Financial
Statements 2010

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Statements 2010

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EADS FINANCIAL STATEMENTS 2010

Financial Statements 2010

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

5

2 Notes to the Consolidated Financial
Statements (IFRS)
13
3 Auditors’ reporton the Consolidated Financial
Statements (IFRS)

103

4 Company Financial Statements

107

5 Notes to the Company Financial
Statements111

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EADS N.V. Consolidated Financial
Statements (IFRS)EADS N.V. Consolidated Income Statements (IFRS)
for the years ended 31 December 2010, 2009 and 2008

6

EADS N.V. Consolidated Statements of Comprehensive
Income (IFRS) for the years ended 31 December 2010,2009 and 2008

7

EADS N.V. Consolidated Statements of Financial Position(IFRS) at 31 December 2010 and 2009

8

EADS N.V. Consolidated Statements of Cash Flows (IFRS)
for the years ended 31 December 2010, 2009 and 2008

9

EADS N.V. Consolidated Statements of Changes in Equity(IFRS) for the years ended 31 December 2010, 2009 and 2008 10

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EADS N.V. Consolidated Income Statements (IFRS)
for the years ended 31 December 2010, 2009 and 2008
(In € million)

Note

2010

2009

2008

Revenues

6, 7

45,752

42,82243,265

Cost of sales

8(39,528)(38,383)(35,907)

Gross margin

6,224

4,439

7,358

Selling expenses(1,024)

(924)

(933)

Administrative expenses(1,288)(1,272)(1,253)

Research and development expenses

9(2,939)(2,825)(2,669)Other income

10

171

170

189

(102)

(102)

(131)

Other expenses
Share of profit from associates accounted for under the equity
method

11

127

115

188

Other income from investments

11

18

19

23

Profit (loss) before finance costs and income taxes

6

2,772

1,187

(380)

Interest income

316

356

617

Interest expense

(415)

(503)

(581)

(272)

(445)

(508)

Total finance costs

Other financial result
12

(371)

(592)

(472)

Income taxes

13

(244)

220

(703)

572

(752)

1,597

Equity owners of the parent (Net income (loss))

553

(763)

1,572

Non-controlling interests

19

11

25

€

€

€

Profit (loss) for the period
Attributable to:Earnings per share
Basic

38

0.68

(0.94)

1.95

Diluted38

0.68(0.94)

1.95

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

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EADS N.V. Consolidated Statements of Comprehensive Income(IFRS) for the years ended 31 December 2010, 2009 and 2008

1

(In € million)

2010

2009

2008

Profit (loss) for the period

572

(752)

1,597

Currency translation adjustments for foreign operations

119

(279)

428

(2,983)

2,948(2,971)

Net change in fair value of cash flow hedges transferred to profit or loss

(201)

(1,456)(2,456)

Net change in fair value of available-for-sale financial assets
Net change in fair value of available-for-sale financial assets transferred
to profit or loss

12

136

(6)

Effective portion of changes in fair value of cash flow hedges

0

0

(6)

(127)

(594)

(346)

Actuarial gains (losses) on defined benefit plans
Unrealized gains (losses) from investments accounted for using
the equity method (1)

(161)

33

1

Tax on income and expense recognized directly in equity

1,096

(381)

1,722

Other comprehensive income, net of tax(2,245)407(3,634)

Total comprehensive income of the period(1,673)(345)(2,037)(1,679)(354)(2,056)6

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EADS FINANCIAL STATEMENTS 2010

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Attributable to:Equity owners of the parent
Non-controlling interests(1) Other comprehensive income recognised for investments accounted for using the equity method are presented separately.
Comparative information has been adjusted accordingly.

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

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EADS N.V. Consolidated Statements of Financial Position (IFRS)
at 31 December 2010 and 2009(In € million)

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

Note

2010

2009

14
15
16
17
17
20
21
13
22

11,29913,427
77
2,451
2,386
871
1,104
4,250
5,332
41,197

11,06012,508
78
2,514
2,210
1,607
1,176
2,656
3,983
37,792

18
19
17
20
21

20,862
6,632
111
1,575
1,712
234
5,834
5,030
41,99083,187

21,577
5,587
230
2,043
1,698
267
4,072
7,038
42,51280,304

816
7,645
46
446
(112)
8,841
95
8,936

816
7,683
(501)
2,646
(109)
10,535106
10,641

25
26
27
28
13
30

8,213
2,870
8,624
9,264
1,195
315
30,481

8,137
2,867
6,175
9,091
751
266
27,287

25
26
29
27
28

5,766
1,408
8,546
1,234
25,772254
790
43,77074,251
83,187

5,883
2,429
8,217
1,200
23,547220880
42,376
69,66380,30422
31

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

2330

Total liabilities
Total equity and liabilities

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

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EADS N.V. Consolidated Statements of Cash Flows (IFRS)
for the years ended 31 December 2010, 2009 and 2008
(In € million)

Note

Profit (loss) for the period attributable to equity ownersof the parent (Net income (loss))
Profit for the period attributable to non-controlling interests
Adjustments to reconcile profit (loss) for the period to cash
provided by operating activities:
Interest income
Interest expense
Interest received
Interest paid
Income tax expense (income)
Income taxes (paid) received
Depreciation and amortization
Valuation adjustments
Results on disposals of non-current assets
Results of companies accounted for by the equity method
Change in current and non-current provisions
Change in other operating assets and liabilities:
uuInventories
uuTrade receivables
uuTrade liabilities
uuAdvance payments received
uuOther assets and liabilities
uuCustomer financing assets
uuCustomer financing liabilities
Cash provided by operating activities
Investments:
uuPurchases of intangible assets, Property, plant and equipment
uuProceeds from disposals of intangible assets, Property, plantand equipment
uuAcquisitions of subsidiaries, joint ventures, businesses
and non-controlling interests (net of cash)
uuProceeds from disposals of subsidiaries (net of cash)
uuPayments for investments in associates, other investments
and other long-term financial assets
uuProceeds from disposals of associates, other investments
and other long-term financial assets
uuDividends paid by companies valued at equity
Disposals of non-current assets / disposal groups classified
as held for sale and liabilities directly associated with non-current
assets classified as held for sale
Change of securities
Contribution to plan assets for pensions
Cash (used for) investing activities
Increase in financing liabilities
Repayment of financing liabilities
Cash distribution to EADS N.V. shareholders
Dividends paid to non-controlling interests
Changes in capital and non-controlling interests
Change in treasury shares
Cash (used for) provided by financing activities
Effect of foreign exchange rate changes and other valuation
adjustments on cash and cash equivalents
Net (decrease) increase in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

31
31

22

1

2010

2009

2008

553
19

(763)
11

1,572
25

(316)
415
332
(278)
244
(140)
1,582
(366)
(75)
(127)
334
2,819
705
(345)
(40)
1,698
738
169
(106)
4,996

(356)
503
382
(331)
(220)
4
1,826
(254)
(31)
(115)
1,767
15
(1,961)
(478)
192
2,925
(257)
(306)
(100)
2,438

(617)
581
657
(471)
703
(252)
1,667
924
(31)
(188)
1
(172)
(1,210)
(845)
757
2,435
(982)
(208)
(119)
4,399

(2,250)(1,957)(1,837)

45

75

35

(38)
12

(21)
13

(265)
2

(190)

(136)

(122)

91
41

43
27

180
50

0
(3,147)(553)(5,989)99(1,160)
0
(7)
(48)
(3)
(1,119)

103
(821)
(173)
(2,847)
1,114
(208)
(162)
(4)
17
(5)
752

117
(2,676)(436)(4,952)
471
(628)
(97)
(10)
24
39
(201)

104
(2,008)
7,038
5,030

(50)
293
6,745
7,038

(50)
(804)
7,549
6,745

For details, see Note 22, “Securities” and Note 31, “Consolidated Statement of Cash Flows”.
The accompanying notes are an integral part of these Consolidated Financial Statements (IFRS).

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EADS N.V. Consolidated Statements of Changes in Equity (IFRS)
for the years ended 31 December 2010, 2009 and 2008
Noncontrollinginterests

Equity attributable to equity owners of the parent
Retained earnings(In € million)

Other Actuarial
CapitalShare retained gains orNote stock premium earnings
lossesBalance at 31 December 2007

814

7,968

Profit for the period

398

Accumulated othercomprehensive income
AvailableForeignfor-saleCashcurrency
financialflow translation Treasury
assets hedges adjustments shares

Capital increase

23

Share-based Payment (IFRS 2)
Cash distribution to EADS N.V.
shareholders / dividends paid to
non-controlling interests
Change in non-controllinginterests

35

Change in treasury shares

23

Cancellation of treasury shares

23

2

423

3,550

1,103

(206) 13,090
1,572

25

(310)

(2) (3,734)

418(3,628)(6) (3,634)

22

24
22

Balance at 31 December 2008

(57)

815

7,836

Profit (loss) for the period

1,992

Capital increase

23

Share-based Payment (IFRS 2)
Cash distribution to EADS N.V.
shareholders / dividends paid to
non-controlling interests
Change in non-controllinginterests

35

Change in treasury shares

23

Cancellation of treasury shares

23

1(1,270)

421

(184)

1,521

(479)

140

1,012

(264)

7,683

Profit (loss) for the period

1,248

(10)

(107)

0

9

9
39
0

(109) 11,022

104 11,126

(763)

11

(752)

409

(2)

407

15

2

17

19

(1,749)

561

(162)

(4)

(166)

0

(5)

(5)

(5)

(5)

5

0

0
106 10,641

828

1,257

(109) 10,535(177) (2,201)

178(2,232)553(32)

Capital increase

23

5

5

Capital decrease

23

(43)

(43)

Share-based Payment (IFRS 2)
Dividends paid tonon‑controlling interests

35

23

Equity transaction (IAS 27)
Change in non-controllinginterests
Change in treasury shares
Balance at 31 December 2010

23
7,645

1,827

(1,781)384 (1,373)

1,435

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

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19

572

(13) (2,245)
5
(6)

23

3

816

19

(5)

553

Other comprehensive income

(97)

0

19

816

22

39

14

(5)

25

58

(162)

Balance at 31 December 2009

1

1,597

39

(763)

Other comprehensive income

85 13,175

22

(97)

(1)

Total

(960)

1,572

Other comprehensive income

Total
equity

(49)
23

0

(7)

(7)

3

(7)

(4)

0

3

(3)

(3)

(112)

8,841

3
(3)

95

8,936

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

15

2.2 Notes to the Consolidated Income Statements (IFRS)

34

2

2.3 Notes to the Consolidated Statementsof Financial Position (IFRS)44
2.4 Notes to the Consolidated Statementsof Cash Flows (IFRS)

65

2.5 Other Notes to the Consolidated Financial
Statements (IFRS)67
2.6 Appendix “Information on principal investments” —Consolidation Scope

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Notes to the Consolidated Financial Statements (IFRS)
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Contents
2.1 Basis of presentation

15

1.

The Company

152.

Summary of significant accounting policies

15

3.

Accounting for the A400M programme

32

4.

Scope of consolidation

32

5.

Acquisitions and disposals

33

2.2 Notes to the Consolidated Income
Statements (IFRS)
34
6.

Segment Reporting

34

7.

Revenues388.

Functional costs

38

9.

Research and development expenses

39

10. Other income39

11. Share of profit from associates accounted
for under the equity method and otherincome from investments

39

12. Total finance costs

40

13. Income taxes

40

2.3 Notes to the Consolidated
Statements of Financial Position(IFRS)44
14. Intangible assets

44

15. Property, plant and equipment

48

16. Investment property

51

17. Investments in associates accounted forunder the equity method, other investments
and other long-term financial assets

51

18. Inventories

53

19. Trade receivables

54

20. Other financial assets

55

21. Other assets

55

22. Securities

56

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23. Total equity

56

24. Capital Management

57

25. Provisions58

26. Financing liabilities

62

27. Other financial liabilities

63

28. Other liabilities

64

29. Trade liabilities

64

30. Deferred income64

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

65

31. Consolidated Statement of Cash Flows

65

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

67

32. Litigation and claims

67

33. Commitments and contingencies

68

34. Information about financial instruments

71

35. Share-based Payment

82

36. Related party transactions91

37. Interest in Joint Ventures

93

38. Earnings per Share

93

39. Number of Employees

94

40. Events after the reporting date94

2.6 Appendix “Information
on principal investments” —Consolidation Scope

95

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

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2.1 Basis of presentation
1. The Company
The accompanying Consolidated Financial Statements
present the financial position and the result of the operationsof European Aeronautic Defence and Space Company
EADS N.V. and its subsidiaries (“EADS” or the “Group”),
a Dutch public limited liability company (Naamloze
Vennootschap) legally seated in Amsterdam (current
registered office at Mendelweg 30, 2333 CS Leiden, The
Netherlands). EADS’ core business is the manufacturing ofcommercial aircraft, civil and military helicopters, commercial

space launch vehicles, missiles, military aircraft, satellites,
defence systems and defence electronics and rendering ofservices related to these activities. EADS has its listings at
the European Stock Exchanges in Paris, Frankfurt am Main,
Madrid, Barcelona, Valencia and Bilbao. The Consolidated
Financial Statements were authorised for issue by EADS’
Board of Directors on 8 March 2011, are prepared andreported in euro (“€”), and all values are rounded to thenearest million appropriately.

2

2. Summary of significant accounting policies
Basis of preparation — EADS’ Consolidated Financial
Statements are prepared in accordance with International
Financial Reporting Standards (“IFRS”), issued by theInternational Accounting Standards Board (“IASB”) and asendorsed by the European Union (“EU”) and with Part 9of Book 2 of the Netherlands Civil Code. They comprise(i) IFRS, (ii) International Accounting Standards (“IAS”) and(iii) Interpretations originated by the International Financial
Reporting Interpretations Committee (“IFRIC”) or former
Standing Interpretations Committee (“SIC”). The Consolidated
Financial Statements have been prepared on a historical costbasis, except for the following material items that have beenmeasured at fair value:(i) derivative financial instruments;(ii) available-for-sale financial assets;(iii) accumulating Money Market Funds, uncapped Structured
Notes and foreign currency Funds of Hedge Funds thathave been designated as financial assets at fair value
through profit or loss (“Fair Value Option”, see Note 34“Information about financial instruments”);(iv) assets and liabilities being hedged items in fair value
hedges that are otherwise carried at cost and whosecarrying values are adjusted to changes in the fair values
attributable to the risks that are being hedged;(vi) the defined benefit asset being netted with the net totalof plan assets, plus unrecognised past service cost andunrecognised actuarial losses, less unrecognised actuarial
gains and the present value of the defined benefit
obligation.
In accordance with Article 402 Book 2 of the Netherlands Civil
Code the Statement of Income of the EADS N.V. company
financial statements is presented in abbreviated form.
The preparation of ﬁnancial statements in conformity withIFRS requires the use of certain critical accounting estimates.
It also requires management to exercise its judgement in theprocess of applying the Group’s accounting policies. The
areas involving a higher degree of judgement or complexity, or
areas where assumptions and estimates are signiﬁcant to theConsolidated Financial Statements are disclosed in the last
subsection “Use of Accounting Estimates” of this Note 2.

NEW, REVISED OR AMENDED IFRS STANDARDSAND NEW INTERPRETATIONSThe IFRS accounting principles applied by EADS for
preparing its 2010 year-end Consolidated Financial
Statements are the same as for the previous financial year
except for those following the application of new or amended
Standards or Interpretations respectively and changes inaccounting policies as detailed below.

(v) liabilities for cash settled share based payment
arrangements; andEADS FINANCIAL STATEMENTS 2010

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

1a) New, Revised or Amended Standards
The application of the following new, revised or amended
standards is mandatory for EADS for the fiscal year starting
1 January 2010. If not otherwise stated, the following new,revised or amended Standards did not have a material impact
on EADS’ Consolidated Financial Statements as well as its
basic and diluted earnings per share.
The amendment to IFRS 2 ”Share-based Payments —Group Cash-settled Share-based Payment Transactions”(issued in June 2009, endorsed in March 2010) amends thedefinitions in IFRS 2 for transactions and arrangements, aswell as the scope of the Standard. In addition, guidance isgiven for accounting for share-based payment transactions
amongst Group entities. The retrospective application of theamendment was mandatory for annual periods beginning on
or after 1 January 2010.
IFRS 3R “Business Combinations” and IAS 27 (amend.)“Consolidated and Separate Financial Statements” (revised
and issued in January 2008, endorsed in June 2009) wereapplied prospectively by EADS including its consequential
amendments to IFRS 2, IFRS 7 and IAS 39 from
1 January 2010 onwards. IFRS 3R continues to apply theacquisition method to business combinations but with somesignificant changes compared to its predecessor IFRS 3:
The definition of a business has been broadened, which islikely to result in more acquisitions being treated as businesscombinations. Contingent consideration will be measured
at fair value, with subsequent changes therein recognised
in profit or loss. Transaction costs, other than share anddebt issue costs, will be expensed as incurred. Any preexisting interest in the acquiree will be measured at fairvalue with the gain or loss recognised in profit or loss. Any
non-controlling interest will be measured at either fair value,
or at its proportionate interest in the identifiable assets andliabilities of the acquiree, on a transaction-by-transaction
basis. Further, IAS 27 (amend.) requires that a change in theownership interest of a subsidiary without gaining or losing
control is accounted for as an equity transaction. Therefore
such transactions regarding changes in non-controllinginterest will no longer give rise to goodwill, nor will it give rise
to a gain / loss. The changes introduced by IFRS 3R and
IAS 27 (amend.) have to be applied prospectively to current
and future business combinations as well as transactions withshareholders holding a non-controlling interest in subsidiaries.
The objective of the Amendment “Eligible Hedged Items —Amendment to IAS 39 ‘Financial Instruments: Recognition
and Measurement’” (issued in July 2008, endorsed in
September 2009) is to propose rules-based amendments
to IAS 39 to simplify the hedge accounting requirements byclarifying the risks that may be designated as hedged risks
and the portion of cash flows of a financial instrument that

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may be designated as a hedged item. The amendment wasapplied retrospectively by EADS for annual periods beginningon 1 January 2010.
In April 2009, the IASB issued its second omnibus ofamendments to its standards containing 15 amendments
to 10 IFRS Standards and 2 Interpretations (endorsed in
March 2010). 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
were mandatory for annual periods beginning on or after
1 January 2010 with separate transition provisions for eachamendment. Furthermore, amendments made to IFRS 5 dueto the annual improvement project 2008 were also applied by
EADS during 2010.

b) New Interpretations
The following Interpretation became effective as of
1 January 2010. If not otherwise stated, the following
Interpretations did not have a material impact on EADS’
Consolidated Financial Statements as well as its basic anddiluted earnings per share.
IFRIC 12 “Service Concession Arrangements” (issued in
November 2006, endorsed in March 2009 resulting in an
effective date as of 1 January 2010) clarifies how certain
aspects of existing IASB guidance are to be applied to service
concession arrangements in the financial statements ofservice concession operators. It was applied retrospectively
from 1 January 2010 onwards.
IFRIC 17 “Distribution of non-cash assets to owners” (issued
in November 2008, endorsed in November 2009) clarifies theaccounting for arrangements whereby an entity distributes
non-cash assets to shareholders either as a distribution ofreserves or as dividends. In this context, IFRS 5 has also
been amended to require that assets are classiﬁed as heldfor distribution only when they are available for distribution in
their present condition and the distribution is highly probable.
IFRIC 17 was applicable for EADS prospectively from
1 January 2010 onwards.
IFRIC 18 “Transfers of Assets from Customers” (issued in
January 2009, endorsed in December 2009) clarifies the
IFRS requirements for the recognition and measurementof agreements in which an entity receives from a customer
either an item of property, plant and equipment or cash thatthe entity has to use either to connect the customer to a
network or to provide the customer with ongoing access toa supply of goods or services (such as a supply of electricity,
gas or water in the utility sector). While IFRIC 18 is particularly
relevant for entities in the utility sector, its prospective
application became mandatory to annual periods of EADS
beginning on 1 January 2010.

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

1

NEW, REVISED OR AMENDED IFRS STANDARDSAND INTERPRETATIONS ISSUED BUT NOT YETAPPLIEDA number of new or revised standards, amendments andimprovements to standards as well as interpretations are notyet effective for the year ended 31 December 2010, and havenot been applied in preparing these Consolidated Financial
Statements. The potential impacts from the applicationof those newly issued standards, amendments andinterpretations are currently under investigation. In generaland if not otherwise stated, these new, revised or amended
IFRS and their interpretations are not expected to have amaterial impact on EADS’ Consolidated Financial Statements
as well as its basic and diluted earnings per share.
In November 2009, the IASB issued IFRS 9 “Financial
Instruments” (not endorsed yet) as the first step of its project
to replace IAS 39 “Financial Instruments: Recognition andMeasurement”. Amongst other changes to the accounting
for financial instruments, IFRS 9 replaces the multiple
classification and measurement models in IAS 39 with a single
model that is based on only two classification categories:
amortised cost and fair value. Further, the classificationof financial assets under IFRS 9 is driven by the entity’sbusiness model for managing its financial assets and thecontractual cash flow characteristics of these financial assets.
Furthermore, the current additional refinements of the IASB
are expected to affect the classification and measurement offinancial liabilities, the impairment and derecognition models
as well as the requirements for hedge accounting. IFRS 9 has
to be applied starting 1 January 2013, with early adoption
permitted, and offers various transition models. EADS iscurrently assessing the potential impacts from the expected
application of IFRS 9.
Further, the IASB issued a revised version of IAS 24 “Related
Party Disclosures” (issued in November 2009, endorsed
in July 2010) that simplifies the disclosure requirements
for government related entities and clarifies the definitionof a related party. The revised standard has to be applied
prospectively by EADS for annual periods beginning on
1 January 2011. EADS is currently assessing the potential
impacts from the expected application of IAS 24.
The amendment to IAS 32 “Classification of Rights Issues —Amendment to IAS 32 Financial Instruments: Presentation”(issued in October 2009, endorsed in December 2009)
addresses the accounting for rights issues (rights, options
or warrants) that are denominated in a currency other than
the functional currency of the issuer. In particular, when theamendment is retrospectively applied, rights (and similar
derivatives) to acquire a fixed number of an entity’s own
equity instruments for a fixed price stated in a currency
other than the entity’s functional currency, would be equity
instruments, provided the entity offers the rights pro rata to
all of its existing owners of the same class of its own nonderivative equity instruments. The amendment has to be

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applied retrospectively by EADS for annual periods beginningon 1 January 2011.
In May 2010, the IASB issued its third omnibus ofamendments to its standards containing amendments
to 8 IFRS Standards and 1 Interpretation (endorsed in
February 2011). The amendments refer to IFRS 1, IFRS 3,
IFRS 7, IAS 1, IAS 21, IAS 28, IAS 31, IAS 34 and IFRIC 13.
Most of the amendments are mandatory for annual periods
beginning on or after 1 January 2011 with separate transition
provisions for each amendment.
In October 2010, the IASB issued amendments to IFRS 7“Financial Instruments: Disclosures” (not endorsed yet) as
part of its comprehensive review of off balance sheet activities
relating to transfers of financial assets. The objective of theamendments is to help users of financial statements evaluate
the risk exposures relating to such transfers and the effect of
those risks on an entity’s financial position. The amendments
also require additional disclosures if a disproportionate
amount of transfer transactions are undertaken around theend of a reporting period. For EADS, this amendment has tobe applied prospectively for annual periods beginning on orafter 1 January 2012, with earlier application permitted.
To correct an unintended consequence of IFRIC 14, the
IASB issued amendments to IFRIC 14 “Prepayments of a
Minimum Funding Requirement (Amendments to IFRIC 14)”in November 2009 (endorsed in July 2010). Without theamendments of IFRIC 14 “IAS 19 — The limit on a defined
benefit asset, minimum funding requirements and theirinteraction”, in some circumstances entities are not permitted
to recognise as an asset some voluntary prepayments forminimum funding contributions. This was not intended when
IFRIC 14 was issued, and the amendments correct this issue.
The amendments will be effective for annual periods of EADS
beginning 1 January 2011.
Further, EADS’ accounting policies are not expected to beaffected by various other pronouncements issued by the IASB
during the last months.

