| 16. | Property, Plant and Equipment |
The annual weighted average rates by asset class are shown below. This information is based on the consolidated depreciation of the assets recognized in the year, compared, after annualization and elimination of any non-typical movement, to the net balance of the assets in the previous year:
| Weighted
average depreciation rate (%) |
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Class of assets |
12.31.2017 | 12.31.2016 | ||||||
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Buildings and improvements |
4.6 | % | 4.6 | % | ||||
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Installations |
5.5 | % | 7.6 | % | ||||
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Machinery and equipment |
13.0 | % | 13.5 | % | ||||
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Furniture and fixtures |
11.8 | % | 12.7 | % | ||||
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Vehicles |
27.7 | % | 23.4 | % | ||||
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Aircraft |
15.8 | % | 15.2 | % | ||||
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Computers and peripherals |
28.2 | % | 30.3 | % | ||||
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Tooling |
16.4 | % | 14.9 | % | ||||
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Other assets |
0.7 | % | 0.2 | % | ||||
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Exchange pool program assets |
3.8 | % | 5.0 | % | ||||
| 12.31.2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Land | Buildings and improvements |
Installations | Machinery and equipment |
Furniture and fixtures |
Vehicles | Aircraft (i) | Computers and peripherals |
Tooling | Other assets |
Exchange pool program assets |
Construction in progress |
Total | ||||||||||||||||||||||||||||||||||||||||
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Cost |
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At December 31, 2016 |
11.0 | 657.1 | 156.1 | 909.8 | 74.1 | 16.8 | 316.7 | 179.3 | 587.8 | 29.4 | 669.7 | 116.4 | 3,724.2 | |||||||||||||||||||||||||||||||||||||||
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Additions |
— | 4.1 | — | 40.3 | 3.6 | 0.4 | 14.4 | 11.4 | 30.8 | 8.6 | 43.6 | 80.5 | 237.7 | |||||||||||||||||||||||||||||||||||||||
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Disposals |
— | (8.1 | ) | — | (10.1 | ) | (1.9 | ) | (0.7 | ) | (8.1 | ) | (0.8 | ) | (1.0 | ) | — | (33.5 | ) | (1.1 | ) | (65.3 | ) | |||||||||||||||||||||||||||||
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Impairment(ii) |
— | — | — | (2.2 | ) | — | — | (25.8 | ) | — | (2.1 | ) | — | — | — | (30.1 | ) | |||||||||||||||||||||||||||||||||||
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Reclassifications* |
— | 85.5 | 4.8 | 22.5 | (1.4 | ) | 0.5 | (104.0 | ) | (0.7 | ) | 5.1 | (12.0 | ) | (22.2 | ) | (142.0 | ) | (163.9 | ) | ||||||||||||||||||||||||||||||||
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Interest on capitalized assets |
— | — | — | — | — | — | — | — | — | — | — | 22.1 | 22.1 | |||||||||||||||||||||||||||||||||||||||
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Translation adjustments |
— | 3.2 | 0.5 | 11.5 | 0.5 | 0.5 | — | 1.1 | 0.3 | — | 14.9 | 0.6 | 33.1 | |||||||||||||||||||||||||||||||||||||||
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At December 31, 2017 |
11.0 | 741.8 | 161.4 | 971.8 | 74.9 | 17.5 | 193.2 | 190.3 | 620.9 | 26.0 | 672.5 | 76.5 | 3,757.8 | |||||||||||||||||||||||||||||||||||||||
