EADS N.V.
Unaudited Condensed Consolidated Financial Information for the three-month period ended March 31, 2006

First quarter 2006 Report

Unaudited Condensed Consolidated
Financial Information of EADS N.V.
for the first quarter 2006

Unaudited Condensed IFRS Consolidated Income Statements ...………………………….….......…2
Unaudited Condensed IFRS Consolidated Balance Sheets….…..………….……………...……....…3
Unaudited Condensed IFRS Consolidated Cash Flow Statements……………....…...…………...…4
Unaudited Condensed IFRS Consolidated Statements of Changes in equity attributable toequity holders of the parent and minority interests…….………………………..………………………5
Explanations to the Unaudited Condensed IFRS Consolidated Financial Statements
as at March 31st, 2006...….…………………………………………….………...……...………………...…..5
1. The Company…………………………………………………………………………………………..5
2. Accounting policies……………….………………………………………………..………………...5
3. Changes in the consolidation perimeter of EADS…………………………....…….….…….…7
4. Segment information………………………………..…………..……………………………………7
5. EBIT pre goodwill impairment and exceptionals…..……..…………………………..…………8
6. Significant income statement items…………..…………………..………….………..……..……97. Significant balance sheet items…………………...…………………………………...…..….......9
8. Significant cash flow items…………………………………………………………...…..……….12
9. Contingencies………………………………………………………………………………………..12
10. Number of shares…………………………………………………………...……………….…...…12
11. Earnings per share……………………………………..………………………...….…..………….12
12. Related party transactions ………………..…………………...……………...……………..……13
13. Number of employees ……………………………….……………………………..……....………14
14. Subsequent events ………..……………...………….……………………………..……....………141

15.05.2006

EADS N.V.
Unaudited Condensed Consolidated Financial Information for the three-month period ended March 31, 2006

Unaudited Condensed IFRS Consolidated Income Statements

January 1 March 31, 2006
Revenues
Cost of sales
Gross margin
Selling, administrative & otherexpenses
Research and development
expenses

M€
9,083-7,390
1,693January 1 March 31, 2005

%
100
-81
19

M€
7,005
-5,529
1,476

-575

-6

-536

Deviation

%
100
-79
21

M€
2,078
-1,861
217

%

-535

-8

-40

7

-6

-422

-6

-114

27

156

1

38

1

118

311

30
34
15

Other income
Share of profit from associates andother income from investments
Profit before finance costs andincome taxes
Finance costs
Income taxes
Profit for the period

25

0

67

1

-42

-63

763
-62
-210
491

8
0
-2
6

624
-2
-212
410

9
0
-3
6

139
-60
2
81

22
3,000
-1
20

Attributable to:Equity holders of the parent (Netincome) *)Minority interests *)

516
-25

6
0

410
0

6
0

106
-25

26
100

Earnings per share
Basic *)
Diluted *)

€

€

€

0.65
0.64

0.52
0.51

0.13
0.13

*) For retrospective adjustments concerning first quarter 2005 please refer to Note 2 “Accounting
policies”.

2

15.05.2006

EADS N.V.
Unaudited Condensed Consolidated Financial Information for the three-month period ended March 31, 2006

Unaudited Condensed IFRS Consolidated Balance Sheets

Non-current assets
Intangible assets
Property, Plant and Equipment
Investments in associates
Other investments and long-term
financial assets
Non-current other assets
Deferred tax assets
Non-current securities
Current assets
Inventories
Trade receivables
Other current assets
Current securities
Cash and cash equivalents
Non-current assets classified asheld for sale
Total assets
Total equity
Equity attributtable to equity holdersof the parent
Capital StockReserves
Accumulated other comprehensive
incomeTreasury shares
Minority interests
Non-current liabilities
Non-current provisions
Long-term financial liabilities
Deferred tax liabilities
Other non-current liabilities
Current liabilities
Current provisions
Short-term financial liabilities
Liability for puttable instruments
Trade liabilities
Current tax liabilities
Other current liabilities
Liabilities directly associated with
non-current assets held for sale
Total equity and liabilities