SIGNIFICANT ACCOUNTING POLICIESThe principal accounting policies applied in the preparation ofthese Consolidated Financial Statements are set out below.
These policies have been consistently applied to all financial
years presented, unless otherwise stated.

Consolidation — The Consolidated Financial Statements
include the subsidiaries of EADS. Subsidiaries are all entities
controlled by the Group, i.e. over which it has the power togovern financial and operating policies. An entity is presumed
to be controlled by EADS when EADS owns more than
50% of the voting power of the entity which is generallyaccompanied with a respective shareholding. Potential voting
rights currently exercisable or convertible are also consideredwhen assessing control over an entity.
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Special purpose entities (“SPEs”) are consolidated as any
subsidiary, when the relationship between the Group and the
SPE indicates that the SPE is in substance controlled by theGroup. SPEs are entities which are created to accomplish
a narrow and well-defined objective. Subsidiaries are fully
consolidated from the date control has been transferred to
EADS and de-consolidated from the date control ceases.
In general, business combinations are accounted for under
the acquisition method of accounting as at the acquisitiondate, which is the date on which control is transferred to
EADS.

Acquisitions on or after 1 January 2010
For acquisitions on or after 1 January 2010, EADS has
applied IFRS 3R in accounting for business combinations.
Goodwill is measured at the acquisition date as:tt the fair value of the consideration transferred; plus
tt the recognised amount of any non-controlling interests inthe acquiree; plus
tt if the business combination is achieved in stages, the fairvalue of the existing equity interest in the acquiree; lesstt the net recognised amount (generally fair value) of theidentifiable assets acquired and liabilities assumed.
Before recognising a gain on a bargain purchase in theConsolidated Income Statement, the identification andmeasurement of the identifiable assets and liabilities isreassessed including also the non-controlling interest, if any,
the consideration transferred as well as EADS’ previously
held equity interest in the acquiree in case of a businesscombination achieved in stages.
Any non-controlling interest will be measured at either fairvalue, or at its proportionate interest in the identifiable assets
and liabilities of the acquiree, on a transaction-by-transaction
basis.
The consideration transferred does not include amounts related
to the settlement of preexisting relationships. Such amounts
are generally recognised in profit or loss. Costs related to theacquisition, other than those associated with the issue of debt
or equity securities, that EADS incurs in connection with abusiness combination are expensed as incurred.
Any contingent consideration payable is recognised at fairvalue at the acquisition date. If the contingent consideration
is classified as equity, it is not remeasured and settlement
is accounted for within equity. Otherwise, subsequentchanges to the fair value of the contingent consideration arerecognised in profit or loss.
When share-based payment awards (replacement awards)
are required to be exchanged for awards held by theacquiree’s employees (acquiree’s awards) and relate topast services, then all or a portion of the amount of the

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acquirer’s replacement awards is included in measuring
the consideration transferred in the business combination.
This determination is based on the market based value ofthe replacement awards compared with the market-basedvalue of the acquiree’s awards and the extent to which thereplacement awards relate to past and / or future service.

Acquisitions before 1 January 2010
For acquisitions before 1 January 2010, goodwill represented
the excess of the cost of the acquisition over EADS’interest in the recognised amount (generally fair value) of
the identifiable assets, liabilities and contingent liabilitiesof the acquiree at the date control is transferred to EADS
(acquisition date). If the cost of an acquisition was less than
the fair value of the net assets of the subsidiary acquired,
the identification and measurement of the identifiable assets,
liabilities and contingent liabilities was reassessed as wellas the measurement of the cost of the combination. Anyremaining difference was immediately recognised in theConsolidated Income Statement.
The cost of a business combination was measured at the fairvalue of assets given, equity instruments issued and liabilities
incurred or assumed at the date of exchange. Transaction
costs, other than those associated with the issue of debt
or equity securities, that EADS incurred in connection withbusiness combinations were capitalised as part of the cost of
the acquisition.

Acquisitions and disposals of non-controllinginterests
From 1 January 2010 onwards, EADS has amended its
accounting policy for acquisitions and disposals of noncontrolling interests due to the application of IAS 27 (amend.).
Under the new accounting policy, acquisitions and disposals
of non-controlling interests are accounted for as transactions
with owners in their capacity as equity owners of EADS and
therefore no goodwill or gain / loss is recognised as a resultof such transactions. The adjustments to non-controllinginterests are based on a proportionate amount of the net
assets of the subsidiary.
Before 1 January 2010, acquisitions and disposals of interestin entities that are controlled by EADS without gaining(ceasing) control, irrespective of whether sole or joint control,
were treated as transactions with parties external to theGroup in accordance with the Parent Company Approach.
Consequently, goodwill was recognised on the acquisition of
non-controlling interests in a subsidiary, whereas disposals tominority shareholders or other venturers were recorded within
the Consolidated Income Statement.

Goodwill impairment tests
Goodwill is tested for impairment in the fourth quarter of
each financial year and whenever there is an indication for
impairment. After initial recognition goodwill is measured at

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

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cost less accumulated impairment losses. For impairment
testing purpose, goodwill is allocated to those Cash Generating
Units (“CGUs”) or group of CGUs – within EADS in principle on
Business Unit (“BU”) level – that are expected to benefit fromthe synergies arising from the business combination.

differences are included as a separate component of total
equity (“Accumulated other comprehensive income” or“AOCI”). If a foreign entity is a non-wholly-owned subsidiary,
then the relevant proportionate share of the translationdifference is allocated to the non-controlling interests.

Other accounting policies related
to consolidation and Group accounting issues

Transactions in foreign currencies are translated into euroat the foreign exchange rate prevailing at transaction date.
Monetary assets and liabilities denominated in foreign
currencies at the end of the reporting period are translated
into euro at the exchange rate in effect at that date. These
foreign exchange gains and losses arising from translation
are recognised in the Consolidated Income Statement
except when deferred in equity as qualifying cash flow
hedges. Changes in the fair value of securities denominatedin a foreign currency that are classified as available-forsale financial assets are analyzed whether they are dueto i) changes in the amortised cost of the security or due
to ii) other changes in the security. Translation differences
related to changes in i) amortised cost are recognised in theConsolidated Income Statement whilst ii) other changes arerecognised in AOCI.

EADS subsidiaries prepare their financial statements at thesame reporting date as EADS Group Consolidated Financial
Statements and apply the same accounting policies for similartransactions.
For investments EADS jointly controls (“joint ventures”) with
one or more other parties (“venturers”), EADS recognises its
interest by using the proportionate method of consolidation.
Joint control is contractually established and requires
unanimous decisions regarding the financial and operating
strategy of an entity.
Investments in which EADS has significant influence(“investments in associates”) are accounted for using theequity method and are initially recognised at cost. Significant
influence in an entity is presumed to exist when EADS owns
20% to 50% of the entity’s voting rights. The investments inassociates include goodwill as recognised at the acquisition
date net of any accumulated impairment loss. EADS’ shareof the recognised income and expenses of investments
in associates is included in the Consolidated Financial
Statements from the date significant influence has beenachieved until the date it ceases to exist. The investments’carrying amount is adjusted by the cumulative movements
in recognised income and expense. When EADS’ sharein losses equals or exceeds its interest in an associate,including any other unsecured receivables, no further losses
are recognised, unless the Group has incurred obligations ormade payments on behalf of the associate.
The effects of intercompany transactions are eliminated.
Total comprehensive income is attributed to the owners of theparent and to the non-controlling interest, even if this resultsin the non-controlling interests having a deficit balance.
The financial statements of EADS’ investments in associates
and joint ventures are generally prepared for the same
reporting period as for the parent company. Adjustments are
made where necessary to bring the accounting policies andaccounting periods in line with those of the Group.

Foreign currency translation — The Consolidated Financial
Statements are presented in euro, EADS’ functional andpresentation currency. The assets and liabilities of foreign
entities, where the reporting currency is other than euro,
are translated using period-end exchange rates, whilst thestatements of income are translated using average exchange
rates during the period, approximating the foreign exchange
rate at the dates of the transactions. All resulting translation2

Non-monetary assets and liabilities denominated in foreign
currencies, which are stated at historical cost, are translated
into euro at the foreign exchange rate in effect at the dateof the transaction. Translation differences on non-monetaryfinancial assets and liabilities that are measured at fair value
are reported as part of the fair value gain or loss. In addition,translation differences of non-monetary financial assets
measured at fair value and classified as available for sale areincluded in AOCI.
Goodwill and fair value adjustments arising on the acquisitionof a foreign entity occurring after 31 December 2004 aretreated as assets and liabilities of the acquired company andare translated at the closing rate. Regarding transactions
prior to that date, goodwill, assets and liabilities acquired aretreated as those of the acquirer.
When a foreign operation is disposed of such that control,
significant influence or joint control is lost, the cumulative
amount in the translation reserve related to that foreign
operation is reclassified to profit or loss as part of the gainor loss on disposal. When EADS disposes of only part of its
interest in a subsidiary that includes a foreign operation while
retaining control, the relevant proportion of the cumulativetranslation reserve is allocated to non-controlling interests.
When EADS disposes of only part of its investment in an
associate or joint venture that includes a foreign operation
while retaining significant influence or joint control, therelevant proportion of the cumulative translation reserve isreclassified to profit or loss.

Current and non-current assets and liabilities — The
classification of an asset or liability as a current or noncurrent asset or liability in general depends on whether theitem is related to serial production or subject to long-term
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production. In case of serial production, an asset or liability
is classified as a non-current asset or liability when the item
is realised or settled respectively after 12 months after thereporting period, and as current asset or liability when theitem is realised or settled respectively within 12 months after
the reporting period. In case of construction contracts, anasset or liability is classified as non-current when the item
is realised or settled respectively beyond EADS’ normal
operating cycle; and as a current asset or liability when theitem is realised or settled in EADS’ normal operating cycle.
However, current assets include assets – such as inventories,
trade receivables and receivables from PoC – that are sold,consumed and realised as part of the normal operating
cycle even when they are not expected to be realised within
12 months after the reporting period. Trade payables areequally part of the normal operating cycle and are therefore
classified as current liabilities.

Revenue recognition — Revenue is recognised to theextent that it is probable that the economic benefit arisingfrom the ordinary activities of the Group will flow to EADS,
that revenue can be measured reliably and that recognition
criteria as stated below have been met. Revenue is measured
at the fair value of the consideration received or receivable
after deducting any discounts, rebates, liquidated damages
and value added tax. For the preparation of the Consolidated
Income Statement intercompany revenue is eliminated.
Revenues from the sale of goods are recognised upon thetransfer of risks and rewards of ownership to the buyer whichis generally on delivery of the goods.
Revenues from services rendered are recognised inproportion to the stage of completion of the transaction at theend of the reporting period.
For construction contracts, when the outcome can be
estimated reliably, revenues are recognised by reference
to the percentage of completion (“PoC”) of the contract
activity by applying the estimate at completion method. The
stage of completion of a contract may be determined by avariety of ways. Depending on the nature of the contract,
revenue is recognised as contractually agreed technicalmilestones are reached, as units are delivered or as thework progresses. Whenever the outcome of a construction
contract cannot be estimated reliably – for example during
the early stages of a contract or when this outcome can nolonger be estimated reliably during the course of a contract’s
completion – all related contract costs that are incurred are
immediately expensed and revenues are recognised only
to the extent of those costs being recoverable (“early stage
method of accounting”). In such specific situations, as soon
as the outcome can (again) be estimated reliably, revenue
is from that point in time onwards accounted for according
to the estimate at completion method, without restating therevenues previously recorded under the early stage methodof accounting. Changes in profit rates are reflected in current

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earnings as identified. Contracts are reviewed regularly andin case of probable losses, loss-at-completion provisions arerecorded. These loss-at-completion provisions in connection
with construction contracts are not discounted.
Sales of aircraft that include asset value guarantee
commitments are accounted for as operating leases whenthese commitments are considered substantial compared to
the fair value of the related aircraft. Revenues then compriselease income from such operating leases.
Revenue related to construction or upgrade services undera service concession arrangement is recognised based on
the stage of completion of the work performed, consistent
with EADS’ group accounting policy on recognising revenue
on construction contracts. Operation or service revenue isrecognised in the period in which the services are provided by
EADS group entities. When the Group entities provide morethan one service in a service concession arrangement, theconsideration received is allocated by reference to the relative
fair values of the services delivered when the amounts are
separately identifiable. Further, EADS recognises a financial
asset arising from a service concession arrangement when
it has an unconditional contractual right to receive cash
or another financial asset from or at the direction of the
grantor for the construction or upgrade services provided.
Such financial assets are measured at fair value upon initialrecognition. Subsequent to initial recognition, the financial
assets are measured at amortised cost. EADS recognises
an intangible asset arising from a service concession
arrangement when it has a right to charge for usage of theconcession infrastructure. An intangible asset received asconsideration for providing construction or upgrade services
in a service concession arrangement is measured at fair value
upon initial recognition. Subsequent to initial recognition,
the intangible asset is measured at cost, which includes
capitalised borrowing costs, less accumulated amortisation
and accumulated impairment losses. If the Group is paid
for the construction services partly by a financial asset andpartly by an intangible asset, then each component of theconsideration is accounted for separately and is recognised
initially at the fair value of the consideration.
Interest income is recognised as interest accrues, using theeffective interest rate method.

Dividend income / distributions — Dividend income
as well as the obligation to distribute dividends to EADS’shareholders is recognised when the shareholder’s right toreceive payment is established.
Leasing — The determination of whether an arrangement
is or contains a lease is based on the substance of thearrangement and requires an assessment of (i) whether thefulfillment of the arrangement is dependent on the use of a
specific asset or assets, and (ii) the arrangement conveys aright to use the asset.

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

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The Group is a lessor and a lessee of assets, primarily inconnection with commercial aircraft sales financing. Leasetransactions where substantially all risks and rewards incident
to ownership are transferred from the lessor to the lessee
are accounted for as finance leases. All other leases areaccounted for as operating leases.
Assets held for leasing out under operating leases areincluded in property, plant and equipment at cost lessaccumulated depreciation (see Note 15 “Property, plantand equipment”). Rental income from operating leases (e.g.
aircraft) is recorded as revenue on a straight-line basis over
the term of the lease. Assets leased out under finance leases
cease to be recognised in the Consolidated Statement of
Financial Position after the inception of the lease. Instead,a finance lease receivable representing the discounted
future lease payments to be received from the lessee plus
any discounted unguaranteed residual value is recorded asother long-term financial assets (see Note 17 “Investments
in associates accounted for under the equity method, otherinvestments and other long-term financial assets”). Unearned
finance income is recorded over time in “Interest result”.
Revenues and the related cost of sales are recognised at the
inception of the finance lease.
Assets obtained under finance leases are included in property,
plant and equipment at cost less accumulated depreciationand impairment if any (see Note 15 “Property, plant andequipment”), unless such assets have been further leased out
to customers. In such a case, the respective asset is either
qualified as an operating lease or as finance lease with EADS
being the lessor (headlease-sublease-transactions) and isrecorded accordingly. For the relating liability from financeleases see Note 26 “Financing liabilities”. When EADS is thelessee under an operating lease contract, rental payments
are recognised on a straight line basis over the leased term(see Note 33 “Commitments and contingencies” for future
operating lease commitments). Such leases often form partof commercial aircraft customer financing transactions withthe related sublease being an operating lease (headleasesublease-transactions).
EADS considers headlease-sublease-transactions which are
set up for the predominant purpose of tax advantages andwhich are secured by bank deposits (defeased deposits)
that correspond with the contractual headlease liability
to be linked and accounts for such arrangements as one
transaction in accordance with SIC 27 “Evaluating theSubstance of Transactions Involving the Legal Form of a
Lease”. To reflect the substance of the transaction, the Group
consequently offsets (head) finance lease obligations with thematching amount of defeased deposits.

Product-related expenses — Expenses for advertising,sales promotion and other sales-related expenses are charged
to expense as incurred. Provisions for estimated warranty
costs are recorded at the time the related sale is recorded.

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Research and development expenses — Research anddevelopment activities can be (i) contracted or (ii) self-initiated.
i)

Costs for contracted research and development activities,
carried out in the scope of externally financed researchand development contracts, are expensed when therelated revenues are recorded.

ii)

Costs for self-initiated research and development
activities are assessed whether they qualify for recognition
as internally generated intangible assets. Apart fromcomplying with the general requirements for and initial
measurement of an intangible asset, qualification criteria
are met only when technical as well as commercial
feasibility can be demonstrated and cost can bemeasured reliably. It must also be probable that theintangible asset will generate future economic benefits
and that it is clearly identifiable and allocable to a specificproduct.

Further to meeting these criteria, only such costs that relatesolely to the development phase of a self-initiated project
are capitalised. Any costs that are classified as part of theresearch phase of a self-initiated project are expensed as
incurred. If the research phase cannot be clearly distinguishedfrom the development phase, the respective project related
costs are treated as if they were incurred in the researchphase only.
Capitalised development costs are generally amortised overthe estimated number of units produced. In case the numberof units produced cannot be estimated reliably capitalised
development cost are amortised over the estimated usefullife of the internally generated intangible asset. Amortisationof capitalised development costs is recognised in cost of
sales. Internally generated intangible assets are reviewed
for impairment annually when the asset is not yet in use andfurther on whenever events or changes in circumstancesindicate that the carrying amount may not be recoverable.
Income tax credits granted for research and development
activities are deducted from corresponding expenses or from
capitalised amounts when earned.

Borrowing costs — Borrowing costs directly attributable tothe acquisition, construction or production of an asset thatnecessarily takes a substantial period of time to get readyfor its intended use or sale are capitalised as part of thecost of the respective assets. All other borrowing costs are
expensed in the period they occur. Borrowing costs consist ofinterest and other costs that EADS incurs in connection withthe borrowing of funds. EADS capitalises borrowing costs
for qualifying assets where construction was commenced
on or after 1 January 2009. Further, EADS continues to
expense borrowing costs relating to construction projects thatcommenced prior to 1 January 2009.

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Intangible assets — Intangible assets comprise (i) internallygenerated intangible assets, i.e. internally developed
software and other internally generated intangible assets(see above: “Research and development expenses”),(ii) acquired intangible assets, and (iii) goodwill (see above:“Consolidation”).
Separately acquired intangible assets are initially recognised
at cost. Intangible assets acquired in a business combination
are recognised at their fair value at acquisition date. Acquired
intangible assets are generally amortised over their respective
estimated useful lives (3 to 10 years) on a straight line basis,less accumulated impairment if necessary. The amortisation
expense on intangible assets with finite lives is recognisedin the Consolidated Income Statement within the expense
category consistent with the function of the related intangible
asset. The amortisation method and the estimate of the useful
lives of the separately acquired intangible asset is reviewed atleast annually and changed if appropriate.
Intangible assets having an indefinite useful life are notamortised but tested for impairment at the end of eachfinancial year as well as whenever there is an indication thatthe carrying amount exceeds the recoverable amount of therespective asset (see below “Impairment of non-financial
assets”). For such intangible assets the assessment for theindefinite useful life is reviewed annually on whether it remains
supportable. A change from indefinite to finite life assessment
is accounted for as change in estimate.
Gains or losses arising from the derecognition of an intangible
asset are measured as the difference between the net
disposal proceeds and the carrying amount of the asset andare recognised in the Consolidated Income Statement when
the asset is derecognised.

Property, plant and equipment — Property, plant andequipment is valued at acquisition or manufacturing costs
less any accumulated depreciation and any accumulated
impairment losses. Such costs include the estimated costof replacing, servicing and restoring part of such property,
plant and equipment. Items of property, plant and equipment
are generally depreciated on a straight-line basis. The costs
of internally produced equipment and facilities include directmaterial and labor costs and applicable manufacturing
overheads, including depreciation charges. The following
useful lives are assumed: buildings 10 to 50 years; site
improvements 6 to 20 years; technical equipment andmachinery 3 to 20 years; and other equipment, factory andoffice equipment 2 to 10 years. The useful lives, depreciation
methods and residual values applying to property, plant andequipment are reviewed at least annually and in case theychange significantly, depreciation charges for current andfuture periods are adjusted accordingly. If the carrying amountof an asset exceeds its recoverable amount an impairment
loss is recognised immediately in profit or loss. At each endof the reporting period, it is assessed whether there is any
indication that an item of property, plant and equipment may
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be impaired (see also below “Impairment of non-financial
assets”).
When a major inspection is performed, its cost is recognisedin the carrying amount of the plant and / or equipment as
a replacement if the recognition criteria are satisfied. The
carrying amount of the replaced part is derecognised. Allother repairs and maintenance are recognised as an expensein the Consolidated Income Statement of the period in which
they are incurred. Cost of an item of property, plant andequipment initially recognised comprise the initial estimateof costs of dismantling and removing the item and restoring
the site on which it is located at the end of the useful life of
the item on a present value basis. A provision presenting theasset retirement obligation is recognised in the same amountat the same date in accordance with IAS 37 “Provisions,Contingent Liabilities and Contingent Assets”.
Property, plant and equipment also includes capitalised
development costs for tangible developments of specialised
tooling for production such as jigs and tools, design,
construction and testing of prototypes and models. In caserecognition criteria are met, these costs are capitalised andgenerally depreciated using the straight-line method over five
years or, if more appropriate, using the number of production
or similar units expected to be obtained from the tools(sum-of-the-units method). Especially for aircraft production
programmes such as the Airbus A380 with an estimatednumber of aircraft to be produced using such tools, thesum-of-the-units method effectively allocates the diminutionof value of specialised tools to the units produced. Property,
plant and equipment is derecognised when it has been
disposed of or when the asset is permanently withdrawn
from use. The difference between the net disposal proceeds
and the carrying amount of such assets is recognisedin the Consolidated Income Statement in the period of
derecognition.

