EADS N.V.
Report of the Board of Directors andUnaudited Condensed Consolidated Financial Information for the six-month period ended June 30, 2009First half-year 2009 Financial Report

2009 Semi-Annual Report of the Board of Directors…………………………………2

Unaudited Condensed Consolidated Financial Information of EADS N.V.
for the six-month period ended June 30, 2009……………..…………………….…...5

1

27.07.2009

EADS N.V.
Report of the Board of Directors andUnaudited Condensed Consolidated Financial Information for the six-month period ended June 30, 20092009 Semi-Annual Report of the Board of Directors

1. Semi-Annual Report on Activities
Main Events in the first half-year of 2009
For an overview of the main events that occurred during the first half of 2009 and their impact
on the Unaudited Condensed Consolidated Financial Information of EADS for the six-month
period ended 30 June 2009 (the “Semi-Annual Financial Statements”), please refer to thepress release issued on 28 July 2009, available on EADS’ website www.eads.com.
For further information regarding EADS’ activities, finances, financing, risk factors andcorporate governance, please refer to the EADS web-site at www.eads.com (Investor
Relations) and the documents posted thereon.
Related Party Transactions
Please refer to the notes to the Semi-Annual Financial Statements attached hereto.

2. Risk Factors
For a description of the main risks and uncertainties facing EADS for the remainder of 2009
and thereafter, please refer to Section 5.4 of the Report of the Board of Directors on activities
during the 2008 financial year (the “2008 Annual Board Report”), available on EADS’
website www.eads.com.
Programme-Specific Risks
In addition to the risk factors related to the A380, A350XWB and NH90 programmes set forthin the 2008 Annual Board Report, EADS also faces the following programme-specific risks
related to the A400M programme in the future (while this list does not purport to becomprehensive, it highlights the current risks believed to be material by management as ofthe date of this mid-year report):
A400M programme.
In connection with the A400M programme which represents a significant exposure for EADS,
the Company faces the following main challenges: (i) negotiating changes to the programmeschedule along with changes to other major areas of the contract with launch customers, (ii)working with the engine consortium and with major suppliers of mission critical systems andsystem integration to firm up a reliable programme schedule, including a reliable date for the
first flight, (iii) managing a flight test programme that differs significantly from that ofcommercial Airbus aircraft, (iv) integrating the civil systems (flight management, navigation,etc.) with the complex military systems, (v) ensuring that the aircraft is both commerciallycertified and meets the range of military qualifications required by programme customers ineach jurisdiction, and (vi) managing the anticipated difficulties during the ramp-up, including
managing and concluding on all existing and potential suppliers’ and subcontractors’ claims.
From a contractual as well as technical perspective, the A400M programme has made some
progress during the last months.

2

27.07.2009

EADS N.V.
Report of the Board of Directors andUnaudited Condensed Consolidated Financial Information for the six-month period ended June 30, 2009

Several discussions with OCCAR and the launch nations have contributed to reinforce thenations’ confidence in the A400M programme and to prepare a common basis for all parties
involved for entering into a new negotiation phase in order to realign the A400M programmeon an achievable basis. This included an extension of the moratorium period until the end of
July 2009.
However, OCCAR retained its contractual right with unanimous mandate of all launch nations
to claim termination of the whole A400M launch contract during this moratorium period. Whilethe discussions with the representatives of OCCAR and the launch nations did not lead to an
updated A400M contract scheme until the end of July 2009, the Defence Ministers of thelaunch nations confirmed on 24 July 2009 to adhere to the A400M contract to enable further
detailed negotiations up to the end of the year. In case of a valid termination according to theinitial terms of the A400M contract, Airbus Military SL (“AMSL”) would be obliged to repay to
OCCAR all initial payments, pre-delivery payments and any other payments received fromOCCAR. These reimbursements would amount to approximately €6.0 billion as of the date ofthis report. Separately, each of the launch customer nations may claim cancellation of thoseindividual aircraft ordered which would be substantially delayed. This would trigger
reimbursement of the initial payments and pre-delivery payments received from OCCAR inrespect of such aircraft. Depending on the magnitude of these individual potential
cancellations, there could be a material negative effect on EADS’ future results of operation,
financial condition and reputation.
The technical progress of the A400M programme includes amongst others the following key
elements:(i) Continuing finalisation of the first A400M development prototype aircraft(ii) Significant progress in the final assembly line of the second and third development
prototype aircraft(iii) Significant amount of TP-400 engine test hours achieved(iv) Start of testing on the iron bird for the redesigned FADEC software(v) Completion of the static test specimen limit load campaign with positive results(vi) The flying test bed has achieved 12 test flights accumulating 35 flight hours. In doing so,it has explored the full C130 flight envelope without finding significant snags.
For further information relating to the A400M programme, see the A400M-related section of
the notes to the Semi-Annual Financial Statements as well as the related notes sections of
the EADS Consolidated Financial Statements for the financial year 2008.

3. Semi-Annual Financial Statements
The Semi-Annual Financial Statements, including the review report by Ernst & Young
Accountants L.L.P. and KPMG Accountants N.V., are attached hereto.

4. Statement of the Board of Directors
The Board of Directors of EADS hereby declares that, to the best of its knowledge:(i) the Semi-Annual Financial Statements for the period ended 30 June 2009 give a true andfair view of the assets, liabilities, financial position and profits or losses of EADS andundertakings included in the consolidation taken as a whole; and(ii) this Semi-Annual Board Report (which includes the press release issued on 28 July2009) gives a true and fair view of the position as per the balance sheet date, and of thedevelopment and performance during the first half of the 2009 financial year andexpected course of events of EADS and undertakings included in the consolidation taken

3

27.07.2009

EADS N.V.
Report of the Board of Directors andUnaudited Condensed Consolidated Financial Information for the six-month period ended June 30, 2009as a whole. This Semi-Annual Board Report has paid special attention to investments
and circumstances upon which the development of revenues and profitability isdependent, as these have been described herein.

Leiden, 27 July 2009
The Board of Directors
Bodo Uebber, Chairman
Louis Gallois, Chief Executive Officer
Rolf Bartke, Director
Dominique D'Hinnin, Director
Juan Manuel Eguiagaray Ucelay, Director
Arnaud Lagardère, Director
Herman-Josef Lamberti, Director
Lakshmi N. Mittal, Director
Sir John Parker, Director
Michel Pébereau, Director
Wilfried Porth, Director

427.07.2009

EADS N.V.
Report of the Board of Directors andUnaudited Condensed Consolidated Financial Information for the six-month period ended June 30, 2009

