EADS N.V.
Unaudited Condensed Consolidated Financial Information for the year ending December 31, 2003

Year 2003 Report

Unaudited Condensed Consolidated
Financial Information of EADS N.V.
for the year 2003

Unaudited Condensed Consolidated Income Statements .......................................... 2
Unaudited Condensed Consolidated Balance Sheets ................................................ 3
Unaudited Condensed Consolidated Cash Flow Statements ..................................... 4
Unaudited Condensed Consolid. Statements of Changes in Shareholders’ Equity .... 5
Explanation to the Unaudited Condensed Consolidated Financial Information(according to IFRS) as at December 31, 2003 ........................................................... 5
1.
The Company .................................................................................................. 5
2.
Change in accounting policies.............................................................................. 5
3.
Changes in the consolidation perimeter and major events of EADS.............................. 6
4.
Segment information .......................................................................................... 6
5.
EBIT pre goodwill amortization and exceptionals ...................................................... 7
6.
Significant profit and loss statement items .............................................................. 8
7.
Significant balance sheet items ............................................................................ 88.
Significant cash flow items .................................................................................. 99.
Number of shares ............................................................................................. 9
10.
Earnings per share .......................................................................................... 10
11.
Related party transactions................................................................................. 10
12.
Number of employees ...................................................................................... 10

105.03.2004

EADS N.V.
Unaudited Condensed Consolidated Financial Information for the year ending December 31, 2003

Unaudited Condensed Consolidated Income Statements
January 1 December 31, 2003
Revenues
Cost of sales
Gross margin
Selling, administrative & otherexpenses
thereof amortization of goodwill
and related impairment losses
Research and development
expensesM€
30.133-24.594
5.539

January 1 December 31, 2002

%
100
-82
18

M€
29.901-24.4655.436-2.985-10-567

Deviation

%

M€

%

100
-82
18

232
-129
103

1
1
2

-3.428

-11

443

-13

-2

-936

-3

369

-39

-2.189-7-2.096-7-93

4

Other income

196

1

248

1

-52

-21

Income from operating activities
Financial result
Income taxes
Profit (loss) from ordinary
activities
Minority interests
Net income (loss)

561
131
-474

2
0
-1

160
27
-453

1
0
-2

401
104
-21

251
385
5

218
-66
152

1
0
1

-266
-33
-299

-1
0
-1

484
-33
451

-182
100
-151

Earnings per share
Basic and diluted

€

€

€

0,19

-0,37

0,56

2

05.03.2004

EADS N.V.
Unaudited Condensed Consolidated Financial Information for the year ending December 31, 2003

Unaudited Condensed Consolidated Balance Sheets
December 31, 2003
M€

December 31, 2002%

M€

Deviation

%

M€

%

Fixed assets
Intangible assets

9.694

17

9.789

21

-95

-1

Property, Plant and Equipment

11.44821

10.50923939

9Financial Assets 1)

4.129

8

3.729

8

400

11

25.27146

24.027

52

1.244

5

Non-fixed assets
Inventories

3.279

6

2.700

6

579

21

Trade receivables

4.001

7

4.114

9

-113

-3

Other receivables and other assets

10.280

19

5.256

11

5.024

96

468

1

799

2

-331

-41

7.404

14

5.401

12

2.003

37

25.43247

18.270

40

7.162

39

2.724

5

2.992

6

-268

-9

951

2

965

2

-14

-1

54.378100

46.254

100

8.124

18

Securities 2)
Cash and cash equivalents
Deferred taxes
Prepaid expenses
Total assets
Shareholders' equity
Capital Stock

813

1

811

2

2

0

Reserves

9.589

18

9.658

21

-69

-1

Accumulated other comprehensive
income

5.934

10

2.452

5

3.482

142

Treasury shares

-187

0

-156

0

-31

20

16.14929

12.765

28

3.384

27

Minority interests

2.179

4

1.361

3

818

60

Provisions

8.726

16

8.248

18

478

6

Financial liabilities 1)

4.767

9

3.830

8

937

24

Trade liabilities

5.117

9

5.070

11

47

1

Other liabilities

11.31821

10.246

22

1.072

10

Liabilities

21.20239

19.146

41

2.056

11

Deferred taxes

3.664

7

2.014

4

1.650

82

Deferred income

2.458

5

2.720

6

-262

-10

Total liabilities andshareholders' equity

54.378100

46.254

100

8.124

18

1) Offsetting of finance lease liabilities with corresponding deposits (in 2003: -1.131 M €, in 2002:-1.146 M €)2) Short term securities are reclassified into cash and cash equivalent (in 2003: -5.555 M €, in
2002: -3.698 M €)305.03.2004