Investment property — Investment property is property,
i.e. land or buildings, held to earn rentals or for capital
appreciation or both. The Group accounts for investment
property using the cost model. Investment property is initiallyrecognised at cost and subsequently measured at costless any accumulated depreciation and any accumulated
impairment losses. Buildings held as investment property are
depreciated on a straight-line basis over their useful lives. The
fair value of investment property is reviewed annually by using
cash-flow models or by determinations from market prices.
Investment properties are derecognised when either they
have been disposed of or when the investment property ispermanently withdrawn from use and no future economic
benefit is expected from its disposal. The difference between
the net disposal proceeds and the carrying amount of theassets is recognised in the Consolidated Income Statementin the period of derecognition. Transfers are made to or frominvestment properties only when there is a change in use.

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

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Inventories — Inventories are measured at the lower ofacquisition cost (generally the average cost) or manufacturing
cost and net realisable value. Manufacturing costs comprise
all costs that are directly attributable to the manufacturing
process, such as direct material and labor, and production
related overheads (based on normal operating capacity andnormal consumption of material, labor and other production
costs), including depreciation charges. Net realisable value
is the estimated selling price in the ordinary course of thebusiness less applicable variable selling expenses.
Impairment of non-financial assets — The Groupassesses at each end of the reporting period whether there
is an indication that a non-financial asset may be impaired.
In addition, intangible assets with an indefinite useful life,
intangible assets not yet available for use and goodwill aretested for impairment in the fourth quarter of each financial
year irrespective of whether there is any indication for
impairment. An impairment loss is recognised in the amountby which the asset’s carrying amount exceeds its recoverable
amount.
The recoverable amount of an asset or a Cash Generating
Unit (“CGU”) is the higher of its fair value less costs to sellor its value in use. The recoverable amount is determined
for an individual asset, unless the asset does not generatecash inflows that are largely independent of those from otherassets or group of assets. In such a case the recoverable
amount is determined for the CGU the asset belongs to.
Where the recoverable amount of a CGU to which goodwill
has been allocated is lower than the CGU’s carrying amount,
firstly the related goodwill is impaired. Any exceeding amountof impairment is recognised on a pro rata basis of the carrying
amount of each asset in the respective CGU.
The value in use is assessed by the present value of the
future cash flows expected to be derived from an asset or a
CGU. Cash flows are projected based on a detailed forecast
approved by management over a period reflecting theoperating cycle of the specific business. The discount rateused for determining an asset’s value in use is the pre-tax
rate reflecting current market assessment of (i) the time valueof money and (ii) the risk specific to the asset for which the
future cash flow estimates have not been adjusted.
An asset’s fair value less costs to sell reflects the amount
EADS could obtain at its end of the reporting period fromthe asset’s disposal in an arm’s length transaction between
knowledgeable, willing parties, after deducting the costsof disposal. If there is no binding sales agreement or active
market for the asset, its fair value is assessed by the use of
appropriate valuation models dependent on the nature of theasset, such as by the use of discounted cash flow models.
These calculations are corroborated by available fair value
indicators such as quoted market prices or sector-specificvaluation multiples.

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Impairment losses of assets used in continuing operations
are recognised in the Consolidated Income Statement inthose expense categories consistent with the function of theimpaired asset.
Impairment losses recognised for goodwill are not reversed
in future periods. For any other non-financial assets anassessment is made at each end of the reporting period as
to whether there is any indication that previously recognised
impairment losses may no longer exist or may havedecreased. If such indication exists, the Group estimates
the asset’s or cash-generating unit’s recoverable amount. A
previously recognised impairment loss is reversed only if there
has been a change in the assumptions used to determine theasset’s recoverable amount since the last impairment loss
was recognised. The reversal is limited so that the carrying
amount of the asset does not exceed its recoverable amount,nor exceed the carrying amount that would have been
determined, net of depreciation, had no impairment loss beenrecognised for the asset in prior years. Such a reversal isrecognised in the Consolidated Income Statement.

Financial instruments — A financial instrument is any
contract that gives rise to a financial asset of one entityand a financial liability or equity instrument of another entity.
EADS’ financial assets comprise mainly cash and shortterm deposits, trade and loan receivables, finance leasereceivables, other quoted and unquoted financial instruments
and derivatives with a positive fair value. The Group’s
financial liabilities mainly include obligations towards financial
institutions, bonds, loans, refundable advances, tradeliabilities, finance lease liabilities as well as derivatives with anegative fair value. EADS recognises a financial instrumenton its Consolidated Statement of Financial Position when it
becomes party to the contractual provision of the instrument.
All purchases and sales of financial assets are recognised
on settlement date according to market conventions. The
settlement date is the date an asset is delivered to or by anentity. Financial instruments are initially recognised at fair valueplus, in the case the financial instruments are not measured
at fair value through profit or loss, directly attributabletransaction costs. Financial instruments at fair value throughprofit or loss are initially recognised at fair value, transaction
costs are recognised in the Consolidated Income Statement.
Finance lease receivables are recognised at an amount equal
to the net investment in the lease. Subsequent measurementof financial instruments depends on their classification into
the relevant category. The Group assesses at each end of
the reporting period whether there is any objective evidence
that a financial asset or a group of financial assets may be
impaired. EADS derecognises a financial asset only when
the contractual rights to the asset’s cash flows expire or
the financial asset has been transferred and the transfer
qualifies for derecognition under IAS 39. EADS derecognises
a financial liability only when the obligation specified in the

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contract is discharged, cancelled or expired. When an
existing financial liability is replaced by another from the samelender on substantially different terms, or the terms of an
existing liability are substantially modified, such an exchange
or modification is treated as a derecognition of the original
liability and the recognition of a new liability, and the differencein the respective carrying amounts is recognised in theincome statement.

(expense) from investments” in the Consolidated Income
Statement for the period. Interest earned on the investment
is presented as interest income in the Consolidated Income
Statement using the effective interest method. Dividends
earned on investment are recognised as “Other income(expense) from investments” in the Consolidated Income
Statement when the right to the payment has been
established.

Fair value of financial instruments — The fair value ofquoted investments is based on current market prices. If
the market for a financial asset is not active (and for unlisted
securities), the Group establishes fair value by using generally
accepted valuation techniques on the basis of market
information available at the end of the reporting period.
Such techniques may include using recent arm’s length
market transactions; reference to the current fair value ofanother instrument that is substantially the same; discounted
cash flow analysis or other valuation models. Available-forsale equity investments that do not have a quoted market
price in an active market and whose fair value cannot be
reliably estimated by alternative valuation methods, such as
discounted cash flow model, are measured at cost, less any
accumulated impairment losses.

Financial assets at fair value through profit or loss —Financial assets at fair value through profit or loss include
financial assets held for trading and financial assets
designated at initial recognition at fair value through profit
or loss. Within EADS, only derivatives not designated ashedges are categorized as held for trading. Further, financial
assets may be designated at initial recognition at fair value
through profit or loss if any of the following criteria is met:(i) the financial asset contains one or more embedded
derivatives that otherwise had to be accounted for separately;or (ii) the designation eliminated or significantly reduces
a measurement or recognition inconsistency that would
otherwise arise from measuring the assets or recognising thegains and losses on them on a different basis (sometimes
referred to as “natural hedge”); or (iii) the financial assets arepart of a group of financial assets that is managed and its
performance is evaluated on a fair value basis, in accordancewith a documented risk management or investment strategy.
Within EADS, uncapped Structured Notes are designated “atfair value through profit or loss” in accordance with criterion(i), foreign currency funds of a hedge funds structure also
comprising foreign currency derivatives are designated “atfair value through profit or loss” in accordance with criterion(ii) and investments in accumulating Money Market Funds aredesignated at “fair value through profit or loss” in accordancewith above criterion (iii).

Investments and other financial assets — EADS’
investments comprise investments in associates accounted
for under the equity method, other investments and otherlong-term financial assets as well as current and non-current
securities and cash equivalents. The Group classifies its
financial assets in the following three categories: i) at fairvalue through profit or loss, ii) loans and receivables andiii) available-for-sale financial assets. Their classification isdetermined by management when first recognised anddepends on the purpose for their acquisition.
Within EADS, all investments in entities for which
consolidation criteria are not fulfilled are classified as noncurrent available-for-sale financial assets. They are included in
the line other investments and other long-term financial
assets in the Consolidated Statement of Financial Position.
The majority of the Group’s securities consists of debt
securities and is classified as available-for-sale financial
assets.

Available for sale financial assets — Financial assets
classified as available-for-sale are accounted for at fair value.
Changes in the fair value subsequent to the recognition ofavailable-for-sale financial assets – other than impairment
losses and foreign exchange gains and losses on monetary
items classified as available-for-sale – are recognised directly
within AOCI, a separate component of total equity, net of
applicable deferred income taxes. As soon as such financial
assets are sold or otherwise disposed of, or are determined
to be impaired, the cumulative gain or loss previously
recognised in equity is recorded as part of “other income

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Loans and receivables — Loans and receivables are
non-derivative financial assets with fixed or determinable
payments that are not quoted in an active market. Theyarise when the Group provides money, goods or services
directly to a debtor with no intention of trading the receivableand include also service concession receivables. Loans andreceivables are classified as trade receivables and otherinvestments and other long-term financial assets.
After initial recognition loans and receivables are measured
at amortised cost using the effective interest rate method
less any allowance for impairment. Gains and losses arerecognised in the Consolidated Income Statement at disposalof the loans and receivables, through the amortisation
process as well as in case of any impairment.
Trade receivables — Trade receivables include claims
arising from revenue recognition that are not yet settled by
the debtor as well as receivables relating to construction
contracts. Trade receivables are initially recognised at fairvalue and, provided they are not expected to be realised

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

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within one year, are subsequently measured at amortised
cost using the effective interest method less any allowance
for impairment. Gains and losses are recognised in theConsolidated Income Statement when the receivables are
derecognised or impaired as well as through the amortisation
process.

Current / non-current other financial assets —Current / non-current other financial assets mainly include
derivatives with positive fair values, receivables from relatedcompanies, loans and are presented separately fromcurrent / non-current other assets.
Cash and cash equivalents — Cash and cash equivalents
consist of cash on hand, cash in bank, checks, fixed deposits
and securities having maturities of three months or less fromthe date of acquisition, that are readily convertible to known
amounts of cash and which are subject to an insignificant riskof changes in value.
Impairment of financial assets — EADS assesses at eachend of the reporting period whether there is any objective
evidence that a financial asset or a group of financial assets is
impaired.
After application of the at equity method to an equity
investment in an associate, the Group determines whether
it is necessary to recognise an impairment loss of the Group’s
investment in its associates. The Group determines at eachend of the reporting period whether there is any objective
evidence that the investment in associate is impaired. Thisobjective evidence for impairment includes information
about significant changes with an adverse effect that havetaken place in the technological, market economic or legal
environment in which the associate operates, and thatindicate that the carrying amount of EADS’ investment may
not be recovered. A significant or prolonged decline in thefair value of an investment in an equity instrument below its
carrying amount is also objective evidence of impairment.
In case of impairment EADS calculates the impairment
amount as being the difference between the fair value ofthe associate and the carrying amount of the investment in
EADS’ associates and recognises the impairment amountin the Consolidated Income Statement. Any reversal of
the impairment loss is recognised as an adjustment to theinvestment in the associate to the extent that the recoverable
amount of the investment increases. As such, the goodwill
related to EADS’ associates is not individually tested for
impairment.
For financial assets carried at amortised cost, at costand for those classified as available-for-sale, a financial
asset or a group of financial assets is deemed to be impaired
if, and only if, there is objective evidence of impairment asa result of one or more events that has occurred after the
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flows of the financial asset or the group of financial assetsthat can be reliably estimated. Evidence of impairment
may include indications that the debtors or a group of
debtors is experiencing significant financial difficulty,
default or delinquency in interest or principal payments, theprobability that they will enter bankruptcy or other financial
reorganisation and where observable data indicate that there
is a measurable decrease in the estimated future cash flows,
such as changes in arrears or economic conditions that
correlate with defaults.
Equity investments classified as available-for-saleare considered for impairment in addition to the indicatorsstated above in case of a significant or prolonged decline of
their fair value below their cost. If any such evidence exists
for available-for-sale financial assets, the cumulative loss –measured as the difference between the acquisition cost
and the current fair value, less any impairment loss on that
financial asset previously recognised in the Consolidated
Income Statement – is removed from AOCI and recognisedin the Consolidated Income Statement. Impairment losses
recognised in the Consolidated Income Statement on equity
instruments are not reversed through the Consolidated
Income Statement; increases in their fair value are recognised
directly in AOCI.
In case of the impairment of debt instruments classified
as available-for-sale, interest continues to be accrued at
the original effective interest rate on the reduced carrying
amount of the asset and is recorded in financial result. If,
in a subsequent year, the fair value of a debt instrument
increases and the increase can be objectively related to an
event occurring after the impairment loss was recognised in
the Consolidated Income Statement, the impairment loss isreversed through the Consolidated Income Statement.
If there is objective evidence regarding loans andreceivables that EADS is not able to collect all amounts due
according to the original terms of the financial instrument,
an impairment charge has to be recognised. The amountof the impairment loss is equal to the difference between
the financial asset’s carrying amount and the present valueof estimated future cash flows, discounted at the original
effective interest rate, i.e. the rate that exactly discounts the
expected stream of future cash payments through maturity
to the current net carrying amount of the financial asset. The
carrying amount of the trade receivable is reduced throughuse of an allowance account. The loss is recognised in theConsolidated Income Statement. If in a subsequent period,
the amount of impairment decreases and the decrease isobjectively related to an event occurring after the impairment
was recognised, the recognised impairment loss is reversed
through the Consolidated Income Statement.

Non-current assets / disposal groups classified asheld for sale — Non-current assets / disposal groups
classified as assets held for sale and stated at the lower

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2of carrying amount and fair value less costs to sell if theircarrying amount is recovered principally through a saletransaction rather than through a continuing use. Whilstclassified as held for sale or part of a disposal group, EADS
does not depreciate or amortise a non-current asset. In
addition, equity accounting of investments in associates
ceases once classified as held for sale or distribution.
Liabilities directly associated with non-current assets held
for sale in a disposal group are presented separately on theface of the Consolidated Statement of Financial Position.
Interest and other expenses attributable to the liabilities of adisposal group classified as held for sale is continued to berecognised.

Derivative financial instruments — Within EADS derivative
financial instruments are (a) used for hedging purposes in
micro-hedging strategies to offset the Group’s exposure to
identifiable transactions or are (b) a component of hybrid
financial instruments that include both the derivative and hostcontract (“Embedded Derivatives”).
In accordance with IAS 39 “Financial Instruments:
Recognition and Measurement”, derivative financial
instruments are recognised and subsequently measured
at fair value. The method of recognising resulting gains orlosses depends on whether the derivative financial instrument
has been designated as hedging instrument, and if so,on the nature of the item being hedged. While derivative
financial instruments with positive fair values are recorded in“current / non-current other financial assets”, such derivative
financial instruments with negative fair values are recorded as“current / non-current other financial liabilities”.
a) Hedging: The Group seeks to apply hedge accounting
to all its hedging activities. Hedge accounting recognises
symmetrically the offsetting effects on net profit or loss

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and the related hedged item. The conditions for sucha hedging relationship to qualify for hedge accounting
include: The hedge transaction is expected to behighly effective in achieving offsetting changes in fairvalue or cash flows attributable to the hedged risk, theeffectiveness of the hedge can be reliably measured
and there is formal designation and documentation of
the hedging relationships and EADS’ risk management
objective and strategy for undertaking the hedge at the
inception of the hedge. The Group further documents
prospectively at the inception of the hedge as well as
at each closing retrospectively and prospectively its
assessment of whether the derivatives used in hedging
transactions are highly effective in offsetting changes infair values or cash flows of hedged items with regard to
the hedged risk.

To be classified as held for sale the non-current assets (ordisposal group) must be available for immediate sale in its
present condition subject only to terms that are usual andcustomary for sales of such assets (or disposal group) andits sale must be highly probable. For a sale to be highly
probable – among other criteria that have to be fulfilled – theappropriate level of EADS management must be committed
to the plan to sell, an active programme to complete the plan
must have been initiated and actions required to complete theplan to sell the assets (or disposal group) should indicate that
it is unlikely that significant changes to the plan will be madeor that the plan will be withdrawn.
If a component of EADS has either been disposed of or isclassified as held for sale and i) represents a separate majorline of business or geographical area of operations, ii) is partof a single co-ordinated plan to dispose of a separate majorline of business or geographical area of operations or iii) is
a subsidiary acquired exclusively with a view to resale thecomponent is a discontinued operation.

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Depending on the nature of the item being hedged,
EADS classifies hedging relationships that qualify forhedge accounting as either (i) hedges of the fair valueof recognised assets or liabilities or unrecognised firm
commitments (“Fair Value Hedges”), (ii) hedges of thevariability of cash flows attributable to recognised assets
or liabilities, highly probable forecast transactions (“CashFlow Hedges”) or (iii) hedges of a net investment in aforeign entity.
i)

Fair value hedge: Fair value hedge accounting is
mainly applied to certain interest rate swaps hedging
the exposure to changes in the fair value of recognised
assets and liabilities. For derivative financial instruments
designated as fair value hedges, changes in the fair valueof the hedging instrument and changes in the fair valueof the hedged asset or liability attributable to the hedged
risk are simultaneously recognised in the Consolidated
Income Statement.

ii) Cash flow hedge: The Group applies cash flow hedge
accounting generally to foreign currency derivative
contracts on future sales as well as to certain interest rate
swaps hedging the variability of cash flows attributableto recognised assets and liabilities. Changes in fairvalue of the hedging instruments related to the effective
part of the hedge are reported in AOCI, a separate
component of total equity, net of applicable income taxes
and recognised in the Consolidated Income Statement
in conjunction with the result of the underlying hedgedtransaction, when realised. The ineffective portion isimmediately recorded in “Profit for the period”. Amounts
accumulated in equity are recognised in the Consolidated
Income Statement in the periods when the hedgedtransaction affects the Consolidated Income Statement,such as when the forecast sale occurs or when thefinance income or finance expense is recognised in theConsolidated Income Statement. If hedged transactions
are cancelled, gains and losses on the hedging instrument

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

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that were previously recorded in equity are generally
recognised in “Profit for the period”. Apart from derivative
financial instruments, the Group also uses financial
liabilities denominated in a foreign currency to hedge
foreign currency risk inherent in forecast transactions.
If the hedging instrument expires or is sold, terminatedor exercised, or if its designation as hedging instrument
is revoked, amounts previously recognised in equity
remain in equity until the forecasted transaction or firm
commitment occurs.
iii) Net investment hedge: Hedges of net investments inforeign entities are accounted for similarly to cash flow
hedges. Any gain or loss on the hedging instrument
relating to the effective portion of the hedge is recognised
in AOCI; the gain or loss relating to the ineffective portionis recognised immediately in the Consolidated Income
Statement. Gains and losses accumulated in AOCI are
included in the Consolidated Income Statement when theforeign entity is disposed of.
In addition, EADS uses certain foreign currency derivatives tomitigate its foreign currency exposure arising from changes
in the fair value of recognised assets and liabilities (natural
hedge). To reflect the largely natural offset those derivatives
provide to the remeasurement gains or losses of specificforeign currency balance sheet items, EADS accordingly
presents the gains or losses of those foreign exchange rate
derivatives as well as the fair value changes of the relating
recognised assets and liabilities in EBIT insofar as certain
formal requirements are met.
Finally, in case certain derivatives or portions of thesederivatives do not qualify for hedge accounting under the
specific rules of IAS 39 “Financial Instruments: Recognition
and Measurement” (for example, the non-designated timevalue of options or de-designated derivatives in general) or do
not belong to a Natural Hedge, changes in fair value of suchderivative financial instruments or its portions are recognised
immediately as part of the financial result.
The fair values of various derivative financial instruments usedas hedging instruments are disclosed in Note 33 “Information
about financial instruments”. Periodical movements in the
AOCI, the separate component of total equity in which
the effective portion of cash flow hedges are recognised,
are also disclosed in Note 34 “Information about financial
instruments”.
b) Embedded derivatives: Derivative components
embedded in a non-derivative-host contract are
separately recognised and measured at fair value if theymeet the definition of a derivative and their economic
risks and characteristics are not clearly and closely
related to those of the host contract. Changes in the fairvalue of the derivative component of these instruments
are recorded in “Other financial result”, unless bifurcated

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foreign currency embedded derivatives are designated as
hedging instruments.
See Note 34 “Information about financial instruments” fora description of the Group’s financial risk management
strategies, the fair values of the Group’s derivative financial
instruments as well as the methods used to determine suchfair values.

Income taxes — Tax expense (tax income) is the aggregate
amount included in the determination of net profit or loss forthe period in respect of (i) Current tax and (ii) Deferred tax.
i)Current tax is the amount of income taxes payableor recoverable in a period. Current income taxes
are calculated applying respective tax rates on the
periodic taxable profit or tax loss that is determined inaccordance with rules established by the competenttaxation authorities. Current tax liabilities are recognisedfor current tax to the extent unpaid for current and priorperiods. A current tax asset is recognised in case the tax
amount paid exceeds the amount due to current and priorperiods. The benefit of a tax loss that can be carried backto recover current taxes of a previous period is recognised
as an asset provided that the related benefit is probableand can be measured reliably.

ii)

Deferred tax assets and liabilities reflect lower or higher
future tax consequences that result from temporary
valuation differences on certain assets and liabilities
between their financial statements’ carrying amounts andtheir respective tax bases, as well as from net operating
losses and tax credit carry forwards. Deferred tax assets
and liabilities are measured using enacted tax rates tobe applied to taxable income in the years in which those
temporary differences are expected to be recovered or
settled. The effect on deferred tax assets and liabilities ofa change in tax rates is recognised in the period the newrates are enacted or substantially enacted. As deferred
tax assets anticipate potential future tax benefits, they
are recorded in the Consolidated Financial Statements
of EADS only to the extent that it is probable that futuretaxable profits will be available against which deferred tax
assets will be utilised. The carrying amount of deferred tax
assets is reviewed at each financial year-end.
Deferred income tax assets and deferred income tax
liabilities are offset, if a legally enforceable right exists
to set off current tax assets against current income tax
liabilities and the deferred income taxes relate to the same
taxable entity and the same taxation authority.