Unaudited Condensed Consolidated
Financial Information of EADS N.V.
for the six-month period ended June 30, 2009
Unaudited Condensed IFRS Consolidated Income Statements ………………………………......…6
Unaudited Condensed IFRS Consolidated Income Statements for the second quarter of 2009
and 2008………………………………………………………………… ………………………………......…7
Unaudited Condensed IFRS Consolidated Balance Sheets….…..………….……………...……...…8
Unaudited Condensed IFRS Consolidated Cash Flow Statements……………....…...…………..…9
Unaudited Condensed IFRS Consolidated Statements of Comprehensive Income……….…….10
Unaudited Condensed IFRS Consolidated Reconciliation of Movement in Equity attributable toEquity holders of the parent and Non-controlling interests.…..…………...……………………......11
Explanatory notes to the Unaudited Condensed IFRS Consolidated Financial Statements
as at June 30, 2009…...……. ………………………………………….…………...…………..….....…....11
1. The Company……………………………………………………………………………………..…11
2. Accounting policies……………….………………………………………………..……………...11
3. Accounting for the A400M programme..………….…………………………………………….14
4. Changes in the consolidation perimeter of EADS…………………………....…….………...16
5. Segment information………………………………..…………..…………………………..……..16
6. EBIT pre-goodwill impairment and exceptionals…..……..………………………………..…18
7. Significant income statement items………….…………………..………….………..……......18
8. Significant balance sheet items…………………...…………………………………...……......19
9. Significant cash flow items……………………………………………………..…...…..……….21
10. Number of shares………………………………………………………..........................….....…22
11. Earnings per share……………………………………..……………….………...………………..22
12. Related party transactions ………………..…………………...…….……………………..……22
13. Number of employees ……………………………….……………….……………..........………23
14. Litigation and claims …..…………………………….……………….……………..........………23
15. Subsequent events ……………………………….……………………………..…….………..…24
Attachment: Review report..………..………………………………………………………………………26

5

27.07.2009

EADS N.V.
Report of the Board of Directors andUnaudited Condensed Consolidated Financial Information for the six-month period ended June 30, 2009

Unaudited Condensed IFRS Consolidated Income Statements

January 1 2009
Revenues
Cost of sales
Gross margin
Selling, administrative & otherexpenses
Research and development
expensesJune 30, January 1 -June 30,
2008

M€
20,195-17,194
3,001

%
100
-85
15

M€
19,739-16,593
3,146-1,124-5-1,172%

Deviation
M€

100
-84
16

456
-601
-145

-1,053

-5

-71

-6

-1,130

-6

-42

89

0

62

0

27

Other income
Share of profit from associates
under the equity method and otherincome from investments
Profit before finance result andincome taxes
Interest income
Interest expense
Other financial result
Finance result
Income taxes
Profit for the period

67

0

110

1

-43

861
203
-243
-267
-307
-174
380

4
1
-1
-1
-1
-1
2

1,135
290
-300
-482
-492
-232
411

6
1
-2
-2
-3
-1
2

-274
-87
57
215
185
58
-31

Attributable to:Equity holders of the parent (Netincome)Non-controlling interests

378
2

2
0

403
8

2
0

-25
-6

Earnings per share

€

€

€

Basic and diluted

0.47

0.50

-0.03

6

27.07.2009

EADS N.V.
Report of the Board of Directors andUnaudited Condensed Consolidated Financial Information for the six-month period ended June 30, 2009

Unaudited Condensed IFRS Consolidated Income Statements for the second
quarter of 2009 and 2008
April 1 -June 30,

April 1 -2009
Revenues
Cost of sales
Gross margin
Selling, administrative & otherexpenses
Research and development
expensesJune 30,

Deviation

2008M€
11.728-9.934
1.794

%
100
-85
15

M€
9.886
-8.448
1.438

-576

-5

-610
19

%
100
-85
15

M€
1.842
-1.486
356

-568

-6

-8

-5

-596

-6

-14

0

37

0

-18

Other income
Share of profit from associates
under the equity method and otherincome from investments
Profit before finance result andincome taxes
Interest income
Interest expense
Other financial result
Finance result
Income taxes
Profit for the period

18

0

66

1

-48

645
81
-112
-307
-338
-97
210

5
1
-1
-3
-3
-1
2

377
143
-146
-149
-152
-107
118

4
1
-1
-2
-2
-1
1

268
-62
34
-158
-186
10
92

Attributable to:Equity holders of the parent (Netincome)Non-controlling interests

208
2

2
0

118
0

1
0

90
2

Earnings per share

€

€

€

Basic and diluted

0,26

0,15

0,11

7

27.07.2009

EADS N.V.
Report of the Board of Directors andUnaudited Condensed Consolidated Financial Information for the six-month period ended June 30, 2009

Unaudited Condensed IFRS Consolidated Balance Sheets

Non-current assets
Intangible assets
Property, plant and equipment
Investments in associates under theequity method
Other investments and long-term
financial assets
Other non-current assets
Deferred tax assets
Non-current securities
Current assets
Inventories
Trade receivables
Other current assets
Current securities
Cash and cash equivalents
Non-current assets / disposal groups
classified as held for sale
Total assets
Total equity
Equity attributable to equity holders of
the parent
Capital stockReserves
Accumulated other comprehensive
incomeTreasury shares
Non-controlling interests
Non-current liabilities
Non-current provisions
Long-term financing liabilities
Deferred tax liabilities
Other non-current liabilities
Current liabilities
Current provisions
Short-term financing liabilities
Trade liabilities
Current tax liabilities
Other current liabilities
Liabilities directly associated with noncurrent assets classified as held forsale
Total liabilities
Total equity and liabilities

June 30, 2009
M€%

December 31, 2008
M€%

11,162
12,52614
16

11,171
12,243

15
16

-9
283

0
2

2,425

3

2,356

3

69

3

1,798

2

1,712

2

86

5

2,741
2,812
3,004
36,468

4
4
4
47

2,646
2,756
3,040
35,924

3
4
4
47

95
56
-36
544

4
2
-1
2

22,273
5,398
4,099
2,365
7,004

29
7
5
3
9

19,452
5,267
4,590
3,912
6,745

26
7
6
5
9

2,821
131
-491
-1,547
259

15
2
-11
-40
4

0

0

263

0

-263

41,13977,60753
100

40,22976,153

53
100

910
1,454

2
2

815
8,601

1
11

815
8,558

1
11

0
43

0
1

2,467

3

1,758

3

709

40

-107
11,776
107
11,883

0
15
0
15

-109
11,022
104
11,126

0
15
0
15

2
754
3
757

-2
7
3
7

7,732
1,948
1,457
15,91327,050

10
3
2
20
35

7,479
3,046
953
16,82428,302

10
4
1
22
37

253
-1,098504-911-1,252

3
-36
53
-5
-4

4,550
2,319
7,485
157
24,163

6
3
10
0
31

4,583
1,458
7,824
201
22,504

6
2
10
0
30

-33
861
-339
-44
1,659

-1
59
-4
-22
7

0

0

155

0

-155

38,67465,72477,60750
85
100

36,72565,02776,153

48
85
100

1,949
697
1,454

8

Deviation
M€

%

5
1
2

27.07.2009

EADS N.V.
Report of the Board of Directors andUnaudited Condensed Consolidated Financial Information for the six-month period ended June 30, 2009

Unaudited Condensed IFRS Consolidated Cash Flow Statements
January 1 - June January 1 - June30, 2009
30, 2008
M€
Profit for the period attributable to equity holders of the parent (Netincome)

M€
378

403

2

8

Depreciation and amortization

802

809

Valuation adjustments

192

1.284

Deferred tax expense
Change in income tax assets, income tax liabilities and provisions for
actual income tax
Results on disposal 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

