Good morning, ladies and gentlemen, and welcome to the audio conference call that will review Embraer's Third Quarter 2020 Results. Thank you for standing by. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions to participate will be given at the time. [Operator Instructions]. As a reminder, this conference is being recorded and webcasted at ri.embraer.com.br. This conference call includes forward-looking statements or statements about events or circumstances which have not occurred. Embraer has based these forward-looking statements largely on its current expectations and projections about future events and financial trends affecting the business and its future financial performance. These forward-looking statements are subject to risks, uncertainties and assumptions, including, among the other things, general economic, political and business conditions in Brazil and other markets where the company is present. The words believes, may, will, estimates, continues, anticipates, intends, expects and similar words are intended to identify forward-looking statements. Embraer undertakes no obligations to update publicly or revise any forward-looking statements because of new information, future events or other factors. In light of these risks and uncertainties, the forward-looking events and circumstances discussed on this conference call might not occur. The company's actual results could differ substantially from those anticipated in the forward-looking statements. Participants on today's conference call are Mr. Francisco Gomes Neto, President and CEO; Mr. Antonio Carlos Garcia, Chief Financial Officer and Procurement; and Mr. Eduardo Couto, Director of Investor Relations. I would like now to turn the conference over to Mr. Francisco Gomes Neto. Please go ahead, sir.

Good morning everyone. Thank you very much for participating in this conference call. I'm Francisco Gomes Neto, President and CEO of Embraer. Before giving the floor to Antonio Garcia, our CFO, I would like to make some initial comments. With the recent growth in the number of COVID-19 cases in different parts of the world, notably in Europe, and in the United States, we remain focused on the health and safety of our people, assessing the situation on a daily basis at each of our units around the globe. Regarding finance, our focus in the short-term remains on preserving cash through the execution of a series of measures implemented over the past few months, which I have already discussed with you during our past earning calls. In parallel, we're preparing the ground for a much better financial performance in 2021 and grow in the following years. Today, I'd like to take a few minutes to focus on some of our priorities, namely a lean organization and recapture synergies and business plan update. Next slide, please. Regarding our lean organization and recapture synergies pillars, we have made every effort to maintain the knowhow and competitive advantage brought by our remarkable people. But in view of the new master reality, it has become essential to review our workforce. And in the last quarter, we made a significant adjustment to our rate structure. We analyzed these structures in teams of each area within the company with the goals of creating a leaner and more agile organization, and eliminating the duplications generated by the Commercial Aviation carve-outs. We have already recovered synergies with the reintegration of Commercial Aviation and the associated services and support, and at the same time, we have retained all the skills necessary to return to grow in the coming years. A simpler and leaner organization has been prepared for properly implementing our 2021-2025 strategic plan, a theme that we'll address on the next slide. While we're dedicated to managing the impacts generated by the crisis in the short-term, over the past few months, we have also focused on updating our business and growth plan. We believe that the period between now and 2025 can be divided into three phases. This year is dedicated to crisis response. Starting next year, we expect that the market will start to recover with variations depending on the specific business areas and markets. And from 2022 onwards, our projects will mature and allow us to grow profitably. Regarding Embraer 2021-2025 strategic plan, we have reviewed the details over the past few months, in response to the new market scenario, including the impacts generated by the pandemic, the end of the agreement with Boeing and the reintegration of commercial aviation. This was a collaborative effort involving dozens of company leaders, who focused on the plans effectiveness and we know it is realistic. The goals are challenging, but doable, and we will execute with focus, governess, and discipline. The plan has two main objectives: to increase your revenue and to improve profitability. To achieve this two objectives, we define this three lines of action. Number one, initiatives aimed at efficiency gains; number two, actions to increase the sales of our current product portfolio; and number three, a combination of business diversification projects, innovation, and strategic partnerships. In total, the plan comprises 18 projects that will bring you more agility and intelligence to the processes and reinforce alignment across the company. Just to give you a little more visibility, the first front which is related to efficient gains entails the creation of a world-class purchasing organization, reporting to the CFO, and focusing in a very structured way on intelligent cost reduction. At the same time, we're incorporating more intelligence into the processes within the material planning and logistics area, focusing on increasing eventual return to reduce substantially working capital. In operations, the process aims to reduce aircraft production cycles, which will allow us to have more competitive products and reduce the working capital as well. Regarding the second front, dedicated to the growth of portfolio sales, we'll intensify the sales efforts of our products, the benefit from new and competitive products in every segment in which we operate. Additionally, we'll focus on adapting and converting aircraft for specific segments, such as converting E-Jet to carry cargo into passenger cabin, or the recently launched Phenom 300 Med which was designed for medical evacuation. Finally, on the diversification, innovation and partnerships front, we're going to expand our operations. This year, we have already announced investments in Cybersecurity with the acquisition of Tempest, the Frigate project with the Brazilian Navy, and more recently, the creation of EV, a company dedicated to the development of the Urban Air Mobility Ecosystem and eVTOL, electrical Vertical Landing and Take-Off aircrafts. From this front we are also developing project to expand our service offerings for aircraft from other manufacturers. And we're discussing potential strategic partnerships aimed at opening new markets and developing new products such as the turboprop. It's important to note that, in addition to managing where we structure the project, the plan focused on the process of execution and on the constant monitoring of the evolution of all initiatives. We're aware of the challenge we have ahead, especially in Commercial Aviation in 2021, but we're very confident in the future of Embraer. We know what must be done. We know how the plan should be carried out, and we have an immensely competent and aligned team that will develop the necessary initiatives to make the company grow profitably in the coming years. With that, I have concluded my comments and I would like to give the floor to our CFO, Antonio Garcia. Over to you, Antonio. Thank you all.

