

A downturn in our key markets may reduce our sales and revenue, and, consequently, our profitability.

We expect that a substantial portion of our results will be affected, directly or indirectly, from sales of aircraft, which have historically been cyclical due to a variety of factors that are both external and internal to the air travel industry, including general economic conditions, and, most recently and importantly, the effects of COVID 19 on our operations and financial condition, which we cannot fully foresee as of the date of this Annual Report. For additional information on the impacts of COVID-19, see “Item 3. Key Information—3D. Risk Factors—Risks Relating to Embraer—The outbreak of communicable diseases around the world, includingCOVID-19, may lead to higher volatility in the global capital markets and recessionary pressure on the global economy.economy, which could adversely and materially affect us.”

Economic downturns in our industry, such as the one caused by the COVID-19 pandemic, may reduce air travel demand and corporate and personal spending, which may negatively impact our Commercial Aviation, Executive Aviation, Defense and Executive JetsSecurity and Services and Support business units. As a result of theCOVID-19 pandemic, as of the date of this annual report, one of our executive jets customers cancelled its firm orders and customers of our Commercial Aviation and Executive Jets business unitsThese downturns have rescheduled their aircraft deliveries. Downturns haveled in the past and may also lead in the future, due toCOVID-19 or to other reasons, lead to a decrease in the volume of financing available to our customers for aircraft purchases, particularly in the aforementioned business units. A continued downturn in general economic conditions could result in further reductions in air travel and decreased orders for our aircraft. Our customers could also continue to defer or to cancel their purchases of our aircraft. We cannot predict the magnitude or duration of the impact that the aforementioned events wouldcould not only have on the air transport industry as a whole, andbut also on our business in particular.

We depend on key customers.

In our Commercial Aviation business unit, as of December 31, 2020, over 90% of our firm orders in backlog for the current EMBRAER 170/190 jet family were from Republic Airlines and SkyWest. Our E-Jets E2 family backlog mainly comprises orders from the companies Azul, AerCap, AirCastle and AirPeace, which represent approximately 83% of our E-Jets E2 family orders. We believe we will continue to depend on a select number of key customers, and the loss of or difficulty in maintaining the relationship with any one of them would significantly reduce our sales and market share.

In the Executive Aviation business unit, we have been increasingly relying on individual orders as the share of fleet orders in the backlog has been diminishing. Despite the fact that we sold a PraetorPraetors and Phenom fleetPhenoms to a large fractional operator in 2019, and which corresponding deliveries will continue to occur in the short-term we believe that fleet renewal demand will occur at a more moderate rate over a longer period as the current operator’s fleet ages.

In our Defense and Security business unit, the Brazilian government is our largest customer of defense aircraft products. Revenue from sales to the Brazilian government accounted for 54.4%44.5% of the business unit revenue for the year ended December 31, 2019.2020. A decrease in defense investments by the Brazilian government due to budgetary constraints or other factors that are out of our control could decrease our Defense and Security revenue. We cannot assure you that the Brazilian government will continue to acquire defense products and services from us in the future at the same rate or at the same level.

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in connection with the wrongful termination of the MTA and/or the Contribution Agreement by Boeing. Both Embraer and Boeing have separately commenced arbitrations in connection with the termination. Such legal proceedings may also include litigation brought by our stockholders and holders of our ADRs related to the Boeing Transaction and/or Boeing’s termination of, and failure to consummate the transactions contemplated by, the MTA and the Contribution Agreement. We continue to strongly believe that Boeing wrongfully terminated the MTA and the Contribution Agreement, that Boeing was under an obligation to continue to comply with the terms of the MTA and the Contribution Agreement, that Embraer was in full compliance with its obligations under the MTA and the Contribution Agreement and that our pending arbitration proceedings against Boeing and its affiliates are a valid enforcement of our rights under the MTA and the Contribution Agreement. We cannot predict the outcome of any such legal proceedings. Such legal proceedings may also create a distraction for our management team and board of directors and require time and attention. In the case of an adverse determination in the arbitration proceedings, we may not recover any damages from Boeing and we may be required to pay significant monetary damages to Boeing. In addition, even if we ultimately succeed in such legal proceedings, there may be negative publicity attached to such legal proceedings, which may materially and adversely affect our reputation and brand names. As a result, any legal proceedings relating to the Boeing Transaction or Boeing’s termination of and failure to close the Boeing Transaction could, among other things, adversely affect our business, financial condition and results of operations.

