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

First Half-year 2005 Report

Unaudited Condensed Interim Consolidated
Financial Information of EADS N.V.
for the first half-year of 2005

Unaudited Condensed IFRS Consolidated Income Statements ...………………………….….......…2
Unaudited Condensed IFRS Consolidated Income Statements for the second quarter2005 and 2004…………………………………….……………………………….…….……………….......…3
Unaudited Condensed IFRS Consolidated Balance Sheets….…..………….……………...……....…4
Unaudited Condensed IFRS Consolidated Cash Flow Statements……………....…...…………...…5
Unaudited Condensed IFRS Consolidated Statements of Changes in equity attributable toequity holders of the parent and minority interests…….………………………..………………………6
Explanations to the Unaudited Condensed IFRS Consolidated Financial Statements
as at June 30, 2005...…...……………………………………………..…..……………...………………...…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 exceptional..…..……..…………………………..…………96. Significant profit and loss statement items……………………..………….………..……..……97. Significant balance sheet items…………………...…………………………………...…..….....10
8. Significant cash flow items…………………………………………………………...…..……….12
9. Contingencies………………………………………………………………………………………..12
10. Number of shares…………………………………………………………...……………….…...…12
11. Earnings per share……………………………………..………………………...….…..………….13
12. Related party transactions ………………..…………………...……………...……………..……13
13. Number of employees ……………………………….……………………………..……....………13

1

26.07.2005

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

Unaudited Condensed IFRS Consolidated Income Statements

January 1 June 30, 2005
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 income (costs)
Income taxes
Profit for the period
Attributable to:Equity holders of the parent(Net income) *)Minority interest

Earnings per share
Basic *)
Diluted *)M€
16,020-12,7393,281January 1 June 30, 2004

%
100
-80
20

M€
14,567-11,657
2,910-1,079-7-950

Deviation

%
100
-80
20

M€
1,453
-1,082371%-1,069

-7

-10

1

-6

-1,113

-8

163

-15

91

1

89

1

2

2

133

1

56

0

77

138

1,476
26
-511
991

9
0
-3
6

873
-61
-335
477

6
0
-2
4

603
87
-176
514

69
-143
53
108

816
175

5
1

381
96

3
1

435
79

114
82

10
9
13

€

€

€

1.03
1.02

0.48
0.47

0.55
0.55

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

226.07.2005

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

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

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

M€
9,015
-7,2101,805April 1 June 30, 2004

%
100
-80
20

M€
8,536
-6,776
1,760

-544

-6

-528
53

Deviation

%

M€

%

100
-79
21

479
-434
45

6
6
3

-507

-6

-37

7

-6

-578

-7

50

-9

0

24

0

29

121

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

66

1

28

0

38

136

852
28
-299
581

9
0
-3
6

727
-17
-293
417

8
0
-3
5

125
45
-6
164

17
-265
2
39

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

488
93

5
1

332
85

4
1

156
8

47
9

Earnings per share
Basic and diluted *)

€

€

€

0.61

0.41

0.20

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

326.07.2005

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

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

December 31, 2004%

M€

Deviation

%

M€

%

Non-current assets
Intangible assets

10,14015

10,00815132

1Property, Plant and Equipment

13,63420

12,90519729

6Investment in associates

1,849

3

1,738

3

111

6

Other investments

2,551

4

2,110

3

441

21

Deferred tax assets

2,761

4

2,543

4

218

9

Non-current securities

644

1

466

1

178

38

Other non-current assets

4,181

6

6,973

10

-2,792-40

35,76053

36,743

55

-983

-3

Inventories, gross *)14,29421

12,334

18

1,960

16

Trade receivables

4,118

6

4,406

7

-288

-7

Current assets

Other current assets

4,044

6

5,325

8

-1,281-24

Cash and cash equivalents

9,836

14

8,718

12

1,118

13

32,29247

30,783

45

1,509

5

68,052

100

67,526

100

526

1

810

1

810

1

0

0

10,70416

10,254

15

450

4

3,930

6

6,086

9

-2,156

-35

-382

-1

-177

0

-205

116

15,062

22

16,97325-1,911

-11

1,940

3

2,370

4

-430

-18

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

6,444

9

6,045

9

399

7

Long-term financial liabilities

5,079

7

4,406

7

673

15

Deferred tax liabilities

2,726

4

4,134

6

-1,408-34

Other non-current liabilities *)Current liabilities
Current provisions
Short-term financial liabilities
Trade liabilities
Current tax liabilities
Other current liabilities *)Total equity and liabilities

10,872

16

10,26715605

625,121

36

24,852

37

269

1

2,332
726
6,142
680
16,04925,92968,052

3
1
9
1
25
39
100

2,350
720
5,860
178
14,22323,331
67,526

3
1
9
0
21
34
100

-18
6
282
502
1,826
2,598
526

-1
1
5
282
13
11
1

*) Advance payments received related to inventories are reclassified to other non-current andcurrent liabilities. Previous year figures are adjusted accordingly (see note 7).

