Condensed Interim Consolidated Financial Statements of EADS NV for the six months ending June 30, 2002

Condensed Interim Consolidated
Financial Statements of EADS NV
for the first half-year 2002

1

Condensed Interim Consolidated Financial Statements of EADS NV for the six months ending June 30, 2002

Consolidated Statements of Income

January 1 - June 30,
2002
Revenues
Cost of sales
Gross margin
Selling, administrative & otherexpenses
Research and development costs
Other operating income
Amortization of goodwill
Result before financial income
and income tax
Financial result
Income taxes
Minority interestNet income

Earnings per share from net
incomeBasic
DilutedEarnings per share from net
income pre exceptionals
Basic
DilutedM€
13.974-11.384
2.590

January 1 - June 30,
2001%
100-81
19M€
14.043-11.536
2.507-1.230-9-876145-296333
14-229-27
91%

Variation
M€%

100-8218-69
152
83-0,5-1,3
3,3-1.470-10240-16,3-7
1-2-768
2.103-317-615-2-108-1.958
21

14,1-93,1-6,6

20-10
12.055-53-359
14
1.657

15-1-2012-1.722
67
130-41-1.566-83,8-126,4-36,2-292,9-94,5

€

€

€

0,110,11

2,05
2,05

-1,94
-1,94

0,57
0,57

0,56
0,56

0,01
0,01

2

Condensed Interim Consolidated Financial Statements of EADS NV for the six months ending June 30, 2002

Consolidated Balance Sheets
June 30, 2002

December 31, 2001

%

M€

%

M€

Deviation%

M€

Fixed assets
Intangible assets

10.32521,810.58821,7-263-2,5

Property, Plant and Equipment

10.034

21,310.050

20,6-16-0,2

Financial Assets

4.522

9,64.726

9,7-204-4,324.881

52,725.364

52,0-483-1,9

Inventory (net)2.501

5,32.469

5,1

32

1,3

Trade receivables

4.773

10,1

5.183

10,6-410-7,9

Other receivables & other assets

4.238

9,0

2.633

5,4

1.605

61,0

Securities

4.809

10,2

5.341

11,1-532-10,0Cash

2.034

4,3

2.692

5,5-658-24,4

18.35538,918.318

37,737

0,2

Deferred tax assets

3.122

6,64.288

8,8-1.166-27,2

Prepaid expenses

862

1,8745

1,5117

15,747.220

100,048.715

100,0-1.495-3,18091,7809

1,7

0

0,0

Reserves

10.034

21,310.346

21,2-312-3,0

Accumulated other comprehensive
income1.260

2,7-1.278

-2,6

2.538

-198,6-79-0,2

0

0,0-7912.024

25,5

9.877

20,3

2.147

21,7

Minority interest

1.201

2,55591,1642

114,8

Provisions

9.177

19,4

11.91824,5-2.741-23,0

Financial liabilities

5.417

11,5

6.500

13,3-1.083-16,7

Trade liabilities

4.942

10,5

5.466

11,2-524-9,6

Other liabilities

10.40822,010.631

21,8-223-2,120.767

44,022.59746,3-1.830-8,1

Deferred tax liabilities

1.302

2,8806

1,7496

61,5

Deferred income

2.749

5,82.958

6,1-209-7,1

Total liabilities andstockholders'equity

47.220100,048.715

100,0-1.495-3,1

Current assets

Total assets
Shareholders'equity
Capital Stock

Treasury shares

Liabilities3

Condensed Interim Consolidated Financial Statements of EADS NV for the six months ending June 30, 2002

Consolidated Statements of Changes in Equity
M€
Equity as of January 1, 2002

9.877

Net income

91

Dividends-403

OCI2.538

Purchase of treasury shares-79

Equity as of June 30, 2002

12.024Equity as of December 31, 2000

10.250First application of IAS 39-337

Equity as of January 1, 2001

9.913

Net income

1.657

Dividends-404

OCI-1.917

Change in reserves

603

Equity as of June 30, 2001

9.852

4

Condensed Interim Consolidated Financial Statements of EADS NV for the six months ending June 30, 2002

Consolidated Cash Flow Statements

Net Income
Income (loss) applicable to minority interest

January 1 - June 30,2002

January 1 - June 30,2001

M€M€
9127

1.657
-141.131-55937
165

087-1.934
25-52-207

3331

Variation in working capital
Cash provided by operating activities
Investments (net) incl.leased equipment-53969-1.30950
1.220-740

Change in cash from changes in consolidation
Cash used for investing activities-7-1.31646-694-404-571-404-271

Purchase of treasury shares
Other
Cash used for financing activities-79
3-1.0510279-396

Effect of foreign exchange rate changes
Change in cash and cash equivalents-71-1.4690130

Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
Additional securities medium-term

7.481
6.012
831

7.760
7.890
162

Cash and securities as stated in Balance Sheet

6.843

8.052

Depreciation and amortization of fixed assets
Valuation adjustments/ net income from associates
Gain on acquisition Airbus
Change in deferred taxes
Results on disposals of fixed assets/businesses
Change in provisions

Dividends paid
Change in financial liabilities

Cash used for investing activities in the first half-year 2002 does include investment
in securities of 290 M €; these medium-term securities are included in Cash andsecurities as stated in the consolidated balance sheet.