109

106

71
-33
-45
-125
-1.898

-104
-20
-89
40
-609

Cash (used for) provided by operating activities

-547

1.828

- Purchase of intangible assets, PPE

-752

-669

Profit for the period attributable to non-controlling interests
Adjustments to reconcile profit for the period to cash (used for) provided
by operating activities- Proceeds from disposals of intangible assets, PPE

1024- Acquisitions of subsidiaries and joint ventures (net of cash)

0

-235

- Proceeds from disposals of subsidiaries (net of cash)- Payments for investments in associates and otherinvestments and long-term financial assets

13

2

-56

-55

- Proceeds from disposals of associates and otherinvestments and long-term financial assets

34

30

27

50

102

0

1.647
1.025
-74
-162
0
1
2
-233

-2.863-3.716
-637
-97
-4
27
39
-672

14
259

-58
-2.618

6.745
7.004

7.549
4.931

- Dividends paid by companies valued at equity
Disposals of non-current assets / disposal groups classified as held forsale and liabilities directly associated with non-current assets classified
Change in securities
Cash provided by (used for) investing activities
Change in long-term and short-term financing liabilities
Cash distribution to EADS N.V. shareholders
Dividends paid to non-controlling interests
Capital increase and changes in non-controlling interests
Change in treasury shares
Cash (used for) financing activities
Effect of foreign exchange rate changes and other valuation adjustments
on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

Note: For retrospective adjustments concerning the first half-year 2009 please refer to Note 9 “Significant cash flow items”

As of June 30, 2009, EADS’ cash position (stated as cash and cash equivalents in the unaudited
consolidated cash flow statements) includes 704 M € (666 M € as of December 31, 2008), which

927.07.2009

EADS N.V.
Report of the Board of Directors andUnaudited Condensed Consolidated Financial Information for the six-month period ended June 30, 2009

represent EADS’ share in MBDA’s cash and cash equivalents deposited at other shareholders. These
funds are available for EADS upon demand.

Unaudited Condensed IFRS Consolidated Statements of Comprehensive
IncomeJanuary 1 June 30, 2009

January 1 June 30, 2008

Profit for the period

380

411

Foreign currency translation differences for foreign operations

-296

-79

Changes in fair value of cash flow hedges

1,374

-113

79

-89

Others-199-12

Tax on income and expense recognized directly in equity

-429

52

Other comprehensive income (loss), net of tax

529

-241

Total comprehensive income of the period

909

170

907
2
909

163
7
170

in M €Net change in fair value of available-for-sale financial assets

Attributable to:Equity holders of the parent
Non-controlling interests
Total comprehensive income of the period

10

27.07.2009

EADS N.V.
Report of the Board of Directors andUnaudited Condensed Consolidated Financial Information for the six-month period ended June 30, 2009

Unaudited Condensed IFRS Consolidated Reconciliation of Movement inEquity attributable to Equity holders of the parent and Non-controlling interests
in M €
Balance at January 1, 2008

Equityattributable to Non-controllinginterests
equity holders of
the parent
13,09085

total
13,175

Total comprehensive income

163

7

170

Cash distribution to shareholders

-97

-4

-101

Capital Increase

0

1

1

Change in treasury shares

39

0

39

Change in non-controlling interests

0

27

27

Others18

119

Balance at June 30, 2008

13,213

117

13,330

Balance at January 1, 2009

11,022

104

11,126

Total comprehensive income

907

2

909

Cash distribution to shareholders

-162

0

-162

Capital Increase

0

1

1

Change in treasury shares

2

0

2

Others70

7

11,776

107

11,883

Balance at June 30, 2009

Explanatory notes to the Unaudited Condensed IFRS Consolidated Financial
Statements as at June 30, 2009
1. The Company
The accompanying Condensed Interim Consolidated Financial Statements (unaudited) present theoperations of European Aeronautic Defence and Space Company EADS N.V. and its
subsidiaries (“EADS” or the “Group”), a Dutch public limited liability company (Naamloze
Vennootschap) legally seated in Amsterdam (registered office at Mendelweg 30, 2333 CS Leiden,
The Netherlands), and are prepared and reported in Euros (“€”). EADS’ core business is the
manufacturing of commercial aircraft, civil and military helicopters, commercial space launchvehicles, missiles, military aircraft, satellites, defence systems and defence electronics andrendering of services related to these activities. The Unaudited Condensed IFRS Consolidated
Financial Statements for the six-month period ended June 30, 2009 were authorized for issue by
EADS’ Board of Directors on July 27, 2009.

2. Accounting policies
These Unaudited Condensed Consolidated Financial Statements have been prepared inaccordance with IAS 34 Interim Financial Reporting as adopted by the European Union (EU).
EADS’ Consolidated Financial Statements are prepared in accordance with International Financial
Reporting Standards (“IFRS”), adopted by the International Accounting Standards Board (“IASB”)
as endorsed by the EU. They comprise (i) IFRS, (ii) International Accounting Standards (“IAS”)

11

27.07.2009

EADS N.V.
Report of the Board of Directors andUnaudited Condensed Consolidated Financial Information for the six-month period ended June 30, 2009

and (iii) Interpretations originated by the International Financial Reporting Interpretations
Committee (“IFRIC”) or former Standards Interpretation Committee (“SIC”).

Financial reporting rules applied for the first time in the first half-year 2009
The following Standards and revised Standards were applied for the first time in the first half-year2009 and are effective for EADS as of January 1, 2009. If not otherwise stated, the following
standards and revised standards did not have a material impact on EADS’ Consolidated Financial
Statements.
The Amendment to IAS 23 “Borrowing Costs” removes the option of recognising borrowing costs
that are directly attributable to the acquisition, construction or production of a qualifying asset as
an expense and therefore requires capitalising such borrowing costs as part of the cost of theasset prospectively. The application of the amended IAS 23 results in the mandatory capitalisationof borrowing costs related to qualifying assets and thus increases the amount of total costs
capitalised and thus the basis of depreciations of such qualifying assets.
IFRS 8 “Operating Segments” replaced IAS 14 “Segment Reporting” for accounting periods
beginning on or after January 1, 2009. IFRS 8 requires the presentation and disclosure of segment
information to be based on the internal management reports regularly reviewed by EADS’ Chief
Operating Decision Maker in order to assess each segment’s performance and to allocate
resources to them. EADS’ segment reporting takes into consideration these new requirements of
IFRS 8 as well as its new management structure from 2009 onwards. See Note 5 “Segment
Information” for relating changes to the presentation of segment information.
The Amendment to IAS 1 “Presentation of Financial Statements: A revised presentation”
introduces among other notes disclosures the term total comprehensive income, which representschanges in equity during a period other than those changes resulting from transactions withowners in their capacity as owners.
The Amendments to IAS 32 and IAS 1 “Puttable Financial Instruments”.
The Amendments to IFRS 1 “First-time Adoption of International Financial Reporting Standards”
and IAS 27 “Consolidated and Separate Financial Statements”.
The Amendments to IFRS 2 “Share Based Payments - Vesting Conditions and Cancellations”.

Finally, in May 2008 the IASB issued its omnibus of amendments to its standards primarily with aview to removing inconsistencies and clarifying wording. There are separate transition rules foreach amended standard. Except for the amendments regarding IAS 16 and IAS 7 (see Note 9“Significant cash flow items”), which were early adopted by EADS in its 2008’ Consolidated
Financial Statements, the majority of these amendments, being effective from January 1, 2009
onwards, did not have a material impact on EADS’ Consolidated Financial Statements.