Thanks, Francisco. Good morning everyone. It's really a great pleasure to talk to all of you. Now moving to the Commercial Aviation highlights on Slide 7. During the third quarter, we delivered seven E-Jets representing a sequential improvement compared to the first and second quarters that will accelerate even more in the fourth quarter. Among our third quarter deliveries, we had five 175s for United Airlines, highlighting our continuous leadership in U.S. regional jet market. As another example of our continuous improvement, ever had deliver more plans in October than in the entirely third quarter of 2020. As far as new operators, Alliance Airlines from Australia received 14 Pre-Owned E190s and Bamboo Airways from Vietnam has started operation with two E195. We're still not in the point where we can give guidance on expected deliveries or financial performance due to the COVID-19 certainties. But we would like to point out that we remain cautiously optimistic for the future as we have seen a gradual rebound in domestic flights activities in several markets around the world, including United States. Looking Commercial Aviation 2021, the uncertainty around the COVID pandemic are still our biggest concern for next year. The fleet of 175 in operations continues to improve with 93% in service as of end of September, outpacing our competitors in the market. I'm also proud to say that we had zero cancellation of commercial jets orders since beginning of the COVID pandemic. The Executive Jets on Slide 8. We had a strong delivery pickup during the third quarter with 21 deliveries. This brought total Executive Jets delivered so far in 2020 to 43 aircrafts. We expect the fourth quarter to remain strong for Embraer and deliveries should continue to increase compared to the previous quarter. As a result of higher deliveries, improvement mix, and measures taken to be more cost efficient, the Executive Jet segments posted positive operating margins in the third quarter and year-to-date marking the continuous turnaround of our profitability of this segment, despite the COVID-19 pandemic. Also, as mentioned in the last call, we launched the Phenom 300 Med during the third quarter, which is our unique Medevac solution that's also available for retrofit on existing Phenom 300s. In terms of new technology, Embraer continues to disrupt the major segments with Praetors, HEPA Filters, now being the standard, while Lavatory Electrical Doors and Synthetic Vision System were both certified during the quarter. Finally, we would like to highlight the continuous recovery during the third quarter, in particular with respect to the Fractional and Charter operation, with small and medium jets. Amongst, Fractional, small jets activity was down only 13% year-over-year compared to the medium jets down to 18% and larger jets 33%. Amongst Charters small jets activities was almost flat versus last year, while the medium and larger jet class were down 5% to 17% respectively. As you can see the marks where Embraer is positioned with the Phenom and Praetors are recovering faster. Moving to Slide 9, which shows the highlights for Defense & Security. Regarding the C-390 Millennium program, there are currently six C-390 in the early stage of production for future deliveries to Brazil and Portugal. And we expect to deliver one more aircraft to the Brazil and Portuguese through this year. The program also received the 2020 Grand Laureate award for defense from the Aviation Week, which selects the best aircraft programs of course commercial, executive, defense around the world. Another highlight during the quarter was the Super Tucano as Embraer was able to deliver 10 planes to international customers. With the reopening of global borders, we were able to deliver Super Tucanos to Nigeria, Chile and the Philippines. Finally, the First Gripen E arrived in Brazil to start its flight test campaign, which is a major milestone in the Brazilian Jet Fighter program we start. Embraer will also play a leading role in the execution of the program in Brazil, and we'll be responsible for the systems development, integration, flight testing, and final assembly, and deliver off the aircraft to the Brazilian Air Force. Now turning to Services & Support on Slide 10. We're proud to say that Embraer once again was ranked first in Pro Pilot's Corporate Aircraft Product Support Survey 2020, underlining our commitment to customers to provide the best after sales support possible. Our Services & Support team also completed the seventh conversion of a Legacy 450 to a Praetor 500 since this service became available early this year. We were also able to get the certification in the third quarter of the First E-Jet modified for cargo transportation in cabins, offering our customer a solution to better utilize their fleets in the environment of lower passenger traffic caused by the COVID-19 pandemic. Further in servicing, we're pleased to see that C390 Millennium has been showing excellent reliability in the humanitarian missions in Brazil and abroad. Moving on to our financial results on the Slide 12. Our backlog finished third quarter at $15.1 billion, representing several years of revenue for Embraer. It's important to highlight again, that despite some deferrals, we didn't have any cancellation in Commercial Aviation, and we expect some new sales to potentially lead for a backlog expansion in the upcoming quarters, depending on the impacts of a second COVID wave in certain