We may face a number of challenges resulting from the development of new products and the possible pursuit of strategic opportunities and transactions.

We cannot assure you that our products will be accepted by our customers and the market, and if any of our new products do not meet customer expectations or market demand, our business would be adversely affected. In addition, as we continue to develop new products, we may need to reallocate existing resources and coordinate with new suppliers and risk-sharing partners. Finally, cost overruns and delays in the development and delivery of new products would adversely affect us.

We may pursue strategic opportunities and transactions, just as we have in the past, including joint ventures, partnerships, acquisitions or divestitures. We may face a number of challenges, including difficulties in identifying appropriate partners, assimilating with or adjusting to our partners’ or targets’ operations and personnel, maintaining internal standards and controls, as well as the diversion of our management’s focus from our ongoing business. We cannot assure you that we will be able to meet these challenges and that our business or the trading price of our common shares or ADSs will not face disruptions as a result of such opportunities or transactions or the markets’ perception thereof.

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aircraft products, we cannot assure you that we will be able to maintain it. In order to remain competitive in the commercial aircraft manufacturing market in the long-term, we must continue to make technological, efficiency and performance enhancements to our aircraft. The competitive landscape has become increasingly aggressive, for example, in light of deals such as the Airbus acquisition of a majority stake in Bombardier’s C-Series Program, rebranded A220s in July 2018.

As a relatively new entrant to the executive jets market, we face significant competition from companies with longer operating histories and established reputations in the industry. Some of our competitors in the executive jets market have a longer track record and a more established customer base. In addition, the level ofpre-owned aircraft for sale continuesin the market may continue to pressure the demand for new aircraft demand in this business unit andaircraft. This may impact the value of the usedpre-owned aircraft in our portfolio.portfolio, despite a recent decrease in the level of pre-owned aircraft for sale in the market. We cannot assure you that we will increase our market share in the executive jets market business unit, or that we will not experience a reduction in our current market share inof this business unit, especially taking into account an instableunstable and contracting market demand scenario that we expect in 2020.2021.

Protectionist measures adopted by the governments of specific countries could adversely affect us. Our production is spread globally, with parts manufactured in one or more countries and assembled in another, and as a result any limitations to trade, including quotas, tariffs, subsidies or local content requirements, may increase our production costs and affect our capacity to compete in equal terms in the market for our products.

We work with a limited number of key suppliers.

We do not manufacture all of the parts and components used in the production of our aircraft. Approximately 65.4%75.0% of theour consolidated production costs in our Commercial Aviation, Executive JetsAviation and Defense and Security business units and approximately 86.8% of the production costs in Commercial Aviation business unit (recorded and presented as discontinued operations for the financial statements as of and for the year ended December 31, 2019) consist of materials and equipment purchased from our risk-sharing partners and other major suppliers. Risk-sharing arrangements are those in which suppliers are responsible for the design, development and manufacture of major components or systems of our aircraft. In some cases, the aircraft are designed specifically to accommodate a particular component, which cannot be substituted by another manufacturer without significant delays and expense. In addition, there exist only a limited number of suppliers of certain key components of aircraft globally. We work closely with our main suppliers in order to mitigate any potential supply chain risk, but we cannot assure you that these risks, which could negatively and adversely affect our operating and financial performance, will not materialize.

Intellectual property violations may adversely affect us.

