EADS N.V.
Unaudited Condensed Consolidated Financial Information for the nine-month period ended September 30, 2006

First nine months 2006 Report

Unaudited Condensed Consolidated
Financial Information of EADS N.V.
for the first nine months of 2006
Unaudited Condensed IFRS Consolidated Income Statements ...………………………….….......…2
Unaudited Condensed IFRS Consolidated Income Statements for the third quarter 2006 and2005……………………………………………………………………………………………………………….3
Unaudited Condensed IFRS Consolidated Balance Sheets….…..………….……………...……....…4
Unaudited Condensed IFRS Consolidated Cash Flow Statements……………....…...…………...…5
Unaudited Condensed IFRS Consolidated Statements of Changes in equity attributable toequity holders of the parent and minority interests…….………………………..………………………6
Explanations to the Unaudited Condensed IFRS Consolidated Financial Statements
as at September 30th, 2006.......…………………………………………….………...……...…..……...……6
1. The Company…………………………………………………………………………………………..6
2. Accounting policies……………….………………………………………………..………………...6
3. Changes in the consolidation perimeter of EADS…………………………....…….….…….…8
4. Segment information………………………………..…………..……………………………………8
5. EBIT pre goodwill impairment and exceptionals…..……..…………………………..…………96. Significant income statement items…………..…………………..………….………..……..….10
7. Significant balance sheet items…………………...…………………………………...…..….....11
8. Significant cash flow items…………………………………………………………...…..……….13
9. Contingencies………………………………………………………………………………………..13
10. Number of shares…………………………………………………………...……………….…...…14
11. Earnings per share……………………………………..………………………...….…..………….14
12. Related party transactions ………………..…………………...……………...……………..……15
13. Number of employees ……………………………….……………………………..……....………15
14. Subsequent events of the period……...……………………………………………………….....15

1

07.11.2006

EADS N.V.
Unaudited Condensed Consolidated Financial Information for the nine-month period ended September 30, 2006

Unaudited Condensed IFRS Consolidated Income Statements
January 1 September 30, 2006
Revenues
Cost of sales
Gross margin
Selling, administrative & otherexpenses
Research and development
expenses
Other income
Share of profit from associates andother income from investments
Profit before finance costs andincome taxes
Finance costs
Income taxes
Profit for the period
Attributable to:Equity holders of the parent(Net income) *)Minority interests *)Earnings per share
Basic *)
Diluted *)M€27,469-23,098
4,371

January 1 September 30, 2005

%
100
-84
16

M€
23,446-18,685
4,761-1,694-6-1,691

Deviation

%
100
-80
20

M€
4,023
-4,413-390%-1,620

-7

-74

5

-6

-1,431

-6

-260

18

225

1

124

1

101

81

137

0

171

1

-34

-20

1,348
-151
-357
840

5
-1
-1
3

2,005
-21
-707
1,277

9
0
-4
5

-657
-130
350
-437

-33
619
-50
-34

848
-8

3
0

1,271
6

5
0

-423
-14

-33
-233

17
24
-8

€

€

€

1.06
1.05

1.60
1.59

-0.54
-0.54

*) For retrospective adjustments concerning first nine months 2005 please refer to Note 2 “Accounting
policies”.

2

07.11.2006

EADS N.V.
Unaudited Condensed Consolidated Financial Information for the nine-month period ended September 30, 2006

Unaudited Condensed IFRS Consolidated Income Statements for the third
quarter 2006 and 2005

July 1 September 30, 2006
Revenues
Cost of sales
Gross margin
Selling, administrative & otherexpenses
Research and development
expenses

M€
8,489-7,724765

July 1 September 30, 2005

%
100
-91
9

M€
7,426
-5,946
1,480

-562

-7

-552

Deviation

%
100
-80
20

M€
1,063
-1,778
-715

%

-541

-7

-21

4

-6

-481

-6

-71

15

29

0

33

0

-4

-12

14
30
-48

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

68

1

38

0

30

79

-252
-6
74
-184

-3
0
1
-2

529
-47
-196
286

7
0
-3
4

-781
41
270
-470

-148
-87
-138
-164

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

-195
11

-2
0

279
7

4
0

-474
4

-170
57

Earnings per share
Basic and diluted *)

€

€

€

-0.24

0.35

-0.59

*) For retrospective adjustments concerning third quarter 2005 please refer to Note 2 “Accounting
policies”.