regions. On Slide 13, we show revenues and deliveries. We can clearly see an improvement in the third quarter relative to what we had in the first half of the year and the impacts of COVID on the industry has started to reduce, with the higher commercial and executive jets delivery in the quarter. As I mentioned earlier, we expect an even better fourth quarter compared to this third quarter. We also had a stronger revenue improvement in Defense & Security following the reopening of international borders to allow for the deliveries of Super Tucanos. Our Services & Support business despite a year-over-year decline due to the COVID-19 has also increased double-digit sequentially from the second quarter with transportation improved activities across the Commercial, Executive and Defense markets. Next on Slide 14, Embraer highlights its continued cost control in selling and administrative expenses. The reduction of SG&A reflects our ongoing efficiency gains in two directions, as Francisco mentioned earlier in his presentation, combined of course lower marketing expenses coming from the COVID-19 restrictions. It is important to mention that selling expenses includes higher bad debt provisions compared to last year, mostly related to our Services & Support receivables. Excluding the bad debt provision SG&A expenses on a year-to-date basis in 2020 are 30% lower than the same period of 2019. On Slide 15, we show our operating results. Embraer reported adjusted EBIT of a loss of $45 million in the third quarter with a margin of minus 6%. The adjusted EBIT in the third quarter excluded a positive impact of $7 million for special items, including $54 million in charge related to our restructuring announced in September, and $13 million in additional bad debt provision, offset by $75 million positive reversal of non-cash impairment charge in Executive and Commercial Aviation. Breaking our third-quarter margin by business: Executive Jets was positive 2%, Services & Support 4% positive, Defense & Security break-even, similar to previous quarter, Commercial Aviation was responsible for the negative operating results due to the low deliveries and the core impacts. Slide 16 shows our adjusted EBITDA which was a loss of $8 million and also excluded the special items already mentioned in previous slides. Adjusted EBITDA margin was minus 1%. The combination of better volumes and cost cut initiatives had already started to appear in the third quarter and we expect this trend to accelerate in the fourth quarter of the year. Moving to next Slide 17 with earnings. Embraer adjusted net income reached a loss of $148 million in the third quarter. Our earnings have been negatively impacted by the lower operating results as well as higher financial expenses and no cash FX losses. Similar to the operating numbers, net income also reached a bottom in the second quarter and has started to rebound. And we expect better borderline performance in the fourth quarter of this year driven by higher deliveries. Next slide, Slide 18, we show Embraer's total investment over the last few quarters. The company has launched several initiatives to cut investment, including CapEx as well research and development. These reflect our actions to preserve the cash. It also highlights Embraer updated portfolio, we say state of our progress in Commercial Aviation, Executive Jets, Defense & Security. Embraer has invested a lot in the last five years, bringing new programs and products to the market and now we expect the upcoming years to show lower investment. Total investment during the third quarter reached $45 million and $134 million year-to-date, which is less than half of our investment level of 2019. Moving to Slide 19, our free cash flow was a usage of $567 million in the third quarter. This free cash flow usage was negatively impacted by approximately $250 million, including three major items. First, one-off charge of around $70 million related to the restructuring and severance costs package as far as headcount reductions in beginning of September, second around $100 million in short-term customer finance that will be normalized now in the fourth quarter, and third another $80 million related to three plans that skipped from the end of the third quarter to the fourth quarter. Disclosing that, our cash consumption in the third quarter of this year will be very close to the third quarter of 2019. Giving expectation for higher deliveries in the fourth quarter we should have positive impact on our working capital, as well as our cost reduction initiatives, we're confident that our free cash flow will be much better in the fourth quarter of the year and we should be at least cash break-even in the second half of 2020. Finally, on Slide 20, we highlight our strong cash position. Our liquidity increased during the third quarter with a total cash position of $2.2 billion, which is a similar cash level that would have prior to COVID pandemic. I'm also happy to announce that we complete a series of liability management initiatives, new bonds with private and public banks as well new bonds issuance of $750 million maturing in 2028, and have repurchase of $250 million of outstanding 2022 and 2023 bonds. It's important to highlight that our new 2028 bonds is unsecured and had a market demand above $3 billion showing the confidence of investor in long-term of Embraer. With that, I conclude my presentation, and we can open for questions. Thank you very much.