426.07.2005

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

Unaudited Condensed IFRS Consolidated Cash Flow Statements

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

January 1 - June 30,
2005
M€

January 1 - June 30,
2004
M€

816
175

381
96

764
-33
-58

899
-242
178

-173

-45

426
849
2,766
-1,198
42
-2
65

-70
351
1,548
-1,096
31
-8
0

-261

-263

206
36
-28
123
-206
38
-162
11
-1,336
359
15
-205
-402
-93
-326

207
36
-202
2
-103
30
217
0
-1,149
156
0
0
-298
-28
-170

14
1,118

10
239

8,718
9,836

7,404
7,643

As of June 30, 2005, EADS’ cash position (stated as cash and cash equivalents in the unaudited
consolidated cash flow statements) includes 1,134 M € (687 M € as of December 31, 2004)
representing the amount Airbus has deposited at BAE Systems. Additionally included are 513 M €(602 M € as of December 31, 2004), which represent EADS’ share in MBDA’s cash and cash
equivalents, deposited at BAe Systems and Finmeccanica. These funds are available for EADS upon
demand.

5

26.07.2005

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

Unaudited Condensed IFRS Consolidated Statements of Changes in equity
attributable to equity holders of the parent and minority interests
Equity attributable toequity holders of theparentin M €
Balance at January 1, 2005

Minority interest

16,973

2,370

Profit for the period

816

175

Cash distribution to shareholders and dividends tominorities

-402

-93

-2,156

-512

15

0

-205

0

OCI
Capital Increase
Purchases of treasury shares
Others21

0Balance at June 30, 2005

15,062

1,940

Balance at January 1, 2004

16,1492,179

Profit for the period

381

96

Cash distribution to shareholders and dividends tominorities

-320

-28

OCI

-893

-219

OthersBalance at June 30, 2004

6

0

15,323

2,028

Explanations to the Unaudited Condensed IFRS Consolidated Financial
Statements as at June 30, 2005
1. The Company
The accompanying Condensed Interim Consolidated Financial Statements (unaudited) present theoperations of European Aeronautic Defence and Space Company EADS N.V. and its subsidiaries(“EADS” or the “Group”), a Dutch public limited liability company (naamloze vennootschap) legallyseated in Amsterdam (Le Carré, Beechavenue 130-132, 1119 PR, Schiphol-Rijk, The
Netherlands), and are prepared and reported in Euros (“€”). EADS’ core business is the
manufacturing of commercial aircraft, civil helicopters, commercial space launch vehicles, missiles,
military aircraft, satellites, defence electronics and rendering of services related to these activities.
2. Accounting policies
These Condensed Interim Consolidated Financial Statements have been prepared in accordancewith IAS 34 Interim Financial Reporting. EADS’ Consolidated Financial Statements are prepared inaccordance with International Financial Reporting Standards (“IFRS”), adopted by the International
Accounting Standards Board (“IASB”). They comprise (i) IFRS, (ii) International AccountingStandards (“IAS”) and (iii) Interpretations originated by the International Financial Reporting
Interpretations Committee (IFRIC) or former Standing Interpretations Committee (“SIC”).
As of January 1, 2005, EADS adopted the following revisions and amendments to existingStandards and new Standards and Interpretations as required by the following announcements
released by the IASB in December 2003 and in 2004:
EADS has applied thirteen revised International Accounting Standards (IASs) in conjunction with
the Improvements Project (IASs 1, 2, 8, 10, 16, 17, 21, 24, 27, 28, 31, 33, 40), new IFRS 2 “Share6