3

07.11.2006

EADS N.V.
Unaudited Condensed Consolidated Financial Information for the nine-month period ended September 30, 2006

Unaudited Condensed IFRS Consolidated Balance Sheets

Non-current assets
Intangible assets
Property, Plant and Equipment
Investments in associates
Other investments and long-term
financial assets
Non-current other assets
Deferred tax assets
Non-current securities
Current assets
Inventories
Trade receivables
Other current assets
Current securities
Cash and cash equivalents
Non-current assets classified asheld for sale
Total assets
Total equity
Equity attributtable to equity holdersof the parent
Capital StockReserves
Accumulated other comprehensive
incomeTreasury shares
Minority interests
Non-current liabilities
Non-current provisions
Long-term financial liabilities
Deferred tax liabilities
Other non-current liabilities
Current liabilities
Current provisions
Short-term financial liabilities
Liability for puttable instruments
Trade liabilities
Current tax liabilities
Other current liabilities
Liabilities directly associated with
non-current assets classified asheld for sale
Total equity and liabilities

September 30, 2006
M€%

December 31, 2005
M€%

10,67914,276
1,989

15
20
3

11,052
13,951
1,908

16
19
3

-373
325
81

-3
2
4

1,825

2

1,938

3

-113

-6

3,649
2,485
1,341
36,244

5
3
2
50

3,610
2,557
1,011
36,027

5
4
1
51

39
-72
330
217

1
-3
33
1

17,484
4,462
4,525
18
9,366
35,855

24
6
7
0
13
50

15,425
4,802
3,675
29
9,546
33,477

22
7
5
0
14
48

2,059
-340
850
-11
-180
2,378

13
-7
23
-38
-2
7

0

0

881

1

-881

-100

72,099100

70,385

100

1,714

2

815
9,687

1
14

818
9,371

1
13

-3
316

0
3

4,576

6

3,982

6

594

15

-332
14,746
174
14,920

0
21
0
21

-445
13,726
176
13,902

0
20
0
20

113
1,020
-2
1,018

-25
7
-1
7

6,757
3,841
2,821
11,74025,159

9
5
4
17
35

6,879
4,189
2,376
11,29524,739

10
6
3
16
35

-122
-348
445
445
420

-2
-8
19
4
2

2,593
2,084
2,750
6,766
234
17,59332,020

4
3
4
9
0
24
44

2,727
908
3,500
6,634
174
17,73931,682

4
1
5
10
0
25
45

-134
1,176
-750
132
60
-146
338

-5
130
-21
2
34
-1
1

0

0

62

0

-62

-100

72,099100

70,385

100

1,714

2

4

Deviation
M€%

07.11.2006

EADS N.V.
Unaudited Condensed Consolidated Financial Information for the nine-month period ended September 30, 2006

Unaudited Condensed IFRS Consolidated Cash Flow Statements

Profit for the period attributable to equity holders of the parent(Net income) *)Profit (loss) attributable to minority interests *)Adjustments to reconcile profit for the period (net income) to cash
provided by operating activities:
Depreciation and amortization
Valuation adjustments and CTA release
Change in deferred taxes
Results on disposal of non-current assets
Results of companies accounted for by the equity method
Change in current and non-current provisions andcurrent tax assets / liabilities
Change in other operating assets and liabilities
Cash provided by operating activities- Purchase of intangible assets, PPE- Proceeds from disposals of intangible assets, PPE- Acquisitions of subsidiaries (net of cash)- Proceeds from disposals of subsidiaries (net of cash)- Payments for investments in associates and otherinvestments and long-term financial assets- Proceeds from disposals of associates and otherinvestments and long-term financial assets- Dividends paid by companies valued at equity- Increase in equipment of leased assets- Proceeds from disposals of leased assets- Increase in finance lease receivables- Decrease in finance lease receivables
Disposals of non-current assets classified as held for sale
Change of securities
Change in cash from changes in consolidation
Cash used for investing activities
Change in long-term and short-term financial liabilities
Cash distribution to EADS N.V. shareholders
Payments related to liability for puttable instruments
Capital increase
Purchase of treasury shares
Cash provided by (used for) financing activities
Effect of foreign exchange rate changes and other valuation
adjustments on cash and cash equivalents
Net (decrease) increase in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

January 1 September 30, 2006
M€

January 1 September 30, 2005
M€

848
-8

1,271
6

1,183
163
128
-271
-107

1,365
-10
12
-108
-160

599
-1,754781-1,758
47
-72
81

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

-169

-470

589
46
-146
29
-9
54
374
-318
0
-1,252
886
-520
-129
85
-18
304

320
36
-34
223
-211
59
0
-184
11
-2,099
373
-396
-93
80
-215
-251

-13
-180

17
1,095

9,546
9,366

8,718
9,813

*) For retrospective adjustments concerning first nine months 2005 please refer to Note 2 “Accounting
policies”.
As of September 30th, 2006, EADS’ cash position (stated as cash and cash equivalents at end of
period in the unaudited condensed consolidated cash flow statements) includes 1,034 M € (1,202 M €as of December 31st, 2005) representing the amount Airbus has deposited at BAE Systems.
Additionally included are 590 M € (579 M € as of December 31st, 2005), which represent EADS’ share5

07.11.2006

EADS N.V.
Unaudited Condensed Consolidated Financial Information for the nine-month period ended September 30, 2006

in MBDA’s cash and cash equivalents, deposited at BAE Systems and Finmeccanica. These funds areavailable for EADS upon demand and, for the Airbus share, have been offset against the transaction
price for the BAE Systems 20 % stake in Airbus SAS on the transaction date in October 2006 (seeNote 14 “Subsequent events”).

