• 
  • Consolidated Balance Sheets
  • Consolidated Statements of income Yeares Ended
  • Consolidated Statements of Comprehensive Income Years Ended
  • Consolidated Statements of Shareholders' Equity
  • Consolidated Statements of Cash Flow Years Ended
  • Notes To the Consolidated Financial Statements
    • 1. Operations
    • 2. Presentation of the Financial Statements and Accounting Practices
    • 3. Critical Accounting Estimates
    • 4. Accounting Pronouncements not yet Adopted
    • 5. First-time Adoption of IFRS
    • 6. Financial Instruments
    • 7. Cash and Cash Equivalents
    • 8. Financial Assets
    • 9. Trade Accounts Receivable, Net
    • 10. Customer and Commercial Financing
    • 11. Collateralized Accounts Receivable and Recourse and Non Recourse Debt
    • 12. Inventories
    • 13. Other Assets
    • 14. Guarantee Deposits
    • 15. Related Party Transactions
    • 16. Property, Plant and Equipment
    • 17. Intangible Assets
    • 18. Financial Liabilities by Category
    • 19. Loans and Financing
    • 20. Trade Accounts Payable
    • 21. Other Payables
    • 22. Contribution from Suppliers
    • 23. Advances from Customers
    • 24. Axes and Payroll Charges Payable and Income Tax Social Contribution
    • 25. Other Provisions
    • 26. Provisions for Contingencies
    • 27. Post-retirement Benefits
    • 28. Shareholders' Equity
    • 29. Stock Compensation
    • 30. Earnings Per Share
    • 31. Employee Profit Sharing-plan
    • 32. Other Operating (expense) Income, Net
    • 33. Revenue and (expenses) by Nature
    • 34. Financial Income (expense)
    • 35. Foreign Exchange Gains (losses), Net
    • 36. Income Taxesincome Taxes
    • 37. Impairment Test
    • 38. Financial Guarantees
    • 39. Financial Instruments
    • 40. Responsibilities and Commitments
    • 41. Insurance (unaudited)
    • 42. Additional Information of Cash Flow
    • 43. Segment Information
    • 44. Events After the Balance Sheet Date
  • Proposal to the Board of Directors
  • ANNUAL REPORT

Notes to the Consolidated Financial Statements
In millions of U.S. dollars, unless otherwise stated

14. GUARANTEE DEPOSITS

	12.31.2010	12.31.2009	01.01.2009
Financing arrangements and residual value guarantees (i)	263,6	308,9	299,8
Sales financing structure guarantees (ii)	199,1	194,6	185,4
Others guarantees	2,1	2,1	8,0
	464,8	505,6	493,2
Less – current portion	-	-	-
Long – term portion	464,8	505,6	493,2

(i) U.S. dollar amounts deposited in an escrow account as collateral for the financing of certain aircraft sold if the guarantor of the debt (unrelated party) is required to pay the lender, the guarantor will be entitled to the amount in the escrow account. The amount deposited will be released at maturity of the financing contracts (between 2013 and 2021) if the aircraft purchaser does not default on the loan. The interest on the escrow account is added to the principal and recognized by the Company as financial income.

Seeking to ensure profitability compatible with the term of the guarantee, in 2004 Embraer invested principal equivalent, to US$123.4 thousand in structured notes. In the event of default by Embraer, the maturity dates of these notes would be brought forward and they would be realized at market value, limited to a minimum of the amounts originally invested. Any amount by which the market value exceeds the amount invested will be paid to the Company in the form of bonds, or loans of that amount Events of default that could result in early maturity of the notes include: (a) insolvency of Embraer or filing for reorganization proceedings; and (b) default or restructuring of the Embraer debt in financing agreements. The interest received monthly is added to the principal and recorded as financial income for the period.

In 2010, US$35.3 (principal of US$26.4) was transferred to noncurrent investments, as the lien on that amount had been released;

(ii) Financial investments denominated in U.S. dollars with third party financial institutions as a pledge under a specific sale financing structure. These investments earn interest at the annual LIBOR rate.

top