26.07.2005

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

Based Payment”, IFRS 4 “Insurance Contracts” and IFRS 5 “Non-current Assets Held for Sale andDiscontinued Operations”, new IFRIC 1 “Changes in Existing Decommissioning, Restoration and
Similar Liabilities”, IFRIC 2 “Members’ Shares in Co-operative Entities and Similar Instruments”
and IFRIC 4 “Determining whether an Arrangement contains a Lease” as well as amendments to
IAS 32 (March 2004), to IAS 39 (March 2004) and to SIC 12 “Consolidation – Special Purpose
Entities”.
The effects of the application of IFRS 2 for the first half-year 2005 and 2004 are disclosed in Note
6.
Furthermore, end of March 2004, the IASB completed Phase I of its ongoing Business
Combinations Project and released new IFRS 3 “Business Combinations”, superseding IAS 22“Business Combinations”, as well as revised Standards IAS 36 “Impairment of Assets” and IAS 38“Intangible Assets”. EADS decided to early adopt IFRS 3, revised IAS 36 and IAS 38 and to apply
these standards as of January 1, 2004 mainly due to the abolishment of goodwill amortization.
Consequently, EADS changed its accounting policies regarding the accounting for impairment
testing, intangible assets and business combinations with an agreement date after December 31,
2003.

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

Besides consequential changes as mentioned above the accounting policies used in the
preparation of the Interim Consolidated Financial Statements are consistent with those used in theannual Consolidated Financial Statements for the year ended December 31, 2004, which aredisclosed as an integral part of the Group’s Annual Report 2004. The annual Consolidated
Financial Statements were authorised for issue by EADS’ Board of Directors on March 8, 2005.
Costs incurring unevenly during the financial year are anticipated or deferred in the interim period
only if it is appropriate to anticipate or defer that type of cost at the end of the financial year.
Income tax expense is recognized based on the best estimate of the weighted-average annual
income tax rate expected for the full year applied on pre-tax income. The estimated annual
average income tax rate for 2005 is about 34 % (previous year: 41 %).
These Condensed Interim Consolidated Financial Statements should be read in conjunction withthe annual IFRS Consolidated Financial Statements 2004.

7

26.07.2005

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

3. Changes in the consolidation perimeter of EADSOn February 28, 2005, EADS sold its Enterprise Telephony Business, which comprises its civil
telecommunication activities, to Aastra Technologies Limited, Concord / Canada. In the first halfyear of 2004, Enterprise Telephony Business has generated revenues of 65 M € in Defence &Security division.
Apart from this transaction, other acquisitions or disposals by the Group are not material.

4. Segment information
The Group operates in 5 divisions (segments) which reflect the internal organizational andmanagement structure according to the nature of the products and services provided:• 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.
• Aeronautics — Development, manufacturing, marketing and sale of civil and military helicopters,
regional turboprop aircraft and light commercial aircraft; and civil and military aircraft conversion
and maintenance services. Following recent changes in the EADS structure, the Aeronautics
Division was dissolved end of June 2005. The newly created Eurocopter Division only
accounts for the Eurocopter results. As Aeronautics operated as a Division until recently and forcomparison purposes, EADS reports the half year results 2005 in the former Aeronautics
structure, but shows the Eurocopter results separately.
• Defence & Security Systems — Development, manufacturing, marketing and sale of missiles
systems; military combat and training aircraft; and provision of defence electronics, defencerelated telecommunications solutions; and logistics, training, testing, engineering and otherrelated services.
• Space — Development, manufacturing, marketing and sale of satellites, orbital infrastructuresand launchers; and provision of space services.
The following table presents information with respect to the Group’s business segments.
Consolidation effects, the holding function of EADS headquarters and other activities not allocableto the divisions are disclosed in the column “HQ/ Conso.”.

8

26.07.2005

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

in M €

AirbusMilitary
Transport
AircraftAeronautics

Defence &Security
SystemsSpace

HQ/ Conso.

Consolidated

Six months ended June 30, 2005
Revenues

11,262

326

1,779

2,172

1,160

-679

16,020Research and development
expenses

-782

-11

-35

-82

-24

-16

-950

EBIT pre goodwill imp. andexceptionals (see definition
below)

1,444

-14

19

-19

7

103

1,540

10,024

234

1,631

2,119

1,090

-531

14,567

Research and development
expenses

-936

-13

-34

-89

-24

-17

-1,113

EBIT pre goodwill imp. andexceptionals (see definition
below)

980

-10

55

-83

-12

49

979

Six months ended June 30, 2004
Revenues

Eurocopter is included in the Aeronautics Division in 2005 with revenues of 1,266 M € (first-halfyear 2004: 1,092 M €), research and development expenses of -31 M € (first half-year 2004: -31 M€) and EBIT pre goodwill amortization and exceptionals of 61 M € (first half-year 2004: 43 M €).