Share capital — Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of
new shares or options are shown directly in equity – as adeduction – net of any tax effects. Own equity instruments
which are reacquired are deducted from total equity and

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remain recognised as treasury shares until they are either
cancelled or reissued. Any gains or losses net of taxes which
are associated with the purchase, sale, issue or cancellationof EADS own shares are recognised within equity.

Provisions — Provisions are recognised when the Group
has a present obligation (legal or constructive) as a resultof a past event, it is probable that an outflow of resources
embodying economic benefits will be required to settle theobligation and a reliable estimate of the obligation’s amount
can be made. When the effect of the time value of money ismaterial, provisions are measured at the present value of theexpenditure expected to be required to settle the Group’s
present obligation. As discount factor, a pre-tax rate is usedthat reflects current market assessments of the time value ofmoney and the risks specific to the obligation. The provision’s
increase in each period reflecting the passage of time isrecognised as finance cost.
Provisions are reviewed at each closing and adjusted as
appropriate to reflect the respective current best estimate.
The change in the measurement of a provision for an
asset retirement obligation (see above “Property, plant andequipment”) is added or deducted from the cost of therespective asset that has to be dismantled and removed at
the end of its useful life and the site on which it is locatedrestored.
Provisions for guarantees corresponding to aircraft sales arerecorded to reflect the underlying risk to the Group in respectof guarantees given when it is probable that an outflow ofresources embodying economic benefits will be required tosettle the obligation and reliable estimates can be made of
the amount of the obligation. The amount of these provisions
is calculated to cover the difference between the Group’s
exposure and the estimated value of the collateral.
Outstanding costs are provided for at the best estimate of
future cash outflows. Provision for other risks and charges
relate to identifiable risks representing amounts expected tobe realised.
Provisions for contract losses are recorded when it
becomes probable that estimated contract costs based ona total cost approach will exceed total contract revenues.
Contractual penalties are included in the contractual margin
calculation. Provisions for loss making contracts are recorded
as write downs of work-in-process for that portion of thework which has already been completed, and as provisions
for the remainder. Losses are determined on the basis ofestimated results on completion of contracts and include
foreign currency effects. Provisions for loss making contracts
are updated regularly.
Provisions for i) constructive obligations and liquidated
damages caused by delays in delivery and for ii) terminating
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future cash outflows for anticipated payments to customers.
Provisions for litigation and claims are set in case legal
actions, governmental investigations, proceedings and otherclaims are pending or may be instituted or asserted in the
future against the Group which are a result of past events,
where it is probable that an outflow of resources embodying
economic benefits will be required for the settlement and a
reliable estimate of the obligation’s amount can be made.
Restructuring provisions are only recognised when adetailed formal plan for the restructuring – including theconcerned business or part of the business, the principal
locations affected, details regarding the employees affected,
the restructuring’s timing and expenditures that will have to beundertaken – has been developed and the restructuring haseither commenced or the plan’s main features have alreadybeen publicly announced to those affected by it.

Employee benefits — The valuation of pension and postretirement benefits classified as defined benefit plans isbased upon the projected unit credit method in accordancewith IAS 19 “Employee Benefits”.
EADS recognises periodical actuarial gains and losses infull for all its defined benefit plans immediately in retained
earnings and presents them in its Consolidated Statements ofComprehensive Income.
Past service costs are recognised as an expense in EADS
Consolidated Income Statements on a straight-line basis over
the average period until the benefits become vested. Past
service costs relating to benefits already vested are expensed
immediately.
When sufficient information is available to apply defined
benefit accounting in conjunction with a defined benefit multiemployer plan, the Group proportionally accounts for the plan
according to its share in the related defined benefit plan.
Contributions to defined contribution plans are recognised as
expenses in the Consolidated Income Statement when they
are due.
Several German Group companies provide life time working
account models, being employee benefit plans with apromised return on contributions or notional contributions
that qualify as other long-term employee benefits under
IAS 19. The employees’ periodical contributions into theirlife time working accounts result in corresponding personnel
expense in that period in the Consolidated Income Statement
while plan assets and corresponding provisions are offset in
the Consolidated Statement of Financial Position.
Termination benefits are payable whenever an employee’s
employment is terminated before the normal retirement dateor whenever an employee accepts voluntary redundancy
in exchange for these benefits. The Group recognises
termination benefits when it is demonstrably committed

Notes to the Consolidated Financial Statements (IFRS)
2.1 Basis of presentation1

to either terminate the employment of current employees
according to a detailed formal plan without possibility ofwithdrawal or to provide termination benefits as a result of an
offer made to encourage voluntary redundancy.

Share based compensation — Stock options issued
by EADS up to 2006 are accounted for in accordance withIFRS 2 “Share-based Payment” and qualify as equity settled
share-based payments. In 2007, EADS also introduced aperformance and restricted unit plan (LTIP) which qualifies ascash settled share-based payment plan under IFRS 2.
For both types, associated services received are measured
at fair value and are calculated by multiplying the number of
options (or units) expected to vest with the fair value of one
option (or unit) as of grant date / end of the reporting period.
The fair value of the option (or unit) is determined by applying
the Black Scholes Option Pricing Model.
The fair value of the services is recognised as personnel
expense. In case of equity settled share based payment plans
the personnel expense results in a corresponding increasein consolidated retained earnings over the vesting period of
the respective plan. For cash settled share based payment
plans a corresponding liability is recognised. Until the liability
is settled its fair value is remeasured at each end of thereporting period through the Consolidated Income Statement.
Part of the grant of both types of share-base payment
plans is conditional upon the achievement of non-market
performance objectives and will only vest provided that theperformance conditions are met. If it becomes obvious during
the vesting period of an equity settled share-based payment
plan that some of the performance objectives will not be
met and, hence, the number of equity instruments expected
to vest differs from that originally expected, the expense isadjusted accordingly.
EADS offers to its employees to buy under the employee
stock ownership plan (ESOP) EADS shares at a certain
discount. The difference between the exercise price andthe corresponding share price is recognised as personnel
expense in EADS’ Consolidated Income Statements at grantdate.

Emission rights and provisions for in-excess-emission —Under the European Union Emission Allowance Trading
Scheme (EATS) national authorities have issued on
1 January 2005 permits (emission rights), free of charge, that
entitle participating companies to emit a certain amount ofgreenhouse gas over the compliance period.
The participating companies are permitted to trade thoseemission rights. To avoid a penalty a participant is required
to deliver emission rights at the end of the compliance period
equal to its emission incurred.

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EADS recognises a provision for emission in case it hascaused emissions in excess of emission rights granted.
The provision is measured at the fair value (market price) of
emission rights necessary to compensate for that shortfall ateach end of the reporting period.
Emission rights held by EADS are generally accounted for as
intangible assets, whereby:i)

Emission rights allocated for free by national authorities
are accounted for as a non-monetary government grantat its nominal value of nil.

ii)

Emission rights purchased from other participants areaccounted for at cost or the lower recoverable amount;
if they are dedicated to offset a provision for in excess
emission, they are deemed to be a reimbursement rightand are accounted for at fair value.

2

Trade liabilities — Trade liabilities are initially recorded atfair value. Trade liabilities having a maturity of more than
12 months are subsequently measured at amortised costusing the effective interest rate method.
Financing liabilities — Financing liabilities comprise
obligations towards financial institutions, issued corporate
bonds, loans, loans to affiliated non-consolidated companies
as well as finance lease liabilities. Financing liabilities qualify
as financial liabilities and are recorded initially at the fair valueof the proceeds received, net of transaction costs incurred.
Subsequently, financing liabilities other than finance leaseliabilities are measured at amortised cost using the effective
interest rate method with any difference between proceeds(net of transaction costs) and redemption amount being
recognised in “Total finance income (cost)” over the period of
the financing liability.
Current / non-current other financial liabilities —Current / non-current other financial liabilities mainly include
refundable advances and derivatives with a negative market
value. Refundable advances from European Governments areprovided to the Group to finance research and development
activities for certain projects on a risk-sharing basis, i.e. they
have to be repaid to the European Governments subject tothe success of the project.
Further, EADS designates certain financial liabilities
representing payment obligations towards airlines
denominated in USD as hedging instruments to hedge theforeign currency risk inherent in future aircraft sales under acash flow hedge.

Current / non-current other liabilities — Current / noncurrent other liabilities mainly consist of advance payments
received from customers.

EADS FINANCIAL STATEMENTS 2010

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

1

Liability for puttable instruments — Under certain
circumstances, EADS records a financial liability rather thanan equity instrument for the exercise price of a written put
option on an entity’s equity.
Litigation and claims — Various legal actions, governmental
investigations, proceedings and other claims are pending or
may be instituted or asserted in the future against the Group.
Litigation is subject to many uncertainties, and the outcomeof individual matters is not predictable with assurance.
EADS believes that it has made adequate provisions tocover current or contemplated litigation risks. It is reasonably
possible that the final resolution of some of these matters
may require the Group to make expenditures, in excess ofestablished reserves, over an extended period of time andin a range of amounts that cannot be reasonably estimated.
The term “reasonably possible” is used herein to mean thatthe chance of a future transaction or event occurring is morethan remote but less than likely. Although the final resolutionof any such matters could have an effect on the Group’s profit
for the period for the particular reporting period in which an
adjustment of the estimated reserve would be recorded, theGroup believes that any such potential adjustment should notmaterially affect its Consolidated Financial Statements. For
further details please refer to Note 32 “Litigation and claims”.

USE OF ACCOUNTING ESTIMATES
EADS’ Consolidated Financial Statements are prepared inaccordance with IFRS. EADS’ significant accounting policies,
as described in Note 2 are essential to understanding theGroup’s results of operations, financial positions and cash
flows. Certain of these accounting policies require accounting
estimates that involve complex and subjective judgements andthe use of assumptions, some of which may be for mattersthat are inherently uncertain and susceptible to change.
Such accounting estimates could change from period toperiod and might have a material impact on the Group’s
results of operations, financial positions and cash flows. The
assumptions and estimates used by EADS’ management
are based on parameters which are derived from theknowledge at the time of preparing the Consolidated Financial
Statements. In particular, the circumstances prevailing at thistime and assumptions as to the expected future developmentof the global and industry specific environment were used toestimate the Company’s future business performance. Where
these conditions develop differently than assumed, andbeyond the control of the Company, the actual figures may
differ from those anticipated. In such cases, the assumptions,and if necessary, the carrying amounts of the assets andliabilities concerned, are adjusted accordingly.
These estimates and underlying assumptions are reviewed
on an ongoing basis. Revisions to accounting estimates arerecognised in the period in which the estimate is revised if the30

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revision affects only that period, or in the period of the revisionand future periods if the revision affects both current andfuture periods.
Subjects that involve assumptions and estimates and that havea significant influence on the amounts recognised in EADS’
Consolidated Financial Statements are further described or are
disclosed in the respective Notes mentioned below.

Revenue recognition on construction contracts —EADS conducts a significant portion of its business underconstruction contracts with customers, for example theA400M programme. The Group generally accounts forconstruction projects using the percentage-of-completion
method, recognising revenue as performance on a contract
progresses measured either on a milestone or on a cost-tocost basis depending on contract terms. This method placesconsiderable importance on accurate estimates at completion
as well as on the extent of progress towards completion. For
the determination of the progress of the construction contract
significant estimates include total contract costs, remaining
costs to completion, total contract revenues, contract
risks and other judgements. Management of the operating
Divisions continually reviews all estimates involved in such
construction contracts and adjusts them as necessary. See
Note 19 “Trade receivables” for further information.
Business combinations — In a business combination, allidentifiable assets, liabilities and contingent liabilities acquired
are recorded at the date of acquisition at their respective fairvalue. One of the most significant estimates relates to thedetermination of the fair value of these assets and liabilities.
Land, buildings and equipment are usually independently
appraised while marketable securities are valued at market
prices. If any intangible assets are identified, depending on thetype of intangible asset and the complexity of determining its
fair value, EADS either consults with an independent externalvaluation expert or develops the fair value internally, using
appropriate valuation techniques which are generally based ona forecast of the total expected future net cash flows. Theseevaluations are linked closely to the assumptions made bymanagement regarding the future performance of the assets
concerned and any changes in the discount rate applied. See
Note 14 “Intangible assets” for further information.
Goodwill impairment test and recoverability of assets —EADS tests at least annually whether goodwill has suffered any
impairment, in accordance with its accounting policies. The
determination of the recoverable amount of a Cash Generating
Unit (CGU) to which goodwill is allocated involves the use of
estimates by management. The outcome predicted by theseestimates is influenced by several assumptions including
for example growth assumptions of CGUs, availability andcomposition of future defence and institutional budgets,foreign exchange fluctuations or implications arising from thevolatility of capital markets. EADS generally uses discounted

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

1

cash flow based methods to determine these values. These
discounted cash flow calculations basically use five-year
projections that are based on the operative plans approved bymanagement. Cash flow projections take into account pastexperience and represent management’s best estimate about
future developments. Cash flows after the planning period are
extrapolated using estimated growth rates. Key assumptions
on which management has based its determination of fair valueless costs to sell and value in use include estimated growth
rates, weighted average cost of capital, tax rates and foreignexchange rates. These estimates, including the methodology
used, can have a material impact on the respective values andultimately the amount of any goodwill impairment. Likewise,
whenever property, plant and equipment and other intangible
assets are tested for impairment, the determination of theassets’ recoverable amount involves the use of estimates bymanagement and can have a material impact on the respective
values and ultimately the amount of any impairment. See
Note 14 “Intangible assets” for further information.

Trade and other receivables — The allowance for doubtful
accounts involves significant management judgement andreview of individual receivables based on individual customer
creditworthiness, current economic trends and analysis ofhistorical bad debts. See Note 19 “Trade receivables” forfurther information.
Employee benefits — The Group accounts for pension andother postretirement benefits in accordance with actuarial
valuations. These valuations rely on statistical and otherfactors in order to anticipate future events. These factors
include key actuarial assumptions including the discount rate,
expected return on plan assets, expected salary increases
and mortality rates. The discount rate assumptions are
determined by reference to yields on high quality corporate
bonds of appropriate duration and currency at the end of
the reporting period. In case such yields aren’t available
discount rates are based on government bonds yields.
Expected returns on plan assets assumptions are determinedconsidering long-term historical returns and asset allocations.
These actuarial assumptions may differ materially from
actual developments due to changing market and economic
conditions and therefore result in a significant change inpostretirement employee benefit obligations and the related
future expense (see Note 25B) “Provisions for retirement
plans” for further information.
Provisions — The determination of provisions, for example
for onerous contracts, warranty costs and legal proceedings
is based on best available estimates. Onerous sales contracts
are identified by monitoring the progress of the contract aswell as the underlying programme and updating the estimateof contract costs, which also requires significant judgement
related to achieving certain performance standards as wellas estimates involving warranty costs. Depending on the size
and nature of our contracts and related programmes, the

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extent of assumptions, judgements and estimates in thesemonitoring processes differs. Especially, the introduction of
new commercial aircraft programmes (such as the A350 XWB)
or major derivative aircraft programmes particularly involves
an increased level of estimates and judgements associatedwith the expected development, production and certification
schedules and expected cost components. These estimatesand judgements are subject to change based on new
information as contracts and related programmes progress.
Furthermore, the complex design and manufacturing
processes of our industry require challenging integration andcoordination along the supply chain including an ongoingassessment of supplier’s assertions which may additionallyimpact the outcome of these monitoring processes. See
Note 25C) “Other provisions” for further information.

Legal contingencies — EADS companies are parties tolitigations related to a number of matters as described in Note 32“Litigation and claims”. The outcome of these matters may havea material effect on the financial position, results of operations
or cash flows of EADS. Management regularly analyses current
information about these matters and provides provisions forprobable contingent losses including the estimate of legal
expense to resolve the matters. Internal and external lawyers areused for these assessments. In making the decision regarding
the need for provisions, management considers the degree ofprobability of an unfavorable outcome and the ability to make asufficiently reliable estimate of the amount of loss. The filing ofa suit or formal assertion of a claim against EADS companiesor the disclosure of any such suit or assertions, does not
automatically indicate that a provision may be appropriate. See
Note 32 “Litigation and claims” for further information.
Income taxes — EADS operates and earns income innumerous countries and is subject to changing tax laws
in multiple jurisdictions within these countries. Significant
judgements are necessary in determining the worldwide
income tax liabilities. Although management believes that it
has made reasonable estimates about the final outcome oftax uncertainties, no assurance can be given that the final
tax outcome of these matters will be consistent with what
is reflected in the historical income tax provisions. Such
differences could have an effect on the income tax liabilities anddeferred tax liabilities in the period in which such determinations
are made. At each end of the reporting period, EADS assesses
whether the realisation of future tax benefits is sufficiently
probable to recognise deferred tax assets. This assessment
requires the exercise of judgement on the part of managementwith respect to, among other things, benefits that could be
realised from available tax strategies and future taxable income,as well as other positive and negative factors. The recorded
amount of total deferred tax assets could be reduced if
estimates of projected future taxable income and benefits fromavailable tax strategies are lowered, or if changes in current tax
regulations are enacted that impose restrictions on the timing or
extent of the Group’s ability to utilise future tax benefits.

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2.1 Basis of presentation

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3. Accounting for the A400M programme
EADS resumed the percentage of completion method basedon milestones for the A400M programme from January 2010
onwards, i.e. A400M related contract revenues and contract
costs are recognised as revenues and expenses respectively
by reference to the stage of completion of the A400M
contract activity at the reporting date.
Overall the A400M flight test programme continues toprogress better than expected. The ongoing technicalprogress of the A400M programme – reflected in the firstflight of the fourth test aircraft on 20 December 2010, a
successful test flight programme logging more than 1,000
flight test hours by the end of December 2010 as well as
the first paratrooper jump through the ramp and paratrooper
doors – resulted in the recognition of A400M related revenuesof € 1,043 million including also a partial utilisation of the
A400M loss provision of € -157 million.
On 5 November 2010 EADS / Airbus / AMSL concluded thenegotiations with OCCAR and the seven A400M launchcustomer nations with an agreement further detailing theprinciple agreement (“A400M Understanding”) reached in
March 2010. The revised OCCAR agreement is subject to
ratification by each customer nation before final adoption.
While the overall economics of the “A400M Understanding”
remain unchanged, the government payments are now more

back-loaded than previously expected. Negotiations on therelated export levy facility (ELF) scheme are to be finalisedwith some nations in line with the “A400M Understanding”(following approval in France and Germany) as well as
negotiations with certain suppliers (see Note 32 “Litigationand claims”, Note 33 “Commitments and contingencies” andNote 40 “Events after the reporting date” for more details).
The full receipt of the € 1.5 billion ELF is conditional to thefinalisation of the ELF contract negotiations with all OCCAR
nations targeted for completion in 2011.
The A400M loss provision as at 31 December 2010
amounting to € 2,344 million (prior year-end: € 2,464 million)
has been updated based on the best estimate of EADS’management, reflecting the current status of the elements of
the ongoing negotiations between AMSL and OCCAR / thelaunch customer nations as of 31 December 2010 as well as
the expected total costs of the A400M programme updated
in December 2010 with reference to 174 firm aircraft orders.
As previously stated, a further reassessment of the revenue
assumptions could have a significant impact on future results.
During 2010 the international market interest in the A400M
airlifter has increased, especially reflected during the RIAT and
Farnborough Air Show 2010 by various delegations.

4. Scope of consolidation
Perimeter of consolidation (31 December 2010) — The
Consolidated Financial Statements include, in addition to
EADS N.V.:

tt 2010: 190 (2009: 189) companies which are fully
consolidated;
tt 2010: 41 (2009: 39) companies which are proportionately
consolidated;

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tt 2010: 19 (2009: 19) investments in associates accounted
for using the equity method.
The number of investments in associates only comprises therespective parent company.
Significant subsidiaries, associates and joint ventures arelisted in the Appendix entitled “Information on principal
investments”.

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

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5. Acquisitions and disposals
A)

ACQUISITIONS

On 3 December 2010, Astrium GmbH acquired JenaOptronik GmbH, Jena (Germany), one of the international
leading providers of space sensors and opto-electronic
instruments. The acquisition of Jena-Optronik willcomplement Astrium’s optical expertise in Germany andenhance its reputation in the development and production ofsophisticated earth observation satellites and sub-systems forspace applications.

The following table summarises the consideration transferred, the preliminary fair value of the identifiable assets acquired andliabilities assumed as at the date of acquisition and the corresponding carrying amounts immediately before the acquisition:
Fair value recognised on acquisition

Carrying value

Property, plant and equipment

3

3Inventories

99Trade receivables and other assets

14

14(In € million)

Cash and cash equivalents

7

7

33

33

Provisions

(3)

(3)

Trade liabilities

(5)

(5)

Other liabilities

(14)

(14)

(22)

(22)

Net assets acquired

11

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

34

Total consideration paid in cash

45

The fair value as well as the gross amount of the tradereceivables amount to € 14 million. None of the tradereceivables has been significantly impaired and it is expectedthat the full contractual amounts can be collected.

Acquisition related costs amounting to € 0.5 million have been
excluded from the consideration transferred and have beenrecognised as an expense in the current year, within the otherexpenses line item in the consolidated income statement.

The preliminary goodwill of € 34 million includes a control
premium as well as amounts in relation to expected synergies
arising from the combination with the existing satellite
equipment and sub-system business of Astrium, joint future
market developments as well as the assembled workforce ofJena-Optronik. None of the goodwill recognised is expected
to be deductible for income tax purposes.

During 2010, ATLAS Elektronik GmbH, a joint venture of
EADS and ThyssenKrupp finalised the purchase priceallocation of “Synge” without material adjustments comparedto the preliminary purchase price allocation in 2009.

From the date of acquisition, Jena-Optronik has contributed€ 3 million of revenues and € 0.1 million to the profit for theperiod of the Group. Had this business combination beeneffected at the beginning of the year, EADS revenues would
have been € 45,784 million and the profit for the period of
the Group would have been € 575 million. EADS considers
these ‘pro-forma’ figures to represent an initial approximate
measure of the performance of the combined Group on anannualised basis and to provide an initial reference point forcomparisons in future periods.