Thank you. We will now begin the question-and-answer session. [Operator Instructions]. Our first question comes from Robert Spingarn, Credit Suisse.

Hi, just a couple of different things. First, what gives you confidence in the outlook of Commercial and Executive Jets for you to reverse these impairments at this time? Well, what improving trends are you seeing and does that include increased interest in ordering aircraft?

Rob, it's Antonio speaking, thank you, a good question. The reversal of impairment assuming that we revised it in a quarterly basis; it was highly driven by the exchange rate. The devaluation of the Brazilian Real we do have a lot of cost in Reais which means dividend change bonds. We just changed the exchange rates, improve the margins which accounts for the impairment reversal. Just we didn't change the baseline.

I see. Are you seeing any evidence of something you've talked about in the past and that we saw after 9/11? Are you seeing actual down gauging at your customers from the commercial narrowbodies to the E-Jets? And is this a trend that is gaining some traction?

Rob, Francisco speaking. Thanks for the question. We believe the domestic and regional markets will rebound first, as it happened in the past as we mentioned. And the airlines, we look for more versatile, flexible and more economical fleet. And we do believe that our E-Jets are very well-positioned in that direction. So that's why we believe we have good chance as soon as the market pick-up.

Okay. And then my last question is about your inventories, either in commercial actually in any of the segments, but do you have whitetails in inventory? And if so can you quantify?

Today in current situation we have really a few, we are sold out in the small jets in the Executive Aviation and in these five jets we still have three or four to be sold this quarter against the minimum and also for the Commercial Aviation, we have no whitetails for this time being. We do have only they carryover inventory that we're doing to the postponement of deliveries to 2021 but is not a big amount. What you do see in our inventory, look we are going to run more or less 40% of our revenue in this first quarter, which means we're going to strongly go down with our inventory in Q4 due to the higher deliveries in Q4, but again, no big whitetails on inventory.

Thank you so much.

To comment Antonio to complement, it's Eduardo here, so as you said, we basically have no positions available. That's the reason we’re so confident on the fourth quarter and on the recovery towards the end.

Our next question comes from Myles Walton, UBS.

Thanks, good morning. Maybe Antonio on the cash performance here in the third quarter, you laid out some of the one-time items. But I think the commentary last quarter was you could have been closer to break-even, even for free cash flow here in the third quarter. So I'm just curious, what changed, what is pushed out to the right. And I guess following on Rob's question, why couldn't those continue to push out to the right, realizing you haven't had any cancellations? But it seems like deferrals are more likely than not.

Myles, thanks for the question again. We -- the previous question we mentioned that we're seeing and we see good chance to become I would say free cash flow break-even in the second semester, second half of the year, and we're still continuing to believe. As you could see, we have cash burn in Q3 from $567 million, and we had skipped of some aircraft deliveries to Q4, we have also the severance payments that will hardly impact in Q3 will be much less in Q4. And we have the huge amount of deliveries in Q4, and we're still confident and we're seeing progressing the improvement our free cash flow and all successful action plays a role and also the other measures that we're taking, I'd say we're still confident that we would be closer to break-even in the second semester. But again, if you ask about my expectation, the third quarter we could be -- we could have been better $250 million. But having this one-time effects shifting this effect for Q4.

