Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders

Embraer S.A.

We have reviewed the condensed consolidated statement of financial position of Embraer S.A. and subsidiaries as of June 30, 2016, the related condensed consolidated statements of income and comprehensive income, for the three-month and six-month periods ended June 30, 2016 and 2015, and the related condensed consolidated statements of shareholders’ equity and cash flows for the six-month periods ended June 30, 2016 and 2015. These condensed consolidated interim financial statements are the responsibility of the Company’s management.

We conducted our reviews in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States), the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our reviews, we are not aware of any material modifications that should be made to the condensed consolidated interim financial statements referred to above for them to be in conformity with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).

We have previously audited, in accordance with standards of the Public Company Accounting Oversight Board (United States), the consolidated statement of financial position of Embraer S.A. and subsidiaries as of December 31, 2015, and the related consolidated statements of income, comprehensive income, shareholders’ equity, and cash flows for the year then ended (not presented herein); and in our report dated March 28, 2016, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated statement of financial position as of December 31, 2015, is fairly stated, in all material respects, in relation to the consolidated statement of financial position from which it has been derived.

São José dos Campos - Brazil

August 17, 2016

/s/ KPMG Auditores Independentes

1.              Operations

Embraer S.A. ("Embraer" or "the Company”) is a publicly-held company incorporated under the laws of the Federative Republic of Brazil with headquarters in São José dos Campos, State of São Paulo, Brazil. The corporate purpose of the Company is:

(i)            To design, build and market aircraft and aerospace materials and related accessories, components and equipment, according to the highest standards of technology and quality;

(ii)           To perform and carry out technical activities related to the manufacturing and servicing of aerospace materials;

(iii)          To contribute to the training of technical personnel as necessary for the aerospace industry;

(iv)         To engage in and provide services for other technological, manufacturing and business activities in connection with the aerospace industry;

(v)          To design, build and trade in equipment, materials, systems, software, accessories and components for the defense, security and power industries, as well as perform and carry out technical activities related to the manufacturing and servicing thereof, in accordance with the highest technological and quality standards; and

(vi)         To conduct other technological, manufacturing, trading and services activities related to the defense, security and power industries.

The Company’s shares are listed on the enhanced corporate governance segment of the Stock Exchange in Brazil (“BM&FBOVESPA”), known as the New Market (“Novo Mercado”). Embraer S.A. also has American Depositary Shares (evidenced by American Depositary Receipts - ADRs) which are registered with the Securities and Exchange Commission (“SEC”) and are listed on the New York Stock Exchange (“NYSE”). The Company has no controlling group and its capital is comprised entirely of common shares.

2.             Presentation of the Financial Statements and Accounting Practices

2.1   Presentation and preparation of the financial statements

These condensed consolidated interim financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting and should be read in conjunction with the Group’s last annual consolidated financial statements as at for the year ended 31 December, 2015 (“last annual financial statements”). They do not include all the information required for a complete set of IFRS financial statements. However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Company’s financial position and performance since the last annual consolidated financial statements as at and for the year ended December 31, 2015.

2.1.1       Basis of preparation

These condensed consolidated interim financial statements have been prepared under the historical cost convention except when the item requires different criteria and adjusted to reflect assets and liabilities measured at fair value through profit or loss or marked to market when available for sale.

The preparation of financial statements requires the use of certain critical accounting estimates. It also requires management of the Company to exercise its judgment in the process of applying the Company's accounting policies. These consolidated financial statements include accounting estimates for certain assets, liabilities and other transactions.

The areas which involve a higher degree of judgment or complexity, or assumptions and estimates significant to the condensed consolidated interim financial statements are consistent with those described in the consolidated financial statements as at and for the year ended December 31, 2015 (not included herein).

Embraer S.A.

Notes to the Condensed Consolidated Interim Financial Statements

11

The weighted average interest rates at June 30, 2016 for cash equivalents and financial investments in reais and in dollars were 14.60% p.a. and 1.96% p.a. (14.70% p.a. and 1.71% p.a. at December 31, 2015), respectively.

5.             Derivative financial instruments

Derivative financial instruments are contracted to protect the Company’s operations from exchange and interest rate fluctuations and are not used for speculation.