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Accumulated depreciation |
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At December 31, 2016 |
— | (191.3 | ) | (101.4 | ) | (445.1 | ) | (40.0 | ) | (12.7 | ) | (153.9 | ) | (136.2 | ) | (278.9 | ) | (9.4 | ) | (201.1 | ) | — | (1,570.0 | ) | ||||||||||||||||||||||||||||
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Depreciation |
— | (21.3 | ) | (3.0 | ) | (60.3 | ) | (4.0 | ) | (1.2 | ) | (25.6 | ) | (12.1 | ) | (50.8 | ) | (0.2 | ) | (18.0 | ) | — | (196.5 | ) | ||||||||||||||||||||||||||||
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Disposals |
— | 4.1 | — | 7.5 | 1.0 | 0.6 | 6.9 | 0.6 | 0.3 | — | 8.8 | — | 29.8 | |||||||||||||||||||||||||||||||||||||||
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Reclassifications* |
— | 0.6 | 0.4 | — | — | 0.3 | 91.3 | — | — | (0.3 | ) | — | — | 92.3 | ||||||||||||||||||||||||||||||||||||||
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Translation adjustments |
— | (1.0 | ) | (0.1 | ) | (8.7 | ) | (0.4 | ) | (0.4 | ) | — | (0.7 | ) | (0.3 | ) | — | 3.1 | — | (8.5 | ) | |||||||||||||||||||||||||||||||
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At December 31, 2017 |
— | (208.9 | ) | (104.1 | ) | (506.6 | ) | (43.4 | ) | (13.4 | ) | (81.3 | ) | (148.4 | ) | (329.7 | ) | (9.9 | ) | (207.2 | ) | — | (1,652.9 | ) | ||||||||||||||||||||||||||||
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Net |
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At December 31, 2016 |
11.0 | 465.8 | 54.7 | 464.7 | 34.1 | 4.1 | 162.8 | 43.1 | 308.9 | 20.0 | 468.6 | 116.4 | 2,154.2 | |||||||||||||||||||||||||||||||||||||||
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At December 31, 2017 |
11.0 | 532.9 | 57.3 | 465.2 | 31.5 | 4.1 | 111.9 | 41.9 | 291.2 | 16.1 | 465.3 | 76.5 | 2,104.9 | |||||||||||||||||||||||||||||||||||||||
| 12.31.2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Land | Buildings and improvements |
Installations | Machinery and equipment |
Furniture and fixtures |
Vehicles | Aircraft (i) | Computers and peripherals |
Tooling | Other assets |
Exchange pool program assets |
Construction in progress |
Total | ||||||||||||||||||||||||||||||||||||||||
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Cost |
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At December 31, 2015 |
11.0 | 616.5 | 151.8 | 853.3 | 70.5 | 17.0 | 323.5 | 163.2 | 533.5 | 22.8 | 622.6 | 75.8 | 3,461.5 | |||||||||||||||||||||||||||||||||||||||
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Additions |
— | 0.6 | — | 54.8 | 4.0 | 0.7 | 137.4 | 17.3 | 54.6 | 8.6 | 65.5 | 91.7 | 435.2 | |||||||||||||||||||||||||||||||||||||||
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Disposals |
— | (9.3 | ) | (0.2 | ) | (7.6 | ) | (2.3 | ) | (0.9 | ) | (17.8 | ) | (3.0 | ) | (0.9 | ) | — | (15.1 | ) | (7.1 | ) | (64.2 | ) | ||||||||||||||||||||||||||||
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Impairment |
— | — | — | — | — | — | (27.0 | ) | — | — | — | — | — | (27.0 | ) | |||||||||||||||||||||||||||||||||||||
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Impairment (iii) |
— | — | — | — | — | — | (64.9 | ) | — | — | — | — | — | (64.9 | ) | |||||||||||||||||||||||||||||||||||||
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Reclassifications* |
— | 49.9 | 4.4 | 10.2 | 1.9 | 0.2 | (34.7 | ) | 1.7 | 0.9 | (2.0 | ) | 1.2 | (59.8 | ) | (26.1 | ) | |||||||||||||||||||||||||||||||||||