We rely on patent, copyright, trademark and trade secret laws, and agreements with our employees, customers, suppliers and other parties, to establish and maintain our intellectual property rights in technology and products used in our operations. Despite these efforts to protect our intellectual property rights, any of our direct or indirect intellectual property rights could be challenged, invalidated or circumvented. In addition,

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We maintain extensive technical security controls, policy enforcement mechanisms, monitoring systems and management oversight in order to address these threats. While these measures are designed to prevent, detect and respond to unauthorized activity in our systems, certain types of attacks, including cyber-attacks, which could materially and adversely affect our business and reputation.

Furthermore, some of our business partners, such as our suppliers, have significant access to confidential and strategic information regarding our projects and engineering data. Many of these suppliers face similar security threats and any attacks on their systems could result in unauthorized access to our systems or data.

Any unauthorized access to, or release or violation of our systems and data or those of our customers or business partners could materially and adversely affect our business and reputation.

On November 24, 2020, we suffered a cybersecurity incident in our IT systems, which was later identified as a ransomware attack. The attack resulted in the encryption of an environment of virtual servers hosted in Brazil, prevented access to certain files and resulted in the inadvertent disclosure of data, some of which were made available on the dark web. We have reported the incident to law enforcement authorities.

Immediately after the incident, we employed significant IT resources, took measures to protect and strengthen the security of our systems, isolated the affected environment and repaired our network. As part of our reaction, we hired Tempest Security Intelligence, a leading cybersecurity firm, to investigate the incident and supplement our remediation efforts.

Despite our extensive security controls and measures to prevent the violation of our systems and data storage, we cannot guarantee that other cyberattacks or similar breaches will not happen in the future.

We may suffer from a lack of qualified personnel.

From time to time, there is significant competition within the aviation industry for skilled personnel in general and engineers in particular. To the extent thethis competitionre-emerges, we may be unable to recruit and retain the necessary number of highly skilled engineers and other personnel we require. Failure to coordinate our resources in a timely manner or to attract and retain skilled personnel could slow down our development efforts and cause delays in production and deliveries of our aircraft, which would adversely affect us.

We are subject to environmental, health and safety risks.

Our products, as well as our manufacturing and service activities, are subject to environmental laws and regulations in each of the jurisdictions in which we operate. These laws regulate product performance or content, energy use, greenhouse gas emissions, air quality, water and noise pollution, hazardous substance management, human health risks arising from the exposure to hazardous or toxic materials and the remediation of soil and groundwater contamination.

In addition, environmental regulations related to climate change, including CO₂ emissions standards adopted by the International Civil Aviation Organization, or the ICAO, in March 2017, are one of the main drivers of global aerospace industry research and development investments since they may affect customer preferences. We may incur additional costs to improve or create new compliance programs to meet environmental regulatory requirements. We currently have several comprehensive programs in place to reduce the effects of our operations on the environment. For additional information, see “Item 4. Information on the Company—4D. Property, Plant and Equipment.”

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Moreover, our services and products must comply with health and safety laws and regulations, as well as substances and preparations. We strive to maintain the highest quality standards and closely follow potential and confirmed changes in laws and regulations to adapt, redesign, redevelop, recertify or eliminate our products to remain compliant with those claims. Seizures ofnon-compliant products may occur, and we may incur administrative, civil or criminal penalties. In the event of an accident or other serious incident involving a product, we may be required to conduct investigations and undertake remedial activities.

We benefit from certain tax and other government-granted benefits and the suspension, cancellation ornon-renewal of those benefits would have a material adverse effect on us.

Similarly to other Brazilian companies across multiple industries, we receive certain tax and other government-granted benefits, including incentives related to our export and research and development activities. For additional information, see “Item 5. Operating and Financial Review and Prospects—5A. Operating Results—Brazilian Economic Environment—Tax Incentives.”

We cannot assure you that these incentives will be maintained or renewed or that we will be able to obtain new incentives. We could be materially adversely affected in the event our existing benefits are canceled or not renewed.

