EADS N.V.
Unaudited Condensed Consolidated Financial Information for the nine months ended September 30, 2005

First 9 month 2005 Report

Unaudited Condensed Interim Consolidated
Financial Information of EADS N.V.
for the first nine months of 2005

Unaudited Condensed IFRS Consolidated Income Statements ...………………………….….......…2
Unaudited Condensed IFRS Consolidated Income Statements for the third quarter2005 and 2004…………………………………….……………………………….…….……………….......…3
Unaudited Condensed IFRS Consolidated Balance Sheets….…..………….……………...……....…4
Unaudited Condensed IFRS Consolidated Cash Flow Statements……………....…...…………...…5
Unaudited Condensed IFRS Consolidated Statements of Changes in equity attributable toequity holders of the parent and minority interests…….………………………..………………………6
Explanations to the Unaudited Condensed IFRS Consolidated Financial Statements
as at September 30, 2005...….…………………………………………..….…………...………………...…6
1. The Company………………………………………………………………………………………….6
2. Accounting policies……………….………………………………………………..………………..6
3. Changes in the consolidation perimeter of EADS…………………………....…….….…….…7
4. Segment information………………………………..…………..……………………………………8
5. EBIT pre goodwill impairment and exceptionals…..……..…………………………..…………96. Significant profit and loss 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……………………………………..………………………...….…..………….13
12. Related party transactions ………………..…………………...……………...……………..……13
13. Number of employees ……………………………….……………………………..……....………13

1

08.11.2005

EADS N.V.
Unaudited Condensed Consolidated Financial Information for the nine months ended September 30, 2005

Unaudited Condensed IFRS Consolidated Income Statements

January 1 September 30, 2005
Revenues
Cost of sales *)Gross margin
Selling, administrative & otherexpenses
Research and development
expenses
Other incomeM€
23,446-18,6854,761

January 1 September 30, 2004

%
100
-80
20

M€
21,459-17,035
4,424-1,620-7-1,431

Deviation

%
100
-79
21

M€
1,987
-1,650337%-1,637

-8

17

-1

-6

-1,612

-8

181

-11

124

1

114

1

10

9

9
10
8

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

171

1

57

0

114

200

2,005
-21
-707
1,277

9
0
-4
5

1,346
-183
-426
737

6
-1
-2
3

659
162
-281
540

49
-89
66
73

Attributable to:Equity holders of the parent(Net income) *)Minority interest

1,025
252

4
1

588
149

3
0

437
103

74
69

Earnings per share
Basic *)
Diluted *)

€

€

€

1.29
1.28

0.73
0.73

0.56
0.55

*) The effect of the retroactive application of IFRS 2 “Share based payment” is included in cost of
sales of previous year (see Note 6).

2

08.11.2005

EADS N.V.
Unaudited Condensed Consolidated Financial Information for the nine months ended September 30, 2005

Unaudited Condensed IFRS Consolidated Income Statements for the third
quarter 2005 and 2004

July 1 September 30, 2005
Revenues
Cost of sales *)Gross margin
Selling, administrative & otherexpenses
Research and development
expenses
Other income

M€
7,426
-5,946
1,480

July 1 September 30, 2004

%
100
-80
20

M€
6,892
-5,378
1,514

-541

-7

-481
33

Deviation

%

M€

%

100
-78
22

534
-568
-34

8
11
-2

-568

-8

27

-5

-6

-499

-7

18

-4

0

25

0

8

32

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

38

0

1

0

37

3,700

529
-47
-196
286

7
0
-3
4

473
-122
-91
260

7
-2
-1
4

56
75
-105
26

12
-61
115
10

Attributable to:Equity holders of the parent(Net income) *)Minority interest

209
77

3
1

207
53

3
1

2
24

1
45

Earnings per share
Basic and diluted *)

€

€

€

0.26

0.26

0.00

*) The effect of the retroactive application of IFRS 2 “Share based payment” is included in cost of
sales in previous third quarter (see Note 6).