5

Condensed Interim Consolidated Financial Statements of EADS NV for the six months ending June 30, 2002

Notes to the interim consolidated financial statements
1. Changes in the composition of EADSIn the first quarter 2002, Airbus sold Aircelle, a joint venture with Snecma, toSnecma. The resulting gain on disposal amounted to 63 M €, included in EBIT.
Apart from that, there were no other material acquisitions or disposals ofsubsidiaries, business combinations, long-term investments and discontinued
operations during the period.
2. Accounting policies
The condensed interim consolidated financial statements have been prepared inaccordance with IAS 34 Interim Financial Reporting. The accounting policies usedin the preparation of the interim consolidated financial statements are consistent
with those used in the annual financial statements for the year ended December
31, 2001. Except for the non-capitalization of R&D costs, EADS is following
International Financial Reporting Standards (IFRS) principles.
Costs that incur unevenly during the financial year are anticipated or deferred in
the interim period only if it is appropriate to anticipate or defer that type of cost at
the end of the financial year.
Income tax expense is recognized based on the best estimate of the weightedaverage annual income tax rate expected for the full year. The estimated annual
average tax rate pre goodwill amortization for 2002 is 39 % (2001: 38 %).
These interim consolidated financial statements should be read in conjunction
with the 2001 annual financial statements.
In the consolidated statement of income, comparative information has been
restated in respect of a change in presenting depreciation of jigs and tools usedfor aircraft production purposes (refer note 4). The change in presentation has noinfluence on net income or EBIT pre goodwill and exceptionals (refer note 3) ofEADS.

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Condensed Interim Consolidated Financial Statements of EADS NV for the six months ending June 30, 2002

3. Segment information
Information with respect to EADS business segments follows:in M €Airbus

Military
Transport

Aeronautics

Space

Defenceand CivilSystems

HQ/ Elimin.

Consolidated

Six months ended June 30, 2002
Revenues

9.870

234

2.226

882

1.245

-483

13.974

680

2272

24

78

0876

874-7263-85-71

66

775

9.982

195

2.020

1.054

1.358-566

14.043

Research andDevelopment
expenses

574

2562

2385-1768

EBIT (pre goodwill/exceptionals)

797-21

85

29-1282764

Research andDevelopment
expenses
EBIT (pre goodwill/exceptionals)

Six months ended June 30, 2001
Revenues

A reconciliation from result before financial income and income taxes to EBIT pregoodwill and exceptionals is set forth in the following table:
M€
Result before financial income and income tax

333

Income from associates

29362

Goodwill and exceptionals:
Goodwill amortisation

296

Fair value adjustment

117

EBIT pre goodwill and exceptionals

775

EADS uses EBIT pre-goodwill amortization and exceptionals as a key indicator ofits economic performance. The term “exceptionals” refers to income or expenses
of a non-recurring nature, such as amortization expenses of Fair Value
Adjustments relating to the EADS Merger or the Airbus Combination, as well as
impairment charges. EBIT pre goodwill and exceptionals is treated bymanagement as a key indicator to measure the segments’ economicperformance.

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Condensed Interim Consolidated Financial Statements of EADS NV for the six months ending June 30, 2002