Unaudited Condensed IFRS Consolidated Statements of Changes in equity
attributable to equity holders of the parent and minority interests
Equity attributable
to equity holders Minority interestsof the parent

in M €
Balance at January 1, 2006

13,726

Total equity

176

13,902

Capital Increase

85

Profit for the period

848

-8

840

Cash distribution to shareholders

-520

-1

-521

OCI

594

2

596

Purchases of treasury shares-18

Others31

5

Balance at September 30, 2006

14,746174

36
14,920

Balance at January 1, 2005, adjusted

16,210144

16,354

6

1,277

Capital Increase

85

-18

80

Profit for the period *)1,271

Cash distribution to shareholders-396

OCI *)-2,896

Purchases of treasury shares
Others *)Balance at September 30, 2005

80
-396
1

-2,895

-215

-215

27

27

14,081

151

14,232*) For retrospective adjustments concerning first nine months 2005 please refer to Note 2 “Accounting
policies”.

Explanations to the Unaudited Condensed IFRS Consolidated Financial
Statements as at September 30th, 2006
1. The Company
The accompanying Condensed Interim Consolidated Financial Statements (unaudited) present theoperations of European Aeronautic Defence and Space Company EADS N.V. and its subsidiaries(“EADS” or the “Group”), a Dutch public limited liability company (Naamloze Vennootschap) legallyseated in Amsterdam (Le Carré, Beechavenue 130-132, 1119 PR, Schiphol-Rijk, The
Netherlands), and are prepared and reported in Euros (“€”). EADS’ core business is the
manufacturing of commercial aircraft, civil and military helicopters, commercial space launchvehicles, missiles, military aircraft, satellites, defence systems and defence electronics andrendering of services related to these activities.
2. Accounting policies
These Condensed Interim Consolidated Financial Statements have been prepared in accordancewith IAS 34 “Interim Financial Reporting”. EADS’ Consolidated Financial Statements are preparedin accordance with International Financial Reporting Standards (“IFRS”), adopted by theInternational Accounting Standards Board (“IASB”) as endorsed by the European Union (EU).

6

07.11.2006

EADS N.V.
Unaudited Condensed Consolidated Financial Information for the nine-month period ended September 30, 2006

They comprise (i) IFRS, (ii) International Accounting Standards (“IAS”) and (iii) Interpretations
originated by the International Financial Reporting Interpretations Committee (“IFRIC”) or former
Standards Interpretation Committee (“SIC”).
As of January 1st, 2006, EADS adopted the following amendments to existing Standards, newStandards and new Interpretations as required by the following announcements released by the
IASB in December 2004 and throughout 2005:
EADS applies new IFRS 6 “Exploration for and Evaluation of Mineral Resources” and two
amendments to IAS 39 “Financial Instruments: Recognition and Measurement”: “Fair Value
Option” (June 2005) and “Financial Guarantee Contracts” (August 2005) with the latter also
amending IFRS 4. Furthermore, EADS applies new Interpretations IFRIC 5 “Rights to Interests
arising from Decommissioning, Restoration and Environmental Rehabilitation Funds” and IFRIC 6“Liabilities arising from Participating in a Specific Market – Waste Electrical and Electronic
Equipment”.
Amendments to IAS 39 Financial Instruments: Recognition and Measurement(i)

Fair Value Option (June 2005): The amendment limits the use of the fair value option to
those financial instruments that meet one of the following conditions: a) fair value option
designation eliminates or significantly reduces an accounting mismatch (i.e. natural
hedging relationship); or b) a group of financial assets, financial liabilities or both ismanaged and its performance is evaluated on a fair value basis in accordance with adocumented risk management or investment strategy. Furthermore, the fair value option
can generally be elected to be applied in case of embedded derivatives to an entire hybrid
contract. EADS currently applies the fair value option for securities / accumulated funds
only (Money Market Funds).

(ii)

Financial Guarantee Contracts (August 2005): The scope of IAS 39 has been widened toinclude financial guarantee contracts issued. In case an issuer of such contracts has
previously asserted that it regards financial guarantee contracts as insurance contracts
and accounted for them accordingly, the issuer may elect to apply either IFRS 4 or IAS 39
to financial guarantee contracts. The issuer can perform the election contract by contract
but the election for each contract remains irrevocable.

The application of the amendments to existing Standards, new Standards and new Interpretations
mentioned above has no major impact on the Condensed Interim Consolidated Financial
Statements.
Besides consequential changes as mentioned above, the accounting policies used in the
preparation of the Condensed Interim Consolidated Financial Statements are consistent with thoseused for the annual Consolidated Financial Statements for the year ended December 31st, 2005
which are disclosed as an integral part of the Group’s Annual Report 2005. The annual
Consolidated Financial Statements were authorised for issue by EADS’ Board of Directors on
March 7th, 2006.
The application of the following standard in 2005 led to retrospective adjustments in theConsolidated Income and Cash Flow Statements as well as in the Statement of changes in equity
for the prior period presented:
IAS 32 Financial Instruments: Disclosure and Presentation (revised 2004) — Since January
1st, 2005, EADS applies revised IAS 32 “Financial Instruments: Disclosure and Presentation”(revised 2004). Amongst others, revised IAS 32 provides modified guidance whether a share in an
entity should be classified as equity or as financial liability. Under certain circumstances, an entity