The following endorsed Interpretations were also required to be applied for the first time beginningof January 1, 2009:
IFRIC 13 “Customer Loyalty Programmes” (issued 2007, endorsed in December 2008)
IFRIC 14 “IAS 19 – The Limit of a Defined Benefit Asset Minimum Funding Requirements and theirInteraction” (issued 2007, endorsed in December 2008 resulting in an effective date as of January
1st, 2009)12

27.07.2009

EADS N.V.
Report of the Board of Directors andUnaudited Condensed Consolidated Financial Information for the six-month period ended June 30, 2009

These Interpretations did not have a significant impact on EADS’ Consolidated Financial
Statements.

IFRIC 12 “Service Concession Arrangements” (issued 2006, endorsed in March 2009) will beeffective from January 1, 2010 onwards. The potential impacts from its application are currently
under investigation.

New financial reporting rules issued during the first half-year 2009
The following amendments were published during the first half-year 2009:
The IASB published in March 2009 Amendments to IFRS 7 “Financial Instruments: Disclosures:
Improving Disclosures about Financial Instruments” which are mandatory for the first time forannual periods beginning on or after January 1, 2009. These amendments will result in additional
disclosures in EADS’ Consolidated Financial Statements for 2009 with regard to the fair value
measurement of financial instruments and liquidity risks.
Further, the IASB issued Amendments to IFRIC 9 and IAS 39 “Embedded Derivatives” to clarify
the accounting treatment of embedded derivatives. The amendments are mandatory (retrospective
application) for the first time for annual periods ending on or after June 30, 2009.
In April 2009, the IASB issued its second omnibus of amendments to its standards containing 15
amendments to 12 standards. The amendments refer to IFRS 2, IFRS 5, IFRS 8, IAS 1, IAS 7, IAS
17, IAS 18, IAS 36, IAS 38, IAS 39, IFRIC 9 and IFRIC 16. Most of the amendments aremandatory for annual periods beginning on or after 1 January 2010 with separate transition rules
for each amendment.
Finally, the IASB issued in June 2009 an amendment to IFRS 2 "Share-based Payments - Group
Cash-settled Share-based Payment Transactions" which amends the definitions in IFRS 2 fortransactions and arrangements, and the scope of the standard. In addition, guidance is given foraccounting for share-based payment transactions amongst group entities. The amendment is
mandatory for annual periods beginning on or after 1 January 2010.

The following Interpretation was also issued:
IFRIC 18 “Transfers of Assets from Customers”. The Interpretation is mandatory (prospective
application) for annual periods beginning on or after July 1, 2009. Retrospective application is also
permitted to a limited extent.

The potential impacts from the application of those new issued amendments and interpretations
are currently under investigation.

The accounting policies used in the preparation of these Unaudited Condensed Interim
Consolidated Financial Statements are consistent with those used for the annual Consolidated
Financial Statements for the year ended December 31, 2008, which are disclosed as an integral
part of the Group’s Annual Report 2008. The annual Consolidated Financial Statements wereauthorized for issue by EADS’ Board of Directors on March 9, 2009.

13

27.07.2009

EADS N.V.
Report of the Board of Directors andUnaudited Condensed Consolidated Financial Information for the six-month period ended June 30, 2009

3. Accounting for the A400M programme
In September 2008, the Airbus A400M airlifter programme was affected by an undefined delay of
the first flight of the A400M, mainly due to the unavailability of the propulsion system and beyond
that – but not first flight critical – due to the fact that other major suppliers of mission criticalsystems and of system integration were severely struggling with the challenging technicalrequirements of this aircraft. Consequently, from September 2008 onwards and up to the
publication date of these Unaudited Condensed IFRS Consolidated Financial Statements, EADS
could not reliably assess either a revised technical timetable of the A400M programme or the
related financial implications of this delay and applied the early-stage method of accounting (seeNote 3 “Accounting for the A400M programme” in EADS’ Consolidated Financial Statements 2008
for further details of the A400M programme and relating accounting issues).
Under the Launch Contract between Airbus Military SL (“AMSL”) and OCCAR, OCCAR had thecontractual right with unanimous mandate of all Launch Nations to claim termination of the whole
A400M Launch Contract as of April 1, 2009, as the first flight of the A400M did not occur before
March 31, 2009. OCCAR did not exercise this cancellation right and subsequently agreed to athree month moratorium period until the end of June 2009. This moratorium period was extended
again until the end of July 2009. On July 24, 2009, the Defence Ministers of the launch nations
confirmed to adhere to the A400M contract to enable detailed negotiations up to the end of theyear.
In general, these discussions and future negotiations provide an opportunity for all partners of the
programme to agree on the way ahead for various unresolved issues related to the whole
programme. Furthermore, they give room to realign and rebase the contract on realistic generaland specific conditions acceptable to all parties.
Therefore, EADS and AMSL continue to address all contractual issues with OCCAR and thelaunch nations as well as the technical challenges associated with the assembly of the first A400M
aircraft and will continue to work with their suppliers and partners to confirm a robust timetable
including a date for the first flight.
Under the early stage method of accounting, all A400M related work-in-progress, which would
have been expensed upon the completion of technical milestones according to the estimate atcompletion method of accounting only, have been expensed as incurred, with related revenues
recognized up to the recoverable part of these costs as per the A400M Launch Contract. The
A400M contract loss provision was accounted for in light of the excess-contract-costs-overremaining-contract-revenues, based on the probable remaining contract costs that could be
estimated. Additional potential contract costs not estimable as of the date of these Unaudited
Condensed IFRS Consolidated Financial Statements have been considered as contingent
liabilities.
The following tables summarize the major accounting balances specifically related to the A400M
programme as at June 30, 2009:

As at June 30, 2009
4,837
(7,225)(2,388)in M €

Accumulated revenues
Accumulated cost of sales
Accumulated EBIT-impact

in M €

Accumulated revenues
Accumulated advance payments received
Net advance payments received (shown in liabilities)

14

As at June 30, 2009
4,837
5,998
1,161
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EADS N.V.
Report of the Board of Directors andUnaudited Condensed Consolidated Financial Information for the six-month period ended June 30, 2009First half-year 2009
Early stage accountingof the A400M programme
295
(562)
(267)
267
(191)
(191)

in M €

Revenues
Expensed work in progress
Subtotal
Consumption of provision
Additional costs (including increase in provision)
Total EBIT impact

In M €

Property, plant and equipment (mainly buildings and jigs and tools)
Current assets (mainly advanced payments made)Net advance payments received (shown in liabilities)
A400M provision