March 31, 2006
M€%

December 31, 2005
M€%

11,092
13,911
1,930

16
19
3

11,052
13,951
1,908

16
19
3

40
-40
22

0
0
1

1,735

2

1,938

3

-203

-10

3,502
2,512
1,239
35,921

5
4
2
51

3,610
2,557
1,011
36,027

5
4
1
51

-108
-45
228
-106

-3
-2
23
0

16,505
4,564
4,567
34
9,451
35,121

23
6
7
0
13
49

15,425
4,802
3,675
29
9,546
33,477

22
7
5
0
14
48

1,080
-238
892
5
-95
1,644

7
-5
24
17
-1
5

0

0

881

1

-881

-100

71,042

100

70,385

100

657

1

822
9,969

1
14

818
9,371

1
13

4
598

0
6

4,196

6

3,982

6

214

5

-479
14,508158
14,666

-1
20
0
20

-445
13,726
176
13,902

0
20
0
20

-34
782
-18
764

8
6
-10
5

6,557
4,027
2,525
11,264
24,373

9
6
4
16
35

6,879
4,189
2,376
11,29524,739

10
6
3
16
35

-322
-162
149
-31
-366

-5
-4
6
0
-1

2,611
805
3,500
6,975
210
17,90232,003

4
1
5
10
0
25
45

2,727
908
3,500
6,634
174
17,73931,682

4
1
5
10
0
25
45

-116
-103
0
341
36
163
321

-4
-11
0
5
21
1
1

0

0

62

0

-62

-100

71,042

100

70,385

100

657

1

3

Deviation
M€%

15.05.2006

EADS N.V.
Unaudited Condensed Consolidated Financial Information for the three-month period ended March 31, 2006

Unaudited Condensed IFRS Consolidated Cash Flow Statements
January 1 - March 31, January 1 - March 31,
2006
2005
M€
M€
Profit for the period attributable to equity holders of the parent(Net income) *)Profit attributable to minority interests *)Adjustments to reconcile profit for the period (net income) to cash
provided by operating activities
Depreciation and amortization
Valuation adjustments and CTA release
Change in deferred taxes
Results of disposal of non-current assets
Results of companies accounted for by the equity method
Change in current and non-current provisions andcurrent tax assets / liabilities
Change in other operating assets and liabilities
Cash provided by operating activities- Purchase of intangible assets, PPE- Proceeds from disposals of intangible assets, PPE- Acquisitions of subsidiaries (net of cash)- Proceeds from disposals of subsidiaries (net of cash)- Payments for investments in associates and otherinvestments and long-term financial assets- Proceeds from disposals of associates and otherinvestments and long-term financial assets- Increase in equipment of leased assets- Proceeds from disposals of leased assets- Increase in finance lease receivables- Decrease in finance lease receivables
Disposals of non-current assets classified as held for sale
Change of securities
Change in cash from changes in consolidation
Cash used for investing activities
Change in long-term and short-term financial liabilities
Capital increase
Purchase of treasury shares
Cash used for financing activities
Effect of foreign exchange rate changes and other valuation
adjustments on cash and cash equivalents
Net (decrease) increase in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

516
-25

410
0

345
23
150
-258
-23

360
-34
-41
-66
-63

107
-603
232
-501
35
-9
81

289
459
1,314
-557
10
0
54

-83

-128

453
-35
19
-5
15
161
-227
0
-96
-265
76
-34
-223

135
-29
19
-196
19
0
-101
11
-763
117
2
-203
-84

-8
-95

4
471

9,546
9,451

8,718
9,189

*) For retrospective adjustments concerning first quarter 2005 please refer to Note 2 “Accounting
policies”.
As of March 31st, 2006, EADS’ cash position (stated as cash and cash equivalents at end of period in
the unaudited consolidated cash flow statements) includes 1,119 M € (1,202 M € as of December 31st,2005) representing the amount Airbus has deposited at BAE Systems. Additionally included are 431 M€ (579 M € as of December 31st, 2005), which represent EADS’ share in MBDA’s cash and cash
equivalents, deposited at BAE Systems and Finmeccanica. These funds are available for EADS upon
demand.

4

15.05.2006

EADS N.V.
Unaudited Condensed Consolidated Financial Information for the three-month period ended March 31, 2006

Unaudited Condensed IFRS Consolidated Statements of Changes in equity
attributable to equity holders of the parent and minority interests
Equity attributable
to equity holders Minority interestsof the parent

in M €
Balance at January 1, 2006

13,726

Total equity

176

13,902

Capital Increase76

Profit for the period

516

OCI

214

Purchases of treasury shares-34

Others10

7

Balance at March 31, 2006

14,508158

17
14,666

Balance at January 1, 2005, adjusted

16,210144

16,354

Capital Increase

76
-25

491
214
-34

2

Profit for the period *)2410

OCI *)-1,031

Purchases of treasury shares

410-1-1,032-203

Others-203

10Balance at March 31, 2005

15,39810
143

15,541*) For retrospective adjustments concerning first quarter 2005 please refer to Note 2 “Accounting
policies”.