5. EBIT pre goodwill impairment and exceptionals
EADS uses EBIT pre goodwill impairment and exceptionals as a key indicator of its economic
performance. The term “exceptionals” refers to such items as amortization expenses of fair value
adjustments relating to the EADS merger, the Airbus combination and the formation of MBDA, as
well as impairment charges thereon. EBIT pre goodwill impairment and exceptionals is treated bymanagement as a key indicator to measure the segments’ economic performances.
A reconciliation from Profit before finance costs and income taxes to EBIT pre goodwill impairment
and exceptionals is set forth in the following table (in M €):in M €
Profit before finance costs and income taxes
Fair value adjustments
EBIT pre goodwill impairment and exceptionals

January 1June 30, 2005

January 1June 30, 2004

1,476

873

64

106

1,540

979

6. Significant profit and loss statement items
Due to the application of IFRS 2 “Share Based Payment”, previous year figures had to be adjusted
accordingly. For the first half-year 2005, the recorded effect on EBIT pre goodwill impairment andexceptionals as well as profit for the period attributable to equity holders (net income) is anadditional expense of 21 M € (first half-year 2004: 6 M €).
EADS Group revenues in the first half-year 2005 reach 16,020 M €, which - compared to the firsthalf-year 2004 – is an increase of 1,453 M €. All divisions record increasing revenues, mostly
reflecting higher aircraft deliveries of Airbus and of Eurocopter.

926.07.2005

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

Research and development expenses of 950 M € (first half-year 2004: 1,113 M €) decrease
because of the entry of the A 380 passenger version into production and increased capitalized
development costs for A 380. In the first half-year 2005, 114 M € of development costs were
capitalized for A 380 (first half-year 2004: 22 M €).
Share of profit from associates and other income from investments of 133 M € (first half-year
2004: 56 M €) is mainly influenced by the result of Dassault Aviation of 121 M € (first half-year
2004: 45 M €). The increase is mainly due to positive 2004 IFRS-catch up adjustments accounted
for in 2005.
The finance income (costs) of 26 M € (first half-year 2004: -61 M €) include a net interest chargeof -77 M € (first half-year 2004: -102 M €) accrued mainly for refundable government advances,more than offset by positive effects from foreign exchange rate revaluations.
7. Significant balance sheet items
Non-current assets
Intangible assets of 10,140 M € (prior year: 10,008 M €) include 9,490 M € (prior year: 9,460 M €)of Goodwill. Goodwill increases, mainly due to foreign exchange rate effects. According to IFRS 3,
Goodwill is no longer regularly amortized, as previously requested under IAS 22, but instead is
subject to annual impairment tests. As of June 30, 2005 no impairment test had to be performed.
Eliminating foreign exchange-rate effects of +373 M €, property, plant and equipment increased
by 356 M € to 13,634 M € (prior year: 12,905 M €). Most of the increase is attributable to Airbus,
due to strong capital expenditures related to the A380 program and the Space Division, mainly
caused by the Paradigm / Skynet 5 program. Property, plant and equipment comprises“Investment property” amounting to 154 M € (prior year: 159 M €).
Investment in associates of 1,849 M € (prior year: 1,738 M €) mainly increases due to thechange in the equity investment of Dassault Aviation.
Other investments of 2,551 M € (prior year: 2,110 M €) are allocated to Airbus in the amount of
2,010 M € (prior year: 1,553 M €), mainly concerning the non-current portion of aircraft financing
activities with a foreign exchange-rate effect of +195 M €.
Deferred tax assets of 2,761 M € (prior year: 2,543 M €) are presented as non-current assets as
required by IAS 1.
Other non-current assets comprise “Non-current other assets” and “Non-current prepaid
expenses”. The decrease of -2,792 M € to 4,181 M € (prior year: 6,973 M €) is mainly caused by
the variation of the non-current portion of fair values of financial instruments (-2,806 M €), as aresult of the rising US dollar exchange rate (USD / € spot rate of 1.21 at June 30, 2005 vs. 1.36 at
December 31, 2004).
Current assets
Inventories, gross of 14,294 M € (prior year: 12,334 M €) increase by 1,872 M € (without foreignexchange revaluation of +88 M €) due to a higher level of unfinished goods and services, mainly
by A 380- and A 400 M programs in Airbus Division. Inventories are shown with their grossamount. Those advance payments received, which so far were deducted from inventories are now
reclassified to current and non-current other liabilities. Previous year figure has been adjusted
accordingly with the amount of 9,259 M €.
The decrease in trade receivables of -288 M € to 4,118 M € (previous year: 4,406 M €) comes toa large extent from higher customer payments in Airbus and Military Transport Aircraft divisions.

