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EADS N.V.
FINANCIAL STATEMENTS
2012

1 EADS N.V. — Consolidated
Financial Statements (IFRS)

5

2 Notes to the Consolidated
Financial Statements (IFRS)

13

3 EADS N.V. — Auditors’ reporton the Consolidated Financial
Statements (IFRS)

107

4 Company Financial Statements

111

5 Notes to the Company
Financial Statements

115

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EADS N.V. — Consolidated Financial
Statements (IFRS)EADS N.V. — Consolidated Income Statements (IFRS)
for the years ended 31 December 2012, 2011 and 2010

6

EADS N.V. — Consolidated Statements of Comprehensive Income (IFRS)
for the years ended 31 December 2012, 2011 and 2010

7

EADS N.V. — Consolidated Statements of Financial Position (IFRS)
at 31 December 2012 and 20118

EADS N.V. — Consolidated Statements of Cash Flows (IFRS)
for the years ended 31 December 2012, 2011 and 2010

9

EADS N.V. — Consolidated Statements of Changes in Equity (IFRS)
for the years ended 31 December 2012, 2011 and 201010

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EADS N.V. — Consolidated Income Statements (IFRS)
for the years ended 31 December 2012, 2011 and 2010(in € million)

Note

Revenues

5, 656,48049,12845,752

Cost of sales

7(48,545)(42,285)(39,528)

Gross margin

7,935

6,843

6,224

Selling expenses(1,192)(981)(1,024)(1,672)(1,427)(1,288)(3,142)(3,152)(2,939)Administrative expenses
Research and development expenses

8

2012

2011

2010

Other income

9

184

359

171

Other expenses

10

(229)

(221)

(102)

Share of profit from associates accounted for underthe equity method

11

241

164

127

Other income from investments

11

6

28

18

Profit before finance costs and income taxes

5

2,131

1,613

1,187

Interest income

237

377

316

Interest expense

(522)

(364)

(415)

(168)

(233)

(272)

(453)

(220)

(371)

Other financial result
Total finance costs

12

Income taxes

13

Profit for the period

(449)

(356)

(244)

1,229

1,037

572

1,228

1,033

553

1

4

19

€

€

€

Attributable to:Equity owners of the parent (Net income)Non-controlling interests

Earnings per share
Basic

38

1.50

1.27

0.68

Diluted

38

1.50

1.27

0.68

The accompanying notes are an integral part of these Consolidated Financial Statements (IFRS).

6 — EADS FINANCIAL STATEMENTS 2012

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EADS N.V. — Consolidated Statements of Comprehensive Income (IFRS)
for the years ended 31 December 2012, 2011 and 2010(in € million)

2012

2011

2010

Profit for the period

1,229

1,037

572

(46)

(25)

119

1,047

(365)

(2,983)

917

(171)

(201)

Currency translation adjustments for foreign operations
Effective portion of changes in fair value of cash flow hedges
Net change in fair value of cash flow hedges transferred to profit or loss
Net change in fair value of available-for-sale financial assets
Actuarial gains (losses) on defined benefit plans

189

(20)

12

(1,031)

(747)

(127)

Changes in other comprehensive income from investments accounted
for using the equity method

(211)

129

(161)

Tax on income and expense recognised directly in equity

(278)

331

1,096

Other comprehensive income, net of tax

587

(868)

(2,245)

Total comprehensive income of the period

1,816

169

(1,673)Equity owners of the parent

1,817

163

(1,679)Non-controlling interests

(1)

6

6

Attributable to:

The accompanying notes are an integral part of these Consolidated Financial Statements (IFRS).

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EADS N.V. — Consolidated Statements of Financial Position (IFRS)
at 31 December 2012 and 2011(in € million)

Note

2012

2011

14
15
16
17
17
20
21
13
22

13,422
15,196
72
2,662
2,115
1,386
1,415
4,518
5,987
46,773

12,786(1)14,146(1)74
2,677
2,352(1)631
1,253
4,318(1)7,229
45,466

18
19
17
20
21

23,216
6,790
287
1,448
2,046
458
2,328
8,756
45,32992,102

22,563
6,394(1)
172
1,739
2,253
339
4,272
5,284
43,01688,482

827
7,253
900
1,513
(84)
10,40925
10,434

820
7,519
471
153
(113)
8,850
15(1)
8,865

25
26
27
28
13
30

9,816
3,506
7,458
10,524
1,504
212
33,0209,144(1)
3,628
8,193
9,817(1)1,043(1)290
32,115

25
26
29
27
28

Total liabilities

6,045
1,273
9,917
1,715
28,183458
1,057
48,64881,6685,856(1)
1,476
9,630
1,687
27,670308
875
47,502
79,617

Total equity and liabilities

92,102

88,482

AssetsNon-current assets
Intangible assets
Property, plant and equipment
Investment property
Investments in associates accounted for under the equity method
Other investments and other long-term financial assets
Non-current other financial assets
Non-current other assets
Deferred tax assets
Non-current securities
Current assets
Inventories
Trade receivables
Current portion of other long-term financial assets
Current other financial assets
Current other assets
Current tax assets
Current securities
Cash and cash equivalents

22
31

Total assets
Equity and liabilities
Equity attributable to equity owners of the parent
Capital stock
Share premium
Retained earnings
Accumulated other comprehensive income
Treasury shares
Non-controlling interests
Total equity
Non-current liabilities
Non-current provisions
Long-term financing liabilities
Non-current other financial liabilities
Non-current other liabilities
Deferred tax liabilities
Non-current deferred income
Current liabilities
Current provisions
Short-term financing liabilities
Trade liabilities
Current other financial liabilities
Current other liabilities
Current tax liabilities
Current deferred income

2330(1) Please refer to Note 4 “Acquisitions and disposals”. Comparative information is adjusted retrospectively in accordance with IFRS 3.45.
Main changes comprise: Intangible assets by € +41 million, property, plant and equipment by € -13 million, other investments and long-term financial assets by € -26 million,
non-controlling interests by € -5 million and non-current provisions by € +19 million.

The accompanying notes are an integral part of these Consolidated Financial Statements (IFRS).
8 — EADS FINANCIAL STATEMENTS 2012

EADS N.V. — Consolidated Financial Statements (IFRS)

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EADS N.V. — Consolidated Statements of Cash Flows (IFRS)
for the years ended 31 December 2012, 2011 and 2010(in € million)

Note

Profit for the period attributable to equity ownersof the parent (Net income)
Profit for the period attributable to non-controlling interests
Adjustments to reconcile profit for the period to cash provided by operating activities:
Interest income
Interest expense
Interest received
Interest paid
Income tax expense
Income taxes paid
Depreciation and amortisation
Valuation adjustments
Results on disposals of non-current assets
Results of companies accounted for by the equity method
Change in current and non-current provisions
Change in other operating assets and liabilities:• Inventories• Trade receivables• Trade liabilities• Advance payments received• Other assets and liabilities• Customer financing assets• Customer financing liabilities
Cash provided by operating activities
Investments:• Purchases of intangible assets, Property, plant and equipment• Proceeds from disposals of intangible assets, Property, plant and equipment• Acquisitions of subsidiaries, joint ventures, businesses and non-controllinginterests (net of cash)
31
Proceeds
fromdisposalsofsubsidiaries
(net
of
cash)
31
•
• Payments for investments in associates, other investments
and other long-term financial assets• Proceeds from disposals of associates, other investments
and other long-term financial assets• Dividends paid by companies valued at equity
Payments for investments in securities
Proceeds from disposals of securities
Cash (used for) investing activities
Increase in financing liabilities
Repayment of financing liabilities
Cash distribution to EADS N.V. shareholders
Dividends paid to non-controlling interests
Changes in capital and non-controlling interests
Change in treasury shares
Cash (used for) provided by financing activities
Effect of foreign exchange rate changes and other valuation adjustments
on cash and cash equivalents

2012

2011

2010

1,228
1

1,033
4

553
19

(237)
522
198
(351)
449
(219)
2,053
318
(21)
(241)
216
(76)
(1,526)
(260)
754
1,243
(141)
30
(176)
3,840

(377)
364
417
(307)
356
(100)
1,884
(408)
(29)
(164)
230
1,386
(1,640)
447
806
1,965
(327)
246
(111)
4,289

(316)
415
332
(278)
244
(140)
1,582
(366)
(75)
(127)
(219)
2,819
705
(345)
(40)
1,698
738
169
(106)
4,443

(3,270)73(2,197)79(2,250)
45

(201)
0

(1,535)
18

(38)
12

(328)

(312)

(190)

232
46
(3,237)
6,659
(26)
380
(505)
(369)
(10)
144
(5)
(365)

77
50
(11,091)
10,713(4,198)
813
(399)
(178)
(5)
(65)
(1)
165

91
41
(10,751)
7,604(5,436)99(1,160)
0
(7)
(48)
(3)
(1,119)

23

(2)

104

Net increase (decrease) in cash and cash equivalents

3,472

254

(2,008)Cash and cash equivalents at beginning of period

5,284

5,030

7,038

Cash and cash equivalents at end of period

8,756

5,284

5,030

For details, see Note 31 “Consolidated Statements of Cash Flows”.
The accompanying notes are an integral part of these Consolidated Financial Statements (IFRS).
EADS FINANCIAL STATEMENTS 2012 — 9

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EADS N.V. — Consolidated Statements of Changes in Equity (IFRS)
for the years ended 31 December 2012, 2011 and 2010

Noncontrollinginterests

Equity attributable to equity holders of the parent
CapitalSharestock premium Retained earnings(In € million)

Treasuryshares

Total

AvailableForeign
Other Actuarial
for-saleCashcurrency
retained gains or financial
flow translation
earnings
lossesassets hedges adjustments

Note

Balance at
31 December 2009

Accumulated othercomprehensive income

816

7,683

Profit for the period

1,248(1,749)

561

828

1,257

(109) 10,535

553

Other comprehensive income
Total comprehensive incomeof the period

553

553
(2,232)(13) (2,245)(32)(177) (2,201)

178(1,679)6 (1,673)

5

5

23

(43)

(43)

Share-based Payment (IFRS 2)

35

23

3

Change in non-controllinginterests
23

(3)
7,645

Profit for the period

1,827(1,781)384 (1,373)

1,435

Total comprehensive incomeof the period

1,033

Capital increase

23

Share-based Payment (IFRS 2)

35

4

23

Cancellation of treasury shares

23

Balance at
31 December 2011

10 — EADS FINANCIAL STATEMENTS 2012

7,519

2,858

3

(7)

(4)

0

3

3

(3)

(3)

1,037

(579)

182

(399)

(74)

(870)

2

(868)

(579)

182

(399)

(74)

163

6

169

(28)

(1)

(7)
820

(7)

4

Change in non-controllinginterests
Change in treasury shares

(7)

1,033

(178)
(17)

0

8,936

59

Equity transaction (IAS 27)

23

95

15

Cash distribution to EADS N.V.
Shareholders / dividends paid
to non-controlling interests(49)(112) 8,841

1,033

Other comprehensive income

5
(6)

23

Dividends paid to
non-controlling interests

816

572

178

23

Balance at
31 December 201019(177) (2,201)

Capital decrease

Equity transaction (IAS 27)

106 10,641(32)

Capital increase

Change in treasury shares

Total
equity(2,388)566 (1,773)

1,361

63

63

15

15

(178)

(5)

(183)

(46)

(79)

(125)

0

3

3

(8)

(8)

(8)

7

0

0

(113) 8,850

20

8,870

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Noncontrollinginterests

Total
equity

20

8,870

(5)

(5)

(113) 8,850

15

8,865

1,228

1

1,229

Equity attributable to equity holders of the parent
CapitalSharestock premium Retained earnings(In € million)

Treasuryshares

Total

AvailableForeign
Other Actuarial
for-saleCashcurrency
retained gains or financial
flow translation
earnings
lossesassets hedges adjustments

Note

Balance at
31 December 2011

Accumulated othercomprehensive income

820

7,519

2,858

(2,388)566 (1,773)

1,361(113) 8,850(1)

Prior year adjustments
Balance at
31 December 2011,adjusted

820

7,519

Profit for the period

2,858 (2,388)

566 (1,773)

1,361

1,228

Other comprehensive income
Total comprehensive incomeof the period

1,228

Capital increase

23

Share-based Payment (IFRS 2)

35

7

(770)

(3)

1,356

6

589

(2)

587

(770)

(3)

1,356

6

1,817

(1)

1,816

137
18

Cash distribution to EADS N.V.
Shareholders / dividends paid
to non-controlling interests(369)

Equity transaction (IAS 27)(46)

Change in non-controllinginterests
Change in treasury shares

23

Cancellation of treasury shares

23

Balance at
31 December 2012

(34)
827

7,253

4,058

(3,158)

563

(417)

1,367

144

144

18

18

(369)

(10)

(379)

(46)

14

(32)

0

7

7

(5)

(5)

(5)

34

0

0

(84) 10,409

25 10,434(1) Please refer to Note 4 “Acquisitions and disposals”. Comparative information is adjusted retrospectively in accordance with IFRS 3.45.

The accompanying notes are an integral part of these Consolidated Financial Statements (IFRS).

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Notes to the Consolidated
Financial Statements (IFRS)
2.1 Basis of Presentation

15

2.2 Notes to the Consolidated Income Statements (IFRS)

38

2.3 Notes to the Consolidated Statements of Financial Position (IFRS) 48
2.4 Notes to the Consolidated Statements of Cash Flows (IFRS)

69

2.5 Other Notes to the Consolidated Financial Statements (IFRS)

71

2.6 Appendix “Information on Principal Investments”— Consolidation Scope98

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21.

Other Assets

59

22.

Securities

60

23.

Total Equity

60

24.

Capital Management

61

Contents

2.1 Basis of Presentation

15

1.

The Company

152.

Summary of Significant Accounting Policies

15

3.

Scope of Consolidation

30

4.

Acquisitions and Disposals

31

2.2 Notes to the Consolidated
Income Statements (IFRS)

38

5.

Segment Reporting

38

6.

Revenues

42

7.

Functional Costs

42

8.

Research and Development Expenses

43

9.

Other Income

43

10.

Other Expenses

44

11.

Share of Profit from Associates Accounted
for under the Equity Method and Other Income
from Investments

44

12.

Total Finance Costs

44

13.

Income Taxes

45

2.3 Notes to the Consolidated
Statements of Financial
Position (IFRS)

48

25.

Provisions

62

26.

Financing Liabilities

66

27.

Other Financial Liabilities

67

28.

Other Liabilities

68

29.

Trade Liabilities

68

30.

Deferred Income

68

2.4 Notes to the Consolidated
Statements of Cash Flows (IFRS)

69

31.

Consolidated Statements of Cash Flows69

2.5 Other Notes to the Consolidated
Financial Statements (IFRS)

71

32.

Litigation and Claims

71

33.

Commitments and Contingencies

72

34.

Information about Financial Instruments

75

35.

Share-Based Payment

85

36.

Related Party Transactions

93

37.

Interest in Joint Ventures

96

Earnings per Share

96

14.

Intangible Assets

48

38.

15.

Property, Plant and Equipment

52

39.

Number of Employees

97

55

40.

Events after the Reporting Date97

2.6 Appendix “Information
on Principal Investments” —Consolidation Scope

98

16.

Investment Property

17.

Investments in Associates Accounted
for Under the Equity Method, Other Investments
and Other Long-Term Financial Assets
55

18.

Inventories

57

19.

Trade Receivables

58

20.

Other Financial Assets

59

14 — EADS FINANCIAL STATEMENTS 2012

Notes to the Consolidated Financial Statements (IFRS)
2.1 Basis of Presentation

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2.1 Basis of Presentation
1.

The Company

The accompanying Consolidated Financial Statements present
the ﬁnancial position and the result of the operations 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) legally seated in Amsterdam(current registered ofﬁ ce at Mendelweg 30, 2333 CS Leiden,
The Netherlands). EADS’ core business is the manufacturing ofcommercial aircraft, civil and military helicopters, commercial

2.

space launch vehicles, missiles, military aircraft, satellites, defence
systems and defence electronics and rendering of services related
to these activities. EADS has its listings at the European Stock
Exchanges in Paris, Frankfurt am Main, Madrid, Barcelona,
Valencia and Bilbao. The Consolidated Financial Statements
were authorised for issue by EADS’ Board of Directors on
26 February 2013. They are prepared and reported in euro (“€”),and all values are rounded to the nearest million appropriately.

Summary of Signiﬁcant Accounting Policies

Basis of preparation — EADS’ Consolidated Financial Statements
are prepared in accordance with International Financial ReportingStandards (“IFRS”), issued by the International AccountingStandards Board (“IASB”) and as endorsed by the European Union(“EU”) and with Part 9 of Book 2 of the Netherlands Civil Code.
The IFRS comprise (i) IFRS, (ii) International Accounting Standards(“IAS”) and (iii) Interpretations originated by the IFRS Interpretations
Committee (“IFRIC”) or former Standing Interpretations Committee(“SIC”). The Consolidated Financial Statements have been preparedon a historical cost basis, except for certain items such as:(i) derivative financial instruments, which are measured at fairvalue;(ii) available-for-sale financial assets, which are measured atfair value;(iii) accumulating Money Market Funds, uncapped Structured
Notes and foreign currency Funds of Hedge Funds that havebeen designated as financial assets at fair value throughprofit or loss, and are hence measured at fair value (“Fair
Value Option”, see Note 34 “Information about financial
instruments”);(iv) assets and liabilities designated as hedged items in fairvalue hedges, which are either measured at fair value or atamortised cost adjusted for changes in fair value attributable
to the risks that are being hedged;(v) share based payment arrangements, which are measured
using the fair-value based measure of IFRS 2; and(vi) defined benefit obligations (or assets), which are measured
according to IAS 19, and related plan assets, which aremeasured at fair value.

The measurement models used when historical cost does not
apply are more fully described below.
In accordance with Article 402 Book 2 of the Netherlands Civil
Code the Statement of Income of the EADS N.V. company
financial statements is presented in abbreviated form.
The preparation of ﬁnancial statements in conformity with IFRS
requires the use of certain critical accounting estimates. It also
requires management to exercise its judgement in the processof applying the Group’s accounting policies. The areas involving
a higher degree of judgement or complexity, or areas whereassumptions and estimates are signiﬁcant to the Consolidated
Financial Statements are disclosed in the last subsection “Use of
Accounting Estimates” of this Note 2.

New, revised or amended IFRS Standards
and new Interpretations
The IFRS accounting principles applied by EADS for preparing
its 2012 year-end Consolidated Financial Statements are thesame as for the previous ﬁnancial year except for those following
the application of new or amended Standards or Interpretations
respectively as detailed below.

a) Amended Standard
The application of the following amended standard is mandatory for
EADS for the ﬁscal year starting 1 January 2012. If not otherwise
stated, the following amended standard did not have a material
impact on EADS’s Consolidated Financial Statements as well as
its basic and diluted earnings per share.
In October 2010, the IASB issued amendments to IFRS 7 “Financial
Instruments: Disclosures” as part of its comprehensive review of offbalance sheet activities relating to transfers of ﬁnancial assets. The
objective of the amendments is to help users of ﬁnancial statements
evaluate the risk exposures relating to such transfers and the effect

EADS FINANCIAL STATEMENTS 2012 — 152

Notes to the Consolidated Financial Statements (IFRS)
2.1 Basis of Presentation

1of those risks on an entity’s ﬁnancial position. The amendments
also require additional disclosures if a disproportionate amount oftransfer transactions are undertaken around the end of a reporting
period. The amendment has to be applied prospectively. It wasendorsed in November 2011.

b) New or Amended Interpretations
There are no new or amended interpretations which became
effective for the ﬁnancial period beginning after 31 December 2011.

New, revised or amended IFRS Standards
and Interpretations issued but not yet applied
A number of new or revised standards, amendments andimprovements to standards as well as interpretations are not yet
effective for the year ended 31 December 2012 and have not been
applied in preparing these Consolidated Financial Statements.
The potential impacts from the application of those newly issued
standards, amendments and interpretations are currently underinvestigation. In general and if not otherwise stated, these new,revised or amended IFRS and their interpretations are not expected
to have a material impact on EADS’ Consolidated Financial
Statements as well as its basic and diluted earnings per share.
In December 2010, the IASB issued amendments to IAS 12“Income Taxes” providing practical guidance for the measurementfor deferred tax relating to an asset by introducing the presumptionthat recovery of the carrying amount of an asset will normally bethrough sale. Respective amendments supersede SIC 21 “Income
Taxes – Recovery of Revalued Non Depreciable Assets”. The
amendments were endorsed in December 2012 and are applicablefor annual periods beginning 1 January 2013.
In November 2009, the IASB issued IFRS 9 “Financial Instruments”(not yet endorsed) as the ﬁrst step of its project to replace IAS 39“Financial Instruments: Recognition and Measurement”. Amongst
other changes to the accounting for ﬁnancial instruments, IFRS 9
replaces the multiple classiﬁcation and measurement models forﬁnancial assets and liabilities in IAS 39 with a simpliﬁed modelthat is based on only two classiﬁcation categories: amortised
cost and fair value. Further, the classiﬁcation of ﬁnancial assets
under IFRS 9 is driven by the entity’s business model for managing
its ﬁnancial assets and the contractual cash ﬂow characteristicsof these ﬁ nancial assets. However, in response to feedback
received from interested parties, the IASB reconsidered the IFRS 9
classiﬁcation model and issued in November 2012 an Exposure
Draft which proposes limited amendments to IFRS 9 to introduce,
amongst others, a fair value through other comprehensive income(OCI) measurement category as a third classiﬁcation category forparticular ﬁnancial assets that are held within a business modelin which assets are managed both for collecting contractual cash
ﬂows and for sale. In the next phases of the IAS 39 replacement
project, the IASB will cover the current impairment methodology
and the requirements for hedge accounting. IFRS 9 has to be
applied starting 1 January 2015, with early adoption permitted,
and offers various transition models. In light of the changes tocome, EADS continues to assess the potential impacts from theexpected application of IFRS 9.

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In May 2011, the IASB published its improvements to the accounting
and disclosure requirements for consolidation, off balance sheet
activities and joint arrangements by issuing IFRS 10 “Consolidated
Financial Statements”, IFRS 11 “Joint Arrangements”, IFRS 12“Disclosure of Interests in Other Entities” and consequential
amendments to IAS 27 “Separate Financial Statements” andIAS 28 “Investments in Associates and Joint Ventures”. IFRS 10
supersedes the requirements related to Consolidated Financial
Statements in IAS 27 “Consolidated and Separate Financial
Statements” (amended 2008) as well as SIC 12 “Consolidation –Special Purpose Entities”. IFRS 11 supersedes IAS 31 “Interests
in Joint Ventures” (amended 2008) and SIC 13 “Jointly Controlled
Entities – Non-Monetary Contributions by Venturers”. IFRS 12
replaces disclosure requirements in IAS 27, IAS 28 and IAS 31.
All of the new or amended standards mentioned above havebeen endorsed in December 2012. IFRS 10 is based on existing
principles and re-conﬁrms control as the single determining factor
in whether an entity should be in the scope of the Consolidated
Financial Statements: An investor controls an investee when it is
exposed, or has rights, to variable returns from its involvementwith the investee and has the ability to affect those returns throughits power over the investee. The standard provides additional
guidance to determine control in cases difﬁcult to assess suchas in situations where an investor holds less than a majority ofvoting rights, but has the practical ability to direct the relevant
activities of the investee unilaterally by other means as well as incases of agency relationships which were neither addressed by
IAS 27 nor by SIC 12.
IFRS 11 provides guidance for the accounting of joint arrangements
by focusing on the rights and obligations arising from thearrangement. The standard distinguishes between two types ofjoint arrangements: joint operations and joint ventures. A joint
operation is a joint arrangement whereby the parties that havejoint control of the arrangement (i.e. joint operators) have rights
to the assets, and obligations for the liabilities, relating to thearrangement. A joint venture is a joint arrangement whereby theparties that have joint control of the arrangement (i.e. joint venturers)
have rights to the net assets of the arrangement. IFRS 11 requires
a joint operator to recognize and measure the assets and liabilities(and recognize the related revenues and expenses) in relation toits interest in the arrangement applicable to the particular assets,
liabilities, revenues and expenses. A joint venturer is required torecognize an investment and to account for this investment using
the equity method. The proportionate consolidation method may
no longer be used for joint ventures.
IFRS 12 provides disclosure requirements for all forms of interests
in other entities, including subsidiaries, joint arrangements,
associates, structured entities (formerly referred to as “special
purpose entities”) and off balance sheet vehicles in one single
standard. The standard requires an entity to disclose informationthat enables users of ﬁnancial statements to evaluate the natureof, and risks associated with, its interests in other entities andthe effects of those interests on its ﬁnancial position, ﬁnancial
performance and cash ﬂows.

Notes to the Consolidated Financial Statements (IFRS)
2.1 Basis of Presentation

1
IFRS preparers in the EU have to apply IFRS 10 to 12 andamendments to IAS 27 and IAS 28 for ﬁnancial periods beginningon or after 1 January 2014 with early application allowed. The
abandonment of the proportional consolidation method for joint
ventures might have a signiﬁcant impact on EADS Consolidated
Financial Statements as EADS has opted to apply this method
for the consolidation of its joint ventures. For information aboutprinciple joint ventures accounted for under the proportionate
consolidation method, please refer to Note 37 “Interest in Joint
Ventures”. The impact from the application of IFRS 10, especiallyfor the consolidation of structured entities, is currently underassessment. The Transition Guidance (Amendments for
IFRS 10, IFRS 11 and IFRS 12) was issued in June 2012 (but not
yet endorsed) and provides transition relief in IFRS 10, IFRS 11
and IFRS 12 by limiting the number of periods for which adjusted
comparative information is to be disclosed.
In May 2011, the IASB issued IFRS 13 “Fair Value Measurement”.
IFRS 13 was endorsed in December 2012 and deﬁnes fair value,
sets out in a single IFRS a framework for measuring fair value andrequires disclosures about fair value measurements. IFRS 13 does
not determine when an asset, a liability or an entity’s own equity
instrument is measured at fair value. Rather, the measurementand disclosure requirements of IFRS 13 apply when another IFRS
requires or permits the item to be measured at fair value (withlimited exceptions).
With the issuance of IFRS 13 the requirements for measuring
fair value and for disclosing information about fair values arecomprehensively summarised in a single standard instead of
having them spread over several standards not articulating a clear
measurement or disclosure objective. IFRS 13 seeks to reducecomplexity and improve consistency in the application of fair value
measurement principles by having a single set of requirements for
all fair value measurements; to communicate the measurement
objective more clearly by clarifying the deﬁnition of fair value; andto improve transparency by enhancing disclosures about fair value
measurements. The new standard deﬁnes fair value as an exit
price, i.e. as the price that would be received to sell an asset
or paid to transfer a liability in an orderly transaction between
market participants at measurement date. It further introduces athree level fair value hierarchy regarding the inputs used for fairvalue determination. IFRS 13 is to be applied prospectively and is
mandatory from 1 January 2013 onwards.
In June 2011, the IASB issued an amended version of IAS 19“Employee Beneﬁ ts” (endorsed June 2012). The amendment
eliminates both the option of deferred recognition of actuarial
gains and losses (known as the “corridor method”) and the optionof immediately recognising them in proﬁ t or loss, to improvecomparability of ﬁ nancial statements. Under the amendment,
full recognition of actuarial gains and losses directly in equity
will become mandatory. EADS already applies this method of
accounting for actuarial gains and losses. In addition, the amended
IAS 19 replaces the expected return on plan assets and interest
costs on the deﬁned beneﬁt obligation with a single net interest
component and requires full recognition of past service cost in the
period of the related plan amendment. The amended standard also

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enhanced presentation and disclosure requirements. For EADS,
the standard becomes applicable for annual periods beginningon 1 January 2013. It generally requires retrospective application.
The introduction of a single net interest component, i.e. the interest
expense (income) resulting from multiplying the net deﬁned beneﬁt
liability (asset) by the discount rate used to determine the deﬁned
beneﬁt obligation (“DBO”), will impact EADS Consolidated Financial
Statements as there will be no longer different rates applicablefor plan assets and DBOs. In addition, retrospectively applying
the requirement to recognise past service cost fully in the periodof the plan amendment requires recognition of unamortised past
service cost at the date of transition. Finally, the amended guidanceon termination beneﬁts will henceforth require EADS to recognise
the additional compensation payable under certain German early
retirement programmes (‘Altersteilzeitregelung’) rateably over
the active service period of such programmes (as opposed torecognising the additional compensation at its present value at
programme inception).
Retrospective application of the net interest approach would have
reduced EADS’ 2012 Consolidated Proﬁt before ﬁnance cost andincome taxes by approximately € 43 million (and correspondingly
increased the actuarial gains or losses recorded directly in equity).
Consolidated Proﬁt before ﬁnance cost and income taxes in 2013
may be reasonably expected to be affected in a similar manner.
Regarding past service costs, the initial application of the revised
standard in 2013 will not have a significant effect on EADS
Consolidated Net income. The retrospective adjustments in the
opening balance sheet as of 1 January 2011 will result in an
increase of pension liabilities of € 45 million and a decrease ofretained earnings of € 29 million.
Regarding German early retirement programmes, the initial
application of the revised standard in 2013 will not have a signiﬁcanteffect on EADS Consolidated Net income. The retrospective
adjustments in the opening balance sheet as of 1 January 2011
will result in a decrease of provisions of € 26 million and an increaseof retained earnings of € 18 million.
In June 2011, the IASB also issued amendments to IAS 1“Presentation of Financial Statements”. The amendments will
improve and align the presentation of other comprehensive
income (“OCI”) by requiring to group together items within OCI
that might be reclassiﬁed to the income statement. The amended
standard becomes effective for ﬁnancial periods beginning on orafter 1 July 2012. The amendments were endorsed in June 2012.
In December 2011, the IASB issued amendments to IAS 32“Financial Instruments: Presentation” clarifying the IASB’s
requirements for offsetting financial instruments. As part ofthe same offsetting project the IASB also issued respective
amendments to IFRS 7 “Financial Instruments: Disclosures”.
Both amendments were endorsed in December 2012 and will
have to be applied retrospectively for annual periods beginningon 1 January 2014 respectively on 1 January 2013.

EADS FINANCIAL STATEMENTS 2012 — 172

Notes to the Consolidated Financial Statements (IFRS)
2.1 Basis of Presentation

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In May 2012 the IASB issued various amendments to IFRSStandards within the Annual Improvements 2009-2011 Cycle(not yet endorsed). The amendments refer to IFRS 1, IAS 1, IAS 16,
IAS 32 and IAS 34. The amendments are mandatory for annual
periods beginning on or after 1 January 2013 and must be applied
retrospectively.

The consideration transferred does not include amounts related
to the settlement of pre-existing relationships. Such amounts are
generally recognised separately in proﬁt or loss. Costs related
to the acquisition, other than those associated with the issue ofdebt or equity securities, that EADS incurs in connection with abusiness combination are expensed as incurred.

Further, EADS’ accounting policies are not expected to be affectedby various other pronouncements issued by the IASB during thelast months.

Any contingent consideration payable is recognised at fair value
at the acquisition date. If the contingent consideration is classiﬁed
as equity, it is not remeasured and settlement is accounted forwithin equity. Otherwise, subsequent changes to the fair valueof the contingent consideration are recognised in proﬁt or loss.

Signiﬁcant Accounting Policies
The principal accounting policies applied in the preparation ofthese Consolidated Financial Statements are set out below.
These policies have been consistently applied to all ﬁnancial years
presented, unless otherwise stated.
Consolidation — The Consolidated Financial Statements include
the subsidiaries of EADS. Subsidiaries are all entities controlled by
the Group, i.e. over which it has the power to govern ﬁnancial andoperating policies. An entity is presumed to be controlled by EADS
when EADS owns more than 50% of the voting power of the entity
which is generally accompanied with a respective shareholding.
Potential voting rights currently exercisable or convertible are also
considered when assessing control over an entity.
Special purpose entities (“SPEs”) are consolidated as any
subsidiary, when the relationship between the Group and the SPE
indicates that the SPE is in substance controlled by the Group.
SPEs are entities which are created to accomplish a narrow andwell-deﬁned objective. Subsidiaries are fully consolidated from thedate control has been transferred to EADS and de-consolidated
from the date control ceases.
Business combinations are accounted for under the acquisition
method of accounting as at the acquisition date, which is the dateon which control is transferred to EADS.
Goodwill is measured at the acquisition date as:— the fair value of the consideration transferred; plus
— the recognised amount of any non-controlling interests in theacquiree; plus

— if the business combination is achieved in stages, the fair valueof the existing equity interest in the acquiree; less— the net recognised amount (generally fair value) of theidentifiable assets acquired and liabilities assumed.
Before recognising a gain on a bargain purchase in the Consolidated
Income Statement, the identiﬁcation and measurement of theidentiﬁable assets and liabilities is reassessed including also thenon-controlling interest, if any, the consideration transferred aswell as EADS’ previously held equity interest in the acquiree incase of a business combination achieved in stages.
Any non-controlling interest will be measured at either fair value, orat its proportionate interest in the identiﬁable assets and liabilitiesof the acquiree, on a transaction-by-transaction basis.

18 — EADS FINANCIAL STATEMENTS 2012

When share-based payment awards (replacement awards) are
required to be exchanged for awards held by the acquiree’s
employees (acquiree’s awards) and relate to past services, then all
or a portion of the amount of the acquirer’s replacement awards isincluded in measuring the consideration transferred in the businesscombination. This determination is based on the market basedvalue of the replacement awards compared with the marketbased value of the acquiree’s awards and the extent to which thereplacement awards relate to past and / or future service.
Acquisitions and disposals of non-controlling interests areaccounted for as transactions with owners in their capacity as
equity owners of EADS and therefore no goodwill or gain / loss isrecognised as a result of such transactions. The adjustments tonon-controlling interests are based on a proportionate amountof the net assets of the subsidiary.
Goodwill is tested for impairment in the fourth quarter of eachﬁnancial year and whenever there is an indication for impairment.
After initial recognition goodwill is measured at cost lessaccumulated impairment losses. For impairment testing purpose,
goodwill is allocated to those Cash Generating Units (“CGUs”) orgroup of CGUs – at EADS on segment level or one level below –that are expected to beneﬁt from the synergies arising from thebusiness combination.
EADS subsidiaries prepare their ﬁnancial statements at the same
reporting date as EADS Consolidated Financial Statements andapply the same accounting policies for similar transactions.
For investments EADS jointly controls (“joint ventures”) with one
or more other parties (“venturers”), EADS recognises its interestby using the proportionate method of consolidation. Joint control
is contractually established and requires unanimous decisions
regarding the ﬁnancial and operating strategy of an entity.
Investments in which EADS has signiﬁcant inﬂuence (“investments
in associates”) are accounted for using the equity method andare initially recognised at cost. Signiﬁcant inﬂuence in an entity ispresumed to exist when EADS owns 20% to 50% of the entity’s
voting rights. The investments in associates include goodwill
as recognised at the acquisition date net of any accumulated
impairment loss. EADS’ share of the recognised income
and expenses of investments in associates is included in theConsolidated Financial Statements from the date signiﬁ cantinﬂ uence has been achieved until the date it ceases to exist.
The investments’ carrying amount is adjusted by the cumulative
movements in recognised income and expense. When EADS’Notes to the Consolidated Financial Statements (IFRS)
2.1 Basis of Presentation

1
share in losses equals or exceeds its interest in an associate,including any other unsecured receivables, no further losses arerecognised, unless the Group has incurred obligations or madepayments on behalf of the associate.
The effects of intercompany transactions are eliminated.
Total comprehensive income is attributed to the owners of theparent and to the non-controlling interest, even if this results inthe non-controlling interests having a deﬁcit balance.
The ﬁ nancial statements of EADS’ investments in associates
and joint ventures are generally prepared for the same reporting
period as for the parent company. Adjustments are made where
necessary to bring the accounting policies and accounting periods
in line with those of the Group.
Foreign currency translation — The Consolidated Financial
Statements are presented in euro, EADS’ functional andpresentation currency. The assets and liabilities of foreign entities,
where the reporting currency is other than euro, are translatedusing period-end exchange rates, whilst the statements of income
are translated using average exchange rates during the period,
approximating the foreign exchange rate at the dates of thetransactions. All resulting translation differences are included
as a separate component of total equity (“Accumulated othercomprehensive income” or “AOCI”). If a foreign entity is a nonwholly-owned subsidiary, then the relevant proportionate shareof the translation difference is allocated to the non-controllinginterests.
Transactions in foreign currencies are translated into euro at theforeign exchange rate prevailing at transaction date. Monetary
assets and liabilities denominated in foreign currencies at the endof the reporting period are translated into euro at the exchange
rate in effect at that date. These foreign exchange gains and losses
arising from translation are recognised in the Consolidated Income
Statement except when deferred in equity as qualifying cash ﬂow
hedges. Changes in the fair value of securities denominated in aforeign currency that are classiﬁed as available-for-sale ﬁnancial
assets are analyzed whether they are due to (i) changes in theamortised cost of the security or due to (ii) other changes in the
security. Translation differences related to changes in (i) amortised
cost are recognised in the Consolidated Income Statement whilst(ii) other changes are recognised in AOCI (translation reserve).
Non-monetary assets and liabilities denominated in foreign
currencies, which are stated at historical cost, are translated
into euro at the foreign exchange rate in effect at the date of thetransaction. Translation differences on non-monetary ﬁnancial
assets and liabilities that are measured at fair value are reported
as part of the fair value gain or loss. In addition, translationdifferences of non-monetary ﬁ nancial assets measured at fairvalue and classiﬁed as available for sale are included in AOCI.
Goodwill and fair value adjustments arising on the acquisition of
a foreign entity occurring after 31 December 2004 are treated asassets and liabilities of the acquired company and are translated
at the closing rate. Regarding transactions prior to that date,goodwill, assets and liabilities acquired are treated as those of
the acquirer.

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When a foreign operation is disposed of such that control,
signiﬁcant inﬂuence or joint control is lost, the cumulative amountin the translation reserve related to that foreign operation isreclassiﬁed to proﬁt or loss as part of the gain or loss on disposal.
When EADS disposes of only part of its interest in a subsidiary that
includes a foreign operation while retaining control, the relevant
proportion of the cumulative translation reserve is allocated to
non-controlling interests. When EADS disposes of only part of its
investment in an associate or joint venture that includes a foreign
operation while retaining signiﬁ cant inﬂ uence or joint control,
the relevant proportion of the cumulative translation reserve isreclassiﬁed to proﬁt or loss.
Current and non-current assets and liabilities — The
classiﬁcation of an asset or liability as a current or non-current
asset or liability in general depends on whether the item is related
to serial production or subject to long-term production. In case ofserial production, an asset or liability is classiﬁed as a non-current
asset or liability when the item is realised or settled respectively
after 12 months after the reporting period, and as current asset
or liability when the item is realised or settled respectively within
12 months after the reporting period. In case of construction
contracts, an asset or liability is classiﬁed as non-current when
the item is realised or settled respectively beyond EADS’ normal
operating cycle; and as a current asset or liability when the item
is realised or settled in EADS’ normal operating cycle. However,current assets include assets – such as inventories, tradereceivables and receivables from PoC – that are sold, consumed
and realised as part of the normal operating cycle even when
they are not expected to be realised within 12 months after thereporting period. Trade payables are equally part of the normal
operating cycle and are therefore classiﬁed as current liabilities.
Revenue recognition — Revenue is recognised to the extent
that it is probable that the economic beneﬁ t arising from theordinary activities of the Group will ﬂow to EADS, that revenue
can be measured reliably and that recognition criteria as statedbelow have been met. Revenue is measured at the fair valueof the consideration received or receivable after deducting any
discounts, rebates, liquidated damages and value added tax.
For the preparation of the Consolidated Income Statement
intercompany revenues are eliminated.
Revenues from the sale of goods are recognised upon the transfer
of risks and rewards of ownership to the buyer which is generally
on delivery of the goods.
Revenues from services rendered are recognised in proportion
to the stage of completion of the transaction at the end of thereporting period.
For construction contracts, when the outcome can be estimatedreliably, revenues are recognised by reference to the percentage
of completion (“PoC”) of the contract activity by applying theestimate at completion method. The stage of completion of acontract may be determined by a variety of ways. Depending on
the nature of the contract, revenue is recognised as contractuallyagreed technical milestones are reached, as units are delivered oras the work progresses. Whenever the outcome of a construction
contract cannot be estimated reliably – for example during the
EADS FINANCIAL STATEMENTS 2012 — 192

Notes to the Consolidated Financial Statements (IFRS)
2.1 Basis of Presentation

1early stages of a contract or when this outcome can no longer be
estimated reliably during the course of a contract’s completion– all related contract costs that are incurred are immediately
expensed and revenues are recognised only to the extent of thosecosts being recoverable (“early stage method of accounting”).
In such speciﬁc situations, as soon as the outcome can (again)
be estimated reliably, revenue is from that point in time onwards
accounted for according to the estimate at completion method,
without restating the revenues previously recorded under the earlystage method of accounting. Changes in proﬁt rates are reﬂectedin current earnings as identiﬁed. Contracts are reviewed regularly
and in case of probable losses, loss-at-completion provisions arerecorded. These loss-at-completion provisions in connection withconstruction contracts are not discounted.
Sales of aircraft that include asset value guarantee commitments
are accounted for as operating leases when these commitments
are considered substantial compared to the fair value of therelated aircraft. Revenues then comprise lease income from suchoperating leases.
Revenue related to construction or upgrade services under aservice concession arrangement is recognised based on thestage of completion of the work performed, consistent with EADS’Group accounting policy on recognising revenue on construction
contracts. Operation or service revenue is recognised in the period
in which the services are provided by EADS Group entities. When
the Group entities provide more than one service in a service
concession arrangement, the consideration received is allocatedby reference to the relative fair values of the services delivered when
the amounts are separately identiﬁable. Further, EADS recognises
a ﬁnancial asset arising from a service concession arrangement
when it has an unconditional contractual right to receive cash or
another ﬁnancial asset from or at the direction of the grantor for theconstruction or upgrade services provided. Such ﬁnancial assets
are measured at fair value upon initial recognition. Subsequent toinitial recognition, the ﬁnancial assets are measured at amortised
cost. EADS recognises an intangible asset arising from a service
concession arrangement when it has a right to charge for usageof the concession infrastructure. An intangible asset received
as consideration for providing construction or upgrade services
in a service concession arrangement is measured at fair value
upon initial recognition. Subsequent to initial recognition, theintangible asset is measured at cost, which includes capitalised
borrowing costs, less accumulated amortisation and accumulated
impairment losses. If the Group is paid for the construction
services partly by a ﬁnancial asset and partly by an intangible
asset, then each component of the consideration is accounted
for separately and is recognised initially at the fair value of theconsideration.
Interest income is recognised as interest accrues, using theeffective interest rate method.
Dividend income / distributions — Dividend income as well as
the obligation to distribute dividends to EADS’ shareholders is
recognised when the shareholder´s right to receive payment isestablished.