Investigations by government authorities under the FCPA and other applicable anti-corruption laws may result in substantial fines and other adverse effects.

On October 24, 2016 we finalized definitive agreements, or the Final Agreements, with the U.S. Department of Justice, or DOJ, and the U.S. Securities and Exchange Commission, or the SEC, for the settlement of criminal and civil violations of the U.S. Foreign Corrupt Practices Act of 1977, as amended, or FCPA. We also finalized a term of undertaking (termo de compromisso e de ajustamento de conduta), or TCAC, with the Brazilian Federal Public Prosecutor’s Office (Ministério Público Federal), or MPF, and the Brazilian Securities and Exchange Commission, or the CVM, for the resolution of violations of certain Brazilian laws.

Under these settlements, in addition to paying a total of US$205.5 million to the SEC, DOJ and a Brazilian federal fund, we agreed to an external and independent monitorship for a period of three years. The monitorship period may be extended at the DOJ’s discretion depending on our compliance with the deferred prosecution agreement, or DPA. In February 2017, the United States authorities appointed the monitor, who has been preparing annual reports containing certain observations and recommendations to further improve our anti-corruption and compliance policies and procedures. In February 2020, we agreed to extend the term of the external and independent monitorship for an additional 90 days in order to allow the monitor to complete his work. On April 13, 2020, the monitor delivered his final report to the DOJ and to the SEC, finding that Embraer’s compliance program is reasonably designed and implemented to detect and prevent violations of the anti-corruption laws. On May 22, 2020, the monitorship term expired. Under both the DPA and the SEC Consent, there remain certain additional steps that the Company must take to complete the requirements of the DPA and the SEC Consent.

In addition, under the DPA the DOJ has agreed to defer prosecution for three years of the facts acknowledged by us that occurred between 2007 and 2011, after which period the charges will be dismissed with prejudice if we do not violate the terms of the DPA. If the DOJ determines that we have breached the DPA, the DOJ may commence prosecution or extend the term of the DPA for up to one year. Similarly, if we breach our obligations under the TCAC, it may also be terminated by the MPF and the CVM in which case we would be subject to sanctions. The criminal prosecution or sanctions could have a material adverse effect on our business, financial condition, results of operations, or cash flows.

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We are subject to stringent certification and regulatory requirements, which may adversely affect us.

Our civil aviation products are subject to regulation in Brazil and in each jurisdiction where our customers are located. The aviation authority in Brazil, known as the National Civil Aviation Agency (Agência Nacional de Aviação Civil – ANAC), or the Brazilian Aviation Authority, as well as authorities in other countries in which our customers are located, most notably the FAA and the European Aviation Safety Agency, or the EASA, must certify our civil aviation products before we can deliver them to our customers. We cannot assure you that we will be able to obtain certification of our aircraft on a timely basis or at all. In addition, complying with the requirements of regulatory authorities can be both expensive and time-consuming. If we fail to obtain a required certification from an aviation authority for any of our aircraft, that aviation authority can prohibit the registration of that aircraft within its jurisdiction until certification has been obtained. Changes in government regulations and certification procedures could also delay our start of production as well as entry of a new product into a new market. Despite our continuous efforts to strictly observe and comply with all aviation certification and other regulatory requirements, we cannot predict how future laws or changes in the interpretation, administration or enforcement of those laws will affect us. We may be required to incur significantly more costs to comply with these laws and/or to respond to these changes.

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In addition, we sometimes providetrade-in options to our customers in purchase agreements for new aircraft. These options provide customers with the right to trade in aircraft upon the purchase and acceptance of a new aircraft. In 2019,2020, we accepted seven aircraft, with a total invoiced value of US$43.4 million, for trade-in pursuant to trade-in options, as compared to 17 aircraft, of which one was from the Commercial Aviation business unit and 16 from the Executive Aviation business unit, with a total invoiced value of US$84.9 million, fortrade-in pursuant totrade-in options, as compared toin 2019, and 11 aircraft, with a total invoiced value of US$109.6110.5 million, in 2018 and 23 aircraft, with a total invoiced value of US$114.0 million, in 2017.2018. Thetrade-in price is determined based on the new aircraft sold, as well as other factors, including a market value assessment performed by independent third-party appraisers. We may be required to accepttrade-ins at prices that could result in financial loss for us when we receive the aircraft.