Explanations to the Unaudited Condensed IFRS Consolidated Financial
Statements as at March 31st, 2006
1. The Company
The accompanying Condensed Interim Consolidated Financial Statements (unaudited) present theoperations of European Aeronautic Defence and Space Company EADS N.V. and its subsidiaries(“EADS” or the “Group”), a Dutch public limited liability company (naamloze vennootschap) legallyseated in Amsterdam (Le Carré, Beechavenue 130-132, 1119 PR, Schiphol-Rijk, The
Netherlands), and are prepared and reported in Euros (“€”). EADS’ core business is the
manufacturing of commercial aircraft, civil and military helicopters, commercial space launchvehicles, missiles, military aircraft, satellites, defence systems and defence electronics andrendering of services related to these activities.
2. Accounting policies
These Condensed Interim Consolidated Financial Statements have been prepared in accordancewith IAS 34 Interim Financial Reporting. EADS’ Consolidated Financial Statements are prepared inaccordance with International Financial Reporting Standards (“IFRS”), adopted by the International
Accounting Standards Board (“IASB”) as endorsed by the European Union (EU). They comprise (i)IFRS, (ii) International Accounting Standards (“IAS”) and (iii) Interpretations originated by theInternational Financial Reporting Interpretations Committee (“IFRIC”) or former Standards
Interpretation Committee (“SIC”).
As of January 1st, 2006, EADS adopted the following amendments to existing Standards, newStandards and new Interpretations as required by the following announcements released by the
IASB in December 2004 and throughout 2005:

5

15.05.2006

EADS N.V.
Unaudited Condensed Consolidated Financial Information for the three-month period ended March 31, 2006

EADS applies new IFRS 6 “Exploration for and Evaluation of Mineral Resources”; twoamendments to IAS 39 “Financial Instruments: Recognition and Measurement”: “Fair Value
Option” (June 2005) and “Financial Guarantee Contracts” (August 2005) with the latter also
amending IFRS 4. Furthermore, EADS applies new Interpretations IFRIC 5 “Rights to Interests
arising from Decommissioning, Restoration and Environmental Rehabilitation Funds” and IFRIC 6“Liabilities arising from Participating in a Specific Market – Waste Electrical and Electronic
Equipment”.
Amendments to IAS 39 Financial Instruments: Recognition and Measurement(i)

Fair Value Option (June 2005): The amendment limits the use of the fair value option to
those financial instruments that meet one of the following conditions: a) fair value option
designation eliminates or significantly reduces an accounting mismatch (i.e. natural
hedging relationship); or b) a group of financial assets, financial liabilities or both ismanaged and its performance is evaluated on a fair value basis in accordance with adocumented risk management or investment strategy. Furthermore, the fair value option
can generally be elected to be applied in case of embedded derivatives to an entire hybrid
contract. EADS currently applies the fair value option for securities / accumulated funds
only (Money Market Funds).

(ii)

Financial Guarantee Contracts (August 2005): The scope of IAS 39 has been widened toinclude financial guarantee contracts issued. In case an issuer of such contracts has
previously asserted that it regards financial guarantee contracts as insurance contracts
and accounted for them accordingly, the issuer may elect to apply either IFRS 4 or IAS 39
to financial guarantee contracts. The issuer can perform the election contract by contract
but the election for each contract remains irrevocable.

The application of the amendments to existing Standards, new Standards and new Interpretations
mentioned above have no major impact on the Condensed Interim Consolidated Financial
Statements.
Besides consequential changes as mentioned above the accounting policies used in the
preparation of the Condensed Interim Consolidated Financial Statements are consistent with thoseused for the annual Consolidated Financial Statements for the year ended December 31st, 2005,
which are disclosed as an integral part of the Group’s Annual Report 2005. The annual
Consolidated Financial Statements were authorised for issue by EADS’ Board of Directors on
March 7th, 2006.