10

26.07.2005

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

Other current assets include “Current portion of financial assets”, “Current other assets”, “Current
income tax assets” and “Current prepaid expenses”. The decrease of -1,281 M € to 4,044 M €(prior year: 5,325 M €) is mainly caused by the variation of the current portion of fair values offinancial instruments (-1,135 M €), as a result of the rising US dollar exchange rate (USD / € spot
rate of 1.21 at June 30, 2005 vs. 1.36 at December 31, 2004).
Cash and cash equivalents increase from 8,718 M € to 9,836 M €.
Equity attributable to equity holders of the parent amounts to 15,062 M € (prior year: 16,973 M€), mainly resulting from a profit for the period (Net income) of 816 M €, a cash distribution toshareholders of -402 M €, a decrease of OCI of -2,156 M €, primarily resulting from changes in fairvalues as well as consumption of derivative financial instruments and the purchases of treasury
shares of -205 M €.
Minority interests of 1,940 M € (prior year: 2,370 M €) mainly represent shares of BAE Systems
in Airbus Group. The decrease in BAE Systems’ minority interest is mainly attributable to thedecrease in fair values of financial instruments that qualify for hedge accounting according to IAS
39 and a dividend payment by Airbus, partly compensated by a positive result allocated to minority
interests.
Non-current liabilities
Non-current provisions of 6,444 M € (previous year: 6,045 M €) include 3,795 M € for the noncurrent portion of the provision for retirement plans and similar obligations (prior year: 3,749 M €)and 253 M € of non-current provision for financial instruments (prior year: 137 M €).
Long-term financial liabilities of 5,079 M € (prior year: 4,406 M €), excluding foreign exchangerate effects of +240 M €, increase by +433 M € in particular due to Airbus (+244 M €), mainly
related to higher non-recourse customer financing, and the Skynet V program external financing of
187 M €.
The decrease in deferred tax liabilities of -1,408 M € to 2,726 M € (prior year: 4,134 M €) issignificantly influenced by the decrease in the fair value of financial instruments accounted for as“Other non-current assets” and “Other current assets”.
Other non-current liabilities comprise “Non-current other liabilities” and “Non-current deferredincome”. Without considering foreign exchange-rate effects of +95 M €, other non-current liabilities
increase by +510 M € to 10,872 M € (prior year: 10,267 M €). Other non-current liabilities mainly
include the non-current portion of European Government refundable advances amounting to 5,093
M € (prior year: 4,781 M €) and non-current customer advance payments received of 4,299 M €(prior year: 3,985 M €). Advance payments received are also included for their non-current portion,
which have previously been recorded as a deduction from inventories. Previous year figure has
been adjusted accordingly with the amount of +632 M €.
Current liabilities
Short-term financial liabilities of 726 M € (prior year: 720 M €), excluding foreign exchange-rate
effects of +20 M €, slightly decrease by -14 M €.
Excluding a foreign exchange rate effect of +59 M €, trade liabilities increase by +223 M € to
6,142 M € (previous year: 5,860 M €), mainly resulting from a step-up in production rates in Airbus
Division.
The increase of current tax liabilities of +502 M € to 680 M € (prior year: 178 M €), mainly
concerns Airbus (+498 M €).