EADS N.V.
Unaudited Condensed Consolidated Financial Information for the year ending December 31, 2003

Unaudited Condensed Consolidated Cash Flow Statements

Net income (loss)
Income applicable to minority interest
Adjustments to reconcile net income(loss) to cash provided byoperating activities
Depreciation and amortization of fixed assets
Valuation adjustments
Deferred tax (income) expenses
Results on disposals of fixed assets/businesses and results ofassociates (equity method)
Change in provisions
Change in other operating assets and liabilities
Cash provided by operating activities
Investments:- Purchases in fixed assets- Increase in equipment of leased assets

January 1 - December January 1 - December
31, 2003
31, 2002
M€
M€
152
-299
66
33

2.375
263
-138

2.768
177
255

-274
246
2.019
4.709

-227
-845
804
2.666

-2.672-279-2.213-101- Payments for investments in financial assets and acquisitions ofsubsidiaries- Proceeds from disposal of fixed assets and decrease inequipment of leased assets- Proceeds from disposal of financial assets and subsidiaries- Change in finance lease receivables
Change in securities
Change in cash from changes in consolidation
Cash used for investing activities
Change in financial liabilities
Cash distribution paid to shareholders
Dividends paid to minorities
Capital increase
Purchase of treasury shares
OthersCash provided by (used for) financing activities
Effect of foreign exchange rate changes on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents-820-1.134

55
416
-359
336
-152
-3.475
1.132
-240
-38
21
-31
8
852

240
849
-599
-264
5
-3.217
-774
-403
-127
16
-156
-3
-1.447

-83
2.003

-82
-2.080Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

5.401
7.404

7.481
5.401

In 2003, cash flow from changes in securities included in investing activities decreased due to sales by
336 M € (2002: increase of -264 M €). These medium-term securities are included in Securities asstated in the balance sheet.
As of December 31, 2003, EADS’ cash position (stated as cash and cash equivalents in the unauditedcondensed consolidated cash flow statements) includes 273 M € (227 M € as of December 31, 2002)
representing the amount Airbus division has deposited at BAe Systems. Additionally included are 613
M € and 596 M € as of December 31, 2003 and 2002, respectively, which represent EADS’ share in
MBDA’s cash and cash equivalents, deposited at BAe Systems and Finmeccanica. These funds areavailable for EADS upon demand.

4

05.03.2004

EADS N.V.
Unaudited Condensed Consolidated Financial Information for the year ending December 31, 2003

Unaudited Condensed Consolidated Statements of Changes in Shareholders’EquityM€
Equity as of January 1, 2003
Capital increase ESOPNet income
Cash distribution to shareholders
Purchase of treasury shares
OCI
Equity as of December 31, 2003
Equity as of January 1, 2002
Capital increase ESOPNet loss
Cash distribution to shareholders
Purchase of treasury shares
OCI
Equity as of December 31, 2002

12.765
21
152
-240
-31
3.482
16.149
9.877
16
-299
-403
-156
3.730
12.765

Explanations to the Unaudited Condensed Consolidated Financial Information(according to IFRS) as at December 31, 2003
1. The Company
The accompanying Condensed Consolidated Financial Statements present the operations ofEuropean Aeronautic Defence and Space Company EADS N.V. and its subsidiaries (“EADS” or
the “Group”), a Dutch public limited liability company (naamloze vennootschap) legally seated in
Amsterdam (Le Carré, Beechavenue 130-132, 1119 PR, Schiphol-Rijk, The Netherlands), and areprepared and reported in Euros (“€”). EADS’ core business is the manufacturing of commercial
aircraft, civil helicopters, commercial space launch vehicles, missiles, military aircraft, satellites,
defence electronics and rendering of services related to these activities.
2. Change in accounting policies
To be in full compliance with IFRS, EADS changed its accounting policy regarding IAS 38, inparticular capitalisation of development costs as internally generated intangible assets. As of
December 31, 2003, development costs that had, as a policy, previously been expensed in the
period incurred, have been retrospectively assessed for capitalisation unless the amount of any
resulting adjustments that relates to prior periods has not been reasonably determinable. EADS
considers that due to the complexity of its products, processes carried out in the various researchand development phases are of such interaction that a proper distinction of the research phasefrom the development phase can not be made up to only a very late stage of the program. As aconsequence, EADS capitalised 4 M € incurred in 2003 as internally generated intangible asset.
Previous financial statements have not been impacted.

