SAO JOSE DOS CAMPOS, Brazil, Oct. 10 /PRNewswire-FirstCall/ -- Embraer
reinforces that its hedging policy does not have any speculative
component and that the derivative instruments in place are exclusively held to
protect its operations against a potential loss arising from adverse changes
in interest and foreign currency exchange rates. Embraer also emphasizes that
an increase in the exchange rate (R$/US$) may have a positive influence on its
operational results.
Therefore, the protection instruments currently held by the Company are
only NDFs (Non Deliverable Forwards) and plain vanilla interest rate swaps,
without any leverage component. In addition, Embraer informs that it does not
have any dual indexation contract or target forward transactions.
Due to the exclusive purpose of hedging its operations against a potential
loss arising from adverse changes in interest and foreign currency exchange
rates, Embraer will not anticipate the cash impact on its positions, and any
cash liquidation for those transactions will be settled within the date of the
underlying asset revenue recognition, which are mainly concentrated in
December 2008 and March 2009.
The earnings release which we plan to disclose on November 3rd, 2008, will
recognize financial expenses related to market value (MTM) of the hedge
position of approximately US$93 million, which amount is compatible with
Embraer's current revenues and expenses.
Antonio Luiz Pizarro Manso
Executive Vice-President & CFO
SOURCE Embraer
Brazil, Rosana Dias, +55-12-3927-1311, cell, +55-12-9724-4929, fax,
+55-12-3927-2411, rosana.dias@embraer.com.br, for Embraer