As of June 30, 2016, the Company had derivative financial instruments such as swap and option to purchase interest rate, swaps and currency put and call options and non-deliverable forwards (NDF).

Swaps are contracted to exchange a floating rate loan to a fixed rate loan or to exchange cash flows in dollars to cash flows in reais, or vice versa and to exchange Euros for dollars or vice versa according to the need to protect the transactions according to the valuation of the Company . The fair value of these instruments is measured at the future flow, determined by applying the contractual rates up to maturity and discounted to present value on the date of the consolidated financial statements at the current market rates.

Cash flow hedges are contracted to protect highly probable cash flows denominated in reais related to salaries and health plan expenses against exchange rate variations. The financial instrument normally used by the Company for this type of transaction is the zero-cost collar, which consists of buying put options and selling call options contracted with the same counterparty and with zero net premium. The fair value of these instruments is determined in accordance with the observable market pricing model (through market information providers) and widely used by market players to measure similar instruments. When the dollar closing rate of is between the put and call exercise values, the fair value reflects the extrinsic value of the option, i.e., the value that is directly connected to the time remaining to maturity. The projected cash flows will affect the income statement according to the accrual period.

Non-deliverable forwards are contracted to protect the Company against the risk of fluctuations in exchange rates. The fair value is determined in accordance with the observable market pricing model.

As of June 30, 2016, the Company did not have any derivative contracts subject to margin calls.

(i)             Derivative financial instruments (swaps), which converted the amount of R$ 48.9 million, equivalent to US$ 15.3 for recourse and non-recourse debt, from an average fixed interest rate of 8.40% p.a., into a floating rate equivalent to LIBOR 6 month + 1.26% p.a.;

(ii)            Derivative financial instruments (swaps) that converted an export modality debt of R$ 112.0 million, equivalent to US$ 34.9, from an average fixed interest rate of 8.00% p.a. to an average rate weighted floating rate equivalent to 68.35% p.a. of the CDI (Interbank Deposit Certificate);

(iii)           Derivative financial instruments (swaps), relating to a transaction of R$ 13.8 million, equivalent to US$ 4.3, which converted funding transactions subject to LIBOR  1 month + 2.44% p.a. floating interest rates to a fixed interest rate of 5.23% p.a.;

(iv)           Zero-cost collar derivative financial instruments, designated as cash flow hedges, of R$ 624.8 million, equivalent to US$ 182.7, through a purchase of a put option with an exercise price of R$ 3.4200 and sales of CALL with an average weighted exercise price of R$ 6.3445 for the year 2016 and the amount of R$ 150.1 millionn, equivalent to US$ 48.0 through purchase PUT with an exercise price of $ 3.40 and sales of CALL with exercise price of $ 4.40 for 2017;

(v)            Derivative financial instruments (interest swaps), designated as hedge accounting of interest, of R$ 2,555.4 million, equivalent to US $ 796.1, of the Export and Project  Development debt lines, subject to a weighted average fixed interest rate of 6.12% p.a. to a weighted average floating rate equivalent to 43.93%.

(vi)           Derivative financial instruments on swap amounting to US$ 2.9, equivalent to R$ 9.9 million on the exchange dollar currency for real and fixed rate of 4.15% p.a for floating rate equivalent to 113.94% of the CDI (Interbank Deposit Certificate).

(vii)          Derivative financial instruments (non-deliverable forwards), amounting to US$ 59.7 equivalent to R$ 191.6 million, relating to dollar to Euro  and euro to dollar currency exchanges;

(viii)         Derivative financial instruments in the form of purchase (CALL) options, the underlying asset for which is the floating LIBOR 6 month interest rate. with exercise values from 2.80% p.a.

At June 30, 2016, the fair value ​​of derivative financial instruments was presented in the Statement of Financial Position as follows:

6.             Inventories

(i)          The following aircraft were held in the finished products inventory:

·         At June 30, 2016: three EMBRAER 175, one EMBRAER 190, two Legacy 450, five Legacy 500, two Phenom 100, four Phenom 300, one Lineage, one Super Tucano and one Ipanema; and

·         At December 31, 2015: four Legacy 500, two Legacy 650, two Phenom 100, four Phenom 300, one Lineage and one Ipanema.