7

07.11.2006

EADS N.V.
Unaudited Condensed Consolidated Financial Information for the nine-month period ended September 30, 2006

shall record a financial liability rather than an equity instrument for the exercise price of a written
put on the entity’s equity.
As part of the Airbus business combination in 2001, the option granted to BAE Systems to put its
20% stake in Airbus to EADS is such a written put option. EADS has the obligation to purchasethese minority shares whenever the minority shareholder requests it, limited to a revolving yearly
window period for an amount equal to the fair value of the shares at the time the option is
exercised, to be paid in cash or an equivalent amount of EADS shares (please refer to Note 14“Subsequent events”). Following revised IAS 32 and despite BAE Systems (legal) minority rights in
Airbus, the related interest has been recognized as financial liability in the EADS Consolidated
Financial Statements, stated at fair value and presented in a separate line of the EADS
Consolidated Balance Sheet as “Liability for puttable instruments”. The fair value at September 30,
2006 has been assessed by reference to the determination provided by an independent third party
valuation expert (please refer to Note 7 “Significant balance sheet items” and Note 14“Subsequent events”). Previous estimations of the fair value had been evaluated by applying a
choice of different valuation techniques, based on best estimates available.
Following IAS 8 “Accounting Policies, Changes in Accounting Estimates and Errors”, the adoptionof revised IAS 32 has been treated as a change in accounting policy firstly effecting EADS’
Consolidated Financial Statements as of December 31st, 2005 with corresponding adjustments toprior period presented. The historical minority interests for BAE Systems’ 20% stake in Airbus at
the time of the business combination in 2001 had been replaced by the posting of a liability forputtable instruments, the difference between those two amounts being accounted for against
consolidated total equity.
Prior and current years dividend payments to BAE Systems have been treated as partial
repayments, thus consequently reducing the liability for puttable instruments. All fair valuechanges are treated as contingent consideration in a business combination in accordance withIFRS 3 “Business Combinations” until settlement and led to adjustments of goodwill. (For the effecton previous year figures and the impact on earnings per share, please refer to Note 6 and 11).

3. Changes in the consolidation perimeter of EADSOn February 28th, 2006, LFK GmbH and TDW GmbH, which were fully consolidated by EADS,
have been sold to the European Missile Group MBDA. MBDA is jointly owned by BAE Systems(37.5 %), EADS (37.5 %) and Finmeccanica (25 %). In EADS consolidated financial statements,
MBDA Group is proportionately consolidated with 50 %.
The closing of Atlas Elektronik took place on August 3, 2006. As of September 30, 2006, Atlas has
been consolidated for the first time pro rata at 40 % effective August 1, 2006. The difference
between the purchase price and the acquired net assets at book value led to a preliminary
recognition of a goodwill of 35 M €. In accordance with IFRS, necessary allocations of thepurchase price will be booked at year-end.
Apart from these transactions, other acquisitions or disposals performed by the Group in the firstnine months 2006 are not material to the unaudited Condensed Consolidated Financial
Statements.
4. Segment information
The Group operates in five divisions (segments) which reflect the internal organizational andmanagement structure according to the nature of the products and services provided.

8

07.11.2006

EADS N.V.
Unaudited Condensed Consolidated Financial Information for the nine-month period ended September 30, 2006

• Airbus — Development, manufacturing, marketing and sale of commercial jet aircraft of morethan 100 seats and the development and manufacturing of aircraft for military use.
• Military Transport Aircraft — Development, manufacturing, marketing and sale of militarytransport aircraft and special mission aircraft.
• Eurocopter — Development, manufacturing, marketing and sale of civil and military helicoptersand maintenance services.
• Defence & Security Systems — Development, manufacturing, marketing and sale of missiles
systems; military combat and training aircraft; provision of defence electronics, defence-related
telecommunications solutions; and logistics, training, testing, engineering and other related
services.
• Space — Development, manufacturing, marketing and sale of satellites, orbital infrastructuresand launchers; and provision of space services.
The following table presents information with respect to the Group’s business segments.
Consolidation effects, the holding functions of EADS Headquarters and other activities notallocable to the divisions are disclosed in the column “HQ/ Conso.”. “Other Businesses” comprises
the development, manufacturing, marketing and sale of regional turboprop aircraft and lightcommercial aircraft, aircraft components as well as civil and military aircraft conversion andmaintenance services.

in M €

AirbusMilitary
Transport
AircraftEurocopter

Defence &Security
SystemsOther
HQ/ Conso.
Businesses

Space

Consolidated

Nine months ended September 30, 2006
Revenues

18,570

1,699

2,364

3,553

1,960

922

-1,59927,469Research anddevelopment
expenses-1,413

-10

-54

-130

-49

-4

-31

-1,691

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

1,141

22

125

148

45

-187

99

1,393

Nine months ended September 30, 2005
Revenues

16,033

504

2,021

3,419

1,670

783

-984

23,446

Research anddevelopment
expenses-1,175

-14

-46

-121

-43

-5

-27

-1,431

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

1,854

1

105

10

10

-56

175

2,099

5. EBIT pre goodwill impairment and exceptionals
EADS uses EBIT pre goodwill impairment and exceptionals as a key indicator of its economic
performance. The term “exceptionals” refers to such items as 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. EBIT pre goodwill impairment and exceptionals is treated bymanagement as a key indicator to measure the segments’ economic performances.