4. Significant net income items
With 13.974 M €, Revenues reached almost the same level as in the first halfyear 2001.
The increase of Research and development costs to 876 M € (June 30, 2001:
768 M €) is mainly due to Airbus A380.
In 2001, recognition of depreciation of jigs and tools in the statement of income
was disclosed as part of research and development expenses (85 M € by June30, 2001). From 2002 onwards, EADS discloses these depreciation costs withincost of sales, as they relate to sales and therefore should rather be recognized aspart of cost of sales instead of research and development cost. Research anddevelopment expenses as well as cost of sales for the first half-year 2001 havebeen adjusted accordingly.
Other operating income decreased from 2.103 M € by June 30, 2001 to 145 M €as the first half year 2001 contained a dilution gain of 1.934 M € resulting from thefirst-time consolidation of Airbus UK. Included in the other operating income of thefist half-year 2002 is the gain on disposal of Aircelle (refer note 1).
The Financial result of 14 M € includes the result from investments of 29 M €,mainly influenced by a positive result from Dassault Aviation and a depreciation
charge on an investment in the Space division. Also included are interest
expenses of 58 M € as well as a positive variation of 43 M € mainly of remaining
macro hedging instruments. The income from the equity investment Dassault
Aviation is based on Dassault Aviation’s previous year’s equity result.
5. Significant balance sheet items
Due to foreign exchange rate effects, Property, Plant and Equipment remained
at constant level despite investments mainly resulting from the development of A
380.
Financial assets of 4.522 M € (December 31, 2001: 4.726 M €) decreased
mainly due to foreign exchange rate effects.
Other receivables and other assets increased by 1.605 M € to 4.238 M €,mainly caused by the variation of foreign currencies to Euro, thus leading to a
positive marked-to-market revaluation of foreign currency hedging instruments,
which total 1.411 M € by June 30, 2002.
Cash and Securities decreased from 8.033 M € to 6.843 M €, mainly due torepayments of loans (571 M €) and the payment of the dividend for 2001 (404 M€).
Shareholders' equity amounts to 12.024 M € by June 30, 2002 in comparison to9.877 M € by December 31, 2001. This increase is mainly the result of a variationof OCI, in principal caused by fair value adjustments of foreign currency hedging
instruments (June 30, 2002: + 654 M €; December 31, 2001: ./. 1.215 M €) as wellas currency translation adjustments (June 30, 2002: + 632 M €; December 31,
2001: ./. 103 M €).
During the second quarter 2002, the group purchased treasury shares for 79 M €.

8

Condensed Interim Consolidated Financial Statements of EADS NV for the six months ending June 30, 2002

The increase in Minority interests by 642 M € mainly represents BAES’ share in
the increase of Other Comprehensive Income due to fair value adjustments offoreign currency hedging instruments as well as currency translation adjustments.
Lower Provisions of 9.177 M € (December 31, 2001: 11.918 M €) are mainly
resulting from a decrease of provisions for financial instruments due to the foreign
currency exchange rate variation (June 30, 2002: 985 M €; December 31, 2001:
3.673 M €).
Financial liabilities decreased by 1.083 M € to 5.417 M €, mainly because of a571 M € loan repayment and foreign currency exchange rate effects.
6. Significant cash flow items
Despite positive cash flows from operating activities (969 M €), cash and cash
equivalents decreased by 1.469 M €.
This is caused by investing activities, which comprise mainly investments in
fixed assets resulting from the development of Airbus A 380 and investments insecurities of 290 M € as well as financing activities, which in particular compriseloan repayments and paid dividends.
Included in the variation of working capital in the first half-year 2002 is an increaseof conditional refundable advances received from European governments of 618
M €.
7. Contingencies
Since the last balance sheet date (December 31, 2001), there were no significant
changes in contingent liabilities.
8. Number of shares
The total number of shares outstanding as of 30 June, 2002 is 804.331.343. AtJune 30, 2002, EADS had repurchased 4.844.218 ordinary shares in conjunction
with the share-buyback program as approved by the general shareholders’meeting in 2001.
9. Earnings per share
Basic earnings per share are calculated by dividing net profit attributable toshareholders by the weighted average number of ordinary shares in issue during
the period:
Weighted average number of ordinary shares in issue
January 1, 2002 to June 30, 2002
807.655.628 shares
January 1, 2001 to June 30, 2001
807.157.667 shares
For the calculation of the diluted earnings per share, the net profit is divided by
the weighted number of shares assuming conversion of all dilutive potentialordinary shares. The Group’s only category of dilutive potential ordinary shares isstock options. Since the exercise price of the stock options under both stock9

Condensed Interim Consolidated Financial Statements of EADS NV for the six months ending June 30, 2002

option plans initiated by the Group in 2001 and 2000 is exceeding the share priceof EADS shares, to include these potential ordinary shares would be anti-dilutive.
As a consequence, net income as well as the weighted number of ordinary sharesin issue is the same for both basic and diluted earnings per share.
10. Dividend policy
Following the annual shareholders’ meeting on May 17, 2002, a dividend of EUR
0,50 per ordinary share was paid for the business year 2001.

10

Condensed Interim Consolidated Financial Statements of EADS NV for the six months ending June 30, 2002

11. Related party transactions
The Group has entered into various transactions with related parties in 2002 and2001 that have all been carried out in the normal course of business at arm’slength. Related parties include the French State, DaimlerChrysler, Lagardère, andSEPI (Spanish State). Except for the transactions with the French State, thetransactions are not considered material to the Group either individually or in theaggregate. The transactions with the French State include mainly sales from theAeronautic, Defence, and Space divisions.

11