The application of the following standard in 2005 led to retrospective adjustments in theConsolidated Income and Cash Flow Statements as well as in the Statement of changes in equity
for the prior period presented:
IAS 32 Financial Instruments: Disclosure and Presentation (revised 2004) — Since January
1st, 2005, EADS applies revised IAS 32 “Financial Instruments: Disclosure and Presentation”(revised 2004). Amongst others, revised IAS 32 provides modified guidance whether a share in an
entity should be classified as equity or as financial liability. Accordingly, under certain
circumstances, an entity shall record a financial liability rather than an equity instrument for the
exercise price of a written put on the entity’s equity.
As part of the Airbus business combination in 2001, the option granted to BAE Systems to put its
20% stake in Airbus is such a written put option. As such EADS has the obligation to purchasethese minority shares whenever the minority shareholder requests it, limited to a revolving yearly
window period for an amount equal to the fair value of the shares at the time the option is

6

15.05.2006

EADS N.V.
Unaudited Condensed Consolidated Financial Information for the three-month period ended March 31, 2006

exercised, to be paid in cash or an equivalent amount of EADS shares (please refer to Note 14
Subsequent events). Following revised IAS 32 and despite BAE Systems (legal) minority rights in
Airbus, the related interest is now to be regarded as financial liability in the EADS Consolidated
Financial Statements, to be stated at fair value. The liability for the put option has been measured
by applying a choice of different valuation techniques, based on best estimates currently available,
and is presented in a separate line of the EADS Consolidated Balance Sheet “Liability for puttable
instruments”.
Following IAS 8 “Accounting Policies, Changes in Accounting Estimates and Errors”, the adoptionof revised IAS 32 is treated as a change in accounting policy firstly effecting EADS’ Consolidated
Financial Statements as of December 31st, 2005 with corresponding adjustments to the priorperiod presented here. The historical minority interests for BAE Systems’ 20% stake in Airbus at
the time of the business combination in 2001 have been replaced by the posting of a liability forputtable instruments, the difference between those two amounts being accounted for against
consolidated total equity. Prior years dividend payments to BAE Systems have been treated as
partial repayments, thus consequently reducing the liability for puttable instruments. All changes tothe fair value have been treated as contingent consideration in a business combination inaccordance with IFRS 3 “Business Combinations” and led to adjustments of goodwill. (For theeffect on previous year figures and the impact on earnings per share, please refer to Note 6, 7 and
11).

3. Changes in the consolidation perimeter of EADSOn February 28th, 2006, LFK GmbH and TDW GmbH, which were fully consolidated by EADS,
have been sold to the European Missile Group MBDA. MBDA is jointly owned by BAE Systems(37.5 %), EADS (37.5 %) and Finmeccanica (25 %). In EADS consolidated financial statements,
MBDA Group is proportionately consolidated with 50 %.
Apart from these transactions, other acquisitions or disposals performed by the Group in the firstquarter 2006 are not material to the unaudited Condensed Consolidated Financial Statements.
4. Segment information
The Group operates in five divisions (segments) which reflect the internal organizational andmanagement structure according to the nature of the products and services provided. Followingchanges in the EADS structure, the Aeronautics Division was dissolved end of June 2005 and split
into Eurocopter Division and Other Businesses. Segment figures have been restated inaccordance with this new structure.
• Airbus — Development, manufacturing, marketing and sale of commercial jet aircraft of morethan 100 seats and the development and manufacturing of aircraft for military use.
• Military Transport Aircraft — Development, manufacturing, marketing and sale of militarytransport aircraft and special mission aircraft.
• Eurocopter — Development, manufacturing, marketing and sale of civil and military helicoptersand maintenance services.
• Defence & Security Systems — Development, manufacturing, marketing and sale of missiles
systems; military combat and training aircraft; provision of defence electronics, defence-related
telecommunications solutions; and logistics, training, testing, engineering and other related
services.

715.05.2006

EADS N.V.
Unaudited Condensed Consolidated Financial Information for the three-month period ended March 31, 2006

• Space — Development, manufacturing, marketing and sale of satellites, orbital infrastructuresand launchers; and provision of space services.
The following table presents information with respect to the Group’s business segments.
Consolidation effects, the holding functions of EADS headquarters and other activities notallocable to the divisions are disclosed in the column “HQ/ Conso.”. “Other Businesses” comprises
the development, manufacturing, marketing and sale of regional turboprop aircraft and lightcommercial aircraft as well as civil and military aircraft conversion and maintenance services.

in M €

AirbusMilitary
Transport
AircraftEurocopter

Defence &Security
SystemsOther
HQ/ Conso.
Businesses

Space

Consolidated

Three months ended March 31, 2006
Revenues

6,362

822

656

1,000

493

330

-580

9,083

Research anddevelopment
expenses

-449

-3

-17

-44

-12

-2

-9

-536

EBIT pre goodwill
imp. and exceptionals(see definition below)

681

9

26

35

0

-4

33

780

Three months ended March 31, 2005
Revenues

4,989

108

519

925

516

231

-283

7,005

Research anddevelopment
expenses

-345

-5

-16

-37

-9

-2

-8

-422

EBIT pre goodwill
imp. and exceptionals(see definition below)