B)

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

DISPOSALS

Cassidian Air Systems sold its shares in ASL Aircraft Services
Lemwerder GmbH per 31 December 2010, to SGL Rotec
GmbH & Co. KG, which intends to establish a production line
for rotor blades at Lemwerder site. The programme related
assets and liabilities of the Eurofighter, Tornado, A400M andC160 programmes were transferred to Premium Aerotec
GmbH.

EADS FINANCIAL STATEMENTS 2010

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2.2 Notes to the Consolidated Income Statements (IFRS)

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The cash flows of the disposed shares as well as the capital gain on sale were as follows:2010(In € million)

Consideration received in cash and cash equivalents

12

Total selling price including contingent consideration

12

Net assets disposed of(1)

Capital gain

11

Overall, the ASL transactions had a negative EBIT impact of € -4 million in 2010, thereof € -15 million are related to restructuringcosts.
The assets and liabilities of the Filton site, classified as a disposal group held for sale in EADS’ Consolidated Financial
Statements as of 31 December 2008, were sold with transfer of titles on 5 January 2009 to GKN. The cash flows of thedisposed assets and liabilities of Filton as well as the capital gain on sale were as follows:(In € million)

2009

Consideration received in cash and cash equivalents

103

Total selling price including contingent consideration

126

Net assets disposed of(93)

Capital gain

33

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

2.2 Notes to the Consolidated Income
Statements (IFRS)
6. Segment Reporting
Through the end of 2010, the Group operated in fivereportable segments which reflect the internal organisationaland management structure according to the nature of the
products and services provided.

tt Airbus Commercial — Development, manufacturing,marketing and sale of commercial jet aircraft of more than
100 seats; aircraft conversion.
tt Airbus Military — Development, manufacturing,marketing and sale of military transport aircraft and special
mission aircraft. Airbus Military integrates the former
Military Transport Aircraft Division (MTAD) and Airbus
A400M operations.
The above mentioned reportable segments Airbus
Commercial and Airbus Military form the Airbus Division.

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tt Eurocopter — Development, manufacturing, marketingand sale of civil and military helicopters; provision ofhelicopter related services.
tt Astrium — Development, manufacturing, marketing andsale of satellites, orbital infrastructures and launchers;
provision of space services.
The Defence & Security Division was renamed to Cassidian in
the third quarter 2010:

tt Cassidian — Development, manufacturing, marketingand sale of missiles systems, military combat aircraft
and training aircraft; provision of defence electronics
and of global security market solutions such as
integrated systems for global border security and securecommunications solutions and logistics; training, testing,engineering and other related services.

2

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2.2 Notes to the Consolidated Income Statements (IFRS)

1

The following tables present information with respect to theGroup’s business segments. “Other Businesses” mainlycomprises the development, manufacturing, marketing andsale of regional turboprop aircraft, aircraft components as wellas the Group’s activities managed in the US.

A)

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Consolidation effects, the holding function of EADSHeadquarters and other activities not allocable to
the reportable segments are disclosed in the column“HQ / Conso.”.

BUSINESS SEGMENT INFORMATION FOR THE YEAR ENDED 31 DECEMBER 2010(In € million)

Total revenues
Internal revenues
Revenues
Segment result
thereof impairment charge forintangible assets and property,
plant and equipment
thereof additions to otherprovisions (see Note 25C)
Share of profit from associates
accounted for under the equity
methodProfit before finance costs
and income taxes
Exceptional depreciation / disposal
EBIT pre-goodwill impairment
and exceptionals(see definition in Note 6C)

AirbusCommercial

27,673

AirbusMilitary Eurocopter

2,684

4,830

Astrium Cassidian

5,003

5,933

Other
Businesses

Total
Segments

1,182

47,305

HQ / Conso. Consolidated

29

47,334

(606)

(196)

(439)

(18)

(186)

(137)

(1,582)0(1,582)

27,067

2,488

4,391

4,985

5,747

1,045

45,72329

45,752

284

11

182

279

441

25

1,222

(162)

1,060

0

0

0

0

0

0

0

0

0

(310)

(124)

(512)

(194)

(631)

(12)

(1,783)(125)(1,908)

(20)

8

0

0

9

0

(3)

130

127

264

19

182

279

450

25

1,219

(32)

1,187

27

2

1

4

7

0

41

3

44

291

21

183

283

457

25

1,260

(29)

1,231

Total finance costs(371)

Income tax expense(244)

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

572

553

Non-controlling interests

19

OTHER INFORMATION
Identifiable segment assets(incl. goodwill) (1)Thereof goodwill
Investments in associates

30,930

3,649

6,934

7,459

10,064

1,067

60,103(47)

60,056

6,425

12

117

644

2,533

64

9,795

14

9,809

9

0

2

3

117

3

134

2,317

2,451

Segment liabilities (2)29,692

6,774

6,609

7,978

10,812817

62,682

144

62,826

Thereof provisions (see Note 25)
Capital expenditures(excl. leased assets)

5,265

2,383

1,741

822

2,688

131

13,030949

13,979

1,419

64

166

339

212

20

2,220

30

2,250

959

35

91

218

141

25

1,469

113

1,582

2,311

10

189

85

251

10

2,856

83

2,939

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

EADS FINANCIAL STATEMENTS 2010

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2.2 Notes to the Consolidated Income Statements (IFRS)

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B)

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BUSINESS SEGMENT INFORMATION FOR THE YEAR ENDED 31 DECEMBER 2009(In € million)

AirbusCommercial

AirbusMilitary Eurocopter

Astrium Cassidian

Other
Businesses

Total
Segments

HQ / Conso. Consolidated

Total revenues

26,370

2,235

4,570

4,799

5,363

1,096

44,43328

44,461

Internal revenues

(585)

(227)

(339)

(13)

(335)

(140)

(1,639)0(1,639)25,785

2,008

4,231

4,786

5,028

956

42,79428

42,822382(1,757)

262

257

424

21

(411)

(84)

(495)

(45)

0

0

0

(8)

0

(53)

(10)

(63)

(122)

(2,016)

(505)

(245)

(663)

(43)

(3,594)(117)(3,711)

(19)

1

0

0

13

0

(5)

120

115

363

(1,756)

262

257

437

21

(416)

36

(380)

23

2

1

4

12

0

42

16

58

386

(1,754)

263

261

449

21

(374)

52

(322)

Revenues
Segment result
thereof impairment charge forintangible assets and property,
plant and equipment
thereof additions to otherprovisions (see Note 25C)
Share of profit from associates
accounted for under the equity
methodProfit (loss) before financecosts and income taxes
Exceptional depreciation / disposal
EBIT pre-goodwill impairment
and exceptionals(see definition in Note 6C)
Total finance costs(592)

Income tax benefit

220

Loss for the period
Attributable to:Equity owners of the parent(Net loss)(752)

Non-controlling interests

11

OTHER INFORMATION
Identifiable segment assets(incl. goodwill) (1)Thereof goodwill
Investments in associates(763)

32,724

2,725

6,441

7,050

9,716

1,064

59,72054

59,774

6,425

12

111

604

2,503

60

9,715

26

9,741

20

0

0

3

108

3

134

2,380

2,514

Segment liabilities (2)27,344

6,138

5,516

7,440

10,753831

58,022393

58,415

Thereof provisions (see Note 25)
Capital expenditures(excl. leased assets)

5,384

2,361

1,469

795

2,820

158

12,9871,033

14,020

1,254

80

149

272

157

29

1,941

16

1,957

996

174

86

228

150

31

1,665

161

1,826

2,293

13

164

74

216

6

2,766

59

2,825

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

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

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EADS FINANCIAL STATEMENTS 2010

Capital expenditures represent the additions to property, plantand equipment and to intangible assets (excluding additions
to goodwill of € 34 million in 2010 and € 16 million in 2009; forfurther details see Note 6E) “Capital expenditures”).

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2.2 Notes to the Consolidated Income Statements (IFRS)

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Back to ContentsC) EBIT PRE-GOODWILL IMPAIRMENT AND EXCEPTIONALSEADS 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, theAirbus Combination and the formation of MBDA, as well as impairment charges thereon. EBIT pre-goodwill impairment andexceptionals is treated by management as a key indicator to measure the segments’ economic performances.
(In € million)

2010

2009

2008

Profit (loss) before finance costs and income taxes

1,187

(380)

2,772

Exceptional depreciation / disposal
EBIT pre-goodwill impairment and exceptionals

44

58

58

1,231

(322)

2,830

2

D) REVENUES BY DESTINATION(In € million)

2010

2009

2008

Germany

5,381

5,018

5,330

France

4,422

3,807

3,697

United Kingdom

2,280

2,983

2,654

Spain

1,018

1,322

1,456

Other European Countries

8,301

8,310

5,741

Asia / Pacific

11,335

8,618

10,747

Middle East

6,247

3,857

2,497

North America

3,507

6,138

7,799

Latin America

2,537

1,893

2,708

Other Countries

724

876

636

Consolidated

45,752

42,82243,265

2010

2009

2008

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

E)

CAPITAL EXPENDITURES(In € million)

France

882

1,001

792

Germany

693

509

566

United Kingdom

385

228

279

Spain

228

133

165

Other Countries

62

86

35

2,250

1,957

1,837

Capital expenditures excluding leased assets
Leased assets
Capital expenditures

270

9

0

2,520

1,966

1,837

EADS FINANCIAL STATEMENTS 2010

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2.2 Notes to the Consolidated Income Statements (IFRS)

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PROPERTY, PLANT AND EQUIPMENT BY GEOGRAPHICAL AREA

(In € million)

2010

2009

2008

France

4,698

4,448

4,154

Germany

3,846

3,635

3,576

United Kingdom

2,535

2,376

2,198

Spain

1,210

1,071

1,012

379

275

338

12,66811,805

11,278Other Countries
Property, plant and equipment by geographical area

Property, plant and equipment split by geographical area excludes leased assets (2010: € 759 million, 2009: € 703 million and2008: € 878 million).

7. Revenues
Revenues in 2010 reach € 45,752 million compared to€ 42,822 million in 2009 and € 43,265 million in 2008.
Revenues are mainly comprised of sales of goods andservices, as well as of revenues associated with construction
contracts accounted for under the percentage-of-completion
method, contracted research and development andcustomer financing revenues. In 2010, the revenues compriserevenues from services including the sale of spare parts of€ 5,113 million compared to € 5,106 million in 2009.
For a breakdown of revenues by business segment andgeographical area, refer to Note 6 “Segment Reporting”.

Detail of Revenues:
2010

2009

2008

45,752

42,82243,265

Thereof revenues from the delivery of goods & services

35,76434,181

33,951

Thereof revenues from construction contracts

9,716

8,377

8,852

(In € million)

Total revenues

Revenues of € 45,752 million (2009: € 42,822 million)
increase by 7%. Airbus Commercial delivered more aircraft(510, thereof 508 with revenue recognition versus 498 in
the previous year) and Cassidian, Eurocopter and Astrium
contributed also positively. Airbus Military includes revenues
related to the A400M programme of € 1,043 million

recognised under the percentage of completion method
based on milestones (in 2009: € 499 million resulting from theapplication of the early stage accounting method; see Note 3“Accounting for the A400M programme”). Positive volume
and mix effects in Airbus Commercial were partly offset by an
unfavorable US dollar impact.

8. Functional costs
Inventories recognised as an expense during the periodamount to € 32,840 million (2009: € 30,274 million; 2008:€ 30,267 million).
Further included in cost of sales are amortisation expenses offair value adjustments of non-current assets in the amount of38

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EADS FINANCIAL STATEMENTS 2010

€ 44 million (2009: € 56 million; 2008: € 52 million); these are
related to the EADS merger, the Airbus Combination and theformation of MBDA.

2

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2.2 Notes to the Consolidated Income Statements (IFRS)

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Personnel expenses are:(In € million)

2010

2009

2008

Wages, salaries and social contributions

9,625

9,094

9,030

Net periodic pension cost (see Note 25B)

452

424

366

10,077

9,518

9,396

Total

The Gross Margin increases by € 1,785 million to€ 6,224 million compared to € 4,439 million in 2009. This
improvement is mainly related to onerous contract charges
incurred on the A400M and A380 programmes in 2009(€ 2.1 billion). Unfavorable foreign exchange rate effects are

partly compensated by operational improvement at Airbus
and Astrium.
On the other hand, in particular negative foreign exchange
rate effects at Airbus Commercial weigh on the gross margin.

9. Research and development expenses
Research and development expenses in 2010 amountto € 2,939 million compared to € 2,825 million in 2009 and€ 2,669 million in 2008, primarily reflecting R&D activities atAirbus Commercial. Most of the increase was attributable
to higher expenses at Airbus Commercial, Cassidian andEurocopter, due to the development of the A350 XWB
programme, various helicopter and air systems programmes,
partly compensated by a decrease for the A380 and theA330 freighter programmes.

10. Other income(In € million)

2010

2009

2008

Other income

171

170

189

Thereof income from sale of fixed assets

33

42

21

Thereof rental income

13

22

26

Thereof release of allowances

1

3

13

11. Share of profit from associates accounted for under the equity
method and other income from investments(In € million)

2010

2009

2008

Share of profit from associates

127

115

188

Other income from investments

18

19

23

Total

145

134

211

The share of profit from associates accounted forunder the equity method in 2010 is mainly derived fromthe result of the equity investment in Dassault Aviation of€ 130 million (2009: € 120 million; 2008: € 169 million). For the
first semester 2010, Dassault Aviation published a net incomeof € 141 million which has been recognised by EADS in its

half year financial statements 2010 with its share of 46.32%
amounting to € 65 million. Since for the second half-year2010 no published financial information was available yet from
Dassault Aviation at the date of authorisation for issue of the2010 Consolidated Financial Statements, EADS uses a best
estimate for the net income of Dassault Aviation.

EADS FINANCIAL STATEMENTS 2010

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

1Furthermore, EADS’ net income includes an IFRS catch‑up
adjustment in the amount of € 3 million for its equity
investment in Dassault Aviation.
For the first semester 2009, Dassault Aviation published a net
income of € 118 million which was recognised by EADS with

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its share of 46.32% amounting to € 55 million. Since for thesecond half-year 2009 no published financial information wasavailable from Dassault Aviation at the date of authorisation
for issue of 2009 Consolidated Financial Statements, EADS
used a best estimate for the net income of Dassault Aviation.

12. Total finance costs
Interest result in 2010 comprises interest income of€ 316 million (2009: € 356 million; 2008: € 617 million) andinterest expense of € -415 million (2009: € -503 million; 2008:€ -581 million). Included in interest income is the return on
cash and cash equivalents, securities and financial assets
such as loans and finance leases. Interest expense includes
interests on financing liabilities and on European Government
refundable advances of € -132 million (2009: € -235 million;
2008: € -255 million) which are positively impacted by thereassessment of relating future cash outflows.

EADS separated derivatives with a nominal amount of
USD 1.4 billion, embedded in supplier host contracts
which relate to the A400M programme. Changes in the fairvalue of these embedded derivatives until 30 June 2010
were recognised in other financial result for the amountof € -178 million. Starting 1 July 2010, these derivatives
were designated as hedging instruments in a cash flow
hedge relationship with the corresponding fair value gains
or losses since that date recorded in OCI for the amount of€ +88 million.

Other financial result in 2010 amounts to € -272 million (in2009: € -445 million and in 2008: € -508 million) and mainly
includes charges from the negative revaluation of financial
instruments (€ -184 million, 2009: € -147 million) and theunwinding of discounts by € -176 million (2009: € -307 million;
2008: € -230 million), partly compensated by the positive
impact from foreign exchange translation of monetary itemsof € +71 million (2009: € +54 million). Included in 2008 were
the negative impact of the reassessment of counterparty riskin the amount of € -49 million and negative foreign exchange
rate effects of Airbus in the amount of € -28 million.

As a result from the refinement of its hedging policy in 2010,
EADS presents the fair value gains or losses of certain
foreign exchange rate derivatives, which are not part ofa formal hedge accounting relationship, in EBIT to betterreflect the natural offset these derivatives provide to theremeasurement gains or losses of specific foreign currency
balance sheet items (‘natural hedge’). The foreign currency
remeasurement impact of these derivatives recorded in EBIT
instead of in financial result amounts to € +125 million as of
31 December 2010.

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

2010

2009

2008

Current tax expense

(259)

(208)

(354)

15

428

(349)

(244)

220

(703)

Deferred tax benefit / (expense)
Total

The Group’s parent company, EADS N.V., legally seated in
Amsterdam, The Netherlands, applies Dutch tax law using
an income tax rate of 25.5% for 31 December 2010, 2009
and 2008. In 2010, a new tax law was enacted reducing theincome tax rates from 2011 onwards to 25.0%.

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EADS FINANCIAL STATEMENTS 2010

Deferred tax assets and liabilities for the Group’s French
subsidiaries were calculated at 31 December 2010, 2009
and 2008 using the enacted tax rate of 34.43% for temporary
differences. The French corporate tax rate in effect was 33
1 / 3% plus a surcharge of 3.3% (“contribution sociale”).

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

1Regarding German subsidiaries, the German federal
corporate tax rate amounts to 15%. In addition there is asurcharge (“Solidaritätszuschlag”) of 5.5% on the amountof federal corporate taxes. In addition to corporate taxation,
the trade taxes amount to 14.2%. In aggregate, the enacted
tax rate which has been applied to German deferred taxes
amounts to 30% in 2010, 2009 and 2008.

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With respect to the Spanish subsidiaries, the corporate
income tax rate amounts to 30% in 2010, 2009 and 2008.
All other foreign subsidiaries apply their national tax rates,
among others United Kingdom with 27% (2009 and 2008: 28%).

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

2010

2009

2008

Profit (loss) before income taxes

816

(972)

2,300

* Corporate income tax rate

25.5%

25.5%

25.5%

Expected benefit (expense) for income taxes

(208)

248

(587)

Effects from tax rate differentials

(53)

122

(125)

Income from investments / associates

42

48

81

Tax credit for R&D expenses

59

54

51

Change of tax rate

(1)

0

0

Change in valuation allowances

(73)

(236)

(113)

Non-deductible expenses and tax-free income

(5)

(12)

(14)

Other
Reported tax benefit (expense)

The change in valuation allowances reflects the updated
assessment regarding the recoverability of the deferred tax
assets for a tax paying entity in the foreseeable future. In
2009, the change in valuation allowance is mainly due to
unexpected write downs of non recoverable tax assets within
Airbus.

(5)

(4)

4

(244)

220

(703)

Deferred income taxes are the result of temporary differences
between the carrying amounts of certain assets and liabilities
in the financial statements and their tax bases. Future tax
impacts from net operating losses and tax credit carryforwards are also considered in the deferred income tax
calculation.

EADS FINANCIAL STATEMENTS 2010

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2.2 Notes to the Consolidated Income Statements (IFRS)

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Deferred income taxes as of 31 December 2010 are related to the following assets and liabilities:
Movement
through equity

31 December 2009

Movement throughincome statement

31 December 2010

Tax assets

Taxliabilities

OCI /IAS 19Others (1)R&D tax
credits

Deferredtax benefit(expense)

Intangible assets

16

(207)

0

0

0

(80)

10

(281)

Property, plant and equipment
Investments and other long-term financial
assets

220

(982)

0

24

0

29

228

(937)

237

(37)

9

0

0

39

331

(83)

Inventories

912

(171)

0

1

0

226

1,108

(140)

Receivables and other assets

116(1,501)

189

2

0

295

740

(1,639)Prepaid expenses

15

(3)

0

0

0

(4)

8

0

Provision for retirement plans

653

0

97

0

0

(45)

877

(172)

1,801

(106)

0

0

0

31

1,888

(162)

Liabilities

648

(733)

801

11

0

(755)

613

(641)

Deferred income
Net operating loss and tax credit carryforwards
Deferred tax assets / (liabilities)
before offsetting

319

0

0

6

0

(144)

181

0

1,521

0

0

33

8

496

2,058

0

6,458

(3,740)

1,096

77

8

88

8,042

(4,055)

Valuation allowances on deferred tax assets

(813)

0

0

(46)

0

(73)

(932)

0

Set-off(2,989)2,989(2,860)2,860

Net Deferred tax assets / (liabilities)

2,656

(751)

4,250

(1,195)(In € million)

Other provisions

1,096

31

8

15

Tax assets Tax liabilities(1) “Others” mainly comprises foreign exchange rate effects.

Deferred income taxes as of 31 December 2009 are related to the following assets and liabilities:
Movement
through equity

31 December 2008

Movement throughincome statement

31 December 2009

Tax assets

Taxliabilities

OCI /IAS 19Intangible assets

14

(200)

0

0

0

(5)

16

(207)

Property, plant and equipment
Investments and other long-term financial
assets

137

(983)

0

(9)

0

93

220

(982)

274

(8)

0

0

0

(66)

237

(37)

Inventories

830

(98)

0

(4)

0

13

912

(171)

Receivables and other assets

171(1,253)

(82)

0

0

(221)

116

(1,501)

1

(15)

0

0

0

26

15

(3)

453

0

112

0

0

88

653

0

(In € million)

Prepaid expenses
Provision for retirement plans

Others (1)R&D tax
credits

Deferredtax benefit(expense)

Tax assets Tax liabilities

Other provisions

1,409

(131)

0

11

0

406

1,801

(106)

Liabilities

1,037

(764)

(411)

8

0

45

648

(733)

341

(24)

0

4

0

(2)

319

0

1,174

0

0

50

10

287

1,521

0

5,841

(3,476)

(381)

60

10

664

6,458

(3,740)

0

(15)

0

(236)

Deferred income
Net operating loss and tax credit carry forwards
Deferred tax assets / (liabilities)
before offsetting
Valuation allowances on deferred tax assets

(562)

0

Set-off(2,523)

2,523

Net Deferred tax assets / (liabilities)

2,756

(953)

(1) “Others” mainly comprises foreign exchange rate effects.

42

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EADS FINANCIAL STATEMENTS 2010

(381)

45

10

428

(813)

0

(2,989)

2,989

2,656

(751)

2

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

1

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

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Companies in deficit situations in two or more subsequent
years recorded a total deferred tax asset balance of€ 811 million (in 2009: € 692 million). Assessments showthat these deferred tax assets will be recovered in future
through either (i) own projected profits, or (ii) profits of othercompanies integrated in the same fiscal group (“regime
integration fiscal” in France, “steuerliche Organschaft” inGermany) or (iii) via the “loss surrender-agreement” in GreatBritain.