3

08.11.2005

EADS N.V.
Unaudited Condensed Consolidated Financial Information for the nine months ended September 30, 2005

Unaudited Condensed IFRS Consolidated Balance Sheets
September 30, 2005
M€

December 31, 2004%

M€

Deviation

%

M€

%

Non-current assets
Intangible assets

10,20915

10,00815201

2Property, Plant and Equipment

13,59319

12,90519

688

5Investment in associates

1,861

3

1,738

3

123

7

Other investments

2,655

4

2,110

3

545

26

Deferred tax assets

2,722

4

2,543

4

179

7

Non-current securities

669

1

466

1

203

44

Other non-current assets

4,118

6

6,973

10

-2,855-41

35,82752

36,743

55

-916

-2

Inventories, gross *)15,33522

12,334

18

3,001

24

Trade receivables

4,177

6

4,406

7

-229

-5

Current assets

Other current assets

4,066

6

5,325

8

-1,259-24

Cash and cash equivalents

9,813

14

8,718

12

1,095

13

33,391

48

30,783

45

2,608

8

69,218100

67,526

100

1,692

3

814

1

810

1

4

0

10,98416

10,254

15

730

7

3,747

6

6,086

9

-2,339

-38

-392

-1

-177

0

-215

121

15,15322

16,97325-1,820

-11

1,975

3

2,370

4

-395

-17

Non-current provisions

6,659

10

6,045

9

614

10

Long-term financial liabilities

5,030

7

4,406

7

624

14

Deferred tax liabilities

2,635

4

4,134

6

-1,499-36

10,592

15

10,26715325

324,91636

24,852

37

64

0

2,379

3

2,350

3

29

1

737

1

720

1

17

2

5,982

9

5,860

9

122

2

611

1

178

0

433

243

17,46527,174
69,21825
39
100

14,22323,331
67,526

21
34
100

3,242
3,843
1,692

23
16
3

Total assets
Equity attributable to equity
holders of the parent
Capital StockReserves
Accumulated other comprehensive
incomeTreasury shares
Minority interests
Non-current liabilities

Other non-current liabilities *)Current liabilities
Current provisions
Short-term financial liabilities
Trade liabilities
Current tax liabilities
Other current liabilities *)Total equity and liabilities*) Advance payments received related to inventories are reclassified to other non-current and current
liabilities. Previous year figures are adjusted accordingly (see note 7).

4

08.11.2005

EADS N.V.
Unaudited Condensed Consolidated Financial Information for the nine months ended September 30, 2005

Unaudited Condensed IFRS Consolidated Cash Flow Statements

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
Deferred tax expense
Results on disposals of non-current assets and results ofcompanies accounted for by the equity method
Change in current and non-current provisions andcurrent tax assets and liabilities
Change in other operating assets and liabilities
Cash provided by operating activities
Purchases of intangible assets and PPEProceeds from disposals of intangible assets and PPE
Acquisitions of subsidiaries (net of cash)
Proceeds from disposals of subsidiaries (net of cash)
Payments for investments in associates and other investments andother long-term financial assets
Proceeds from disposals of associates and other investments andlong-term financial assets
Dividends paid by companies valued at equity
Increase in equipment of leased assets
Proceeds from disposals of leased assets
Increase in finance lease receivables
Decrease in finance lease receivables
Change in securities
Change in cash from changes in consolidation
Cash used for investing activities
Change in long-term and short-term financial liabilities
Capital increase
Own shares purchased
Cash distribution paid to shareholders
Dividends paid to minorities
Cash used for financing activities
Effect of foreign exchange rate changes and other valuation
adjustments on cash and cash equivalents
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

January 1 September 30, 2005
M€

January 1 September 30, 2004
M€

1,025
252

588
149

1,365
-10
12

1,255
-326
285

-268

-48

520
532
3,428
-1,840
52
-96
35

-174
249
1,978
-1,652
57
-10
0

-470

-493

320
36
-34
223
-211
59
-184
11
-2,099
373
80
-215
-396
-93
-251

532
36
-295
35
-111
69
299
0
-1,533
283
2
0
-320
-65
-100

17
1,095

7
352

8,718
9,813

7,404
7,756

As of September 30, 2005, EADS’ cash position (stated as cash and cash equivalents in theunaudited consolidated cash flow statements) includes 1,040 M € (687 M € as of December 31, 2004)
representing the amount Airbus has deposited at BAE Systems. Additionally included are 477 M €(602 M € as of December 31, 2004), 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.