907.11.2006

EADS N.V.
Unaudited Condensed Consolidated Financial Information for the nine-month period ended September 30, 2006

A reconciliation from Profit before finance costs and income taxes to EBIT pre goodwill impairment
and exceptionals is set forth in the following table (in M €):January 1Sep 30, 2006

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

January 1Sep 30, 2005

1,348

2,005

45

94

1,393

2,099

6. Significant income statement items
Revenues of 27,469 M € (first nine months 2005: 23,446 M €) increase by 17 % contributed by all
divisions, mostly by Airbus, MTA and Eurocopter.
The Gross Margin decreases by -390 M € to 4,371 M € compared to 4,761 M € in the first ninemonths 2005. The decrease mainly results from Airbus (in particular due to the negative impact
resulting from the A 380 program delays, with about half a billion € charges specifically related tocontracts, and the balance to production overcosts) whereas Defence & Security Systems,
Eurocopter, Space and MTA record increasing gross margins. On the basis of the financial termsof the Group TAT proposal, EADS has performed an impairment test as of June 30, 2006 of theSogerma related assets and has accounted for an impairment charge of 117 M € against specificproperty, plant and equipment as well as inventories.
Research and development expenses of 1,691 M € (first nine months 2005: 1,431 M €) mainly
increase because of aircraft programs and more research & technology efforts. Additionally, EADS
capitalized 194 M € of development costs for A380 in the first nine months 2006 (in the first ninemonths 2005: 172 M €) in accordance with IAS 38.
Other income increases by +101 M € to 225 M €, due to the gain of 106 M € as a result of thesale of LFK GmbH and TDW GmbH to MBDA Group.
Share of profit from associates and other income from investments of 137 M € (first ninemonths 2005: 171 M €) is mainly influenced by the result of Dassault Aviation of 105 M € (first ninemonths 2005: 157 M €). Since for the third quarter 2006 no quarterly financial information isavailable from Dassault Aviation, 50 % of the net income of the second half-year 2005 according
to IFRS has been used as the best estimate (47 M €) to report the current net income from thisequity investment of 105 M €. The result in the first nine months 2005 of Dassault Aviation
included positive catch up adjustments amounting to +64 M €.
Finance costs deteriorate to -151 M € (first nine months 2005: -21 M €) mainly due to negative
effects from foreign exchange rate revaluations on US dollar-cash balance. These effects are
partly offset by a lower net interest charge of -78 M € (first nine months 2005: -116 M €), mainly
due to improved interest rates and a higher net cash position.
Income taxes of -357 M € (first nine months 2005: -707 M €) result in an effective income tax rateof 30 % (first nine months 2005: 36 %), positively impacted by a tax-free gain from the sale of LFKGmbH and TDW GmbH to MBDA Group.
Loss for the period attributable to minority interests of -8 M € (first nine months 2005: +6 M €)mainly relates to a consolidation impact from the sale of LFK GmbH and TDW GmbH to the MBDA
Group.

10

07.11.2006

EADS N.V.
Unaudited Condensed Consolidated Financial Information for the nine-month period ended September 30, 2006

Profit for the period attributable to equity holders of the parent (Net income) amounts to 848
M € (first nine months 2005: 1,271 M €). The profit for the first nine months 2005 was adjusted dueto the retrospective application of revised IAS 32 by an amount of +246 M €.