2

Deferred taxes on Net Operating Losses and Tax Credit carry forwards:(In € million)

FranceGermany

Spain

UK

Netherlands

Othercountries

31 December
2010

31 December
2009

Net Operating Losses (NOL)

1,711

1,500

141

2,416

3

29

5,800

3,955

Trade tax loss carry forwards

0

1,490

0

0

0

0

1,490

1,093

Tax credit carry forwards

0

0

312

0

0

3

315

306

Tax effect

589

448

354

652

1

14

2,058

1,521

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

(12)

(32)

(116)

(493)

0

0

(653)

(508)

577

416

238

159

1

14

1,405

1,013

NOLs, capital losses and trade tax loss carry forwards are indefinitely usable in France, Germany and in Great Britain. In Spain,
NOLs and tax credit carry forwards expire after 15 years. The first tranche of tax credit carry forwards (€ 2 million) will expire in2016. In the Netherlands, NOLs and tax credit carry forwards expire after nine years.
Roll forward of deferred taxes:(In € million)

2010

2009

Net deferred tax asset beginning of the year

1,905

1,803

Deferred tax benefit (expense) in income statement

15

428

Deferred tax recognised directly in AOCI (IAS 39)

999

(493)

Variation of Defined benefit plan actuarial gains

97

112

Others

39

55

3,055

1,905

2010

2009

Net deferred tax asset at year end

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

Available-for-sale investments

(18)

(27)

Cash flow hedges

629

(361)

468

371

1,079

(17)

Defined benefit plan actuarial losses
Total

EADS FINANCIAL STATEMENTS 2010

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

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2.3 Notes to the Consolidated Statementsof Financial Position (IFRS)
14. Intangible assets
A schedule detailing gross values, accumulated depreciation and net values of intangible assets as of 31 December 2010 is asfollows:

Cost
Balance at
1 January
2010

Exchangedifferences

Goodwill

10,85941

340Capitalised development costs

1,052

6

145

0

(In € million)

Additions

Changes in
consolidation
scope

Disposals

Balance at
31 December
2010

0

0

10,934

32

(1)

1,234

Reclassification

Other intangible assets

1,694

12

192

1

18

(62)

1,855

Total

13,605

59

371

1

50

(63)

14,023

Balance at
1 January
2010

Exchangedifferences

Amortisation
chargeChanges in
consolidation
scope

Disposals

Balance at
31 December
2010

Amortisation(In € million)

Goodwill
Capitalised development costs

Reclassification(1,118)

(7)

0

0

0

0

(1,125)

(255)

(1)

(34)

0

1

1

(288)

Other intangible assets(1,172)

(4)

(185)

(1)

(2)

53

(1,311)

Total(2,545)

(12)

(219)

(1)

(1)

54

(2,724)

Net book value(In € million)

Goodwill
Capitalised development costs
Other intangible assets
Total

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Balance at
1 January
2010

Balance at
31 December
2010

9,741

9,809

797

946

522

544

11,06011,299EADS FINANCIAL STATEMENTS 2010

2

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

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A schedule detailing gross values, accumulated depreciation and net values of intangible assets as of 31 December 2009 is asfollows:

Cost(In € million)

Goodwill
Capitalised development costs

Balance at
1 January
2009

Exchangedifferences

Additions

Changes in
consolidation
scope

Reclassification

Disposals

Balance at
31 December
2009

10,863

4

16

0

(24)

0

10,859

988

11

53

0

1

(1)

1,052

Other intangible assets

1,522

(1)

195

0

24

(46)

1,694

Total

13,373

14

264

0

1

(47)

13,605

Amortisation
chargeChanges in
consolidation
scope

Disposals

Balance at
31 December
20092

Amortisation(In € million)

Goodwill
Capitalised development costs
Other intangible assets
Total

Balance at
1 January
2009

Exchangedifferences(1,103)

(15)

0

0

0

0

(1,118)

(107)

(1)

(146)

0

(1)

0

(255)

Reclassification

(992)

(2)

(217)

0

(4)

43

(1,172)(2,202)

(18)

(363)

0

(5)

43

(2,545)Net book value(In € million)

Goodwill
Capitalised development costs
Other intangible assets
Total

Balance at
1 January
2009

Balance at
31 December
2009

9,760

9,741

881

797

530

522

11,171

11,060

The regular amortisation charge of capitalised development costs and other intangible assets is mainly accounted for in cost of
sales.

GOODWILL IMPAIRMENT TESTSEADS performed goodwill impairment tests in the fourth quarter of the financial year on Cash Generating Unit (CGU) level where
goodwill is allocated to.
As of 31 December 2010 and 2009, goodwill was allocated to CGUs, which is summarized in the following schedule onsegment level:
AirbusCommercial

AirbusMilitary

Eurocopter

Cassidian

Astrium

Other
Businesses

HQ / Conso.

Consolidated

Goodwill as of 31 December 2010

6,425

12

117

2,533

644

64

14

9,809

Goodwill as of 31 December 2009

6,425

12

111

2,503

604

60

26

9,741

(In € million)

The Cassidian goodwill is allocated to the CGUs Cassidian Air Systems (€ 863 million), Cassidian Systems (€ 712 million), MBDA(€ 655 million) and Cassidian Electronics (€ 303 million).

EADS FINANCIAL STATEMENTS 2010

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

1GENERAL ASSUMPTIONS APPLIED IN
THE PLANNING PROCESSThe discounted cash flow method has been applied as a
primary valuation approach to determine the value in use of
the CGUs. Generally, cash flow projections used for EADS
impairment testing are based on operative planning.
The operative planning which was presented to the Board of
Directors takes into account general economic data derived
from external macroeconomic and financial studies. The
operative planning assumptions reflect for the periods underreview specific inflation rates and future labour expenses inthe European countries where the major production facilities
are located. Regarding the expected future labour expenses,
an increase of 2 to 3% was implied. In addition, futureinterest rates are also projected per geographical market, for
the European Monetary Union, Great Britain and the USA.
With regard to the A400M programme no other specificassumptions have been taken different from those used forthe preparation of these Consolidated Financial Statements(see Note 3 “Accounting for the A400M programme”).
EADS follows an active policy of foreign exchange risk
hedging. As of 31 December 2010, the total hedge portfoliowith maturities up to 2016 amounts to US$ 70 billion andcovers a major portion of the foreign exchange exposure
expected over the period of the operative planning (2011to 2015). The average US$ / € hedge rate of the US$ / €hedge portfolio until 2016 amounts to 1.38 US$ / € andfor the US$ / GBP hedge portfolio until 2016 amounts to
1.64 US$ / GBP. For the determination of the operativeplanning in the CGUs management assumed future exchange
rates of 1.35 US$ / € for 2010 onwards to convert in euro
the portion of future US$ which are not hedged. Foreignexchange exposure arises mostly from Airbus and to a lesser
extent from the other EADS divisions.
The assumption for the perpetuity growth rate used to
calculate the terminal values as of 31 December 2010
has been determined with 1% (previous years: 1%). This
assumption is lower than experienced in past economic
cycles in order to reflect current uncertainty regarding market
developments in the long-term.
The main assumptions and the total of the recoverable
amounts obtained have been compared for reasonablenessto market data.
Key assumptions on which management has based its
determination of value in use include amongst others,
weighted average cost of capital and estimated growth
rates as well as the underlying foreign exchange rates.
These estimates, including the methodology used, can havea material impact on the respective values and hence aresubject to uncertainties.

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AIRBUS COMMERCIAL
The goodwill allocated to Airbus Commercial relates tothe contributions of Airbus Operations Ltd. (UK), Airbus
Operations GmbH (Germany) and Airbus Operation SL(Spain). It has been increased in 2009 by the allocation of
the goodwill from the Cassidian Division attached to theAugsburg plant in the frame of the creation of Premium
AEROTEC GmbH (Germany).
The assessment was based on the following key specificassumptions, which represent management’s current best
assessment as of the date of these Consolidated Financial
Statements:

tt Projected cash flows for the next five years were
presented to EADS Board of Directors in the frame of theoperative plan. This planning scenario takes into accountthe decision to ramp-up the production of the A320
programme to 40 aircraft to be achieved until early 2012
and the LR-programme to 9 aircraft to be achieved until
2012. In the absence of long-term financial reference,
expected cash flows generated beyond the planninghorizon are considered through a terminal value. The
terminal value reflects management’s assessment of anormative operating year based on an outlook of a fullaeronautic cycle over the next decade.
tt Long-term commercial assumptions are based on General
Market Forecast updated in 2010. The development ofmarket share per segment considers enlargement of thecompetition as per current best assessment. Current
market evolutions are considered through sensitivities.
Cash flow projections include all of the estimated costsavings of the Power8 / Power8 Plus programme as well
as non-recurring cost improvement plan and benefits frominitiatives already launched in the frame of “Future EADS”.
tt Cash flows are discounted using a euro weighted average
cost of capital pre-tax (WACC) of 11.2% (in 2009: 12.8%).
tt Carrying value as well as planned cash flows include
impacts from the existing hedge portfolio as per end
December 2010.
With regard to the assessment of the value in use for the
CGU Airbus Commercial, management believes that thelikelihood of a change in the above key assumptions to an
extent that would cause the recoverable amount to fall below
the carrying value is remote.
The recoverable amount is particularly sensitive to thefollowing areas:

tt Change of the euro against the US$: A change by
10 cents would however not imply an impairment charge
in the EADS accounts.
tt Change of the WACC: An increase of 50 basis points inthe WACC would not imply an impairment charge in the
EADS accounts.

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

1

The current positive difference between the recoverable value
and the carrying value of Airbus Commercial’s net assets
indicates that the assessed (negative) impacts of the sum ofthese sensitivities would not imply an impairment charge in
EADS accounts.

AIRBUS MILITARY
For impairment testing purposes, the cash flows have been
discounted using a weighted average cost of capital pre-tax(WACC) of 9.1% (in 2009: 10.2%).
A400M launch order from OCCAR is included as per
assumptions used for the preparation of these Consolidated
Financial Statements (see Note 3 “Accounting for the
A400M programme”). A400M is based on the effect of the
March 2010’s agreement with OCCAR and the Nations as
A400M launch customers.
This adjusted plan is the reference for projected cash flows forthe next five years. Expected cash flows generated beyond
the planning horizon are considered through a terminal value.
The terminal value reflects management’s assessment of anormative operating year.
Value in use of the CGU Airbus Military is above carrying
value, indicating no goodwill impairment for 2010 and 2009.

OTHER SEGMENTS
In order to reflect the different underlying business risks,a segment specific WACC factor has been applied. For
Eurocopter the cash flows were discounted using a weighted
average cost of capital pre-tax (WACC) of 9.1% (in 2009:10.2%), while the calculation for the more defence related
CGUs like Cassidian and Astrium applied a pre-tax WACC
of 8.8% (in 2009: 9.7%). Cash flow projections are based on
operative planning covering a five-year planning period.
For the Cassidian Division, a slight growth in revenues isassumed in the operative planning. This is driven by a strong
order backlog and further key orders expected in the next
years in the domestic market as well as in global markets,
as for example Eurofighter contracts, ramp-up in Unmanned

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Aerial Vehicles (“UAV”), orders for Missile export, Security andCommunication Solutions, Integrated Systems, Electronic
Warfare and Radar business. In spite of additional efforts for
globalisation and product renewal, the Division continuously
expects a strong performance over the operative planning
period thanks to the volume growth and benefiting fromrestructuring efforts to adapt the cost structure to declining
domestic and increasing global business.
The strong order book of the Astrium Division as of
31 December 2010 (including satellites, launchers, ballistic
missiles and military telecom services) supports the positive
revenue development which is assumed for this Division over
the operative planning period. Based on key achievements in2010, like the successful launch of SatcomBW 2, TanDEM-X
and Hylas as well as six successful Ariane 5 launches
and the successful M51 acceptance launch, the planning
period is characterised by business development in telecom
services and Earth observation services and further orderintake in established key areas (e.g. M51, telecom and Earthobservation satellites). The operating margin and the Free
Cash Flow are planned to increase continuously, supported
by existing process improvement programmes.
The goodwill of Other Businesses fully relates to the CGU
EADS North America reflecting the business activities in
the US. The recoverable amount of the CGU EADS North
America exceeds the carrying amount by more than 20%.
The recoverable amounts of all CGUs have exceeded theircarrying amounts, indicating no goodwill impairment for 2010
and 2009.

DEVELOPMENT COSTSEADS has capitalised development costs in the amount of€ 946 million as of 31 December 2010 (€ 797 million as of
31 December 2009) as internally generated intangible assets
mainly for the Airbus A380 programme. The amortisation
for the A380 programme development costs has started
when the aircraft entered the final assembly line, on a unit ofproduction basis.

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15. Property, plant and equipment
Schedules detailing gross values, accumulated depreciation and net values of property, plant and equipment show the following
as of 31 December 2010:

Cost(In € million)

Land, leasehold improvements
and buildings including buildings
on land owned by others
Technical equipment
and machinery
Other equipment, factoryand office equipment

Balance at
1 January
2010

Exchangedifferences

6,838

Additions

Changes in
consolidation
scope

Reclassification

Disposals

Balance at
31 December
2010

28

173

(1)

326

0

7,364

11,868

155

210

(4)

451

(163)

12,517
3,712

3,521

72

437

(1)

(28)

(289)

Construction in progress

1,877

37

1,385

0

(775)

(7)

2,517

Total

24,104

292

2,205

(6)

(26)

(459)

26,110

Balance at
1 January
2010

Exchangedifferences

Additions

Changes in
consolidation
scope

Reclassification

Disposals

Balance at
31 December
2010(2,835)

(9)

(286)

0

(62)

0

(3,192)(6,668)

(72)

(723)

1

10

153

(7,299)(2,049)

(39)

(215)

2

34

75

(2,192)

Depreciation(In € million)

Land, leasehold improvements
and buildings including buildings
on land owned by others
Technical equipment
and machinery
Other equipment, factoryand office equipment
Construction in progress
Total

(44)

0

4

0

40

0

0

(11,596)(120)(1,220)

3

22

228

(12,683)

Net book value(In € million)

Land, leasehold improvements
and buildings including buildings
on land owned by others
Technical equipment
and machinery
Other equipment, factoryand office equipment

Balance at
1 January
2010

Balance at
31 December
2010

4,003

4,172

5,200

5,218

1,472

1,520

Construction in progress

1,833

2,517

Total

12,50813,42748

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Schedules detailing gross values, accumulated depreciation and net values of property, plant and equipment show the following
as of 31 December 2009:

Cost(In € million)

Land, leasehold improvements
and buildings including buildings
on land owned by others
Technical equipment
and machinery
Other equipment, factoryand office equipment

Balance at
1 January
2009

Exchangedifferences

Additions

Reclassification

Disposals

Balance at
31 December
2009

6,626

27

72

209

(96)

6,838

10,784

216

252

769

(153)

11,868
3,521

3,348

8

194

125

(154)

Construction in progress

1,729

43

1,193

(1,065)

(23)

1,877

Total

22,487

294

1,711

38

(426)

24,104

Balance at
1 January
2009

Exchangedifferences

Additions

Reclassification

Disposals

Balance at
31 December
2009(2,620)

(4)

(308)

15

82

(2,835)(5,867)

(114)

(828)

27

114

(6,668)(1,805)

(14)

(244)

(32)

46

(2,049)2

Depreciation(In € million)

Land, leasehold improvements
and buildings including buildings
on land owned by others
Technical equipment andmachinery
Other equipment, factoryand office equipment
Construction in progress
Total

(39)

0

(7)

2

0

(44)

(10,331)(132)(1,387)

12

242(11,596)

Net book value(In € million)

Land, leasehold improvements
and buildings including buildings
on land owned by others
Technical equipment
and machinery
Other equipment, factoryand office equipment

Balance at
1 January
2009

Balance at
31 December
2009

4,006

4,003

4,917

5,200

1,543

1,472

Construction in progress

1,690

1,833

Total

12,156

12,508

EADS FINANCIAL STATEMENTS 2010

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

1

Property, plant and equipment include at
31 December 2010 and 2009, buildings, technical equipment
and other equipment accounted for in fixed assets underfinance lease agreements for net amounts of € 146 million and€ 124 million, net of accumulated depreciation of € 49 millionand € 37 million. The related depreciation expense for 2010was € 10 million (2009: € 8 million; 2008: € 10 million).

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Other equipment, factory and office equipment include
the net book value of “aircraft under operating lease” for€ 759 million and € 703 million as of 31 December 2010
and 2009, respectively; related accumulated depreciation is€ 687 million and € 733 million. Depreciation expense for 2010
amounts to € 31 million (2009: € 49 million; 2008: € 71 million).

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

The corresponding non-cancellable future operating lease payments (not discounted) due from customers to be included
in revenues, at 31 December 2010 are as follows:(In € million)

not later than 201134

later than 2011 and not later than 201582

later than 2015

18

Total

134

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

cost previously recognised in inventory is transferred to“Other equipment, factory and office equipment” anddepreciated over its estimated useful economic life, withthe proceeds received from the customer being recorded
as deferred income (see Note 30 “Deferred income”).

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

31 December 201031 December 2009

579

341

(75)

(70)

Net book value of aircraft under operating lease

504

271

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

255

432

Total Net Book value of aircraft under operating lease

759

703

For details please refer to Note 33 “Commitment and contingencies”.

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

Book value of Investment Property

Historicalcost

Accumulated
depreciation
31 December
2009Book value
31 December
2009

213

(135)

78

As of 31 December 2010, the fair value of the Group’s
investment property amounts to € 81 million (in 2009:€ 86 million). For the purposes of IAS 40 “Investment
property”, the fair values have been determined by using
external appraisal reports or using discounted cash flow

Depreciation
Amortisation

Accumulated
depreciation
31 December
2010Book value
31 December
2010

(1)

(136)

77

projections for estimated rental income less rental expenses.
Related rental income in 2010 is € 8 million (in 2009:€ 10 million) with direct operating expenses amounting to€ 2 million (in 2009: € 2 million).

17. Investments in associates accounted for under the equity
method, other investments and other long-term financial assets
The following table sets forth the composition of investments in associates accounted for under the equity method, otherinvestments and other long-term financial assets:(In € million)

Investments in associates accounted for under the equity method

31 December 201031 December 2009

2,451

2,514

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

415

380

Other long-term financial assets

1,971

1,830

Total

2,386

2,210

111

230

Current portion of other long-term financial assets

Investments in associates accounted for under the equity
method as of 31 December 2010 and 2009, mainlycomprise EADS’ interest in Dassault Aviation (46.32%
at 31 December 2010 and 2009) of € 2,318 million and€ 2,380 million. Since for the second half-year 2010 nofinancial information is available yet from Dassault Aviation
at the date of authorisation for issue of 2010 financial
statements, EADS used a best estimate for the net incomeof the second half year 2010 of Dassault Aviation. In addition
the equity investment income from Dassault Aviation includes
an IFRS catch-up adjustment. The 30 June 2010 equity
components have been used to estimate the 2010 year-end
consolidated equity position of Dassault Aviation.

authorisation for issue of 2009 financial statements, EADS
used a best estimate for the net income of the second halfyear 2009 of Dassault Aviation. Furthermore, the equity
investment income from Dassault Aviation includes an IFRS
catch-up adjustment as well as direct recognitions in equity(AOCI) with regard to restatements for different treatmentsof actuarial gains and losses of pensions. The 30 June 2009
equity components had been used to estimate the 2009 yearend consolidated equity position of Dassault Aviation.
EADS’ 46.32% interest in Dassault Aviation’s market
capitalisation, derived from an observable free float of 3.5%,
amounts to € 2,819 million as of 31 December 2010 (as of
31 December 2009: € 2,462 million).

Since for the second half-year 2009 no financial information
was available from Dassault Aviation at the date of

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The following table illustrates summarised financial information of the EADS investment of 46.32% in Dassault Aviation:
30 June 201031 December 2009

Non-current assets

2,691

2,640

Current assets

2,197

2,465

(In € million)

Share of the associate’s financial position:

Non-current liabilities

125

216

Current liabilities

2,891

2,855

Total equity

1,872

2,034

6 months

12 months

924

1,587

Share of the associate’s revenues and profit:
Net Sales
Net Income
Carrying amount of the investment at 31 December

65

119

31 December 201031 December 2009

2,318

2,380

Further significant associates, being accounted for under the equity method (like Air Tanker, Daher-Socata SA and Patria Oyi),
are stated in aggregate in the following table:
31 December 201031 December 2009

Non-current assets

697

469

Current assets

188

152

Non-current liabilities

735

480

Current liabilities

155

112

Total equity

(5)

29

12 months

12 months

Net Sales

396

417

Net Income

9431 December 201031 December 2009

59

57

(In € million)

Share of the associate’s financial position:

Share of the associate’s revenues and profit:

Carrying amount of the investments at 31 December

A list of major investments in associates and the proportionof ownership is included in Appendix “Information on principal
investments”.
Other investments comprise EADS’ investments in various
non-consolidated entities, the most significant being at
31 December 2010 the participations in AviChina amounting
to € 88 million (2009: € 67 million).

Other long-term financial assets of € 1,971 million (2009:€ 1,830 million) and the current portion of other long-term
financial assets of € 111 million (in 2009: € 230 million)
encompass mainly the Group’s sales finance activities in
the form of finance lease receivables and loans from aircraft
financing. They are reported net of accumulated impairments.
These sales financing transactions are generally securedby the underlying aircraft used as collateral (see Note 33“Commitments and contingencies” for details on sales
financing transactions).

Loans from aircraft financing are provided to customers to finance the sale of aircraft. These loans are long-term and normally
have a maturity which is linked to the use of the aircraft by the customer. The calculation of the net book value is:(In € million)

Outstanding gross amount of loans to customers

31 December 201031 December 2009

558

757

Accumulated impairment

(72)

(67)

Total net book value of loans

486

690

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Finance lease receivables from aircraft financing are as follows:
31 December 201031 December 2009

Minimum lease payments receivables

809

932

Unearned finance income

(78)

(87)

Accumulated impairment

(104)

(91)

Total net book value of finance lease receivables

627

754

(In € million)

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

not later than 2011107

later than 2011 and not later than 2015

480

later than 2015

222

Total

809

Additionally included are € 969 million and € 616 million of other loans as of 31 December 2010 and 2009, e.g. loans toemployees.
No defeased bank deposits have been offset against financing liabilities as of 31 December 2010 (2009: € 306 million).