5

08.11.2005

EADS N.V.
Unaudited Condensed Consolidated Financial Information for the nine months ended September 30, 2005

Unaudited Condensed IFRS Consolidated Statements of Changes in equity
attributable to equity holders of the parent and minority interests
Equity attributable toequity holders of theparentin M €

Minority interest

Balance at January 1, 2005

16,973

2,370

Profit for the period

1,025

252

Cash distribution to shareholders and dividends tominorities

-396

-93

-2,339

-554

80

0

-215

0

OCI
Capital Increase
Purchases of treasury shares
Others25

0Balance at September 30, 2005

15,153

1,975

Balance at January 1, 2004

16,1492,179

Profit for the period

588

149

Cash distribution to shareholders and dividends tominorities

-320

-65

OCI

-923

-209

OthersBalance at September 30, 2004

11

0

15,5052,054

Explanations to the Unaudited Condensed IFRS Consolidated Financial
Statements as at September 30, 2005
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 helicopters, commercial space launch vehicles, missiles,
military aircraft, satellites, defence electronics and rendering 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”). They comprise (i) IFRS, (ii) International AccountingStandards (“IAS”) and (iii) Interpretations originated by the International Financial Reporting
Interpretations Committee (IFRIC) or former Standing Interpretations Committee (“SIC”).
As of January 1, 2005, EADS adopted the following revisions and amendments to existingStandards and new Standards and Interpretations as required by the following announcements
released by the IASB in December 2003 and in 2004:
EADS has applied thirteen revised International Accounting Standards (IASs) in conjunction with
the Improvements Project (IASs 1, 2, 8, 10, 16, 17, 21, 24, 27, 28, 31, 33, 40), new IFRS 2 “Share6

08.11.2005

EADS N.V.
Unaudited Condensed Consolidated Financial Information for the nine months ended September 30, 2005

Based Payment”, IFRS 4 “Insurance Contracts” and IFRS 5 “Non-current Assets Held for Sale andDiscontinued Operations”, new IFRIC 1 “Changes in Existing Decommissioning, Restoration and
Similar Liabilities”, IFRIC 2 “Members’ Shares in Co-operative Entities and Similar Instruments”
and IFRIC 4 “Determining whether an Arrangement contains a Lease” as well as amendments to
IAS 32 (March 2004), to IAS 39 (March 2004) and to SIC 12 “Consolidation – Special Purpose
Entities”.
The effects of the application of IFRS 2 for the first nine months of 2005 and 2004 are disclosed in
Note 6.

Minority interests accounting and commitments to buy out Minority interests – When EADS
exercises the control over the operations of one of its subsidiaries, such entity or sub-group is fully
consolidated. All third-party stakes in the voting rights of these subsidiaries are accounted for as
part of Minority Interests. Contrary to the requirements of IAS 27 (§33), EADS has not reclassified
on the balance sheet within Equity such Minority Interests.
The majority of the balance of the Minority Interests as at September 30, 2005 relates to BAE
Systems for its 20 % minority stake in Airbus. BAE Systems had been granted in 2001 an option tosell its Airbus S.A.S. shares at market value to EADS, either for cash consideration or in exchange
for EADS shares (if no burdensome regulatory authorisations impact such allocation), as
determined by EADS. This option is since May 2005 exercisable without cause.
Although IAS 32 is applicable since January 1, 2005, EADS has, in the light of the ongoing
discussion around the implementation of that standard, decided for its interim financial statements
to maintain the historical valuation of the Minority Interests.