Okay.

I have one point, Myles, sorry to do here. We had some planes that really skipped to the fourth quarter. But as Antonio highlighted in the call, we already delivered more planes in October than the whole third quarter. So I think that shows that we're very confident on to reverse that now in the fourth quarter. And I would say all the deliverers for fourth quarter, are confirmed, so we're not seeing any risks or delays as we had. We had some planes that moved from Q3 to Q4, but now they are all confirmed, okay.

Maybe an additional information Myles, the Super Tucano we deliver is sustainable and we delivered, but we are going to book as revenue and cash-in now in Q4, which also helps this equation around $80 million that is not part of the Q3 results again.

Okay.

Aviation is working happy in Q3 but we should see the rebound in Q4.

Okay. And Francisco, maybe I can ask you as you're repositioning the business and you want to get obviously Commercial business in particular to profit or cash break-even at worst, what is the size -- what's the deliveries or the size of the commercial business, that you're sizing the cost structure to and the workforce to?

Good question, Myles. We're -- we'll be discussing this a lot in our plan for the following years. I mean, we still see the 2021 as a very challenging year. I mean with sales not much higher than we see in this year, but we are working in various fronts to adjust the cost structure of the company to deliver a much better performance in 2021 even with sales not much higher than the 2020. So and the main reason for that is the Commercial Aviation. We see that 2021 will be still a challenge year for Commercial Aviation, we're very clear on that that scenario, but we see an opportunity to grow, I mean from 2022 onwards.

Do you think 2021 could be break-even for Commercial Aviation?

No, Commercial Aviation, we're still suffering 2021, but we can the other unit will have a much better performance next year.

And we're seeing this fiscal year. By the way, we're seeing this year not the -- because of our, Myles, we've the -- we're lucky to have a broader portfolio, we're seeing a good performance investor margin for Executives and Defense & Security and Services which is more or less tried to compensate the drop in the Commercial Aviation margin results. But we’re going to see the same picture in 2021.

Our next question comes from Ron Epstein, Bank of America. Mariana Pérez Mora: Good morning, everyone. This is Mariana Pérez Mora for Ron today.

Hi. Mariana Pérez Mora: So my first question will be could you please give us some color on the short-term capital and finance cash headwind, you have this quarter? And not only the color on the quarter, but also how -- why are you confident that this is going to recover going into next year -- into next quarter?

Yes, that was really short-term timing delays. So we don't do customer finance. And we have the very short-term finance that we're transferring to the final finance agent. And so there is no risk of not revisiting that. So we don't do customer finance. Mariana Pérez Mora: Okay. And then it becomes --

And it's a red conferment for the ECA in Brazil that [indiscernible] everything. Mariana Pérez Mora: Okay. And then, in general, because I understand for competitive reasons you cannot give like particular details but how is cash profitability compared to like pre-pandemic cash profitability upon delivery?

Are you talking about commercial or the whole business? Mariana Pérez Mora: Commercial, particularly.

We're improving, right; we suffered with the lower deliveries especially in the first half. Third quarter already started to show improvement but the big improvements will come now in the fourth quarter. As we mentioned October already better than the whole third quarter and we're going to have much more deliveries. And that will drive a big improvement in cash profitability coming from working capital reduction and also the cost adjustments that we did that Francisco and Antonio highlighted. Mariana Pérez Mora: Thank you. And if I may the last one, you highlighted improvement in business operations. Have you seen sound like pickup in demand already?

No, you mean demand for 2021 or for the following years? Mariana Pérez Mora: Yes. How are your sales campaigns coming in, have you seen any pickup from for like Business Jet demand, what’s book-to-bill there?

Okay. Well, I mean, Executive Aviation is showing a good reaction. We are for example, our Phenom 10, we're sold out for 2020. We're selling aircrafts for 2021, the Phenom. We sold it's moving well. The Defense & Security, we're working in different campaigns as well. And also in the Commercial Aviation, we're working in different campaigns. So hope, this second wave of COVID will not bring a negative impact, on the opposite if they announce a new vaccine, this will help a lot in the rebound of the regional and domestic flights that will help us to boost our sales in the Commercial Aviation as well.