628

-6

13

-35

-6

-2

65

657

5. EBIT pre goodwill impairment and exceptionals
EADS uses EBIT pre goodwill impairment and exceptionals as a key indicator of its economic
performance. The term “exceptionals” refers to such items as depreciation expenses of fair value
adjustments relating to the EADS merger, the Airbus combination and the formation of MBDA, as
well as impairment charges thereon. EBIT pre goodwill impairment and exceptionals is treated bymanagement as a key indicator to measure the segments’ economic performances.
A reconciliation from Profit before finance costs and income taxes to EBIT pre goodwill impairment
and exceptionals is set forth in the following table (in M €):in M €
Profit before finance costs and income taxes
Fair value adjustments
EBIT pre goodwill impairment and exceptionals

8

January 1Mar. 31, 2006

January 1Mar. 31, 2005

763

624

17

33

780

657

15.05.2006

EADS N.V.
Unaudited Condensed Consolidated Financial Information for the three-month period ended March 31, 2006

6. Significant income statement items
Revenues of 9,083 M € (first quarter 2005: 7,005 M €) increase by 30 % mostly due to Airbus,
MTA and Eurocopter.
The Gross Margin increases by +217 M € to 1,693 M € compared to 1,476 M € in the first quarter2005. The increase mainly results from Airbus (+148 M €).
Research and development expenses of 536 M € (first quarter 2005: 422 M €) mainly increase
because of the A350 program and to a lower extent from the A380 program. Moreover, EADS
capitalized 49 M € of development costs for A380 in the first quarter 2006 (in the first quarter 2005:
52 M €).
Other income increases by +118 M € to 156 M €, due to the capital gain of 106 M € as a result of
the sale of LFK GmbH and TDW GmbH to MBDA Group.
Share of profit from associates and other income from investments of 25 M € (first quarter
2005: 67 M €) is mainly influenced by the result of Dassault Aviation of 24 M € (first quarter 2005:
60 M €). The result in the first quarter 2005 of Dassault additionally included positive 2004 IFRScatch up adjustments amounting to +32 M €.
Finance costs deteriorate to -62 M € (first quarter 2005: -2 M €) mainly due to negative effects
from foreign exchange rate revaluations on US dollar-cash balance. These effects are partly offset
by a lower net interest charge of -29 M € (first quarter 2005: -57 M €), mainly due to a higher net
cash position and customer financing at Airbus.
Income taxes of -210 M € (first quarter 2005: -212 M €) result in an effective income tax rate of 30% (first quarter 2005: 34 %), positively impacted by a tax-free capital gain from the sale of LFKGmbH and TDW GmbH to MBDA Group.
Loss for the period attributable to minority interest of -25 M € (first quarter 2005: 0 M €) mainly
relates to an accounting impact of the sale of LFK GmbH and TDW GmbH to the MBDA Group.
Profit for the period attributable to equity holders of the parent (Net income) amounts to 516
M € (first quarter 2005: 410 M €). The profit for the first quarter 2005 was adjusted due to theretrospective application of revised IAS 32 by an amount of +82 M €.

7. Significant balance sheet items
Non-current assets
Intangible assets of 11,092 M € (prior year: 11,052 M €) include 10,166 M € (prior year: 10,167 M€) of Goodwill. It mainly stems from Airbus (6,988 M €), Defence & Security Systems (2,468 M €),Space (559 M €) and Eurocopter (111 M €). The annual impairment tests, which were performedat the end of the prior year, did not lead to any impairment.
Eliminating foreign exchange-rate effects of -87 M €, property, plant and equipment increase by+47 M € to 13,911 M € (prior year: 13,951 M €), including leased assets of 2,276 M €. Most of theincrease is attributable to Space (+74 M €), partly offset by a decrease in Defence (-26 M €) andthe Airbus Division (-16 M €). Property, plant and equipment comprises “Investment property”
amounting to 129 M € (prior year: 134 M €).
Investments in associates of 1,930 M € (prior year: 1,908 M €) mainly increases due to thechange in the equity investment of Dassault Aviation, amounting to 1,891 M € (prior year:
1,867 M €).

