EMBRAER S.A. MATERIAL FACT

SAO JOSE DOS CAMPOS, Brazil, July 29, 2016 /PRNewswire/ -- Embraer S.A. (NYSE: ERJ; BM&F BOVESPA: EMBR3) announces to its shareholders and the market, pursuant to its Material Fact as of May 19, 2015, that the negotiations with the U.S. Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) for the settlement of the allegations of non-compliance with the U.S. Foreign Corrupt Practices Act (FCPA) have significantly progressed, to the point that Embraer is recognizing a US$ 200 million loss contingency in the quarter ended June 30, 2016, reflecting the likely outcome of this matter. The amount of the contingency is an estimate and has not been finally determined.

In addition to the monetary consequences, a final settlement with the DOJ and SEC is likely to include: (1) a deferred prosecution agreement (DPA), under which the prosecution of criminal charges against Embraer will be deferred for the term of the DPA, and dismissed upon the expiration of the term of the DPA, and (2) an imposition of an independent monitor to assess the Company's compliance with the terms of any agreement that may be reached with the U.S. authorities.  These may not be the only non-monetary consequences contained in any final settlement.

The negotiations with the U.S. authorities are ongoing and thus subject to change. There is no assurance that Embraer will ultimately reach a final settlement of these matters with the U.S. government agencies.  Related proceedings and developments in other countries are ongoing and could result in additional fines, which may be substantial, and possibly other substantial sanctions and adverse consequences.

José Antonio de Almeida FilippoExecutive Vice-President and Chief Financial Investor Relations Officer

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SOURCE Embraer S.A.