Our next question comes from Cai Von Rumohr, Cowen.

Thank you very much. So maybe you could comment on the mix of your bizjets, you've done very well very well with the 300 and the 100 and basically, very, very poorly in terms of deliveries of the Legacy's and the Praetor's. Why you have that sort of extreme mix and should we expect a big pickup in those larger planes in the fourth quarter and going into next year?

Cai, thanks for the question. I mean, let's see if I understand your question. But Phenom 300 is our best seller, and is the most sold aircraft in each category for the past I mean 80 years I would say. I mean, but we're improving our sales for the Praetor's, the 600 now also the 500 and we have specific programs, specific initiatives in our strategic plan 2021 -2025 to improve the competitiveness of the Phenom 100 and Praetor 500. And with those plans, we expect to capture additional market share in the following years for all the families. Because we do believe we have a great family with two Phenom's 100, 300 and two Praetor's the 500 and 600.

Just to add Francisco now, we had only two Praetor's in the third quarter right and 19 Phenom's. So we expect a much better performance in terms of the Praetor's now for the fourth quarter.

That's correct. Thank you, Eduardo.

Got it. That was essentially the question. And then going forward, because if we look at this year, and last year, basically the third quarter very weak for -- generally weak for the larger bizjets. Do you expect a more level, even spread of the large bizjets because both the Phenom's clearly doing well nut the large ones where the product looks attractive doesn't seem to be doing quite as well.

Operator. Can you hear us, Cai?

Yes, perfectly. I don't know what that was?

Yes, there was some background noise, sorry.

Eduardo, just allow me to answer, Cai, it's a good question for sure. We -- if you see the chart, I showed in large jets they are not doing well compared with the small jets. That's why we're sold out in the Phenom 100 and 300. And we still have some open position for the last quarter. But let's say we do have complaints for all of them and we're going to start with another question but let's say we talk about five to six aircrafts on the Praetor's and with the others, we're sold out and you saw the deliveries we had yesterday 43 and we're seeing for the whole year mid-80s for the total 2020 is actually delivered, which shows that last quarter will be hard anyway for us but for sure the mid-sized jets are suffering more also the large jets compared with the small jets.

Great. And the last question is your gross margins have come down, what should we think about where your gross margins, what is the incremental gross margin we should think obviously, you have different businesses. But overall, if commercial and bizjet get better, what kind of incremental margins should they yield? Thank you.

In my point of view normal like this, because we do not have a better weeks until now for this fiscal year, as we'll see growth in the long run 15% to 16% for the first year.

And also, Cai, we have a lot of initiatives to help us to reduce the cost of goods sold of the aircraft, as well to reduce the production cycles of the aircraft. And these will also help us beside the mix, the mix will also help us to increase the gross margin of our products.

Yes, and I've one important point. We were impacted by the idleness this year in our gross margin, which with the adjustment we're doing now in our workforce is not going to happen next year, even in Q4. September was already if you ask me today, September was already positive in EBITDA gains and cash flow just in the month of September, because the idleness is being reduced and should be come to an end in Q4, which is, highly impacts our gross margins this fiscal year.

Our next question comes from Noah Poponak, Goldman Sachs.

In Commercial Aviation, you've mentioned that you haven't really had many cancellations. But you've -- there could have been a decent amount of deferral activity with this -- with the lower deliveries. Can you speak to, where are your customers deferring to? It sounds like you're saying 2021 deliveries will be somewhere in the zone of similar to 2020. Are they deferring to 2022? Are they deferring even further? And are they giving you new plans that you feel are relatively firm? Or are they just still kind of throwing their hands up in the air and are still very uncertain as to when they're going to want the airplanes?

Thanks for the question, Noah. The majority of the deferral was between 2020, from fall 2022 onwards, especially the local airline in Brasilia Zoo, which has impacted us heavily this year. And we do see as Francisco mentioned 2021 more or less in the same level of this year and picking up starting 2022 to I would say mid-70s and again they'll have highest amount of deferrals starting in 2022, 2023, 2024. And again, there is no additional postponements or deferrals. We may see maybe that if the environment change, the second wave of COVID is not going to impact, we may see even Christmas left towards the state something. But today's flights to everything we discussed between March and April remains distant, also the deliveries of this year everything we discussed, which was agreed between March and April and since then there is no change, very stable.