915.05.2006

EADS N.V.
Unaudited Condensed Consolidated Financial Information for the three-month period ended March 31, 2006

Other investments and long-term financial assets of 1,735 M € (prior year: 1,938 M €) areallocated to Airbus in the amount of 993 M € (prior year: 1,242 M €), mainly concerning the noncurrent portion of aircraft financing activities with a foreign exchange-rate effect of -24 M €.
Non-current other assets mainly comprise “Non-current financial instruments” and “Non-current
prepaid expenses”. The decrease by -108 M € to 3,502 M € (prior year: 3,610 M €) is mainly
caused by the variation of the non-current portion of fair values of financial instruments and thereclassification to “Other current assets” of the fair value of those contracts becoming current.
Non-current prepaid expenses increase by +44 M €.
Deferred tax assets of 2,512 M € (prior year: 2,557 M €) are presented as non-current assets as
required by IAS 1.
The fair values of financial instruments are included in non-current other assets with an amountof 2,625 M € (prior year: 2,762 M €), in current other assets (1,424 M €, prior year: 1,191 M €), in
non-current provisions (277 M €, prior year: 472 M €) and in current provisions (323 M €, prioryear: 449 M €), which corresponds to a net fair value of 3,449 M € (prior year: 3,032 M €). The
volume of hedged US dollar-contracts has risen from 47.1 billion US dollar to 51.9 billion US dollar
and the US dollar exchange rate became less favourable (USD / € spot rate of 1.21 at March 31st,
2006 vs. 1.18 at December 31st, 2005). The average US dollar hedged rate for the hedge portfolioof the Group as at March 31st, 2006 moved from 1.12 as at December 31st, 2005 to 1.14 as at
March 31st, 2006 (US dollar / € rate respectively).

Current assets
Inventories of 16,505 M € (prior year: 15,425 M €) increase by 1,099 M € (without foreignexchange revaluation of -19 M €) in all divisions except for Military Transport. This is mainly driven
by a higher level of unfinished goods and services in Airbus (mainly for A380 (+431 M €)), theprogress of several serial production programs in Eurocopter (+243 M €) and Defence (+115 M €).
Military Transport decreased mainly due to revenue recognition of Milestone M7 concerning theA400 M program.
The decrease in trade receivables by -238 M € to 4,564 M € (prior year: 4,802 M €) comes to alarge extent from normal trade fluctuations in Defence (-245 M €) and Eurocopter (-116 M €),partly offset by Airbus (+149 M €).
Other current assets include “Current portion of long-term financial assets”, “Current otherassets”, “Current tax assets” and “Current prepaid expenses”. The increase of 892 M € to 4,567 M€ (prior year: 3,675 M €) is caused in the amount of +233 M € by the variation of the current
portion of fair values of financial instruments (see “Financial instruments” under “Non-current
assets”). Moreover, an increase of +553 M € comes from an escrow account, reflecting sales
financing activities in Airbus previously reported as non-current assets classified as held forsale (0 M € as of March 31st , 2006; prior period: 881 M €).
Cash and cash equivalents decrease from 9,546 M € to 9,451 M €.

Total equity
Equity attributable to equity holders of the parent (including treasury shares) amounts to
14,508 M € (prior year: 13,726 M €), mainly resulting from the profit for the period (Net income) of+516 M € and an increase in OCI of +214 M €, primarily resulting from changes in fair values aswell as consumption of derivative financial instruments, partly offset by purchases of treasury
shares of -34 M €.

10

15.05.2006

EADS N.V.
Unaudited Condensed Consolidated Financial Information for the three-month period ended March 31, 2006

Minority interests of 158 M € (prior year: 176 M €) mainly represent shares of Finmeccanica in
MBDA. According to revised IAS 32, minority interests for BAE Systems’ share in Airbus areshown as “Liability for puttable instruments” (please refer to Note 2 “Accounting policies”).

Non-current liabilities
Non-current provisions of 6,557 M € (prior year: 6,879 M €) comprise the non-current portions ofpension provisions with a decrease of -101 M € to 3,799 M € and other provisions, decreasing by-221 M € to 2,758 M €. Other provisions include among others aircraft financing activities with adecrease of -30 M € to 1,123 M € and provisions for derivative financial instruments according to
IAS 39 with a decrease of -195 M € to 277 M €.
Long-term financial liabilities of 4,027 M € (prior year: 4,189 M €), excluding foreign exchangerate effects of -62 M €, decrease by -100 M €.
Deferred tax liabilities of 2,525 M € (prior year: 2,376 M €) are significantly influenced by thedecrease in the fair value of financial instruments. They are defined as non-current liabilities.
Other non-current liabilities comprise “Non-current other liabilities” and “Non-current deferredincome” and slightly decrease by -31 M € to 11,264 M € (prior year: 11,295 M €). They mainly
include the non-current portion of European Government refundable advances amounting to 5,118
M € (prior year: 4,950 M €) and non-current customer advance payments received of 4,804 M €(prior year: 4,911 M €). The main part of non-current deferred income of 1,249 M € (prior year:
1,324 M €) is linked to restated revenues of Airbus and ATR according to RVG clauses. The
remaining portfolio, which is included in non-current deferred income is depreciated over thewindow period.