505.03.2004

EADS N.V.
Unaudited Condensed Consolidated Financial Information for the year ending December 31, 2003

3. Changes in the consolidation perimeter and major events of EADSEADS acquired BAe Systems’ 25 percent interest (27,5 percent economic share) in Astrium N.V.
The transaction was signed on January 30, 2003 and is accounted for under the purchase method.
Control of Astrium N.V.,has been transferred to EADS at this date.
At completion of this transaction, EADS acquired BAe Systems’ share in Astrium N.V. for 84 M €.
Prior to completion, EADS and BAe Systems each made a capital contribution into Astrium N.V. of
84 M € (total 168 M €). Taking the cash contribution into account, BAe Systems’ interest has beeneffectively transferred to EADS for no net cash contribution.
Nortel Networks and EADS reorganized their joint telecommunications activities in France andGermany. On September 18, 2003, EADS exchanged its 42 percent ownership interest in Nortel
Networks Germany GmbH & Co. KG and its 45 percent ownership interest in Nortel Networks
France S.A.S. for a 41 percent interest in EADS Telecom France S.A.S., a net additional paymentof 42 M € by Nortel Networks and a waiver of Nortel Networks for financial receivables of 72 M €.
At completion of transaction, EADS holds 100 % of the shares of EADS Telecom France S.A.S.
On October 21, 2003, a Dornier family member being shareholder of Dornier GmbH exercised aput option and offered 17,7 % of the shares in Dornier GmbH to DaimlerChrysler. DaimlerChrysler
exercised the right to sell its shares to DADC Luft- und Raumfahrt Beteiligungs AG (DADC), a
subsidiary of EADS, in the amount of 62 M €. As a result, EADS holds indirectly through DADC 94% of the shares of Dornier GmbH (2002: 76 %).
On December 31, 2003, EADS obtained control of ASL Aircraft Services Lemwerder GmbH. The
acquisition costs for the company amount to 15 M €.
Apart from these transactions, there were no material acquisitions or disposals of subsidiaries,
business combinations, long-term investments and discontinued operations during the year 2003.
4. Segment information
The Group operates in 5 divisions (segments) which reflect the internal organizational andmanagement structure according to the nature of the products and services provided:• 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 — Development, manufacturing, marketing and sale of military transport
aircraft and special mission aircraft.
• Aeronautics — Development, manufacturing, marketing and sale of civil and military helicopters,
regional turboprop aircraft and light commercial aircraft; and civil and military aircraft conversion
and maintenance services.
• Defence & Security Systems — Development, manufacturing, marketing and sale of missiles
systems; military combat aircraft; and provision of defence electronics, defence-related
telecommunications solutions; and logistics, training, testing, engineering and other related
services.
• Space — Development, manufacturing, marketing and sale of satellites, orbital infrastructuresand launchers; and provision of launch services.
The following table presents information with respect to the Group’s business segments.
Consolidation effects, the holding function of EADS headquarters and other activities not allocableto the divisions are disclosed in the column “HQ/ Conso.”.

605.03.2004

EADS N.V.
Unaudited Condensed Consolidated Financial Information for the year ending December 31, 2003

Due to the new organizational structure of the Group, the Defence & Security Systems division has
been renamed and restructured, especially the Military Aircraft business unit has been transferredfrom Aeronautics division to Defence & Security Systems division. Prior year figures are adjusted
accordingly in these notes.

in M €

AirbusMilitary
Transport

Aeronautics

Defence &Security
SystemsSpace

HQ/ Conso.

Consolidated

Year ended December 31, 2003
External revenues

19.048

934

3.803

5.165

2.424

-1.24130.133

Research and development
expenses

1.819

23

62

223

62

0

2.189

EBIT pre goodwill amort. andexceptionals (see definition
below)

1.353

30

217

171

-400

172

1.543

External revenues

19.512

524

3.834

4.770

2.216

-955

29.901

Research and development
expenses

1.682

40

90

227

59

-2

2.096

EBIT pre goodwill amort. andexceptionals (see definition
below)

1.361

-80

180

122

-268

111

1.426

Year ended December 31, 2002

5. EBIT pre goodwill amortization and exceptionals
EADS uses EBIT pre goodwill amortization and exceptionals as a key indicator to measure theeconomic performance of the Group and its Segments. 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, the Airbus combination and the formation of MBDA, as well as
impairment charges.
A reconciliation from Income from operating activities to EBIT pre goodwill amortization andexceptionals is set forth in the following table (in M €):January 1Dec. 31, 2003