Besides consequential changes as mentioned above the accounting policies used in the
preparation of the Interim Consolidated Financial Statements are consistent with those used in theannual Consolidated Financial Statements for the year ended December 31, 2004, which aredisclosed as an integral part of the Group’s Annual Report 2004. The annual Consolidated
Financial Statements were authorised for issue by EADS’ Board of Directors on March 8, 2005.
Costs incurring 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 weighted-average annual
income tax rate expected for the full year applied on pre-tax income. The estimated annual
average income tax rate for 2005 is about 35.6 % (previous year: 36.3 %).
These Condensed Interim Consolidated Financial Statements should be read in conjunction withthe annual IFRS Consolidated Financial Statements 2004.
3. Changes in the consolidation perimeter of EADSOn February 28, 2005, EADS sold its Enterprise Telephony Business, which comprises its civil
telecommunication activities, to Aastra Technologies Limited, Concord / Canada. In the first ninemonths of 2004, Enterprise Telephony Business has generated revenues of 104 M € in Defence &Security System division.
Australian Aerospace, which represents activities of Eurocopter in Australia, is fully consolidated
from January 1, 2005 onwards.
Apart from this transaction, other acquisitions or disposals by the Group are not material.

7

08.11.2005

EADS N.V.
Unaudited Condensed Consolidated Financial Information for the nine months ended September 30, 2005

4. Segment information
The Group operates in divisions (segments) which reflect the internal organizational andmanagement structure according to the nature of the products and services provided. Following
recent changes in the EADS structure, the Aeronautics Division was dissolved end of June andsplit 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; and provision of defence electronics, defencerelated telecommunications solutions; and logistics, training, testing, engineering and otherrelated services.
•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 function of EADS headquarters and other activities not allocableto the divisions are disclosed in the column “HQ/ Conso.”. “Other Businesses” comprises thedevelopment, 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
SystemsSpace

HQ/ Conso.

Other
Businesses

Consolidated

Nine months ended September 30, 2005
Revenues

16,033

504

2,021

3,419

1,670

-984

783

23,446

Research anddevelopment
expenses-1,175

-14

-46

-121

-43

-27

-5

-1,431

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

1,854

1

105

10

10

175

-56

2,099

Nine months ended September 30, 2004
Revenues

14,415

539

1,732

3,204

1,646

-886

809

21,459Research anddevelopment
expenses-1,337

-18

-44

-145

-37

-26

-5

-1,612

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

1,379

5

101

-77

-6

77

12

1,491

8

08.11.2005

EADS N.V.
Unaudited Condensed Consolidated Financial Information for the nine months ended September 30, 2005

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 amortization 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 €):January 1- Sept. January 1- Sept.
30, 2005
30, 2004

in M €
Profit before finance costs and income taxes
Fair value adjustments
EBIT pre goodwill impairment and exceptionals

2,005

1,346

94

145

2,099

1,491

6. Significant profit and loss statement items
Due to the application of IFRS 2 “Share Based Payment”, previous year figures had to be adjusted
accordingly. For the first nine months of 2005, the recorded effect on EBIT pre goodwill impairment
and exceptionals as well as profit for the period attributable to equity holders (net income) is anadditional expense of 25 M € (first nine months of 2004: 9 M €).
EADS Group revenues in the first nine months of 2005 reach 23,446 M €, which - compared to
the first nine months of 2004 – is an increase of 1,987 M €. Airbus and Eurocopter record
increasing revenues, mostly reflecting higher aircraft deliveries and the first consolidation ofAustralian Aerospace (see Note 3). Stronger revenues from defence customers are recognized in
the Defence and Security Systems Division.
Research and development expenses of 1,431 M € (first nine months of 2004: 1,612 M €)decrease because of the entry of the A 380 passenger version into production and increased
capitalized development costs for A 380. In the first nine months of 2005, 172 M € of development
costs were capitalized for A 380 (first nine months of 2004: 89 M €).
Share of profit from associates and other income from investments of 171 M € (first ninemonths of 2004: 57 M €) is mainly influenced by the result of Dassault Aviation of 157 M € (firstnine months of 2004: 51 M €). The increase is mainly due to positive 2004 IFRS-catch up
adjustments accounted for in 2005 compared to negative IFRS-catch up adjustments accounted
for in 2004.
The finance costs of -21 M € (first nine months of 2004: -183 M €) include a net interest charge of-116 M € (first nine months of 2004: -181 M €) mainly related to refundable government advances,
partly offset by positive effects from foreign exchange rate revaluations of monetary items.
7. Significant balance sheet items
Non-current assets
Intangible assets of 10,209 M € (prior year: 10,008 M €) include 9,479 M € (prior year: 9,460 M €)of Goodwill. Goodwill increases due to acquisition of shares from Dornier family members and908.11.2005