18. Inventories
Inventories at 31 December 2010 and 2009 consist of the following:(In € million)

31 December 201031 December 2009

Raw materials and manufacturing supplies

1,654

1,736

Work in progress

13,631

13,899Finished goods and parts for resale

1,618

1,804

Advance payments to suppliers

3,959

4,138

Total

20,862

21,577The decrease of work in progress of € -268 million is mainly
driven by Astrium and Airbus Commercial programmes.
The successful ramp-up of Airbus Commercial deliveries
resulted in a reduction of finished goods of € -186 million.
Advance payments provided to suppliers mainly decrease at
Airbus Commercial partly compensated by higher advancepayments made at Eurocopter and EADS North America.
The finished goods and parts for resale before write down
to net realisable value amount to € 2,091 million in 2010(2009: € 2,215 million) and work in progress before write
down to net realisable value amounts to € 14,766 million(2009: € 15,136 million). Write downs for finished goods
and services are recorded when it becomes probable that
total estimated contract costs will exceed total contract
revenues. In 2010, write downs of inventories in the amountof € -249 million (2009: € -593 million) are recognised in
Cost of Sales, whereas reversal of write downs amounts
to € 81 million (2009: € 19 million). The impairment charges
in 2009 for work in progress mainly relate to the A380
programme. At 31 December 2010 € 3,144 million of work inprogress and € 1,177 million of finished goods and parts forresale were carried at net realisable value.

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19. Trade receivables
Trade receivables at 31 December 2010 and 2009 consist of the following:(In € million)

Receivables from sales of goods and services

31 December 201031 December 2009

6,953

5,951

Allowance for doubtful accounts

(321)

(364)

Total

6,632

5,587

The trade receivables increase by € +1,045 million mainly
caused by Airbus (€ +321 million), Eurocopter (€ +263 million),
Cassidian (€ +223 million) and Astrium (€ +211 million).
Trade receivables are classified as current assets. As of
31 December 2010 and 2009, respectively, € 383 millionand € 270 million of trade receivables are not expected to becollected within one year.
In application of the percentage of completion(PoC) method, as of 31 December 2010 an amount of€ 2,829 million (in 2009: € 2,348 million) for construction
contracts is included in the trade receivables net of related
advance payments received.

The aggregate amount of costs incurred andrecognised profits (less recognised losses) to dateamounts to € 45,650 million comparable to € 35,446 million at
year-end 2009.
The gross amount due from customers for construction
work amounts to € 3,973 million (in 2009: € 4,185 million) andrelates to construction contracts where incurred contract
costs plus recognised profits less the sum of recognised
losses exceed progress billings.
The gross amount due to customers amounts to€ 2,500 million (in 2009: € 2,565 million) and corresponds tothe construction contracts whose total of incurred contract
costs plus recognised profits less the sum of recognised
losses and progress billings is negative.

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

2010

2009

Allowance balance at 1 January

(364)

(357)

Utilisations / disposals

3

13

Release / additions

41

(13)

Foreign exchange rate differences
31 December

(1)

(7)

(321)

(364)

Based on historic default rates, the Group believes that no allowance for doubtful accounts is necessary in respect of tradereceivables not past due in the amount of € 5,081 million (in 2009: € 4,391 million).

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20. Other financial assets
Other financial assets at 31 December 2010 and 2009 consist of the following:
31 December 201031 December 2009

Positive fair values of derivative financial instruments

602

1,307

Option premiums

99

32

Others

170

268

Total

871

1,607

Positive fair values of derivative financial instruments

364

937

Receivables from related companies

790

722

(In € million)

Non-current other financial assets

Current other financial assets

Loans

54

41

Others

367

343

Total

1,575

2,043

31 December 201031 December 2009

Prepaid expenses

887

894

Capitalised settlement payments to German Government

70

103

Others

147

179

Total

1,104

1,176

Value added tax claims

805

810

Prepaid expenses

521

507

21. Other assets
Other assets at 31 December 2010 and 2009 consist of the following:(In € million)

Non-current other assets

Current other assets

Others

386

381

Total

1,712

1,698

The capitalised settlement payments to the German Government are related to refundable advances which are amortised
through the income statement (in cost of sales) at the delivery pace of the corresponding aircraft.

EADS FINANCIAL STATEMENTS 2010

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22. Securities
The Group’s security portfolio amounts to € 11,166 millionand € 8,055 million as of 31 December 2010 and 2009,
respectively. The security portfolio contains a non-current
portion of available-for-sale-securities of € 5,035 million (in2009: € 3,702 million) and securities designated at fair value
through profit and loss of € 297 million (in 2009: € 281 million)
as well as a current portion of available-for-sale-securitiesof € 5,834 million (in 2009: € 3,749 million) and securities
designated at fair value through profit and loss of € 0 million(in 2009: € 323 million).
Included in the securities portfolio as of 31 December 2010
and 2009, respectively, are corporate bonds bearing
either fixed rate coupons (€ 9,307 million nominal value;comparably in 2009: € 6,031 million) or floating rate
coupons (€ 1,138 million nominal value; comparably in 2009:€ 1,093 million) as well as Structured Rate Notes (€ 265 million
nominal value; 2009: € 265 million), Money Market Funds(€ 0 million nominal value, 2009: € 323 million) and foreign
currency Funds of Hedge Funds (€ 275 million nominal value;
2009: € 275 million).
With regard to the Consolidated Statements of Cash Flows,in 2010 the change of securities presented in cash used forinvesting activities comprises additions of € -10,751 million
and disposals of € +7,604 million reflecting the investment inlong-term securities.

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

Issued as at 1 January
Issued for ESOP
Issued for exercised options

2010

2009

816,105,061

814,769,112

0

1,358,936

297,66100(22,987)

Issued as at 31 December

816,402,722

816,105,061

Treasury shares as at 31 December(5,341,084)(5,196,450)

Outstanding as at 31 December

811,061,638

810,908,611

Cancelled

EADS’ shares are exclusively ordinary shares with a parvalue of € 1.00. The authorised share capital consists of
3,000,000,000 shares.
On 27 May 2009, the Shareholders’ General Meeting of
EADS renewed the authorisation given to the Board of
Directors to issue shares and to grant rights to subscribe forshares which are part of the Company’s authorised sharecapital, provided that such powers will be limited to 1% of theCompany’s authorised capital from time to time and to limit
or exclude preferential subscription rights, in both cases fora period expiring at the Shareholders’ General Meeting to beheld in 2011. The mentioned powers include without limitation
the approval of share-related long-term incentive plans (suchas stock option, performance and restricted share plans)and employee share ownership plans. They may also include
the granting of rights to subscribe for shares which can be
exercised at a time that may be specified in or pursuant tosuch plans and the issue of shares to be paid up from freely
distributable reserves.

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The Shareholders’ General Meeting on 1 June 2010
renewed the authorisation given to the Board of Directors
for a new period of 18 months from the date of the Annual
General Meeting to repurchase shares of the Company,
by any means, including derivative products, on any stock
exchange or otherwise, as long as, upon such repurchase,
the Company will not hold more than 10% of the Company’s
issued share capital and at a price not less than the nominal
value and not more than the higher of the price of the last
independent trade and the highest current independent bid
on the trading venues of the regulated market of the country
in which the purchase is carried out. This authorisation
supersedes and replaces the authorisation given by the
Annual General Meeting of 27 May 2009.
On 1 June 2010, the Shareholders’ General Meeting alsodecided to deduct the net loss of the fiscal year 2009 of€ -763 million from retained earnings. In 2010 there was no
cash distribution payment. For the fiscal year 2010, the EADS
Board of Directors proposes a cash distribution payment of€ 0.22 per share.

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

1Capital stock comprises the nominal amount of shares
outstanding. The addition to capital stock represents thecontribution for exercised options of € 297,661 (in 2009: € 0,
in 2008: € 14,200) in compliance with the implemented stock
option plans and by employees of € 0 (in 2009: € 1,358,936,
in 2008: € 2,031,820) under the Employee Stock Ownership
Plans. In 2010 the usual Employee Stock Ownership Plan
was replaced by a Free Share Plan, which did not lead toan issuance of new shares (see Note 35B) “Employee Stock
Ownership Plan (ESOP)”).

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Share premium mainly results from contributions in kind in thecourse of the creation of EADS, cash contributions from theInitial Public Offering, capital increases and reductions dueto the issuance and cancellation of shares as well as cash
distributions to EADS N.V. shareholders. In 2010, € 19 million
are reclassified from currency translation adjustments to profit
or loss. Treasury shares represent the amount paid for own
shares held in treasury.

24. Capital Management
EADS seeks to maintain a strong financial profile to safeguard
its going concern, financial flexibility as well as shareholders’and other stakeholders’ confidence in the Group.
As part of its capital management, it is one of EADS’
objectives to maintain a strong credit rating by institutional
rating agencies. This enables EADS to contain the Group’s
cost of capital which positively impacts its stakeholder value(entity value). Next to other also non-financial parameters,
the credit rating is based on factors such as capital ratios,
profitability and liquidity ratios. EADS focuses on keeping
them in a preferable range.
Standard & Poor’s upgraded EADS’ long-term rating on
22 September 2010 to A- (Outlook: stable) and Moody’s
Investors Service reconfirmed the A1 (Outlook: stable) longterm rating of EADS on 24 August 2010. In accordance with
its conservative financial policy it is essential for EADS to
maintain an investment grade rating.
EADS’ management uses a Value Based Management
approach in order to guide the Company towards
management for sustainable value creation. The key elementsof the Value Based Management concept are:

2
EADS developed the following guiding principles with regard
to this value based management approach:Financial value is created if profits exceed the cost of thecapital. The Value Creation is measured through Economic
Profit (EP) as the residual of: net operating profit after tax(NOPAT) after deducting the cost of capital employed (withthe cost of the capital employed being derived from the
Average Capital Employed multiplied with the weighted
average cost of capital (WACC)).
The Group also monitors the level of dividends paid to its
shareholders.
EADS generally satisfies its obligations arising from sharebased payment plans by issuing new shares. In order to avoid
any dilution of its current shareholders out of these sharebased payment plans, EADS has accordingly decided to buyback and cancel its own shares following the decisions of
the Board of Directors and approval of the Annual General
Meeting. Apart from this purpose, EADS generally does nottrade with treasury shares.
EADS complies with the capital requirements underapplicable law and its articles of association.

tt the measurement of value creation,
tt prioritisation of actions based on the financial value drivers
and operational business drivers andtt the assessment of value creation in reference to thecompetition and the industry in total.

EADS FINANCIAL STATEMENTS 2010

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25. Provisions
Provisions are comprised of the following:(In € million)

Provision for retirement plans (see Note 25B)

31 December 201031 December 2009

4,938

5,090

Provision for deferred compensation (see Note 25A)

283

216

Retirement plans and similar obligations

5,221

5,306

Other provisions (see Note 25C)

8,758

8,714

Total

13,97914,020

Thereof non-current portion

8,213

8,137

Thereof current portion

5,766

5,883

As of 31 December 2010 and 2009, respectively,€ 5,037 million and € 5,080 million of retirement plans andsimilar obligations and € 3,176 million and € 3,057 million ofother provisions mature after more than one year.

A)

PROVISIONS FOR DEFERREDCOMPENSATIONThis amount represents obligations that arise if employees
elect to convert part of their remuneration or bonus into an
equivalent commitment for deferred compensation which istreated as a defined benefit post-employment plan.

B)

PROVISIONS FOR RETIREMENT PLANS

When Group employees retire, they receive indemnities as
stipulated in retirement agreements, in accordance withregulations and practices of the countries in which the Group
operates.
French law stipulates that employees are paid retirement
indemnities on the basis of the length of service.
In Germany, EADS has a pension plan (P3) for executive
and non-executive employees in place. Under this plan, theemployer makes contributions during the service period,
which are dependent on salary in the years of contribution
and years of service. These contributions are converted into
components which become part of the accrued pension
liability at the end of the year. Total benefits are calculated asa career average over the entire period of service.
Certain employees that are not covered by the new plan
receive retirement indemnities based on salary earned in
the last year or on an average of the last three years of
employment. For some executive employees, benefits are
depending on final salary at the date of retirement and thetime period as executive. EADS implemented a Contractual
Trust Arrangement (CTA) for EADS’ pension obligation. The
CTA structure is that of a bilateral trust arrangement. Assetsthat are transferred to the CTA qualify as plan assets under
IAS 19.

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In the UK, EADS participates in several funded trusteeadministered pension plans for both executive and nonexecutive employees with BAE Systems being the principal
employer. These plans qualify as multi-employer defined
benefit plans under IAS 19 “Employee Benefits”. EADS’ mostsignificant investments in terms of employees participatingin these BAE Systems UK pension plans are Airbus UK
and MBDA UK. For Airbus, this remains the case evensubsequent to the acquisition of BAE Systems’ 20% minority
interests on 13 October 2006. Participating Airbus UK
employees have continued to remain members in the BAE
Systems UK pension plans due to the UK pension agreement
between EADS and BAE Systems and a change in UK
pensions legislation enacted in April 2006.
Generally, based on the funding situation of the respective
pension schemes, the pension plan trustees determine thecontribution rates to be paid by the participating employers
to adequately fund the schemes. The different UK pension
plans in which EADS investments participate are currently
underfunded. BAE Systems has agreed with the trustees
various measures designed to make good the underfunding.
These include i) regular contribution payments for active
employees well above such which would prevail for fundedplans and ii) extra employers’ contributions.
Due to the contractual arrangements between EADS
and BAE Systems, EADS’ contributions in respect of its
investments for the most significant pension scheme (Main
Scheme) are capped for a defined period of time (until
July 2011 for Airbus UK and until December 2007 for MBDA
UK). Contributions exceeding the respective capped amounts
are paid by BAE Systems. EADS is therefore neither exposed
to increased regular contribution payments resulting from thepension plans’ underfunding nor to a participation in extra
contribution payments during the period of the contribution
caps. Even after the expiry of the contribution caps theunique funding arrangements between BAE Systems and
EADS create a situation for EADS different from common UK
multi-employer plans with special regulations limiting regular2

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

1

contributions that have to be paid by Airbus UK and MBDA
UK to rates applicable to all participating employers.
Based on detailed information about the different multiemployer pension schemes which BAE Systems has
started to share since 31 December 2006, EADS is able
to appropriately and reliably estimate the share of its
participation in the schemes, i.e. its share in plan assets,
defined benefit obligations (DBO) and pension costs. The
information enables EADS to derive keys per plan to allocate
for accounting purposes an appropriate proportion in plan
assets, defined benefit obligations and pension costs to its
UK investments as of 31 December 2010 and 2009, taking
into account the impact of the capped contributions as well
as future extra contributions agreed by BAE Systems with the

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Trustees. Therefore, EADS accounts for its participation in
BAE Systems’ UK defined benefit schemes under the defined
benefit accounting approach in accordance with IAS 19.
In 2010, the share of Airbus in BAE Systems’ main schemesamounts to 17.88% (in 2009: 17.41%). The impact of thischange is mainly reflected in actuarial gains and losses of theperiod.
Actuarial assessments are regularly made to determine theamount of the Group’s commitments with regard to retirement
indemnities. These assessments include an assumption
concerning changes in salaries, retirement ages and longterm interest rates. It comprises all the expenses the Groupwill be required to pay to meet these commitments.

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

Assumptions in %Euro-countries (1)

EADS UK

BAE Systems UK

31 December

31 December

31 December

2010

2009

2008

2010

2009

2008

2010

2009

2008

4.7-4.75

5.25-5.3

5.6-5.85

5.4

5.7

6.5

5.5

5.7

6.3

Rate of compensation increase

3.0-3.5

2.75-3.5

3.0-3.5

4.0

4.1

4.1

4.4

4.5

3.9

Inflation rate

1.75-2.0

1.75-2.0

1.8-2.25

3.3

3.5

3.0

3.4

3.5

2.9

6.5

6.5

6.5

5.8

5.8

5.8

6.9

7.1

7.1

Discount rate

Expected return on plan assets(1) Euro-countries comprise Germany and France respectively.

The amount recorded as provision on the statement of financial position can be derived as follows:

Change in defined benefit obligations(In € million)

2010

2009

2008

Defined benefit obligations at beginning of year

8,845

7,777

8,573

Service cost

237

189

191

Interest cost

483

450

449

Actuarial (gains) and losses

387

634

(390)

Acquisitions, curtailments and other

(19)

(21)

26

Benefits paid

(382)

(352)

(352)

Foreign currency translation adjustment

94

168

(720)

Defined benefit obligations at end of year

9,645

8,845

7,777

Actuarial losses which are related to the BAE Systems UK pension plans amount to € 16 million (2009: € 269 million) and foreign
currency translation adjustment amounts to € 84 million (2009: € 159 million).

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Change in plan assets(In € million)

2010

2009

2008

Fair value of plan assets at beginning of year

3,706

3,335

4,031

Actual return on plan assets

555

270

(457)

Contributions

553

173

436

Acquisitions and other

13

0

80

(230)

(202)

(200)

Benefits paid
Foreign currency translation adjustments

65

130

(555)

Fair value of plan assets at end of year

4,662

3,706

3,335

The actual return on plan assets includes among others,
also € 393 million (2009: € 153 million; 2008: € -280 million)
relating to the BAE Systems’ UK pension plans. Furthermore,€ 57 million (2009: € 116 million; 2008: € -504 million) of
foreign currency translation adjustments and € -123 million(2009: € -102 million; 2008: € -106 million) of benefits paid
result from BAE Systems’ UK pension plans.

into the relief fund in Germany with € 125 million (2009:€ 70 million; 2008: € 57 million) and the BAE Systems UK
pension plans with € 66 million (2009: € 66 million; 2008:€ 61 million). In 2011, further contributions are intended.

In 2010, EADS companies contributed in total € 553 million
in cash. Main contributions were made into the CTA
with € 300 million (2009: € 0 million; 2008: € 300 million),

In 2010, 43% (in 2009: 47%) of plan assets are invested inequity securities and 40% (in 2009: 28%) in debt securities.
The remaining plan assets are mainly invested in cash andother securities.

Based on past experience, EADS expects a rate of return forplan assets of 6.5% for Euro-countries.

Recognised Provision(In € million)

2010

2009

2008

2007

2006

Funded status (1)

4,983

5,139

4,442

4,542

5,751

(45)

(49)

(55)

(25)

(4)

4,938

5,090

4,387

4,517

5,747

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

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

from employee service in the current and prior periods. The
provision contains the funded status less any unrecognised
past service cost.

The components of the net periodic pension cost, included in “Profit (loss) before finance costs and income taxes”, are as
follows:(In € million)

2010

2009

2008

Service cost

237

189

191

Interest cost

483

450

449

Expected return on plan assets

(272)

(221)

(278)

Past service cost
Net periodic pension cost

4

6

4

452

424

366

The expected return on plan assets for BAE Systems’ UK pension plans amounts to € -141 million (in 2009: € -111 million).

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Actuarial gains and losses for retirement plans are recognised net of deferred taxes in total equity and develop as follows:

Actuarial gains and losses recognised directly in total equity
2010

2009

2008

Cumulative amount at 1 January(2,131)(1,546)(1,200)Recognised during the period

(114)

(585)

(346)

(2,245)(2,131)(1,546)(In € million)

Cumulative value at 31 December
Deferred Tax Asset at 31 December
Actuarial gains and losses recognised directly in equity, net

459

368

259

(1,786)(1,763)(1,287)

Contribution to state and private pension plans, mainly in Germany and France, are to be considered as defined contributionplans. Contributions in 2010 amount to € 633 million (in 2009: € 605 million).

2C) OTHER PROVISIONS
Movements in provisions during the year were as follows:(In € million)

Balance at
1 January
2010

Exchangedifferences

Increasefrompassageof time

Additions

Reclassification /Change inconsolidated
group

Used

Released

Balance at
31 December
2010

Contract losses

3,479

1

76

178

(14)

(214)

(77)

3,429

Outstanding costs

1,593

(4)

0

643

118

(561)

(71)

1,718

Aircraft financing risks
Restructuring measures /pre-retirement part-time work

952

58

69

21

0

(122)

(2)

976

428

0

6

88

(14)

(212)

(67)

229

Personnel charges
Obligation from services
and maintenance agreements

434

2

0

308

(20)

(190)

(14)

520

411

1

38

133

(41)

(91)

(27)

424

Warranties

205

1

0

97

0

(58)

(10)

235

Litigations and claims

187

1

0

35

(4)

(21)

(4)

194

Asset retirement

98

0

2

0

0

0

0

100

Other risks and charges

927

3

2

405

(147)

(102)

(155)

933

Total

8,714

63

193

1,908

(122)

(1,571)

(427)

8,758

The provision for contract losses mainly relates to Airbus
Military in conjunction with the A400M (see Note 3“Accounting for the A400M programme”) and to the A350
programme in Airbus Commercial.
The addition to provisions for outstanding costs mainly relates
to Cassidian and Eurocopter and mainly corresponds to tasks
to complete on construction contracts.
The provision for aircraft financing risks fully covers, in linewith the Group’s policy for sales financing risk, the net
exposure to aircraft financing of € 293 million (€ 295 million
at 31 December 2009) and asset value risks of € 683 million(€ 657 million at 31 December 2009) related to Airbus,

Eurocopter and ATR (see Note 33 “Commitments andcontingencies”).
The provision for restructuring measures / pre-retirement parttime work mainly relates to Cassidian, Eurocopter and Airbus.
In general, as the contractual and technical parameters to beconsidered for provisions in the aerospace sector are rather
complex, uncertainty exists with regard to the timing andamounts of expenses to be taken into account.

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26. Financing liabilities
In 2004, the EIB (European Investment Bank) granted a longterm loan to EADS in the amount of US$421 million, bearing afixed interest rate of 5.1% (effective interest rate 5.1%). EADS
issued under its EMTN Programme (Euro Medium Term Note
Programme) three euro denominated bonds. The first issue of€ 1 billion carried a coupon of 4.625% (effective interest rate4.7%) which was swapped into variable rate of 3M-Euribor+1.02% and was repaid in March 2010. The second issueof € 0.5 billion maturing in 2018 carries a coupon of 5.5%
(effective interest rate 5.6%) which was swapped during 2005
into variable rate of 3M-Euribor +1.72%. The third issue of€ 1 billion in 2009 maturing 2016 carries a coupon of 4.625%(effective interest rate 4.6%) which was swapped into variable
rate of 3M-Euribor +1.57%. Furthermore, Airbus received
in 1999 a Reinvestment Note from Deutsche Bank AG in
the amount of US$800 million, bearing a fixed interest rateof 9.88% with an outstanding debt of € 275 million (2009:€ 305 million).
(In € million)

Bonds

EADS can issue commercial paper under the so called “billet
de trésorerie” programme at floating or fixed interest rates
corresponding to the individual maturities ranging from 1
day to 12 months. The issued volume at 31 December 2010
amounted to € 0 million (2009: € 0 million). The programme
has been set up in 2003 with a maximum volume of€ 2 billion.
Financing liabilities include liabilities connected with sales
financing transactions amounting to € 631 million (2009:€ 733 million), mainly at variable interest rates.
Non recourse Airbus financing liabilities (risk is supported byexternal parties) amount to € 532 million (2009: € 652 million).
As of 31 December 2010, no defeased bank deposits foraircraft financing have been offset against financing liabilities(2009: € 306 million).

