Condensed Interim Consolidated Financial Statements of EADS NV for the nine months ending Sept. 30, 2002

Condensed Interim Consolidated
Financial Statements of EADS NVfor the first three quarters of 2002

1

Condensed Interim Consolidated Financial Statements of EADS NV for the nine months ending Sept. 30, 2002

Consolidated Statements of Income

January 1 - September
30, 2002
Revenues

M€
19.996%

January 1 - September
30, 2001

100

M€
20.685%

Variation

100

M€
-689

%
-3,3

Cost of sales
Gross margin
Selling, administrative & otherexpenses-16.297
3.699-8218-17.063
3.622

-82
18766
77-4,52,1-1.749-8-1.913-9

164-8,6

Research and development costs-1.356205-431-7
1-2-1.213
2.677
-475

-613-3-143-2.472
44

11,8-92,3-9,3Result before financial income
and income tax

368

22.69813-2.330-86,4

Financial result
Income taxes
Minority interest-6-323-160-2037-470
170-20-43147-33-116,2-31,3-194,1

230

2.282

11-2.259-99,0

Other operating income
Amortization of goodwill

Net income

Earnings per share from netincome
Basic
Diluted€€

€

0,03
0,03

2,83
2,81-2,80-2,782

Condensed Interim Consolidated Financial Statements of EADS NV for the nine months ending Sept. 30, 2002

Consolidated Balance Sheets
September 30, 2002%

M€

December 31, 2001%

M€

Deviation%

M€

Fixed assets
Intangible assets

10.20522,1

10.58821,7-383-3,6

Property, Plant and Equipment

10.26822,210.05020,6218

2,2

Financial Assets

4.772

10,3

4.726

9,746

1,025.245

54,625.364

52,0-119-0,5Inventory (net)2.880

6,22.469

5,141116,6

Trade receivables

4.475

9,75.183

10,6-708-13,7

Other receivables & other assets

3.733

8,02.633

5,4

1.100

41,8

Securities

4.100

8,9

5.341

11,1-1.241-23,2Cash

1.829

4,0

2.692

5,5-863-32,1

17.01736,818.31837,7-1.301-7,1

Deferred tax assets

3.171

6,9

4.288

8,8-1.117-26,0

Prepaid expenses

805

1,77451,560

8,146.238100,048.715

100,0-2.477-5,18091,78091,700,09.967

21,610.346

21,2-379-3,7

Accumulated other comprehensive
income886

1,9-1.278

-2,6

2.164

-169,3

Treasury shares

-152

-0,3

0

0,0-152

11.510

24,9

9.877

20,3

1.633

16,5996

2,1559

1,1437

78,2

8.907

19,3

11.91824,5-3.011-25,3Financial liabilities

5.259

11,4

6.500

13,3-1.241-19,1

Trade liabilities

5.183

11,2

5.466

11,2-283-5,2

Other liabilities

10.45622,610.631

21,8-175-1,6

20.89845,222.59746,3-1.699-7,5

Deferred tax liabilities

1.169

2,5806

1,736345,0Deferred income

2.758

6,02.958

6,1-200-6,8

Total liabilities andstockholders'equity

46.238100,048.715

100,0-2.477-5,1

Current assets

Total assets
Shareholders'equity
Capital StockReserves

Minority interest
Provisions
Liabilities3

Condensed Interim Consolidated Financial Statements of EADS NV for the nine months ending Sept. 30, 2002

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

9.877

Net income

23Dividends-403

Accumulated other comprehensive income

2.165

Treasury shares-152

Equity as of September 30, 2002

11.510Equity as of December 31, 2000

10.250First application of IAS 39-337

Equity as of January 1, 2001

9.913

Net income

2.282

Dividends-404

Accumulated other comprehensive income-513

Equity as of September 30, 2001

11.2784

Condensed Interim Consolidated Financial Statements of EADS NV for the nine months ending Sept. 30, 2002

Consolidated Cash Flow Statements

Net Income
Income (loss) applicable to minority interest

January 1 - September
30, 2002

January 1 - September
30, 2001

M€M€
2316

2.282
-17

1.715
-63

1.782
2Gain on acquisition Airbus
Change in deferred taxes

0191-2.537
52

Results on disposals of fixed assets/businesses
Change in provisions-68-607

21-116

Variation in working capital
Cash provided by operating activities
Investments (net) incl.leased equipment

-78
1.129
-2.049

-562
907
-744

Change in cash from changes in consolidation
Cash used for investing activities-7-2.056

42-702

-506
-715

-405
-713

Purchase of treasury shares
Other
Cash used for financing activities-152-1-1.3740209-909

Effect of foreign exchange rate changesChange in cash and cash equivalents-81-2.382-46-750

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

7.481
5.099
830

7.760
7.010
402

Cash and securities as stated in Balance Sheet

5.929

7.412

Depreciation and amortization of fixed assets
Valuation adjustments/ net income from associates

Dividends paid
Change in financial liabilities

Cash used for investing activities in the first three quarters of 2002 does include
investments in securities of 305 M €; these medium-term securities are included in
Cash and securities as stated in the consolidated balance sheet.

5

Condensed Interim Consolidated Financial Statements of EADS NV for the nine months ending Sept. 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 otheroperating income.
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 41 %.
These interim consolidated financial statements should be read in conjunction
with the 2001 annual financial statements.