20 — EADS FINANCIAL STATEMENTS 2012

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Leasing — The determination of whether an arrangement is orcontains a lease is based on the substance of the arrangement
and requires an assessment of (i) whether the fulﬁlment of thearrangement is dependent on the use of a speciﬁc asset or assets,and (ii) the arrangement conveys a right to use the asset(s).
The Group is a lessor and a lessee of assets, primarily inconnection with commercial aircraft sales financing. Leasetransactions where substantially all risks and rewards incident
to ownership are transferred from the lessor to the lessee areaccounted for as ﬁnance leases. All other leases are accounted
for as operating leases.
Assets held for leasing out under operating leases are included
in property, plant and equipment at cost less accumulated
depreciation (see Note 15 “Property, plant and equipment”).
Rental income from operating leases (e.g. aircraft) is recorded asrevenue on a straight-line basis over the term of the lease. Assets
leased out under ﬁnance leases cease to be recognised in theConsolidated Statement of Financial Position after the inceptionof the lease. Instead, a ﬁnance lease receivable representing thediscounted future lease payments to be received from the lessee
plus any discounted unguaranteed residual value is recorded
as other long-term ﬁnancial assets (see Note 17 “Investments
in associates accounted for under the equity method, otherinvestments and other long-term ﬁ nancial assets”). Unearned
ﬁnance income is recorded over time in “Interest result”. Revenues
and the related cost of sales are recognised at the inception of
the ﬁnance lease.
Assets obtained under ﬁnance leases are included in property,
plant and equipment at cost less accumulated depreciation andimpairment if any (see Note 15 “Property, plant and equipment”),
unless such assets have been further leased out to customers.
In such a case, the respective asset is either qualiﬁ ed as an
operating lease or as a ﬁnance lease with EADS being the lessor(headlease-sublease-transactions) and is recorded accordingly.
For the relating liability from ﬁnance leases see Note 26 “Financing
liabilities”. When EADS is the lessee under an operating lease
contract, rental payments are recognised on a straight line
basis over the leased term (see Note 33 “Commitments andcontingencies” for future operating lease commitments). Suchleases often form part of commercial aircraft customer ﬁnancing
transactions with the related sublease being an operating lease(headlease-sublease-transactions).
Product-related expenses — Expenses for advertising, sales
promotion and other sales-related expenses are charged to
expense as incurred. Provisions for estimated warranty costs
are recorded at the time the related sale is recorded.
Research and development expenses — Research anddevelopment activities can be (i) contracted or (ii) self-initiated.

(i) Costs for contracted research and development activities,
carried out in the scope of externally financed research anddevelopment contracts, are expensed when the related
revenues are recorded.

Notes to the Consolidated Financial Statements (IFRS)
2.1 Basis of Presentation

1(ii) Costs for self-initiated research and development activities
are assessed whether they qualify for recognition asinternally generated intangible assets. Apart from complying
with the general requirements for and initial measurementof an intangible asset, qualification criteria are met only
when technical as well as commercial feasibility can bedemonstrated and cost can be measured reliably. It mustalso be probable that the intangible asset will generate
future economic benefits and that it is clearly identifiable andallocable to a specific product.
Further to meeting these criteria, only such costs that relate solely
to the development phase of a self-initiated project are capitalised.
Any costs that are classiﬁed as part of the research phase of a selfinitiated project are expensed as incurred. If the research phasecannot be clearly distinguished from the development phase,the respective project related costs are treated as if they wereincurred in the research phase only.
Capitalised development costs are generally amortised overthe estimated number of units produced. In case the numberof units produced cannot be estimated reliably capitalised
development cost are amortised over the estimated useful lifeof the internally generated intangible asset. Amortisation ofcapitalised development costs is recognised in cost of sales.
Internally generated intangible assets are reviewed for impairment
annually when the asset is not yet in use and further on whenever
events or changes in circumstances indicate that the carrying
amount may not be recoverable.
Income tax credits granted for research and development activities
are deducted from corresponding expenses or from capitalisedamounts when earned.
Borrowing costs — Borrowing costs directly attributable to theacquisition, construction or production of an asset that necessarily
takes a substantial period of time (generally more than 12 months)
to get ready for its intended use or sale are capitalised as partof the cost of the respective assets. All other borrowing costs
are expensed in the period they occur. Borrowing costs consistof interest and other costs that EADS incurs in connection withthe borrowing of funds. EADS capitalises borrowing costs for
qualifying assets where construction was commenced on or after
1 January 2009. Further, EADS continues to expense borrowing
costs relating to construction projects that commenced prior to
1 January 2009.
Intangible assets — Intangible assets comprise (i) internallygenerated intangible assets, i.e. internally developed software andother internally generated intangible assets (see above: “Researchand development expenses”), (ii) acquired intangible assets, and(iii) goodwill (see above: “Consolidation”).
Separately acquired intangible assets are initially recognised
at cost. Intangible assets acquired in a business combination
are recognised at their fair value at acquisition date. Acquired
intangible assets with ﬁnite useful lives are generally amortised ona straight line basis over their respective estimated useful lives (3to 10 years) to their estimated residual values. The amortisation

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expense on intangible assets with ﬁnite lives is recognised in theConsolidated Income Statement within the expense category
consistent with the function of the related intangible asset. The
amortisation method and the estimate of the useful lives of theseparately acquired intangible asset is reviewed at least annuallyand changed if appropriate.
Intangible assets having an indeﬁnite useful life are not amortised
but tested for impairment at the end of each ﬁnancial year aswell as whenever there is an indication that the carrying amountexceeds the recoverable amount of the respective asset (see below“Impairment of non-ﬁnancial assets”). For such intangible assets
the assessment for the indeﬁnite useful life is reviewed annually on
whether it remains supportable. A change from indeﬁnite to ﬁnite
useful life assessment is accounted for as change in estimate.
Gains or losses arising from the derecognition of an intangible
asset are measured as the difference between the net disposal
proceeds and the carrying amount of the asset and are recognisedin the Consolidated Income Statement when the asset isderecognised.
Property, plant and equipment — Property, plant andequipment is valued at acquisition or manufacturing costs lessany accumulated depreciation and any accumulated impairment
losses. Such costs include the estimated cost of replacing, servicing
and restoring part of such property, plant and equipment. Items
of property, plant and equipment are generally depreciated on astraight-line basis. The costs of internally produced equipment andfacilities include direct material and labour costs and applicablemanufacturing overheads, including depreciation charges. The
following useful lives are assumed: buildings 10 to 50 years; site
improvements 6 to 30 years; technical equipment and machinery
3 to 20 years; and other equipment, factory and ofﬁce equipment
2 to 10 years. The useful lives, depreciation methods and residual
values applying to property, plant and equipment are reviewed atleast annually and in case they change signiﬁcantly, depreciation
charges for current and future periods are adjusted accordingly. If
the carrying amount of an asset exceeds its recoverable amountan impairment loss is recognised immediately in proﬁt or loss. At
each end of the reporting period, it is assessed whether there is
any indication that an item of property, plant and equipment may
be impaired (see also below “Impairment of non-ﬁnancial assets”).
When a major inspection is performed, its cost is recognised in the
carrying amount of the plant and / or equipment as a replacement
if the recognition criteria are satisﬁed. The carrying amount of thereplaced part is derecognised. All other repairs and maintenanceare recognised as an expense in the Consolidated Income
Statement of the period in which they are incurred. Cost of an
item of property, plant and equipment initially recognised comprisethe initial estimate of costs of dismantling and removing the item
and restoring the site on which it is located at the end of the usefullife of the item on a present value basis. A provision presenting theasset retirement obligation is recognised in the same amount at
the same date in accordance with IAS 37 “Provisions, Contingent
Liabilities and Contingent Assets”.

EADS FINANCIAL STATEMENTS 2012 — 212

Notes to the Consolidated Financial Statements (IFRS)
2.1 Basis of Presentation

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Property, plant and equipment also includes capitalised
development costs for tangible developments of specialised toolingfor production such as jigs and tools, design, construction andtesting of prototypes and models. In case recognition criteria aremet, these costs are capitalised and generally depreciated using
the straight-line method over ﬁve years or, if more appropriate,using the number of production or similar units expected to beobtained from the tools (sum-of-the-units method). Especially foraircraft production programmes such as the Airbus A380 with anestimated number of aircraft to be produced using such tools, thesum-of-the-units method effectively allocates the diminution ofvalue of specialised tools to the units produced. Property, plantand equipment is derecognised when it has been disposed of or
when the asset is permanently withdrawn from use. The difference
between the net disposal proceeds and the carrying amount ofsuch assets is recognised in the Consolidated Income Statementin the period of derecognition.
Investment property — Investment property is property, i.e.
land or buildings, held to earn rentals or for capital appreciation
or both. The Group accounts for investment property using thecost model. Investment property is initially recognised at costand subsequently measured at cost less any accumulated
depreciation and any accumulated impairment losses. Buildings
held as investment property are depreciated on a straight-line
basis over their useful lives. The fair value of investment property
is reviewed annually by determinations from market prices or byusing cash-ﬂow models.
Investment properties are derecognised when either they havebeen disposed of or when the investment property is permanently
withdrawn from use and no future economic beneﬁt is expectedfrom its disposal. The difference between the net disposal
proceeds and the carrying amount of the assets is recognised in
the Consolidated Income Statement in the period of derecognition.
Transfers are made to or from investment properties only when
there is a change in use.
Inventories — Inventories are measured at the lower of acquisition
cost (generally the average cost) or manufacturing cost and net
realisable value. Manufacturing costs comprise all costs that are
directly attributable to the manufacturing process, such as directmaterial and labor, and production related overheads (based on
normal operating capacity and normal consumption of material,
labour and other production costs), including depreciation
charges. Net realisable value is the estimated selling price in theordinary course of the business less applicable variable selling
expenses.
Impairment of non-ﬁnancial assets — The Group assesses at
each end of the reporting period whether there is an indicationthat a non-ﬁnancial asset may be impaired. In addition, intangible
assets with an indeﬁ nite useful life, intangible assets not yet
available for use and goodwill are tested for impairment in the
fourth quarter of each ﬁnancial year irrespective of whether there
is any indication for impairment. An impairment loss is recognisedin the amount by which the asset’s carrying amount exceeds its
recoverable amount.

22 — EADS FINANCIAL STATEMENTS 2012

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The recoverable amount of an asset or a Cash Generating Unit(“CGU”) is the higher of its fair value less costs to sell or its value
in use. The recoverable amount is determined for an individual
asset, unless the asset does not generate cash inﬂows that arelargely independent of those from other assets or group of assets.
In such a case the recoverable amount is determined for the
CGU the asset belongs to. Where the recoverable amount ofa CGU to which goodwill has been allocated is lower than the
CGU’s carrying amount, ﬁrstly the related goodwill is impaired.
Any exceeding amount of impairment is recognised on a pro rata
basis of the carrying amount of each asset in the respective CGU.
The value in use is assessed by the present value of the future
cash ﬂows expected to be derived from an asset or a CGU. Cashﬂows are projected based on a detailed forecast approved bymanagement over a period reﬂecting the operating cycle of thespeciﬁ c business. The discount rate used for determining an
asset’s value in use is the pre-tax rate reﬂecting current market
assessment of (i) the time value of money and (ii) the risk speciﬁcto the asset for which the future cash ﬂow estimates have notbeen adjusted.
An asset’s fair value less costs to sell reﬂects the amount EADS
could obtain at its end of the reporting period from the asset’s
disposal in an arm’s length transaction between knowledgeable,
willing parties, after deducting the costs of disposal. If there isno binding sales agreement or active market for the asset, its
fair value is assessed by the use of appropriate valuation models
dependent on the nature of the asset, such as by the use of
discounted cash ﬂow models. These calculations are corroborated
by available fair value indicators such as quoted market prices or
sector-speciﬁc valuation multiples.
Impairment losses of assets used in continuing operations arerecognised in the Consolidated Income Statement in those
expense categories consistent with the function of the impaired
asset.
Impairment losses recognised for goodwill are not reversed infuture periods. For any other non-ﬁnancial assets an assessment
is made at each end of the reporting period as to whether there
is any indication that previously recognised impairment losses
may no longer exist or may have decreased. If such indication
exists, the Group estimates the asset’s or cash-generating unit’s
recoverable amount. A previously recognised impairment loss
is reversed only if there has been a change in the assumptions
used to determine the asset’s recoverable amount since thelast impairment loss was recognised. The reversal is limited
so that the carrying amount of the asset does not exceed its
recoverable amount, nor exceed the carrying amount that would
have been determined, net of depreciation, had no impairment
loss been recognised for the asset in prior years. Such a reversal
is recognised in the Consolidated Income Statement.
Financial instruments — A ﬁnancial instrument is any contractthat gives rise to a ﬁnancial asset of one entity and a ﬁnancial
liability or equity instrument of another entity. EADS’ ﬁ nancial
assets comprise mainly cash and short to medium-term deposits,
trade and loan receivables, ﬁ nance lease receivables, otherNotes to the Consolidated Financial Statements (IFRS)
2.1 Basis of Presentation

1
quoted and unquoted financial instruments and derivatives
with a positive fair value. The Group’s ﬁnancial liabilities mainly
include obligations towards ﬁnancial institutions, bonds, loans,refundable advances, trade liabilities, ﬁnance lease liabilities aswell as derivatives with a negative fair value. EADS recognises aﬁnancial instrument on its Consolidated Statement of Financial
Position when it becomes party to the contractual provision of
the instrument. All purchases and sales of ﬁnancial assets arerecognised on settlement date according to market conventions.
The settlement date is the date an asset is delivered to or by anentity. Financial instruments are initially recognised at fair valueplus, in the case the ﬁnancial instruments are not measured at fairvalue through proﬁt or loss, directly attributable transaction costs.
Financial instruments at fair value through proﬁt or loss are initiallyrecognised at fair value, transaction costs are recognised in theConsolidated Income Statement. Finance lease receivables arerecognised at an amount equal to the net investment in the lease.
Subsequent measurement of ﬁnancial instruments depends ontheir classiﬁcation into the relevant category. The Group assesses
at each end of the reporting period whether there is any objective
evidence that a ﬁnancial asset or a group of ﬁnancial assets may
be impaired. EADS derecognises a ﬁ nancial asset only when
the contractual rights to the asset’s cash ﬂ ows expire or the
ﬁnancial asset has been transferred and the transfer qualiﬁes forderecognition under IAS 39. EADS derecognises a ﬁnancial liability
only when the obligation speciﬁed in the contract is discharged,
cancelled or expired. When an existing ﬁnancial liability is replacedby another from the same lender on substantially different terms,
or the terms of an existing liability are substantially modiﬁed, suchan exchange or modiﬁcation is treated as a derecognition of theoriginal liability and the recognition of a new liability, and thedifference in the respective carrying amounts is recognised in
the income statement.
Fair value of ﬁnancial instruments — The fair value of quoted
investments is based on current market prices. If the market forﬁnancial assets is not active or in the case of unlisted ﬁnancial
instruments, EADS determines fair values by using generally
accepted valuation techniques on the basis of market information
available at the end of the reporting period. Such techniques may
include using recent arm’s length market transactions; reference
to the current fair value of another instrument that is substantiallythe same; discounted cash ﬂow analysis or other valuation models.
Available-for-sale equity investments that do not have a quoted
market price in an active market and whose fair value cannot
be reliably estimated by alternative valuation methods, such as
discounted cash ﬂ ow model, are measured at cost, less any
accumulated impairment losses.
Investments and other ﬁnancial assets — EADS’ investments
comprise investments in associates accounted for under theequity method, other investments and other long-term ﬁnancial
assets as well as current and non-current securities and cash
equivalents. The Group classiﬁ es its ﬁ nancial assets in thefollowing three categories: (i) at fair value through proﬁt or loss,(ii) loans and receivables and (iii) available-for-sale ﬁnancial assets.
Their classiﬁ cation is determined by management when ﬁ rst
recognised and depends on the purpose for their acquisition.

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Within EADS, all investments in entities for which consolidation
criteria are not fulﬁlled are classiﬁed as non-current availablefor-sale ﬁ nancial assets. They are included in the line otherinvestments and other long-term financial assets in theConsolidated Statement of Financial Position.
The majority of the Group’s securities consists of debt securities
and is classiﬁed as available-for-sale ﬁnancial assets.
Available for sale ﬁnancial assets — Financial assets classiﬁed
as available-for-sale are accounted for at fair value. Changes
in the fair value subsequent to the recognition of available-forsale ﬁnancial assets – other than impairment losses and foreignexchange gains and losses on monetary items classiﬁ ed asavailable-for-sale – are recognised directly within AOCI, a separate
component of total equity, net of applicable deferred income
taxes. As soon as such ﬁnancial assets are sold or otherwise
disposed of, or are determined to be impaired, the cumulative gainor loss previously recognised in equity is recorded as part of “otherincome (expense) from investments” in the Consolidated Income
Statement for the period. Interest earned on the investment
is presented as interest income in the Consolidated Income
Statement using the effective interest method. Dividends earned
on investment are recognised as “Other income (expense) frominvestments” in the Consolidated Income Statement when theright to the payment has been established.
Financial assets at fair value through proﬁt or loss — Financial
assets at fair value through proﬁt or loss include ﬁnancial assets
held for trading and ﬁnancial assets designated at initial recognition
at fair value through proﬁt or loss. Within EADS, only derivatives
not designated as hedges are categorized as held for trading.
Further, ﬁnancial assets may be designated at initial recognition atfair value through proﬁt or loss if any of the following criteria is met:(i) the ﬁnancial asset contains one or more embedded derivatives
that otherwise had to be accounted for separately; or (ii) the
designation eliminated or signiﬁcantly reduces a measurement
or recognition inconsistency that would otherwise arise frommeasuring the assets or recognising the gains and losses on themon a different basis (sometimes referred to as “natural hedge”);or (iii) the ﬁnancial assets are part of a group of ﬁnancial assetsthat is managed and its performance is evaluated on a fair value
basis, in accordance with a documented risk management orinvestment strategy. Within EADS, uncapped Structured Notes
are designated “at fair value through proﬁt or loss” in accordancewith criterion (i), foreign currency funds of a hedge funds structure
also comprising foreign currency derivatives are designated “at fairvalue through proﬁt or loss” in accordance with criterion (ii) andinvestments in accumulating Money Market Funds are designatedat “fair value through proﬁt or loss” in accordance with above
criterion (iii).
Loans and receivables — Loans and receivables are
non-derivative financial assets with fixed or determinable
payments that are not quoted in an active market. They arise
when the Group provides money, goods or services directly toa debtor with no intention of trading the receivable and include
also service concession receivables. Loans and receivables areclassiﬁed as trade receivables, other investments and other

EADS FINANCIAL STATEMENTS 2012 — 232

Notes to the Consolidated Financial Statements (IFRS)
2.1 Basis of Presentation

1
current / non-current financial assets. After initial recognitionloans and receivables are measured at amortised cost using theeffective interest rate method less any allowance for impairment.
Gains and losses are recognised in the Consolidated Income
Statement at disposal of the loans and receivables, through theamortisation process as well as in case of any impairment.
Trade receivables — Trade receivables include claims arisingfrom revenue recognition that are not yet settled by the debtor
as well as receivables relating to construction contracts. Trade
receivables are initially recognised at fair value and, provided
they are not expected to be realised within one year, aresubsequently measured at amortised cost using the effective
interest method less any allowance for impairment. Gains andlosses are recognised in the Consolidated Income Statement
when the receivables are derecognised or impaired as well as
through the amortisation process.
Current / non-current other ﬁnancial assets — Current / noncurrent other ﬁ nancial assets mainly include derivatives withpositive fair values, receivables from related companies, loans andare presented separately from current / non-current other assets.
Cash and cash equivalents — Cash and cash equivalents
consist of cash on hand, cash in bank, checks, ﬁxed deposits
and securities having maturities of three months or less from thedate of acquisition, that are readily convertible to known amountsof cash and which are subject to an insigniﬁcant risk of changes
in value.
Impairment of ﬁnancial assets — EADS assesses at each endof the reporting period whether there is any objective evidence
that a ﬁnancial asset or a group of ﬁnancial assets is impaired.
After application of the at equity method to an investment in
an associate, the Group determines whether it is necessary torecognise an impairment loss of the Group’s investment in its
associates. The Group determines at each end of the reporting
period whether there is any objective evidence that the investment
in associate is impaired. This objective evidence for impairment
includes information about signiﬁcant changes with an adverse
effect that have taken place in the technological, market economicor legal environment in which the associate operates, and thatindicate that the carrying amount of EADS’ investment may not
be recovered. A signiﬁcant or prolonged decline in the fair value of
an investment in an equity instrument below its carrying amountis also objective evidence of impairment. In case of impairment
EADS calculates the impairment amount as being the difference
between the recoverable amount of the associate and the carrying
amount of the investment in EADS’ associates and recognises theimpairment amount in the Consolidated Income Statement. Anyreversal of the impairment loss is recognised as an adjustment to
the investment in the associate to the extent that the recoverable
amount of the investment increases. As such, the goodwill related
to EADS’ associates is not individually tested for impairment.
For financial assets carried at amortised cost, at cost andfor those classiﬁed as available-for-sale, a ﬁnancial asset or agroup of ﬁnancial assets is deemed to be impaired if, and only
if, there is objective evidence of impairment as a result of one or

24 — EADS FINANCIAL STATEMENTS 2012

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more events that has occurred after the initial recognition of theasset (an incurred ‘loss event’) and that loss event has an impact
on the estimated future cash ﬂows of the ﬁnancial asset or thegroup of ﬁnancial assets that can be reliably estimated. Evidenceof impairment may include indications that the debtors or a groupof debtors is experiencing signiﬁcant ﬁnancial difﬁculty, default
or delinquency in interest or principal payments, the probability
that they will enter bankruptcy or other ﬁnancial reorganisation
and where observable data indicate that there is a measurable
decrease in the estimated future cash ﬂows, such as changes
in arrears or economic conditions that correlate with defaults.
Equity investments classified as available-for-sale areconsidered for impairment in addition to the indicators statedabove in case of a signiﬁcant or prolonged decline of their fair value
below their cost. If any such evidence exists for available-for-saleﬁnancial assets, the cumulative loss – measured as the difference
between the acquisition cost and the current fair value, less any
impairment loss on that ﬁnancial asset previously recognised in
the Consolidated Income Statement – is removed from AOCI andrecognised in the Consolidated Income Statement. Impairment
losses recognised in the Consolidated Income Statement onequity instruments are not reversed through the Consolidated
Income Statement; increases in their fair value are recognised
directly in AOCI.
In case of the impairment of debt instruments classified asavailable-for-sale, interest continues to be accrued at the original
effective interest rate on the reduced carrying amount of the asset
and is recorded in ﬁnancial result. If, in a subsequent year, thefair value of a debt instrument increases and the increase canbe objectively related to an event occurring after the impairment
loss was recognised in the Consolidated Income Statement, theimpairment loss is reversed through the Consolidated Income
Statement.
If there is objective evidence regarding loans and receivables
that EADS is not able to collect all amounts due according to theoriginal terms of the ﬁnancial instrument, an impairment charge
has to be recognised. The amount of the impairment loss is equal
to the difference between the ﬁnancial asset’s carrying amountand the present value of estimated future cash ﬂows, discounted at
the original effective interest rate, i.e. the rate that exactly discounts
the expected stream of future cash payments through maturity
to the current net carrying amount of the ﬁ nancial asset. The
carrying amount of the trade receivable is reduced through use ofan allowance account. The loss is recognised in the Consolidated
Income Statement. If in a subsequent period, the amount of
impairment decreases and the decrease is objectively related
to an event occurring after the impairment was recognised, therecognised impairment loss is reversed through the Consolidated
Income Statement.
Non-current assets / disposal groups classiﬁed as held for sale
— Non-current assets / disposal groups classiﬁed as assets held
for sale and stated at the lower of carrying amount and fair valueless costs to sell if their carrying amount is recovered principally
through a sale transaction rather than through a continuing use.
Whilst classiﬁ ed as held for sale or part of a disposal group,Notes to the Consolidated Financial Statements (IFRS)
2.1 Basis of Presentation

1
EADS does not depreciate or amortise a non-current asset. In
addition, equity accounting of investments in associates ceases
once classiﬁed as held for sale or distribution. Liabilities directly
associated with non-current assets held for sale in a disposalgroup are presented separately on the face of the Consolidated
Statement of Financial Position. Interest and other expenses
attributable to the liabilities of a disposal group classiﬁed as held
for sale is continued to be recognised.
To be classiﬁed as held for sale the non-current assets (or disposalgroup) must be available for immediate sale in its present condition
subject only to terms that are usual and customary for sales of such
assets (or disposal group) and its sale must be highly probable.
For a sale to be highly probable – among other criteria that haveto be fulﬁlled – the appropriate level of EADS management must
be committed to the plan to sell, an active programme to complete
the plan must have been initiated and actions required to complete
the plan to sell the assets (or disposal group) should indicate that
it is unlikely that signiﬁcant changes to the plan will be made orthat the plan will be withdrawn.
If a component of EADS has either been disposed of or is classiﬁed
as held for sale and (i) represents a separate major line of businessor geographical area of operations, (ii) is part of a single coordinated plan to dispose of a separate major line of business orgeographical area of operations or (iii) is a subsidiary acquired
exclusively with a view to resale the component is a discontinued
operation.
Derivative ﬁ nancial instruments — Within EADS derivative
financial instruments are (i) used for hedging purposes in
micro-hedging strategies to offset the Group’s exposure to
identiﬁable transactions or are (ii) a component of hybrid ﬁnancial
instruments that include both the derivative and host contract(“Embedded Derivatives”).
In accordance with IAS 39 “Financial Instruments: Recognition andMeasurement”, derivative ﬁnancial instruments are recognised andsubsequently measured at fair value. The method of recognising
resulting gains or losses depends on whether the derivative
ﬁnancial instrument has been designated as hedging instrument,
and if so, on the nature of the item being hedged. While derivativeﬁ nancial instruments with positive fair values are recorded in“current / non-current other ﬁ nancial assets”, such derivative
ﬁnancial instruments with negative fair values are recorded as“current / non-current other ﬁnancial liabilities”.

a) Hedging: The Group seeks to apply hedge accounting
to all its Hedging Activities. Hedge accounting recognises
symmetrically the offsetting effects on net profit or lossof changes in the fair values of the hedging instrument
and the related hedged item. The conditions for sucha hedging relationship to qualify for hedge accounting
include: The hedge transaction is expected to be highly
effective in achieving offsetting changes in fair value orcash flows attributable to the hedged risk, the effectivenessof the hedge can be reliably measured and there is

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formal designation and documentation of the hedging
relationships and EADS’ risk management objective andstrategy for undertaking the hedge at the inception of
the hedge. The Group further documents prospectively
at the inception of the hedge as well as at each closing
retrospectively and prospectively its assessment of
whether the derivatives used in hedging transactions arehighly effective in offsetting changes in fair values or cash
flows of hedged items with regard to the hedged risk.
Depending on the nature of the item being hedged, EADS
classifies hedging relationships that qualify for hedge
accounting as either (i) hedges of the fair value of recognised
assets or liabilities or unrecognised firm commitments(“Fair Value Hedges”), (ii) hedges of the variability of cash
flows attributable to recognised assets or liabilities, highly
probable forecast transactions (“Cash Flow Hedges”)or (iii) hedges of a net investment in a foreign entity.
(i) Fair value hedge: Fair value hedge accounting is mainly
applied to certain interest rate swaps hedging the exposure
to changes in the fair value of recognised assets andliabilities. For derivative financial instruments designated asfair value hedges, changes in the fair value of the hedging
instrument and changes in the fair value of the hedged asset
or liability attributable to the hedged risk are simultaneously
recognised in the Consolidated Income Statement.
(ii) Cash flow hedge: The Group applies cash flow hedge
accounting generally to foreign currency derivative
contracts on future sales as well as to certain interest rate
swaps hedging the variability of cash flows attributable torecognised assets and liabilities. Changes in fair value ofthe hedging instruments related to the effective part of thehedge are reported in AOCI, a separate component of total
equity, net of applicable income taxes and recognised in
the Consolidated Income Statement in conjunction with theresult of the underlying hedged transaction, when realised.
The ineffective portion is immediately recorded in “Profit forthe period”. Amounts accumulated in equity are recognisedin the Consolidated Income Statement in the periods when
the hedged transaction affects the Consolidated Income
Statement, such as when the forecast sale occurs or when
the finance income or finance expense is recognised in theConsolidated Income Statement. If hedged transactions
are cancelled, gains and losses on the hedging instrumentthat were previously recorded in equity are generally
recognised in “Profit for the period”. Apart from derivative
financial instruments, the Group also uses financial liabilities
denominated in a foreign currency to hedge foreign currency
risk inherent in forecast transactions. If the hedging
instrument expires or is sold, terminated or exercised, or if
its designation as hedging instrument is revoked, amounts
previously recognised in equity remain in equity until theforecasted transaction or firm commitment occurs.

EADS FINANCIAL STATEMENTS 2012 — 252

Notes to the Consolidated Financial Statements (IFRS)
2.1 Basis of Presentation

1(iii) Net investment hedge: Hedges of net investments inforeign entities are accounted for similarly to cash flow
hedges. Any gain or loss on the hedging instrument
relating to the effective portion of the hedge is recognised
in AOCI; the gain or loss relating to the ineffective portionis recognised immediately in the Consolidated Income
Statement. Gains and losses accumulated in AOCI are
included in the Consolidated Income Statement when theforeign entity is disposed of.
In addition, EADS uses certain foreign currency derivatives tomitigate its foreign currency exposure arising from changes in
the fair value of recognised assets and liabilities (natural hedge).
To reﬂect the largely natural offset those derivatives provide to
the remeasurement gains or losses of speciﬁc foreign currency
balance sheet items, EADS accordingly presents the gains orlosses of those foreign exchange rate derivatives as well as thefair value changes of the relating recognised assets and liabilities
in EADS’ Consolidated Proﬁt before ﬁnance costs and income
taxes (EBIT) insofar as certain formal requirements are met.
Finally, in case certain derivatives or portions of these derivatives
do not qualify for hedge accounting under the speciﬁc rules of
IAS 39 “Financial Instruments: Recognition and Measurement”(for example, the non-designated time value of options orde-designated derivatives in general) or do not belong to a
Natural Hedge, changes in fair value of such derivative ﬁnancial
instruments or its portions are recognised immediately as partof the ﬁnancial result.
The fair values of various derivative ﬁnancial instruments used as
hedging instruments are disclosed in Note 34 “Information aboutﬁ nancial instruments”. Periodical movements in the AOCI, theseparate component of total equity in which the effective portionof cash ﬂow hedges are recognised, are disclosed in Note 34 d).

b) Embedded derivatives: Derivative components embedded
in a non derivative-host contract are separately recognised
and measured at fair value if they meet the definition of a
derivative and their economic risks and characteristics are
not clearly and closely related to those of the host contract.
Changes in the fair value of the derivative componentof these instruments are recorded in “Other financial
result”, unless bifurcated foreign currency embedded
derivatives are designated as hedging instruments.
See Note 34 “Information about ﬁ nancial instruments” for a
description of the Group’s ﬁnancial risk management strategies,
the fair values of the Group’s derivative ﬁnancial instruments aswell as the methods used to determine such fair values.
Income taxes — Tax expense (tax income) is the aggregate
amount included in the determination of net proﬁt or loss for theperiod in respect of (i) Current tax and (ii) Deferred tax.

(i) Current tax is the amount of income taxes payable orrecoverable in a period. Current income taxes are calculated
applying respective tax rates on the periodic taxable profit

26 — EADS FINANCIAL STATEMENTS 2012

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or tax loss that is determined in accordance with rules
established by the competent taxation authorities. Current
tax liabilities are recognised for current tax to the extent
unpaid for current and prior periods. A current tax asset
is recognised in case the tax amount paid exceeds theamount due to current and prior periods. The benefit of atax loss that can be carried back to recover current taxes
of a previous period is recognised as an asset provided
that the related benefit is probable and can be measured
reliably.
(ii) Deferred tax assets and liabilities are generally recognised
on temporary valuation differences between the carrying
amounts of assets and liabilities and their respective tax
bases, as well as for net operating losses and tax credit carryforwards. Deferred tax assets and liabilities are measured
using enacted tax rates to be applied to taxable income inthe years in which those temporary differences are expected
to be recovered or settled. The effect on deferred tax assets
and liabilities of a change in tax rates is recognised in the
period the new rates are enacted or substantially enacted.
As deferred tax assets anticipate potential future tax benefits,
they are recorded in the Consolidated Financial Statements
of EADS only to the extent that it is probable that futuretaxable profits will be available against which deferred tax
assets will be utilised. The carrying amount of deferred tax
assets is reviewed at each financial year-end.
Deferred income tax assets and deferred income tax
liabilities are offset, if a legally enforceable right exists
to set off current tax assets against current income tax
liabilities and the deferred income taxes relate to thesame taxable entity and the same taxation authority.
Share capital — Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new sharesor options are shown directly in equity – as a deduction – net ofany tax effects. Own equity instruments which are reacquired
are deducted from total equity and remain recognised astreasury shares until they are either cancelled or reissued.
Any gains or losses net of taxes which are associated with thepurchase, sale, issue or cancellation of EADS own shares arerecognised within equity.
Provisions — Provisions are recognised when the Group has apresent obligation (legal or constructive) as a result of a past event,
it is probable that an outﬂow of resources embodying economic
beneﬁ ts will be required to settle the obligation and a reliable
estimate of the obligation’s amount can be made. When the effectof the time value of money is material, provisions are measured
at the present value of the expenditure expected to be required
to settle the Group’s present obligation. As discount factor, apre-tax rate is used that reﬂects current market assessments ofthe time value of money and the risks speciﬁc to the obligation.
The provision’s increase in each period reﬂecting the passage oftime is recognised as ﬁnance cost.

Notes to the Consolidated Financial Statements (IFRS)
2.1 Basis of Presentation

1
Provisions are reviewed at each closing and adjusted as
appropriate to reﬂect the respective current best estimate. Thechange in the measurement of a provision for an asset retirement
obligation (see above “Property, plant and equipment”) is added
or deducted from the cost of the respective asset that has to be
dismantled and removed at the end of its useful life and the siteon which it is located restored.
Provisions for guarantees corresponding to aircraft sales arerecorded to reﬂect the underlying risk to the Group in respect ofguarantees given when it is probable that an outﬂow of resources
embodying economic benefits will be required to settle theobligation and reliable estimates can be made of the amountof the obligation. The amount of these provisions is calculated
to cover the difference between the Group’s exposure and theestimated value of the collateral.
Outstanding costs are provided for at the best estimate of future
cash outﬂows. Provision for other risks and charges relate to
identiﬁable risks representing amounts expected to be realised.
Provisions for contract losses are recorded when it becomesprobable that estimated contract costs based on a total cost
approach will exceed total contract revenues. Contractual
penalties are included in the contractual margin calculation.
Provisions for loss making contracts are recorded as write downsof work-in-process for that portion of the work which has alreadybeen completed, and as provisions for the remainder. Losses are
determined on the basis of estimated results on completion ofcontracts and include foreign currency effects. Provisions for loss
making contracts are updated regularly.
Provisions for (i) constructive obligations and liquidated damages
caused by delays in delivery and for (ii) terminating existingcustomer orders are based on best estimates of future cash
outﬂows for anticipated payments to customers. Provisions forlitigation and claims are set in case legal actions, governmental
investigations, proceedings and other claims are pending or may
be instituted or asserted in the future against the Group which
are a result of past events, where it is probable that an outﬂow
of resources embodying economic beneﬁts will be required forthe settlement and a reliable estimate of the obligation’s amount
can be made.
Restructuring provisions are only recognised when a detailed
formal plan for the restructuring – including the concernedbusiness or part of the business, the principal locations affected,
details regarding the employees affected, the restructuring’s
timing and expenditures that will have to be undertaken – hasbeen developed and the restructuring has either commenced or
the plan’s main features have already been publicly announced
to those affected by it.
Employee benefits — The valuation of pension andpost-retirement benefits classiﬁ ed as deﬁ ned beneﬁ t plans
is based upon the projected unit credit method in accordancewith IAS 19 “Employee Beneﬁts”. In determining the appropriate
discount rate, the Group considers the interest rates of high quality
corporate bonds with an AA rating.

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EADS recognises actuarial gains and losses in full for all its deﬁned
beneﬁt plans immediately in retained earnings and presents themin its Consolidated Statements of Comprehensive Income.
Past service costs are recognised as an expense in EADS
Consolidated Income Statements on a straight-line basis over
the average period until the beneﬁts become vested. Past service
costs relating to beneﬁts already vested are expensed immediately.
EADS applies deﬁned beneﬁt accounting for its deﬁned beneﬁt
multi-employer plan. Accordingly, the Group accounts for its sharein the related deﬁned beneﬁt plan.
Contributions to deﬁned contribution plans are recognised as
expenses in the Consolidated Income Statement when they are
due.
Several German Group companies provide life time working
account models, being employee beneﬁt plans with a promised
return on contributions or notional contributions that qualify
as other long-term employee benefits under IAS 19. The
employees’ periodical contributions into their life time working
accounts result in corresponding personnel expense in that period
in the Consolidated Income Statement while plan assets andcorresponding provisions are offset in the Consolidated Statementof Financial Position.
Termination benefits are payable whenever an employee’s
employment is terminated before the normal retirement dateor whenever an employee accepts voluntary redundancy inexchange for these beneﬁts. The Group recognises termination
beneﬁts when it is demonstrably committed to either terminate theemployment of current employees according to a detailed formal
plan without possibility of withdrawal or to provide termination
beneﬁ ts as a result of an offer made to encourage voluntary
redundancy.
Share based compensation — Stock options issued by
EADS up to 2006 are accounted for in accordance withIFRS 2 “Share-based Payment” and qualify as equity settled
share-based payments. In 2007, EADS also introduced aperformance and restricted unit plan (LTIP) which qualiﬁ es ascash settled share-based payment plan under IFRS 2. For
both types, associated services received are measured at fairvalue and are calculated by multiplying the number of options (orunits) expected to vest with the fair value of one option (or unit)
as of grant date (end of the reporting period). The fair value ofthe option (or unit) is determined by applying the Black Scholes
Option Pricing Model.
The fair value of the services is recognised as personnel expense.
In case of equity settled share based payment plans the personnel
expense results in a corresponding increase in consolidated
retained earnings over the vesting period of the respective plan.
For cash settled share based payment plans a corresponding
liability is recognised. Until the liability is settled its fair value isremeasured at each end of the reporting period through theConsolidated Income Statement.

EADS FINANCIAL STATEMENTS 2012 — 272

Notes to the Consolidated Financial Statements (IFRS)
2.1 Basis of Presentation

1
Part of the grant of both types of share-base payment plans isconditional upon the achievement of non-market performance
conditions and will only vest provided that the performance
conditions are met. If it becomes obvious during the vesting periodof an equity settled share-based payment plan that some of theperformance conditions will not be met and, hence, the numberof equity instruments expected to vest differs from that originally
expected, the expense is adjusted accordingly.
EADS offers its employees under the employee stock ownershipplan (ESOP) EADS shares at fair value matched with a numberof free shares based on a determining ratio. The number offree shares is recognised at fair value as personnel expense in
EADS’ Consolidated Income Statements at grant date.
Emission rights and provisions for in-excess-emission —Under the EU Emission Allowance Trading Scheme (EATS) national
authorities have issued on 1 January 2005 permits (emission
rights), free of charge, that entitle participating companies to emita certain amount of greenhouse gas over the compliance period.
The participating companies are permitted to trade those emission
rights. To avoid a penalty a participant is required to deliveremission rights at the end of the compliance period equal to its
emission incurred.
EADS recognises a provision for emission in case it has caused
emissions in excess of emission rights granted. The provision
is measured at the fair value (market price) of emission rights
necessary to compensate for that shortfall at each end of thereporting period.
Emission rights held by EADS are generally accounted for as
intangible assets, whereby:(i) emission rights allocated for free by national authorities areaccounted for as a non-monetary government grant at its
nominal value of nil;(ii) emission rights purchased from other participants areaccounted for at cost or the lower recoverable amount;
if they are dedicated to offset a provision for in excess
emission, they are deemed to be a reimbursement right andare accounted for at fair value.

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Current / non-current other ﬁ nancial liabilities — Current /non-current other ﬁnancial liabilities mainly include refundable
advances and derivatives with a negative market value. Refundable
advances from European Governments are provided to the Groupto ﬁnance research and development activities for certain projects
on a risk-sharing basis, i.e. they have to be repaid to the European
Governments subject to the success of the project.
Further, EADS designates certain ﬁnancial liabilities representing
payment obligations towards airlines denominated in USD as
hedging instruments to hedge the foreign currency risk inherent
in future aircraft sales under a cash ﬂow hedge.
Current / non-current other liabilities — Current / non-current
other liabilities mainly consist of advance payments received from
customers.
Liabilit y for put table instruments — Under cer tain
circumstances, EADS records a ﬁnancial liability rather than anequity instrument for the exercise price of a written put option
on an entity’s equity.
Litigation and claims — Various legal actions, governmental
investigations, proceedings and other claims are pending or
may be instituted or asserted in the future against the Group.
Litigation is subject to many uncertainties, and the outcomeof individual matters is not predictable with assurance. EADS
believes that it has made adequate provisions to cover current
or contemplated litigation risks. It is reasonably possible that theﬁnal resolution of some of these matters may require the Groupto make expenditures, in excess of established reserves, over an
extended period of time and in a range of amounts that cannot
be reasonably estimated. The term “reasonably possible” is usedherein to mean that the chance of a future transaction or event
occurring is more than remote but less than likely. Although theﬁnal resolution of any such matters could have an effect on theGroup’s proﬁt for the period for the particular reporting period inwhich an adjustment of the estimated reserve would be recorded,
the Group believes that any such potential adjustment should notmaterially affect its Consolidated Financial Statements. For further
details please refer to Note 32 “Litigation and claims”.

Use of Accounting Estimates
Trade liabilities — Trade liabilities are initially recorded at fairvalue. Trade liabilities having a maturity of more than 12 months
are subsequently measured at amortised cost using the effective
interest rate method.
Financing liabilities — Financing liabilities comprise obligations
towards ﬁnancial institutions, issued corporate bonds, loans, loans
to afﬁliated non-consolidated companies as well as ﬁnance leaseliabilities. Financing liabilities qualify as ﬁnancial liabilities and arerecorded initially at the fair value of the proceeds received, net oftransaction costs incurred. Subsequently, ﬁnancing liabilities otherthan ﬁnance lease liabilities are measured at amortised cost using
the effective interest rate method with any difference between
proceeds (net of transaction costs) and redemption amount being
recognised in “Total ﬁnance income (cost)” over the period of the
ﬁnancing liability.