If I may just add to that, Antonia, it's Eduardo here, Noah. It's important to say that the situation is very fluid, right, given everything going on with COVID. But at a first moment, maybe some customers they put a big deferral, but as the situation starts to get better, they start to operate again, we're the whole time talking to the customers and discussing when exactly they're going to take the plane. So as Antonio mentioned, there could be anticipations right to the initial deferral that they put, so the situation could really change depending on how COVID goes, especially next year.

Thanks again. Just you allow me to compete, we have set the company for this new normal, I would say in our lower base in order that we're able to capture more when you get an improvement and a recovery in volumes. We're not running the company by what is really fit on the ground and be conservative in the volumes for next year.

Yes. And Noah I mean just also helping my colleagues here, I mean this year we have to face a combination of two bad things, right, we had the drop in our revenues because of the COVID impact. But combined, which costs much higher than the normal, because of the carve-out of the Commercial Aviation. But we have done our homework, we have adjusted the workforce, and we have put in place a lot of initiatives to reduce costs, to reduce inventory that will help us to deliver a much better financial performance in 2021 even let's say is not much higher than 2020.

Okay, great. That's -- I appreciate all that detail on Commercial. Maybe, kind of same question on Executive, I mean, obviously it's fluid, it can change. But for now, would you speak to where you're planning production levels for total executive units in 2021, 2022?

On 2021, 2022 we're still evaluating the scenario, we even change our SNLP process last month, and we do see something around 90 aircrafts. But again still fluid but you see more or less a good level of 90 aircrafts.

Okay. And then just last one on Defense. The quarterly revenues have been very volatile. I know you had the delivery restrictions, but it seems like it's been volatile even excluding that. Yes, when does the Defense business, I guess just get back onto a more smooth trajectory quarter-over-quarter. And maybe just kind of walk us back through some of the bigger programmatic moving pieces that can drive growth, or not in that segment on a multiyear basis?

Go ahead, Antonio, go ahead.

For sure, always the strength is hanging also in the budget of each government, that's buying aircraft, when the COVID we do have some restriction. But I would say what you're seeing in Defense somewhat is stable, in the Super Tucano deliveries and also in the KC-390s the ones that we are operating for this year and also for next year. What you're still missing is additional sales for the C-390 Millennium that we’re right now discussing some additional companies. But if you ask me, what could bolster the situations really, additional sales campaign for this C-390.

Should we be thinking about Defense revenues three to five years out as meaningfully higher or something relatively similar to the current level?

No, absolutely higher. We have a good perspective in Defense for 20 years. We're working campaigns for the C-390 Millennium as Antonio mentioned. We also have a business with the Brazilian Navy, Brazilian Army. We have announced an acquisition of a Cybersecurity company, Tempest. We see opportunity in that period as well. So we have a good perspective for the Defense for the following five years.

Our next question comes from Augusto Ensiki, HSBC.

Hi, good morning. Just a quick question. In most of your financials, that your financial interests or your financial expense increased sharply is that related to the pay down of the -- of some of your debt as well as the issuance of the new debt? And what would be a more normal level, if not the one this quarter? Thank you.

Yes, thanks Augusto, yes you're right. There are some additional costs related to the new debt that we raised in the third quarter. We also had some impacts from basically non-cash effects losses, which is non-cash. And we also had an RVG provision, so that affected our financial expenses. I would say the normal level will be something around $50 million per quarter. That would be our net financial expenses per quarter.

Including the new debt, thank you.

Our next question comes from Paul Rofe, Loomis Sales. Please proceed.

Hi, thanks for taking the call, and taking the question. Is the loan maturity in the fourth quarter, I'm curious how you're planning on handling this?

Sorry, what was the question?

Is the loan maturity in the fourth quarter, just curious how you're planning to handle this?

Yes, as I mentioned basically now we had very short-term customer finance that was already sold and transferred to the finance agents. So there is no -- nothing much here, okay it had an impact when you look the picture at the end of the quarter but it was already sold.

So there is no $600 million maturity in the fourth quarter?

No, no, no, no, no. We have in the fourth quarter is, it's around $100 million, $150 million.

Thank you. This concludes today's question-and-answer session. That does conclude Embraer's audio conference for today. Thank you very much for your participation. Have a good day.