7. Significant balance sheet items
Non-current assets
Intangible assets of 10,679 M € (prior year: 11,052 M €) include 9,595 M € (prior year: 10,167 M€) of goodwill. It mainly stems from Airbus (6,366 M €), Defence & Security Systems (2,518 M €),Space (559 M €) and Eurocopter (111 M €). The revision of the A 380 delivery program represents
a triggering event for an impairment test on the goodwill and other intangible assets of Airbus. The
test was performed for Airbus goodwill on the basis of the purchase price of 2,750 M € for BAE
Systems’ stake in Airbus as well as other value-in-use methodologies, which did not lead to an
impairment charge. According to EADS accounting policy, the goodwill is tested annually for
impairment in the fourth quarter of the financial year based on the new operative planning.
Eliminating foreign exchange-rate effects of -100 M €, property, plant and equipment increaseby +425 M € to 14,276 M € (prior year: 13,951 M €), including leased assets of 2,210 M € (prioryear: 2,385 M €). The major increases result from Space for Skynet V (+256 M €) and Airbus(+102 M €). Property, plant and equipment comprises “Investment property” amounting to 123 M €(prior year: 134 M €).
Investments in associates of 1,989 M € (prior year: 1,908 M €) mainly comprise the equity
investment in Dassault Aviation, amounting to 1,949 M € (prior year: 1,867 M €).
Other investments and long-term financial assets of 1,825 M € (prior year: 1,938 M €) areallocated to Airbus in the amount of 1,059 M € (prior year: 1,242 M €), mainly concerning the noncurrent portion of aircraft financing activities with a foreign exchange-rate effect of -73 M €.
Non-current other assets mainly comprise “Non-current derivative financial instruments” and“Non-current prepaid expenses”. The increase by +39 M € to 3,649 M € (prior year: 3,610 M €) ismainly caused by the variation of the non-current portion of prepaid expenses (+36 M €).
Deferred tax assets of 2,485 M € (prior year: 2,557 M €) are presented as non-current assets as
required by IAS 1.
The fair values of derivative financial instruments are included in non-current other assets with
an amount of 2,777 M € (prior year: 2,762 M €), in current other assets (1,778 M €, prior year:
1,191 M €), in non-current provisions (201 M €, prior year: 472 M €) and in current provisions (132M €, prior year: 449 M €), which corresponds to a net positive fair value of 4,222 M € (prior year:
3,032 M €). The volume of hedged US dollar-contracts remains with 47.3 billion US dollar nearlyon the same level (prior year: 47.1 billion USD). The US dollar exchange rate became lessfavourable (USD / € spot rate of 1.27 at September 30th, 2006 vs. 1.18 at December 31st, 2005).
The average US dollar hedge rate for the hedge portfolio of the Group as at September 30th, 2006
moved from 1.12 as at December 31st, 2005 to 1.15 as at September 30th, 2006 (US dollar / € rate
respectively).

Current assets
Inventories of 17,484 M € (prior year: 15,425 M €) increase by 2,059 M € in all divisions except
for Military Transport. This is mainly driven by the progress of several serial production programs

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EADS N.V.
Unaudited Condensed Consolidated Financial Information for the nine-month period ended September 30, 2006

in Eurocopter (+367 M €) and Defence (+136 M €), higher advance payments made especially inSpace (+268 M €) and by a higher level of unfinished goods and services in Airbus (mainly for
A380 (+1,016 M €)). An impairment of -150 M € has been accounted for against inventories
related to A 380 program (please also refer to “Non-current provisions”). Military Transport
inventories decreased mainly due to achievement of milestones concerning the A400 M program.
The decrease in trade receivables by -340 M € to 4,462 M € (prior year: 4,802 M €) comes to alarge extent from Space (-192 M €), Defence (-169 M €) and Eurocopter (-104 M €), partly offset
by Airbus (+164 M €).
Other current assets include “Current portion of long-term financial assets”, “Current otherassets”, “Current tax assets” and “Current prepaid expenses”. The increase of +850 M € to 4,525
M € (prior year: 3,675 M €) comprises a +587 M € variation of the current portion of fair values ofderivative financial instruments (see “Derivative financial instruments” under “Non-current assets”).
Moreover, an increase of +318 M € comes from an escrow account, reflecting sales financing
activities in Airbus previously reported as non-current assets classified as held for sale (0 M €as of September 30, 2006; prior period: 881 M €).
Cash and cash equivalents decrease from 9,546 M € to 9,366 M €. (Please refer to theunaudited condensed IFRS Consolidated Cash Flow Statements and Note 8 “Significant cash flow
items”.)

Total equity
Equity attributable to equity holders of the parent (including treasury shares) amounts to
14,746 M € (prior year: 13,726 M €), the increase mainly results from the profit for the period (Netincome) of +848 M € and an increase in other comprehensive income (OCI) of +594 M €, primarily
resulting from changes in fair values as well as consumption of derivative financial instruments,
partly offset by a cash distribution to shareholders of -520 M €.
Minority interests of 174 M € (prior year: 176 M €) mainly represent shares of Finmeccanica in
MBDA. According to revised IAS 32, minority interests for BAE Systems’ share in Airbus areshown as “Liability for puttable instruments” (please refer to Note 2 “Accounting policies”).

Non-current liabilities
Non-current provisions of 6,757 M € (prior year: 6,879 M €) comprise the non-current portion ofpension provisions with a decrease of -10 M € to 3,890 M €. Other provisions include among
others aircraft financing activities with a decrease of -138 M € (thereof foreign exchange rate effectof -82 M €) to 1,015 M € and provisions for derivative financial instruments according to IAS 39
with a decrease of -271 M € to 201 M €. Provisions for loss making contracts amount to 440 M €,mainly resulting from onerous contracts in the course of the revision of the A 380 production anddelivery program (please also refer to the comment on “Inventories”).
Long-term financial liabilities of 3,841 M € (prior year: 4,189 M €), excluding foreign exchangerate effects of -112 M €, decrease by -236 M €.
Deferred tax liabilities of 2,821 M € (prior year: 2,376 M €) are significantly influenced by theincrease in the fair value of derivative financial instruments. They are defined as non-current
liabilities.
Other non-current liabilities comprise “Non-current other liabilities” and “Non-current deferredincome” and increase in total by +445 M € to 11,740 M € (prior year: 11,295 M €). They mainly
include the non-current portion of European Government refundable advances amounting to 5,079

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EADS N.V.
Unaudited Condensed Consolidated Financial Information for the nine-month period ended September 30, 2006

M € (prior year: 4,950 M €) and non-current customer advance payments received of 5,244 M €(prior year: 4,911 M €). The main part of non-current deferred income of 1,186 M € (prior year:
1,324 M €) is linked to deferred revenues of Airbus and ATR according to RVG clauses. The
remaining portfolio, which is included in non-current deferred income is depreciated over theguaranteed period.