28 — EADS FINANCIAL STATEMENTS 2012

EADS’ significant accounting policies, as described above,are essential for the understanding of the Group’s results ofoperations, ﬁnancial positions and cash ﬂows. Certain of theseaccounting policies require accounting estimates that involve
complex and subjective judgments and the use of assumptions,some of which may be for matters that are inherently uncertain andsusceptible to change. Such accounting estimates could change
from period to period and might have a material impact on theGroup’s results of operations, ﬁnancial positions and cash ﬂows.
The assumptions and estimates used by EADS’ management
are based on parameters which are derived from the knowledge
at the time of preparing the Consolidated Financial Statements.
In particular, the circumstances prevailing at this time andassumptions as to the expected future development of the global
and industry speciﬁ c environment were used to estimate theNotes to the Consolidated Financial Statements (IFRS)
2.1 Basis of Presentation

1
Company’s future business performance. Where these conditions
develop differently than assumed, and beyond the control of theCompany, the actual ﬁgures may differ from those anticipated.
In such cases, the assumptions, and if necessary, the carrying
amounts of the assets and liabilities concerned, are adjusted
accordingly.
These estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognisedin the period in which the estimate is revised if the revision affects
only that period, or in the period of the revision and future periods
if the revision affects both current and future periods.
Subjects that involve assumptions and estimates and that havea signiﬁ cant inﬂ uence on the amounts recognised in EADS’
Consolidated Financial Statements are further described or are
disclosed in the respective Notes mentioned below.
Revenue recognition on construction contracts — EADS
conducts a signiﬁcant portion of its business under construction
contracts with customers, for example within aerospace related
governmental programmes. The Group generally accounts
for construction projects using the percentage-of-completion
method, recognising revenue as performance on a contract
progresses measured either on a milestone or on a cost-to-costbasis depending on contract terms. This method placesconsiderable importance on accurate estimates at completion
as well as on the extent of progress towards completion. For
the determination of the progress of the construction contract
signiﬁcant estimates include total contract costs, remaining costs
to completion, total contract revenues, contract risks and otherjudgments. Management of the operating Divisions continuallyreview all estimates involved in such construction contracts andadjusts them as necessary. See Note 19 “Trade receivables” forfurther information.
Business combinations — In a business combination, allidentiﬁable assets, liabilities and contingent liabilities acquired
are recorded at the date of acquisition at their respective fair value.
One of the most signiﬁcant estimates relates to the determinationof the fair value of these assets and liabilities. Land, buildings andequipment are usually independently appraised while marketablesecurities are valued at market prices. If any intangible assets
are identiﬁed, depending on the type of intangible asset and thecomplexity of determining its fair value, EADS either consultswith an independent external valuation expert or develops the fairvalue internally, using appropriate valuation techniques which are
generally based on a forecast of the total expected future net cash
ﬂows. These evaluations are linked closely to the assumptions
made by management regarding the future performance of theassets concerned and any changes in the discount rate applied.
See Note 4 “Acquisitions and Disposals” and Note 14 “Intangible
assets” for further information.
Goodwill impairment test and recoverability of assets —EADS tests at least annually whether goodwill has suffered any
impairment, in accordance with its accounting policies. The
determination of the recoverable amount of a Cash Generating Unit
(CGU) to which goodwill is allocated involves the use of estimates

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by management. The outcome predicted by these estimates isinﬂuenced by several assumptions including for example growth
assumptions of CGUs, availability and composition of future
defence and institutional budgets, foreign exchange ﬂuctuations
or implications arising from the volatility of capital markets. EADS
generally uses discounted cash ﬂow based methods to determine
these values. These discounted cash ﬂow calculations basicallyuse ﬁve-year projections that are based on the operative plansapproved by management. Cash ﬂow projections take into accountpast experience and represent management’s best estimate
about future developments. Cash ﬂows after the planning period
are extrapolated using estimated growth rates. Key assumptions
on which management has based its determination of fair valueless costs to sell and value in use include estimated growth rates,
weighted average cost of capital, tax rates and foreign exchange
rates. These estimates, including the methodology used, canhave a material impact on the respective values and ultimately theamount of any goodwill impairment. Likewise, whenever property,
plant and equipment and other intangible assets are tested for
impairment, the determination of the assets’ recoverable amountinvolves the use of estimates by management and can have amaterial impact on the respective values and ultimately the amountof any impairment. See Note 14 “Intangible assets” for further
information.
Trade and other receivables — The allowance for doubtful
accounts involves significant management judgment andreview of individual receivables based on individual customer
creditworthiness, current economic trends including potential
impacts from the EU sovereign debt crisis and analysis of historicalbad debts. See Note 19 “Trade receivables” for further information.
Foreign currency derivatives — Fair value measurements offoreign currency derivatives are based on market assumptions
relating to, among others, foreign exchange basis spreads andrelevant interest rate levels. See Note 34 “Information about
Financial Instruments” for further information.
Employee beneﬁts — The Group accounts for pension and otherpostretirement beneﬁts in accordance with actuarial valuations.
These valuations rely on statistical and other factors in orderto anticipate future events. These factors include key actuarial
assumptions including the discount rate, expected return onplan assets, expected salary increases and mortality rates. In
determining the appropriate discount rate, the Group considers
the interest rates of high quality corporate bonds with an AA rating.
Expected returns on plan assets assumptions are determinedconsidering long-term historical returns and asset allocations.
These actuarial assumptions may differ materially from actual
developments due to changing market and economic conditions
and therefore result in a signiﬁ cant change in postretirement
employee beneﬁt obligations and the related future expense. See
Note 25b) “Provisions for retirement plans” for further information.
Provisions — The determination of provisions, for example foronerous contracts, warranty costs and legal proceedings is basedon best available estimates. Onerous sales contracts are identiﬁed
by monitoring the progress of the contract as well as the underlying

EADS FINANCIAL STATEMENTS 2012 — 292

Notes to the Consolidated Financial Statements (IFRS)
2.1 Basis of Presentation1
programme and updating the estimate of contract costs, which
also requires signiﬁcant judgement related to achieving certain
performance standards as well as estimates involving warranty
costs. Depending on the size and nature of EADS’s contracts andrelated programmes, the extent of assumptions, judgements andestimates in these monitoring processes differs. Especially, theintroduction of new commercial aircraft programmes (such as theA350 XWB) or major derivative aircraft programmes particularly
involves an increased level of estimates and judgements associatedwith the expected development, production and certiﬁ cation
schedules and expected cost components. A commercial
aircraft contract or amendment to a contract may include option
clauses for extension as well as termination of full or part of thecontract. The assessment of the probability of execution of these
options is based on management’s best estimates. Estimatesand judgements are subject to change based on new informationas contracts and related programmes progress. Furthermore,
the complex design and manufacturing processes of EADS’industry require challenging integration and coordination along
the supply chain including an ongoing assessment of supplier’s
assertions which may additionally impact the outcome of thesemonitoring processes. See Note 25c) “Other provisions” for further
information.
Legal contingencies — EADS companies are parties to litigations
related to a number of matters as described in Note 32 “Litigationand claims”. The outcome of these matters may have a material
effect on the ﬁnancial position, results of operations or cash ﬂows
of EADS. Management regularly analyses current information
about these matters and provides provisions for probablecontingent losses including the estimate of legal expense toresolve the matters. Internal and external lawyers are used for

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these assessments. In making the decision regarding the needfor provisions, management considers the degree of probabilityof an unfavourable outcome and the ability to make a sufﬁciently
reliable estimate of the amount of loss. The ﬁling of a suit or formal
assertion of a claim against EADS companies or the disclosureof any such suit or assertions, does not automatically indicatethat a provision may be appropriate. See Note 32 “Litigation andclaims” for further information.
Income taxes — EADS operates and earns income in numerous
countries and is subject to changing tax laws in multiple
jurisdictions within these countries. Signiﬁ cant judgments arenecessary in determining the worldwide income tax liabilities.
Although management believes that it has made reasonableestimates about the final outcome of tax uncertainties, noassurance can be given that the ﬁnal tax outcome of these matterswill be consistent with what is reﬂected in the historical income tax
provisions. Such differences could have an effect on the current
income tax liabilities and deferred income tax liabilities in the
period in which such determinations are made. At each end of
the reporting period, EADS assesses whether the realisation of
future tax beneﬁts is sufﬁciently probable to recognise deferred
tax assets. This assessment requires the exercise of judgmenton the part of management with respect to, among other things,
beneﬁts that could be realised from available tax strategies andfuture taxable income, as well as other positive and negative
factors. The recorded amount of total deferred tax assets could
be reduced if estimates of projected future taxable income andbeneﬁts from available tax strategies are lowered, or if changes incurrent tax regulations are enacted that impose restrictions on thetiming or extent of the Group’s ability to utilise future tax beneﬁts.
See Note 13 “Income Taxes” for further information.

Scope of Consolidation

Perimeter of consolidation (31 December 2012) —The Consolidated Financial Statements include, in addition to
EADS N.V.:— 2012: 271 (2011: 245) companies which are fully consolidated;— 2012: 47 (2011: 46) companies which are proportionately
consolidated;

30 — EADS FINANCIAL STATEMENTS 2012

— 2012: 23 (2011: 18) investments in associates accounted forusing the equity method.
The number of investments in associates only comprises therespective parent company.
Signiﬁcant subsidiaries, associates and joint ventures are listed
in the Appendix entitled “Information on principal investments”.

Notes to the Consolidated Financial Statements (IFRS)
2.1 Basis of Presentation

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Acquisitions and Disposalsa) Acquisitions and other M&A Transactions
The following individually insigniﬁcant M&A transactions of EADS’
divisions were completed during the ﬁnancial year 2012 with theintention to further expand EADS’ platform and services portfolio.
On 3 April 2012, Astrium acquired 66.8% of Space Engineering
SpA, Rome (Italy), a specialist in digital telecommunications, RF
and antenna equipment engineering for both space and groundbased applications for a total consideration of € 10 million.
This acquisition enhanced Astrium’s capability to develop andmanufacture sophisticated telecommunications hardware andunderlines Astrium’s commitment to the Italian space market.
Space Engineering SpA reported revenues of € 17 million for thefull year 2012.
On 1 July 2012, Cassidian acquired 51% of Rheinmetall Airborne
Systems GmbH, Bremen (Germany), for a total consideration of€ 85 million, to pursue Rheinmetall’s activities related to Unmanned
Aerial Systems (UAS) as well as cargo loading systems (CLS)
together with Rheinmetall within a new entity. Rheinmetall Airborne
Systems GmbH reported revenues of € 63 million for the full year2012.
On 1 October 2012, Cassidian acquired 75.1% of the shares of Carl
Zeiss Optronics GmbH, Oberkochen (Germany), with the intention
to run the optics and optronics activities of Carl Zeiss Optronics
GmbH together with Carl Zeiss AG for a total consideration of€ 121 million. Carl Zeiss Optronics GmbH is a manufacturer of
optronic, optic and precision-engineered products for military andcivil applications. Carl Zeiss Optronics GmbH reported revenuesof € 110 million for the full year 2012.

On 16 November 2012, Cassidian acquired 99.8% of Netasq,
Villeneuve d’Ascq (France), a leading expert and pioneer in the
IT security market for a total consideration of € 27 million. Netasq
reported revenues of € 17 million for the full year 2012.
All Cassidian acquisitions are expected to strengthen Cassidian´smarket positions in the global UAS-, sensor- and cybersecurity
related markets by providing access to broader development
resources as well as additional product and service offerings being
complementary to Cassidian´s current portfolio.
On 20 November 2012, EADS acquired Eltra Holdings Pte Ltd.,Singapore (Singapore), an aerospace group involved in various
aerospace supply chain and MRO activities for a total considerationof € 28 million. Eltra Holdings Pte Ltd. reported revenues of€ 31 million for the full year 2012.
Finally, Eurocopter expanded the MRO engine business of its
subsidiary Vector Aerospace Corp., Toronto (Canada), via several
asset deals in the ﬁrst half year 2012, primarily in the Asia-Paciﬁcregion, for a total consideration of € 43 million. The acquired
businesses reported revenues of € 17 million for the full year 2012.
For all these individually insigniﬁ cant transactions mentioned,
the goodwill of € 199 million primarily includes a control premium
reﬂecting the expected synergies arising from the combination withthe existing businesses of EADS, joint future market developments
as well as the values of the various assembled workforces.

EADS FINANCIAL STATEMENTS 2012 — 312

Notes to the Consolidated Financial Statements (IFRS)
2.1 Basis of Presentation

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The following table summarises for all individually insigniﬁcant M&A transactions mentioned above the considerations transferred,
the fair value of identiﬁable assets acquired, liabilities assumed and any non-controlling interest as at the acquisition date. For all
M&A transactions, fair values remain provisional due to ongoing purchase price allocation projects, but will be ﬁnalised within 12
months after each acquisition date.
Fair value recognised on acquisition2012 individually insignificant acquisitions(In € million)

Intangible assets(1)Customer / supplier relationships

58
(1)

15

Technologies / Licenses(1)Trademarks

41

(1)

2

Property, plant and equipment

41

Inventories

105

Trade receivables

65

Other assets

42

Cash and cash equivalents

58
369

Provisions

126

Financing liabilities

11

Trade liabilities

32

Tax liabilities

10

Other liabilities

67
246

Net assets acquired123

Non-controlling interests(2)8

EADS’ portion in net assets acquired

115

Preliminary goodwill(3) arising on acquisition (see Note 14 “Intangible Assets”)

199

Total consideration (4)314(1) Depending on the specific fact pattern of each M&A transaction, customer / supplier relationships, technologies / licences and trademarks are expected to be amortised overa period between 3-8 years, 5-7 years and 2 years respectively (the latter only regarding specific product-related trademarks in connection with the Carl Zeiss Optronics
transaction, as most of the acquired corporate trademarks are considered to have an indefinite life).
(2) All non-controlling interest portions were measured at their proportional share in net assets.
(3) None of the goodwill portions of EADS’ 2012 M&A transactions are considered to be tax deductable in the respective local tax accounts.
(4) The total consideration (€ 314 million) exceeds total consideration paid gross of acquired cash in 2012 (€ 259 million) by € 55 million. Thereof, € 52 million relate to the recognitionof earn-out obligations to be paid at a later stage, impacts from the separate recognition of settlements of pre-existing relationships (€ 7 million) as well as the recognition ofpreviously held shares within the step-acquisitions of Netasq at their fair values of € 1 million. Further, EADS’ total consideration paid gross of acquired cash in 2012 also included€ 5 million paid to non-controlling shareholders of Satair (a 2011 acquisition) in a linked-squeeze out transaction in February 2012. All gains related to business combinations were
presented within ‘other income’ in the Consolidated Income Statement.

As at the acquisition dates, trade and other receivables of theseacquired companies comprise gross contractual amounts due of€ 71 million of which € 6 million are expected to be uncollectible
resulting in a fair value of the trade receivables portfolio of

32 — EADS FINANCIAL STATEMENTS 2012

€ 65 million. The fair value of contingent considerations of€ 52 million relates to certain future order intake levels of someacquirees.

Notes to the Consolidated Financial Statements (IFRS)
2.1 Basis of Presentation

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The table attached summarises selected proﬁt and loss related key ﬁgures of these 2012 M&A transactions, such as the contributionsof all acquired entities to EADS Group´s revenue, EBITDA and proﬁt for the 2012 period since their acquisition dates as well as theirrevenues, EBITDA and proﬁt during the 12 months period ended 31 December 2012.
2012 individually insignificant acquisitions(In € million)(1)Acquisition datevarious dates

Acquisition costs(2)32012 revenue contributions since acquisition date65

2012 contributions to the EBITDA of EADS since acquisition date2

2012 contributions to the profit of EADS since acquisition date2

Revenues during the 12 months period ended 31 December 2012255

Pro-forma EBITDA during the 12 months period ended 31 December 2012(3)9Pro-forma profit during the 12 months period ended 31 December 2012(3)1(1) If not stated otherwise.
(2) All acquisition related costs mentioned have been excluded from the consideration transferred and have been recognised as an expense in the current year,
within ‘other expenses’ in the Consolidated Income Statement.
(3) EADS considers these ‘pro-forma’ profit figures to represent an initial approximate measure to determine the performance of the combined group on an annualised basis
and to provide an initial reference point for comparisons in future periods without considering additional impacts arising from synergies, exceptionals and one-offs that related tothe acquisition or will contribute to the future efficiency of the acquired companies as well as any unwinding effects on the profit for the period from amortisation impacts
of intangible assets recognised within the purchase price allocations.

Transactions with non-controlling shareholders

In addition to pursuing organic growth via its divisions, EADS
signiﬁcantly strengthened its services and platform portfolio byseveral M&A transactions during 2011. The following section
reﬂects the outcome of the ﬁnalised purchase price allocation
procedures related to EADS’ 2011 M&A transactions.

The acquired intangible assets of € 158 million identiﬁed within apurchase price allocation include customer relationships, a brandname as well as supplier relationships. The goodwill of € 181 million
includes a control premium reﬂ ecting the expected synergies
arising from the combination with the existing MRO business ofEurocopter and EADS, joint future market developments as wellas the signiﬁcant value of Vector’s assembled workforce. The
gross amount of the trade receivables acquired of € 88 million
reﬂects their fair value. None of the trade receivables have beensigniﬁcantly impaired and it is expected that the full contractual
amounts can be collected.

Acquisition of Vector Aerospace GroupAcquisition of Satair GroupOn 30 June 2011, Eurocopter Holding S.A.S., a subsidiary of
EADS N.V., acquired 98.3% of Vector Aerospace Corporation,
Toronto (Canada), (hereafter referred to as “Vector”) following
a CAD 13.00 / share cash offer for all of the outstanding
common shares of Vector, including all shares that may be
issued on the exercise of options granted under Vector’s shareoption plan. The remaining 1.7% shares of Vector were acquired
via linked squeeze out procedures ﬁ nalised on 4 August 2011.

On 5 October 2011, Airbus S.A.S., a subsidiary of EADS N.V.,
obtained control of Satair A / S, Copenhagen, Denmark (hereafterreferred to as “Satair”) via its subsidiary Airbus Denmark Holding
ApS following a public voluntary conditional tender offer of DKr 580 /share for all of the outstanding shares of Satair, including an offer
of DKr 378.66 / warrant for each warrant holder. As a result of the
public voluntary offer EADS acquired 98.5% of Satair’s shares
during October and November 2011, while the remaining 1.5% of
Satair’s shares were acquired via linked squeeze out procedures
ﬁnalised on 6 February 2012.

On 28 May 2012, Cassidian reduced its current shareholdingof 87.4% in Grintek Ewation (Pty) Ltd., Pretoria, South Africa, to
75% to comply with local black economic empowerment (BEE)
requirements for € 7 million.

Vector is an independent global provider of Original Equipment
Manufacturer (OEM) approved Maintenance, Repair and Overhaul
aviation services (MRO services) for aircraft and helicopter
operators. The acquisition of Vector will help to increase thegrowth of support and services activities for Eurocopter and
EADS in both the civil and governmental markets. Vector will
also strengthen EADS’ presence in North America and the UK,
in alignment with the company’s strategic goals as outlined in
EADS’ Vision 2020 plan.
The total consideration includes the amount paid in cash for theacquisition of 98.3% of Vector’s shares (€ 452 million) at the endof June 2011 as well as the amount of € 8 million paid to theremaining shareholders within linked squeeze out procedures.

Satair is a Danish premier independent distributor of aircraft
parts and services specialised in expendables and components.
Through its worldwide supply chain network and its regional salesofﬁces, Satair provides aviation parts and innovative services toa broad customer base around the world, supporting all major
aircraft families in the commercial aviation market. The acquisition
will facilitate the growth of Airbus’ material management businessand offers an opportunity to develop new services both in civiland governmental markets.

EADS FINANCIAL STATEMENTS 2012 — 332

Notes to the Consolidated Financial Statements (IFRS)
2.1 Basis of Presentation

1
The total consideration of € 351 million for this acquisition includes€ 346 million paid in cash for 98.5% of Satair’s shares and 100%of warrants during October and November 2011 as well as an
amount of € 5 million paid to the remaining shareholders (1.5% of
Satair´s shares) within the linked squeeze out procedures ﬁnalisedin February 2012.
Intangible assets of € 139 million identiﬁ ed during a purchaseprice allocation primarily included supplier relationships and abrand name. The goodwill of € 163 million reﬂects the assembled
workforce of Satair as well as the expected business volume fromthe future expansion of aerospace supplier relationships.
At the acquisition date the trade and other receivables comprisegross contractual amounts due of € 48 million of which € 1 million
were expected to be uncollectible resulting in a fair value of the
trade receivables portfolio of € 47 million.

Acquisition of Vizada GroupOn 19 December 2011, Astrium Holding S.A.S., a subsidiary of
EADS N.V., acquired 100% of MobSat Group Holding S.a.r.l.,
Munsbach, Luxemburg, being the ultimate parent company ofVizada group (hereafter referred to as “Vizada”) from a consortiumof investors led by Apax France, a French Private Equity fundand the former majority shareholder. The total consideration paid
by Astrium included € 413 million for the acquisition of Vizada´sequity instruments as well as € 325 million due to a mandatory
extinguishment of the former Vizada debt structure.

34 — EADS FINANCIAL STATEMENTS 2012

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Vizada - being a world leader in commercial satellite
communications services - comprises Vizada Americas, Vizada
Networks, Vizada EMEA & Asia and Marlink. By serving 200.000
end-customers across all major satcom sectors such as maritime,
aero, land or media, but also non governmental organisations andvarious governmental / defence customers, Vizada offers mobile
and ﬁ xed connectivity services from multiple satellite network
operators both directly and through a network of currently 400
service provider partners. This acquisition will broaden the rangeof services offered globally by Astrium, as such strengthening also
EADS’ presence across Europe, the Middle East, Asia, Africa andthe United States. As Astrium´s existing satellite communications
portfolio is heavily focused on governmental and secure civil
satcom services, Vizada forms a perfect complement to Astrium´scurrent service portfolio and will enable Astrium to be moreinnovative and to diversify its range of satcom services.
Intangible assets of € 73 million identiﬁed within a purchase priceallocation primarily included customer relationships and brandnames. The ﬁ nal goodwill of € 579 million primarily includes acontrol premium reﬂecting expected synergies arising from thebusiness combination as well as future customer relationships
in the global satcom market. At the acquisition date the tradeand other receivables comprise gross contractual amounts
due of € 118 million of which € 9 million were expected to beuncollectible resulting in a fair value of the trade receivables
portfolio of € 109 million.

Notes to the Consolidated Financial Statements (IFRS)
2.1 Basis of Presentation

1

2

3

4

5

4

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The following table summarises for all three signiﬁcant M&A transactions described above (Vector, Satair and Vizada) as well as for all
remaining individually insigniﬁcant M&A transactions mentioned below the consideration transferred, the ﬁnal fair values of identiﬁable
assets acquired, liabilities assumed and any non-controlling interest as at the acquisition date.

Fair value recognisedon acquisition

Acquisitionof Vizada

Remaining
individuallyinsignificant
acquisitions

Final figures
for all 2011acquisitions

Aggregatedchanges

Provisional
figures forall 2011
acquisitions

139

73

141

511

(11)

522

66

61

30

250

1

249

Acquisitionof Vector
Aerospace

Acquisitionof Satair

158
93(In € million)

Intangible assets(1)Customer / supplier
relationships(1)Technologies / Licenses(1)

Trademarks(1)

16

5

1

104

126

18

108

49

68

11

7

135

(30)

165

Property, plant and equipment

85

8

61

54

208

(13)

221

Inventories

103

87

6

78

274

0

274

Trade receivables

88

47

109

143

387

(5)

392

Others

7

41

10

70

128

(17)

145

Cash and cash equivalents

28

4

29

35

96

0

96

469

326

288

521

1,604

(46)

1,650

6

0

23

111

140

15

125

Provisions
Financing liabilities

19

52

0

132

203

0

203

Trade liabilities

66

35

106

81

288

0

288

Tax liabilities

53

31

0

17

101

(7)

108

Other liabilities

46

20

0

141

207

3

204

190

138

129

482

939

11

928

Net assets acquired

279

188

159

39

665

(57)

722

Non-controlling interests

0

0

0

2(4)

2(4)

(5)

7(4)

279

188

159

37

663

(52)

715

Badwill arising on acquisition

0

0

0

(2)

(2)

0

(2)

Goodwill(3) arising on acquisition(see Note 14 “Intangible Assets”)

181

163

579

97

1,020

52

968

460

351

738

132

1,681

0

1,681

EADS’ portion in net assets acquired(2)

Total consideration(5)(1) Depending on the specific fact pattern of each M&A transaction, customer / supplier relationships, technologies / licences and trademarks are expected to be amortised overa period between 3-28 years, 5-14 years and 1-8 years respectively (the latter only regarding product and specific corporate trademarks in connection with the ND SatCom,
Signalis and Grintek transaction, as most of the acquired corporate trademarks are considered to have an indefinite life).
(2) The badwill of € 2 million arose in the context of the ND SatCom acquisition and has been recognised as a gain in the current year, within ‘other income’ in the Consolidated
Income Statement.
(3) None of the goodwill portions of EADS’ 2011 M&A transactions is considered to be tax deductable in the respective local tax accounts.
(4) Except for the non-controlling interest in ND SatCom, which was measured at its fair value of € 2 million with reference to the acquisition price of the shares acquired by Astrium,
all remaining non-controlling interest portions in Grintek and i-cubed of € 5 million in total were measured at their proportional share in net assets.
(5) The total consideration (€ 1,681 million) exceeds total consideration paid gross of acquired cash in 2011 (€ 1,631 million) by € 50 million due to the inclusion of € 5 million paid
to non-controlling shareholders of Satair in a linked-squeeze out transaction in February 2012, the recognition of previously held shares within the step-acquisitions of Grintek
and i-cubed at their fair values of € 27 million (resulting in an included step-up gain of € 6 million), a merger gain of € 14 million arisen in the Signalis transaction as well as due toimpacts from the separate recognition of settlements of pre-existing relationships (€ 4 million).
All gains related to business combinations were presented within ‘other income’ in the Consolidated Income Statement.

In addition to these three signiﬁcant 2011 M&A transactions thefollowing M&A activities of EADS’ divisions are summarised in
the column “remaining individually insigniﬁcant acquisitions” inthe table above.

Additional M&A transactions of the Airbus
Division
On 19 October 2011, Airbus Americas, Inc., Herndon, Virginia(USA), a subsidiary of EADS N.V., acquired 100% of the sharesand voting rights of Metron Holdings, Inc., Dulles, Virginia (USA),the ultimate parent company of Metron Aviation (hereafter referred

to as “Metron”) from its management team and two institutional
investors for a total consideration of € 55 million. In general,
Metron provides advanced research, Air Trafﬁc Flow Management(ATFM), airspace design, energy and environmental solutions to
Air Navigation Service Providers (ANSPs), airlines and airports
worldwide. Especially, Metron is a US prime contractor on System
Engineering 2020 (SE-2020), the FAA’s strategic programmein connection with the US Next Generation Air Transportation
System (NextGen) initiative to modernise the U.S. national airspacesystem. Metron also provides advanced research and development
services related to SESAR - the Single European Sky ATM Research

EADS FINANCIAL STATEMENTS 2012 — 352

Notes to the Consolidated Financial Statements (IFRS)
2.1 Basis of Presentation

1
Programme of the European Commissions and EUROCONTROL.
This acquisition strengthens Airbus’ strategy to accelerate andsupport ATFM programmes that will signiﬁcantly improve global airtransportation capacity, efﬁciency and environmental sustainability.
Metron reported revenues of € 32 million for the full year 2011.
On 20 October 2011, Airbus Operations GmbH, a subsidiary of
EADS N.V., acquired 74.9% of the shares and voting rights of PFW
Aerospace AG, Speyer, Germany, the ultimate parent company of
PFW Aerospace Group (hereafter referred to as “PFW”) in a linked
transaction for a total consideration of € 4 million primarily arisingfrom impacts due to the separate recognition of settlements of preexisting relationships (€ 4 million). PFW is a specialised producer oftube and duct systems, aircraft on-board cargo loading systems aswell as structural and assembly components. Airbus’ investment isintended to stabilise PFW´s ﬁnancial position and operational set
up during its current turnaround situation. PFW reported revenuesof € 167 million for the full year 2011.

Additional M&A transactions of the Astrium
Division
On 28 February 2011, Astrium Services GmbH, Ottobrunn,
Germany, a subsidiary of EADS N.V., obtained control of ND
SatCom GmbH, Immenstaad (Germany), a supplier of satellite
and ground systems equipment and solutions, by acquiring
75.1% of the shares and voting interests in the company for a
total consideration of € 5 million from SES ASTRA. With thisacquisition, Astrium and SES ASTRA will further reinforce theirlong-term relationship, and will also explore the potential for the twocompanies to work together in the development of new business
opportunities in the government and institutions sector, as well asother speciﬁc satellite infrastructure projects. This acquisition also
provides an opportunity to Astrium to deploy a signiﬁcantly wider
product range by combining Astrium’s secure satcoms, networks
and terminals expertise with ND SatCom’s for a stronger offering to
the civil, governmental and military markets. ND SatCom reported
revenues of € 52 million for the full year 2011.
On 10 May 2011, the GEO Information Division of Astrium Services(formerly Spot Image and Infoterra, hereafter referred to as GEO)
expanded its investment in i-cubed LLC, Fort Collins, Colorado(USA), (hereafter referred to as i-cubed) from 25.6% to 77.7% by
a step-acquisition of additional 52.1% for € 6 million via its US
subsidiary SPOT Image Corporation, Chantilly, Virginia (USA).
i-cubed is a leading worldwide provider of value-added imagery
and geospatial data management technologies for commercial andgovernmental customers, including amongst others earth imaging
satellite operators, wireless telecommunications companies, georelated internet portals and various governmental agencies. This
step acquisition strengthened GEO´s longstanding relationships
with i-cubed and will enable GEO to capitalise on combined
resources across Astrium to assist in delivering i-cubed’s innovative
solutions for geospatial content management to the global market.
i-cubed reported revenues of € 8 million for the full year 2011.

36 — EADS FINANCIAL STATEMENTS 2012

2

3

4

5

4

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Additional M&A transactions of the Cassidian
Division
On 11 January 2011, Cassidian and Atlas Elektronik GmbH, Bremen,
Germany (hereafter referred to as Atlas Elektronik), a joint ventureof ThyssenKrupp AG and Cassidian, completed the merger of theirmaritime safety and security activities formerly carried out via theirseparate subsidiaries Sofrelog and Atlas Maritime Security. The
new company named SIGNALIS was set up as a medium-sizedcorporation which will be co-owned by Cassidian (60%) and Atlas
Elektronik (40%). SIGNALIS will address markets worldwide with
innovative, reliable and cost effective maritime security products
ranging from small-scale Vessel Trafﬁc Service (VTS) systems
to high-performance Coastal Surveillance Systems (CSS). It will
also provide solutions for harbour security, port management andinformation systems, as well as other related radar processing
applications. This merger will allow Cassidian and Atlas Elektronik
to offer their customers solutions that will respond to even more
complex safety and security needs covering land and sea basedon SIGNALIS’ proven capabilities to integrate the latest sensor
systems, communications, and data processing technologies.
For the full year 2011, SIGNALIS reported revenues of € 39 million.
On 9 June 2011, Cassidian increased via EADS DeutschlandGmbH, Ottobrunn, Germany, (hereafter referred to as Cassidian)its 45.0% shareholding in Grintek Ewation (Pty) Ltd., Pretoria, South
Africa, (hereafter referred to as GEW) by acquiring a 42.4% stake
formerly held by Saab South Africa Ltd., Centurion, South Africa,for € 21 million within a step-acquisition. A 12.6% shareholding
was held by Kunene Finance Company (Pty.) Ltd., Gauteng,South Africa, a South African private equity investor. GEW is asystem engineering company for the design and production ofsophisticated communication monitoring and direction ﬁnding
systems, equipment for the management of frequency spectrums
and related countermeasures as well as integrated security
systems incorporating a wide range of surveillance and monitoringproducts. The new shareholding structure takes the long standing
relationship between GEW and Cassidian to a new level andprovides the opportunity for future growth and competitivenesson a global scale in the ﬁ eld of governmental intelligence andelectronic protection. GEW reported revenues of € 58 million for
the full year 2011.
For all these individually insigniﬁcant transactions mentioned, thegoodwill of € 97 million primarily reﬂects expected synergies fromcombining these acquired companies with the operations of theacquiring EADS divisions as well as the expertise of their assembled
workforces. At the acquisition date trade and other receivables ofthese acquired companies comprise gross contractual amounts
due of € 145 million of which € 2 million were uncollectible resulting
in a fair value of the trade receivables portfolio of € 143 million.

Notes to the Consolidated Financial Statements (IFRS)
2.1 Basis of Presentation

1

2

3

4

5

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The table attached summarises selected proﬁt and loss related key ﬁgures of these 2011 M&A transactions, such as the contributionsof all acquired entities to EADS Group´s revenue, EBITDA and proﬁt for the 2011 period since their acquisition dates as well as theirrevenues, EBITDA and proﬁt during the 12 months period ended 31 December 2011.
VectorAerospace

SatairVizadaRemaining individuallyinsignificant acquisitions

Total
acquisitions

30 June 2011

5 October 201119 December 2011

various dates

various dates

8

6

7

5

26

2011 revenue contributions sinceacquisition date

210

86

0

159

455

2011 contributions to the EBITDA
of EADS since acquisition date

13

1

0

0

14

2011 contributions to the profit
of EADS since acquisition date

(13)

0

0

(13)

(26)

Revenues during the 12 months
period ended 31 December 2011

411

326

447

378

1,562

Pro-forma EBITDA during
the 12 months period ended
31 December 2011(3)

40

28

61

4

133

Pro-forma profit (loss) during
the 12 months period ended
31 December 2011(3)

17

7

10

(60)

(26)

(In € million)(1)Acquisition date
Acquisition costs(2)(1) If not stated otherwise.
(2) All acquisition related costs mentioned have been excluded from the consideration transferred and have been recognised as an expense in the current year,
within “other expenses” in the Consolidated Income Statement.
(3) EADS considers these “pro-forma” profit figures to represent an initial approximate measure to determine the performance of the combined group on an annualised basis
and to provide an initial reference point for comparisons in future periods without considering additional impacts arising from synergies, exceptionals and one-offs that related
to the acquisition or will contribute to the future efficiency of the acquired companies as well as any unwinding effects on the profit for the period from amortisation impacts
of intangible assets recognised within the purchase price allocations.

Transactions with non-controlling shareholdersb) Disposals

On 7 June 2011, EADS N.V. purchased the remaining 25% of
DADC Luft- und Raumfahrt Beteiligungs AG, Munich (Germany),
from Daimler Luft- and Raumfahrt Holding AG, Ottobrunn, for a
total consideration of € 110 million.

On 13 May 2011, EADS North America, Inc., Herndon, Virginia(USA), sold its subsidiary EADS North America Defense Security
and Systems Solutions, Inc., San Antonio, Texas (USA), to Camber
Corporation, Huntsville, Alabama (USA), for a total considerationof € 18 million.

Apart from those mentioned, other acquisitions of EADS were notsigniﬁcant – neither individually nor collectively.

The cash ﬂows of the disposed shares as well as the capital gain on sale were as follows:(In € million)

2011

Consideration received in cash and cash equivalents

18

Total selling price including contingent consideration

18

Net assets disposed of(18)

Capital gain0

Apart from those mentioned, other disposals by the Group were not signiﬁcant.

EADS FINANCIAL STATEMENTS 2012 — 372

Notes to the Consolidated Financial Statements (IFRS)
2.2 Notes to the Consolidated Income Statements (IFRS)

1

2

3

4

5

4

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2.2 Notes to the Consolidated Income
Statements (IFRS)
5.

Segment Reporting

Through the end of 2012, the Group operated in ﬁve reportablesegments which reﬂect the internal organisational and management
structure according to the nature of the products and services
provided.

— Airbus Commercial — Development, manufacturing,marketing and sale of commercial jet aircraft of more than 100
seats; aircraft conversion and related services.

— Airbus Military — Development, manufacturing, marketing andsale of military transport aircraft and special mission aircraft
and related services.
The above mentioned reportable segments Airbus Commercialand Airbus Military form the Airbus Division.

— Eurocopter — Development, manufacturing, marketing andsale of civil and military helicopters; provision of helicopter
related services.

— Astrium — Development, manufacturing, marketing and saleof satellites, orbital infrastructures and launchers; provision of
space related services.

38 — EADS FINANCIAL STATEMENTS 2012

— Cassidian — Development, manufacturing, marketing and saleof missiles systems, military combat aircraft and training aircraft;provision of defence electronics and of global security market
solutions such as integrated systems for global border security
and secure communications solutions and logistics; training,
testing, engineering and other related services.
The following tables present information with respect to theGroup’s business segments. “Other Businesses” mainly comprises
the development, manufacturing, marketing and sale of regional
turboprop aircraft, aircraft components as well as the Group’s
activities managed in the US.
Consolidation effects, the holding function of EADS Headquarters
and other activities not allocable to the reportable segments aredisclosed in the column “HQ / Conso.”.

Notes to the Consolidated Financial Statements (IFRS)
2.2 Notes to the Consolidated Income Statements (IFRS)

1

2

3

4

4

5

Back to Contentsa) Business Segment Information for the year ended 31 December 2012
AirbusCommercial(In € million)

AirbusOther
Military Eurocopter Astrium Cassidian Businesses

Total
Segments HQ / Conso. Consolidated

Total revenues

36,943

2,131

6,264

5,817

5,740

1,524

58,41953

58,472

Internal revenues

(716)

(279)

(540)

(23)

(232)

(182)

(1,972)(20)(1,992)36,227

1,852

5,724

5,794

5,508

1,342

56,44733

56,480

1,100

74

307

309

113

32

1,935

(45)

1,890

thereof additions to otherprovisions (see Note 25c)

776

50

843

157

645

25

2,496

185

2,681

thereof impairments ofintangible assets and PPE

(30)

0

0

0

(100)

0

(130)

0

(130)

Share of profit from associates
accounted for under the equity
method

0

18

3

(1)

23

0

43

198

241

Profit before finance costs
and income taxes

1,100

92

310

308

136

32

1,978

153

2,131

Goodwill impairment

0

0

0

0

0

17

17

0

17

Exceptionals

25

1

1

4

6

0

37

1

38

1,125

93

311

312

142

49

2,032

154

2,186

Revenues
Segment result

EBIT pre-goodwill
impairment andexceptionals(see definition in Note 5c)
Total finance costs(453)

Income tax expense(449)

Profit for the period

1,229

Attributable to:Equity owners of the parent(Net income)

1,228

Non-controlling interests

1

OTHER INFORMATION
Identifiable segment assets(incl. goodwill)(1)thereof goodwill
Investments in associates(2)35,697

4,051

9,354

7,855

9,634

1,510

68,101(708)

67,393

6,670

12

323

1,236

2,711

17

10,96934

11,003

1

0

4

0

133

3

141

2,521

2,662

39,250

1,803

8,796

7,837

10,211

802

68,699115

68,814

thereof provisions(see Note 25)

6,880

1,226

2,670

1,084

2,992

128

14,980881

15,861

Capital expenditures(excl. leased assets)

2,288

85

323

393

179

41

3,309

(39)

3,270

Depreciation, amortisation

1,205

77

134

298

252

45

2,011

42

2,053

Research and development
expenses

2,431

11

297

128

234

12

3,113

29

3,142

Segment liabilities(1) Segment assets exclude investments in associates, current and deferred tax assets as well as cash and cash equivalents and securities as segment result does not include shareof profit from associates, total finance costs and income taxes.
(2) Segment liabilities exclude current and deferred tax liabilities and interest bearing liabilities.

EADS FINANCIAL STATEMENTS 2012 — 392

Notes to the Consolidated Financial Statements (IFRS)
2.2 Notes to the Consolidated Income Statements (IFRS)

1

2

3

4

4

5

Back to Contentsb) Business Segment Information for the year ended 31 December 2011
AirbusCommercial(In € million)

AirbusOther
Military Eurocopter Astrium Cassidian Businesses

Total
Segments HQ / Conso. Consolidated

Total revenues

31,159

2,504

5,415

4,964

5,803

1,252

51,097

31

51,128Internal revenues

(770)

(374)

(458)

(15)

(221)

(162)

(2,000)0(2,000)30,389

2,130

4,957

4,949

5,582

1,090

49,097

31

49,128

533

36

254

264

294

29

1,410

39

1,449

thereof additions to otherprovisions

702

41

681

222

723

28

2,397

93

2,490

Share of profit from associates
accounted for under the equity
method

(16)

12

4

(1)

18

0

17

147

164

Profit before finance costs
and income taxes

517

48

258

263

312

29

1,427

186

1,613

Revenues
Segment result

Goodwill impairment / disposal

0

0

0

0

12

30

42

0

42

Exceptionals

26

1

1

4

7

0

39

2

41

EBIT pre-goodwill
impairment andexceptionals(see definition in Note 5c)

543

49

259

267

331

59

1,508

188

1,696

Total finance costs(220)

Income tax expense(356)

Profit for the period

1,037

Attributable to:Equity ownersof the parent (Net income)

1,033

Non-controlling interests

4

OTHER INFORMATION
Identifiable segment assets(incl. goodwill)(1)32,445(3)(3)

thereof goodwill
Investments in associates

8,463(3) 8,164(3)
(3)

(3)

10,1001,035

64,293(3)7064,363(3)

(3)

6,672

12

315

1,212

2,551

35

10,79715

10,812(3)

0

0

4

1

117

3

125

2,552

2,677

953

67,659(3)

6167,720(3)

2,748

120

14,036(3)964

15,000(3)

344

149

49

2,183

14

2,197

140

235

167

58

1,785

99

1,884

235

109

275

10

3,110

42

3,152

(3)

6,632

7,764

thereof provisions(see Note 25)

6,005(3)1,994Capital expenditures(excl. leased assets)

1,331

Depreciation, amortisation
Research and development
expenses

Segment liabilities

(2)

4,086

(3)

10,574

2,171(3)998(3)

110

200

1,065

120

2,467

14

33,528(3)

8,208(1) Segment assets exclude investments in associates, current and deferred tax assets as well as cash and cash equivalents and securities as segment result does not include shareof profit from associates, total finance costs and income taxes.
(2) Segment liabilities exclude current and deferred tax liabilities and interest bearing liabilities.
(3) Please refer to Note 4 “Acquisitions and Disposals”. Comparative period information is adjusted retrospectively in accordance with IFRS 3.45. Main changes comprise: Intangible
assets by € +41 million, property, plant and equipment by € -13 million, other investments and long-term financial assets by € -26 million, non-controlling interests by € -5 million
and provisions by € +15 million.

As a rule, inter-segment transfers are carried out on an arm´s length
basis. Inter-segment sales predominantly take place between
Airbus Commercial and Airbus Military and between Eurocopterand Airbus Commercial as well as between Cassidian and Airbus
Military.

40 — EADS FINANCIAL STATEMENTS 2012

Capital expenditures represent the additions to property, plantand equipment and to intangible assets (excluding additions togoodwill; for further details see Note 5e) “Capital expenditures”).

Notes to the Consolidated Financial Statements (IFRS)
2.2 Notes to the Consolidated Income Statements (IFRS)

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3

4

5

4

Back to Contentsc) 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 theformation of MBDA, as well as impairment charges thereon. EBIT pre-goodwill impairment and exceptionals is treated by management
as a key indicator to measure the segments’ economic performances.
(In € million)

2012

2011

2010

Profit before finance costs and income taxes

2,131

1,613

1,187

17

42

0

Disposal and impairment of goodwill
Exceptional depreciation / disposal

38

41

44

2,186

1,696

1,231

(In € million)

2012

2011

2010

Germany

5,231

5,074

5,381

France

4,685

4,762

4,422

United Kingdom

3,320

2,757

2,280

EBIT pre-goodwill impairment and exceptionalsd) Revenues by Geographical Area

Spain

646

702

1,018

Other European Countries

7,124

7,359

8,301

18,34414,303

11,335

North America

7,681

5,852

3,507

Middle East

5,413

5,111

6,247

Latin America

3,540

2,874

2,537

Other Countries

496

334

724

Consolidated

56,48049,12845,752

Asia / Pacific

Revenues are allocated to geographical areas based on the location of the customer.

e) Capital Expenditures by Geographical Area
(In € million)

2012

2011

2010

France

1,578

951

882

Germany

818

576

693

United Kingdom

448

333

385

Spain

212

255

228

Other Countries

214

82

62

3,270

2,197

2,250

350

243

270

3,620

2,440

2,520

Capital expenditures excluding leased assets
Leased assets
Capital expenditures

EADS FINANCIAL STATEMENTS 2012 — 412

Notes to the Consolidated Financial Statements (IFRS)
2.2 Notes to the Consolidated Income Statements (IFRS)

1

f)

2

3

4

5

4

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Property, Plant and Equipment by Geographical Area

(In € million)

2012

2011

2010

France

5,618

4,992

4,698

Germany

4,164

3,950

3,846

United Kingdom

2,846

2,728

2,535

Spain

1,314

1,273

1,210

678

629

379

14,62013,572

12,668Other Countries
Property, plant and equipment by geographical area

Property, plant and equipment split by geographical area excludes leased assets of € 576 million (2011: € 574 million and 2010:€ 759 million).

6.

Revenues

Revenues in 2012 reach € 56,480 million compared to€ 49,128 million in 2011 and € 45,752 million in 2010.

contracted research and development and customer ﬁnancing
revenues.

Revenues are mainly comprised of sales of goods and services,
as well as of revenues associated with construction contracts
accounted for under the percentage-of-completion method,

For a breakdown of revenues by business segment andgeographical area, refer to Note 5 “Segment Reporting”.

Details of Revenues:(In € million)

2012

2011

2010

Revenues from construction contracts

8,962

8,808

9,716

Other revenues

47,51840,32036,036

Total

56,48049,12845,752

7,465

6,027

5,113

thereof service revenues including sale of spare parts

Revenues of € 56,480 million (2011: € 49,128 million) increase by
15%. Airbus Commercial delivered more aircraft (588, but 585 withrevenue recognition versus 534 in the previous year, but 536 withrevenue recognition) and Astrium as well as Eurocopter contributed
also positively. Airbus Military includes revenues related to the
A400M launch contract of € 513 million (2011: € 758 million).
Cassidian revenues decrease slightly.

7.

Revenues in 2011 of € 49,128 million (2010: € 45,752 million)
increased by 7%. Airbus Commercial delivered more aircraft (534,but 536 with revenue recognition versus 510 in the previous year,
thereof 508 with revenue recognition) and Eurocopter contributed
also positively. Airbus Military included revenues related to the
A400M programme of € 758 million (in 2010: € 1,043 million).
Cassidian and Astrium revenues decrease slightly.