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Interest on capitalized assets |
— | — | — | — | — | — | — | — | — | — | — | 16.1 | 16.1 | |||||||||||||||||||||||||||||||||||||||
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Translation adjustments |
— | (0.6 | ) | 0.1 | (0.9 | ) | — | (0.2 | ) | 0.2 | 0.1 | (0.3 | ) | — | (4.5 | ) | (0.3 | ) | (6.4 | ) | ||||||||||||||||||||||||||||||||
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At December 31, 2016 |
11.0 | 657.1 | 156.1 | 909.8 | 74.1 | 16.8 | 316.7 | 179.3 | 587.8 | 29.4 | 669.7 | 116.4 | 3,724.2 | |||||||||||||||||||||||||||||||||||||||
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Accumulated depreciation |
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At December 31, 2015 |
— | (180.8 | ) | (97.2 | ) | (389.5 | ) | (37.9 | ) | (12.5 | ) | (156.4 | ) | (128.7 | ) | (233.4 | ) | (9.4 | ) | (188.3 | ) | — | (1,434.1 | ) | ||||||||||||||||||||||||||||
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Depreciation |
— | (20.0 | ) | (4.2 | ) | (62.7 | ) | (4.1 | ) | (1.1 | ) | (25.4 | ) | (10.4 | ) | (44.7 | ) | — | (21.9 | ) | — | (194.5 | ) | |||||||||||||||||||||||||||||
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Disposals |
— | 9.2 | — | 4.9 | 1.9 | 0.8 | 15.5 | 2.9 | 0.5 | — | 6.0 | — | 41.7 | |||||||||||||||||||||||||||||||||||||||
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Reclassifications* |
— | — | — | 1.8 | — | — | 8.6 | (0.1 | ) | (1.6 | ) | — | — | — | 8.7 | |||||||||||||||||||||||||||||||||||||
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Translation adjustments |
— | 0.3 | — | 0.4 | 0.1 | 0.1 | 3.8 | 0.1 | 0.3 | — | 3.1 | — | 8.2 | |||||||||||||||||||||||||||||||||||||||
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At December 31, 2016 |
— | (191.3 | ) | (101.4 | ) | (445.1 | ) | (40.0 | ) | (12.7 | ) | (153.9 | ) | (136.2 | ) | (278.9 | ) | (9.4 | ) | (201.1 | ) | — | (1,570.0 | ) | ||||||||||||||||||||||||||||
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At December 31, 2015 |
11.0 | 435.7 | 54.6 | 463.8 | 32.6 | 4.5 | 167.1 | 34.5 | 300.1 | 13.4 | 434.3 | 75.8 | 2,027.4 | |||||||||||||||||||||||||||||||||||||||
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At December 31, 2016 |
11.0 | 465.8 | 54.7 | 464.7 | 34.1 | 4.1 | 162.8 | 43.1 | 308.9 | 20.0 | 468.6 | 116.4 | 2,154.2 | |||||||||||||||||||||||||||||||||||||||
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At December 31, 2014 |
11.0 | 577.6 | 145.3 | 741.3 | 65.7 | 16.0 | 521.3 | 163.0 | 420.0 | 34.4 | 586.3 | 129.9 | 3,411.8 | |||||||||||||||||||||||||||||||||||||||
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Additions |
— | 1.6 | — | 65.1 | 2.5 | 0.8 | 23.6 | 13.0 | 81.7 | 9.9 | 71.6 | 71.7 | 341.5 | |||||||||||||||||||||||||||||||||||||||
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Disposals |
— | (0.1 | ) | (0.1 | ) | (5.5 | ) | (0.5 | ) | (0.4 | ) | (158.6 | ) | (2.2 | ) | (1.9 | ) | — | (13.7 | ) | (2.2 | ) | (185.2 | ) | ||||||||||||||||||||||||||||
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Impairment |
— | — | — | — | — | — | (11.6 | ) | — | — | — | — | — | (11.6 | ) | |||||||||||||||||||||||||||||||||||||
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Reclassifications* |
— | 40.6 | 7.1 | 66.5 | 3.5 | 1.0 | (50.7 | ) | (9.0 | ) | 33.9 | (21.3 | ) | (6.1 | ) | (122.3 | ) | (56.8 | ) | |||||||||||||||||||||||||||||||||
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Translation adjustments |