Current liabilities
Current provisions decrease by -134 M € to 2,593 M € (prior year: 2,727 M €) and comprise thecurrent portions of pensions (217 M €, prior year: 220 M €) and other provisions (2,376 M €, prioryear: 2,507 M €). The decrease reflects the revaluation of derivative financial instruments
according to IAS 39 (-317 M €) partly compensated by provisions for loss making contracts
becoming current (+69 M €) and an increase of aircraft financing activities (+60 M €).
Short-term financial liabilities of 2,084 M € (prior year: 908 M €) increase by +1,176 M €, mainly
due to the issue of commercial papers with an amount of 1,265 M €.
EADS has adopted in 2005 revised IAS 32 and accounts for a liability for puttable instruments
for the 20 % interest of BAE Systems in Airbus. This liability was stated at fair value of 3,500 M€
as at December 31, 2005. In the course of the exercised put option by BAE Systems, a third party
investment bank has determined on July 2, 2006, that the price to be paid by EADS is 2,750 M€.
(Please also refer to Note 14 “Subsequent events”.)
Trade liabilities increase by +132 M € to 6,766 M € (prior year: 6,634 M €).
Other current liabilities include “Current other liabilities” and “Current deferred income”. They
decrease by -146 M € to 17,593 M € (prior year: 17,739 M €). Other current liabilities mainlycomprise the current portion of customer advance payments of 14,401 M € (prior year: 14,078 M€).
8. Significant cash flow items
Cash provided by operating activities amounts to 781 M € (first nine months 2005: 3,428 M €).
This reflects a negative variation in working capital (change in other operating assets andliabilities) of -1,754 M € (first nine months 2005: positive variation of +532 M €), mainly resulting
from lower contributions from received customer advance payments compared to the previous
period, party offset by a lower increase of inventories.
Cash used for investing activities improves by +847 M € to -1,252 M € (first nine months 2005:-2,099 M €). The outflow is mainly caused by Airbus and Skynet V activities, partly offset bypositive effects from customer financing sell-down operations at Airbus.
Cash provided by (used for) financing activities results to 304 M € (first nine months 2005:-251 M €). The inflow mainly reflects the issuance of commercial papers for an amount of 1,265 M€ partly compensated by cash distributions to EADS NV shareholders (-520 M €) and BAE
Systems (-129 M €).
9. Contingencies
Pension commitments - EADS has several common investments with BAES, of which the mostsignificant in terms of employees are Airbus and MBDA. In respect of each investment, UK
employees may stay in the BAES pensions schemes, which currently qualify as multi-employer

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EADS N.V.
Unaudited Condensed Consolidated Financial Information for the nine-month period ended September 30, 2006

defined benefit plans. BAES is applying IFRS as of January 1, 2005. In accordance with IAS 19,
BAES has disclosed for its UK defined pension schemes a net (pre tax) pension liability as of June30, 2006 in a total amount of 3,634 M GBP. As participants in the BAES schemes, EADS
investments are potentially affected by any shortfall of BAES schemes. However, the agreements
between EADS and BAES have the effect of capping the contributions that the investment has tomake to the pension scheme for a certain period of time (until July 2011 for Airbus and until
December 2007 for MBDA). Any additional contribution would be paid by BAES. EADS is therefore
not exposed to increased contribution payments resulting from the pension underfunding during
the period of the contribution caps. EADS has requested detailed information about these pension
schemes. Based on limited information made available, EADS has judged this information not tobe sufficient to properly allocate the pension plans’ deficit and is therefore not able to reliably
determine its participation in any potential future deficit once the period of contribution caps will
have expired. Consequently, EADS continues to expense the contributions made to the pension
schemes as if the plans were defined contribution plans.
10. Number of shares
The total number of shares outstanding is 801,467,988 and 794,587,504 as of September 30,
2006 and 2005, respectively. EADS’ shares are exclusively ordinary shares with a par value of
1.00 €.
During the first nine months 2006, the number of treasury shares held by EADS decreased from20,602,704 as of December 31, 2005 to 13,881,577 as of September 30, 2006.
4,263,405 new shares (first nine months 2005: 3,188,834 shares) were issued as a result of theexercise of stock options in compliance with the implemented stock option plans.
11. Earnings per share
The net income for the first nine months 2005 was adjusted due to retrospective application ofrevised IAS 32 in 2005 with an amount of +246 M € representing minority interests of 20 % of
Airbus (please refer to Note 2 “Accounting policies”).
Basic earnings per share are calculated by dividing profit for the period attributable to equity
holders of the parent (Net income) by the weighted average number of issued ordinary shares
during the period, excluding ordinary shares purchased by the Group and held as treasury shares:

January 1 to
September 30,
2006
Net income attributable to shareholders
Weighted average number of ordinary shares outstanding
Basic earnings per share

January 1 to
September 30,
2005

848 M €

1,271 M €799,634,560

794,102,069

1.06 €

1.60 €The effect from the retrospective application of IAS 32 (revised) on basic earnings per shareamounts to an increase of 0.31 € in the first nine months 2005.
For calculation of the diluted earnings per share, the weighted average number of ordinary
shares is adjusted to assume conversion of all potential ordinary shares. The Group’s only

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EADS N.V.
Unaudited Condensed Consolidated Financial Information for the nine-month period ended September 30, 2006

category of dilutive potential ordinary shares is stock options. Since the average price of EADS
shares of the first nine months 2006 exceeded the exercise price of the stock options under the 1st,
2nd, 3rd, 4th, 5th and 6th stock option plans (in the first nine months 2005: 1st, 2nd, 4th, 5th and 6thstock option plan) initiated by the Group, the inclusion of the related potential ordinary shares
increases the weighted average number of shares. 5,081,257 shares (first nine months 2005:
5,103,898 shares) are considered dilutive according to IAS 33.

January 1 to
September 30,
2006
Net income attributable to shareholders
Weighted average number of ordinary shares outstanding(diluted)
Diluted earnings per share

January 1 to
September 30,
2005

848 M €

1,271 M €804,715,817

799,205,967

1.05 €

1.59 €The effect from the retrospective application of IAS 32 (revised) on diluted earnings per shareamounts to an increase of 0.31 € in the first nine months 2005.
12. Related party transactions
The Group has entered into various transactions with related companies in the first nine months
2006 and 2005 that have all been carried out in the normal course of business. As is the Group’s
policy, all related party transactions have to be carried out at arm’s length. Transactions withrelated parties include the French State, DaimlerChrysler, Lagardère, and SEPI (Spanish State).
Except for the transactions with the French State, 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 Systems and Space divisions.
13. Number of employees
The number of employees at September 30th, 2006 is 116,146 as compared to 113,210 at
December 31st, 2005.
14. Subsequent events
A350 – Last year, on October 6, 2005, the EADS Board of Directors authorised the go-ahead for
Airbus to launch the industrial program for a new medium-sized long-range aircraft, the A350
aircraft family. This go-ahead together with that received from BAE Systems, enabled Airbus tostart with the A350 program. On July 17, 2006 and following customers’ recommendations, Airbus
presented technical specifications of a revised aircraft family, the A350 XWB, intended to replace
the A350 definition of the industrial program launched earlier which, due to this, has been put on
hold since.
EADS, now being the sole owner of Airbus, is currently considering possible scenarios for thismedium-sized long-range aircraft: (1) launch of the new A350 XWB program in the near future orlater, (2) resumption of the paused A350 program or (3) no A350/A350 XWB program at all. It is
anticipated that EADS, since October 13, 2006 the sole shareholder of Airbus, will decide on oneof these options during the fourth quarter of 2006 after all technical and financial impacts, as wellas engineering resources availability have been reliably assessed.

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EADS N.V.
Unaudited Condensed Consolidated Financial Information for the nine-month period ended September 30, 2006

Because no decision has been taken yet, these Condensed Interim Financial Statements are notimpacted by any of the three scenarios. However, Airbus currently has delivery commitments for
the A350 program that might not be fulfilled or that could trigger concessions or indemnifications incase of a revised product policy. Depending on the scenario finally selected, different ranges ofnegative financial impacts can be expected with a maximum currently assessed up to 800 M €.
A 400M – Following the review of the A380 production and delivery program, a review of the
A 400 M program has been initiated, but has not been finalized to date.
Put option BAE Systems - EADS had recognised BAE Systems’ put option regarding its 20%
stake in Airbus with its fair value (2,750 M € at June 30, 2006 and 3,500 M € at December 31,2005) as liability for puttable instruments in the EADS Consolidated Balance Sheet.
BAE Systems exercised the put option on June 7, 2006. In accordance with the Airbus
Shareholders’ Agreement, an independent investment bank was appointed by EADS and BAE
Systems to determine the price in the absence of an agreement between the two parties. On
July 2, 2006, the bank has determined the fair value price to be 2,750 M €. The transaction wasapproved by a BAE Systems’ shareholders’ meeting on October 4, 2006. On October 13, 2006,
EADS executed this transaction and paid the purchase price in cash from its existing resources,
after setting off the Airbus cash balance deposited at BAE Systems.
Claim – On October 31, 2006, EADS was notified that an individual shareholder filed a civil
complaint against the Company with the District Court of Frankfurt am Main. The plaintiff isseeking damages in the context of the alleged failure of timely disclosure of the A 380 program
delays.

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