January 1Dec. 31, 2002

Income from operating activities

561

160

Income from investments

186

87

747

247

Goodwill amortisation and related impairment charges

567

936

Fair value adjustment

229

243

1.543

1.426

in M €

Goodwill and exceptionals:

EBIT pre goodwill amortization and exceptionals

705.03.2004

EADS N.V.
Unaudited Condensed Consolidated Financial Information for the year ending December 31, 2003

6. Significant profit and loss statement items
EADS Group revenues reached 30.133 M €, which is compared with 2002 an increase of 232 M €mainly contributed from Military Transport, Defence & Security systems and Space divisions.
Revenues in Airbus division slightly decreased by 2 % to 19.048 M €, but would have beensignificantly higher at constant US-Dollar rates.
Research and development expenses of 2.189 M € (2002: 2.096 M €) increased mainly
because of the Airbus A 380 project. The change in accounting policy with respect to capitalizationof development costs did not significantly impact the R&D costs recognized as expenses .
Other income of 196 M € (2002: 248 M €) decreased, as it comprised last year the gain on thedisposal of the 50 % shares in Aircelle by Airbus (63 M €).
As there was no impairment charge recognized in 2003, Goodwill amortization of 567 M € (2002:
936 M €) comprised regular periodic amortization. Previous year’s amortization included additional
impairment charges of 350 M €.
The financial result comprises interest income of 502 M € (2002: 526 M €) and interest expenseof -705 M € (2002: -607 M €). Included in interest income is the return on cash and cash
equivalents, securities and financial assets such as loans and finance leases. Interest expenses
comprise interest on financial liabilities and European Government refundable advances.
Income from investments of 186 M € (2002: 87 M €) was mainly influenced by the result ofDassault Aviation of 225 M € (2002: 111 M €). Since for the second half year of 2003 no financial
information according to IFRS is available yet from Dassault Aviation, the net income of thesecond half year 2002 of Dassault Aviation has been used as the best estimate to report thecurrent second half year’s net income 2003. The current year’s equity investment income from
Dassault Aviation also includes a catch-up of the prior year financial performance in accordancewith IFRS, which amounts to 77 M €.
Other financial result of 148 M € (2002: 21 M €) includes, among others, fair value gains onembedded derivatives not used in hedging relationships.
7. Significant balance sheet items
Intangible assets include 9.372 M € (prior year: 9.586 M €) of Goodwill, which is decreased
according to the amortization plan. The reduction of Goodwill is partly compensated by anincrease, mainly coming from the purchase of additional shares of EADS Telecom France S.A.S,
100 % consolidation of Astrium N.V., the acquisition of Dornier GmbH shares and ASL
Lemwerder.
Eliminating to foreign exchange-rate effects of -281 M €, Property, plant and equipment
increased by 1.220 M € to 11.448 M € (prior year: 10.509 M €). Most of the increase is made by
Airbus, due to strong capital expenditures related to the A380 project and Space division, mainly
caused by the Skynet program.
Financial Assets of 4.129 M € (prior year: 3.729 M €) increased in total – excluding foreignexchange-rate effect of -346 M € – by 746 M €, coming mainly from new customer aircraft
financing and change in equity-value of Dassault Aviation. Defeased bank deposits (-1.131 M € in2003 and -1.146 M € in 2002) were offset with corresponding finance lease liabilities.
Inventories of 3.279 M € (prior year: 2.700 M €), net of customer advances, excluding foreignexchange-rate effects of 658 M €, decreased by -79 M € due to a higher level of customer
advances received.

805.03.2004

EADS N.V.
Unaudited Condensed Consolidated Financial Information for the year ending December 31, 2003