EADS N.V.
Unaudited Condensed Consolidated Financial Information for the nine months ended September 30, 2005

Racal US. According to IFRS 3, Goodwill is no longer regularly amortized, as previously requested
under IAS 22, but instead is subject to annual impairment tests. As of September 30, 2005 no
impairment test had to be performed.
Eliminating foreign exchange-rate effects of +352 M €, property, plant and equipment increased
by 336 M € to 13,593 M € (prior year: 12,905 M €). Most of the increase is attributable to Airbus,
due to strong capital expenditures related to the A380 program and the Space Division, mainly
caused by the Paradigm / Skynet 5 program. Property, plant and equipment comprises“Investment property” amounting to 134 M € (prior year: 159 M €).
Investment in associates of 1,861 M € (prior year: 1,738 M €) mainly increases due to thechange in the equity investment of Dassault Aviation.
Other investments of 2,655 M € (prior year: 2,110 M €) are allocated to Airbus in the amount of
2,032 M € (prior year: 1,553 M €), mainly concerning the non-current portion of aircraft financing
activities with a foreign exchange-rate effect of +201 M €.
Deferred tax assets of 2,722 M € (prior year: 2,543 M €) are presented as non-current assets as
required by IAS 1.
Other non-current assets comprise “Non-current other assets” and “Non-current prepaid
expenses”. The decrease of -2,855 M € to 4,118 M € (prior year: 6,973 M €) is mainly caused by
the variation of the non-current portion of fair values of financial instruments.
Financial instruments are included in other non-current assets with an amount of 3,345 M €(previous year: 6,243 M €), in current other assets (1,512 M €, previous year 2,705 M €), in noncurrent provisions (321 M €, previous year 137 M €) and in current provisions (236 M €, previous
year 44 M €). While the volume of hedged US dollar-contracts has risen from 40.2 bn US dollar to43.4 bn US dollar, the US dollar exchange rate decreased (USD / € spot rate of 1.20 at September
30, 2005 vs. 1.36 at December 31, 2004). The average US dollar hedged rate for the hedge
portfolio of the Group as at September 30, 2005 increased for the same period (US dollar / € rateof 1.10 as at September 30, 2005 vs. 1.03 as at December 31, 2004).
Current assets
Inventories, gross of 15,335 M € (prior year: 12,334 M €) increase by 2,943 M € (without foreignexchange revaluation of +58 M €) in all divisions. This is due to a higher level of unfinished goods
and services, mainly by A 380-, A 400 M-, NH90-, SuperPuma- and Tiger-programs. Inventories
are shown with their gross amount. Those advance payments received, which so far werededucted from inventories are now reclassified to current and non-current other liabilities. Previous
year figure has been adjusted accordingly with an amount of 9,259 M €.
The decrease in trade receivables of -229 M € to 4,177 M € (previous year: 4,406 M €) comes toa large extent from higher customer payments in Military Transport Aircraft division.
Other current assets include “Current portion of financial assets”, “Current other assets”, “Current
income tax assets” and “Current prepaid expenses”. The decrease of -1,259 M € to 4,066 M €(prior year: 5,325 M €) is with an amount of -1,193 M € caused by the variation of the current
portion of fair values of financial instruments (see “Financial instruments” under “Non-current
assets”).
Cash and cash equivalents increase from 8,718 M € to 9,813 M €.
Equity attributable to equity holders of the parent amounts to 15,153 M € (prior year: 16,973 M€), the decrease mainly resulting from a profit for the period (Net income) of +1,025 M €, a cash
distribution to shareholders of -396 M €, a decrease of OCI of -2,339 M €, primarily resulting from10