As at June 30, 2009
798
1,061
1,161
1,289

In case of a potential, but still considered to date unlikely by EADS, cancellation of the A400M
contract by OCCAR during or at the end of the moratorium period, AMSL would have to reimburse
all initial payments, pre-delivery payments and any other payments received from OCCAR which
would represent a total amount of cash of approximately 6.0 bn €. In addition, EADS would haveto determine the further utilisation of specific tangible assets currently used for the A400M
programme.
Under the scenario of a continuation of the A400M programme under the Launch Contract,significant penalties based on contractual clauses could be notified to EADS for a cumulative
amount of €1.3 bn, due in case each aircraft delivery would be delayed by more than 10 months
from the original contractual timetable. Based upon the currently probable minimum delivery
delays, this penalty clause would apply at least to a significant number of aircraft, but would be
subject to future discussion with customers. The A400M provision as of June 30, 2009 includes
EADS’ current assessment of the pro-rated amount of penalties to be finally paid.
Considering the current status of discussions between EADS and OCCAR as well as the launchnations, the initial A400M contract is not expected to frame the conditions to proceed with the A400M
programme on an achievable reasonable basis over the next years. However, as long as this existing
contract scheme is not replaced by an updated contract, it still remains terminable at the end of themoratorium period.
Taken into consideration the ongoing technical and industrial uncertainties attached to the A400M
programme and the uncertainties from the ongoing discussions with OCCAR and the launchnations to adjust contractual arrangements, no update of the cost to complete was possible. Dueto these ongoing uncertainties the early stage method of accounting was retained for the closing of
the second quarter 2009 and the provision was adjusted accordingly. Therefore, significant
negative income statement’s impacts may still have to be accounted for in future periods whensuch costs become estimable or triggering events lead to a return to the estimate-at-completion
method of accounting. Potential benefits from current discussions with customers might reducesuch impacts, but would only be taken into account once agreed upon by OCCAR and the launchnations. Currently, under certain continuation scenarios which are still lacking enough estimatableevidence and which are not taking into account the expected outcome by EADS of the current
discussions with OCCAR, the magnitude of the negative impact of additional costs could
substantially alter the financial statements of EADS as a whole in the future. An appropriate
assessment of this negative impact requires sufficient progress of current discussions with

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EADS N.V.
Report of the Board of Directors andUnaudited Condensed Consolidated Financial Information for the six-month period ended June 30, 2009

OCCAR and the clients as well as an in-depth related update of the consolidated financial contract
review of the A400M programme.
In conclusion, EADS believes the early stage method of accounting currently incorporated in the
Unaudited Condensed IFRS Consolidated Financial Statements reflects its most appropriate
judgments under the current circumstances, the technical complexity of the A400M programme andthe uncertainty about the outcome of on-going developments.

4. Changes in the consolidation perimeter of EADSOn April 22, 2008, EADS acquired PlantCML California / USA, a leading provider of emergency
response solutions, which is fully consolidated from that date. The difference between thepurchase price and the acquired net assets led to the recognition of a goodwill of 275 M USD.
In the previous year, EADS had concluded negotiations with GKN to divest its Airbus site in Filton(UK). The closing of the sale occurred on January 5, 2009.
On January 7, 2009, DAHER acquired a 70% majority share of EADS SOCATA. The remaining
30% of EADS SOCATA are accounted for using the equity method and presented in “Other
Businesses”.
Other acquisitions or disposals by the Group that occurred in the first six months of 2009 are notmaterial, nor were those that occurred in the first six months of 2008.

5. Segment information
In 2009, the Group operates in four divisions (reportable segments) which reflect the internalorganizational and management structure.
• Airbus segment — Development, manufacturing, marketing and sale of commercial jet aircraftof more than 100 seats, military transport aircraft and special mission aircraft; aircraft
conversion.
• Eurocopter — Development, manufacturing, marketing and sale of civil and military helicopters;
provision of maintenance services.
•

Astrium — Development, manufacturing, marketing and sale of satellites, orbital infrastructuresand launchers; provision of space services.

• Defence & Security — Development, manufacturing, marketing and sale of missiles systems;
military combat aircraft and training aircraft; provision of defence electronics and defencerelated telecommunications solutions and logistics; training, testing, engineering and otherrelated services.

In the context of the full integration of the former Military Transport Aircraft Division (MTA) into
Airbus being Airbus Military and the consolidation of EADS EFW (previously included in Other
Businesses) within Airbus from 2009 onwards, the Airbus segment’s 2008 figures and Other
Businesses’ figures have been restated accordingly. Until the completion of the consequentialchanges to the internal reporting systems, the Airbus Segment is presented as one reportablesegment, disclosing Airbus Military thereof in the former MTA perimeter. Additionally, completing
the reorganisation of aerostructures activities within EADS, the site in Augsburg (previously

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EADS N.V.
Report of the Board of Directors andUnaudited Condensed Consolidated Financial Information for the six-month period ended June 30, 2009

included in Defence & Security) has been transferred to Airbus segment in 2009. The respective
previous year’s figures are not restated, but explained where considered to be material.
In the second quarter 2009, the carrying amounts of operative real estate, which is owned by
Headquarters, were transferred retroactively to the respective segments (mainly Airbus) as atJanuary 1, 2009. Since the operative segments as tenants are treated as if they were the owners,
rental income and depreciations in Headquarters are restated accordingly, thus affecting EBIT.
The following table presents information with respect to the Group’s reportable segments.
Consolidation effects, the holding function of EADS Headquarters and other activities not allocableto the divisions (segments) are disclosed in the column “HQ / Conso.”. “Other Businesses”
comprises operating segments, which are not reportable and mainly includes the development,
manufacturing, marketing and sale of regional turboprop aircraft, aircraft components as well as
maintenance services.

in M €

AirbusEurocopter

Defence &Security

Astrium

Other
Businesses

Total
segments

Consolidated

HQ/
Conso.

Six-month period ended June 30, 2009
Revenues

13.951

thereof Airbus Military855

Research anddevelopment expenses-937

thereof Airbus Military-7

Profit before financeresult and income taxes

507

thereof Airbus Military-37

EBIT pre-goodwill imp.
and exceptionals (seedefinition below)

519

thereof Airbus Military

-36

1.908

2.161

2.194

480

20.694-499

20.195

-78

-90

-32

-2

-1.139-33-1.172

98

134

97

2

838

23

861

99

143

99

2

862

26

888

1.795

2.167 *)

1.701

597

20.400-661

19.739

-56

-76

-31

-5

-1.102-28-1.130

104

129

86

17

1.034

101

1.135

104

134

88

17

1.053

105

1.158

Six-month period ended June 30, 2008
Revenues

14.140

thereof Airbus Military

898

Research anddevelopment expenses-934

thereof Airbus Military-3

Profit before financeresult and income taxes

698

thereof Airbus Military-21

EBIT pre-goodwill imp.
and exceptionals (seedefinition below)

710

thereof Airbus Military

-20

*)

thereof revenues of 199 M € related to the site in Augsburg

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Report of the Board of Directors andUnaudited Condensed Consolidated Financial Information for the six-month period ended June 30, 2009

6. 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 the formation of MBDA, as
well as impairment charges thereon. It also comprises disposal impacts related to goodwill and fairvalue adjustments from these transactions. EBIT pre-goodwill impairment and exceptionals is
treated by management as a key indicator to measure the segments’ economic performances.
A reconciliation from profit before finance result and income taxes to EBIT pre-goodwill impairment
and exceptionals is set forth in the following table (in M €):in M €
Profit before finance result and income taxes

Janua ry 1 Ju ne 3 0, 2 009

Jan uary 1June 30, 200 8

861

1,135

27

23

888

1,158

Goodwill and exceptionals:
Exceptional depreciation (fixed assets in cost of sales)
EBIT pre-goodwill impairment and exceptionals