Functional Costs

Inventories recognised as an expense during the period amountto € 39,639 million (2011: € 35,036 million; 2010: € 32,840 million).

42 — EADS FINANCIAL STATEMENTS 2012

Further included in cost of sales are amortisation expenses offair value adjustments of non-current assets in the amount of€ 38 million (2011: € 40 million; 2010: € 44 million); these are related
to the EADS merger and the Airbus Combination.

Notes to the Consolidated Financial Statements (IFRS)
2.2 Notes to the Consolidated Income Statements (IFRS)

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Personnel expenses are:
2012

2011

2010

Wages, salaries and social contributions

11,692

10,286

9,625

Net periodic pension cost (see Note 25b)

523

424

452

12,215

10,71010,077(In € million)

Total

The Gross Margin increases by € 1,092 million to € 7,935 million
compared to € 6,843 million in 2011. This improvement is mainly
related to better performance of legacy programmes at Airbus
Commercial (including better pricing and positive volume / mix
effects) and Eurocopter.
Based on an updated technical solution concept to ﬁx permanently
the retroﬁt of the A380 wing rib issue, an additional amount of€ -251 million was recognised in 2012 for the repair costs ondelivered aircraft. Contractually, Airbus Commercial is not liableversus airlines for loss of use, revenue or proﬁt or for any otherdirect, incidental or consequential damages related to wingribs issue. However, in view of overall commercial relationships,
contracts adjustments may occur, and be considered on a case by

8.

Research and Development Expenses

Research and development expenses in 2012 amount to€ 3,142 million compared to € 3,152 million in 2011 and € 2,939 million
in 2010, primarily reﬂecting R&D activities at Airbus Commercial.
The main contribution to the expenses comes from the A350 XWB

9.

case basis. As disclosed in the half-year 2012 notes, the A350 XWB
Entry Into Service has moved into the second half of 2014.
Airbus Commercial booked in the ﬁrst half-year 2012 a charge of€ -124 million, which accounts for an actual delay incurred of aroundthree months. In relation to the end of the Hawker 900 businessjet programme where Airbus Commercial was a subcontractor,a charge of € -76 million was recorded in the third quarter 2012.
Eurocopter is continuing its high stake discussions with several
NH90 and Tiger customers, whereby a charge of € -100 million for
expected impacts of the renegotiation of governmental programs
is included. Cassidian recognised a restructuring charge (in total)of € -98 million, of which € -49 million are allocated to cost of sales,
and an additional expense of € -100 million for impairment charges.

programme. In addition, an amount of € 366 million of development
costs for the A350 XWB programme has been capitalised.

Other Income(In € million)

2012

2011

2010

Other income

184

359

171

Thereof rental income

6

16

13

Thereof income from sale of fixed assets

14

9

33

Thereof release of allowances

2

2

1

Thereof badwill and other gains related to businesscombinations

0

26

0

The decrease in other income in 2012 is mainly due to a release of refundable advances of € 192 million at Airbus Commercial recognisedin 2011 (see Note 28 “Other Liabilities”).

EADS FINANCIAL STATEMENTS 2012 — 432

Notes to the Consolidated Financial Statements (IFRS)
2.2 Notes to the Consolidated Income Statements (IFRS)

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10. Other Expenses(In € million)

2012

2011

2010

Other expenses

229

221

102

Thereof goodwill impairment charge

17

20

0

Thereof loss from disposal of fixed assets

3

18

7

Regarding the goodwill impairment charge please refer to Note 14 “Intangible assets”.

11. Share of Proﬁt from Associates Accounted for under the Equity Method
and Other Income from Investments(In € million)

2012

2011

2010

Share of profit from associates

241

164

127

Other income from investments
Total

The share of profit from associates accounted for underthe equity method in 2012 is mainly derived from the result of
the equity investment in Dassault Aviation of € 198 million (2011:€ 146 million; 2010: € 130 million). For the ﬁrst half-year of 2012,
Dassault Aviation published a net income of € 191 million which
has been recognised by EADS in its half year ﬁnancial statements
2012 with its share of 46.32% amounting to € 88 million. Since forthe second half-year 2012 no published ﬁnancial information isavailable yet from Dassault Aviation at the date of authorisation for
issue of the 2012 Consolidated Financial Statements, EADS uses abest estimate for the net income of Dassault Aviation. Furthermore,
EADS’ net income includes an IFRS catch-up adjustment for its
equity investment in Dassault Aviation.

6

28

18

247

192

145

For the ﬁrst half-year of 2011, Dassault Aviation published a net
income of € 88 million which has been recognised by EADS in
its half year ﬁnancial statements 2011 with its share of 46.32%
amounting to € 41 million. Since for the second half-year 2011 no
published ﬁnancial information was available from Dassault Aviation
at the date of authorisation for issue of the 2011 Consolidated
Financial Statements, EADS used a best estimate for the net
income of Dassault Aviation. Furthermore, EADS’ net income
included an IFRS catch-up adjustment for its equity investment
in Dassault Aviation.

12. Total Finance Costs
Interest result in 2012 comprises interest income of € 237 million(2011: € 377 million; 2010: € 316 million) and interest expense of€-522 million (2011: € -364 million; 2010: € -415 million). Included
in interest income is the return on cash and cash equivalents,
securities and ﬁnancial assets such as loans and ﬁnance leases.
Interest expense includes interests on ﬁnancing liabilities and on
European Government refundable advances of € -272 million (2011:€ -92 million; 2010: € -132 million) which was positively impacted
in 2011 by the release of € 120 million following the termination of
the A340 programme (see Note 27 “Other Financial Liabilities”). A
similar positive impact was recorded in 2010.

44 — EADS FINANCIAL STATEMENTS 2012

Other financial result in 2012 amounts to € -168 million (2011:€ -233 million and in 2010: € -272 million) and mainly includes
charges from the unwinding of discounts by € -180 million(2011: € -172 million; 2010: € -176 million) and the negative revaluationof ﬁnancial instruments of € -11 million (2011: € -94 million; 2010:€ -184 million), partly compensated by the positive impact fromforeign exchange translation of monetary items of € +41 million(2011: € +109 million; 2010: € +71 million).

Notes to the Consolidated Financial Statements (IFRS)
2.2 Notes to the Consolidated Income Statements (IFRS)

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13. Income Taxes
The beneﬁt from (expense for) income taxes is comprised of the following:(In € million)

2012

2011

2010

Current tax expense

(409)

(253)

(259)

Deferred tax benefit / (expense)

(40)

(103)

15

(449)

(356)

(244)

Total

Deferred tax assets and liabilities are measured using enacted
tax rates to be applied to taxable income in the years in which
temporary differences are expected to be recovered or settled. The
Group’s parent company, EADS N.V., legally seated in Amsterdam,
The Netherlands, applies Dutch tax law using an income tax rateof 25.0% for 31 December 2012 and for 31 December 2011 and25.5% for 31 December 2010.

Regarding German subsidiaries, the German federal corporate
tax rate amounts to 15%. In addition, there is a surcharge(“Solidaritätszuschlag”) of 5.5% on the amount of federal corporate
taxes. In addition to corporate taxation, the trade taxes amountto 14.2% on average. In aggregate, the enacted tax rate which
has been applied to German deferred taxes amounts to 30% in
2012, 2011 and 2010.

On 19 December 2011 a new tax law has been enacted in France
increasing the income tax rate from previously 34.43% (in 2010)
to 36.10% for the years 2011 and 2012. The new tax rate of 36.1%
has been prolonged on 20 December 2012 for the years 2013 and2014. Furthermore, for speciﬁc participations the French long-term
capital gains regime requires to add back a lump sum rate of now
12% (in 2011: 10%).

With respect to the Spanish subsidiaries, the corporate income
tax rate amounts to 30% in 2012, 2011 and 2010.
All other foreign subsidiaries apply their national tax rates, including
the latest changes in the United Kingdom.

The following table shows a reconciliation from the theoretical income tax (expense) – using the Dutch corporate tax rate of 25.0%
in 2012 (2011: 25.0% and 2010: 25.5%) to the reported tax (expense). The reconciling items represent, besides the impact of tax rate
differentials and tax rate changes, non-taxable beneﬁts or non-deductible expenses arising from permanent differences between thelocal tax base and the reported Consolidated Financial Statements according to IFRS rules.
(In € million)

2012

2011

2010

Profit before income taxes

1,678

1,393

816

* Corporate income tax rate

25.0%

25.0%

25.5%

Expected (expense) for income taxes

(420)

(348)

(208)

Effects from tax rate differentials

(154)

(103)

(53)

Income from investments / associates

76

58

42

Tax credit for R&D expenses

54

68

59

Change of tax rate

(22)

(45)

(1)

Change in valuation allowances

44

(12)

(73)

Non-deductible expenses and tax-free income

(21)

(10)

(5)

Other

(6)

36

(5)

(449)

(356)

(244)

Reported tax (expense)

Changes in valuation allowances represent reassessments of
the recoverability of deferred tax assets based on future taxable
proﬁts of certain companies mainly in the United Kingdom andin Germany. The amount of change in valuation allowances of€ 44 million in 2012 (2011: € -12 million) excludes a positive impactof € 56 million (2011: € 22 million) from a change in tax rates which
is presented in the line “change of tax rate”. Changes of tax rates
in 2012 mainly relate to changes in the tax laws in the United

Kingdom and in France. In 2011, the line “Other” mainly reﬂecteda release of an income tax provision related to a reassessment oftax audit proceedings.
Deferred income taxes are the result of temporary differences
between the carrying amounts of certain assets and liabilities inthe ﬁnancial statements and their tax bases. Future tax impacts
from net operating losses and tax credit carry forwards are also
considered in the deferred income tax calculation.

EADS FINANCIAL STATEMENTS 2012 — 452

Notes to the Consolidated Financial Statements (IFRS)
2.2 Notes to the Consolidated Income Statements (IFRS)

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Deferred income taxes as of 31 December 2012 are related to the following assets and liabilities:
31 December 2011(2) (3)Other movements

DeferredTax
assetsDeferredTaxliabilities

OCI /IAS 19Intangible assets

27

(350)

Property, plant and equipment(In € million)

Movement throughincome statement

31 December 2012

Others(1)R&D tax
credits

Deferredtax benefit(expense)

DeferredTax
assetsDeferredTaxliabilities

0

1

0

52

153

(423)

0

12

381

(1,139)242(1,011)0(1)Investments and other long-term financial
assets

257

(99)

(34)

(1)

0

85

313

(105)

Inventories

1,192

(74)

0

1

0

596

1,752

(37)

Receivables and other assets

229(1,900)786

00(1,341)102(2,328)

2

(5)

0

0

0

(5)

1

(9)

Prepaid expenses
Provision for retirement plans

883

0

347

4

0

(101)

1,133

0

Other provisions

2,060

(176)

0

1

0

224

2,385

(276)

Liabilities

1,059

(560)

(1,377)

3

0

235

684

(1,324)

161

(3)

0

0

0

29

225

(38)

Net operating loss and tax credit carry forwards

2,280

0

0

(18)

47

74

2,383

0

Deferred tax assets / (liabilities)
before offsetting

8,392(4,178)

(278)

(10)

47

(140)

9,512

(5,679)Deferred income

Valuation allowances on deferred tax assets

(939)

0

0

20

0

100

(819)

0

Set-off(3,135)

3,135

0

0

0

0

(4,175)

4,175

Net Deferred tax assets / (liabilities)

4,318(1,043)

(278)

10

47

(40)

4,518

(1,504)(1) “Others” mainly comprises changes in the consolidation scope and foreign exchange rate effects.
(2) Deferred taxes on temporary differences of plan assets are reclassified compared to prior year’s presentation.
(3) Please refer to Note 4 “Acquisitions and Disposals”. Comparative period information is adjusted retrospectively in accordance with IFRS 3.45.

Deferred income taxes as of 31 December 2011 are related to the following assets and liabilities:

31 December 2010

Other movements

DeferredTax
assetsDeferredTaxliabilities

OCI /IAS 19 Others(1) (3)Intangible assets

10

(281)

0

Property, plant and equipment

228

(937)

Investments and other long-term financial
assets(2)159(In € million)

Inventories
Receivables and other assets
Prepaid expenses(2)

Movement throughincome statement

31 December 2011

R&D tax
credits

Deferredtax benefit(expense)

DeferredTax
assetsDeferredTaxliabilities

(86)

0

34

27

(350)

0

(26)

0

(34)

242

(1,011)

(83)

17

4

0

61

257

(99)

1,108

(140)

0

14

0

136

1,192

(74)

740

(1,639)

(604)

32

0

(200)

229

(1,900)

8

0

0

0

0

(11)

2

(5)

877

0

167

1

0

(162)

883

0

1,888

(162)

0

7

0

151

2,060

(176)

Liabilities

613

(641)

751

3

0

(227)

1,059

(560)

Deferred income

181

0

0

3

0

(26)

161

(3)

Net operating loss and tax credit carryforwards

2,058

0

0

29

28

165

2,280

0

Deferred tax assets / (liabilities)
before offsetting

7,870(3,883)

331

(19)

28

(113)

8,392

(4,178)Provision for retirement plans
Other provisions

Valuation allowances on deferred tax assets

(932)

0

0

(17)

0

10

(939)

0

Set-off(2)(2,688)

2,688

0

0

0

0

(3,135)

3,135

Net Deferred tax assets / (liabilities)

4,250(1,195)

331

(36)

28

(103)

4,318

(1,043)(1) “Others” mainly comprises changes in the consolidation scope and foreign exchange effects.
(2) Deferred taxes on temporary differences of plan assets are reclassified compared to prior year’s presentation.
(3) Please refer to Note 4 “Acquisitions and Disposals”. Comparative period information is adjusted retrospectively in accordance with IFRS 3.45.

46 — EADS FINANCIAL STATEMENTS 2012

Notes to the Consolidated Financial Statements (IFRS)
2.2 Notes to the Consolidated Income Statements (IFRS)

1
The amount of the Group’s deferred tax assets’ allowances is based
upon management’s estimate of the level of deferred tax assetsthat will be realised in the foreseeable future. In future periods,
depending upon the Group’s ﬁ nancial results, management’s
estimate of the amount of the deferred tax assets considered
realisable may change, and hence the write down of deferred
tax assets may increase or decrease. The Group has various
unresolved issues concerning open income tax years with the
tax authorities in a number of jurisdictions. EADS believes thatit has recorded adequate provisions for future income taxes that
may be owed for all open tax years.

2

3

4

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Companies in deﬁcit situations in two or more subsequent years
recorded a total deferred tax asset balance of € 923 million(in 2011: € 867 million). Assessments show that these deferred tax
assets will be recovered in future through either (i) own projected
proﬁts, or (ii) proﬁts of other companies integrated in the sameﬁscal group (“régime d´ intégration fiscale” in France, “steuerliche
Organschaft” in Germany) or (iii) via the “loss surrender-agreement”
in Great Britain.

Deferred taxes on Net Operating Losses and Tax Credit carry forwards:

Germany

Spain

UK

Other
countries

31 December
2012

31 December
2011

1,839

1,787

158

2,972

228

6,984

6,645

0

2,013

0

0

0

2,013

2,048

(In € million)

FranceNet Operating Losses (NOL)
Trade tax loss carry forwards
Tax credit carry forwards

0

0

381

0

2

383

323

Tax effect

664

568

429

683

39

2,383

2,280

Valuation allowances

(6)

(110)

(122)

(346)

(2)

(586)

(657)

Deferred tax assets on NOL’s
and tax credit carry forwards

658

458

307

337

37

1,797

1,623

NOLs, capital losses and trade tax loss carry forwards are indeﬁnitely usable in France, Germany and in Great Britain. In Spain, NOLs
and tax credit carry forwards expire after 18 years. The ﬁrst tranche of tax credit carry forwards (€ 21 million) will expire in 2021.
Roll forward of deferred taxes:(In € million)

2012

2011

Net deferred tax asset beginning of the year

3,275

3,055

Deferred tax (expense) in income statement

(40)

(103)

Deferred tax recognised directly in AOCI (IAS 39)

(625)

164

Variation of Defined benefit plan actuarial gains

347

167

Others57(8)(1)

3,014

3,275(1)Net deferred tax asset at year end(1) Please refer to Note 4 “Acquisitions and Disposals”. Comparative period information is adjusted retrospectively in accordance with IFRS 3.45.

Details of deferred taxes recognised cumulatively in equity are as follows:(In € million)

2012

2011

Available-for-sale investments

(34)

(1)

Cash flow hedges

184

776

Defined benefit plan actuarial losses

982

635

1,132

1,410

Total

EADS FINANCIAL STATEMENTS 2012 — 47

2

Notes to the Consolidated Financial Statements (IFRS)
2.3 Notes to the Consolidated Statements of Financial Position (IFRS)

1

2

3

4

5

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2.3 Notes to the Consolidated Statementsof Financial Position (IFRS)
14. Intangible Assets
A schedule detailing gross values, accumulated depreciation and impairment and net values of intangible assets as of 31 December 2012is as follows:
Cost(In € million)

Balance at
1 January
2012

Exchangedifferences

Goodwill

11,965(1)4Capitalised development costs

1,383

(1)

5

488

0

Other intangible assets

2,523(1)

5

306

58

(1)

15,871

14

799

257

5

Balance at
1 January
2012

Exchangedifferences

Additions

Changes in
consolidation
scope(1,153)

(4)

(17)

0

Total

Additions

Changes in
consolidation
scope

Reclassification

Disposals

Balance at
31 December
2012

5

199

4

0

12,177

79

0

1,955

(78)

(78)

2,736

(78)

16,868

Reclassification

Disposals

Balance at
31 December
2012

0

0

(1,174)

Amortisation / Impairment(In € million)

Goodwill
Capitalised development costs

(418)

(1)

(171)

0

0

0

(590)

Other intangible assets(1,514)

1

(243)

0

0

74

(1,682)

Total(3,085)

(4)

(431)

0

0

74

(3,446)

Net Book Value(In € million)

Balance at
1 January
2012

Balance at
31 December
2012

Goodwill

10,812(1)11,003(1)

1,365

1,009(1)

1,054

(1)

13,422

Capitalised development costs
Other intangible assets
Total

965

12,786

Additions to amortisation / impairment include impairment of capitalised development costs at Cassidian (€ -74 million) based on adetailed re-usage analysis of respective intangible assets and latest business plan update as well as € -2 million at Airbus Commercial.

(1) Please refer to Note 4 “Acquisitions and Disposals”. Comparative period information is adjusted retrospectively in accordance with IFRS 3.45.

48 — EADS FINANCIAL STATEMENTS 2012

Notes to the Consolidated Financial Statements (IFRS)
2.3 Notes to the Consolidated Statements of Financial Position (IFRS)

1

2

3

4

5

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A schedule detailing gross values, accumulated depreciation and impairment and net values of intangible assets as of 31 December 2011is as follows:
Cost
Balance at
1 January
2011

Exchangedifferences

Goodwill

10,934

Capitalised development costs

1,234(In € million)

Additions

Changes in
consolidation
scope

Reclassification

Disposals

Balance at
31 December
2011

33

0

1,020(1)0(22)

11,965(1)

8

97

18(1)

26

0

1,383(1)

(1)

25

(70)

2,523(1)51(92)

15,871(1)Reclassification

Disposals

Balance at
31 December
2011

Other intangible assets

1,855

22

198

493

Total

14,02363

295

1,531(1)

Additions

Changes in
consolidation
scope

Amortisation / Impairment
Balance at
1 January
2011

Exchangedifferences

Goodwill(1,125)

(8)

(20)

0

0

0

(1,153)

Capitalised development costs

(288)

(1)

(116)

0

(13)

0

(418)

Other intangible assets(1,311)

(5)

(241)

0

(21)

64

(1,514)

Total(2,724)

(14)

(377)

0

(34)

64

(3,085)(In € million)

Net Book Value
Balance at
1 January
2011

Balance at
31 December
2011

9,809

10,812(1)Capitalised development costs

946

965(1)

Other intangible assets

544

1,009(1)11,29912,786(1)(In € million)

Goodwill

Total

Additions to amortisation / impairment of capitalised development costs and other intangible assets are mainly accounted for in costof sales.

Goodwill Impairment Tests
EADS performed goodwill impairment tests in the fourth quarter of the ﬁnancial year on Cash Generating Unit (CGU) level where
goodwill is allocated to.
As of 31 December 2012 and 2011, goodwill was allocated to CGUs, which is summarized in the following schedule on segment level:(In € million)

Goodwill as of 31 December 2012
Goodwill as of 31 December 2011

AirbusCommercial

AirbusMilitary

6,670

12
(1)

6,672

Eurocopter Astrium

12

In 2012 additional goodwill has been recognised due to acquisitionof businesses within Cassidian (€ 159 million), Astrium (€ 21 million)and Headquarters (€ 19 million); for further details please refer toNote 4 “Acquisitions and disposals”.

323
315

1,236
(1)

(1)

1,212

Cassidian

Other
Businesses

2,711

17

34

11,003

2,551

35

15

10,812(1)

HQ / Conso. Consolidated

The Astrium CGUs consist of Astrium Satellites, Astrium SpaceTransportation and Astrium Services (allocated goodwill 2012:€ 657 million, 2011: € 653 million). Cassidian consists of two CGUs
including MBDA with a goodwill of € 658 million (2011: € 656 million).

(1) Please refer to Note 4 “Acquisitions and Disposals”. Comparative period information is adjusted retrospectively in accordance with IFRS 3.45.

EADS FINANCIAL STATEMENTS 2012 — 49

2

Notes to the Consolidated Financial Statements (IFRS)
2.3 Notes to the Consolidated Statements of Financial Position (IFRS)

1During the one-year windows period the 2011 Purchase Price
Allocations were retrospectively adjusted which led to a total
increase in goodwill of € 52 million (increased goodwill in Airbus
Commercial € +15 million and Astrium Services € +41 million, but
decreased goodwill in Eurocopter € -4 million).

General Assumptions Applied in the Planning
Process
The discounted cash ﬂow method has been applied as a primaryvaluation approach to determine the value in use of the CGUs.
Generally, cash ﬂow projections used for EADS impairment testing
are based on operative planning.
The operative planning – approved by the Board of Directors on
13 December 2012 – takes into account general economic data
derived from external macroeconomic and ﬁnancial studies. The
operative planning assumptions reﬂect for the periods under review
speciﬁc inﬂation rates and future labour expenses in the European
countries where the major production facilities are located.
Regarding the expected future labour expenses, an increase of
2 to 3% was implied. In addition, future interest rates are also
projected per geographical market, for the European Monetary
Union, Great Britain and the USA.
EADS follows an active policy of foreign exchange risk hedging.
As of 31 December 2012, the total hedge portfolio with maturities
up to 2020 amounts to US$ 84 billion and covers a major portionof the foreign exchange exposure expected over the period of theoperative planning (2013 to 2017). The average US$ / € hedge rateof the US$ / € hedge portfolio until 2020 amounts to 1.35 US$ / €and for the US$ / GBP hedge portfolio until 2018 amounts to1.58 US$ / GBP. For the determination of the operative planningin the CGUs management assumed future exchange rates of
1.35 US$ / € from 2013 onwards to convert in € the portion of
future US$ which are not hedged. Foreign exchange exposure
arises mostly from Airbus and to a lesser extent from the other
EADS divisions.
The assumption for the perpetuity growth rate used to calculate theterminal values as of 31 December 2012 has been determined with
1% (previous year: 1%). This assumption is lower than experienced
in past economic cycles in order to reﬂect current uncertainty
regarding market developments in the long-term.
The main assumptions and the total of the recoverable amounts
obtained have been compared for reasonableness to market data.
Key assumptions on which management has based its
determination of value in use include amongst others, weighted
average cost of capital and estimated growth rates as well as theunderlying foreign exchange rates. These estimates, including themethodology used, can have a material impact on the respective
values and hence are subject to uncertainties.

50 — EADS FINANCIAL STATEMENTS 2012

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Airbus Commercial
The goodwill allocated to Airbus Commercial mainly relates to thecreation of EADS in 2000 and the Airbus Combination in 2001.
The assessment was based on the following key specificassumptions, which represent management’s current best
assessment as of the date of these Consolidated Financial
Statements:— projected cash flows for the next five years were presented to
EADS Board of Directors in the frame of the operative plan. This
planning scenario takes into account the decision to ramp-up
the production of the A320 programme to 42 a / c, of the Long
Range-programme to 10 a / c and of the A380 - programme
to 2.7 a / c. In the absence of long-term financial reference,
expected cash flows generated beyond the planning horizon
are considered through a terminal value. The terminal value
reflects management’s assessment of a normative operating
year based on an outlook of a full aeronautic cycle over the
next decade;— long-term commercial assumptions are based on General
Market Forecast updated in 2012. The development of market
share per segment considers enlargement of the competitionas per current best assessment. Current market evolutions are
considered through sensitivities. Cash flow projections include
all of the estimated cost savings of the Power8 / Power8 Plus
programme as well as non-recurring cost improvement planand benefits from initiatives already launched in the frame of“Future EADS”;— cash flows are discounted using a euro weighted average costof capital pre-tax (WACC) of 10.2% (in 2011: 10.4%);— carrying value as well as planned cash flows include impacts
from the existing hedge portfolio.
With regard to the assessment of the value in use for the CGU
Airbus Commercial, management believes that the likelihood of achange in the above key assumptions to an extent that would cause
the recoverable amount to fall below the carrying value is remote.
The recoverable amount is particularly sensitive to the following
areas:— change of the euro against the US$ (reference scenario at
1.35 US$ / €): A change by 10 cents, + or - would not imply an
impairment charge in the EADS accounts;— change of the WACC: An increase of 50 basis points in the
WACC would not imply an impairment charge in the EADS
accounts.
The current positive difference between the recoverable value andthe carrying value of Airbus Commercial’s net assets indicates thatthe assessed (negative) impacts of the sum of these sensitivities
would not imply an impairment charge in EADS accounts.

Notes to the Consolidated Financial Statements (IFRS)
2.3 Notes to the Consolidated Statements of Financial Position (IFRS)

1

Airbus Military
For impairment testing purposes, the cash flows have been
discounted using a weighted average cost of capital pre-tax(WACC) of 8.3% (in 2011: 8.7%).
A400M launch order from OCCAR is included as per assumptions
used for the preparation of these Consolidated Financial Statements.
A400M is based on the contract amendment negotiations with
OCCAR and the seven A400M launch customer nations ﬁnalisedon 7 April 2011.
This is the reference for projected cash ﬂows for the next ﬁve years.
Expected cash ﬂows generated beyond the planning horizon are
considered through a terminal value. The terminal value reﬂects
management’s assessment of a normative operating year.
Value in use of the CGU Airbus Military is above carrying value,indicating no goodwill impairment for 2012 and 2011.

Other Segments
In order to reﬂect the different underlying business risks, a segment
speciﬁc WACC factor has been applied. For Eurocopter the cash
ﬂows were discounted using a weighted average cost of capital
pre-tax (WACC) of 9.5% (in 2011: 9.6%), whereas Cassidian applieda weighted average cost of capital pre-tax (WACC) of 8.3% (in 2011:8.8%) and Astrium applied a pre-tax WACC of 9.5% (in 2011: 9.8%).
Cash ﬂow projections are based on operative planning covering aﬁve-year planning period.
The strong order book of the Cassidian Division as of
31 December 2012 supports the stable revenues, which areassumed for this Division over the operative planning period despite
unfavourable conditions on the domestic markets. This is driven by
further key orders from global markets for Missile export, Security
and Communication Solutions, Integrated Systems, Electronic
Warfare and Radar business. Any further major Euroﬁghter export
campaign that will be secured represents additional upsides
and will strongly contribute to further growth and proﬁtability ofCassidian. Main key achievements in 2012 are the Euroﬁghter
Sustainment Contract, Oman joining the international Euroﬁghter
defence programme and contract award for Alliance Ground
Surveillance (AGS). Following continued efforts for globalisationand product renewal, the Division continuously expects a strong
and increasing performance over the operative planning period
thanks to the investment in new products and cost efﬁ ciency
programmes.

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The strong order book of the Astrium Division as of
31 December 2012 (including satellites, launchers, ballistic
missiles and military telecom services) supports the positive
revenue development which is assumed for this Division over
the operative planning period. Main key achievements in 2012
are the successful launch of 9 Astrium-built satellites, including
4 telecommunication satellites and 5 Earth observation, navigationand sciences satellites (including the second pair of Galileo IOVs
deployed in orbit completing the initial consolidation of 4 satellites),
7 successful Ariane 5 launches, the successful mission of the third
Automated Transfer Vehicle spacecraft and the conﬁrmation of
Astrium key programmes at ESA Ministerial Conference. Based onthese achievements, the planning period is characterised by further
order intake in home countries and export market in established
key areas (e.g. M51, Ariane 5 production, Ariane 5 ME, MPCV,
telecom and Earth observation satellites), as well as businessdevelopment in telecom services and Earth observation services.
The operating margin and the Free Cash Flow are planned toincrease continuously, supported by existing process improvement
programmes.
The recoverable amounts of all CGU’s in Cassidian, Astrium andEurocopter have exceeded their carrying amounts, indicating no
goodwill impairment for 2012 and 2011.
The goodwill of Other Businesses fully relates to the CGU EADS
North America reﬂecting the business activities in the US. For
impairment testing purposes, the cash ﬂows have been discounted
using a weighted average cost of capital pre-tax (WACC) of 8.5% (in2011: 8.9%). The annual impairment test resulted in an impairment
charge of € 17 million in 2012.

Development Costs
EADS has capitalised development costs in the amount of€ 1,365 million as of 31 December 2012 (€ 965(1) million as of
31 December 2011) as internally generated intangible assets mainly
for the Airbus A380 and A350 XWB programme. The amortisation
for the A380 programme development costs is performed on aunit of production basis. Capitalisation for development costs of
the A350 XWB programme started in the second quarter 2012.
Since 1 April 2012, a total amount of € 366 million was capitalised.

(1) Please refer to Note 4 “Acquisitions and Disposals”. Comparative period information is adjusted retrospectively in accordance with IFRS 3.45.

EADS FINANCIAL STATEMENTS 2012 — 512

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15. Property, Plant and Equipment
Schedules detailing gross values, accumulated depreciation and impairment and net values of property, plant and equipment show
the following as of 31 December 2012:
Cost
Balance at
1 January
2012

Exchangedifferences

Land, leasehold improvements
and buildings including buildings
on land owned by others

8,044

Technical equipment
and machinery
Other equipment, factoryand office equipment(In € million)

Construction in progress

Additions

Changes in
consolidation
scope

Reclassification

Disposals

Balance at
31 December
2012

14

321

44

149

(30)

8,542

13,376(1)

86

366

24

1,558

(117)

15,2933,882(1)

(22)

567

(29)

(126)

(426)

3,846

3,011

12

1,586

3

(1,141)

(30)

3,441

28,313 (1)

90

2,840

42

440

(603)

31,122

Balance at
1 January
2012

Exchangedifferences

Additions

Changes in
consolidation
scope

Reclassification

Disposals

Balance at
31 December
2012

Land, leasehold improvements
and buildings including buildings
on land owned by others(3,547)

(3)

(339)

0

(30)

10

(3,909)Technical equipment
and machinery(8,145)

(54)

(883)

0

(456)

116

(9,422)Other equipment, factoryand office equipment(2,475)

10

(399)

0

79

190

(2,595)Construction in progress

0

0

0

0

0

0

0

(14,167)(47)(1,621)

0

(407)

316

(15,926)

Total
Depreciation / Impairment(In € million)

Total
Net Book Value

Balance at
1 January
2012

Balance at
31 December
2012

Land, leasehold improvements
and buildings including buildings
on land owned by others

4,497

4,633

Technical equipment
and machinery

5,231(1)5,871

Other equipment, factoryand office equipment

1,407(1)1,251

Construction in progress

3,011

3,441

14,146(1)15,196(In € million)

Total

Additions to depreciation / impairment include impairment of technical equipment and machinery at Cassidian (€ -26 million) as well as
impairment of land and buildings (€ -8 million), technical equipment and machinery (€ -16 million) and other equipment (€ -4 million) at
Airbus Commercial.

(1) Please refer to Note 4 “Acquisitions and Disposals”. Comparative period information is adjusted retrospectively in accordance with IFRS 3.45.

52 — EADS FINANCIAL STATEMENTS 2012

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Schedules detailing gross values, accumulated depreciation and impairment and net values of property, plant and equipment show
the following as of 31 December 2011:
Cost
Balance at
1 January
2011

Exchangedifferences

Land, leasehold improvements
and buildings including buildings
on land owned by others

7,364

Technical equipment
and machinery
Other equipment, factoryand office equipment(In € million)

Additions

Changes in
consolidation
scope

Reclassification

Disposals

Balance at
31 December
2011

23

88

79

490

0

8,044

12,517

130

222

57(1)

565

(115)

13,376(1)

3,712

42

428

40(1)

103

(443)

3,882(1)Construction in progress

2,517

29

1,404

32

(969)

(2)

3,011

Total

26,110224

2,142208(1)

189(560)

28,313(1)Balance at
1 January
2011

Exchangedifferences

Additions

Changes in
consolidation
scope

Reclassification

Disposals

Balance at
31 December
2011

Land, leasehold improvements
and buildings including buildings
on land owned by others(3,192)

(7)

(266)

0

(82)

0

(3,547)

Technical equipment
and machinery(7,299)

(79)

(803)

0

(2)

38

(8,145)

Other equipment, factoryand office equipment(2,192)

(27)

(297)

0

(14)

55

(2,475)Construction in progress

0

0

0

0

0

0

0

(12,683)(113)(1,366)

0

(98)

93

(14,167)

Depreciation / Impairment(In € million)

Total
Net Book Value

Balance at
1 January
2011

Balance at
31 December
2011

Land, leasehold improvements
and buildings including buildings
on land owned by others

4,172

4,497

Technical equipment
and machinery

5,218

5,231(1)Other equipment, factoryand office equipment

1,520

1,407(1)Construction in progress

2,517

3,011

13,427

14,146(1)(In € million)

Total(1) Please refer to Note 4 “Acquisitions and Disposals”. Comparative period information is adjusted retrospectively in accordance with IFRS 3.45.

EADS FINANCIAL STATEMENTS 2012 — 532

Notes to the Consolidated Financial Statements (IFRS)
2.3 Notes to the Consolidated Statements of Financial Position (IFRS)

1
Property, plant and equipment include at 31 December 2012
and 2011, buildings, technical equipment and other equipment
accounted for in ﬁxed assets under ﬁnance lease agreements for
net amounts of € 148 million and € 141 million, net of accumulated
depreciation of € 74 million and € 60 million. The related depreciation
expense for 2012 was € 14 million (2011: € 11 million; 2010:€ 10 million).

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Other equipment, factory and office equipment include thenet book value of “aircraft under operating lease” for € 576 millionand € 574 million as of 31 December 2012 and 2011, respectively;
related accumulated depreciation is € 720 million and € 746 million.
Depreciation expense for 2012 amounts to € 52 million (2011:€ 59 million; 2010: € 31 million).

The “aircraft under operating lease” include:i)Group’s sales finance activity in the form of aircraft which have been leased out to customers and are classified as operatingleases: They are reported net of the accumulated impairments. These sales financing transactions are generally secured by theunderlying aircraft used as collateral (see Note 33 “Commitments and contingencies” for details on sales financing transactions).

The corresponding non-cancellable future operating lease payments (not discounted) due from customers to be included in revenues,
at 31 December 2012 are as follows:(In € million)

Not later than 201375

Later than 2013 and not later than 2017188

Later than 2017

152

Total

415

ii) Aircraft which have been accounted as “operating lease”
because they were sold under terms that include asset
value guarantee commitments with the present value ofthe guarantee being more than 10% of the aircraft’s sales
price (assumed to be the fair value). Upon the initial saleof these aircraft to the customer, their total cost previously

recognised in inventory is transferred to “Other equipment,
factory and office equipment” and depreciated over its
estimated useful economic life, with the proceeds received
from the customer being recorded as deferred income (seeNote 30 “Deferred income”).

The total net book values of aircraft under operating lease are as follows:(In € million)(i) Net book value of aircraft under operating lease before impairment charge
Accumulated impairment

31 December 201231 December 2011

693

497

(223)

(127)

Net book value of aircraft under operating lease

470

370

(ii) Aircraft under operating lease with the present value of the guarantee being more than 10%

106

204

Total Net Book value of aircraft under operating lease

576

574

For details please refer to Note 33 “Commitments and contingencies”.
Contractual commitments for purchases of “Land, leasehold improvements and buildings including buildings on land owned by others”
amount to € 346 million as of 31 December 2012 compared to 2011 of € 361 million.

54 — EADS FINANCIAL STATEMENTS 2012

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16. Investment Property
The Group owns investment property that is leased to third parties. Buildings held as investment property are depreciated on a linear
basis over their useful life up to 20 years. The values assigned to investment property are as follows:(In € million)

Book value of Investment Property

Historicalcost

Accumulated
depreciation
31 December
2011Book value
31 December
2011

Disposals
Historical
cost

211

(137)

74

0

As of 31 December 2012, the fair value of the Group’s investment
property amounts to € 79 million (in 2011: € 80 million). For the
purposes of IAS 40 “Investment property”, the fair values havebeen determined by using external appraisal reports or using

Depreciation /Amortisation

Accumulated
depreciation
31 December
2012Book value
31 December
2012

(2)

(139)

72

discounted cash ﬂ ow projections for estimated rental income
less rental expenses. Related rental income in 2012 is € 8 million(in 2011: € 9 million) with direct operating expenses amounting to€ 1 million (in 2011: € 1 million).

17. Investments in Associates Accounted for Under the Equity Method,
Other Investments and Other Long-Term Financial Assets
The following table sets forth the composition of investments in associates accounted for under the equity method, other investments
and other long-term ﬁnancial assets:(In € million)

Investments in associates accounted for under the equity method

31 December 201231 December 2011

2,662

2,677

Non-current other investments and other long-term financial assets
Other investments

596

466

Other long-term financial assets

1,519

1,886(1)Total non-current other investments and other long-term financial assets

2,115

2,352 (1)Current portion of other long-term financial assets

287

172

(1) Please refer to Note 4 “Acquisitions and Disposals”. Comparative period information is adjusted retrospectively in accordance with IFRS 3.45.

Investments in associates accounted for under the equity method
as of 31 December 2012 and 2011, mainly comprise EADS’interest in Dassault Aviation (46.32% at 31 December 2012 and2011) of € 2,519 million and € 2,552 million. Since for the second
half-year 2012 no published ﬁnancial information is available yetfrom Dassault Aviation at the date of authorisation for issue of2012 ﬁnancial statements, EADS used a best estimate for the net
income of the second half year 2012 of Dassault Aviation. The
equity investment in Dassault Aviation includes an IFRS catch-up
adjustment for income and other comprehensive income relating
to prior period. The 30 June 2012 equity components have beenused to estimate the 2012 year-end consolidated equity positionof Dassault Aviation.

Since for the second half-year 2011 no ﬁnancial information wasavailable from Dassault Aviation at the date of authorisation for issueof 2011 ﬁnancial statements, EADS used a best estimate for the
net income of the second half year 2011 of Dassault Aviation. The
equity investment in Dassault Aviation included an IFRS catch-up
adjustment for income and other comprehensive income relating
to prior period. The 30 June 2011 equity components have beenused to estimate the 2011 year-end consolidated equity positionof Dassault Aviation.
EADS’ 46.32% interest in Dassault Aviation’s market capitalisation,
derived from an observable free float of 3.5%, amounts to€ 3,490 million as of 31 December 2012 (as of 31 December 2011:€ 2,673 million).

EADS FINANCIAL STATEMENTS 2012 — 55

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The following table reﬂects summarised most recent published proportionate ﬁnancial information of Dassault Aviation in which EADS
holds 46.32%:
30 June 201231 December 2011

Non-current assets

2,624

2,587

Current assets

2,092

2,127

125

128

(In € million)

Share of the associate’s financial position:

Non-current liabilities
Current liabilities

2,566

2,519

Total equity

2,025

2,067

Share of the associate’s revenues and profit:

6 months

12 months

Revenues

894

1,531

Net Income

88

149

(In € million)

31 December 201231 December 2011

2,519

2,552

Carrying amount of the investment at 31 December

Further signiﬁcant associates, being accounted for under the equity method (like Air Tanker, Daher-Socata SA, Patria Oyi, United
Monolithic Semiconductors and ESG), are stated in aggregate in the following table:(In € million)

31 December 201231 December 2011

1,271

1,079

256

248

1,344

1,165

Share of the associate’s financial position:
Non-current assets
Current assets
Non-current liabilities
Current liabilities

285

279

Total equity

(102)

(117)

12 months

12 months

Revenues

551

571

Net Income

38

24(In € million)

31 December 201231 December 2011

125

109

Share of the associate’s revenues and profit:

Carrying amount of the investments

The cumulative unrecognised comprehensive loss in 2012 amounts
to € -226 million (thereof € -5 million for the period).
A list of major investments in associates and the proportion ofownership is included in Appendix “Information on principal
investments”.
Other investments mainly comprise EADS’ participations, themost signiﬁcant being at 31 December 2012 the participations
in CARMAT SAS (EADS share: 30.7%) amounting to € 161 million(2011: € 106 million) and AviChina (EADS share: 5.0%) amounting
to € 92 million (2011: € 80 million).

Other long-term financial assets of € 1,519 million (2011:€ 1,886 (1) million) and the current portion of other long-term
financial assets of € 287 million (in 2011: € 172 million) encompass
other loans in the amount of € 863 million and € 925(1) million asof 31 December 2012 and 2011, available-for-sale securities forpart time retirement and deferred compensation amounting to€ 203 million and € 184 million as of 31 December 2012 and 2011
and the Group’s sales ﬁnance activities in the form of ﬁnance leasereceivables and loans from aircraft ﬁnancing. They are reported netof accumulated impairments. These sales ﬁnancing transactions
are generally secured by the underlying aircraft used as collateral(see Note 33 “Commitments and contingencies” for details onsales ﬁnancing transactions).

(1) Please refer to Note 4 “Acquisitions and Disposals”. Comparative period information is adjusted retrospectively in accordance with IFRS 3.45.

56 — EADS FINANCIAL STATEMENTS 2012

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Loans from aircraft ﬁnancing are provided to customers to ﬁnance the sale of aircraft. These loans are long-term and normally have amaturity which is linked to the use of the aircraft by the customer. The calculation of the net book value is:
31 December 201231 December 2011

Outstanding gross amount of loans to customers

424

503

Accumulated impairment

(60)

(82)

Total net book value of loans

364

421

31 December 201231 December 2011

462

697

(In € million)

Finance lease receivables from aircraft ﬁnancing are as follows:(In € million)

Minimum lease payments receivables
Unearned finance income

(14)

(79)

Accumulated impairment

(72)

(90)

Total net book value of finance lease receivables

376

528

Future minimum lease payments from investments in ﬁnance leases to be received are as follows (not discounted):(In € million)

Not later than 2013

183

Later than 2013 and not later than 2017139

Later than 2017

140

Total

462

18. Inventories

Inventories at 31 December 2012 and 2011 consist of the following:(In € million)

31 December 201231 December 2011

Raw materials and manufacturing supplies

2,397

1,980

Work in progress

15,464

14,803Finished goods and parts for resale

1,888

1,719

Advance payments to suppliers

3,467

4,061

Total

23,216

22,563The increase in work in progress of € +661 million is mainly driven by
Airbus Commercial and Eurocopter programmes, partly offset by
Cassidian and Astrium programmes. Raw materials were built-up
at Airbus, at Eurocopter and at Cassidian. Advance payments
provided to suppliers mainly decrease at Astrium, at Cassidianand Eurocopter, partly compensated by higher advance payments
made at Airbus.
The ﬁ nished goods and parts for resale before write down to
net realisable value amount to € 2,481 million in 2012 (2011:€ 2,220 million) and work in progress before write down to net
realisable value amounts to € 17,599 million (2011: € 16,270 million).
Write downs for ﬁnished goods and services are recorded when it
becomes probable that total estimated contract costs will exceed
total contract revenues. In 2012, write downs of inventories in theamount of € -368 million (2011: € -194 million) are recognised in Costof Sales, whereas reversal of write downs amounts to € 80 million(2011: € 132 million). At 31 December 2012 € 4,009 million of workin progress and € 1,348 million of ﬁnished goods and parts forresale were carried at net realisable value.