08.11.2005

EADS N.V.
Unaudited Condensed Consolidated Financial Information for the nine months ended September 30, 2005

changes in fair values as well as consumption of derivative financial instruments, and thepurchases of treasury shares of -215 M €.
Minority interests of 1,975 M € (prior year: 2,370 M €) mainly represent shares of BAE Systems
in Airbus Group. The decrease in BAE Systems’ minority interest is mainly attributable to thedecrease in fair values of financial instruments that qualify for hedge accounting according to IAS
39 and a dividend payment by Airbus, partly compensated by a positive result allocated to minority
interests.

Non-current liabilities
Non-current provisions of 6,659 M € (previous year: 6,045 M €) include among others 3,859 M €for the non-current portion of the provision for retirement plans and similar obligations (prior year:
3,749 M €) and 321 M € (previous year: 137 M €) of non-current provision for financial instruments(see “Financial instruments” under “Non-current assets”).
Long-term financial liabilities of 5,030 M € (prior year: 4,406 M €), excluding foreign exchangerate effects of +228 M €, increase by +396 M € in particular due to Airbus (+192 M €), mainly
related to higher non-recourse customer financing, and the Skynet V program external financing of+190 M €.
The decrease in deferred tax liabilities of -1,499 M € to 2,635 M € (prior year: 4,134 M €) issignificantly influenced by the decrease in the fair value of financial instruments accounted for as“Other non-current assets” and “Other current assets”.
Other non-current liabilities comprise “Non-current other liabilities” and “Non-current deferredincome”. Without considering foreign exchange-rate effects of +80 M €, other non-current liabilities
increase by +245 M € to 10,592 M € (prior year: 10,267 M €). Other non-current liabilities mainly
include the non-current portion of European Government refundable advances amounting to 4,993
M € (prior year: 4,781 M €) and non-current customer advance payments received of 4,252 M €(prior year: 3,985 M €). Advance payments received are also included for their non-current portion,
which have previously been recorded as a deduction from inventories. Previous year figure has
been adjusted accordingly with an amount of +632 M €.
Current liabilities
Short-term financial liabilities of 737 M € (prior year: 720 M €), excluding foreign exchange-rate
effects of +27 M €, slightly decrease by -10 M €.
Excluding a foreign exchange rate effect of +54 M €, trade liabilities increase by +68 M € to 5,982
M € (previous year: 5,860 M €), mainly resulting from a step-up in production rates in Airbus
Division.
The increase of current tax liabilities of +433 M € to 611 M € (prior year: 178 M €), mainly
concerns Airbus (+463 M €).
Other current liabilities include “Current other liabilities” and “Current deferred income”. Without
considering foreign exchange rate revaluations of +32 M €, they increase by 3,210 M € to 17,465
M € (prior year: 14,223 M €). Other current liabilities mainly include current customer advancepayments of 13,797 M € (prior year: 10,884 M €) . The current portion of advance payments, whichhas previously been deducted from inventories is reclassified to other current liabilities. The figureof previous year has been adjusted accordingly with an amount of +8,627 M €.