7. Significant income statement items
Revenues of 20,195 M € (first half-year 2008: 19,739 M €) increase by +456 M € mainly at
Eurocopter and Astrium (partly driven by a catch-up for in-orbit incentive schemes on commercial
telecommunication satellites). This is to some extent compensated by Airbus and Socata, of which
70 % was sold in 2009 and the remaining 30% are now accounted for at equity.
The Gross Margin decreases by -145 M € to 3,001 M € compared to 3,146 M € in the first halfyear of 2008. This deterioration is mainly related to Airbus which is in particular burdened in 2009
by foreign exchange rate effects and lower realized prices for sold aircraft, partly benefiting bylower A380 onerous contract business charges. Except for Airbus, the other divisions increase
their gross margins.
Research and development expenses of -1,172 M € (first half-year 2008: -1,130 M €) principallyreflect an increase for the Airbus A350XWB and some Eurocopter programmes partly
compensated by a decrease in the Airbus A380-800 programme.
Other income increases by 27 M € to 89 M € (first half-year 2008: 62 M €) mainly due to the gainof +33 M € resulting from the sale of Airbus UK’s former site in Filton to GKN.
Share of profit from associates under the equity method and other income frominvestments of 67 M € (first half-year 2008: 110 M €) is mainly influenced by the result ofDassault Aviation of 59 M € (first half-year 2008: 85 M €). The Dassault Aviation equity accountedfor income in the first half-year 2009 includes a positive catch-up on 2008 results amounting to
4 M €.
Finance result amounts to -307 M € (first half-year 2008: -492 M €) including negative impacts
from the revaluation of capitalized option premiums and the unwinding of the discounting mainly
on A380, A350XWB and Power8 provisions partly offset by the positive effects from the foreignexchange rate revaluation of monetary items.

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The income tax expense of -174 M € (first half-year 2008: -232 M €) corresponds to an effective
income tax rate of 31% (first half-year 2008: 36%).

8. Significant balance sheet items
Non-current assets
Intangible assets of 11,162 M € (prior year-end: 11,171 M €) include 9,755 M € (prior year-end:
9,760 M €) of goodwill. This mainly relates to Airbus (6,437 M €), Defence & Security (2,496 M €),Astrium (625 M €) and Eurocopter (111 M €). The last annual impairment tests, which were
performed at the end of the year 2008, did not lead to any impairment charges.
Eliminating foreign exchange-rate effects of +276 M €, property, plant and equipment increaseby +7 M € to 12,526 M € (prior year-end: 12,243 M €), including leased assets of 803 M € (prioryear-end: 878 M €). Property, plant and equipment also comprise “Investment property” amounting
to 83 M € (prior year-end: 87 M €).
Investments in associates under the equity method of 2,425 M € (prior year-end: 2,356 M €)mainly reflect the increase in the equity investment in Dassault Aviation, amounting to 2,286 M €(prior year-end: 2,243 M €). At June 30, 2009, EADS assessed that the value in use of its equityaccounted for investment in Dassault Aviation was higher than its book value.
Other investments and other long-term financial assets of 1,798 M € (prior year-end: 1,712 M€) are related to Airbus for an amount of 1,305 M € (prior year-end: 1,290 M €), mainly concerning
the non-current portion of aircraft financing activities including a foreign exchange rate effect of -8
M €.
Other non-current assets mainly comprise Non-current derivative financial instruments and Noncurrent prepaid expenses. The increase by +95 M € to 2,741 M € (prior year-end: 2,646 M €) ismainly caused by the positive variation of the non-current portion of fair values of derivative
financial instruments (+216 M €) and higher non-current prepaid expenses (+43 M €), partly offset
by the negative revaluation of option premiums at Airbus contracted in the course of the EADS US
dollar hedging strategy.
Deferred tax assets of 2,812 M € (prior year-end: 2,756 M €) are presented as non-current assets
as required by IAS 1.
The fair values of derivative financial instruments are included in other non-current assets(1,317 M €, prior year-end: 1,101 M €), in other current assets (1,023 M €, prior year-end:
1,482 M €), in other non-current liabilities (988 M €, prior year-end: 2,208 M €) and in other current
liabilities (537 M €, prior year-end: 657 M €) which corresponds to a total net fair value of 815 M €(prior year-end: -282 M €). The volume of hedged US dollar-contracts decreases from 68.1 billion
US dollar as at December 31, 2008 to a net of 64.5 billion US dollar as at June 30, 2009, including
5 billion of US dollar vanilla options. The US dollar exchange rate became less favorable (USD / €spot rate of 1.41 at June 30, 2009 vs. 1.39 at December 31, 2008). The average US dollar hedge
rate for the hedge portfolio of the Group deteriorates from 1.36 USD / € as at December 31, 2008
to 1.37 USD / € as at June 30, 2009 (excluding US dollar plain vanilla options which are out of themoney).

Current assets
Inventories of 22,273 M € (prior year-end: 19,452 M €) increase by +2,821 M €. This is mainly
driven by an increase of unfinished goods and services at Airbus segment (+1,325 M €), at

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Eurocopter (+402 M €) due to a ramp-up of commercial programmes (mainly SuperPuma,
Dauphin and EC 135) and governmental programmes and at Defence (+186 M €) fueled bycommunication systems and launchers. Boosted by its launcher business, Astrium records ahigher level of work in progress as well as of advance payments made.
Other current assets include “Current portion of other long-term financial assets”, “Current otherfinancial assets”, “Current other assets” and “Current tax assets”. The decrease of -491 M € to
4,099 M € (prior year-end: 4,590 M €) comprises among others a decrease of -459 M € in positive
fair values of derivative financial instruments.
Cash and cash equivalents increase from 6,745 M € to 7,004 M € (see also note 9 “Significant
cash flow items”).

Total equity
Equity attributable to equity holders of the parent (including purchased treasury shares) amounts
to 11,776 M € (prior year-end: 11,022 M €). The increase is mainly due to a comprehensive
income for the period of +907 M €, primarily resulting from positive effects from changes in fairvalues of derivative financial instruments and the profit for the period, partly compensated by the
cash distribution to the shareholders. The re-assessment of BAE Systems’ pension schemes leads
for the EADS share to a decrease of accumulated actuarial gains and losses of -171 M € and to aforeign exchange rate effect of -77 M € (see “non-current provisions”).
Non-controlling interests slightly increase to 107 M € (prior year-end: 104 M €).