EADS FINANCIAL STATEMENTS 2012 — 57

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19. Trade Receivables
Trade receivables at 31 December 2012 and 2011 consist of the following:
31 December 201231 December 2011

Receivables from sales of goods and services

7,138

6,760(1)Allowance for doubtful accounts

(348)

(366)

Total

6,790

6,394 (1)(In € million)

The trade receivables increase by € +396 million mainly causedby Airbus (€ +214 million), Eurocopter (€ +145 million) and Astrium(€ +60 million).

The aggregate amount of costs incurred and recognised profits(less recognised losses) to date amounts to € 58,206 million
comparable to € 55,858 million at year-end 2011.

Trade receivables are classified as current assets. As of
31 December 2012 and 2011, respectively, € 1,407 million and€ 668 million of trade receivables are not expected to be collected
within one year.

The gross amount due from customers for construction work
amounts to € 3,746 million (in 2011: € 4,204 million) and relates
to construction contracts where incurred contract costs plus
recognised proﬁ ts less the sum of recognised losses exceed
progress billings.

In application of the percentage of completion (PoC) method,
as of 31 December 2012 an amount of € 1,946 million (in 2011:€ 2,170 million) for construction contracts is included in the tradereceivables net of related advance payments received.

The gross amount due to customers amounts to € 1,190 million(in 2011: € 1,688 million) and corresponds to the construction
contracts whose total of incurred contract costs plus recognised
proﬁts less the sum of recognised losses and progress billings
is negative.

The respective movement in the allowance for doubtful accounts in respect of trade receivables during the year was as follows:(In € million)

Allowance balance at 1 January

31 December 201231 December 2011

(366)

(321)

Utilisations / disposals

1011(Additions) / release

8

(56)

(348)

(366)

31 December

Based on historic default rates, the Group believes that no allowance for doubtful accounts is necessary in respect of trade receivables
not past due in the amount of € 4,776 million (in 2011: € 4,120(1) million).

(1) Please refer to Note 4 “Acquisitions and Disposals”. Comparative period information is adjusted retrospectively in accordance with IFRS 3.45.

58 — EADS FINANCIAL STATEMENTS 2012

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20. Other Financial Assets
Other ﬁnancial assets at 31 December 2012 and 2011 consist of the following:(In € million)

31 December 201231 December 2011

1,197

486

Non-current other financial assets
Positive fair values of derivative financial instruments
Option premiums

41

12

Others

148

133

Total

1,386

631

Positive fair values of derivative financial instruments

321

404

Receivables from related companies

757

871

Current other financial assets

Loans

31

78

Others

339

386

Total

1,448

1,739

31 December 201231 December 2011

1,223

1,050

0

35

21. Other Assets

Other assets at 31 December 2012 and 2011 consist of the following:(In € million)

Non-current other assets
Prepaid expenses
Capitalised settlement payments to German Government
Others

192

168

Total

1,415

1,253

1,001

1,130

Current other assets
Value added tax claims
Prepaid expenses

586

591

Others

459

532

Total

2,046

2,253

EADS FINANCIAL STATEMENTS 2012 — 592

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22. Securities
The Group’s security portfolio amounts to € 8,315 million and€ 11,501 million as of 31 December 2012 and 2011, respectively.
The security portfolio contains a non-current portion of availablefor-sale-securities of € 5,978 million (in 2011: € 7,212 million) andsecurities designated at fair value through proﬁt or loss of € 9 million(in 2011: € 17 million) as well as a current portion of availablefor-sale-securities of € 2,328 million (in 2011: € 4,222 million)
and securities designated at fair value through proﬁt or loss of€ 0 million (in 2011: € 50 million).

Included in the securities portfolio as of 31 December 2012 and2011, respectively, are corporate and government bonds bearing
either ﬁxed rate coupons (€ 7,400 million nominal value; comparably
in 2011: € 10,075 million) or ﬂoating rate coupons (€ 563 million
nominal value; comparably in 2011: € 1,057 million) as well as
Structured Rate Notes (€ 0 million nominal value; 2011: € 175 million)
and foreign currency Funds of Hedge Funds (€ 14 million nominal
value; 2011: € 19 million).

23. Total Equity
The following table shows the development of the number of shares outstanding:(In number of shares)

Issued as at 1 January

2012

2011

820,482,291

816,402,722

Issued for ESOP

2,177,103

2,445,527

Issued for exercised options

5,261,784

1,712,892

Cancelled
Issued as at 31 December(553,233)(78,850)

827,367,945

820,482,291

Treasury shares as at 31 December(5,226,305)(5,585,780)

Outstanding as at 31 December

822,141,640

814,896,511

EADS’ shares are exclusively ordinary shares with a parvalue of € 1.00. The authorised share capital consists of
3,000,000,000 shares.
On 31 May 2012, the Shareholders’ General Meeting of EADS
renewed the authorisation given to the Board of Directors to
issue shares and to grant rights to subscribe for shares which arepart of the Company’s authorised share capital, provided that such
powers will be limited to 0.15% of the Company’s authorised capitalfrom time to time and to limit or exclude preferential subscription
rights, in both cases for a period expiring at the Shareholders’
General Meeting to be held in 2013. The mentioned powers
include without limitation the approval of share-related long-term
incentive plans (such as stock option, performance and restricted
share plans) and employee share ownership plans. They may also
include the granting of rights to subscribe for shares which canbe exercised at a time that may be speciﬁed in or pursuant tosuch plans and the issue of shares to be paid up from freely
distributable reserves.
The Shareholders’ General Meeting on 31 May 2012 renewed
the authorisation given to the Board of Directors for a new periodof 18 months from the date of the Annual General Meeting torepurchase shares of the Company, by any means, including
derivative products, on any stock exchange or otherwise, aslong as, upon such repurchase, the Company will not hold morethan 10% of the Company’s issued share capital and at a price

60 — EADS FINANCIAL STATEMENTS 2012not less than the nominal value and not more than the higher ofthe price of the last independent trade and the highest current
independent bid on the trading venues of the regulated market ofthe country in which the purchase is carried out. This authorisation
supersedes and replaces the authorisation given by the Annual
General Meeting of 26 May 2011.
Furthermore, the Shareholders’ General Meeting authorised boththe Board of Directors and the Chief Executive Ofﬁcer, with powersof substitution, to cancel up to a maximum of 553,233 shares.
As per decision of the Chief Executive Ofﬁcer, on 8 August 2012,
553,233 shares have been cancelled.
On 31 May 2012, the Shareholders’ General Meeting decided to
add the net proﬁt of the ﬁscal year 2011 of € 1,033 million to retained
earnings. It also decided to distribute a gross amount of € 0.45
per share, which was paid on 7 June 2012. For the ﬁscal year
2012, the EADS Board of Directors proposes a cash distribution
payment of € 0.60 per share.
Capital stock comprises the nominal amount of shares outstanding.
The addition to capital stock represents the contribution forexercised options of € 5,261,784 (in 2011: € 1,712,892) in compliancewith the implemented stock option plans and by employeesof € 2,177,103 (in 2011: € 2,445,527) under the Employee Stock
Ownership Plans.

Notes to the Consolidated Financial Statements (IFRS)
2.3 Notes to the Consolidated Statements of Financial Position (IFRS)

1
Share premium mainly results from contributions in kind in thecourse of the creation of EADS, cash contributions from theInitial Public Offering, capital increases and reductions due to theissuance and cancellation of shares as well as cash distributions to

2

3

4

5

4

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EADS N.V. shareholders. In 2012, € 13 million are reclassiﬁed fromcurrency translation adjustments to proﬁt or loss. Treasury shares
represent the amount paid for own shares held in treasury.

24. Capital Management
EADS seeks to maintain a strong ﬁnancial proﬁle to safeguard its
going concern, ﬁnancial ﬂexibility as well as shareholders’ and otherstakeholders’ conﬁdence in the Group. Consequently, operating
liquidity is of great importance.
As part of its capital management, it is one of EADS’ objectives
to maintain a strong credit rating by institutional rating agencies.
This enables EADS to contain the Group’s cost of capital which
positively impacts its stakeholder value (entity value). Next to otheralso non-ﬁnancial parameters, the credit rating is based on factors
such as capital ratios, cash ﬂow ratios, proﬁtability and liquidity
ratios. EADS focuses on keeping them in a preferable range.
Standard & Poor’s upgraded EADS’ short-term rating to A-1
from A-2 and reconfirmed EADS’ long-term A- rating andpositive outlook on 2 October 2012. Moody’s Investors Services
upgraded EADS’ Base Credit Assessment (BCA) to A3 from Baa1
on 20 November 2012 while reducing the Government Related
Issuer (GRI) rating from A1 to A2 (stable outlook) as a result of
the announced change in EADS governance and shareholding
structure. In accordance with its conservative ﬁnancial policy it isessential for EADS to maintain a strong investment grade rating.
EADS’ management uses a Value Based Management approach inorder to guide the Company towards management for sustainablevalue creation. The key elements of the Value Based Management
concept are:— the measurement of value creation;— prioritisation of actions based on the financial value drivers andoperational business drivers; andEADS developed the following guiding principles with regard to
this value based management approach:Financial value is created if proﬁts exceed the cost of the capital.
For operational value creation deployment, EADS and its divisions
internally plan and report on Return on Capital Employed (RoCE)
which is deﬁned as EBIT pre-goodwill impairment and exceptionals
divided by Average Capital Employed. Average Capital Employed
for the EADS Group is deﬁned as the average of the opening andclosing positions of: Fixed Assets plus Net Operating Working
Capital plus operating cash less Other Provisions. A ﬁ ve year
plan for a value creation ambition is annually constructed, which
is decomposed into (1) RoCE, (2) EBIT pre-goodwill impairment
and exceptionals, and (3) Free Cash Flow, which is deﬁned as
Cash provided by operating activities and Cash used for investing
activities less Change of securities and Contribution to plan assets
for pensions. EADS’ RoCE long-term aspiration is to reach the ﬁrst
quartile of our peers.
The Group also monitors the level of dividends paid to its
shareholders.
EADS generally satisﬁes its obligations arising from share-based
payment plans by issuing new shares. In order to avoid any dilutionof its current shareholders out of these share-based payment
plans, EADS has accordingly decided to buy back and cancel its
own shares following the decisions of the Board of Directors andapproval of the Annual General Meeting. Apart from this purpose,
EADS generally does not trade with treasury shares.
EADS complies with the capital requirements under applicablelaw and its Articles of Association.

— the assessment of value creation with reference to thecompetition and the industry in total.

EADS FINANCIAL STATEMENTS 2012 — 612

Notes to the Consolidated Financial Statements (IFRS)
2.3 Notes to the Consolidated Statements of Financial Position (IFRS)

1

2

3

4

5

4

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25. Provisions
Provisions are comprised of the following:
31 December 201231 December 2011

5,986

5,463

447

358

Retirement plans and similar obligations

6,433

5,821

Other provisions (see Note 25c)

9,428

9,179(1)

Total

15,861

15,000 (1)Thereof non-current portion

9,816

9,144(1)Thereof current portion

6,045

5,856(1)(In € million)

Provision for retirement plans (see Note 25b)
Provision for deferred compensation (see Note 25a)

As of 31 December 2012 and 2011, respectively, € 6,121 million and € 5,628 million of retirement plans and similar obligations and€ 3,695 million and € 3,516(1) million of other provisions mature after more than one year.

a) Provisions for Deferred Compensation
This amount represents obligations that arise if employees elect to convert part of their remuneration or bonus into an equivalentcommitment for deferred compensation which is treated as a deﬁned beneﬁt post-employment plan. The development in 2012 is asfollows:(In € million)

Deferred Compensation

Balance at
1 January
2012

358

Utilisation

Transfer
to otherliabilities

Change inconsolidated
group

Actuarial(gains) andlosses

(2)

(6)

2

45

b) Provisions for Retirement Plans
When Group employees retire, they receive indemnities as
stipulated in retirement agreements, in accordance with regulations
and practices of the countries in which the Group operates.
French law stipulates that employees are paid retirement
indemnities on the basis of the length of service.
In Germany, EADS has a pension plan (P3) for executive andnon-executive employees in place. Under this plan, the employer
provides contributions for the services rendered by the employees,
which are dependent on their salaries in the respective service
period. These contributions are converted into components whichbecome part of the accrued pension liability at the end of the year.
Total beneﬁts are calculated as a career average over the entire
period of service.
Certain employees that are not covered by the new plan receive
retirement indemnities based on salary earned in the last year oron an average of the last three years of employment. For some
executive employees, beneﬁts are depending on ﬁnal salary at
the date of retirement and the time period as executive. EADS
implemented a Contractual Trust Arrangement (CTA) for EADS’
pension obligation. The CTA structure is that of a bilateral trust
arrangement. Assets that are transferred to the CTA qualify asplan assets under IAS 19.

Additions

Increasefrompassage oftime

Balance at
31 December
2012

35

15

447

In the UK, the EADS Astrium Pension Scheme was implemented
by Astrium Ltd., Stevenage (UK). This plan comprises all eligible
employees of Astrium Ltd. as well as all personnel, who is newly
recruited by one of the EADS companies located in the UK. The
majority of the Scheme’s liabilities relates to Astrium Ltd. Moreover,
EADS participates in the UK in several funded trustee-administeredpension plans for both executive and non-executive employeeswith BAE Systems being the principal employer. These plans
qualify as multi-employer deﬁ ned beneﬁ t plans under IAS 19“Employee Beneﬁts”. EADS’ most signiﬁcant investments in termsof employees participating in these BAE Systems UK pension
plans are Airbus Operations Ltd., UK and MBDA UK Ltd., UK.
Participating Airbus Operations Ltd., UK employees have continued
to remain members in the BAE Systems UK pension plans dueto the UK pension agreement between EADS and BAE Systems
and a change in UK pensions legislation enacted in April 2006.
Generally, based on the funding situation of the respective pension
schemes, the pension plan trustees determine the contribution
rates to be paid by the participating employers to adequately
fund the schemes. The different UK pension plans in which EADS
investments participate are currently underfunded. BAE Systems
has agreed with the trustees various measures designed to makegood the underfunding. These include (i) regular contribution
payments for active employees well above such which would
prevail for funded plans and (ii) extra employers’ contributions.

(1) Please refer to Note 4 “Acquisitions and Disposals”. Comparative period information is adjusted retrospectively in accordance with IFRS 3.45.

62 — EADS FINANCIAL STATEMENTS 2012

Notes to the Consolidated Financial Statements (IFRS)
2.3 Notes to the Consolidated Statements of Financial Position (IFRS)

1
Due to the contractual arrangements between EADS and BAE
Systems, EADS’ contributions in respect of its investments forthe most signiﬁcant pension scheme (Main Scheme) were capped
until July 2011 for Airbus Operations Ltd., UK. Contributions
exceeding the respective capped amounts were paid by BAE
Systems. Even after the expiry of the contribution cap the uniquefunding arrangements between BAE Systems and EADS createa situation for EADS different from common UK multi-employer
plans with special regulations limiting regular contributions thathave to be paid by Airbus Operations Ltd., UK to rates applicable
to all participating employers.
Based on detailed information about the different multi-employer
pension schemes provided by BAE Systems, EADS is able toappropriately and reliably estimate the share of its participation in
the schemes, i.e. its share in plan assets, deﬁned beneﬁt obligations(DBO) and pension costs. The information enables EADS to derive
keys per plan to allocate for accounting purposes an appropriate

2

3

4

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proportion in plan assets, deﬁned beneﬁt obligations and pension
costs to its UK investments as of 31 December 2012 and 2011,
taking into account the impact of the capped contributions aswell as future extra contributions agreed by BAE Systems with theTrustees. Therefore, EADS accounts for its participation in BAE
Systems’ UK deﬁned beneﬁt schemes under the deﬁned beneﬁt
accounting approach in accordance with IAS 19.
In 2012, the share of Airbus in BAE Systems’ main schemesamounts to 19.57% (in 2011: 17.76%). The impact of this change
is mainly reﬂected in actuarial gains and losses of the period.
Actuarial assessments are regularly made to determine the amountof the Group’s commitments with regard to retirement indemnities.
These assessments include an assumption concerning changes insalaries, retirement ages and long-term interest rates. It comprises
all the expenses the Group will be required to pay to meet thesecommitments.

The weighted-average assumptions used in calculating the actuarial values of the retirement plans are as follows:
Germany

France31 December
Assumptions in %UK

31 December

BAE Systems UK

31 December

31 December

2012

2011

2010

2012

2011

2010

2012

2011

2010

2012

2011

2010

4.75

4.75

4.7

4.8

5.4

4.5

4.8

5.5

3.1 3.0-3.5

3.5

3.6

4.0

3.4

3.4

4.4

Discount rate

3.7

4.5

4.7

3.5

Rate of compensation
increase

3.25

3.0

3.0

3.1-3.5

Inflation rate

2.0

2.0

1.75

2.0

2.0

2.0

2.8

2.9

3.3

2.9

2.9

3.4

Expected return on plan
assets as of 1 January

5.5

6.5

6.5

4.0

6.5

6.5

5.4

5.8

5.8

5.5

6.9

7.1

EADS derives the discount rate used to determine the deﬁned
beneﬁt obligation from yields on high quality corporate bonds withan AA rating. The determination of the discount rate is based on theiBoxx€ Corporates AA bond data and in 2012 uses the granularityof single bond data in order to receive more market informationfrom the given bond index. The discount rate for the estimatedduration of the respective pension plan is then extrapolated along
the yield curve.
An increase of the discount rate for the pension plans in Germany
and France of +0.25% would decrease the DBO by € 204 million,
whereas a corresponding decrease by -0.25% would increase the
DBO by € 200 million.

EADS FINANCIAL STATEMENTS 2012 — 632

Notes to the Consolidated Financial Statements (IFRS)
2.3 Notes to the Consolidated Statements of Financial Position (IFRS)

1

2

3

4

5

4

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The amount recorded as provision in the Consolidated Statement of Financial Position can be derived as follows:
Change in defined benefit obligations(In € million)

2012

2011

2010

10,639

9,645

8,845

Service cost

289

265

237

Interest cost

505

472

483

Plan amendments and curtailments

30

0

0

1,463

506

387

81

46

(19)

(463)

(408)

(382)

68

113

94

12,612

10,6399,645

Defined benefit obligations at beginning of year

Actuarial (gains) and losses
Acquisitions and otherBenefits paid
Foreign currency translation adjustment
Defined benefit obligations at end of year

Included in the line “acquisitions and others” are € 99 million from acquisitions in 2012 (2011: € 61 million; 2010: € 1 million).
Actuarial losses which are related to the BAE Systems UK pension plans amount to € 567 million (2011: € 213 million; 2010: € 16 million)
and foreign currency translation adjustment amounts to € 73 million (2011: € 99 million, 2010: € 84 million).
Change in plan assets(In € million)

2012

2011

2010

Fair value of plan assets at beginning of year

5,135

4,662

3,706

304

317

272

Actuarial gains and losses on plan assets

477

(222)

283

Contributions

856

489

553

Expected return on plan assets

Acquisitions and otherBenefits paid

31

47

13

(278)

(244)

(230)

Foreign currency translation adjustments

63

86

65

Fair value of plan assets at end of year

6,588

5,135

4,662

The actuarial gains and losses on plan assets include among
others, also € 429 million (2011: € -10 million; 2010: € 251 million)
relating to the BAE Systems’ UK pension plans. Furthermore,€ -158 million (2011: € -136 million; 2010: € -123 million) of beneﬁts
paid and € 53 million (2011: € 71 million; 2010: € 57 million) of
foreign currency translation adjustments relate to BAE Systems’
UK pension plans.
In 2012, EADS companies contributed in total € 856 million(2011: € 489 million; 2010: € 553 million) in cash. Main contributions

were made into the CTA with € 583 million (2011: € 300 million;
2010: € 300 million), into the relief fund in Germany with€ 96 million (2011: € 94 million; 2010: € 125 million) and the BAE
Systems UK pension plans with € 126 million (2011: € 78 million;
2010: € 66 million). In 2013, further contributions are intended.
In 2012, 45% (in 2011: 47%) of plan assets are invested in debt
securities and 40% (in 2011: 38%) in equity securities. The
remaining plan assets are mainly invested in other securities,
property and cash.

Recognised Provision(In € million)

2012

2011

2010

2009

2008

Funded status(1)

6,024

5,504

4,983

5,139

4,442

(38)

(41)

(45)

(49)

(55)

5,986

5,463

4,938

5,090

4,387

Unrecognised past service cost
Provision recognised in the statements of financial position(1) Difference between the defined benefit obligations and the fair value of plan assets at the end of the year.

The deﬁned beneﬁt obligation at the end of the year is the present
value, without deducting any plan assets, of expected future
payments required to settle the obligation resulting from employee

64 — EADS FINANCIAL STATEMENTS 2012service in the current and prior periods. The provision contains thefunded status less any unrecognised past service cost.

Notes to the Consolidated Financial Statements (IFRS)
2.3 Notes to the Consolidated Statements of Financial Position (IFRS)

1

2

3

4

5

4

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The components of the net periodic pension cost, included in “Proﬁt before ﬁnance costs and income taxes”, are as follows:
2012

2011

Service cost

289

265

237

Interest cost

505

472

483

Expected return on plan assets(In € million)

2010

(304)

(317)

(272)

Past service cost

33

4

4

Net periodic pension cost

523

424

452

The expected return on plan assets for BAE Systems’ UK pension plans amounts to € -147 million (in 2011: € -151 million).
Actuarial gains and losses for retirement plans and deferred compensation are recognised net of deferred taxes in total equity anddevelop as follows:
Actuarial gains and losses recognised directly in total equity (cumulative)(In € million)

Cumulative amount at 1 January

2012

2011

2010

(3,023)(2,277)(2,140)Recognised during the period(1,116)

(746)

(137)

Cumulative value at 31 December(4,139)(3,023)(2,277)

982

635

468

(3,157)(2,388)(1,809)Deferred Tax Asset at 31 December
Actuarial gains and losses recognised directly in equity, net

Employer’s contribution to state and private pension plans, mainly in Germany and France, are to be considered as deﬁned contributionplans. Contributions in 2012 amount to € 623 million (in 2011: € 643 million).

c) Other Provisions
Movements in provisions during the year were as follows:(In € million)

Balance at
1 January
2012

Exchangedifferences

Increasefrompassageof time

Additions

Reclassification /Change inconsolidated
group

Used

Released

Balance at
31 December
2012

Contract losses

3,252

0

65

251

(742)

(119)

(69)

2,638

Outstanding costs

2,071

0

0

729

259

(566)

(127)

2,366

Aircraft financing risks

959

(7)

60

39

3

(248)

(2)

804

Personnel charges

570

(1)

1

428

10

(272)

(10)

726

Obligation from services
and maintenance agreements

380

0

14

38

2

(58)

(2)

374

Warranties

373

(1)

8

288

8

(50)

(21)

605

Restructuring measures /pre-retirement part-time work

220(1)

3

2

176

10

(73)

(9)

329

Litigations and claims

185

(1)

0

43

3

(18)

(6)

206

Asset retirement

104

0

3

6

0

0

(1)

112

Other risks and charges

1,065(1)

1

2

683

(120)

(204)

(159)

1,268

Total

9,179 (1)

(6)

155

2,681

(567)

(1,608)

(406)

9,428

(1) Please refer to Note 4 “Acquisitions and Disposals”. Comparative period information is adjusted retrospectively in accordance with IFRS 3.45.

The provision for contract losses mainly relates to Airbus Military
in conjunction with the A400M and to the A350 programme in
Airbus Commercial.

The addition to provisions for outstanding costs mainly relates
to Eurocopter and Cassidian and mainly corresponds to tasks tocomplete on construction contracts.

EADS FINANCIAL STATEMENTS 2012 — 652

Notes to the Consolidated Financial Statements (IFRS)
2.3 Notes to the Consolidated Statements of Financial Position (IFRS)

1
The provision for aircraft ﬁnancing risks fully covers, in line with theGroup’s policy for sales ﬁnancing risk, the net exposure to aircraft
ﬁnancing of € 92 million (€ 224 million at 31 December 2011) andasset value risks of € 712 million (€ 735 million at 31 December 2011)
related to Airbus, Eurocopter and ATR (see Note 33 “Commitments
and contingencies”).
The addition to provision for restructuring measures / pre-retirement
part-time work mainly relates to Cassidian.

2

3

4

5

4

Back to Contents“Reclassiﬁcation / Change in consolidated group” mainly relates tooffsetting of contract provisions to respective inventories.
In general, as the contractual and technical parameters to beconsidered for provisions in the aerospace sector are rather
complex, uncertainty exists with regard to the timing and amountsof expenses to be taken into account.
The majority of the company’s other provisions are generally
expected to result in cash outﬂows during the next 1 to 12 years.

26. Financing Liabilities
In 2011, EADS entered into US$ 721 million long-term credit
agreement with EIB (European Investment Bank) maturing in
2021 under which EADS pays variable interest rate of 3 month
USD Libor +0.849%. Concurrently, EADS swapped the variableinterest rate into ﬁxed rate of 3.2%. In 2004, the EIB (European
Investment Bank) granted a long-term loan to EADS in the amountof US$ 421 million maturing in 2014 and bearing a ﬁxed interest
rate of 5.1% (effective interest rate 5.1%). In 2011, EADS enteredinto a US$ 300 million credit facility maturing in 2021 with theDevelopment Bank of Japan under which EADS drew the fullamount and pays a variable interest rate of 3 month USD Libor+1.15%. Concurrently, EADS swapped the variable interest rate
into ﬁxed rate of 4.8%.
EADS issued under its EMTN Programme (Euro Medium Term
Note Programme) two currently outstanding euro denominatedbonds. The ﬁrst issue of € 0.5 billion maturing in 2018 carries a
coupon of 5.5% (effective interest rate 5.6%) which was swapped
during 2005 into variable rate of 3M-Euribor +1.72%. The second(In € million)

Bonds

issue of € 1 billion in 2009 maturing 2016 carries a coupon of
4.625% (effective interest rate 4.7%) which was swapped into
variable rate of 3M-Euribor +1.57%. Furthermore, Airbus received in
1999 a Reinvestment Note from Deutsche Bank AG in the amountof US$ 800 million, bearing a ﬁxed interest rate of 9.88% with an
outstanding debt of € 195 million (2011: € 224 million).
EADS can issue commercial paper under the so called “billet
de trésorerie” programme at floating or fixed interest rates
corresponding to the individual maturities ranging from 1 day to
12 months. The issued volume at 31 December 2012 amounted
to € 165 million (2011: € 0 million). The programme has been set
up in 2003 with a maximum volume of € 2 billion.
Financing liabilities include liabilities connected with sales ﬁnancing
transactions amounting to € 345 million (2011: € 532 million), mainly
at variable interest rates.
Non recourse Airbus ﬁ nancing liabilities (risk is supported byexternal parties) amount to € 345 million (2011: € 455 million).

31 December 201231 December 2011

1,669

1,605

1,382

1,480

287

372

168

171

3,506

3,628

thereof due in more than five years: 579 (31 December 2011: 549)
Liabilities to financial institutions
thereof due in more than five years: 561 (31 December 2011: 679)
Loans
thereof due in more than five years: 56 (31 December 2011: 185)
Liabilities from finance leases
thereof due in more than five years: 69 (31 December 2011: 112)
Long-term financing liabilities
Bonds

165

0

Liabilities to financial institutions

53

74

Loans

189

279

Liabilities from finance leases

13

13

Others853

1,110

Short-term financing liabilities (due within one year)

1,273

1,476

Total

4,779

5,104

Included in “Others” are ﬁnancing liabilities to joint ventures. The reduction mainly reﬂects a dividend from MBDA.

66 — EADS FINANCIAL STATEMENTS 2012

Notes to the Consolidated Financial Statements (IFRS)
2.3 Notes to the Consolidated Statements of Financial Position (IFRS)

1

2

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4

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The aggregate amounts of ﬁnancing liabilities maturing during the next ﬁve years and thereafter are as of 31 December 2012 as follows:
Financing liabilities(In € million)

2013

1,273

2014

539

2015

219

2016

1,316

2017

167

Thereafter

1,265

Total

4,779

The aggregate amounts of ﬁnancing liabilities maturing during the next ﬁve years and thereafter are as of 31 December 2011 as follows:
Financing liabilities(In € million)

2012

1,476

2013

139

2014

482

2015

209

2016

1,273

Thereafter

1,525

Total

5,104

27. Other Financial Liabilities

31 December 201231 December 2011

European Governments refundable advances

5,754

5,526

Liabilities for derivative financial instruments

1,159

2,140

Others

545

527

7,458

8,193

(In € million)

Non-current other financial liabilities

Total
Current other financial liabilities
Liabilities to related companies

26

10

Liabilities for derivative financial instruments

852

995

OthersTotal

European Governments refundable advances including interest
accretion for the total amount of € 406 million representing
obligations arising out of contracts associated with the longrange programme in Airbus Commercial have been settled as aresult of actions taken by Airbus in 2011, due to the termination of
the A340 programme. The release of the liabilities has positively
affected the 2011 Consolidated Income Statement before taxes by€ 192 million in other income and by € 120 million in interest result.
The settlement has further resulted in an associated operating
cash outﬂow of € 94 million in the fourth quarter 2011.
Regarding the interest expenses on European Governments
refundable advances see Note 12 “Total ﬁnance costs”. Due to

837

682

1,715

1,687

their speciﬁc nature, namely their risk-sharing features and thefact that such advances are generally granted to EADS on thebasis of signiﬁcant development projects, European Governments
refundable advances are accounted for by EADS within “Noncurrent / current other ﬁ nancial liabilities” on the statement offinancial position including accrued interests and presented
within “cash provided by operating activities” in the Consolidated
Statements of Cash Flows.
Included in “Other financial liabilities” are € 1,713 million(2011: € 1,753 million) due within one year and € 3,847 million(2011: € 4,526 million) maturing after more than ﬁve years.

EADS FINANCIAL STATEMENTS 2012 — 672

Notes to the Consolidated Financial Statements (IFRS)
2.3 Notes to the Consolidated Statements of Financial Position (IFRS)

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28. Other Liabilities(In € million)

31 December 201231 December 2011

9,881

9,256

643

561(1)

10,524

9,817(1)25,33325,006

Non-current other liabilities
Customer advance payments
Others
Total
Current other liabilities
Customer advance payments
Tax liabilities (excluding income tax)
Others
Total

592

595

2,258

2,069

28,18327,670(1) Please refer to Note 4 “Acquisitions and Disposals”. Comparative period information is adjusted retrospectively in accordance with IFRS 3.45.

I n c l u d e d i n “O th e r l i a b i l i ti e s” a re € 25,16 4 m i l l i o n(2011: € 23,617 million) due within one year and € 3,746 million(2011: € 3,493 million) maturing after more than ﬁve years.

Advance payments received relating to construction contracts
amount to € 10,037 million (2011: € 9,586 million) mainly resulting
from Airbus Military (€ 3,955 million), Astrium (€ 2,936 million),
Cassidian (€ 2,136 million) and Eurocopter (€ 997 million).

29. Trade Liabilities
As of 31 December 2012, trade liabilities amounting to € 74 million (€ 74 million as of 31 December 2011) mature after more than
one year.

30. Deferred Income(In € million)

Non-current deferred income

31 December 201231 December 2011

212

290

Current deferred income

1,057

875

Total

1,269

1,165

Deferred income includes sales of Airbus and ATR aircraft with asset value guarantee commitments which are accounted for as
operating leases (€ 117 million and € 198 million as of 31 December 2012 and 2011, respectively).

68 — EADS FINANCIAL STATEMENTS 2012

Notes to the Consolidated Financial Statements (IFRS)
2.4 Notes to the Consolidated Statements of Cash Flows (IFRS)

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2.4 Notes to the Consolidated Statementsof Cash Flows (IFRS)
31. Consolidated Statements of Cash Flows
As of 31 December 2012, EADS’ cash position (stated as cash
and cash equivalents in the Consolidated Statements of Cash
Flows) includes € 374 million (€ 710 million and € 735 million asof 31 December 2011 and 2010, respectively) which represent

EADS’ share in MBDA’s cash and cash equivalents, depositedat BAE Systems and Finmeccanica and which are available upon
demand.

The following chart provides details on cash ﬂow for acquisitions (resulting in additional assets and liabilities acquired) of subsidiaries,
joint ventures and businesses:(In € million)

Total purchase pricethereof paid in cash and cash equivalents
Cash and cash equivalents included in the acquired subsidiaries,
joint ventures and businesses
Cash Flow for acquisitions, net of cash

31 December 201231 December 201131 December 2010

(259)

(1,631)

(45)

(259)

(1,631)

(45)

58

96

7

(201)

(1,535)(38)

In 2012, the aggregate cash ﬂow for acquisitions, net of cash of € -201 million relates mainly to the acquisitions of Cassidian (€ -123 million
for Carl Zeiss Optronics GmbH, Rheinmetall Airborne Systems GmbH and Netasq) and to the asset deals of Eurocopter (€ -43 million).
In 2011, the aggregate cash ﬂow for acquisitions, net of cash of € -1,535 million includes mainly the acquisition of Vizada (€ -709 million),
Vector (€ -432 million) and Satair (€ -342 million).
In 2010, the aggregate cash ﬂow for acquisitions, net of cash results from the acquisition of Jena-Optronik GmbH amounting to€-38 million.

EADS FINANCIAL STATEMENTS 2012 — 69

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2.4 Notes to the Consolidated Statements of Cash Flows (IFRS)

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31 December 201231 December 201131 December 2010

Intangible assets; property, plant and equipment

99719(1)

3

Inventories

105

274

9

(In € million)(1)

Trade receivables

65

387

13

Other assets

42

128(1)

1

Cash and cash equivalents

58

96

7

Assets369

1,604 (1)33

Provisions(126)(140)(1)(3)

Trade liabilities

(32)

(288)

(5)

Financing liabilities

(11)

(203)

0

Tax liabilities and other liabilities(77)(308)(1)

(14)

(246)

(939)(1)(22)

Fair value of total net assets

123

665

(1)

11

Increase in non-controlling interests due to acquisitions(8)(2)(1)

0

Fair value of net assets acquired

115

663

(1)

11

Goodwill arising on acquisitions

199

1,020(1)34

Liabilities

Badwill0(2)0Total consideration

314

1,681

45

Gains related to business combinations

(7)

(24)

0

Non-cash effective consideration of investments held prior
to the acquisitions

(1)

(21)

0

Linked non-controlling interests squeeze out transactions of 2011’acquisitions settled in February 2012

5

(5)

0

(52)

0

0

Non-cash effective consideration of earn-outs to be paid
at a later stage
Less cash and cash equivalents of acquired subsidiaries,
joint ventures and businesses

(58)

(96)

(7)

Cash Flow for acquisitions, net of cash

201

1,535

38

(1) Please refer to Note 4 “Acquisitions and Disposals”. Comparative period information is adjusted retrospectively in accordance with IFRS 3.45.

The following chart provides details on cash ﬂow from disposals (resulting in assets and liabilities disposed) of subsidiaries:(In € million)

Total selling pricethereof received by cash and cash equivalents

31 December 201231 December 201131 December 2010

0

18

12

0

18

12

Cash and cash equivalents included in the (disposed) subsidiaries

0

0

0

Cash Flow from disposals, net of cash

0

18

12

The aggregate cash ﬂow from disposals, net of cash, in 2011 of € 18 million results from the sale of EADS NA Defense Security Systems
Solutions Inc.
The aggregate cash ﬂow from disposals, net of cash, in 2010 of € 12 million results from the sale of ASL Aircraft Services LemwerderGmbH.

70 — EADS FINANCIAL STATEMENTS 2012

Notes to the Consolidated Financial Statements (IFRS)
2.5 Other Notes to the Consolidated Financial Statements (IFRS)

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31 December 201231 December 2011

Intangible assets; property, plant and equipment

0

(8)

(4)

Trade receivables

0

(4)

(3)

Other assets

0

0

(14)

Assets

0

(12)

(21)

Provisions

0

2

8

Other liabilities

0

2

12

Liabilities

0

4

20

Book value of net assets

0

(8)

(1)

Related disposal of Goodwill

0

(10)

0

Result from disposal of subsidiaries

0

0

(11)

Cash Flow from disposals, net of cash

0

(18)

(12)

(In € million)

31 December 2010

2.5 Other Notes to the Consolidated Financial
Statements (IFRS)
32. Litigation and Claims
EADS is involved from time to time in various legal and arbitration
proceedings in the ordinary course of its business, the mostsigniﬁcant of which are described below. Other than as described
below, EADS is not aware of any material governmental, legal or
arbitration proceedings (including any such proceedings which
are pending or threatened), during a period covering at least theprevious twelve months which may have, or have had in the recent
past signiﬁcant effects on EADS N.V.’s or the Group’s ﬁnancial
position or proﬁtability.
Regarding EADS’ provisions policy, EADS recognises provisions
for litigation and claims when (i) it has a present obligation from legal
actions, governmental investigations, proceedings and other claims
resulting from past events that are pending or may be instituted or
asserted in the future against the Group, (ii) it is probable that an
outﬂow of resources embodying economic beneﬁts will be required
to settle such obligation and (iii) a reliable estimate of the amountof such obligation can be made. EADS believes that it has madeadequate provisions to cover current or contemplated general andspeciﬁc litigation risks. For the amount of provisions for litigationand claims, see Note 25c) “Other provisions”.

WTO

Civil Aircraft, the US lodged a request on 6 October 2004 to initiate
proceedings before the WTO. On the same day, the EU launcheda parallel WTO case against the US in relation to its subsidies to
Boeing.
On 1 June 2011, the WTO adopted the Appellate Body’s ﬁnal reportin the case brought by the US assessing funding to Airbus from
European governments. On 1 December 2011, the EU informed
the WTO that it had taken appropriate steps to bring its measures
fully into conformity with its WTO obligations, and to comply with
the WTO’s recommendations and rulings. Because the US did
not agree, the matter is now under WTO panel review pursuant
to WTO rules.
On 23 March 2012, the WTO adopted the Appellate Body’s ﬁnal
report in the case brought by the EU assessing funding to Boeing
from the US. The EU has cited the failure by the US to implement theﬁndings prior to the due date of 23 September 2012 in commencing
a new proceeding on the adequacy of US compliance.
Exact timing of further steps in the WTO litigation process is subject
to further rulings and to negotiations between the US and the EU.
Unless a settlement, which is currently not under discussion, isreached between the parties, the litigation is expected to continue
for several years.

Although EADS is not a party, EADS is supporting the European
Commission in litigation before the WTO. Following its unilateral
withdrawal from the 1992 EU-US Agreement on Trade in Large

EADS FINANCIAL STATEMENTS 2012 — 712

Notes to the Consolidated Financial Statements (IFRS)
2.5 Other Notes to the Consolidated Financial Statements (IFRS)

1Securities Litigation
Following the dismissal of charges brought by the French Autoritédes marchés financiers for alleged breaches of market regulations
and insider trading rules with respect primarily to the A380 delays
announced in 2006, proceedings initiated in other jurisdictions
have also been terminated. Nevertheless, following criminal
complaints ﬁled by several shareholders in 2006 (including civil
claims for damages), a French investigating judge is still carryingout an investigation based on the same facts. It is expected thatthe investigating judge will decide later in 2013 on whether to closethe ﬁle (ordonnance de non-lieu) or to bring the case to trial (renvoi
devant le tribunal correctionnel).

CNIM
On 30 July 2010, Constructions Industrielles de la Méditerrannée(“CNIM”) brought an action against EADS and certain of its
subsidiaries before the commercial court of Paris, alleging anticompetitive practices, breach of long-term contractual relationships
and improper termination of pre-contractual discussions. CNIM
is seeking approximately € 115 million in damages on a joint andseveral basis. On 12 January 2012, the court rejected all of CNIM’sclaims, following which CNIM ﬁled for appeal.

GPT
Prompted by a whistleblower’s allegations concerning GPT Special
Project Management Ltd. (“GPT”), an EADS subsidiary, and certain
aspects of the conduct of its business in Saudi Arabia, EADS

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conducted comprehensive internal audits in 2010 which did notdetect any violations of law. To enable further investigation of thecase, EADS engaged PricewaterhouseCoopers (“PwC”), which
conducted an independent review into certain allegations madeabout GPT, the scope of which was agreed with the UK Serious
Fraud Ofﬁce (“SFO”). In the period under review and based on thework it undertook, nothing came to PwC’s attention to suggestthat improper payments were made by GPT: “Further, the review
did not ﬁnd evidence to suggest that GPT or through GPT, anyother EADS Group company, asked specific third parties tomake improper payments on their behalves.” The PwC review
was conducted between November 2011 and March 2012, and a
copy of its report was provided by EADS to the SFO in March 2012.
Separately, in August 2012, the SFO announced that it had opened
a formal criminal investigation into the matter. EADS is cooperating
fully with this investigation.

Euroﬁghter Austria
In March 2012, a German public prosecutor, following a request forassistance by the Austrian public prosecutor, launched a criminal
investigation into alleged bribery, tax evasion and breach of trust
by current and former employees of EADS Deutschland GmbHand Euroﬁghter Jagdﬂugzeug GmbH as well as by third parties
relating to the sale of Euroﬁghter aircraft to Austria in 2003. EADS
is cooperating fully with this investigation, and has also launched its
own independent review into the matter by outside legal counsel.

33. Commitments and Contingencies
Commitments and contingent liabilities
Sales ﬁnancing – In relation to its Airbus, Eurocopter and ATR
activities, EADS is committing itself in sales ﬁnancing transactions
with selected customers. Sales ﬁnancing transactions are generally
collateralised by the underlying aircraft. Additionally, Airbus,
Eurocopter and ATR beneﬁt from protective covenants and fromsecurity packages tailored according to the perceived risk andthe legal environment. EADS believes that the estimated fairvalue of the aircraft securing such commitments will substantially
offset any potential losses from the commitments. Any remaining
difference between the amount of ﬁnancing commitments given
and the collateral value of the aircraft ﬁnanced is provided for as
an impairment to the relating asset, if assignable, or as a provision
for aircraft ﬁnancing risk. The basis for this write down is a riskpricing-model, which is applied at every closing to closely monitor
the remaining value of the aircraft.

72 — EADS FINANCIAL STATEMENTS 2012

Depending on which party assumes the risks and rewards ofownership of a ﬁ nanced aircraft, the assets relating to sales
ﬁnancing are accounted for on the statement of financial position
either as (i) an operating lease (see Note 15 “Property, plant andequipment”) or (ii) a loan from aircraft ﬁnancing or (iii) a ﬁnance leasereceivable (see Note 17 “Investments in associates accounted forunder the equity method, other investments and other long-term
ﬁnancial assets”). As of 31 December 2012, related accumulated
impairment amounts to € 223 million (2011: € 127 million) for
operating lease and to € 132 million (2011: € 172 million) for loans
and ﬁnance lease receivables. As part of provisions for aircraft
ﬁnancing risks € 49 million (2011: € 45 million) are recorded (seeNote 25c) “Other provisions”).
Certain sales ﬁnancing transactions include the sale and leaseback of the aircraft with a third party lessor under operatinglease. Unless the Group has sold down the relating operatinglease commitments to third parties, which assume liability for thepayments, it is exposed to future lease payments.