Current liabilities
Current provisions decrease by -116 M € to 2,611 M € (prior year: 2,727 M €) and comprise thecurrent portions of pensions (207 M €) and other provisions (2,404 M €, prior period: 2,507 M €).
The decrease mainly reflects the revaluation of derivative financial instruments according to
IAS 39 (-126 M €).
Short-term financial liabilities of 805 M € (prior year: 908 M €), excluding foreign exchange-rate
effects of -8 M €, decrease by -95 M €.
EADS has adopted in 2005 revised IAS 32 and accounts for a liability for puttable instrumentsof 3,500 M € (prior year: 3,500 M €) for the 20 % interest of BAE Systems in Airbus.
Without considering foreign exchange rate effects of -17 M €, trade liabilities increase by+358 M € to 6,975 M € (prior year: 6,634 M €), mainly coming from Airbus (+524 M €), partly offset
by Defence (-143 M €).
Other current liabilities include “Current other liabilities” and “Current deferred income”. Without
considering foreign exchange rate revaluations of -6 M €, they increase by +169 M € to 17,902 M€ (prior year: 17,739 M €). Other current liabilities mainly comprise the current portion of customer
advance payments of 14,367 M € (prior year: 14,078 M €).

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EADS N.V.
Unaudited Condensed Consolidated Financial Information for the three-month period ended March 31, 2006

8. Significant cash flow items
Cash provided by operating activities decreases by -1,082 M € to 232 M € (first quarter 2005:
1,314 M €). This decrease mainly reflects the negative variation in working capital (change in otheroperating assets and liabilities) of -603 M € (first quarter 2005: positive variation of 459 M €). This
primarily results from an increase in inventories, partly offset by positive effects of trade liabilities /
receivables and ongoing customer advance payments.
Cash used for investing activities improves by +667 M € to -96 M € (first quarter 2005:
763 M €). The outflow is mainly caused by Airbus and Skynet V activities, nearly offset by selldowns of aircraft financing exposure of Airbus.
Cash used for financing activities decreases by -139 M € to -223 M € (first quarter 2005:-84 M €). The outflow mainly corresponds to repayments of financial liabilities as well aspurchases of treasury shares.
9. Contingencies
Pension commitments - EADS has several common investments with BAES, of which the mostsignificant in terms of employees are Airbus and MBDA. In respect of each investment, for so longas BAES remains a shareholder, UK employees may stay in the BAES pensions schemes, whichcurrently qualify as multi-employer defined benefit plans. BAES is applying IFRS as of January 1st,
2005. In accordance with IAS 19, BAES has disclosed for its UK defined pension schemes a net(pre tax) pension liability as of December 31st, 2005 in a total amount of 4,659 M GBP. As
participants in the BAES schemes, EADS investments are potentially affected by any shortfall of
BAES schemes. However, the agreements between EADS and BAES have the effect of capping
the contributions that the investment has to make to the pension scheme for a certain period oftime (until July 2011 for Airbus and until December 2007 for MBDA). Any additional contribution
would be paid by BAES. EADS is therefore not exposed to increased contribution payments
resulting from the pension underfunding during the period of the contribution caps. EADS hasrequested detailed information about these pension schemes. Based on limited information madeavailable, EADS has judged this information not to be sufficient to properly allocate the pension
plans’ deficit and is therefore not able to reliably determine its participation in any potential future
deficit once the period of contribution caps will have expired. Consequently, EADS continues to
expense the contributions made to the pension schemes as if the plans were defined contributionplans.
10. Number of shares
The total number of shares outstanding is 799,933,291 and 790,727,881 as of March 31st, 2006
and 2005, respectively. EADS’ shares are exclusively ordinary shares with a par value of 1.00 €.
During the first quarter 2006, EADS repurchased 1,020,026 of its ordinary shares (in the firstquarter 2005: 8,950,275) in conjunction with the share-buyback program.
3,812,891 new shares (first quarter 2005: 127,862 shares) were issued as a result of the exerciseof stock options in compliance with the implemented stock option plans.
11. Earnings per share
The net income for the first quarter 2005 was adjusted due to retrospective application of revised
IAS 32 in 2005 with an amount of +82 M € representing minority interests of 20 % of Airbus(please refer to Note 2 “Accounting policies”).