6

Condensed Interim Consolidated Financial Statements of EADS NV for the nine months ending Sept. 30, 2002

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

Military
Transport

Aeronautics

SpaceDefenceand Civil
Systems

HQ/ Elimin.

Consolidated

Nine months ended September 30, 2002
Revenues

13.750

310

3.363

1.389

1.874

-690

19.996

1.071

28

101

36120

0

1.356

1.072

-79

132-101-91

80

1.013

14.431

306

3.161

1.543

2.044-800

20.685

935

34

86

36

124

-2

1.213

1.131

-12

144

-8-16331

1.123

Research andDevelopment
expenses
EBIT (pre goodwill
amortization/exceptionals)

Nine months ended September 30, 2001
RevenuesResearch andDevelopment
expenses
EBIT (pre goodwillamortization/exceptionals)

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

368

Income from associates

42410

Goodwil amortization and exceptionals:
Goodwill amortisation

431

Fair value adjustment

172

EBIT pre goodwill amortization and exceptionals

1013

EADS uses EBIT pre goodwill amortization and exceptionals as a key indicator tomeasure the segments’ economic performance. The term “exceptionals” refers toincome or expenses of a non-recurring nature, such as amortization expenses ofFair Value Adjustments relating to the EADS Merger or the Airbus Combination,
as well as impairment charges.

7Condensed Interim Consolidated Financial Statements of EADS NV for the nine months ending Sept. 30, 2002

4. Significant net income items
With 19.996 M €, Revenues reached almost the same level as in the first threequarters of 2001.
The increase of Research and development costs to 1.356 M € (September 30,
2001: 1.213 M €) is mainly due to Airbus A380.
Cost of sales also includes depreciation of jigs and tools.
Other operating income decreased from 2.677 M € by September 30, 2001 to205 M € as the first three quarters of 2001 contained a dilution gain of 2.537 M €resulting from the first-time consolidation of Airbus UK. Included in other operating
income of the first three quarters of 2002 is the gain on disposal of Aircelle (refernote 1).
The Financial result of ./.6 M € includes the result from investments of 42 M €,mainly influenced by a positive result from Dassault Aviation of 68 M € and adepreciation charge on investments in the Space division. Also included areinterest expenses of 77 M € as well as a positive variation of 29 M € mainly of
matured 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 increased
only slightly despite investments mainly resulting from the investment in A 380.
Again, due to foreign exchange rate effects, Financial assets of 4.772 M €(December 31, 2001: 4.726 M €) remained at constant level despite some
additions to loans for aircraft financing.
Other receivables and other assets increased by 1.100 M € to 3.733 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 964 M € by September 30, 2002.
Cash and Securities decreased from 8.033 M € to 5.929 M €, mainly due torepayments of loans (715 M €) and the payment of the dividend in 2002 of EADSN.V. for 2001 (403 M €).
Shareholders' equity amounts to 11.510 M € by September 30, 2002 incomparison to 9.877 M € by December 31, 2001. This increase is mainly theresult of a variation of Accumulated Other Comprehensive Income (AOCI), inprincipal caused by fair value adjustments of foreign currency hedging
instruments (September 30, 2002: + 367 M €; December 31, 2001: ./. 1.215 M €)as well as currency translation adjustments (September 30, 2002: + 540 M €;December 31, 2001: ./. 103 M €).
During the second and third quarter 2002, the group purchased own shares for
152 M €.
The increase in Minority interests by 437 M € mainly represents BAES’ share in
the increase of OCI due to fair value adjustments of foreign currency hedging
instruments as well as currency translation adjustments in the main representing
Airbus.
8

Condensed Interim Consolidated Financial Statements of EADS NV for the nine months ending Sept. 30, 2002

Lower Provisions of 8.907 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 (September 30, 2002: 860 M €; December 31,
2001: 3.673 M €). The change in provisions for financial instruments has noimpact on EBIT pre goodwill amortization and exceptionals. Provisions also
include pension provisions of 3,324 M € as of September 2002 (3,176 M € as ofDecember 2001) and other provisions of 4,723 € M as of September 2002 (5,069€ M as of December 2001). The decline in other provisions has been caused
essentially by the foreign currency exchange rate variation.
Financial liabilities decreased by 1.241 M € to 5.259 M €, mainly because of a715 M € loan repayment and foreign currency exchange rate effects.
6. Significant cash flow items
Despite positive cash flows from operating activities (1.129 M €), cash and cash
equivalents decreased by 2.382 M €.
This decrease is caused by investing activities, which comprise mainlyinvestments in fixed assets resulting from the development of Airbus A 380 andinvestments in securities of 305 M € as well as financing activities, which inparticular comprise loan repayments and paid dividends.
Included in the variation of working capital in the first three quarters of 2002 is anincrease of conditional refundable advances received from European
governments of 735 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 September, 2002 is 799.284.309.
At September 30, 2002, EADS had repurchased 9.891.252 ordinary shares in
conjunction with the share-buyback program as approved by the generalshareholders’ 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 Sept. 30, 2002
805.389.028 shares
January 1, 2001 to Sept. 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 potential
9Condensed Interim Consolidated Financial Statements of EADS NV for the nine months ending Sept. 30, 2002

ordinary shares. The Group’s only category of dilutive potential ordinary shares isstock options. Since the exercise price of the stock options under both stock
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.
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 the
Aeronautic, Defence, and Space divisions.

10