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Future nominal operating lease payments that result from aircraft sales ﬁnancing transactions are recorded off balance sheet andare scheduled to be paid as of 31 December 2012 as follows:(In € million)

Not later than 201369

Later than 2013 and not later than 2017

219

Later than 2017

44

Total

332

Of which commitments where the transaction has been sold to third parties(281)

Total aircraft lease commitments where EADS bears the risk (not discounted)

51

Future nominal operating lease payments that result from aircraft sales ﬁnancing transactions are recorded off balance sheet andare scheduled to be paid as of 31 December 2011 as follows:(In € million)

Not later than 2012103

Later than 2012 and not later than 2016

404

Later than 2016

82

Total

589

Of which commitments where the transaction has been sold to third parties(336)

Total aircraft lease commitments where EADS bears the risk (not discounted)

253

Total aircraft lease commitments of € 332 million as of
31 December 2012 (2011: € 589 million) arise from aircraft headleases and are typically backed by corresponding sublease
income from customers with an amount of € 300 million (2011:€ 443 million). A large part of these lease commitments (€ 281 millionand € 336 million as of 31 December 2012 and 2011) arises fromtransactions that were sold down to third parties, which assume
liability for the payments. EADS determines its gross exposure

to such operating leases as the present value of the related
payment streams. The difference between gross exposure andthe estimated value of underlying aircraft used as collateral, the net
exposure, is provided for in full with an amount of € 43 million as of
31 December 2012 (2011: € 179 million), as part of the provision foraircraft ﬁnancing risks (see Note 25c) “Other provisions”).

As of 31 December 2012 and 2011, the total consolidated – on and off balance sheet – Commercial Aviation Sales Financing Exposure
is as follows (Airbus Commercial, Eurocopter and 50% for ATR):
31 December 201231 December 2011

Total gross exposure

1,297

1,289

Estimated fair value of collateral (aircraft)

(850)

(766)

Net exposure (fully provided for)

447

523

31 December 201231 December 2011

Accumulated impairment on operating leases (see Note 15 “Property, plantand equipment”)

223

127

Accumulated impairment on loans from aircraft financing and finance leases(see Note 17 “Investments in associates accounted for under the equity method,other investments and other long-term financial assets”)

132

172

Provisions for aircraft financing risk (on balance sheet) (see Note 25c) “Other provisions”)

49

45(In € million)

Details of provisions / accumulated impairments are as follows:(In € million)

Provisions for aircraft financing risk (commitment off balance sheet) (see Note 25c)
“Other provisions”)

43

179

Total provisions / accumulated impairments for sales financing exposure

447

523

EADS FINANCIAL STATEMENTS 2012 — 732

Notes to the Consolidated Financial Statements (IFRS)
2.5 Other Notes to the Consolidated Financial Statements (IFRS)

1Asset value guarantees — Certain sales contracts may include theobligation of an asset value guarantee whereby Airbus Commercial,
Eurocopter or ATR guarantee a portion of the value of an aircraft
at a speciﬁc date after its delivery. Management considers theﬁnancial risks associated with such guarantees to be manageable.
Three factors contribute to this assessment: (i) the guarantee only
covers a tranche of the estimated future value of the aircraft, and its
level is considered prudent in comparison to the estimated future
value of each aircraft; (ii) the asset value guarantee related exposure
is diversiﬁed over a large number of aircraft and customers; and(iii) the exercise dates of outstanding asset value guarantees are
distributed through 2022. If the present value of the guarantee
given exceeds 10% of the sales price of the aircraft, the sale ofthe underlying aircraft is accounted for as an operating lease (seeNote 15 “Property, plant and equipment” and Note 30 “Deferredincome”). In addition, EADS is contingently liable in case asset
value guarantees with less than 10% are provided to customers aspart of aircraft sales. Counter guarantees are negotiated with third
parties and reduce the risk to which the Group is exposed. As of
31 December 2012, the nominal value of asset value guarantees
provided to airlines, that do not exceed the 10% criteria, amounts to€ 1,046 million (2011: € 1,117 million), excluding € 333 million (2011:€ 354 million) where the risk is considered to be remote. In manycases the risk is limited to a speciﬁc portion of the residual valueof the aircraft. The present value of the risk inherent to the given
asset value guarantees where a settlement is being considered asprobable is fully provided for and included in the total amount ofprovisions for asset value risks of € 712 million (2011: € 735 million)(see Note 25c) “Other provisions”). This provision covers a potential
expected shortfall between the estimated value of the aircraft ofthe date upon which the guarantee can be exercised and the value
guaranteed on a transaction basis taking counter guarantees into
account.

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With respect to ATR, EADS and Finmeccanica are jointly andseverally liable to third parties without limitation. Amongst theshareholders, the liability is limited to each partner’s proportionate
share.
While backstop commitments to provide financing related
to orders on Airbus Commercial’s and ATR’s backlog are also
given, such commitments are not considered to be part of gross
exposure until the ﬁnancing is in place, which occurs when theaircraft is delivered. This is due to the fact that (i) past experiencesuggests it is unlikely that all such proposed ﬁnancings actually
will be implemented (although it is possible that customers not
beneﬁ ting from such commitments may nevertheless request
ﬁnancing assistance ahead of aircraft delivery), (ii) until the aircraft
is delivered, Airbus Commercial or ATR retain the asset and do notincur an unusual risk in relation thereto, and (iii) third parties may
participate in the ﬁnancing. In order to mitigate Airbus Commercialand ATR credit risks, such commitments typically contain ﬁnancial
conditions which guaranteed parties must satisfy in order to beneﬁt
therefrom.
Other commitments — Other commitments comprise contractual
guarantees and performance bonds to certain customers as wellas commitments for future capital expenditures.
Future nominal operating lease payments (for EADS as a lessee)
for rental and lease agreements (not relating to aircraft sales
financing) amount to € 916 million (2011: € 968 million) as of
31 December 2012, and relate mainly to procurement operations(e.g. facility leases, car rentals).

Maturities as of 31 December 2012 are as follows:(In € million)

Not later than 2013164

Later than 2013 and not later than 2017

383

Later than 2017

369

Total

916

The respective maturities as of 31 December 2011 are as follows:(In € million)

Not later than 2012131

Later than 2012 and not later than 2016

362

Later than 2016

475

Total

968

74 — EADS FINANCIAL STATEMENTS 2012

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2.5 Other Notes to the Consolidated Financial Statements (IFRS)

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34. Information about Financial Instrumentsa) Financial Risk Management
By the nature of the activities carried out, EADS is exposed toa variety of ﬁnancial risks, as explained below: (i) market risks,
especially foreign currency exchange rate risks, interest rate risks,
equity price risks and commodity price risks, (ii) liquidity risk and(iii) credit risk. EADS’ overall ﬁnancial risk management programme
focuses on mitigating unpredictable ﬁnancial market risks and theirpotential adverse effects on the Group’s operational and ﬁnancial
performance. The Group uses derivative ﬁnancial instruments
and, to a minor extent, non-derivative ﬁnancial liabilities to hedge
certain risk exposures.
The ﬁnancial risk management of EADS is generally carried out
by the Central Treasury department at EADS Headquarters underpolicies approved by the Board of Directors or by the Chief Financial
Ofﬁcer. The identiﬁcation, evaluation and hedging of the ﬁnancial
risks is in the responsibility of established treasury committees
jointly with the Group’s Divisions and Business Units.

Market Risk
Currency risk — Foreign exchange risk arises when futurecommercial transactions or firm commitments, recognised
assets and liabilities and net investments in foreign operations
are denominated in a currency that is not the entity’s functional
currency.
EADS manages a long-term hedge portfolio with a maturity ofseveral years covering its net exposure to US dollar sales, mainly
from the activities of Airbus Commercial. This hedge portfolio
covers to a large extent the Group’s highly probable transactions.
Signiﬁcant parts of EADS’ revenues are denominated in US dollars,
whereas a major portion of its costs is incurred in euros and toa smaller extent in GBP. Consequently, to the extent that EADS
does not use ﬁnancial instruments to cover its current and future
foreign currency exchange rate exposure, its proﬁts are affectedby changes in the euro-US dollar exchange rate. As the Groupintends to generate proﬁts only from its operations and not throughspeculation on foreign currency exchange rate movements, EADS
uses hedging strategies to manage and minimise the impact of
exchange rate ﬂuctuations on these proﬁts.
EADS endeavours to hedge the majority of its exposure based
on ﬁrm commitments or forecasted transactions. For ﬁnancial
reporting purposes, foreign currency transactions qualify as ahedged item if they are included in the internally audited orderbook or are otherwise considered highly probable, e.g. becauseof contractual or planning evidence.
For products such as aircraft, EADS typically hedges firmly
committed sales in US dollar. The hedged items are deﬁned asﬁrst ﬁrmly committed future cash inﬂows for a given month based
upon ﬁnal payments at delivery. Usually, EADS designates a portionof the total monthly cash inﬂows as the hedged position to coverits expected foreign currency exposure. Therefore, as long as theactual gross foreign currency cash inﬂows (per month) exceed
the portion designated as being hedged, a postponement orcancellation of sales transactions and corresponding cash inﬂows
have no impact on the hedging relationship. For the non-aircraftbusiness EADS hedges in- and outﬂows in foreign currencies fromﬁrmly committed or forecast sales and purchase contracts. In the
non-aircraft business, hedges are typically contracted in lower
volumes but follow similar ﬁrst ﬂow logic or are designated basedon agreed milestone payments. The amount of the expected ﬂows
to be hedged can cover up to 100% of the equivalent of the net
US dollar exposure at inception. The coverage ratio is adjusted
to take into account macroeconomic movements affecting the
spot rates and interest rates as well as the robustness of thecommercial cycle. As hedging instruments, EADS primarily
uses foreign currency forwards, foreign currency options, somesynthetic forwards and at Airbus Commercial to a minor extent
non-derivative ﬁnancial instruments.
The Company also has foreign currency derivative instruments
which are embedded in certain purchase and lease contracts
denominated in a currency other than the functional currency of thesigniﬁcant parties to the contract, principally USD and GBP. Gainsor losses relating to such embedded foreign currency derivatives
are reported in other ﬁnancial result if not designated as hedging
instrument. In addition, EADS hedges currency risk arising fromﬁnancial transactions in other currencies than euro, such as fundingtransactions or securities.
Interest rate risk — The Group uses an asset-liability management
approach with the objective to limit its interest rate risk. The
Group undertakes to match the risk proﬁle of its assets with acorresponding liability structure. The remaining net interest rate
exposure is managed through several types of interest rate
derivatives in order to minimise risks and ﬁnancial impacts. Hedging
instruments that are speciﬁcally designated to debt instruments
have at the maximum the same nominal amounts as well as thesame maturity dates compared to the hedged item.
The cash and cash equivalents and securities portfolio of the Groupis invested in ﬁnancial instruments such as overnight deposits,
certiﬁcates of deposits, commercial papers, other money market
instruments and short-term as well as mid-term bonds. Any related
interest rate hedges qualify for hedge accounting as either fairvalue hedges or cash ﬂow hedges. For this portfolio, EADS holds
on a regular basis an Asset Management Committee which aims
at limiting the interest rate risk on a fair value basis through avalue-at-risk approach.
Commodity price risk — EADS is exposed to risk relating toﬂuctuations in the prices of commodities used in the supply chain.
EADS manages these risks in the procurement process and to

EADS FINANCIAL STATEMENTS 2012 — 752

Notes to the Consolidated Financial Statements (IFRS)
2.5 Other Notes to the Consolidated Financial Statements (IFRS)

1
a certain extent uses derivative ﬁnancial instruments in order tomitigate the risks associated with the purchase of raw materials.
Equity Price risk — EADS is to a small extent invested in equity
securities mainly for operational reasons. Therefore, the Groupassesses its exposure towards equity price risk as limited.
Sensitivities of Market Risks — The approach used to measure
and control market risk exposure within EADS’ ﬁnancial instrument
portfolio is amongst other key indicators the value-at-risk (“VaR”).
The VaR of a portfolio is the estimated potential loss that will
not be exceeded on the portfolio over a speciﬁed period of time
(holding period) from an adverse market movement with a speciﬁed
conﬁdence level. The VaR used by EADS is based upon a 95%
conﬁdence level and assumes a 5-day holding period. The VaRmodel used is mainly based on the so called “Monte-CarloSimulation” method. Deriving the statistical behavior of the markets
relevant for the portfolio out of market data from the previous two
years and observed interdependencies between different markets
and prices, the model generates a wide range of potential futurescenarios for market price movements.
EADS VaR computation includes the Group’s ﬁnancial debt, shortterm and long-term investments, foreign currency forwards, swaps
and options, commodity contracts, ﬁ nance lease receivables
and liabilities, foreign currency trade payables and receivables,
including intra-group payables and receivables affecting Group
proﬁt and loss.

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Although VaR is an important tool for measuring market risk,
the assumptions on which the model is based give rise to some
limitations, including the following:— a five-day holding period assumes that it is possible to hedge
or dispose of positions within that period. This is considered
to be a realistic assumption in almost all cases but may not be
the case in situations in which there is severe market illiquidity
for a prolonged period.

— a 95% confidence level does not reflect losses that may occur
beyond this level. Even within the model used there is a five
percent statistical probability that losses could exceed thecalculated VaR.

— the use of historical data as a basis for estimating the statisticalbehavior of the relevant markets and finally determining thepossible range of future outcomes out of this statistical behavior
may not always cover all possible scenarios, especially thoseof an exceptional nature.
The Group uses VaR amongst other key figures in order todetermine the riskiness of its ﬁnancial instrument portfolio and inorder to optimise the risk-return ratio of its ﬁnancial asset portfolio.
Further, the Group’s investment policy deﬁnes a VaR limit for the
total portfolio of cash, cash equivalents and securities. The total
VaR as well as the different risk-factor speciﬁc VaR ﬁgures of thisportfolio are measured and serve amongst other measures asa basis for the decisions of the Asset Management Committee.

A summary of the VaR position of EADS’ ﬁnancial instruments portfolio at 31 December 2012 and 31 December 2011 is as follows:
Total VaR

Equity price VaR

Currency VaR

Commodity price VaRInterest rate VaR

FX hedges for forecast transactions
or firm commitments

916

0

937

0

91

Financing liabilities, financial assets(incl. cash, cash equivalents,
securities and related hedges)

122

122

38

0

14

Finance lease receivables andliabilities, foreign currency trade
payables and receivables

30

0

5

0

27

Commodity contracts

18

0

0

18

0

Diversification effect

(204)

0

(85)

0

(30)

All financial instruments

882

122

895

18

102

FX hedges for forecast transactions
or firm commitments

1,249

0

1,264

0

128

Financing liabilities, financial assets(incl. cash, cash equivalents,
securities and related hedges)

192

164

71

0

37

Finance lease receivables andliabilities, foreign currency trade
payables and receivables

61

0

10

0

56

(In € million)

31 December 201231 December 2011

Commodity contracts

8

0

1

7

0

Diversification effect

(219)

0

(27)

0

(44)

All financial instruments

1,291

164

1,319

7

177

76 — EADS FINANCIAL STATEMENTS 2012

Notes to the Consolidated Financial Statements (IFRS)
2.5 Other Notes to the Consolidated Financial Statements (IFRS)

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The decrease of total VaR compared to 31 December 2011 ismainly attributable to strong decrease of market volatilities, inparticular FX volatilities, despite an increase of the foreign exchange
portfolio in comparison to year end 2011. EADS uses its derivative
instruments almost entirely as well as some of its non-derivative
ﬁnancial liabilities for hedging purposes. As such, the respective
market risks of these hedging instruments are – depending on thehedges’ actual effectiveness – offset by corresponding opposite
market risks of the underlying forecast transactions, assets or
liabilities. Under IFRS 7 the underlying forecast transactions do
not qualify as ﬁnancial instruments and are therefore not includedin the tables shown above. The VaR of the FX hedging portfolio
in the amount of € 916 million (2011: € 1,249 million) cannot be
considered as a risk indicator for the Group in the economic sense.

Liquidity Risk

Further, EADS also measures VaR of the Group-internal transaction
risk arising on Group entities contracting in a currency different
from its functional currency affecting Group profit and loss.
However, these currency risks arise purely EADS internally andare in economic terms 100% compensated by the corresponding
currency ﬂuctuations recognised in a separate component of equity
when translating the foreign entity into EADS functional currency. At
31 December 2012, the related total VaR amounts to € 153 million(2011: € 70 million).

Further, the management of the vast majority of the Group’s
liquidity exposure is centralised by a daily cash concentration
process. This process enables EADS to manage its liquidity
surplus as well as its liquidity requirements according to the actual
needs of its subsidiaries. In addition, Management monitors theGroup’s liquidity reserve as well as the expected cash ﬂows fromits operations based on a quarterly rolling cash forecast.

(In € million)

The Group’s policy is to maintain sufficient cash and cash
equivalents at any time to meet its present and future commitments
as they fall due. EADS manages its liquidity by holding adequate
volumes of liquid assets and maintains a committed credit facility(€ 3.0 billion as of 31 December 2012 and 2011, respectively) in
addition to the cash inﬂow generated by its operating business.
The liquid assets typically consist of cash and cash equivalents.
In addition, the Group maintains a set of other funding sources.
Depending on its cash needs and market conditions, EADS may
issue bonds, notes and commercial papers. EADS continues tokeep within the asset portfolio the focus on low counterparty risk,
however, adverse changes in the capital markets could increase
the Group’s funding costs and limit its ﬁnancial ﬂexibility.

Carrying
amountContractual
cash flows< 1 year

1 year– 2 years

2 years– 3 years

3 years– 4 years

4 years– 5 years

More than
5 years(15,697)(16,430)(11,574)

(708)

(426)

(1,599)(416)(1,707)31 December 2012
Non-derivative financial liabilities
Derivative financial liabilities(2,011)(2,168)

(753)

(678)

(514)

(126)

(28)

(69)

(17,708)(18,598)(12,327)(1,386)(940)(1,725)(444)(1,776)

Non-derivative financial liabilities(15,742)(16,512)(11,513)

(314)

(610)

(340)

(1,567)(2,168)Derivative financial liabilities(3,135)(3,556)(919)(1,052)

(769)

(597)

(144)

(75)

(18,877)(20,068)(12,432)(1,366)(1,379)(937)(1,711)(2,243)Total
31 December 2011

Total

The above table analyses EADS ﬁnancial liabilities by relevant
maturity groups based on the period they are remaining on EADS
Consolidated Statement of Financial Position to the contractual
maturity date.
The amounts disclosed are the contractual undiscounted cash
ﬂows, comprising all outﬂows of a liability such as repayments
and eventual interest payments.
Non-derivative ﬁnancial liabilities comprise ﬁnancing liabilities atamortised cost and ﬁnance lease liabilities as presented in thetables of Note 34b) “Carrying amounts and fair values of ﬁnancial
instruments”. Due to their specific nature, namely their risksharing features and uncertainty about the repayment dates, theEuropean Governments refundable advances are not includedin the above mentioned table with an amount of € 6,112 million(2011: € 5,737 million).

Credit Risk
EADS is exposed to credit risk to the extent of non-performanceby either its customers (e.g. airlines) or its counterparts with regard
to ﬁnancial instruments. However, the Group has policies in place
to avoid concentrations of credit risk and to ensure that credit
risk is limited.
As far as central treasury activities are concerned, credit risk
resulting from ﬁnancial instruments is managed on Group level.
Counterparts for transactions on cash, cash equivalents andsecurities as well as for derivative transactions are limited to highly
rated ﬁnancial institutions, corporates or sovereigns. For suchﬁnancial transactions EADS has set up a credit limit system toactively manage and limit its credit risk exposure. This limit systemassigns maximum exposure lines to counterparts of ﬁ nancialtransactions, taking into account the lowest of their credit ratings

EADS FINANCIAL STATEMENTS 2012 — 772

Notes to the Consolidated Financial Statements (IFRS)
2.5 Other Notes to the Consolidated Financial Statements (IFRS)

1
as published by Standard & Poors, Moody’s and Fitch IBCA.
Besides the credit rating, the limit system takes into consideration
fundamental counterparty data, as well as sectoral and maturity
allocations and further qualitative and quantitative criteria such as
credit risk indicators. The credit exposure of EADS is reviewed ona regular basis and the respective limits are regularly monitored
and updated. Further, EADS constantly aims for maintaining acertain level of diversiﬁcation in its portfolio between individual
counterparts as well as between ﬁnancial institutions, corporates
and sovereigns in order to avoid an increased concentration of
credit risk on only a few counterparts.
The Group is monitoring the performance of the individual
ﬁ nancial instruments and the impact of the credit markets on
their performance. EADS has procedures in place that allow
to hedge, to divest from or to restructure ﬁnancial instruments
having undergone a downgrade of the counterparts’ credit ratingor showing an unsatisfactory performance. These measures aim toprotect EADS to a certain extent against credit risks from individual
counterparts. Nevertheless, a potential negative impact resulting
from a market-driven increase of systematic credit risks cannot
be excluded.
European ﬁnancial markets have recently experienced signiﬁcantdisruptions. Such disruptions affected the credit markets andcreated uncertainty regarding the near-term economic prospectsof countries in the EU as well as the quality of loans to sovereign
debtors and banks in the EU. There has also been an indirect
impact on ﬁnancial markets worldwide. If economic conditionsin the relevant European countries or in Europe more generally
were to deteriorate or if more pronounced market disruptions
were to occur, there could be a new or incremental tightening in
the credit markets, low liquidity and extreme volatility in credit,

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currency and equity markets. This could have a number of effects
on EADS’ business, including:— continued de-leveraging as well as mergers and bankruptcies
of banks or other financial institutions, resulting in a smaller
universe of counterparties and lower availability of credit, which
may in turn reduce the availability of bank guarantees needed
by EADS for its businesses or restrict its ability to implement
desired foreign currency hedges; and— default of investment or derivative counterparties and otherfinancial institutions, which could negatively impact EADS’
treasury operations.
EADS’ ﬁnancial results could also be negatively affected dependingon gains or losses realised on the sale or exchange of ﬁnancial
instruments, impairment charges resulting from revaluations of debt
and equity securities and other investments, interest rates, cash
balances and changes in fair value of derivative instruments.
Sales of products and services are made to customers after having
conducted appropriate internal credit risk assessment. In orderto support sales, primarily at Airbus Commercial and ATR, EADS
may agree to participate in the ﬁnancing of customers, on a caseby-case basis, directly or through guarantees provided to third
parties. In determining the amount and terms of the ﬁnancing
transaction, Airbus Commercial and ATR take into account theairline’s credit rating and economic factors reﬂecting the relevant
ﬁnancial market conditions, together with appropriate assumptions
as to the anticipated future value of the ﬁnanced asset.
The booked amount of ﬁnancial assets represents the maximum
credit exposure. The credit quality of ﬁ nancial assets can beassessed by reference to external credit rating (if available) orinternal assessment of customers’ (e.g. airlines’) creditworthinessby way of internal risk pricing methods.

The maximum exposure of the current portion of other long-term ﬁnancial assets, trade receivables, receivables from related companies,
loans and others included in current other ﬁnancial assets to credit risk at the end of the reporting periods is the following:(In € million)

2012

2011

Receivables, neither past due nor impaired

5,569

4,979(1)39

52

Not past due following negotiations and not impaired
Receivables impaired individually
Receivables not impaired and past due ≤ 3 months

30

18

1,107

1,139

Receivables not impaired and past due >3 and ≤ 6 months

124

314

Receivables not impaired and past due >6 and ≤ 9 months

255

331

Receivables not impaired and past due >9 and ≤ 12 months

273

233

Receivables not impaired and past due > 12 months

807

835

8,204

7,901

Total

(1) Please refer to Note 4 “Acquisitions and disposals”. Comparative information is adjusted retrospectively in accordance with IFRS 3.45.

78 — EADS FINANCIAL STATEMENTS 2012

Notes to the Consolidated Financial Statements (IFRS)
2.5 Other Notes to the Consolidated Financial Statements (IFRS)

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Back to Contentsb) Carrying Amounts and Fair Valuesof Financial Instruments
The fair value of a ﬁnancial instrument is the price at which one party
would assume the rights and / or duties of another party. Fair valuesof ﬁnancial instruments have been determined with reference toavailable market information at the end of the reporting period
and the valuation methodologies discussed below. Considering

the variability of their value-determining factors and the volume ofﬁnancial instruments, the fair values presented herein may not be
indicative of the amounts that the Group could realise in a current
market environment.

The following tables present the carrying amounts and fair values of ﬁnancial instruments according to IAS 39 measurement categories
as of 31 December 2012 and 2011 respectively:

31 December 2012(In € million)

Fair Valuefor hedge
relations

Fair Value throughprofit or loss

Loans and Receivables
and Financial liabilities
at amortised cost
Other(3)Financial
Instruments
Total

Fair
Value

Amortised
Cost

Fair
Value

Book
Value

Fair
Value

Available
for SaleHeld fortrading

Designated

Fair
value

Book
value

-

-

-

-

-

1,115

1,115

201

1,316

1,316

-

-

-

341

(1)

AssetsOther investments and otherlong-term financial assets• thereof at amortised cost
• thereof at cost
• thereof Fair value via OCI

-

-

-

341

(1)

-

-

-

458

458

-

-

-

458

458

Current portion of otherlong-term financial assets

-

-

-

-

-

112

112

175

287

287

Non-current and current
other financial assets

422

-

1,145

-

-

1,267

1,267

-

2,834

2,834

-

-

-

-

-

6,790

6,790

-

6,790

6,790

Trade receivables
Non-current and current securities

-

9

-

8,306

8,306

-

-

-

8,315

8,315

Cash and Cash Equivalents

-

2,296

-

3,323

3,323

3,137

3,137

-

8,756

8,756

422

2,305

1,145 12,428 12,087

12,421

12,421376

29,09728,756

-

-

-

-

-

(4,598)(4,892)(181)(4,779)(5,073)(278)-(1,787)--(7,108)(7,108)(2)-(9,173)(9,173)

-

-

-

-

-

(9,917)(9,917)-(9,917)(9,917)(278)-(1,787)

-

-

Total

Liabilities
Long-term and short-term
financing liabilities
Non-current and current otherfinancial liabilities
Trade liabilities
Total(21,623) (21,917)(181) (23,869) (24,163)(1) Fair value is not reliably measurable.
(2) The European Governments refundable advances of € 6,112 million are measured at amortised cost; a fair value cannot be measured reliably due to their risk sharing natureand uncertainty about the repayment dates. They may be reassessed as relating programmes approach the end of production.
(3) This includes finance lease receivables and finance lease liabilities, which are not assigned to a measurement category according to IAS 39. The carrying amountsof these receivables / payables approximate their fair values.

EADS FINANCIAL STATEMENTS 2012 — 792

Notes to the Consolidated Financial Statements (IFRS)
2.5 Other Notes to the Consolidated Financial Statements (IFRS)

1

31 December 2011(In € million)

Fair Valuefor hedge
relations

Fair Value throughprofit or loss

2

3

4

4

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Loans and Receivables
and Financial liabilities
at amortised cost
Other(3)Financial
Instruments
Total

Fair
Value

Amortised
Cost

Fair
Value

Book
Value

Fair
Value

Available
for SaleHeld fortrading

Designated

Fair
value

Book
value

-

-

-

-

-

1,270(4)1,270(4)

432

1,702

1,702

-

-

-

279

(1)

AssetsOther investments and otherlong-term financial assets• thereof at amortised cost
• thereof at cost
• thereof Fair value via OCI

-

-

-

279

(1)

-

-

-

371

371

-

-

-

371

371

Current portion of otherlong-term financial assets

-

-

-

-

-

76

76

96

172

172

Non-current and current
other financial assets

412

-

490

-

-

1,468

-

2,370

2,370

Trade receivables

-

-

-

-

-

6,394

Non-current and current securities

-

67

-

11,434

11,434-

Cash and Cash Equivalents

1,468
(4)

6,394

(4)

-

-

6,394

6,394

-

11,501

11,501

-

365

-

2,842

2,842

2,077

2,077

-

5,284

5,284

412

432

490

14,926

14,647

11,285

11,285528

28,073

27,794

-

-

-

-

-

(4,920)(5,180)(184)(5,104)(5,364)(131)-(3,060)--(6,689)(6,689)(2)-(9,880)(9,880)

-

-

-

-

-

(9,630)(9,630)-(9,630)(9,630)(131)-(3,060)-- (21,239)(21,499)

Total

Liabilities
Long-term and short-term
financing liabilities
Non-current and current
other financial liabilities
Trade liabilities
Total(184) (24,614) (24,874)(1) Fair value is not reliably measurable.
(2) The European Governments refundable advances of € 5,737 million are measured at amortised cost; a fair value can not be measured reliably due to their risk sharing natureand uncertainty about the repayment dates. They may be reassessed as relating programmes approach the end of production.
(3) This includes finance lease receivables and finance lease liabilities, which are not assigned to a measurement category according to IAS 39. The carrying amountsof these receivables / payables approximate their fair values.
(4) Please refer to Note 4 “Acquisitions and disposals”. Comparative information is adjusted retrospectively in accordance with IFRS 3.45.

The fair value hierarchy consists of the following levels:— Level 1: quoted prices (unadjusted) in active markets for identical assets and liabilities;— Level 2: inputs other than quoted prices that are observable for the asset or liability, either directly (i.e. as prices) or indirectly(i.e. derived from prices); and— Level 3: inputs for the asset or liability that are not based on observable market data.
The following tables allocate the ﬁnancial assets and liabilities measured at fair value to the three levels of the fair value hierarchy asof 31 December 2012 and 2011 respectively:
31 December 2012

Level 1

Level 2

Level 3

Total

2,296

390

41

2,727

-

1,137

8

1,145

(In € million)

Financial assets measured at fair value
Financial assets measured at fair value through profit or loss
Derivative financial instruments for hedge relations
Available for Sale financial assets
Total

11,780307-

12,087

14,076

1,834

49

15,959Financial liabilities measured at fair value
Financial liabilities measured at fair value through profit or loss

-

(278)

-

(278)

Financial instruments for hedge relations-(1,782)(5)(1,787)-(2,060)(5)(2,065)

Total
80 — EADS FINANCIAL STATEMENTS 2012

Notes to the Consolidated Financial Statements (IFRS)
2.5 Other Notes to the Consolidated Financial Statements (IFRS)

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The development of ﬁnancial instruments of Level 3 is as follows:
Balance at
31 December
2012

Total gains or losses in
Balance at
1 January
2012

profitor lossothercomprehensive
incomePurchases

IssuesSettlements

Reclassification

Financial assets
measured at fair value
through profit or loss

39

-

-

39

-

(37)

-

41

Financial instruments
for hedge relations

0

(1)

2

-

-

-

7

8

39

(1)

2

39

-

(37)

7

49

(56)

(1)

(3)

-

-

62

(7)

(5)

Level 1

Level 2

Level 3

Total

365

440

39

844

Financial assets and liabilities
on Level 3

Financial assets

Total
Financial liabilities
Financial instruments
for hedge relations

31 December 2011(In € million)

Financial assets measured at fair value
Financial assets measured at fair value through profit or loss
Derivative financial instruments for hedge relations
Available for Sale financial assets
Total

-

490

-

490

11,6492,998-

14,647

12,014

3,928

39

15,981

-

(131)

-

(131)

Financial liabilities measured at fair value
Financial liabilities measured at fair value through profit or loss
Financial instruments for hedge relations
Total

-

(3,004)(56)(3,060)-(3,135)(56)(3,191)The development of ﬁnancial instruments of Level 3 is as follows:
Balance at
31 December
2011

Total gains or losses in

Financial assets and liabilities
on Level 3

Balance at
1 January profit or
2011
loss

other
comprehensive
incomePurchases

IssuesSettlements

Transfer toliabilities

Financial assets
Financial assets
measured at fair value
through profit or loss

-

39

-

-

-

-

-

39

(101)

(5)

(1)

-

-

51

-

(56)

Financial liabilities
Financial instruments
for hedge relations

Financial Assets and Liabilities — Generally, fair values are
determined by observable market quotations or valuation
techniques supported by observable market quotations.
By applying a valuation technique, such as present value of future
cash ﬂows, fair values are based on estimates. However, methods
and assumptions followed to disclose data presented herein are

inherently judgmental and involve various limitations like estimatesas of 31 December 2012 and 2011, which are not necessarily
indicative of the amounts that the Company would record uponfurther disposal / termination of the ﬁnancial instruments. Unquoted
other investments are measured at cost as their fair value is notreliably determinable.

EADS FINANCIAL STATEMENTS 2012 — 812

Notes to the Consolidated Financial Statements (IFRS)
2.5 Other Notes to the Consolidated Financial Statements (IFRS)

1
The methodologies used are as follows:

2

3

4

5

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Company would receive or pay to settle the related agreements asof 31 December 2012 and 2011. EADS determines the fair valuesof derivative ﬁ nancial instruments using recognised valuation
techniques such as option-pricing models and discounted cash
ﬂ ow models. The valuation is based on market data such as
currency rates, interest rates and credit spreads as well as priceand rate volatilities obtained from recognised vendors of market
data.

Short-term investments, cash, short-term loans, suppliers —The carrying amounts reflected in the annual accounts arereasonable estimates of fair value because of the relatively shortperiod of time between the origination of the instruments and its
expected realisation.
Securities — The fair value of securities included in available-forsale investments is determined by reference to their quoted market
price at the end of the reporting period. If a quoted market priceis not available, fair value is determined on the basis of generally
accepted valuation methods on the basis of market information
available at the end of the reporting period.

The fair value of financing liabilities as of 31 December 2012
and 2011 has been estimated including all future interest
payments. It also reﬂects the interest rate as stated in the tables
above. The fair value of the EMTN bonds has been assessedusing public price quotations.

Currency, Interest Rate and Commodity Contracts — The fairvalue of these instruments is the estimated amount that the
The following types of financial assets held at 31 December 2012 and 2011 respectively are designated at fair value through proﬁt
or loss:(In € million)

Nominal amount at
initial recognition asof 31 December 2012

Fair value as of
31 December 2012

Nominal amount at
initial recognition as of
31 December 2011

Fair value as of
31 December 2011

2,296

2,296

365

365

14

9

19

17

Designated at fair value through profit or loss
at recognition:
Money Market Funds (accumulating)Foreign currency Funds of Hedge Funds
Uncapped Structured Interest Rate Notes
Total

0

0

50

50

2,310

2,305

434

432

The accumulating Money Market Funds have been designated atfair value through proﬁt or loss as their portfolio is managed andtheir performance is measured on a fair value basis.

to their nominal amount at initial recognition date amounting to€ 3,117 million (2011: € 2,609 million).
Investments in foreign currency Funds of Hedge Funds have been
designated at fair value through proﬁt or loss.

In addition, EADS invests in Money Market Funds paying interest
on a monthly basis. The fair value of those funds correspondsc) Notional Amounts of Derivative Financial Instruments
The contract or notional amounts of derivative ﬁnancial instruments shown below do not necessarily represent amounts exchanged by
the parties and, thus, are not necessarily a measure for the exposure of the Group through its use of derivatives.
The notional amounts of foreign exchange derivative ﬁnancial instruments are as follows, speciﬁed by year of expected maturity:
Year ended 31 December 2012(In € million)

Remaining period

Total

2013

2014

2015

2016

2017

2018

2019

2020+

16,034

16,201

13,680

9,422

4,663

1,079

(118)

1

Purchased USD call options

407

0

0

0

0

0

0

0

407

Purchased USD put options

880

0

0

0

0

0

0

0

880

Written USD call options

881

0

0

0

0

0

0

0

881

5

0

0

0

0

0

0

0

5

1,689

211

0

172

0

0

0

0

2,072

Foreign Exchange Contracts:
Net forward sales contracts

60,962Foreign Exchange Options:

Other Purchased call options
FX swap contracts

82 — EADS FINANCIAL STATEMENTS 2012

Notes to the Consolidated Financial Statements (IFRS)
2.5 Other Notes to the Consolidated Financial Statements (IFRS)

1

Year ended 31 December 2011(In € million)

2

3

4

4

5

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Remaining period

Total

2012

2013

2014

2015

2016

2017

2018

2019+

13,457

14,707

12,916

8,567

2,359

(92)

(235)

(275)

Foreign Exchange Contracts:
Net forward sales contracts

51,404Foreign Exchange Options:Purchased USD call options

1,525

415

0

0

0

0

0

0

1,940

Purchased USD put options

2,814

1,222

0

0

0

0

0

0

4,036

2,723

1,236

0

0

0

0

0

0

3,959

4,821

130

225

0

228

0

0

0

5,404

Written USD call options
FX swap contracts

The notional amounts of interest rate contracts are as follows:Year ended 31 December 2012

Remaining period

Total(In € million)

2013

2014

2015

2016

2017

2018

2019

2020

2021+

Interest Rate Contracts

1,044

1,297

922

1,513

146

595

1,065

0

980

7,562

Please also refer to Note 26 “Financing Liabilities”.
Year ended 31 December 2011

Remaining period

Total(In € million)

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021+

Interest Rate Contracts

230

1,073

1,330

983

1,507

142

610

1,157

0

922

7,954

Notional amounts of commodity contracts:
Year ended 31 December 2012

Remaining period

Total(In € million)

2013

2014

2015

2016

2017

Commodity contracts

332

167

126

89

51

Year ended 31 December 2011

Remaining period

765

Total

(In € million)

2012

2013

2014

Commodity contracts

283

104

6

393

EADS FINANCIAL STATEMENTS 2012 — 832

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The following interest rate curves are used in the determination of the fair value in respect of the derivative ﬁnancial instruments as of
31 December 2012 and 2011:
EUR

31 December 2012

USD

GBP

Interest rate in %6 months

0.16

0.52

0.62

1 year

0.47

0.88

0.96

5 years

0.63

0.82

1.02

10 years

1.45

1.74

1.86

31 December 2011

EUR

USD

GBP

6 months

1.82

0.93

1.45

1 year

2.15

1.35

1.96

5 years

1.73

1.21

1.57

10 years

2.37

2.03

2.31

Interest rate in %The development of the foreign exchange rate hedging instruments recognised in AOCI as of 31 December 2012 and 2011 is as follows:(In € million)

Equity attributable to equity
owners of the parent

Non-controllinginterests

Total(1,373)

1(1,372)

1 January 2011
Unrealised gains and losses from valuations, net of tax

(276)

1

(275)

Transferred to profit or loss for the period, net of tax

(124)

0

(124)

Changes in fair values of hedging instruments recorded in AOCI, net of tax
31 December 2011 / 1 January 2012

(400)

1

(399)

(1,773)2(1,771)

718

(1)

717

Unrealised gains and losses from valuations, net of tax

638

0

638

Changes in fair values of hedging instruments recorded in AOCI, net of tax

Transferred to profit or loss for the period, net of tax

1,356

(1)

1,355

31 December 2012

(417)

1

(416)

In the year 2012 an amount of € -917 million (in 2011: € 171 million) was reclassiﬁed from equity mainly to revenues resulting from matured
cash ﬂow hedges. No material ineffectiveness arising from hedging relationship has been determined.
Corresponding with its carrying amounts, the fair values of each type of derivative ﬁnancial instruments is as follows:
31 December 2012(In € million)

31 December 2011

AssetsLiabilities

AssetsLiabilities

Foreign currency contracts – Cash Flow Hedges

959(1,484)233(2,742)Foreign currency contracts – not designated in a hedge relationship

164

(51)

361

(55)

0

(81)

0

(61)

Interest rate contracts – Cash Flow Hedges
Interest rate contracts – Fair Value Hedges

178

(171)

257

(116)

Interest rate contracts – not designated in a hedge relationship

144

(144)

0

(19)

Commodity contracts – not designated in a hedge relationship

41

(32)

39

(28)

Embedded foreign currency derivatives – Cash Flow Hedges

0

(46)

0

(85)

Embedded foreign currency derivatives – not designatedin a hedge relationshipTotal

84 — EADS FINANCIAL STATEMENTS 2012

32

(2)

0

(29)

1,518

(2,011)890(3,135)

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EADS net gains or net losses recognised in proﬁt or loss in 2012 and 2011 respectively are as follows:(In € million)

2012

2011

44

71

Financial assets or financial liabilities at fair value through profit or loss:
Held for trading(1)

4

Loans and receivables

Designated on initial recognition

18

19

Financial liabilities measured at amortised cost

(27)

105

Interest income from ﬁnancial assets or ﬁnancial liabilities through proﬁt or loss is included in net gains or losses.
Net gains or net losses of loans and receivables contain among others impairment losses.
Net gains or net losses of € 189 million (2011: € -20 million) are recognised directly in equity relating to available-for-sale ﬁnancial assets.
In 2011, the net gains or net losses of ﬁnancial liabilities measured at amortised cost include among others the gains from the releaseof European government refundable advances due to the termination of the A340 programme (see Note 27 “Other ﬁnancial liabilities”).

f)Total Interest Income and Total Interest Expenses

In 2012, the total interest income amounts to € 238 million (in 2011: € 372 million) for ﬁnancial assets which are not measured at fairvalue through proﬁt or loss. For ﬁnancial liabilities which are not measured at fair value through proﬁt or loss € -522 million (in 2011:€-364 million) are recognised as total interest expenses. Both amounts are calculated by using the effective interest method.

g) Impairment Losses
The following impairment losses on ﬁnancial assets are recognised in proﬁt or loss in 2012 and 2011 respectively:(In € million)

Available-for-sale financial assets
Loans and receivables

2012

2011

(2)

(12)

(100)

(156)

Other(1)

(4)

(2)

Total

(106)

(170)

(1) Concerns finance lease receivables.

35. Share-Based Paymenta) Stock Option Plans (SOP) and Long-Term Incentive Plans (LTIP)
Based on the authorisation given to it by the Shareholders’ Meetings(see dates below), the Group’s Board of Directors approved (seedates below) stock option plans in 2006, 2005, 2004, 2003, 2002
and 2001. These plans provide to the Members of the Executive
Committee as well as to the Group’s senior management the grantof options for the purchase of EADS shares.

In 2012, 2011, 2010, 2009, 2008 and 2007, the Board of Directorsof the Company approved the granting of performance units andrestricted units in the Company. The grant of so called “units” will
not physically be settled in shares (except with regard to EADS
Executive Committee Members) but represents a cash settled
plan in accordance with IFRS 2.

For all of EADS’ Stock Option Plans, the granted exercise price
was exceeding the share price at grant date.

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In 2012, compensation expense for Long-Term Incentive Plans was recognised for an amount of € 163 million (in 2011: € 99 million).
The fair value of units granted per vesting date is as follows (LTIP plan 2012):
In € (per unit granted)

FV of restricted and performance units to be settled in cash

Expected vesting date
May 2016

25.61

November 201625.07

May 2017

24.56

November 201724.04

As of 31 December 2012 provisions of € 253 million (2011: € 160 million) relating to LTIP have been recognised.
The lifetime of the performance and restricted units is contractually ﬁ xed (see within the description of the respective tranche).
The measurement is based on an Option Pricing Model which is, next to other market data, mainly affected by the share price as ofthe end of the reporting period (€ 29.50 as of 31 December 2012) and the lifetime of the units.
The principal characteristics of the options as well as performance and restricted units as at 31 December 2012 are summarised in
the various tables below:
Fourth tranche

Date of Shareholders’ Meeting

10 May 2001

Grant date

9 August 2002

Number of options granted

7,276,700

Number of options outstanding-

Total number of eligible employees
Exercise date

1,562
50% of options may be exercised after a period of two years and four weeks fromthe date of grant of the options; 50% of options may be exercised as of the third
anniversary of the date of grant of the options (subject to specific provisions containedin the Insider Trading Rules — see “Part 2 / 3.1.3 Governing Law — Dutch Regulations”).

Expiry date

8 August 2012

Conversion right

One option for one share

Vested100%

Exercise price€ 16.96

Exercise price conditions

110% of fair market value of the shares at the date of grant

Number of exercised options

6,434,110

Fifth tranche

Date of Shareholders’ Meeting
Grant date

Sixth tranche

6 May 2003

6 May 2003

10 October 2003

8 October 2004

Number of options granted

7,563,980

7,777,280

Number of options outstanding

1,502,835

3,316,613

1,491

1,495

Total number of eligible employees
Exercise date
Expiry date

50% of options may be exercised after a period of two years and four weeks fromthe date of grant of the options; 50% of options may be exercised as of the third
anniversary of the date of grant of the options (subject to specific provisions containedin the Insider Trading Rules — see “Part 2 / 3.1.3 Governing Law — Dutch Regulations”).
9 October 2013

Conversion right

7 October 2014
One option for one share

Vested100%

100%(1)

Exercise price€ 15.65€ 24.32

Exercise price conditions
Number of exercised options

110% of fair market value of the shares at the date of grant
5,403,571

1,909,745(1) As regards to the sixth tranche, vesting of part of the options granted to EADS top Executives was subject to performance conditions. As a result, part of these conditional
options have not vested and were therefore forfeited during the year 2007.