— | (3.2 | ) | (0.5 | ) | (14.1 | ) | (0.7 | ) | (0.4 | ) | (0.5 | ) | (1.6 | ) | (0.2 | ) | (0.2 | ) | (15.5 | ) | (1.3 | ) | (38.2 | ) | |||||||||||||||||||||||||||
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At December 31, 2015 |
11.0 | 616.5 | 151.8 | 853.3 | 70.5 | 17.0 | 323.5 | 163.2 | 533.5 | 22.8 | 622.6 | 75.8 | 3,461.5 | |||||||||||||||||||||||||||||||||||||||
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Accumulated depreciation |
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At December 31, 2014 |
— | (165.3 | ) | (93.9 | ) | (352.0 | ) | (34.6 | ) | (11.8 | ) | (217.6 | ) | (119.5 | ) | (207.8 | ) | (9.4 | ) | (174.1 | ) | — | (1,386.0 | ) | ||||||||||||||||||||||||||||
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Depreciation |
— | (15.9 | ) | (4.0 | ) | (49.9 | ) | (4.0 | ) | (1.1 | ) | (31.9 | ) | (11.5 | ) | (26.2 | ) | — | (17.4 | ) | — | (161.9 | ) | |||||||||||||||||||||||||||||
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Disposals |
— | — | — | 0.8 | 0.3 | — | 75.1 | 1.4 | 0.4 | — | 5.9 | — | 83.9 | |||||||||||||||||||||||||||||||||||||||
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Reclassifications* |
— | (0.5 | ) | 0.5 | — | — | — | 17.7 | — | — | — | — | — | 17.7 | ||||||||||||||||||||||||||||||||||||||
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Translation adjustments |
— | 0.9 | 0.2 | 11.6 | 0.4 | 0.4 | 0.3 | 0.9 | 0.2 | — | (2.7 | ) | — | 12.2 | ||||||||||||||||||||||||||||||||||||||
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At December 31, 2015 |
— | (180.8 | ) | (97.2 | ) | (389.5 | ) | (37.9 | ) | (12.5 | ) | (156.4 | ) | (128.7 | ) | (233.4 | ) | (9.4 | ) | (188.3 | ) | — | (1,434.1 | ) | ||||||||||||||||||||||||||||
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At December 31, 2014 |
11.0 | 412.3 | 51.4 | 389.3 | 31.1 | 4.2 | 303.7 | 43.5 | 212.2 | 25.0 | 412.2 | 129.9 | 2,025.8 | |||||||||||||||||||||||||||||||||||||||
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At December 31, 2015 |
11.0 | 435.7 | 54.6 | 463.8 | 32.6 | 4.5 | 167.1 | 34.5 | 300.1 | 13.4 | 434.3 | 75.8 | 2,027.4 | |||||||||||||||||||||||||||||||||||||||
| * | Non-cash transactions. On “Aircraft” and “Exchange pool program assets” classes the amount refers to aircraft and items transferred to the inventory. In September 2017, 17 ERJ 145 aircraft were transferred to inventory in order to be disassembled and sold as parts (part-out procedures). |
| (i) | The aircraft are used for testing, shuttle and operating leases and are adjusted to fair value, if applicable. The following aircraft are held: |
| • | December 31, 2017: nine ERJ 135, 26 ERJ 145, four EMBRAER 170, one EMBRAER 190, one EMBRAER 120, one Legacy 450, one Legacy 500, one Phenom 300, one 690B, and; |
| • | December 31, 2016: 23 ERJ 135, 28 ERJ 145, six EMBRAER 170, three EMBRAER 190, one EMBRAER 120, one 690B, and. |
| (ii) | Impairment losses for the Legacy 650 CGU and Monitoring, Sensoring and Radars CGU (Note 18). |
| (iii) | Because of the Chapter 11 filing by Republic Airways Holdings (Note 25), the Company has received certain aircraft as part of the negotiation of the financial guarantees existent at that date.. The Company initially recognized these aircraft based on the contractual amount and subsequently recognized impairment losses to adjust the initial cost to the recoverable value. |
At December 31, 2017, property, plant and equipment of US$ 134.1 were pledged as collateral for loans, financing and labor contingencies (December 31, 2016, US$ 136.2).