Non-current liabilities
Non-current provisions of 7,732 M € (prior year-end: 7,479 M €) comprise the non-current
portion of pension provisions with an increase of +447 M € to 4,782 M € (prior year-end: 4,335 M€). For half-year 2009, BAE Systems re-assessed its pension schemes including an update of theassumptions for their calculation of the defined benefit obligations, thereby leading to an increaseof the net pension obligation. Since EADS applies the equity approach under IAS 19, non-current
pension provisions increase by +264 M €, reflecting EADS share in the BAE Systems’ pension
schemes. For its other pension schemes, EADS re-assessed the cumulated actuarial gains andlosses, resulting in no material change in the net pension obligation.
Moreover, other provisions are included in non-current provisions, which decrease by -194 M € to
2,950 M €. A significant part of the decrease (-129 M €) relates to the shift of parts of the noncurrent portion of the restructuring provisions for the “Power 8” program to current provisions. Achange in estimate considering foreign exchange rate effects in the onerous contracts’ provisions
for aircraft sales in Airbus led to an additional charge of 71 M €. Other provisions include among
others the provision for aircraft financing activities with a decrease of -17 M € to 786 M € (thereof
foreign exchange effects of -13 M €).
Long-term financing liabilities of 1,948 M € (prior year-end: 3,046 M €) decrease by -1,098 M €.
Due to the maturity date of the first tranche of the EMTN bond, an amount of 1 bn € is classified
among short-term financing liabilities.
Other non-current liabilities comprise “Non-current other financial liabilities”, “Non-current otherliabilities” and “Non-current deferred income” and decrease in total by -911 M € to 15,913 M €(prior year-end: 16,824 M €). They mainly include non-current customer advance payments
received of 9,085 M € (prior year-end: 8,843 M €) and the non-current portion of European
Government refundable advances amounting to 4,677 M € (prior year-end: 4,563 M €). The main20

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EADS N.V.
Report of the Board of Directors andUnaudited Condensed Consolidated Financial Information for the six-month period ended June 30, 2009

part of non-current deferred income of 272 M € (prior year-end: 418 M €) is linked to deferred
revenues of Airbus and ATR according to Residual Value Guarantee clauses. These are reversed
over the guaranteed period.

Current liabilities
Current provisions decrease by -33 M € to 4,550 M € (prior year-end: 4,583 M €) and comprisethe current portions of pensions (198 M €) and other provisions (4,352 M €). The decrease mainlyreflects provisions for personnel expenses (-75 M €) and for outstanding costs (-61 M €), partly
compensated by the above mentioned shift of the non-current portion of the restructuringprovisions for the “Power 8” program to current provisions.
Short-term financing liabilities of 2,319 M € (prior year-end: 1,458 M €) increase by +861 M €,mainly due to the first tranche of the EMTN bond with an amount of 1 bn €, which matures within
one year from June 30, 2009 onwards.
Trade liabilities decrease by -339 M € (thereof +127 M € foreign exchange rate effect) to7,485 M € (prior year-end: 7,824 M €), mainly coming from Airbus (-286 M €).
Other current liabilities include “Current other financial liabilities”, “Current other liabilities” and“Current deferred income”. They increase by +1,659 M € to 24,163 M € (prior year-end:
22,504 M €). Other current liabilities mainly comprise current customer advance payments of
19,411 M € (prior year-end: 17,802 M €).

9. Significant cash flow items
IAS 16 “Property, Plant and Equipment” and consequentially IAS 7 “Statement of Cash Flows”
were amended by the IASB’s Annual Improvements Project 2008 regarding the presentation of
cash flows relating to customer financing activities. Cash flows from leased assets and financelease receivables formerly presented within investing activities are now included in “change inother operating assets and liabilities” within operating activities. Cash flows in relation to customer
finance liabilities formerly presented in “change in long-term and short-term financing liabilities”
within financing activities are now also included in “change in other operating assets and liabilities”
within operating activities.
Cash (used for) provided by operating activities decreases by -2,375 M € to -547 M € (firsthalf-year 2008: 1,828 M €). Gross cash flow from operations (excluding working capital changes)of 1,351 M € falls below prior period’s level (first half-year 2008: 2,437 M €). The decrease ismainly caused by Airbus. Changes in other operating assets and liabilities (working capitalchanges) amount to -1,898 M € (first half-year 2008: -609 M €). This degradation mainly resultsfrom an increase of inventories.
Cash provided by (used for) investing activities amounts to 1,025 M € (first half-year 2008:-3,716 M €). This mainly comprises a net sale of securities of 1,647 M €, partly offset by purchasesof intangible assets and property, plant and equipment of -752 M €, namely in Airbus.
Cash (used for) financing activities improves by +439 M € to -233 M € (first half-year 2008:-672 M €). The outflow comprises the cash payment to shareholders as well as the net repaymentof financing liabilities.

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10. Number of shares
The total number of shares outstanding is 809,964,924 and 806,984,099 as of June 30, 2009 and2008, respectively. EADS’ shares are exclusively ordinary shares with a par value of 1.00 €.
During the first half-year 2009, the number of treasury shares held by EADS decreased from5,259,965 as of December 31, 2008 to 4,781,201 as of June 30, 2009.
EADS neither issued any new shares nor implemented an Employee Stock Ownership Plan. In thefirst half-year 2008, EADS issued 14,200 shares as a result of the exercise of stock options inrelation with the implemented stock option plans. Under ESOP 2008, 2,031,820 shares were
granted in June 2008 and issued in July 2008.

11. Earnings per share
Basic earnings per share are calculated by dividing profit for the period attributable to equity
holders of the parent (Net income) by the weighted average number of issued ordinary shares
during the period, excluding ordinary shares purchased by the Group and held as treasury shares:
January 1 toJune 30, 2009
Net income attributable to equity holders of the parent
Weighted average number of ordinary shares outstanding
Basic earnings per share

January 1 to June30, 2008

378 M €

403 M €

810,058,069

805,297,126

0.47 €

0.50 €For calculation of the diluted earnings per share, the weighted average number of ordinary
shares is adjusted to assume conversion of all potential ordinary shares. The Group’s categories
of dilutive potential ordinary shares are stock options as well as performance and restricted
shares. Since the average price of EADS shares during the first half-year 2009 did not exceed theexercise price of any stock option plan (in the first half-year 2008: the 5th stock option plan)
initiated by the Group, no shares related to stock options were considered in the calculation ofdiluted earnings per share (in the first half-year 2008: 69,066 shares). Since the average price of
EADS shares during the first half-year 2009 exceeded the price of performance and restricted
shares, 909,871 shares related to performance and restricted shares (in the first half-year 2008:
321,046 shares) were considered in the calculation.
January 1 toJune 30, 2009
Net income attributable to equity holders of the parent
Weighted average number of ordinary shares outstanding(diluted)
Diluted earnings per share

January 1 to June30, 2008

378 M €

403 M €

810,967,940

805,687,238

0.47 €

0.50 €

12. Related party transactions
The Group has entered into various transactions with related companies in the first six months of2009 and 2008 that have all been carried out in the normal course of business. As is the Group’s

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Report of the Board of Directors andUnaudited Condensed Consolidated Financial Information for the six-month period ended June 30, 2009

policy, all related party transactions have to be carried out at arm’s length. Transactions withrelated parties include the French State, Daimler, Lagardère and SEPI (Spanish State). Except for
the transactions with the French State and SEPI, such transactions are not considered material to
the Group either individually or in the aggregate. The transactions with the French State include
mainly sales from the Eurocopter, Defence & Security and Astrium divisions. The transactions withSEPI include mainly sales from Airbus Military in Airbus segment and Defence & Security division.