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Seventh tranche

Date of Shareholders’ Meeting
Grant date

11 May 2005
9 December 2005

Number of options granted

7,981,760

Number of options outstanding

5,333,695

Total number of eligible beneficiaries

Exercise date

Expiry dateConversion right

1,608
50% of options may be exercised after a period of two years from the dateof grant of the options; 50% of options may be exercised as of the third
anniversary of the date of grant of the options (subject to specific provisions
contained in the Insider Trading Rules — see “Part 2 / 3.1.3 Governing Law— Dutch Regulations”). As regards the seventh tranche, part of the options
granted to the EADS top Executives are performance related.
8 December 2015
One option for one share

Vested100%(1)

Exercise price€ 33.91

Exercise price conditions

110% of fair market value of the shares at the date of grant

Number of exercised options

0(1) As regards to the seventh tranche, vesting of part of the options granted to EADS top Executives was subject to performance conditions. As a result, part of these conditional
options have not vested and were therefore forfeited during the year 2008.

Eighth tranche

Date of Shareholders’ Meeting
Grant date

4 May 2006
18 December 2006

Number of options granted

1,747,500

Number of options outstanding

1,202,000

Total number of eligible beneficiaries

Date from which the options may be exercised

221
50% of options may be exercised after a period of two years from the dateof grant of the options; 50% of options may be exercised as of the third
anniversary of the date of grant of the options (subject to specificprovisions contained in the Insider Trading Rules —see “Part 2 / 3.1.3 Governing Law — Dutch Regulations”).

Date of expiration

16 December 2016

Conversion right

One option for one share

Vested100%

Exercise price€ 25.65

Exercise price conditions
Number of exercised options

110% of fair market value of the shares at the date of grant
350,000

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Ninth tranche

Grant date

7 December 2007
Performance and restricted unit plan

Number of units granted
Number of units outstanding

Performance units

Restricted units

1,693,940

506,06000Total number of eligible beneficiaries

1,617
The restricted units will vest if the participant is still employedby an EADS company at the respective vesting dates.
Vesting schedule is made up of 4 payments over two years:• 25% in May 2011;• 25% in November 2011;• 25% in May 2012;• 25% in November 2012.

Vesting dates

Number of vested units

4,240

475,860

Tenth tranche

Grant date

13 November 2008
Performance and restricted unit plan

Number of units granted(1)

Number of units outstanding(2)Performance units

Restricted units

2,192,740

801,860

1,409,592

377,575

Total number of eligible beneficiaries

Vesting dates

Number of vested units(2)1,684
The performance and restricted units will vest if the participant is still employedby an EADS company at the respective vesting dates and, in the caseof performance units, upon achievement of mid-term business performance.
Vesting schedule is made up of 4 payments over two years:• 25% in May 2012;• 25% in November 2012;• 25% expected in May 2013;• 25% expected in November 2013.
1,422,956

382,535(1) Based on 100% target performance achievement. A minimum of 50% of performance units will vest; 100% in case of on-target performance achievement; up to a maximum of
150% in case of overachievement of performance criteria. In case of absolute negative results (cumulative EBIT* of EADS) during the performance period, the Board can decide toreview the vesting of the Performance units including the 50% portion which is not subject to performance conditions (additional vesting condition).
(2) Re-evaluation is based on 136% performance achievement for the remaining outstanding performance units.

Eleventh tranche

Grant date

13 November 2009
Performance and restricted unit plan
Performance units

Restricted units

Number of units granted(1)2,697,740

928,660

Number of units outstanding

2,579,920

903,820

Total number of eligible beneficiaries

Vesting dates

Number of vested units

1,749
The performance and restricted units will vest if the participant is still employedby an EADS company at the respective vesting dates and, in the caseof performance units, upon achievement of mid-term business performance.
Vesting schedule is made up of 4 payments over two years:• 25% expected in May 2013;• 25% expected in November 2013;• 25% expected in May 2014;• 25% expected in November 2014.
9,150

4,160

(1) Based on 100% target performance achievement. A minimum of 50% of performance units will vest; 100% in case of on-target performance achievement; up to a maximum of
150% in case of overachievement of Performance criteria. In case of absolute negative results (cumulative EBIT* of EADS) during the performance period, the Board can decide toreview the vesting of the performance units including the 50% portion which is not subject to performance conditions (additional vesting condition).

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Twelfth tranche

Grant date

10 November 2010
Performance and restricted unit plan
Performance units

Restricted units

Number of units granted(1)2,891,540

977,780

Number of units outstanding

2,835,240

947,160

Total number of eligible beneficiaries

Vesting dates

Number of vested units

1,711
The performance and restricted units will vest if the participant is still employedby an EADS company at the respective vesting dates and, in the caseof performance units, upon achievement of mid-term business performance.
Vesting schedule is made up of 4 payments over two years:• 25% expected in May 2014;• 25% expected in November 2014;• 25% expected in May 2015;• 25% expected in November 2015.
0700(1) Based on 100% target performance achievement. A minimum of 50% of performance units will vest; 100% in case of on-target performance achievement; up to a maximum of
150% in case of overachievement of performance criteria. In case of absolute negative results (cumulative EBIT* of EADS) during the performance period, the Board can decide toreview the vesting of the Performance units including the 50% portion which is not subject to performance conditions (additional vesting condition).

Thirteenth tranche

Grant date

9 November 2011
Performance and restricted unit plan
Performance units

Restricted units

Number of units granted(1)2,588,950

877,750

Number of units outstanding

2,559,950

877,125

Total number of eligible beneficiaries

Vesting dates

Number of vested units

1,771
The performance and restricted units will vest if the participant is still employedby an EADS company at the respective vesting dates and, in the caseof performance units, upon achievement of mid-term business performance.
Vesting schedule is made up of 4 payments over two years:• 25% expected in May 2015;• 25% expected in November 2015;• 25% expected in May 2016;• 25% expected in November 2016.
0625(1) Based on 100% target performance achievement. A minimum of 50% of performance units will vest; 100% in case of on-target performance achievement; up to a maximum of
150% in case of overachievement of performance criteria. In case of absolute negative results (cumulative EBIT* of EADS) during the performance period, the Board can decide toreview the vesting of the Performance units including the 50% portion which is not subject to performance conditions (additional vesting condition).

Fourteenth tranche

Grant date

13 December 2012
Performance and restricted unit plan
Performance units

Restricted units

Number of units granted(1)2,121,800

623,080

Number of units outstanding

2,121,800

623,080

Total number of eligible beneficiaries

Vesting dates

Number of vested units

1,797
The performance and restricted units will vest if the participant is still employedby an EADS company at the respective vesting dates and, in the caseof performance units, upon achievement of mid-term business performance.
Vesting schedule is made up of 4 payments over two years:• 25% expected in May 2016;• 25% expected in November 2016;• 25% expected in May 2017;• 25% expected in November 2017.
00(1) Based on 100% target performance achievement. A minimum of 50% of performance units will vest; 100% in case of on-target performance achievement; up to a maximum of
150% in case of overachievement of performance criteria. In case of absolute negative results (cumulative EBIT* of EADS) during the performance period, the Board can decide toreview the vesting of the Performance units including the 50% portion which is not subject to performance conditions (additional vesting condition).

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The following table summarises the development of the number of stock options, shares as well as units:
Number of Options

Fourth Tranche

Options granted

Balance at
1 January

Exercised

Forfeited

Balance at
31 December

7,276,700

-

-

(600)

7,276,100

2002
2003

-

7,276,100-(70,125)

7,205,975

2004-

7,205,975(262,647)(165,500)

6,777,828

2005-

6,777,828(2,409,389)(9,250)4,359,189

2006-

4,359,189(1,443,498)(3,775)2,911,916

2007-

2,911,916(189,532)(15,950)

2,706,434

2008-

2,706,434-(159,313)

2,547,121

2009-

2,547,121-(87,845)2,459,276

2010-

2,459,276(88,881)(86,925)

2,283,470

2011-

2,283,470(664,727)(25,200)

1,593,543

2012-

1,593,543(1,375,436)(218,107)0

Forfeited

Balance at
31 December

Number of Options

Fifth Tranche

Options granted

Balance at
1 January

Exercised2003

7,563,980---

7,563,980

2004-

7,563,980(9,600)(97,940)

7,456,440

2005-

7,456,440(875,525)(87,910)

6,493,005

2006-

6,493,005(1,231,420)(31,620)

5,229,965

2007-

5,229,965(386,878)(24,214)

4,818,873

2008-

4,818,873(14,200)(75,080)

4,729,593

2009-

4,729,593-(113,740)

4,615,853

2010-

4,615,853(208,780)(168,120)

4,238,953

2011-

4,238,953(1,044,665)(28,300)

3,165,988

2012-

3,165,988(1,632,503)(30,650)

1,502,835

Number of Options

Options granted

Balance at
1 January

Exercised

Forfeited

Balance at
31 December

2004

7,777,280---

7,777,280

2005-

7,777,280-(78,220)

7,699,060

2006-

7,699,060(2,400)(96,960)

7,599,700

2007-

7,599,700-(1,358,714)

6,240,986

2008-

6,240,986-(183,220)6,057,766

2009-

6,057,766-(41,060)

6,016,706

2010-

6,016,706-(419,680)

5,597,026

2011-

5,597,026(3,500)(324,526)

5,269,000

2012-

5,269,000(1,903,845)(48,542)3,316,613

Sixth Tranche

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Number of Options

Seventh Tranche

2005

Options granted

Balance at
1 January

Exercised

Forfeited

Balance at
31 December

7,981,760---

7,981,760

2006-

7,981,760-(74,160)

7,907,600

2007-

7,907,600-(142,660)

7,764,940

2008-

7,764,940-(1,469,989)

6,294,951

2009-

6,294,951-(49,520)

6,245,431

2010-

6,245,431-(149,040)

6,096,391

2011-

6,096,391-(295,713)

5,800,678

2012-

5,800,678-(466,983)

5,333,695

Number of Options

Options granted

Balance at
1 January

Exercised

Forfeited

Balance at
31 December

2006

1,747,500---

1,747,500

2007-

1,747,500-(5,500)1,742,000

2008-

1,742,000-(64,000)

1,678,000

2009-

1,678,000-(11,000)

1,667,000

Eighth Tranche

2010

-

1,667,000-(16,500)

1,650,500

2011-

1,650,500-(11,000)

1,639,500

2012-

1,639,500(350,000)(87,500)

1,202,000

32,347,220

17,468,709(14,097,426)(6,894,651)

11,355,143

Total options for all Tranches

Number of Units

Units granted

Balance at
1 January

VestedForfeited

Balance at
31 December

Performance units in 2007

1,693,940---

1,693,940

Performance units in 2008-

1,693,940(1,680)(38,760)

1,653,500

Performance units in 2009-

1,653,500(840)(18,560)

1,634,100

Performance units in 2010-

1,634,100(1,720)(29,100)

1,603,280

Ninth Tranche

Performance units in 2011-

1,603,280-(1,603,280)

0Restricted units in 2007

506,060---

506,060

Restricted units in 2008-

506,060-(9,800)496,260

Restricted units in 2009-496,260-(2,940)493,320

Restricted units in 2010-

493,320(640)(5,960)486,720

Restricted units in 2011-

486,720(240,712)(11,500)

234,508

Restricted units in 2012
Total units-

234,508(234,508)-02,200,000

234,508(480,100)(1,719,900)

0EADS FINANCIAL STATEMENTS 2012 — 912

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Number of Units

Tenth Tranche

Balance at
1 January

Units granted

VestedForfeited

Performance units in 2008

2,192,740---

Performance units in 2009-

2,192,740(1,120)(21,280)

Re-evaluation*

Balance at
31 December-

2,170,340

2,192,740

Performance units in 2010-

2,170,340(2,520)(29,120)-

2,138,700

Performance units in 2011-

2,138,700(1,960)(31,920)-

2,104,820-

2,104,820(1,417,356)(29,764)

751,892

1,409,592

801,860

-

-

-

-

801,860

Performance units in 2012
Restricted units in 2008
Restricted units in 2009-

801,860-(6,480)-795,380

Restricted units in 2010-

795,380(2,940)(10,480)-

781,960

Restricted units in 2011-

781,960(840)(19,700)-

761,420

Restricted units in 2012-

761,420(378,755)(5,090)-377,575

2,994,600

2,866,240(1,805,491)(153,834)

751,892

1,787,167

Total units*

Re-evaluation is based on 136% performance achievement for the remaining outstanding performance units.

Number of Units

Eleventh Tranche

Units granted

Balance at
1 January

VestedForfeited

Balance at
31 December

Performance units in 2009

2,697,740---

2,697,740

Performance units in 2010-

2,697,740(4,250)(29,400)

2,664,090

Performance units in 2011-

2,664,090(3,600)(48,110)2,612,380

Performance units in 2012-

2,612,380(1,300)(31,160)

2,579,920

Restricted units in 2009

928,660---

928,660

Restricted units in 2010-

928,660(400)(1,400)926,860

Restricted units in 2011-

926,860(3,000)(13,500)

910,360

Restricted units in 2012
Total units-

910,360(760)(5,780)903,820

3,626,400

3,522,740(13,310)(129,350)

3,483,740

Forfeited

Balance at
31 December

Number of Units

Twelfth Tranche

Units granted

Balance at
1 January

VestedPerformance units in 2010

2,891,540--(1,400)2,890,140

Performance units in 2011-

2,890,140-(46,700)

2,843,440

Performance units in 2012-

2,843,440-(8,200)2,835,240

Restricted units in 2010

977,780

-

-

(460)

977,320

Restricted units in 2011-

977,320-(20,920)

956,400

Restricted units in 2012-

956,400(700)(8,540)947,160

3,869,320

3,799,840(700)(86,220)

3,782,400

Total units

Number of Units

Thirteenth Tranche

Units granted

Balance at
1 January

VestedForfeited

Balance at
31 December

2,588,950---

2,588,950-

2,588,950-(29,000)

2,559,950

877,750---

877,750

Performance units in 2011
Performance units in 2012
Restricted units in 2011
Restricted units in 2012
Total units

92 — EADS FINANCIAL STATEMENTS 2012-

877,750(625)-

877,125

3,466,700

3,466,700(625)(29,000)

3,437,075

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Number of Units

Fourteenth Tranche

Units granted

Balance at
1 January

VestedForfeited

Balance at
31 December

Performance units in 2012

2,121,800--

2,121,800

Restricted units in 2012

623,080--

623,080

2,744,880--

2,744,880

Total unitsb) Employee Stock Ownership Plan (ESOP)In 2012 (and 2011), the Board of Directors approved an additional
ESOP. For the 2012 and 2011 ESOP, eligible employees were able
to purchase a ﬁxed number of previously unissued shares at fairvalue (10, 30, 50, 100, 200 or 400 shares). EADS matched eachﬁxed number of shares with a number of free EADS shares basedon a determining ratio (10, 20, 30, 43, 67 and 107 free shares,
respectively). During a lockup period of at least one year or,
provided the purchase took place in the context of a mutualfund (regular saving plan), of ﬁve years, employees are restrictedfrom selling the shares, but have the right to receive all dividends
paid. Employees who purchased directly EADS shares have in
addition the ability to vote at the annual Shareholder Meetings.
The subscription price was equal to the opening price at the Paris

stock exchange on 31 May 2012 and amounted to € 27.07 (in 2011
the subscription price for ESOP was equal to the opening priceat the Paris stock exchange on 3 June 2011 and amounted to€ 21.49). Investing through the mutual fund led to a price which
was the higher of the subscription price or the average opening
price at the Paris stock during the 20 trading days immediately
preceding 31 May 2012 (in 2011: preceding 3 June 2011), resulting
in a price of € 28.55 (in 2011: € 22.15). EADS issued and sold2,177,103 ordinary shares (in 2011: 2,445,527 ordinary shares)
with a nominal value of € 1.00 in total. Compensation expense of€ 18 million (in 2011: € 15 million) was recognised in connection
with ESOP.

36. Related Party Transactions
Related parties — The Group has entered into various business
transactions with related companies in 2012 and 2011 that haveall been carried out in the normal course of business. As is theGroup’s policy, related party transactions have to be carried out atarm’s length. Transactions with related parties include the Frenchgovernment, Daimler AG, Lagardère and the Spanish government(SEPI) and their related entities. Except for the transactions with
the French and Spanish government, the transactions are notconsidered material to the Group either individually or in theaggregate. The transactions with the French government include
mainly sales from Eurocopter, Astrium, Cassidian and Airbus
Military for programmes like Tiger, M51 / M45 ballistic missiles and
SCALP naval cruise missiles. The transactions with the Spanish
government include mainly sales from Airbus Military and Cassidian
for military programmes. The transactions with the joint ventures
mainly concern the Euroﬁghter programme.

This agreement aims at normalising and simplifying the governanceof EADS while securing a shareholding structure that allows
France, Germany and Spain to protect their legitimate strategicinterests. Subject to customary regulatory conditions and theapproval of the shareholders in an Extraordinary General Meeting,the implementation of the changes shall be closed in 2013.
EADS intends to enter into an agreement with the French State by
the Consummation pursuant to which EADS will:— grant the French State a right of first offer in case of the sale of
all or part of its shareholding in Dassault Aviation; and— commit to consult with the French State prior to making any
decision at any General Meeting of Dassault Aviation.
This agreement will be conditional upon (A) obtaining the required
regulatory approvals and (B) the Consummation occurring.

On 5 December 2012, EADS announced that their Board of
Directors and core shareholders have agreed on a far-reachingchange of the company’s shareholding structure and governance.

EADS FINANCIAL STATEMENTS 2012 — 932

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The following table discloses the related party transactions on a full EADS’ share as of 31 December 2012:(In € million)

French government

Sales of goods
Purchases
and servicesof goods andand otherservices andincome in other expense in
2012
2012

Receivables
due as of
31 December
2012

Payablesdue as of
31 December
2012

Other
Liabilities / Loans
received as of
31 December
2012(1)

1,347

91

706

6

2,852

Spanish government (SEPI)

63

0

20

0

610

Daimler AG

1

15

1

0

0

Lagardère group

0

0

0

0

0

1,411

106

727

6

3,462

97

461

84

205

0

2,192

46

612

41

1,000

488

97

13

7

24

Total transactions with shareholder
Total transactions with French government
related entities
Total transactions with joint ventures
Total transactions with associates(1) Including European Governments refundable advances from the French and Spanish government.

As of 31 December 2012, EADS granted guarantees to the Spanish State in the amount of € 52 million mainly relating to advancepayments received and performance bonds and in the amount of € 452 million to Air Tanker group in the UK, a loan to Daher-Socata
SA in the amount of € 24 million and a loan to OnAIR B.V. in the amount of € 9 million.

The following table discloses the related party transactions being made comparable on a full EADS’ share as of 31 December 2011:(In € million)

French government

Sales of goods
and services
and otherincome in2011

Purchases ofgoods andservices andother expense in2011

Receivables
due as of
31 December
2011

Payablesdue as of
31 December
2011

Other
Liabilities / Loans
received as of
31 December
2011(1)

1,252

139

1,484

0

2,351

Spanish government (SEPI)

63

0

67

0

535

Daimler AG

2

16

1

3

0

Lagardère group
Total transactions with shareholder
Total transactions with French government
related entities
Total transactions with joint ventures
Total transactions with associates

0

6

0

0

0

1,317

161

1,552

3

2,886

93

509

92

151

0

2,110

39

723

18

1,526

315

25

31

6

0

(1) Including European Governments refundable advances from the French and Spanish government.

As of 31 December 2011, EADS granted guarantees to the Spanish State in the amount of € 181 million mainly relating to advancepayments received and performance bonds and in the amount of € 334 million to Air Tanker group in the UK, a loan to Daher-Socata
SA in the amount of € 24 million and a loan to OnAIR B.V. in the amount of € 23 million.
On 7 June 2011, EADS N.V. acquired the remaining 25% in DADC Luft- und Raumfahrt Beteiligungs AG, Munich (Germany) from Daimler
AG, please refer to Note 4 “Acquisitions and Disposals”.

94 — EADS FINANCIAL STATEMENTS 2012

Notes to the Consolidated Financial Statements (IFRS)
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Remuneration – The annual remuneration and related compensation costs of all of key management personnel, i.e. Non-Executive
Board Members, Executive Board Members and Members of the Executive Committee, can be summarised as follows:
2012

Compensation expense(In € million)

Non-Executive Board Members(3)

PensionDefined benefit
obligation(1)Pension expense(2)

-

-

1.7
(4)

Executive Board Member (former CEO Louis Gallois)

1.2

3.9

-

Executive Board Member (current CEO Tom Enders)(4)

2.1

11.8

1.0

Other Executive Committee Members(5)

23.4

29.1

5.3

(1)
(2)
(3)
(4)

Amount of the net pension defined benefit obligation.
Aggregated amount of current service and interest costs related to the defined benefit obligation accounted for during fiscal year 2012.
Non-Executive Board Members in office as at 31 December 2012.
The Chief Executive Officer was the sole Executive Board Member in office as at 31 December 2012. Figures account for pro rata periods considering the change of EADS CEO
during 2012.
(5) Executive Committee Members in office as at 31 December 2012, including specific exceptional bonus if any and EADS N.V. compensation.

2011

Compensation expense

Executive Board Member(4)

Other Executive Committee Members
(1)
(2)
(3)
(4)
(5)

(5)

PensionDefined benefit
obligation(1)Pension expense(2)

1.6

-

-

3.0

2.9

0.6

17.0

32.0

3.1

(In € million)

Non-Executive Board Members(3)2Amount of the net pension defined benefit obligation.
Aggregated amount of current service and interest costs related to the defined benefit obligation accounted for during fiscal year 2011.
Non-Executive Board Members in office as at 31 December 2011.
The Chief Executive Officer was the sole Executive Board Member in office as at 31 December 2011.
Executive Committee Members in office as at 31 December 2011, including specific exceptional bonus if any and EADS N.V. compensation.

Additionally, performance units granted in 2012 to the Chief
Executive Ofﬁcer and to the other Executive Committee Members
represented 275,900 units.
The amounts detailed above do neither comprise the termination
package nor the estimated cost of long-term incentives granted
to Executive Committee Members.
For more information in respect of remuneration of Directors,
see “Notes to the Company Financial Statements – Note 11:
Remuneration”.
EADS has not provided any loans to / advances to / guarantees
on behalf of Directors, former Directors or Executive Committee
Members except for salary and reimbursement advances and anundertaking to potentially assume certain legal defence costs forcertain of its Executive Committee Members in relation with certain
regulatory or judicial proceedings.
The Executive Committee Members are furthermore entitled to atermination indemnity when the departure results from a decisionby the Company (good leaver). The maximum termination indemnity
comprises 18 months of an annual total target salary.
The indemnity could be reduced pro rata or would even not beapplicable depending on age and date of retirement.
In order to strengthen the alignment of EADS top managementwith the long-term growth objectives of the Company, the Board
has requested EADS Executive Committee Members to acquire
and to hold in the future EADS shares with a value equal to theindividual annual contractual remuneration consisting of “annual
base salary” and “annual variable remuneration (at 100% target
level)”. The Board has not set a speciﬁc time delay to acquire
the requested number of EADS shares but expects Executive
Committee Members to use speciﬁcally gains from EADS Longterm Incentive Plans to achieve this goal in a timely manner.
The Company grants the Members of the Executive Committee
appropriate insurance coverage, in particular D&O insurance.
Executive Committee Members are also entitled to a company car.

EADS FINANCIAL STATEMENTS 2012 — 95

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37. Interest in Joint Ventures
The Group’s principal investments in joint ventures and the proportion of ownership are included in Appendix “Information on principal
investments”. Joint ventures are consolidated using the proportionate method.
The following amounts represent the Group’s proportional share of the assets, liabilities, income and expenses of the signiﬁcant joint
ventures (MBDA, Atlas, ATR, Signalis and Emiraje Systems) in aggregate:
2012(In € million)

Non-current assets
Current assets
Non-current liabilities

2011

557

564

2,526

3,049

522

490

Current liabilities

2,567

2,607

Revenues

1,928

1,876

148

154

Profit for the period

The Group’s proportional share in contingent liabilities of these joint ventures as of 31 December 2012 amounts in aggregate to€ 495 million (2011: € 391 million).

38. Earnings per Share
Basic earnings per share — Basic earnings per share are calculated by dividing proﬁt for the period attributable to equity owners of
the parent (Net income) by the weighted average number of issued ordinary shares during the year, excluding ordinary shares purchasedby the Group and held as treasury shares.
2012

2011

2010

Profit for the period attributable to equity owners of the parent(Net income)€ 1,228 million€ 1,033 million€ 553 million

Weighted average number of ordinary shares

819,378,264

812,507,288

810,693,339€ 1.50€ 1.27€ 0.68

Basic earnings per share

Diluted earnings per share — For the calculation of the diluted
earnings per share, the weighted average number of ordinary sharesis adjusted to assume conversion of all potential ordinary shares.
After the end of the vesting period of the performance andrestricted shares granted under the 8th tranche, the Group’s only
remaining category of dilutive potential ordinary shares is stock

Profit for the period attributable to equity owners of the parent(Net income)Weighted average number of ordinary shares (diluted)
Diluted earnings per share

96 — EADS FINANCIAL STATEMENTS 2012

options. In 2012, the average share price of EADS exceeded theexercise price of the 5th, 6th and the 8th stock option plan (in2011: the 4th and the 5th stock option plan, in 2010: the 5th stock
option plan). Hence, 1,173,667 shares related to stock options (in2011: 1,194,624 shares, in 2010: 242,591 shares) were consideredin the calculation of diluted earnings per share.
2012

2011

2010

€ 1,228 million€ 1,033 million€ 553 million

820,551,931

813,701,912

810,935,930€ 1.50€ 1.27€ 0.68

Notes to the Consolidated Financial Statements (IFRS)
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39. Number of Employees
The number of employees at 31 December 2012 is 140,405 as compared to 133,115 at 31 December 2011.

40. Events after the Reporting Date
On 31 January 2013, ST Aerospace Ltd., Singapore (Singapore)acquired a 35% equity stake in Elbe Flugzeugwerke, Dresden(Germany) (EFW) to support the establishment of a strategic
partnership for the development of an A330 passenger-to-freighter
conversion program. EADS as the former sole shareholder retains

65% of the shares of EFW. In 2012 EFW contributed € 207 million
to EADS Group revenues on a preconsolidated base.
These Consolidated Financial Statements have been authorisedfor issuance by the Board of Directors on 26 February 2013.

EADS FINANCIAL STATEMENTS 2012 — 972

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2.6 Appendix “Information on Principal
Investments” — Consolidation Scope
2012

%

2011

%

Company

Head officeF

100.00F

100.00AD Grundstückgesellschaft mbH & Co. KG

Pullach i. Isartal (Germany)F

100.00F

100.00Aerolia S.A.S.

Toulouse (France)F

100.00F

100.00AFS Cayman II Ltd.

Cayman Islands

F

100.00F

100.00

AIFS (Cayman) Ltd.

Cayman Islands

F

100.00F

100.00

AIFS Cayman Liquidity Ltd.

Cayman Islands

F

100.00F

100.00

AIFS Leasing Company Ltd.

Dublin (Ireland)

F

70.00

F

70.00

Airbus (Beijing) Engineering Centre Company Ltd.

Beijing (China)
Beijing (China)

Airbus Commercial

F

100.00F

100.00Airbus (China) Enterprise Management& Services Company Ltd.

F

100.00F

100.00Airbus (TIANJIN) Delivery Center Ltd.

Tianjin (China)

P

51.00

P

51.00

Airbus (TIANJIN) Final Assembly Company Ltd.

Tianjin (China)

P

51.00

P

51.00

Airbus (TIANJIN) Jigs & Tools Company Ltd.

Tianjin (China)F100.00Airbus (TIANJIN) Logistics Company Ltd.

Tianjin (China)F100.00F

100.00Airbus Americas Customer Services, Inc.

Herndon, VA (USA)F

100.00F

100.00Airbus Americas Engineering, Inc.

Herndon, VA (USA)F

100.00F

100.00Airbus Americas Sales, Inc.

Herndon, VA (USA)F

100.00F

100.00Airbus Americas, Inc.

Herndon, VA (USA)F

100.00F

100.00Airbus China Ltd.

Hong Kong (China)F100.00F

100.00Airbus Corporate Jet Centre S.A.S. (ACJC)

Toulouse (France)F

100.00Airbus Denmark Holdings ApS

Copenhagen (Denmark)F

100.00F

100.00Airbus Filton Limited

Bristol (United Kingdom)F

100.00F

100.00Airbus Financial Service Unlimited

Dublin (Ireland)

F

100.00Airbus Flight Hour Services Ltd.

Dublin (Ireland)

E

50.00

E

50.00

Airbus Freighter Conversion GmbH

Dresden (Germany)F

100.00F

100.00Airbus Invest

Blagnac (France)F

100.00F

100.00Airbus Invest II S.A.S.

Blagnac (France)F

100.00F

100.00Airbus Operations GmbH

Hamburg (Germany)F

100.00F

100.00Airbus Operations Ltd.

Filton (United Kingdom)F

100.00F

100.00Airbus Operations S.A.S.

Toulouse (France)F

100.00F

100.00Airbus Operations S.L.

Madrid (Spain)F

100.00F

100.00Airbus ProSky S.A.S.

Blagnac (France)F

100.00F

100.00Airbus Real Estate Premium AEROTEC
Nord GmbH & Co. KG

Pullach i. Isartal (Germany)F

100.00F

100.00Airbus S.A.S.

Blagnac (France)F

100.00F

100.00Airbus Transport International S.N.C. (ATI)

Blagnac (France)F

100.00F

100.00Airbus UK Limited

Bristol (United Kingdom)F

100.00F

100.00Aviateur Finance Ltd.

Dublin (Ireland)

F

100.00F

100.00Aviateur International Ltd.

Dublin (Ireland)

F: Fully consolidated
P: Proportionate consolidated
E: At equity consolidated
The stated percentage of ownership is related to EADS N.V.
* Regarding associated investments, only the parent company is stated in this list.

98 — EADS FINANCIAL STATEMENTS 2012

Notes to the Consolidated Financial Statements (IFRS)
2.6 Appendix “Information on Principal Investments” — Consolidation Scope

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2012

%

2011

%

2

3

4

5

4

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Company

Head officeF

100.00F

100.00Aviateur Leasing Ltd.

Dublin (Ireland)

E

33.33

E

33.33

Blue Sky Alliance GmbH

Kaltenkirchen (Germany)F

100.00F

100.00CIMPA GmbH

Hamburg (Germany)F

100.00F

100.00CIMPA Ltd.

Bristol (United Kingdom)F

100.00F

100.00CIMPA S.A.S.

Blagnac (France)F

100.00F

100.00CTC GmbH

Stade (Germany)F

100.00F

100.00EADS Real Estate Premium AEROTEC
Augsburg GmbH & Co. KG

Augsburg (Germany)F

100.00F

100.00Elbe Flugzeugwerke GmbH

Dresden (Germany)

P

50.00

P

50.00

Hua-Ou Aviation Support Centre Ltd.

Beijing (China)

P

50.00

P

50.00

Hua-Ou Aviation Training Centre Ltd.

Beijing (China)F100.00F

100.00IFR France S.A.S.

Colomiers (France)F

100.00F

100.00Metron Aviation, Inc.

Dulles, VA (USA)F

100.00F

100.00Metron Holdings, Inc.

Dulles, VA (USA)

E

30.05

E

30.05

OnAir N.V.

Amsterdam (Netherlands)

F

74.90

F

74.90

PFW Aerospace AG

Speyer (Germany)F

100.00F

100.00Premium AEROTEC GmbH

Augsburg (Germany)F

100.00F

100.00

Satair A / S

Kastrup (Denmark)F

100.00F

100.00

Satair China

Beijing (China)F100.00F

100.00

Satair Pte Ltd.

Singapore (Singapore)F

100.00F

100.00

Satair UK Ltd.

Heston (United Kingdom)F

100.00F

100.00

Satair USA, Inc.

Atlanta, GA (USA)F

100.00F

100.00Star Real Estate S.A.S.

Toulouse (France)

E

29.50

E

29.50

Telair International Services Pte Ltd.

Singapore (Singapore)

Airbus Military S.L.

Madrid (Spain)

Additionally consolidated are 28 SPEs.
Airbus Military
F

90.00

F

90.00

E

40.00

E

40.00

AirTanker Holdings Ltd.*

London (United Kingdom)F

100.00F

100.00EADS CASA North America, Inc.

Chantilly, VA (USA)F

100.00F

100.00EADS CASA S.A. (Unit: Airbus Military)

Madrid (Spain)

F

78.54

F

78.54

EADS PZL “ WARSZAWA-OKECIE” S.A.

Warsaw (Poland)

F

100.00F

100.00AA Military Maintenance Pty. Ltd.

Brisbane (Australia)

F

100.00F

100.00AA New Zealand Pty. Ltd.

Bankstown (Australia)

F

100.00F

100.00American Eurocopter Corp.

Dallas, TX (USA)F

100.00F

100.00Australian Aerospace Composites Pty Ltd.

Sydney (Australia)

F

100.00F

100.00Australian Aerospace Ltd.

Bankstown (Australia)

F

100.00F

100.00EADS SECA S.A.S.

Le Bourget (France)F

100.00F

100.00EIP Holding Pty. Ltd.

Bankstown (Australia)

F

75.00

F

75.00

Eurocopter South East Asia Pte. Ltd.

Singapore (Singapore)F

100.00F

100.00Eurocopter Canada Ltd.

Ontario (Canada)F

100.00Eurocopter Chile S.A.

Santiago (Chile)F

100.00Eurocopter Cono Sur S.A.

Montevideo (Uruguay)F

100.00F

100.00Eurocopter de Mexico Planta Queretaro S.A. de C.V.

Queretaro (Mexico)F

100.00F

100.00Eurocopter de Mexico S.A.

Mexico D.F. (Mexico)

Eurocopter

F: Fully consolidated
P: Proportionate consolidated
E: At equity consolidated
The stated percentage of ownership is related to EADS N.V.
* Regarding associated investments, only the parent company is stated in this list.

EADS FINANCIAL STATEMENTS 2012 — 992

Notes to the Consolidated Financial Statements (IFRS)
2.6 Appendix “Information on Principal Investments” — Consolidation Scope

1

2

3

4

5

4

2012

%

2011

%

F

100.00F

100.00Eurocopter Deutschland GmbH

Donauwörth (Germany)F

100.00F

100.00Eurocopter Deutschland Real Estate GmbH & Co. KG

Pullach i. Isartal (Germany)F

100.00F

100.00Eurocopter España S.A.

Madrid (Spain)F

100.00F

100.00Eurocopter Financial Services Ltd.

Dublin (Ireland)

F

100.00F

100.00Eurocopter Holding S.A.

Paris (France)F

100.00F

100.00Eurocopter International Services Ltd.

Dublin (Ireland)

F

90.00

F

90.00

Eurocopter Japan Co. Ltd.

Tokyo (Japan)

F

90.00

F

90.00

Eurocopter Japan RG Co.Ltd.

Tokyo (Japan)

F

90.00

Eurocopter Japan T&E Co. Ltd.

Osaka (Japan)

F

100.00F

100.00F

100.00Company

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Head office

Eurocopter Malaysia Sdn. Bhd.

Subang Selongor (Malaysia)

Eurocopter Malaysia Simulation Center Sdn. Bhd.

Subang Selongor (Malaysia)

F

95.00

F

95.00

Eurocopter S.A.S.

Marignane (France)F

100.00F

100.00Eurocopter South Africa Pty. Ltd.

Lanseria (South Africa)

F

100.00F

100.00Eurocopter Training Services S.A.S.

Marignane (France)F

100.00F

100.00Eurocopter UK Ltd.

Oxford (United Kingdom)F

100.00Eurovertol LLC

Moscow (Russia)

F

85.66

F

85.66

Helibras - Helicopteros do Brasil S.A.

Itajuba (Brazil)

F

50.00

F

50.00

Heliescuela S.A.P.I. de C.V.

Mexico D.F. (Mexico)

E

25.00

E

25.00

HFTS Helicopter Flight Training Services GmbH

Hallbergmoos (Germany)F

100.00F

100.00

Korean Helicopter Development Support Ltd.

Sacheon-si (South Korea)

F

100.00Motorflug Baden-Baden GmbH

Baden-Baden (Germany)F

100.00Spaero Trade GmbH

Rheinmünster (Germany)F

100.00F

100.00The Sigma Aerospace Pension Trustee Ltd.

Croydon (United Kingdom)F

100.00F

100.00

Vector Aerospace (UK-Holdings) Ltd.

Aberdeen (United Kingdom)F

100.00F

100.00

Vector Aerospace Africa Pty. Ltd.

Lanseria (South Africa)

F

100.00

Vector Aerospace Australia Pty. Ltd.

Brisbane (Australia)

F

100.00F

100.00

Vector Aerospace Corporation

Toronto (Canada)F

100.00F

100.00

Vector Aerospace Engine Services UK Ltd.

Croydon (United Kingdom)F

100.00F

100.00

Vector Aerospace Engine Services-Atlantic, Inc.

Toronto (Canada)F

100.00

Vector Aerospace Financial Services Ltd.

Dublin (Ireland)

F

67.70

F

67.70

Vector Aerospace Helicopter Services California, Inc.

Sacramento, CA (USA)F

100.00F

100.00

Vector Aerospace Helicopter Services, Inc.

Toronto (Canada)F

100.00F

100.00

Vector Aerospace Holdings Ltd.

Toronto (Canada)F

100.00F

100.00

Vector Aerospace International Ltd.

Gosport (United Kingdom)F

100.00F

100.00

Vector Aerospace USA Holdings, Inc.

Las Vegas, NV (USA)F

100.00F

100.00

Vector Aerospace USA, Inc.

Montgomery, AL (USA)F

100.00F

100.00

Vector Holding S.A.S.

Marignane (France)

E

24.01

E

24.01

Advanced Lithium Systems Europe S.A.

Athens (Greece)

CassidianF

100.00F

100.00Apsys S.A.

Suresnes (France)

E

14.70

E

14.70

Atlas Defence Technology Sdn. Bhd.

Kuala Lumpur (Malaysia)

P

49.00

P

49.00

Atlas Elektronik Finland Oy

Helsinki (Finland)

P

49.00

P

49.00

Atlas Elektronik GmbH

Bremen (Germany)

P

49.00

P

49.00

Atlas Elektronik Pty. Ltd.

Sydney (Australia)

F: Fully consolidated
P: Proportionate consolidated
E: At equity consolidated
The stated percentage of ownership is related to EADS N.V.
* Regarding associated investments, only the parent company is stated in this list.

100 — EADS FINANCIAL STATEMENTS 2012

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Head office

2012

%

2011

%

Company

P

49.00

P

49.00

Atlas Elektronik UK (Holdings) Ltd.

Newport (United Kingdom)

P

49.00

P

49.00

Atlas Elektronik UK Ltd.

Newport (United Kingdom)

P

49.00

P

49.00

Atlas Hydrographic GmbH

Bremen (Germany)

P

49.00

P

49.00

Atlas Maridan ApS

Horsholm (Denmark)

P

49.00

P

49.00

Atlas Naval Engineering Company

Kyungnam (South Korea)

E

24.01

Atlas Naval Support Centre Ltd.

Bangkok (Thailand)

P

49.00

P

49.00

Atlas Naval Systems Malaysia Sdn. Bhd.

Kuala Lumpur (Malaysia)

P

49.00

P

49.00

Atlas North America LLC

Virginia Beach, VA (USA)

F

43.89

F

43.89

Aviation Defense Service S.A.

Saint-Gilles (France)
Aschau / Inn (Germany)

P

37.50

P

37.50

Bayern-Chemie Gesellschaft
für flugchemische Antriebe mbH

F

100.00F

100.00Cassidian Aviation Training Services S.A.S.

Paris (France)F

100.00F

100.00Cassidian Belgium N.V.

Oostkamp (Belgium)

F

100.00F

100.00Cassidian Communications GmbHUlm (Germany)F

100.00F

100.00F

100.00F

100.00F

100.00F

100.00F

100.00FF

100.00F

F
F
F

100.00

Plant Holdings, Inc.

Temecula, CA (USA)

Cassidian Cybersecurity GmbH

Ottobrunn (Germany)

Cassidian Cybersecurity S.A.S.

Elancourt (France)

Cassidian Finland Oy

Helsinki (Finland)

100.00Cassidian Ltd.

Newport (United Kingdom)

100.00Cassidian Ltd. - Holding

Newport (United Kingdom)

100.00Cassidian Optronics GmbH

Oberkochen (Germany)

70.00

Cassidian Optronics Pty. Ltd.

Irene (South Africa)

100.00Cassidian Real Estate Manching GmbH & Co. KG

Pullach i. Isartal (Germany)
Pullach i. Isartal (Germany)
Elancourt (France)FF

100.00F

100.00Cassidian Real Estate Ulm /Unterschleißheim GmbH & Co. KG

F

100.00F

100.00Cassidian S.A.S.

F

100.00F

100.00Cassidian Solutions S.A.U.

Madrid (Spain)F

100.00F

100.00Cassidian Test & Services Ltd.

Wimborne (United Kingdom)F

100.00F

100.00Cassidian Test & Services S.A.S.

Velizy (France)

Cybicom Atlas Defence Pty. Ltd.

Umhlanga Rocks(South Africa)

E

19.60

E

19.60

F

100.00F

100.00Dornier Consulting GmbHFriedrichshafen (Germany)F

100.00F

100.00EADS CASA S.A. (Unit: Military Aircraft)

Madrid (Spain)F

100.00F

100.00Cassidian Saudi Ltd.

Riyadh (Saudi Arabia)

F

100.00F

100.00EADS Deutschland GmbH (Unit: Cassidian)

Ottobrunn (Germany)F

100.00F

100.00EADS Operations & Services UK Ltd.

Newport (United Kingdom)F

100.00EADS Secure Networks S.A.S.

Elancourt (France)F

100.00F

100.00Cassidian Mexico SA de C.V.

Mexico D.F. (Mexico)

P

49.00

P

49.00

Emiraje Systems LLC

Abu Dhabi(United Arab Emirates)

E

30.00

E

30.00

ESG Elektroniksystem- und Logistikgesellschaft mbH

Munich (Germany)

E

24.50

E

24.50

ET Marinesysteme GmbH

Wilhelmshaven (Germany)F

100.00F

100.00Fairchild Controls Corporation

Frederick, MD (USA)F

100.00F

100.00FmElo Elektronik- und Luftfahrtgeräte GmbH

Ottobrunn (Germany)F

100.00F

100.00Get Electronique S.A.S.

Castres (France)F

100.00F

100.00GFD Gesellschaft für Flugzieldarstellung mbH

Hohn (Germany)

F

75.00

F

87.40

GEW Technologies Pty. Ltd.

Pretoria (South Africa)

F: Fully consolidated
P: Proportionate consolidated
E: At equity consolidated
The stated percentage of ownership is related to EADS N.V.
* Regarding associated investments, only the parent company is stated in this list.

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2

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%

2011

%

Company

Head office

P

49.00

P

50.00

P

49.00

Hagenuk Marinekommunikation GmbH

Flintbek (Germany)

P

50.00

Maîtrise d’Oeuvre Système S.A.S.

Issy-les-Moulineaux (France)

P

37.50

P

37.50

E

49.00

E

49.00

Matrium GmbH

Karlsruhe (Germany)

P

37.50

P

37.50

MBDA Deutschland GmbH

Schrobenhausen (Germany)

P

37.50

P

37.50

MBDA España S.L.

Madrid (Spain)

P

37.50

P

37.50

MBDA France S.A.S.

Velizy (France)

P

75.00

P

75.00

MBDA Holding S.A.S.

Velizy (France)

P

37.50

P

37.50

P

37.50

P

37.50

MBDA Italy SpA

Roma (Italy)

P

37.50

P

37.50

MBDA Reinsurance Ltd.

Dublin (Ireland)

P

37.50

P

37.50

MBDA S.A.S.

Velizy (France)

P

37.50

P

37.50

MBDA Services S.A.

