Embraer-Empresa Brasileira de Aeronautica (ERJ)

ERJ » Topics » Brazilian political and economic conditions have a direct impact on our business and the trading price of our preferred shares and the ADSs .

This excerpt taken from the ERJ 20-F filed May 1, 2009.

Brazilian political and economic conditions have a direct impact on our business and the trading price of our common shares and ADSs.

The Brazilian government has frequently intervened in the Brazilian economy and occasionally has made drastic changes in policy and regulations. The Brazilian government’s actions to control inflation and affect other policies and regulations have often involved, among other measures, increases in interest rates, changes in tax policies, price controls, currency devaluations, capital controls and limits on imports. Our business, financial condition, results of operations and the trading price of the common shares and the ADSs may be adversely affected by changes in policy or regulations at the federal, state or municipal level involving or affecting factors such as:

 

   

interest rates;

 

   

monetary policies;

 

   

exchange controls and restrictions on remittances abroad (such as those that were imposed in 1989 and early 1990);

 

   

currency fluctuations;

 

   

inflation;

 

   

liquidity of domestic capital and lending markets;

 

   

tax policies; and

 

   

other political, diplomatic, social and economic developments in or affecting Brazil.

Uncertainty over whether the Brazilian government will implement changes in policy or regulation affecting these or other factors in the future may contribute to economic uncertainty in Brazil and to heightened volatility in the Brazilian securities markets and securities issued abroad by Brazilian companies.

In addition, in October 2006 elections were held in all states of Brazil and at the federal level to elect state governors and the president. The re-elected president has, to date, largely continued the policies of his previous administration; however, it is impossible to predict how new policies that may be adopted by the president or by the state governors would affect the Brazilian economy or our business.

Historically, the political scenario in Brazil has influenced the performance of the Brazilian economy in the past; in particular, political crises have affected the confidence of investors and the public in general, which adversely affected the economic development in Brazil.

These and other future developments in the Brazilian economy and governmental policies may adversely affect us and our business and results of operations and may adversely affect the trading price of our common shares and ADSs.

 

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Table of Contents
This excerpt taken from the ERJ 6-K filed Mar 17, 2006.

          Brazilian political and economic conditions have a direct impact on our business and the trading price of our preferred shares and the ADSs.

          The Brazilian government frequently intervenes in the Brazilian economy and occasionally makes drastic  changes in policy and regulations.  The Brazilian government’s actions to control inflation and affect other policies and regulations have often involved, among other measures, increases in interest rates, changes in tax policies, price controls, currency devaluations, capital controls and limits on imports.  Our business, financial condition, results of operations and the trading price of the preferred shares and the ADSs may be adversely affected by changes in policy or regulations at the federal, state or municipal level involving or affecting factors such as:

 

interest rates;

 

 

 

 

exchange controls;

 

 

 

 

currency fluctuations;

 

 

 

 

inflation;

 

 

 

 

liquidity of domestic capital and lending markets;

 

 

 

 

tax policies; and

 

 

 

 

other political, diplomatic, social and economic developments in or affecting Brazil.

          Uncertainty over whether the Brazilian government will implement changes in policy or regulation affecting these or other factors in the future may contribute to economic uncertainty in Brazil and to heightened volatility in the Brazilian securities markets and securities issued abroad that are supported by Brazilian issuers.

          These and other future developments in the Brazilian economy and governmental policies may adversely affect us and our business and results of operations and may adversely affect the trading price of our preferred shares and ADSs.

          Inflation and government efforts to combat inflation may contribute significantly to economic uncertainty in Brazil and to heightened volatility in the Brazilian securities markets and, consequently, may adversely affect the market value of the preferred shares and the ADSs.

          Brazil has in the past experienced extremely high rates of inflation in the past.  More recently, Brazil’s annual rate of inflation was 10.4% in 2001, 25.3% in 2002, 8.7% in 2003 and 12.4% in 2004 (as measured by Índice Geral de Preços – Mercado or the IGP-M).  Inflation, and certain government actions taken to combat inflation, have in the past had significant negative effects on the Brazilian economy.  Actions taken to combat inflation, coupled with public speculation about possible future governmental actions, have contributed to economic uncertainty in Brazil and heightened volatility in the Brazilian securities markets.

          Future Brazilian government actions, including interest rate decreases, intervention in the foreign exchange market and actions to adjust or fix the value of the real may trigger increases in inflation.  If Brazil experiences high inflation again in the future, our operating expenses and borrowing costs may increase, our operating and net margins may decrease and, if investor confidence decreases, the price of the preferred shares and ADSs may fall.

A-17



This excerpt taken from the ERJ 20-F filed Jun 30, 2005.

          Brazilian political and economic conditions have a direct impact on our business and the trading price of our preferred shares and the ADSs.

          The Brazilian government frequently intervenes in the Brazilian economy and occasionally makes drastic  changes in policy and regulations.  The Brazilian government’s actions to control inflation and affect other policies and regulations have often involved, among other measures, increases in interest rates, changes in tax policies, price controls, currency devaluations, capital controls and limits on imports.  Our business, financial condition, results of operations and the trading price of the preferred shares and the ADSs may be adversely affected by changes in policy or regulations at the federal, state or municipal level involving or affecting factors such as:

 

interest rates;

 

 

 

 

exchange controls;

 

 

 

 

currency fluctuations;

 

 

 

 

inflation;

 

 

 

 

liquidity of domestic capital and lending markets;

 

 

 

 

tax policies; and

 

 

 

 

other political, diplomatic, social and economic developments in or affecting Brazil.

          Uncertainty over whether the Brazilian government will implement changes in policy or regulation affecting these or other factors in the future may contribute to economic uncertainty in Brazil and to heightened volatility in the Brazilian securities markets and securities issued abroad that are supported by Brazilian issuers.

          These and other future developments in the Brazilian economy and governmental policies may adversely affect us and our business and results of operations and may adversely affect the trading price of our preferred shares and ADSs.

          Inflation and government efforts to combat inflation may contribute significantly to economic uncertainty in Brazil and to heightened volatility in the Brazilian securities markets and, consequently, may adversely affect the market value of the preferred shares and the ADSs.

          Brazil has in the past experienced extremely high rates of inflation in the past.  More recently, Brazil’s annual rate of inflation was 10.4% in 2001, 25.3% in 2002, 8.7% in 2003 and 12.4% in 2004 (as measured by Índice Geral de Preços – Mercado or the IGP-M).  Inflation, and certain government actions taken to combat inflation, have in the past had significant negative effects on the Brazilian economy.  Actions taken to combat inflation, coupled with public speculation about possible future governmental actions, have contributed to economic uncertainty in Brazil and heightened volatility in the Brazilian securities markets.

          Future Brazilian government actions, including interest rate decreases, intervention in the foreign exchange market and actions to adjust or fix the value of the real may trigger increases in inflation.  If Brazil experiences high inflation again in the future, our operating expenses and borrowing costs may increase, our operating and net margins may decrease and, if investor confidence decreases, the price of the preferred shares and ADSs may fall.

12



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