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EADS N.V.
Unaudited Condensed Consolidated Financial Information for the nine months ended September 30, 2005

8. Significant cash flow items
Cash provided by operating activities increases by +1,450 M € to 3,428 M € (first nine monthsof 2004: 1,978 M €). This increase mainly reflects improvements in EADS operations. The positive
variation in working capital (change in other operating assets and liabilities) of 532 M € (first ninemonths of 2004: 249 M €) primarily results from ongoing customer advance payments.
Cash used for investing activities increases by -566 M € to -2,099 M € (first nine months of
2004: -1,533 M €). The outflow is mainly caused by Airbus activities and the net acquisition of
securities.
Cash used for financing activities increases by -151 M € to -251 M € (first nine months of 2004:-100 M €). The outflow mainly contains cash distributions paid to shareholders and dividends paid
to minorities as well as the purchases of treasury shares and the exercise of stock options, partly
offset by drawdowns on financial liabilities.
9. Contingencies
Pension commitments - EADS has several common investments with BAE Systems, of which
the most significant in terms of active employees are Airbus and MBDA. UK employees of suchcommon investments are able to participate in the BAE Systems pension schemes.
On April 28, 2005, BAE Systems publicly disclosed the impacts of the conversion of its accounts
from UK GAAP to IFRS. One of the major reconciliation items arises in pension accounting withthe application of IAS 19 “Employee Benefits” which leads to BAE Systems’ recognition of apension provision due to the defined benefit schemes’ current under funding situation.
In disclosing IAS 19 impacts, BAE Systems has allocated a share of the underfunding toinvestments it has in joint ventures, assuming that these investments would be affected by any
shortfall of the pension schemes. BAE Systems has applied an internally developed approach to
calculate the IAS 19 impacts.
Given the limited availability to EADS of adequate information, EADS will continue to expense thecontributions made to BAE Systems as if the BAE Systems pension schemes were defined
contribution plans.
Apart from the pension commitments, there were no other significant changes in contingent
liabilities since the last balance sheet date (December 31, 2004).
10. Number of shares
The total number of shares outstanding is 794,587,504 and 801,072,938 as of September 30,
2005 and 2004, respectively. EADS’ shares are exclusively ordinary shares with a par value of
1.00 €.
During the first nine months of 2005, EADS repurchased 10,089,933 of its ordinary shares (in thefirst nine months of 2004: no treasury shares purchased) in conjunction with the share-buyback
program. The General shareholders’ meeting on May 11, 2005 had renewed the authorization
given to the Board of Directors to repurchase shares of EADS. 1,336,358 of these treasury shares(in the first nine months of 2004: 5,686,682 shares), repurchased and held by the Group, werecancelled in July 2005.
3,188,834 new shares (first nine months of 2004: 115,690 shares) were issued as a result of theexercise of stock options in compliance with the implemented stock option plans. Under the 2005
Employee Stock Ownership Plan, 1,938,309 shares were issued in July 2005 (in the first ninemonths 2004: no issuance of shares).

1208.11.2005

EADS N.V.
Unaudited Condensed Consolidated Financial Information for the nine months ended September 30, 2005

11. Earnings per share
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:
January 1 to
September 30,
2005
Net income attributable to shareholders
Weighted average number of ordinary shares outstanding
Basic earnings per share

January 1 to
September 30,
2004

1,025 M €588 M €

794,102,069

800,961,781

1.29 €

0.73 €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 nine months of 2005 exceeded the exercise price of the stock options under
all six stock option plans initiated by the Group, the inclusion of the related potential ordinary
shares increases the weighted average number of shares. 5,103,898 stock options are considereddilutive according to IAS 33.
January 1 to
September 30,
2005
Net income attributable to shareholders
Weighted average number of ordinary shares outstanding(diluted)
Diluted earnings per share

January 1 to
September 30,
2004

1,025 M €588 M €

799,205,967

803,739,194

1.28 €

0.73 €

12. Related party transactions
The Group has entered into various transactions with related companies in 2005 and 2004 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, such transactions are not considered material to the Groupeither individually or in the aggregate. The transactions with the French State include mainly sales
from the Aeronautics, Defence & Security Systems and Space divisions.
13. Number of employees
The number of employees at September 30, 2005 is 112,184 as compared to 110,662 at
December 31, 2004.

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