Velizy (France)

P

37.50

P

37.50

MBDA Treasury Ltd.

Jersey (United Kingdom)

P

37.50

P

37.50

MBDA UAE Stevenage (United Kingdom)

P

37.50

P

37.50

MBDA UK Ltd. Stevenage (United Kingdom)

P

37.50

P

37.50

Matra Electronique S.A.S. Le Plessis-Robinson (France)

MBDA International Ltd. Stevenage (United Kingdom)

MBDA, Inc.

Westlack, CA (USA)NETASQ S.A

Villeneuve d’Asq (France)

Patria Oyj

Helsinki (Finland)

F

99.84

E

26.80

E

26.80

F

80.00

F

80.00

F

51.00

E

18.75

E

18.75

P

79.60

P

79.60

Signalis GmbH

Bremen (Germany)

P

79.60

P

79.60

Signalis Holding GmbH

Unterschleißheim (Germany)

P

79.60

P

79.60

Signalis S.A.S.

Bozons (France)

P

49.00

P

49.00

Sonartech Atlas Pty. Ltd.

Sydney (Australia)

P

25.13

P

25.13

TAURUS Systems GmbH

Schrobenhausen (Germany)

37.50

TDW- Ges. für verteidigungstechnische WirksystemeGmbH

Schrobenhausen (Germany)P

Pentastar S.A.

Paris (France)

Rheinmetall Airborne Systems GmbH

Bremen (Germany)

Roxel S.A.

Saint-Médard-en-Jalles(France)

37.50

P

E

50.00

E

50.00

United Monolithic Semiconductors Holding*Orsay (France)

F

90.00

F

90.00

UTE CASA y Aeronautica industrial S.A.

Madrid (Spain)F

100.00F

100.00Astrium Americas, Inc.

Rockville, MD (USA)F

100.00F

100.00Astrium GmbH (Unit: Satellites)

Munich (Germany)F

100.00F

100.00Astrium GmbH (Unit: Services)

Munich (Germany)F

100.00F

100.00Astrium GmbH (Unit: Space Transportation)

Munich (Germany)F

100.00Astrium GmbH (Unit: HQs & Holdings)

Munich (Germany)F

100.00F

100.00Astrium Holding S.A.S.

Paris (France)F

100.00F

100.00F

100.00Astrium Ltd. (Unit: Satellites) Stevenage (United Kingdom)F

100.00F

100.00Astrium Ltd. (Unit: Services) Stevenage (United Kingdom)F

100.00F

100.00Astrium Pte Ltd.

Singapore (Singapore)F

100.00F

100.00Astrium S.A.S. (Unit: HQs & Holdings)

Les Muraux (France)F

100.00F

100.00Astrium S.A.S. (Unit: Satellites)

Toulouse (France)

Astrium

Astrium Ltd. (Unit: HQs & Holdings) Stevenage (United Kingdom)

F: Fully consolidated
P: Proportionate consolidated
E: At equity consolidated
The stated percentage of ownership is related to EADS N.V.
* Regarding associated investments, only the parent company is stated in this list.

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Company

Head office

2012

%

2011

%

F

100.00F

100.00Astrium S.A.S. (Unit: Services)

Paris (France)F

100.00F

100.00Astrium S.A.S. (Unit: Space Transportation)

Les Muraux (France)F

100.00Astrium s.r.l.

Rome (Italy)F

100.00F

100.00Astrium Services AS

Lysaker (Norway)

F

100.00F

100.00Astrium Services BC AS

Lysaker (Norway)

F

100.00F

100.00Astrium Services BC B.V. ‘s-Gravenhage (Netherlands)

F

100.00F

100.00Astrium Services BC GmbH

Köln (Germany)F

100.00F

100.00Astrium Services BC KKTokyo (Japan)

F

65.00

F

65.00

Astrium Services BC Ltd.

Dar es Salaam (Tansania)

F

100.00F

100.00Astrium Services BC MEPE

Athen (Greece)

F

100.00F

100.00Astrium Services BC S.A.

Brussels (Belgium)

F

100.00F

100.00Astrium Services BC S.A.S.

Paris (France)F

100.00F

100.00Astrium Services BC S.r.o.

Bratislava (Slovakia)

F

100.00F

100.00Astrium Services BC, Inc.

Rockville, MD (USA)F

100.00F

100.00F

100.00F

100.00Astrium Services Enterprises AS

Holmestrand (Norway)

F

100.00F

100.00Astrium Services Enterprises S.A.S.

Choisy-le-Roi (France)F

100.00F

100.00Astrium Services GmbH

Ottobrunn (Germany)F

100.00F

100.00Astrium Services Government, Inc.

Rockville, MD (USA)F

100.00F

100.00Astrium Services Holding S.A.S.

Paris (France)F

100.00F

100.00Astrium Services Maritime GmbH

Hamburg (Germany)F

100.00F

100.00

F

98.86

F

98.86

Axio-Net GmbHHannover (Germany)

F

54.40

F

54.40

Beijing Spot Image Co Ltd.

Beijing (China)

Collaborative Engineering s.r.l.

Rome (Italy)

100.00Computadoras, Redes e Ingenieria SA (CRISA)

Madrid (Spain)

Astrium Services BCFZ LLC Dubai (United Arab Emirates)

Astrium Services UK Ltd. Stevenage (United Kingdom)

F

56.76

F

100.00

F

F

99.99

F

99.99

DMC International Imaging Ltd.

Surrey (United Kingdom)F

100.00F

100.00Dutch Space B.V.

Leiden (Netherlands)

F

100.00F

100.00Astrium B.V.

The Hague (Netherlands)

F

100.00F

100.00Astrium España S.L.

Madrid (Spain)F

100.00F

100.00EADS CASA Espacio S.L.

Madrid (Spain)F

100.00F

100.00GPT Special Project Management Ltd.

Riyadh (Saudi Arabia)

F

76.85

F

76.85

i-cubed LLC

Fort Collins, CL (USA)F

100.00F

100.00Imass Holding Limited

Newcastle (United Kingdom)F

100.00F

100.00Imass Ltd.

Newcastle (United Kingdom)F

100.00F

100.00

Infoterra GmbHFriedrichshafen (Germany)F

100.00F

100.00

Infoterra Ltd.

Leicester (United Kingdom)F

100.00F

100.00Jena-Optronik GmbH

Jena (Germany)F

100.00F

100.00

F

74.90

F

74.90

MilSat Services GmbH

Bremen (Germany)F

100.00F

100.00Mobsat Group Holding S.A.R.L.

Munsbach (Luxembourg)F

100.00F

100.00Mobsat Holding 1BV

Amsterdam (Netherlands)

F

100.00F

100.00Mobsat Holding 2BV

Amsterdam (Netherlands)

F

100.00F

100.00Mobsat Holding Norway AS

Lysaker (Norway)

F

75.10

F

75.10

ND SatCom Defence GmbH

Immenstaad (Germany)

Matra Marconi Space UK Ltd. Stevenage (United Kingdom)

F: Fully consolidated
P: Proportionate consolidated
E: At equity consolidated
The stated percentage of ownership is related to EADS N.V.
* Regarding associated investments, only the parent company is stated in this list.

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Company

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2012

%

2011

%

Head office

F

75.10

F

75.10

ND Satcom GmbH

Immenstaad (Germany)

F

75.10

F

75.10

ND SatCom Products GmbH

Immenstaad (Germany)

F

75.10

F

75.10

ND SatCom Satellite Communication Systems(Beijing) Co. Ltd.

Beijing (China)

F

75.10

F

75.10

F

75.10

F

75.10

F

100.00F

100.00

ND SatCom FZE Dubai (United Arab Emirates)
ND Satcom, Inc.

Richardson, TX (USA)

Paradigm Secure Communications Ltd. Stevenage (United Kingdom)F

100.00F

100.00

E

99.99

E

99.99

Paradigm Services Ltd. Stevenage (United Kingdom)

F

89.98

F

89.98

F

66.78

F

69.24

F

F

98.91

F

98.91

F

98.91

F

98.91

Spot Image S.A.

Toulouse (France)

F

99.81

F

98.81

Spot Imaging Services Pty. Ltd.

Weston Creek (Australia)

F

99.99

F

99.99

Surrey Satellite Investments Ltd.

Surrey (United Kingdom)

F

99.99

F

99.99

Surrey Satellite Services Ltd.

Surrey (United Kingdom)

F

99.99

F

99.99

Surrey Satellite Technology Holdings, Inc.

Delaware (USA)

F

99.99

F

99.99

Surrey Satellite Technology Ltd.

Surrey (United Kingdom)

F

99.99

F

99.99

Surrey Satellite Technology Ltd.

Isle of Man

F

99.99

F

99.99

Surrey Satellite Technology US LLC

Delaware (USA)

F

66.78

Teleinformatica e Sistemi s.r.l.

Rome (Italy)F

100.00F

100.00TESAT-Spacecom Geschäftsführung GmbH

Backnang (Germany)F

100.00F

100.00TESAT-Spacecom GmbH & Co. KG

Backnang (Germany)

F

98.91

F

98.91

Tokyo Spot ImageTokyo (Japan)

F

100.00F

100.00Vizada Networks B.V.

Hoofddorp (Netherlands)

ATR Eastern Support Pte. Ltd.

Singapore (Singapore)

Responsive Geospatial Systems

Fort Collins, CL (USA)

Sodern S.A.

Limeil Brevannes (France)

Space Engineering SpA

Rome (Italy)

69.24

Spot Asia Pte Ltd.

Singapore (Singapore)

F

98.91

Spot Image Brasil Servicios en ImageSão Paulo (Brazil)

F

98.91

Spot Image Corporation, Inc.

Chantilly, VA (USA)

Other Businesses
P

50.00

P

50.00

P

50.00

P

50.00

ATR G.I.E.

Blagnac (France)

P

50.00

P

50.00

ATR India Customer Support Pte. Ltd.

Bangalore (India)

P

50.00

P

50.00

ATR International S.A.S.

Blagnac (France)

P

50.00

P

50.00

ATR North America, Inc.

Washington, VA (USA)

P

50.00

P

50.00

ATR North American Training Center, Inc.

Montreal (Canada)

P

50.00

P

50.00

ATR South African Training Center (Proprietary) Ltd.

Illovo (South Africa)

P

50.00

P

50.00

ATR Training Center S.A.R.L.

Blagnac (France)

P

50.00

P

50.00

ATRiam Capital Ltd.

Dublin (Ireland)

F

100.00F

100.00Composites Aquitaine S.A.

Salaunes (France)F

100.00F

100.00Composites Atlantic Ltd.

Halifax (Canada)

E

30.00

E

30.00

Daher - Socata S.A.*

Louey (France)F

100.00F

100.00EADS ATR S.A.

Colomiers (France)F

100.00F

100.00EADS North America Holdings, Inc.

Herndon, VA (USA)F

100.00F

100.00EADS North America, Inc.

Arlington, VA (USA)F

100.00F

100.00EADS Sogerma S.A.

Mérignac (France)F

100.00F

100.00EADS Supply Services, Inc.

Rockville, MD (USA)

F: Fully consolidated
P: Proportionate consolidated
E: At equity consolidated
The stated percentage of ownership is related to EADS N.V.
* Regarding associated investments, only the parent company is stated in this list.

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Head office

2012

%

2011

%

CompanyF

100.00F

100.00Manhattan Beach Holding Company

Herndon, VA (USA)F

100.00F

100.00

Maroc Aviation S.A.

Casablanca (Morocco)F

100.00F

100.00

Matra Aerospace, Inc.

Herndon, VA (USA)Headquarters
F

100.00Aelis Mexico LLP

Querétaro (Mexico)

Aero Equipement S.A.S.

Boulogne-Billancourt(France)

F

60.00

F

100.00F

100.00

Aero Ré S.A.

Luxembourg (Luxembourg)F

100.00F

100.00EADS Aeroassurance S.N.C.

Paris (France)

F

99.73

F

99.73

AL Objekt Taufkirchen GrundstücksVerwaltungsgesellschaft mbH & Co. KG

Grünwald (Germany)F

100.00F

100.00DADC Luft- und Raumfahrt Beteiligungs AG

Munich (Germany)

E

46.32

E

46.32

Dassault Aviation S.A.*

Paris (France)F

100.00F

100.00Dornier GmbH – Zentrale

Friedrichshafen (Germany)F

100.00F

100.00EADS CASA France S.A.S.

Paris (France)F

100.00F

100.00EADS CASA S.A. (Unit: Headquarters)

Madrid (Spain)F

100.00F

100.00EADS Deutschland GmbH (Unit: Headquarters)

Ottobrunn (Germany)F

100.00F

100.00EADS Finance B.V.

Amsterdam (Netherlands)

F

100.00F

100.00EADS France S.A.S.

Paris (France)F

100.00F

100.00EADS Management Service GmbH

Munich (Germany)F

100.00F

100.00EADS Real Estate Dornier Grundstücke GmbH & Co. KG

Taufkirchen (Germany)F

100.00F

100.00EADS Real Estate Taufkirchen GmbH & Co. KG

Pullach (Germany)F

100.00F

100.00EADS UK Ltd.

London (United Kingdom)

E

30.00

Elson Ltd.

Hong Kong (China)F100.00

Eltra Aeronautics Pte Ltd.

Singapore (Singapore)

F

99.00

Eltra Aeronautique S.A.S.

Marseille (France)

F

49.00

Eltra Beijing Outou

Beijing (China)F100.00

Eltra Holdings Pte Ltd.

Singapore (Singapore)F

100.00

Eltra Services Ltd.

Hong Kong (China)F100.00Immobilière AELIS S.A.S.

Paris (France)F

100.00F

100.00

Matra Défense S.A.S.

Velizy (France)F

100.00F

100.00

Matra Holding GmbH

Kehl (Germany)F

100.00F

100.00OBRA Grundstücks-Verwaltungsgesellschaft mbH

Grünwald (Germany)F

100.00F

100.00OOO “EADS”

Moscow (Russia)

E

33.00

Pesola Ltd.

São José dos Campos(Brazil)E

30.00

Sinelson Aero

Tianjin (China)

E

34.00

Sopecaero Ltd.

São José dos Campos(Brazil)

F: Fully consolidated
P: Proportionate consolidated
E: At equity consolidated
The stated percentage of ownership is related to EADS N.V.
* Regarding associated investments, only the parent company is stated in this list.

EADS FINANCIAL STATEMENTS 2012 — 105

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EADS N.V. — Auditors’ report on theConsolidated Financial Statements (IFRS)
Independent Auditors’ report

108

EADS FINANCIAL STATEMENTS 2012 — 107

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Independent Auditors’ report
To: The EADS N.V. Shareholders:

Report on the Consolidated Financial Statements
We have audited the accompanying Consolidated Financial Statements 2012 which are part of the ﬁnancial statements of European
Aeronautic Defence and Space Company EADS N.V., Amsterdam, and comprise the consolidated statement of ﬁnancial position as
at 31 December 2012, the Consolidated Statements of income, comprehensive income, cash ﬂow and changes in equity for the year
then ended and notes, comprising a summary of the signiﬁcant accounting policies and other explanatory information.

Management’s responsibility
Management is responsible for the preparation and fair presentation of the Consolidated Financial Statements in accordance with
International Financial Reporting Standards as adopted by the European Union and with Part 9 of Book 2 of the Netherlands Civil
Code and for the preparation of the report of the Board of Directors in accordance with Part 9 of Book 2 of the Netherlands Civil
Code. Furthermore, management is responsible for such internal control as it determines is necessary to enable the preparation of theConsolidated Financial Statements that are free from material misstatement, whether due to fraud or error.

Auditors’ responsibility
Our responsibility is to express an opinion on these Consolidated Financial Statements based on our audit. We conducted our audit
in accordance with Dutch law, including the Dutch Standards on Auditing. This requires that we comply with ethical requirements
and plan and perform the audit to obtain reasonable assurance about whether the Consolidated Financial Statements are free frommaterial misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Consolidated Financial
Statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatementof the Consolidated Financial Statements, whether due to fraud or error. In making those risk assessments, the auditor considers
internal control relevant to the entity’s preparation and fair presentation of the Consolidated Financial Statements in order to design
audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness ofthe entity’s internal control.
An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates
made by management, as well as evaluating the overall presentation of the Consolidated Financial Statements.
We believe that the audit evidence we have obtained is sufﬁcient and appropriate to provide a basis for our audit opinion.

OpinionIn our opinion, the Consolidated Financial Statements give a true and fair view of the ﬁnancial position of European Aeronautic Defence
and Space Company EADS N.V. as at 31 December 2012 and of its result and its cash ﬂows for the year then ended in accordance with
International Financial Reporting Standards as adopted by the European Union and with Part 9 of Book 2 of the Netherlands Civil Code.

108 — EADS FINANCIAL STATEMENTS 2012

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Report on other legal and regulatory requirements
Pursuant to the legal requirements under Section 2:393 sub 5 at e and f of the Netherlands Civil Code, we have no deﬁciencies toreport as a result of our examination whether the report of the Board of Directors, to the extent we can assess, has been prepared inaccordance with Part 9 of Book 2 of this Code, and if the information as required under Section 2:392 sub 1 at b-h has been annexed.
Further, we report that the report of the Board of Directors, to the extent we can assess, is consistent with the Consolidated Financial
Statements as required by Section 2:391 sub 4 of the Netherlands Civil Code.
Utrecht, 26 February 2013

Rotterdam, 26 February 2013

KPMG Accountants N.V.

Ernst & Young Accountants LLP

J.C.M. van Rooijen RA

C.T. Reckers RA

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Company Financial Statements
Balance Sheet of the Company Financial Statements

112

Income Statement of the Company Financial Statements

113

EADS FINANCIAL STATEMENTS 2012 — 111

Company Financial Statements

1

2

3

4

5

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Balance Sheet of the Company Financial Statements(In € million)Note

At 31 December 2012

At 31 December 2011

2

4,354

4,354

Financial fixed assets

2

11,3379,802

Non-current securities

4

5,786

7,103

21,477

21,259

8,654

6,362

AssetsFixed assets
Goodwill

Non-fixed assets
Receivables and other assets

3

Current securities

4

2,228

4,140

Cash and cash equivalents

4

6,962

3,394

Total assets

17,844

13,89639,32135,155827

820

Liabilities and stockholders’ equity
Stockholders’ equity(1)5Issued and paid up capital
Share premium
Revaluation reserves
Legal reserves

7,253

7,519

146

(1,207)

4,143

3,544

Treasury shares

(84)

(113)

Retained earnings(3,104)(2,746)

Result of the year

1,228

1,033

10,409

8,850

3,078

3,090

3,078

3,090

Non-current liabilities
Financing liabilities

6

Current liabilities
Other current liabilities

Total liabilities and stockholders’ equity(1) The balance sheet is prepared before appropriation of the net result.

112 — EADS FINANCIAL STATEMENTS 20127

25,834

23,21525,834

23,21539,32135,155

Company Financial Statements

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2

3

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5

4

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Income Statement of the Company Financial Statements(In € million)

Note

Income from investments
Other results
Net result

8

2012

2011

1,168

1,010

60

23

1,228

1,033

4

EADS FINANCIAL STATEMENTS 2012 — 113

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3

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5

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114 — EADS FINANCIAL STATEMENTS 2012

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1

2

3

4

5

4

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Notes to the Company Financial
Statements

EADS FINANCIAL STATEMENTS 2012 — 115

Company Financial Statements

1

2

3

4

5

4

Contents

1.

Basis of presentation

117

2.

Fixed assets

118

3.

Receivables and other assets

119

4.

Securities, Cash and cash equivalents

119

5.

Stockholders’ equity

119

6.

Non-current financing liabilities

120

7.

Current liabilities

120

8.

Net income

120

9.

Financial instruments

121

10.

Commitments and contingent liabilities

121

11.

Remuneration

121

12.

Employees

125

13.

Related party transactions

125

14.

Auditor Fees

125

Supplementary Information

126

Independent Auditors’ report126

Other Supplementary Information

127

1.

Appropriation of result

127

2.

Subsequent events

127

116 — EADS FINANCIAL STATEMENTS 2012

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Notes to the Company Financial Statements

1

1.

2

3

4

5

4

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Basis of presentation

1.1 General
EADS N.V., having its legal seat in Amsterdam, the Netherlands, isengaged in the holding, coordinating and managing of participations
or other interests in and to ﬁnance and assume liabilities, provide
for security and / or guarantee debts of legal entities, partnerships,
business associations and undertakings that are involved in the
aeronautic, defence, space and / or communication industry or
activities that are complementary, supportive or ancillary thereto.
The Company Financial Statements are part of the 2012 ﬁnancial
statements of EADS N.V.
The description of the company’s activities and the G roup
structure, as included in the notes to the Consolidated Financial
Statements, also apply to the Company Financial Statements. In
accordance with article 402 Book 2 of the Dutch Civil Code theIncome Statement is presented in abbreviated form.

1.2 Principles for the measurement of assets
and liabilities and the determination of
the result
For setting the principles for the recognition and measurementof assets and liabilities and determination of the result for its
C ompany F inancial S tatements, EADS N.V. makes use of theoption provided in section 2:362 (8) of the Netherlands Civil Code.

As from 2005, the Netherlands Civil Code allows that the principles
for the recognition and measurement of assets and liabilities anddetermination of the result (hereinafter referred to as principles
for recognition and measurement) of the C ompany F inancial
Statements of EADS N.V. are the same as those applied for theConsolidated EU-IFRS Financial Statements. These Consolidated
EU-IFRS Financial Statements are prepared according to thestandards laid down by the International Accounting Standards
Board and adopted by the European Union (herein referred to
as EU-IFRS). Please see Note 2 of the Consolidated Financial
Statements for a description of these principles.
Subsidiaries, over which signiﬁcant inﬂuence is exercised, arestated on the basis of the Net Asset Value.
The share in the result of participating interests consists of theshare of EADS N.V. in the result of these participating interests.
Results on transactions, where the transfer of assets and liabilities
between EADS N.V. and its participating interests and mutually
between participating interests themselves, are not incorporated
insofar as they can be deemed to be unrealised.
Undistributed results from investments are included in the legal
reserves to the extent the company cannot enforce dividend
distribution.

5
EADS FINANCIAL STATEMENTS 2012 — 117

Notes to the Company Financial Statements

1

2.

2

3

4

4

5

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Fixed assets

At the end of 2012, goodwill acquisition cost amounts to € 5,676 million (2011: € 5,676 million) and the cumulative amortisation andimpairments to € 1,322 million (2011: € 1,322 million).
The movements in ﬁnancial ﬁxed assets are detailed as follows:(In € million)

Subsidiaries

Participations

Loans

Total

5,902

149

1,909

7,960

1,625

1,735

(109)

(109)

Balance at 31 December 2010
Additions

110

Redemptions
Share based payments

16

16

Net income from investments

1,004

Actuarial gains / losses IAS 19

(579)

(579)

Dividends received

(75)

(75)

Translation differences / other changes

(252)

(6)

102

(156)

Balance at 31 December 2011

6,126

149

3,527

9,802

138

9

367

514

(4)

(328)

(332)

Additions
Redemptions
Share based payments

6

1,010

18

Net income from investments

1,150

Actuarial gains / losses IAS 19

(770)

18
18

1,168
(770)

Dividends received

(240)

(12)

Translation differences / other changes

1,213

2

(26)

1,189

Balance at 31 December 2012

7,635

162

3,540

11,337The investments in subsidiaries are included in the balance
sheet based on their net asset value in accordance with theaforementioned accounting principles of the Consolidated Financial
Statements. The participations include available-for-sale securities
measured at fair value and investments in associated companies
accounted for using the equity method.
The translation differences / other changes reﬂect mainly the impact
in the other comprehensive income related to the application of
IAS 39.
Signiﬁcant subsidiaries, associates and joint ventures are listed
in the Appendix “Information on principal investments” to theConsolidated Financial Statements.

118 — EADS FINANCIAL STATEMENTS 2012(252)

The loans in the amount of € 3,540 million (2011: € 3,527 million)
include loans provided to subsidiaries in the amount of€ 2,990 million (2011: € 2,981 million) and the loans provided toparticipations in the amount of € 58 million (2011: € 63 million).
The increase of loans is mainly driven by loans provided to thesubsidiaries Astrium Holding SAS, Astrium Services Holding SAS
and Astrium Americas Inc. The item redemptions mainly reﬂects
early repayments of loans provided to Astrium BV and Astrium
Holding SAS. An amount of € 1,434 million has a maturity between
ﬁve and ten years and an amount of € 319 million matures after ten
years. On average, the interest rate of the loans is 3.5%.

Notes to the Company Financial Statements

1

3.

2

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4

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5

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Receivables and other assets(In € million)

2012

2011

Receivables from subsidiaries

8,410

5,907

244

455

8,654

6,362

Other assets
Total receivables and other assets

The receivables from subsidiaries include mainly receivables in connection with the cash pooling in EADS N.V.
Other assets include deferred tax assets amounting to € 0 million (2011: € 20 million).
The receivables and other assets in the current year and in the previous year are due within one year.

4.

Securities, Cash and cash equivalents

The securities comprise mainly available-for-sale securities. The
available-for-sale security portfolio contains a non-current portionof € 5,786 million (2011: € 7,103 million). For further information
please see Note 22 of the Consolidated Financial Statements.

5.

EADS limits its cash equivalents to such investments having amaturity of three months or less from acquisition date.

Stockholders’ equity(In € million)

Balance at 31 December 2010
Capital increase

Capital
stock

Share
premiums

Revaluation
reserves

Legal
reserves

TreasurysharesRetainedearnings

Result of
the yearTotal
equity

816

7,645

(989)

3,532

(112)

(2,604)

553

8,841

4

59
1,033

1,033

63

Net income
Cash distribution

(178)

(178)

Share based payments

15

Transfer to legal reserves

86

Purchase / sale of treasury shares(7)

Others

(86)
(1)

(218)

(74)

Capital increase

820

7,519

(1,207)

3,544

7

137

(8)
(624)

Appropriation of result
Balance at 31 December 2011

(113)

553

(553)
1,033

8,850

1,228

1,228

144

(369)

(369)

Share based payments

18

Transfer to legal reserves593

Purchase / sale of treasury shares

18

(593)
(5)

Cancellation of treasury shares(34)

Others

827

7,253

(5)

34
1,353

6

(816)

Appropriation of result
Balance at 31 December 2012(916)

(2,746)

Net income
Cash distribution

15

146

4,143

(84)

543

1,033

(1,033)(3,104)

1,228

10,409For further information to the Stockholders’ equity, please see Note 23 of the Consolidated Financial Statements.

EADS FINANCIAL STATEMENTS 2012 — 1195

Notes to the Company Financial Statements

1
As of 31 December 2012, the item ‘Revaluation reserves’ relates to€ 564 million (2011: € 566 million) resulting from unrealised positive
fair values of securities classiﬁed as available for sale and fair valuesof cash ﬂow hedges, recognised directly in equity with a negative
amount of € 418 million (2011: € 1,773 million negative fair values).
The cash ﬂow hedges are included in “Subsidiaries”.
The legal reserves are related to EADS’ share in the undistributed
results from investments for € 1,412 million (2011: € 1,237 million),internally generated capitalised development costs of € 1,365 million(2011: € 947 million) and € 1,366 million (2011: € 1,360 million)
resulting from currency translation effects of afﬁliated companies.
The internally generated development costs reﬂect capitalised
development costs in the consolidated subsidiaries and areallocated to other legal reserves in accordance with Article 2:389
paragraph 6 of the Dutch Civil Code.

6.

3

4

5

4

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The retained earnings include actuarial losses arising from deﬁned
beneﬁt plans, recognised in equity, with an amount of € 3,158 million(2011: € 2,388 million).
Pursuant to Dutch law, limitations exist relating to the distributionof stockholders’ equity with an amount of € 5,534 million (2011:€ 4,930 million). The limitations relate to capital stock of € 827 million(2011: € 820 million) and to legal reserves of € 4,143 million (2011:€ 3,544 million). In 2012, unrealised gains related to revaluation
reserves with an amount of € 564 million (2011: € 566 million) were
not distributable. In general, gains related to available for salesecurities, fair values of cash ﬂow hedges, currency translation
effects of afﬁliated companies and capitalised development costs
reduce the distributable stockholders’ equity.

Non-current ﬁnancing liabilities

The non-current ﬁnancing liabilities in the amount of € 3,078 million(2011: € 3,090 million) include two long-term loans, granted by
the European Investment Bank to EADS with an amount of
US$ 1,142 million, a US$ 300 million loan granted in 2012 by theDevelopment Bank of Japan and two loans granted by EADS
Finance B.V. with an amount of € 1,494 million. The latter twoloans originate from the issuance of two euro denominated bonds

7.

2

under EADS’ EMTN Programme by EADS Finance B.V. Terms andconditions of both loans basically match those of the underlying
EMTN bonds.
For further details, please see Note 26 of the Consolidated Financial
Statements.

Current liabilities

2012

2011

Liabilities to subsidiaries

24,577

21,609Liabilities to participations

891

1,392

(In € million)

Other liabilities
Total

366

214

25,834

23,215The liabilities to subsidiaries comprise mainly liabilities in connection with the cash pooling in EADS N.V.

8.

Net income

The net income in 2012 amounts to € 1,228 million (2011: net income of € 1,033 million).

120 — EADS FINANCIAL STATEMENTS 2012

Notes to the Company Financial Statements

1

9.

2

3

4

5

4

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Financial instruments

By the nature of the activities carried out, EADS is exposed to avariety of ﬁnancial risks, especially foreign currency exchange raterisks and interest risks. EADS uses ﬁnancial instruments in order tolimit these ﬁnancial risks. Information to the terms and conditions of

the ﬁnancial instruments and the respective fair values is provided
in Note 34 of the Consolidated Financial Statements.

10. Commitments and contingent liabilities
EADS N.V. issues guarantees on behalf of consolidated companies
with an amount of € 6,358 million. The commitments of thesecompanies to third parties mainly relate to their operating businessas described in Note 33 and Note 36 to the Consolidated Financial
Statements. The company is heading a ﬁscal unity, which also

includes EADS Finance B.V., Astrium B.V. and Dutch Space B.V.
and therefore the company is several and jointly liable for income
tax liabilities of the ﬁscal unity as a whole.

11. Remuneration
The total remuneration of the Non-Executive and the Executive Members of the Board of Directors and former Directors related to
the reporting periods 2012 and 2011 can be summarised as follows:

Non-Executive Members of the Board:
2012

2011

Fixum

1,158,335

1,170,000

Fees

510,000

425,000

2012

2011

(In €)

Executive Members of the Board:(In €)

Base Salary

1,229,169

990,000

Annual Variable Pay

2,108,698

1,993,475

5
EADS FINANCIAL STATEMENTS 2012 — 121

Notes to the Company Financial Statements

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2

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Summary table of the remuneration of the Non-Executive Directors
The remuneration of the Non-Executive Members of the Board of Directors was as follows:
Directors’ remuneration related to 2012 (1)Directors’ remuneration related to 2011(1)Fixum

Attendance Fees

Fixum

Attendance Fees(in €)(in €)(in €)(in €)

Bodo Uebber

157,500

55,000210,000

90,000Dominique D’Hinnin

120,000

55,000120,000

45,000Arnaud Lagardère

164,167

80,000100,000

30,000Hermann-Josef Lamberti

130,000

50,000130,000

35,000Lakshmi N. Mittal

80,00040,00080,00030,000Current Non-Executive Board Members(1)

Sir John Parker

130,000

50,000130,000

35,000Michel Pébereau

100,000

40,000100,000

35,000Wilfried Porth

108,334

35,000120,000

40,000Josep Piqué i Camps(2)46,66735,000

N/A

N/A

46,66740,000

N/A

N/A

41,667

15,000100,000

45,000(2)Jean-Claude Trichet

Former Non-Executive Board Members
Rolf Bartke
Juan Manuel Eguiagaray Ucelay
Total

(2)

33,33315,00080,00040,0001,158,335

510,000

1,170,000

425,000(1) The Fixum related to 2011 was paid in 2012; the Fixum related to 2012 will be paid in 2013.
(2) Pro rata in accordance with their periods of membership with the Board of Directors.

Summary table of the remuneration of the current and former Executive Directors
The remuneration of the Executive Members of the Board of Directors was as follows:
Directors’ remuneration in respect of 2012

Directors’ remuneration in respect of 2011

Base Salary

Annual Variable Pay

Base Salary

Annual Variable Pay(in €)(in €)(in €)(in €)

412,500

830,615

990,000

1,993,475

Executive Board Members
Louis Gallois (1 January to 31 May 2012)
Tom Enders (1 June to 31 December 2012)
Total

816,669

1,278,083

N/A

N/A

1,229,169

2,108,698

990,000

1,993,475

The bonus conditions are disclosed in the Board Report, chapter 4.3.1.2.

122 — EADS FINANCIAL STATEMENTS 2012

Notes to the Company Financial Statements

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2

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The table below gives an overview of the interests of the current Executive Board Directors under the various long-term incentive
plans of EADS:Stock option plans

Number of options
Year of plan

Initially
granted

As at
1 Jan 2012

Granted in2012

Exercisedduring 2012

As at
31 Dec 2012

Exercise
price in Euro

Expirydate

67,50067,500--67,50025.65

Dec. 16, 2016

50,00025,000--25,00015.65

Oct. 9, 2013Louis Gallois
2006
Tom Enders
2003
2004

50,00037,500--37,50024.32

Oct. 7, 20142005

135,000

67,500--67,50033.91

Dec. 8, 2015

2006

67,50067,500--67,50025.65

Dec. 16, 2016

Performance units plan

Number of performance units(1):Louis Gallois

Tom Enders

Louis Gallois

Tom Enders

Louis Gallois

Tom Enders

Granted in 2008

Vested in 2012

40,00027,200 (Re-evaluation of Performance Units
based on 136% performance achievement).
Remaining vesting schedule:• 25% expected in May 2013
• 25% expected in November 2013

40,00027,200 (Re-evaluation of Performance Units
based on 136% performance achievement).
Remaining vesting schedule:• 25% expected in May 2013
• 25% expected in November 2013

Granted in 2009

Vesting date

46,000

Vesting schedule is made up of 4 payments over 2 years:• 25% expected in May 2013
• 25% expected in November 2013
• 25% expected in May 2014
• 25% expected in November 2014

46,000

Vesting schedule is made up of 4 payments over 2 years:• 25% expected in May 2013
• 25% expected in November 2013
• 25% expected in May 2014
• 25% expected in November 2014

Granted in 2010

Vesting date

54,400

Vesting schedule is made up of 4 payments over 2 years:• 25% expected in May 2014
• 25% expected in November 2014
• 25% expected in May 2015
• 25% expected in November 2015

54,400

Vesting schedule is made up of 4 payments over 2 years:• 25% expected in May 2014
• 25% expected in November 2014
• 25% expected in May 2015
• 25% expected in November 2015

(1) Vesting of all performance units granted to the Chief Executive Officer is subject to performance conditions.

5
EADS FINANCIAL STATEMENTS 2012 — 123

Notes to the Company Financial Statements

1

Louis Gallois

Tom Enders

Tom Enders

3

4

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Granted in 2011

Vesting date

51,400

Vesting schedule is made up of 4 payments over 2 years:• 25% expected in May 2015
• 25% expected in November 2015
• 25% expected in May 2016
• 25% expected in November 2016

51,400

Vesting schedule is made up of 4 payments over 2 years:• 25% expected in May 2015
• 25% expected in November 2015
• 25% expected in May 2016
• 25% expected in November 2016

Granted in 2012

Vesting date

50,300

Vesting schedule is made up of 4 payments over 2 years:• 25% expected in May 2016
• 25% expected in November 2016
• 25% expected in May 2017
• 25% expected in November 2017

Stock option plans
To the other current Members of the Executive Committee andto the Group’s senior management, the number of outstanding
stock options amounted to 11,355,143 at 31 December 2012 (2011:17,468,709).
During the year 2012, the Executive Committee Members haveexercised 80,000 options granted under the various EADS stock
option plans. 279,175 options were exercised by former Executive
Board Directors. Exercises of options by the EADS Executive
Committee Members are disclosed on the EADS internet website
in accordance with the applicable regulations.

Performance and Restricted unit plans
To the current Members of the Executive Committee and to
the Group’s senior management, the number of outstanding
performance and restricted units amounted to 15,235,262 at
31 December 2012 (2011: 13,890,028).
The expense accounted for in 2012 for performance shares andperformance units granted to the Chief Executive Ofﬁ cer was€ 1.399 million (2011: € 1.1 million for long-term incentive plans
and stock options).
For further information on these various plans, please see Note 35
and 36 of the Consolidated IFRS Financial Statements.
The pension benefit obligation for the Executive Committee
Members is as follows:
The Members of the Executive Committee have pension promises
as part of their employment agreements. The general policy is to
give them annual pensions of 50% of their annual base salary upon

124 — EADS FINANCIAL STATEMENTS 20122

reaching 5 years of service in the Executive Committee of EADS,
payable once they reach retirement age.
These rights can gradually increase to 60% after a second
term, usually after ten years of service in the EADS Executive
Committee. However, in order to reach this 60% replacement
ratio the respective Member of the Executive Committee mustalso have 12 years of seniority within the Group.
These pension schemes have been implemented through collective
executive pension plans in France and Germany. These pension
promises have also separate rules e.g. for minimum length ofservice and other conditions to comply with national regulations.
The former Chief Executive Ofﬁcer, Louis Gallois, has retired 1 June
2012, with a pension promise worth € 3,869,637 (deﬁned beneﬁt
obligation (i.e. the book cash value)).
For the Chief Executive Ofﬁcer, Tom Enders, the amount of thepension deﬁ ned beneﬁ t obligation (i.e. the book cash value)amounted to € 11,800,233 as of 31 December 2012, while
the amount of current service and interest cost related to his
pension promise accounted for the ﬁscal year 2012 represented
an expense of € 1,000,769. This obligation has been accruedin the Consolidated Financial Statements. The deﬁned beneﬁ t
obligation for the Company pension of Tom Enders results fromEADS Executive Committee pension policy as described above
and takes into account (1) the seniority of Tom Enders in EADS and
its Executive Committee and (2) the signiﬁcant lower public pension
promise deriving from the German social security pension systemcompared to public pensions resulting from the membership in
the French public pension system.

Notes to the Company Financial Statements

1

Other beneﬁts
All amounts reported above for the Executive Board Directors(current and former) are free of beneﬁts in kind, as explained below,
they are entitled to, as well as all national social and income tax
impacts. The company grants to the Members of the Executive
Committee appropriate insurance coverage, in particular a
Directors and Ofﬁcers liability insurance.

2

3

4

4

5

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The Chief Executive Ofﬁcer, Tom Enders, is entitled to a company
car. The residual value of his company car was worth €57,134(excluding VAT) as of 31 December 2012.
EADS has not provided any loans to / advances to / guarantees
on behalf of Directors.
For further information on the remuneration, please see Note 35
and 36 of the Consolidated Financial Statements.

12. Employees
The number of persons employed by the company at year end 2012 was 2 (2011: 2).

13. Related party transactions

An interest free loan was granted by Lagardère and the French State to EADS in 2007. The amount of € 29 million was repaid in 2011.
For further information on the related party transactions, please see Note 36 of the Consolidated Financial Statements.

14. Auditor Fees

Services of Statutory Auditors and Members of their Network rendered to the Group for the ﬁnancial years 2012 and 2011:
KPMG Accountants N.V.
2012
Amountin €K

Ernst & Young Accountants LLP

2011

2012

%

Amountin €K%Amount
in €K

2011
%

Amount
in €K

%

Audit
Audit process, certification,
examination of individualand consolidated accounts

5,780

55.0

5,675

70.0

5,836

61.3

5,851

69.2

Additional tasks(1)

3,725

35.5

1,678

20.7

3,158

33.2

2,338

27.6

Sub-total

9,505

90.5

7,353

90.7

8,994

94.5

8,189

96.8

961

9.2

715

8.8

519

5.5

201

2.4

70

0.8

Other services as relevant
Legal, tax, employment
Information Technology

20

0.1

37

0.5

Other

22

0.2

6

0.1

Sub-total

1,003

9.5

758

9.3

519

5.5

271

3.2

Total

10,508

100.0

8,111

100.0

9,513

100.0

8,460

100.0

(1) Mainly transaction related work.

5
EADS FINANCIAL STATEMENTS 2012 — 125

Notes to the Company Financial Statements
Supplementary Information

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Supplementary Information
Independent Auditors’ report
To: The EADS N.V. Shareholders:

Report on the Company Financial Statements
We have audited the accompanying Company Financial Statements 2012 which are part of the ﬁnancial statements of European
Aeronautic Defence and Space Company EADS N.V., Amsterdam, and comprise the company balance sheet as at 31 December 2012,
the company proﬁt and loss account for the year then ended and the notes, comprising a summary of the accounting policies andother explanatory information.

Management’s responsibility
Management is responsible for the preparation and fair presentation of the Company Financial Statements and for the preparation of
the report of the Board of Directors, both in accordance with Part 9 of Book 2 of the Netherlands Civil Code. Furthermore, management
is responsible for such internal control as it determines is necessary to enable the preparation of the Company Financial Statementsthat are free from material misstatement, whether due to fraud or error.

Auditors’ responsibility
Our responsibility is to express an opinion on these Company Financial Statements based on our audit. We conducted our audit inaccordance with Dutch law, including the Dutch Standards on Auditing. This requires that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether the Company Financial Statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Company Financial
Statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatementof the Company Financial Statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal
control relevant to the entity’s preparation and fair presentation of the Company Financial Statements in order to design audit proceduresthat are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal
control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting
estimates made by management, as well as evaluating the overall presentation of the Company Financial Statements.
We believe that the audit evidence we have obtained is sufﬁcient and appropriate to provide a basis for our audit opinion.

OpinionIn our opinion, the Company Financial Statements give a true and fair view of the ﬁnancial position of European Aeronautic Defence
and Space Company EADS N.V. as at 31 December 2012 and of its result for the year then ended in accordance with Part 9 of Book 2of the Netherlands Civil Code.

Report on other legal and regulatory requirements
Pursuant to the legal requirements under Section 2:393 sub 5 at e and f of the Netherlands Civil Code, we have no deﬁciencies toreport as a result of our examination whether the report of the Board of Directors, to the extent we can assess, has been prepared inaccordance with Part 9 of Book 2 of this Code, and if the information as required under Section 2:392 sub 1 at b - h has been annexed.
Further, we report that the report of the Board of Directors, to the extent we can assess, is consistent with the Company Financial
Statements as required by Section 2:391 sub 4 of the Netherlands Civil Code.
Utrecht, 26 February 2013

Rotterdam, 26 February 2013

KPMG Accountants N.V.

Ernst & Young Accountants LLP

J.C.M. van Rooijen RA

C.T. Reckers RA

126 — EADS FINANCIAL STATEMENTS 2012

Notes to the Company Financial Statements
Other Supplementary Information

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Back to Contents

Other Supplementary Information
1.

Appropriation of result

Articles 30 and 31 of the Articles of Association provide that theBoard of Directors shall determine which part of the result shall be
attributed to the reserves. The General Meeting of Shareholders
may dispose of a reserve only upon a proposal of the Board of
Directors and to the extent it is permitted by law and the Articles
of Association. Dividends may only be paid after adoption of theannual accounts from which it appears that the shareholders’equity of the company is more than the amount of the issued andpaid-in part of the capital increased by the reserves that must be
maintained by law.

2.

It will be proposed at the Annual General Meeting of Shareholders
that the net income of € 1,228 million as shown in the income
statements for the ﬁnancial year 2012 is to be added to retained
earnings and that a payment of a gross amount of € 0.60 per share
shall be made to the shareholders.

Subsequent events

For further information please see Note 40 of the Consolidated Financial Statements.

5
EADS FINANCIAL STATEMENTS 2012 — 127

128 — EADS FINANCIAL STATEMENTS 2012

Photographs © by EADS: Astrium – EADS Innovation works.
All rights reserved

www.eads.com
European Aeronautic Defence
and Space Company EADS N.V.
Mendelweg 302333 CS Leiden
The Netherlands
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4, rue du Groupe d’Or – BP 90112
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In Spain
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