Other receivables and other assets increased by 5.024 M € to 10.280 M € (prior year 5.256 M€). The increase is mainly caused by the development of the fair values of financial instruments(+5.145 M €), as a result of the declining US dollar exchange rate (USD / € year-end spot rate of
1.26 at December 31, 2003 vs. 1.05 at December 31, 2002).
Securities, Cash and cash equivalents increased from 6.200 M € to 7.872 M €.
Stockholders‘ equity amounts to 16.149 M € (prior year: 12.765 M €), resulting mainly from a Net
income of 152 M €, a dividend payment to shareholders of - 240 M €, revaluation of hedges
according to IAS 39 by 2.524 M € and a currency translation adjustment of 804 M €.
Minority interests of 2.179 M € (2002: 1.361 M €) mainly represent shares of BAe Systems in
Airbus Group. The increase in BAe Systems’ minority interest mainly is attributable to change infair values of financial instruments that qualify for hedge accounting according to IAS 39 in Airbus.
The increase within the provision for pensions by 380 M € to 3.772 M € (2002: 3.392 M €)results by 68 M € from 100 % consolidation of Astrium and by 74 M € from transfer of Astrium UK
pension plans from BAe Systems to EADS.
Other provisions of 4.954 M € (2002: 4.856 M €) are affected by a foreign exchange-rate effect of-315 M €. Without currency effects, other provisions increase by 413 M €, mainly due to theincrease in restructuring and tax provisons
Financial liabilities of 4.767 M € (prior year: 3.830 M €) have mainly increased due to theissuance of a Eurobond loan of 1.500 M €. Formerly included finance lease liabilities are offset
with corresponding defeased bank deposits in an amount of 1.131 M € (2002: 1.146 M €)Without considering foreign exchange-rate effects of -520 M €, other liabilities increased by
1.592 M € to 11.318 M € (prior year: 10.246 M €). The increase is mainly impacted by refundable
government advances and advances received from customers.
The increase in deferred tax liabilities of 1.650 M € to 3.664 M € (2002: 2.014 M €) issignificantly influenced by the increase of the fair value of financial instruments recognized in otherassets.
8. Significant cash flow items
Cash provided by operating activities increased by 2.043 M € to 4.709 M € (2002: 2.666 M €).
This increase is mostly due to the higher level of customer advance payments received during theyear and also to the lower impact from the consumption of provision for old “macro-hedges” thatbear unfavourable rates.
Cash used for investing activities remains almost stable at -3.475 M € (2002: -3.217 M €). The
outflow is mainly caused by investments in fixed assets of -2.672 M €, thereof -1.176 M € for the A
380 program within Airbus division. Further outflows are based on new aircraft loans and cash
invested for aircraft under finance leases. These outflows were partly offset by the sale ofsecurities in 2003 by 336 M €.
Cash provided by financing activities amounts to 852 M € (2002: -1.447 M €) and mainlycontains new Eurobond loans of 1.500 M € issued in 2003. It is reduced by the cash distribution
paid to shareholders of - 240 M € as well as a dividend paid to minorities (mainly BAe Systems) of- 38 M €.
9. Number of shares
The total number of shares outstanding is 800.957.248 and 800.957.248 as of December 31, 2003
and 2002, respectively. EADS’ shares are exclusively ordinary shares with a par value of 1,00 €.

905.03.2004

EADS N.V.
Unaudited Condensed Consolidated Financial Information for the year ending December 31, 2003

During the year 2002, EADS repurchased 10.241.252 ordinary shares in conjunction with theshare-buyback program as approved by the General shareholders’ meeting on May 10, 2001. The
General shareholders’ meeting on May 6, 2003 renewed the authorization given to the Board of
Directors to repurchase shares of EADS. In 2003, the Company repurchased 1.686.682 shares.
10. Earnings per share
Basic earnings per share are calculated by dividing net income (loss) attributable toshareholders by the weighted average number of issued ordinary shares during the period,
excluding ordinary shares purchased by the Group and held as treasury shares:
January 1 to
December 31,
2003
Net income (loss) attributable to shareholders
Weighted average number of ordinary shares outstanding
Basic earnings per share

January 1 to
December 31,
2002

152 M €

(299) M €800.957.248

804.116.877

0,19 €(0,37) €For the 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 exercise price of the stock
options under all existing stock option plans initiated by the Group is exceeding the average shareprice of EADS shares, to include these potential ordinary shares would be anti-dilutive. As aconsequence, net income as well as the weighted number of ordinary shares in issue are thesame for both basic and diluted earnings per share.
11. Related party transactions
The Group has entered into various transactions with related companies in 2003 and 2002 thathave 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 related parties include
the French State, DaimlerChrysler, Lagardère, and SEPI (Spanish State). Except for thetransactions with the French State the transactions are not considered material to the Group either
individually or in the aggregate. The transactions with the French State include mainly sales fromthe Aeronautics, Defence & Security Systems and Space divisions.
12. Number of employees
The number of employees at December 31, 2003 is 109.135 as compared to 103.967 at
December 31, 2002 reflecting 100% consolidation of Astrium (previous year 75 %) as well as new
employments at Airbus mainly in relation with the A380 program ramp up.

1005.03.2004