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Unaudited Condensed Consolidated Financial Information for the six months ended June 30, 2005

Other current liabilities include “Current other liabilities” and “Current deferred income”. Without
considering foreign exchange rate revaluations of +41 M €, they increase by 1,785 M € to 16,049
M € (prior year: 14,223 M €). Other current liabilities mainly include current customer advancepayments of 12,520 M € (prior year: 10,884 M €) . The current portion of advance payments, whichhas previously been deducted from inventories is reclassified to other current liabilities. The figureof previous year has been adjusted accordingly with the amount of +8,627 M €.
8. Significant cash flow items
Cash provided by operating activities increases by +1,218 M € to 2,766 M € (first half-year
2004: 1,548 M €). This increase mainly reflects improvements in EADS operations. The positive
working capital (change in other operating assets and liabilities) of 849 M € (first half-year 2004:
351 M €) primarily results from ongoing customer payments.
Cash used for investing activities increases by -187 M € to -1,336 M € (first half-year 2004: 1,149 M €). The outflow is mainly caused by Airbus activities (A380) and the Skynet V program.
Cash used for financing activities increases by -156 M € to -326 M € (first half-year 2004: -170
M €). The outflow mainly contains cash distributions paid to shareholders and minorities as well as
the purchases of treasury shares, partly offset by drawdowns on financial liabilities.
9. Contingencies
Pension commitments - EADS has several common investments with BAE Systems, of which
the most significant in terms of active employees are Airbus and MBDA. UK employees of suchcommon investments are able to participate in the BAE Systems pension schemes.
On April 28, 2005, BAE Systems publicly disclosed the impacts of the conversion of its accounts
from UK GAAP to IFRS. One of the major reconciliation items arises in pension accounting withthe application of IAS 19 “Employee Benefits” which leads to BAE Systems’ recognition of apension provision due to the defined benefit schemes’ current under funding situation.
In disclosing IAS 19 impacts, BAE Systems has allocated a share of the underfunding to common
investments it has with EADS, assuming that these investments would be affected by any shortfallof the pension schemes. BAE Systems has applied an internally developed approach to calculate
the IAS 19 impacts.
Given the limited availability to EADS of adequate information, EADS will continue to expense thecontributions made to BAE Systems as if the BAE Systems pension schemes were defined
contribution plans.
Apart from the pension commitments, there were no other significant changes in contingent
liabilities since the last balance sheet date (December 31, 2004).
10. Number of shares
The total number of shares outstanding is 791,270,277 and 800,957,248 as of June 30, 2005 and2004, respectively. EADS’ shares are exclusively ordinary shares with a par value of 1.00 €.
During the first half-year 2005, EADS repurchased 9,077,323 of its ordinary shares (in the firsthalf-year 2004: no treasury shares purchased) in conjunction with the share-buyback program.
The General shareholders’ meeting on May 11, 2005 had renewed the authorization given to theBoard of Directors to repurchase shares of EADS.
797,306 new shares (first half-year 2004: 0 shares) were issued as a result of the exercise of stock
options in compliance with the implemented stock option plans.

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

11. Earnings per share
Basic earnings per share are calculated by dividing profit for the period attributable to equity
holders of the parent (Net income) by the weighted average number of issued ordinary shares
during the period, excluding ordinary shares purchased by the Group and held as treasury shares:
January 1 toJune 30, 2005
Net income attributable to shareholders
Weighted average number of ordinary shares outstanding
Basic earnings per share

January 1 toJune 30, 2004

816 M €

381 M €

794,012,149

800,957,248

1.03 €

0.48 €For calculation of the diluted earnings per share, the weighted average number of ordinary
shares is adjusted to assume conversion of all potential ordinary shares. The Group’s only
category of dilutive potential ordinary shares is stock options. Since the average price of EADS
shares during the first half-year of 2005 exceeded the exercise price of the stock options under the
1st, 2nd, 4th and 5th stock option plans initiated by the Group, the inclusion of the related potential
ordinary shares increases the weighted average number of shares. 4,595,260 stock options are
considered dilutive according to IAS 33.
January 1 toJune 30, 2005
Net income attributable to shareholders
Weighted average number of ordinary shares outstanding(diluted)
Diluted earnings per share

January 1 toJune 30, 2004

816 M €

381 M €

798,607,409

803,165,268

1.02 €

0.47 €

12. Related party transactions
The Group has entered into various transactions with related companies in 2005 and 2004 thathave all been carried out in the normal course of business. As is the Group’s policy, all related
party transactions have to be carried out at arm’s length. Transactions with related parties include
the French State, DaimlerChrysler, Lagardère, and SEPI (Spanish State). Except for thetransactions with the French State, such transactions are not considered material to the Groupeither individually or in the aggregate. The transactions with the French State include mainly sales
from the Aeronautics, Defence & Security Systems and Space divisions.
13. Number of employees
The number of employees at June 30, 2005 is 111,169 as compared to 110,662 at December 31,
2004.

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