We continuouslyre-evaluate our risk related to financial guarantees andtrade-in obligations based on a number of factors, including the estimated future market value of our aircraft based on third-party appraisals, information on similar aircraft remarketing in the secondary market and the credit rating of the customers.

In 2020, 2019 2018 and 2017,2018, we maintained provisions and contract liabilities on financial guarantees and residual value guarantees of US$140.3125.2 million (including accounts payable of US$152.134.6 million in relation to financial guarantees and residual value guarantees claimed by the counterparties in 2020), US$140.3 million and US$156.8152.1 million (including provision for Chapter 11 filled by Republic Airways on,of US$15.1 million in 2018 and US$30.8 million in 2017)2018), respectively, related to exposure from financial guarantees offered to the main financing agent of the ERJ 140/145 aircraft and Embraer 170/190 aircraft acquired by and delivered to this customer.

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From 2005, when we first delivered EMBRAER 170/190 jet family, through 2019,2020, approximately 28%29% of our Commercial Aviation deliveries was subject to official export credits. In 20182019 and 2019,2020, approximately 51%16% and 16%80%, respectively, of our Commercial Aviation deliveries were supported by the Brazilian export financing program.program, and this significant increase was due to the COVID-19 pandemic in 2020. We cannot assure that the Brazilian government, for policy reasons or otherwise, will not reduce or discontinue this type of funding for the financing of our aircraft or that other sources of funding will be available to our customers. The loss or significant reduction of funds available to our customers, without an adequate substitute, could lead to a reduction in sales of our aircraft or to an increase of eventual aircraft financing arrangements.

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Since 2011, Brazil’s economy has been weak. The Gross Domestic Product, or GDP, had a contraction rate of (4.1)% in 2020, driven by the COVID-19 pandemic, and growth rate wasrates of 1.1% in 2019, 1.3% in 2018, 1.3% in 2017, compared to contraction rates of 3.3% in 2016 and 3.5% in 2015, and GDP growth was 0.5% in 2014, 3.0% in 2013, 1.9% in 2012 and 4.0% in 2011, compared to a GDP growth of 7.5% in 2010. According to the Focus bulletin dated May 22, 2020,April 1, 2021, the consensus of Brazilian economists was for expectations of Brazilian GDP will decrease 5.9%to increase 3.2% in 2020.2021.

Our results of operations and financial condition have been, and will continue to be, affected by the growth rate of the Brazilian GDP. Developments in the Brazilian economy may affect Brazil’s growth rates and, consequently, the use of our products and services.

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Tight monetary policies with high interest rates have restricted and may restrict Brazil’s growth and the availability of credit. Conversely, more lenient government and Central Bank policies and interest rate decreases have triggered and may trigger increases in inflation, and, consequently, growth volatility and the need for sudden and significant interest rate increases, which could adversely affect us. Increases in interest rates could adversely affect our ability to incur additional debt and increase the cost of service of debt, resulting in an increase in our financial costs, which may reduce our liquidity, thereby adversely affecting our ability to meet our financial obligations. As of December 31, 2019,2020, approximately 2.5%2.9% of our consolidated cash and cash equivalents were indexed to the variation of the SELIC and CDI rates, while approximately 5.1% of the cash and cash equivalents of our continuing operations were indexed to the same rates. Therefore, fluctuations in Brazilian interest rates and inflation may adversely affect us. On the other hand, a significant decrease in the CDI or inflation rates may adversely affect the revenue we receive from our financial investments.

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