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EADS N.V.
Unaudited Condensed Consolidated Financial Information for the three-month period ended March 31, 2006

Basic earnings per share are calculated by dividing profit for the period attributable to equity
holders of the parent (Net income) by the weighted average number of issued ordinary shares
during the period, excluding ordinary shares purchased by the Group and held as treasury shares:

Net income attributable to shareholders
Weighted average number of ordinary shares outstanding
Basic earnings per share

January 1 toMarch 31, 2006

January 1 toMarch 31, 2005

516 M €

410 M €

795,283,531

795,573,328

0.65 €

0.52 €The effect from the retrospective application of IAS 32 (revised) on basic earnings per shareamounts to an increase of 0.10 € in the first quarter 2005.
For calculation of the diluted earnings per share, the weighted average number of ordinary
shares is adjusted to assume conversion of all potential ordinary shares. The Group’s only
category of dilutive potential ordinary shares is stock options. Since the average price of EADS
shares during the first quarter 2006 exceeded the exercise price of the stock options under the 1st,
2nd, 3rd, 4th, 5th and 6th stock option plans (in the first quarter 2005: 1st, 2nd, 4th and 5th stock optionplan) initiated by the Group, the inclusion of the related potential ordinary shares increases theweighted average number of shares. 7,953,755 shares (first quarter 2005: 4,627,286 shares) areconsidered dilutive according to IAS 33.

Net income attributable to shareholders
Weighted average number of ordinary shares outstanding(diluted)
Diluted earnings per share

January 1 toMarch 31, 2006

January 1 toMarch 31, 2005

516 M €

410 M €

803,237,286

800,200,614

0.64 €

0.51 €The effect from the retrospective application of IAS 32 (revised) on diluted earnings per shareamounts to an increase of 0.10 € in the first quarter 2005.
12. Related party transactions
The Group has entered into various transactions with related companies in the first quarter 2006
and 2005 that have all been carried out in the normal course of business. As is the Group’s policy,
all related party transactions have to be carried out at arm’s length. Transactions with relatedparties include the French State, DaimlerChrysler, Lagardère, and SEPI (Spanish State). Except
for the transactions with the French State, such transactions are not considered material to theGroup either individually or in the aggregate. The transactions with the French State include
mainly sales from the Eurocopter, Defence & Security Systems and Space divisions.

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EADS N.V.
Unaudited Condensed Consolidated Financial Information for the three-month period ended March 31, 2006

13. Number of employees
The number of employees at March 31st, 2006 is 114,203 as compared to 113,210 at December
31st, 2005.
14. Subsequent events
On May 12th, 2006, the EADS Board of Directors examined all the industrial options concerning
EADS Sogerma Services. It asked the Board of EADS Sogerma Services to launch as quickly as
possible the option it thought to be credible to secure the company’s recovery and durability. This
project implies developing activities with growth potential and shutting down of loss-making
activities without profitability prospects. It will, of course, be supported by the industrial synergies
and considerable input of aerostructure workloads that may be envisaged by other entities, mainly
Airbus. The EADS Board of Directors, aware of the fact that this project should lead to the closedown of the company’s site in Mérignac, ensures that total Group solidarity comes into play with
an ambitious social plan aiming at proposing an appropriate solution for everybody involved.
EADS has entered into consultations with BAE Systems on the potential sale of its 20 % stake in
Airbus. On May 2nd, 2006, BAE Systems triggered a further step in the sale process by issuing a
Put Option Intention Notice, a process contemplated in the Airbus Shareholders Agreement signed
in 2001. Following completion of this consultation process, BAE Systems may - but is not obliged
to - formally exercise its put option. There can be no certainty as to the result of this phase of thesale process, however the negotiations will now be governed by the guidelines within the Airbus
Shareholders Agreement.
On April 4th, 2006, DaimlerChrysler and Lagardère SCA, two of EADS’ core shareholders, haveannounced they entered into simultaneous transactions aimed at reducing by 7.5 % each theirrespective stakes in EADS. Daimler Chrysler has described its transaction as a forward saleagreement on approximately 61 million EADS shares with a group of international investmentbanks. According to the DaimlerChrysler Group, it has lent these shares to the banks inanticipation of the settlement of the forward sale. Lagardère SCA has announced it has issued
Mandatory Exchangeable Bonds subscribed by IXIS CIB. In turn, IXIS CIB has sold forward alarge majority of the underlying shares to a group of French institutional investors. DaimlerChrysler
and Lagardère have noted that, under the shareholder agreements, the balance of control
between the core shareholders in EADS’ corporate governance remains unchanged.

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