13. Number of employees
The number of employees at June 30, 2009 is 117,661 as compared to 118,349 at December 31,
2008.

14. Litigation and claims
EADS is involved from time to time in various legal and arbitration proceedings in the ordinary
course of its business, the most significant of which are described below. Other than as described
below, EADS is not aware of any governmental, legal or arbitration proceedings (including any
such proceedings which are pending or threatened of which EADS is aware), during a period
covering at least the previous twelve months which may have, or have had in the recent pastsignificant effects on EADS and/or the Group’s financial position or profitability.
In 2005, a liquidator representing the special purpose vehicle GFAC (a joint venture between
Swissair and GATX) sued Airbus before a New York court to recover USD 227 million in predelivery payments, together with interest and costs. The lawsuit followed Airbus’ termination of apurchase agreement with GFAC in October 2001 for 38 single-aisle and long-range aircraft, in thecontext of Swissair’s bankruptcy. On 6 February 2009, a judge decided in favour of GFAC. In
March 2009, GFAC submitted arguments on the amount of its alleged damages and requested
entry of judgment. In parallel, Airbus has filed an appeal of the February 2009 decision. Bothrequests are currently under consideration by the courts, and it cannot be excluded that Airbus
could be ordered to pay an amount equal to the pre-delivery payments plus legal interest.
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
Civil Aircraft, the US lodged a request on 6 October 2004 to initiate proceedings before the WTO.
On the same day, the EU launched a parallel WTO case against the US in relation to its
subsidisation of Boeing. On 31 May 2005, the US and the EU each requested the establishment ofa panel. At its meeting on 20 July 2005, the Dispute Settlement Body established the panels.
Between November 2005 and the present, the parties filed numerous written submissions andattended several oral hearings in both cases. The parties continue to provide input in response to
the WTO’s written questions in advance of issuance of the WTO panels’ reports. Exact timing offurther steps in the WTO litigation process is subject to ruling of the panels and to negotiations
between the US and the EU. Unless a settlement, which is currently not under discussion, isreached between the parties, the WTO panels have indicated that they will issue draft reports in
2009.
The French Autorité des marchés financiers (the “AMF”) began investigations in 2006 for alleged
breaches of market regulations and insider trading rules with respect to, among other things, theA380 delays announced in 2006. On 1 April 2008, the AMF announced the notification of charges
against EADS and certain of its executives for breach of such market regulations and insider
trading rules, respectively. EADS and the individual defendants intend to vigorously exercise their

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Report of the Board of Directors andUnaudited Condensed Consolidated Financial Information for the six-month period ended June 30, 2009

defence rights in front of the Sanction Commission of the AMF, which will decide whether toimpose fines after due hearing of the parties. EADS believes that the financial risk associated withthis procedure and its possible consequences is not material. However, it recognises that theseproceedings may have significant consequences on its image and reputation. Following criminal
complaints filed by a shareholders’ association and by an individual shareholder (including a civil
claim for damages), French investigating judges are also carrying out investigations on the samefacts.
In Germany, criminal proceedings regarding suspected insider trading offences are still pending
against a small number of individuals at lower management level, while proceedings against otherindividuals have either been discontinued without charges being brought or dismissed by the court.
Furthermore, in Germany, several shareholders have filed civil actions against EADS since 2006
to recover their alleged losses in connection with the disclosure of A380 programme delays. The
actions are in their preliminary stage and the amounts claimed are relatively small. On 17 July
2009, the regional court of Frankfurt partially granted one plaintiff’s motion for “model
proceedings”, which would allow common issues of fact or law in multiple individual securities
actions to be bundled together. EADS anticipates a vigorous defence.
On 12 June 2008, two actions were initiated in the United States District Court for the Southern
District of New York, one of which has since been voluntarily withdrawn. The remaining action
purports to be a class action brought on behalf of all persons and entities residing in the UnitedStates who purchased or otherwise acquired EADS’ common stock during the period from27 July 2005 through 9 March 2007. Named as defendants are EADS and four current or former
executives of EADS and Airbus. The action seeks damages in an unspecified amount, withinterest and attorneys’ fees, for alleged violations of the US securities laws in connection withfinancial disclosures issued by EADS in 2005, 2006 and 2007 and public statements made duringthat same time frame relating to A380 programme delays. On 2 January 2009, defendants filed
motions to dismiss the complaint in the action. On 17 March 2009, plaintiff filed its opposition to
the motions to dismiss; on 23 April 2009, defendants filed replies; and on 30 April 2009, plaintiff
requested leave to file a sur-reply. That request and defendants’ motions to dismiss are pending.
EADS anticipates a vigorous defence to the lawsuit.
Regarding EADS’ provisions policy, EADS recognises provisions for litigation and claims when(i) it has a present obligation from legal actions, governmental investigations, proceedings andother 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 amount of suchobligation can be made. EADS believes that it has made adequate provisions to cover current orcontemplated general and specific litigation risks.

15. Subsequent events
On 24 July 2009, the nations’ Defence Ministers confirmed on their meeting in Le Castellet(France), that the A400M is still their preferred choice for future air transport and their agreement
to enter into detailed negotiations with AMSL up to the end of the year. These negotiations will
enable the launch nations to finalise, together with EADS, realistic general and specific conditions
for the development and production of the A400M. On their side, EADS, Airbus and AMSL are fullycommitted to finding an agreement that is technically and contractually acceptable to both sides.

24

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EADS N.V.
Report of the Board of Directors andUnaudited Condensed Consolidated Financial Information for the six-month period ended June 30, 2009

Further, the final award of the Eryx-arbitration tribunal regarding the dispute between MBDA andthe Turkish MoD has also been rendered on 24 July 2009, which requires final legal analysis as toits consequences.The financial impacts of the arbitral award, which are considered to be nonsignificant from an EADS perspective, will be taken into account during the second half year 2009.

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27.07.2009

To: EADS N.V.:

Review report
Introduction
We have reviewed the condensed consolidated interim financial information of EADS N.V.,
Leiden (“EADS” or “the Company”) as at June 30, 2009, which comprises the condensed
interim consolidated balance sheet as at June 30, 2009, and the related condensed interim
consolidated statements of income, comprehensive income, changes in equity and cash flows forthe 6 month period then ended and explanatory notes. Company’s management is responsible
for the preparation and presentation of this condensed interim consolidated financial informationin accordance with International Financial Reporting Standards as adopted by the European
Union (‘IAS 34’). Our responsibility is to express a conclusion on this condensed interim
consolidated financial information based on our review.
Scope of Review
We conducted our review in accordance with Dutch law including standard 2410, “Review ofInterim Financial Information Performed by the Auditor of the Entity”. A review of interim
financial information consists of making inquiries, primarily of persons responsible for financial
and accounting matters, and applying analytical and other review procedures. A review issubstantially less in scope than an audit conducted in accordance with auditing standards andconsequently does not enable us to obtain assurance that we would become aware of all
significant matters that might be identified in an audit. Accordingly, we do not express an audit
opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that theaccompanying condensed consolidated interim financial information as at June 30, 2009 is notprepared, in all material respects, in accordance with IAS 34, ‘Interim Financial Reporting’, as
adopted by the European Union.

Emphasis of matter
Without qualifying our conclusion above, we draw attention to all of the specific disclosures
made by the Company in its notes to the condensed consolidated interim financial statements
under Note 3 “Accounting for the A400M Program” in relation with the risks and uncertainties
attached to the A400M program.

Rotterdam, July 27, 2009

Amsterdam, July 27, 2009

KPMG Accountants N.V.
(signed by L.A. Blok)

Ernst & Young Accountants LLP(signed by F.A.L van der Bruggen)