Of the total aircraft inventories at June 30, 2016, three EMBRAER 175 had been delivered by August 11, 2016.

(ii)         The following used aircraft were held in inventory as available for sale:

·         At June 30, 2016: one EMBRAER 175, one Legacy 500, two Legacy 600, one Lineage, one Phenom 100, five Phenom 300 and one Ipanema; and

·         At December 31, 2015: one Legacy 600, two Legacy 650, three Phenom 100 and two Phenom 300.

(iii)        A provision was recorded for items without activity for over two years and with no planned use in the production program, as well as to cover expected losses from excess inventories or obsolete work in process, except for inventories of spare parts, for which the provision is based on technical obsolescence of items without activity for over two years.

7.             Interest in entities

(i)             Wholly owned subsidiaries and special purpose entities

Subsidiaries and structured entities that the Company directly or indirectly has control, as of June 30, 2016, which are disclosed in the consolidated financial statements as of December 31, 2015, are consolidated into the Embraer group.

There are no contractual or legal restrictions on the Company’s access to assets or settlement of liabilities of the wholly owned subsidiaries of the group.

There are inherent risks to the operations of these entities and the most significant are described below:

·          Economic Risks: potential losses from fluctuations in market conditions (price of products, exchange rate and interest);

·          Operational risk: potential losses resulting from the emergence of new technologies or failure of current processes;

·          Credit risk: potential losses that might occur if a third party (customer) becomes unable to meet its obligations; and

·          Liquidity risk: financial inability to meet financial obligations.

(ii)            Subsidiaries with participation of non-controlling shareholders

Non-controlling shareholders have interests in the group entities listed below, however, based on contractual agreements and analysis of the current accounting standards, the Company has control and therefore has the right to consolidate these entities:

Although the Embraer group holds 51.0% of the entities Harbin Embraer Aircraft Industry Company Ltd., Embraer CAE Training Services Ltd., and Visiona Tecnologia Espacial S.A., the powers enumerated in the contractual agreements show that the Board of Directors is mainly comprised of Embraer representatives and the Embraer Group directs the principal operating activities of the entity.

An agreement with Bradar Aerolevantamento Ltda. assigns to Embraer S.A. an irrevocable option to purchase all the shares of the non-controlling interests. This option is exercisable at any time and can be transferred to any person, which determines the control of Bradar Aerolevantamento by the Embraer group, despite holding only 25% of its capital.

At June 1, 2016 Embraer and the non-controlling (AVIC Harbin Aviation Industry (Group) Co., and Harbin Hafei Aviation Industry Co., Ltd) confirmed the phase out of their company Harbin Embraer Aircraft Industry Co., Ltd (HEAI) after 13 years of successful manufacturing and delivery of commercial and executive jets in China. The last delivery of its Legacy 650 aircraft occurred last March. Embraer remains fully committed to and will continue to serve the Chinese commercial and executive aircraft markets, providing efficient support to the existing customers and their 166 strong fleet, as well as offering to the market a world class portfolio of products and services, through its Beijing based team and its infrastructure throughout the country.

The financial position of the group entities that have non-controlling interests is summarized below:

Group subsidiaries with non-controlling interests are subject to the same risks as the wholly owned subsidiaries.

(iii)          Jointly controlled entity

EZ Air Interior Limited is a joint operation between the Embraer group and Zodiac Aerospace and shares with the other members the joint management of the relevant activities of the entities.

The net assets and liabilities of the joint operations are recognized in consolidation in accordance with the rights and obligations assigned to Embraer.

(iv)           Interests in other companies

On May, 2016 the Company has sold 25% of the share participation Embraer Defesa & Segurança held on AEL Sistemas S.A to its controlling shareholders. This operation occurred by exercising a put option held by Embraer Defesa & Segurança against AEL controlling shareholders. The put option was measured by its fair value and was liquidated in cash, all the fair value fluctuations previously recognized on other comprehensive income was reclassified to the P&L as operating results, and impact on the P&L as a result of this sale was US$ 1.2.