31 December 201031 December 2009

1,535

1,500

783

811

375

391

177

165

thereof due in more than five years: 1,535 (31 December 2009: 1,500)
Liabilities to financial institutions
thereof due in more than five years: 135 (31 December 2009: 182)
Loans
thereof due in more than five years: 161 (31 December 2009: 154)
Liabilities from finance leases
thereof due in more than five years: 119 (31 December 2009: 116)
Long-term financing liabilities

2,870

2,867

Bonds

0

974

Liabilities to financial institutions

39

90

Loans

200

205

Liabilities from finance leases

13

17

1,156

1,143

Short-term financing liabilities (due within one year)

1,408

2,429

Total

4,278

5,296

OthersIncluded in “Others” are financing liabilities to joint ventures.

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The aggregate amounts of financing liabilities maturing during the next five years and thereafter are as of 31 December 2010 asfollows:
Financing liabilities(In € million)

2011

1,408

2012

166

2013

134

2014

473

2015

147

Thereafter

1,950

Total

4,278

The aggregate amounts of financing liabilities maturing during the next five years and thereafter are as of 31 December 2009 asfollows:
Financing liabilities(In € million)

2010

2,429

2011

189

2012

160

2013

134

2014

432

Thereafter

1,952

Total

5,296

27. Other financial liabilities
31 December 201031 December 2009

Thereof European Governments refundable advances

5,968

4,882

Thereof liabilities for derivative financial instruments

2,109

732

547

561

8,624

6,175

(In € million)

Non-current other financial liabilities

Others
Total
Current other financial liabilities
Thereof liabilities to related companies

11

23

Thereof liabilities for derivative financial instruments

821

220

OthersTotal

European Governments refundable advances (incl.
A350 XWB) net of reimbursements have increased in 2010.
Regarding the interest expenses on European Governments
refundable advances see Note 12 “Total finance costs”. Dueto their specific nature, namely their risk-sharing features andthe fact that such advances are generally granted to EADS
on the basis of significant development projects, European
Governments refundable advances are accounted for by

402

957

1,234

1,200

EADS within “Non-current / current other financial liabilities” on
the statement of financial position including accrued interestsand presented within “cash provided by operating activities”
in the Consolidated Statements of Cash Flows.
Included in “Other financial liabilities” are € 1,228 million(2009: € 1,192 million) due within one year and € 4,697 million(2009: € 3,957 million) maturing after more than five years.

EADS FINANCIAL STATEMENTS 2010

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28. Other liabilities(In € million)

31 December 201031 December 2009

8,817

8,579

447

512

9,264

9,091

23,285

21,271

Non-current other liabilities
Thereof customer advance payments
Others
Total
Current other liabilities
Thereof customer advance payments
Thereof tax liabilities (excluding income tax)
Others
Total

Included in “Other liabilities” are € 20,608 million (2009:€ 18,619 million) due within one year and € 5,512 million(2009: € 3,009 million) maturing after more than five years.

545

582

1,942

1,694

25,772

23,547

Advance payments received relating to construction
contracts amount to € 8,403 million (2009: € 8,167 million)
mainly resulting from Astrium (€ 3,297 million), Airbus Military(€ 2,790 million) and Cassidian (€ 2,053 million).

29. Trade liabilities
As of 31 December 2010, trade liabilities amounting to € 118 million (€ 77 million as of 31 December 2009) mature after morethan one year.

30. Deferred income(In € million)

Non-current deferred income
Current deferred income
Total

31 December 201031 December 2009

315

266

790

880

1,105

1,146

The main part of deferred income is related to sales of Airbus and ATR aircraft that include asset value guarantee commitments
and that are accounted for as operating leases (€ 227 million and € 400 million as of 31 December 2010 and 2009,
respectively).

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

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2.4 Notes to the Consolidated Statementsof Cash Flows (IFRS)
31. Consolidated Statement of Cash Flows
As of 31 December 2010, EADS’ cash position (stated as
cash and cash equivalents in the Consolidated Statementsof Cash Flows) includes € 735 million (€ 751 million and€ 666 million as of 31 December 2009 and 2008, respectively)

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

2

The following charts provide details on acquisitions (resulting in additional assets and liabilities acquired) of subsidiaries, joint
ventures and businesses:
31 December 201031 December 200931 December 2008

Total purchase price

(45)

(21)

(335)

thereof paid in cash and cash equivalents
Cash and cash equivalents included in the acquired subsidiaries,
joint ventures and businesses

(45)

(21)

(335)

7

0

70

Cash Flow for acquisitions, net of cash

(38)

(21)

(265)

(In € million)

In 2010, the aggregate cash flow for acquisitions, net of cash results from the acquisition of Jena-Optronik GmbH amounting to€ -38 million.
In 2009, the aggregate cash flow for acquisitions, net of cash of € -21 million includes the acquisition of the underwater systems
business of QinetiQ, UK of € -14 million and additional non controlling interests in Spot Image € -7 million.
In 2008, the aggregate cash flow for acquisitions, net of cash of € -265 million includes mainly the acquisition of Plant CML of€ -233 million, Surrey Satellite Technology Limited (SSTL) of € -55 million and additional 41% of Spot Image amounting to € +35 million.
(In € million)

31 December 201031 December 200931 December 200890

Intangible assets; property, plant and equipment

30

Financial assets

0

0

1

Inventories

9

1

16

Trade receivables

13

4

44

Other assets

1

0

22

Cash and cash equivalents

7

0

70

Assets33

5243

Provisions

(3)

(3)

(7)

Trade liabilities

(5)

(1)

(34)

Financing liabilities

0

0

(7)

Other liabilities

(14)

0

(92)

Liabilities

(22)

(4)

(140)

Fair value of net assets

11

1

103

Goodwill (in 2010 preliminary) arising on acquisitions
Non-controlling interests / Consolidation of investments held prior
to the acquisition
Less own cash and cash equivalents of acquired subsidiaries,
joint ventures and businesses

34

14

259

0

6

(27)

(7)

0

(70)

Cash Flow for acquisitions, net of cash

38

21

265

EADS FINANCIAL STATEMENTS 2010

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The following charts provide details on disposals (resulting in assets and liabilities disposed) of subsidiaries:(In € million)

Total selling pricethereof received by cash and cash equivalents

31 December 201031 December 200931 December 2008

12

15

9

12

15

9

Cash and cash equivalents included in the (disposed) subsidiaries

0

(2)

(7)

Cash Flow from disposals, net of cash

12

13

2

The aggregate cash flow from disposals, net of cash, in 2010 of € 12 million results from the sale of ASL Aircraft Services
Lemwerder GmbH.
The aggregate cash flow from disposals, net of cash, in 2009 of € 13 million results from the sale of 70% of the interest in EADS
Socata.
The aggregate cash flow from disposals, net of cash, in 2008 of € 2 million results from the sale of Protac.
31 December 201031 December 200931 December 2008

Intangible assets; property, plant and equipment

(4)

(50)

(8)

Financial assets

0

0

0

Inventories

0

(78)

(1)

Trade receivables

(3)

(26)

(3)

Other assets

(14)

(37)

0

0

(2)

(7)

(21)

(193)

(19)

(In € million)

Cash and cash equivalents
AssetsProvisions

8

26

4

Trade liabilities

0

83

2

Financing liabilities

0

26

0

Other liabilities

12

43

4

Liabilities

20

178

10

Book value of net assets

(1)

(15)

(9)

Goodwill arising from disposals
Result from disposal of subsidiaries
Less own cash and cash equivalents of disposed subsidiaries
Cash Flow from disposals, net of cash

0

0

0

(11)

0

0

0

2

7

(12)

(13)

(2)

The cash flow from the disposal of the Airbus site of Laupheim in 2008 amounts to € +117 million resulting in a gain of€ 1 million.

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

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2.5 Other Notes to the Consolidated Financial
Statements (IFRS)
32. Litigation and claims
EADS is involved from time to time in various legal andarbitration 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), during
a period covering at least the previous 12 months which may
have, or have had in the recent past significant effects on
EADS’ or the Group’s financial position or profitability.
Although EADS is not a party, EADS is supporting theEuropean 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 European Union launched a parallel WTO
case against the US in relation to its subsidies to Boeing.
On 30 June 2010, the final report was published in the casebrought by the US but did not become binding because
it was appealed by both sides, with appeal proceedings
now underway. On 31 January 2011, a non-binding
confidential report was issued in the case brought by theEuropean Union concerning subsidies to Boeing; the reportis expected to be released publicly on 31 March 2011 andis also likely to be appealed. Exact timing of further steps in
the WTO litigation process is subject to further rulings andto negotiations between the US and the European Union.
Unless a settlement, which is currently not under discussion,is reached between the parties, the litigation is expected tocontinue for several years.
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, the A380 delays announced in 2006. On
1 April 2008, the AMF announced the notification of charges
against EADS and certain of its current and former executives
for breach of such market regulations and insider trading
rules, respectively. On 22 July 2009, the Rapporteur of theSanction Commission of the AMF issued a report regarding
the charges notified by the AMF, which contained various
recommendations to the Sanction Commission on the meritsof the charges. Following oral hearings before the Sanction
Commission which took place from 23-27 November 2009,
the Sanction Commission decided, in a decision publishedon 17 December 2009, to dismiss all charges against EADS

and the other notified persons. The Sanction Commission
held that EADS had complied with all applicable market
information duties, in particular in respect of risk of delays
affecting the A380 programme and its development, andthat there had been no breach of insider trading rules. The
decision of the Sanction Commission is final and cannot be
appealed. Nevertheless, following criminal complaints filed
by several shareholders in 2006 (including civil claims fordamages), French investigating judges are still carrying out an
investigation based on the same facts.
In Germany, criminal proceedings regarding suspected insider
trading offences did not establish any wrongdoing and havebeen terminated. However, since 2006, several shareholders
have filed civil actions against EADS in Germany in order torecover their alleged losses in connection with the disclosureof A380 programme delays. Several of these plaintiffs have
filed motions for “model proceedings”, which would allow
common issues of fact or law in multiple individual securities
actions to be decided together with binding effect in all suchactions. The proceedings are in their preliminary stage andthe amounts claimed are relatively small.
On the basis of largely the same facts, institutional
shareholders filed two separate requests in the second half of2009 with the Enterprise Chamber (Ondernemingskamer) of
the Court of Appeal in Amsterdam to open an inquiry into the
management and affairs of EADS. On 3 November 2010, theEnterprise Chamber denied the applicants’ requests to open
an inquiry. While the decision of the Enterprise Chamber isfinal and cannot be appealed, a Dutch Foundation (Stichting)has threatened to initiate separate civil proceedings against
EADS in the Netherlands for alleged breaches of market
regulations with respect to the A380 delays announced in2006.
On 12 June 2008, two actions were initiated in the UnitedStates District Court for the Southern District of New York,
one of which was voluntarily withdrawn shortly thereafter. The
remaining action purported to be a class action brought onbehalf of all persons and entities residing in the United States
who purchased or otherwise acquired EADS’ common stockduring the period from 27 July 2005 through 9 March 2007.
The action sought damages in an unspecified amount, withinterest and attorneys’ fees, for alleged violations of the US
securities laws in connection with financial disclosures issued

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by EADS in 2005, 2006 and 2007 and public statements
made during that same time frame relating to A380
programme delays. On 26 March 2010, the Court granted
defendants’ motion to dismiss for lack of subject matter
jurisdiction. On 23 April 2010, plaintiff filed a notice of appealof the Court’s decision, which was voluntarily withdrawn on
23 August 2010.
On 10 November 2009, Airbus Military SL (AMSL) notified
Europrop International GmbH (EPI), the engine manufacturer
under the A400M aircraft programme, that it had a numberof contractual claims against it for breach of Milestones 7, 8
and 9 under the engine agreement, in an amount currently
totalling approximately € 500 million. On 8 February 2010, EPI
notified AMSL of its own claims under the engine agreement
in an amount totalling approximately € 425 million, andon 23 February 2010, EPI sent notice of its intent to seek
arbitration, and of its sending of a request for arbitration to
the International Chamber of Commerce (ICC) on the sameday. On 4 May 2010, AMSL and EPI entered into a Standstill
Agreement to allow without prejudice business discussions
and renegotiations, which are ongoing.
In 2005, the liquidator of FlightLease Holdings Group (aSwissAir subsidiary and 50% shareholder of the special
purpose vehicle GFAC, a joint venture between Swissair
and GATX), prompted a lawsuit by GFAC against Airbus in acourt in New York to recover USD 227 million in pre-delivery
payments, together with interest and costs. The lawsuit
followed Airbus’ termination of a purchase agreement with
GFAC in October 2001 for 38 single-aisle and long-range
aircraft, in the context of Swissair’s bankruptcy. In 2006,
the FlightLease liquidator brought a separate action before
the commercial court of Paris to recover an additional
USD 319 million in pre-delivery payments, together withinterest and costs, on a separate purchase agreement
between Airbus and a wholly owned subsidiary of FlightLease(which was also terminated by Airbus in the context ofSwissair’s bankruptcy). On 6 February 2009, the trial judge
in the New York action decided in favor of GFAC. Airbus
appealed the decision to the appellate division. In May 2010,
while the decision on Airbus’ appeal in the New York lawsuit

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was still pending and before trial had commenced in the Paris
lawsuit, the parties agreed on a confidential settlement toterminate all proceedings.
Following an investigation conducted by the Italian Guardia
di Finanza, Italian tax authorities are currently evaluating
whether Astrium owes any overdue tax in Italy related to its
past contractual relationships. In parallel, the Italian Public
Prosecutor decided at the end of December 2009 to initiate
proceedings against Astrium’s legal representatives for failure
to file a tax declaration and attempted fraud. Astrium has
submitted memoranda to Italian tax authorities in supportof its position, and is currently awaiting a response. In themeantime, Astrium will continue to defend itself as well as theconcerned legal representatives.
On 30 July 2010, Constructions Industrielles de laMéditerrannée (“CNIM”) brought an action against EADS
and certain of its subsidiaries before the commercial court ofParis, alleging anti-competitive practices, breach of longterm contractual relationships and improper termination ofpre-contractual discussions. CNIM is seeking approximately€ 115 million in damages on a joint and several basis. EADS
believes that the plaintiff’s action lacks merit and will mount avigorous defence. The proceedings are currently at an earlystage.
Regarding EADS’ provisions policy, EADS recognises
provisions for litigation and claims when (i) it has a present
obligation from legal actions, governmental investigations,proceedings and other claims resulting from past events
that are pending or may be instituted or asserted in the
future against the Group, (ii) it is probable that an outflow ofresources embodying economic benefits will be required tosettle such obligation and (iii) a reliable estimate of the amountof such obligation can be made. EADS believes that it has
made adequate provisions to cover current or contemplated
general and specific litigation risks. For the amount ofprovisions for litigation and claims, (see “Notes to theConsolidated Financial Statements (IFRS) — Note 25C) Other
provisions”.

33. Commitments and contingencies
COMMITMENTS AND CONTINGENT LIABILITIESSales financing — In relation to its Airbus, Eurocopter and
ATR activities, EADS is committing itself in sales financing
transactions with selected customers. Sales financing
transactions are generally collateralised by the underlying
aircraft. Additionally, Airbus, Eurocopter and ATR benefit fromprotective covenants and from security packages tailoredaccording to the perceived risk and the legal environment.
EADS believes that the estimated fair value of the aircraft

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securing such commitments will substantially offset any
potential losses from the commitments. Any remaining
difference between the amount of financing commitments
given and the collateral value of the aircraft financed isprovided for as an impairment to the relating asset, if
assignable, or as a provision for aircraft financing risk. The
basis for this write down is a risk-pricing-model, which isapplied at every closing to closely monitor the remaining valueof the aircraft.

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Depending on which party assumes the risks and rewardsof ownership of a financed aircraft, the assets relating tosales financing are accounted for on the statement offinancial position either as (i) an operating lease (seeNote 15 “Property, plant and equipment”) or (ii) a loan fromaircraft financing or (iii) a finance lease receivable (see Note 17“Investments in associates accounted for under the equity
method, other investments and other long-term financial
assets”). As of 31 December 2010, related accumulated
impairment amounts to € 75 million (2009: € 70 million) for

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operating lease and to € 176 million (2009: € 158 million) for
loans and finance lease receivables. As part of provisions
for aircraft financing risks € 37 million (2009: € 35 million) arerecorded (see Note 25C) “Other provisions”).
Certain sales financing transactions include the sale and leaseback of the aircraft with a third party lessor under operatinglease. Unless the Group has sold down the relating operatinglease commitments to third parties, which assume liability forthe payments, it is exposed to future lease payments.

Future nominal operating lease payments that result from aircraft sales financing transactions are recorded off balance
sheet and are scheduled to be paid as of 31 December 2010 as follows:2(In € million)

Not later than 2011

146

Later than 2011 and not later than 2015

474

Later than 2015

162

Total

782

Of which commitments where the transaction has been sold to third parties(403)

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

379

Future nominal operating lease payments that result from aircraft sales financing transactions are recorded off balance
sheet and are scheduled to be paid as of 31 December 2009 as follows:(In € million)

Not later than 2010

159

Later than 2010 and not later than 2014

476

Later than 2014

249

Total

884

Of which commitments where the transaction has been sold to third parties(468)

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

416

Total aircraft lease commitments of € 782 million as of
31 December 2010 (2009: € 884 million) arise from aircraft
head-leases and are typically backed by corresponding
sublease income from customers with an amount of€ 515 million (2009: € 616 million). A large part of theselease commitments (€ 403 million and € 468 million as of
31 December 2010 and 2009) arises from transactions thatwere sold down to third parties, which assume liability forthe payments. EADS determines its gross exposure to suchoperating leases as the present value of the related payment
streams. The difference between gross exposure and theestimated value of underlying aircraft used as collateral,the net exposure, is provided for in full with an amount of€ 256 million as of 31 December 2010 (2009: € 260 million),as part of the provision for aircraft financing risks (seeNote 25C) “Other provisions”).

As of 31 December 2010 and 2009, the total consolidated – on and off balance sheet – Commercial Aviation Sales Financing
Exposure is as follows (Airbus Commercial, Eurocopter and 50% for ATR):
31 December 201031 December 2009

Total gross exposure

1,470

1,495

Estimated fair value of collateral (aircraft)

(926)

(972)

Net exposure (fully provided for)

544

523

(In € million)

EADS FINANCIAL STATEMENTS 2010

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

Accumulated impairment on operating leases (see Note 15 “Property, plant and equipment”)
Accumulated impairment on loans from aircraft financing and finance leases(see Note 17 “Investments in associates accounted for under the equity method,other investments and other long-term financial assets”)

31 December 201031 December 2009

75

70

176

158

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

37

35

256

260

Total provisions / accumulated impairments for sales financing exposure

544

523

Asset value guarantees — Certain sales contracts may
include the obligation of an asset value guarantee whereby
Airbus Commercial, Eurocopter or ATR guarantee a portionof the value of an aircraft at a specific date after its delivery.
Management considers the financial risks associated withsuch guarantees to be manageable. Three factors contributeto this assessment: (i) the guarantee only covers a trancheof the estimated future value of the aircraft, and its level isconsidered prudent in comparison to the estimated future
value of each aircraft; (ii) the asset value guarantee related
exposure is diversified over a large number of aircraft andcustomers; and (iii) the exercise dates of outstanding asset
value guarantees are distributed through 2022. If the present
value of the guarantee given exceeds 10% of the sales priceof the aircraft, the sale of the underlying aircraft is accounted
for as an operating lease (see Note 15 “Property, plant andequipment” and Note 30 “Deferred income”). In addition,
EADS is contingently liable in case asset value guarantees
with less than 10% are provided to customers as part ofaircraft sales. Counter guarantees are negotiated with third
parties and reduce the risk to which the Group is exposed.
As of 31 December 2010, the nominal value of asset value
guarantees provided to airlines, that do not exceed the 10%
criteria, amounts to € 1,095 million (2009: € 1,015 million),
excluding € 406 million (2009: € 430 million) where the risk
is considered to be remote. In many cases the risk is limited
to a specific portion of the residual value of the aircraft.
The present value of the risk inherent to the given asset
value guarantees where a settlement is being considered
as probable is fully provided for and included in the total
amount of provisions for asset value risks of € 683 million(2009: € 657 million) (see Note 25C) “Other provisions”). This
provision covers a potential expected shortfall between theestimated value of the aircraft of the date upon which the70

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guarantee can be exercised and the value guaranteed on atransaction basis taking counter guarantees into account.
With respect to ATR, EADS and Finmeccanica are jointly andseverally liable to third parties without limitation. Amongst
the shareholders, the liability is limited to each partner’s
proportionate share.
While backstop commitments to provide financing related
to orders on Airbus Commercial’s and ATR’s backlog arealso given, such commitments are not considered to bepart of gross exposure until the financing is in place, which
occurs when the aircraft is delivered. This is due to the factthat (i) past experience suggests it is unlikely that all suchproposed financings actually will be implemented (although
it is possible that customers not benefiting from suchcommitments may nevertheless request financing assistanceahead of aircraft delivery), (ii) until the aircraft is delivered,
Airbus Commercial or ATR retain the asset and do notincur an unusual risk in relation thereto, and (iii) third parties
may participate in the financing. In order to mitigate Airbus
Commercial and ATR credit risks, such commitments typicallycontain financial conditions which guaranteed parties mustsatisfy in order to benefit therefrom.

Other commitments — Other commitments comprisecontractual guarantees and performance bonds to certain
customers as well as commitments for future capital
expenditures.
Future nominal operating lease payments (for EADS as alessee) for rental and lease agreements (not relating to aircraft
sales financing) amount to € 986 million (2009: € 954 million)
as of 31 December 2010, and relate mainly to procurement
operations (e.g. facility leases, car rentals).

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Maturities as of 31 December 2010 are as follows:(In € million)

Not later than 2011130

Later than 2011 and not later than 2015

364

Later than 2015

492

Total

986

The respective maturities as of 31 December 2009 are as follows:(In € million)

Not later than 2010

130

Later than 2010 and not later than 2014

335

Later than 2014

489

Total

954

34. Information about financial instruments
A)

FINANCIAL RISK MANAGEMENT

By the nature of the activities carried out, EADS is exposed toa variety of financial risks, as explained below: i) market risks,
especially foreign currency exchange rate risks and interest
rate risks, ii) liquidity risk and iii) credit risk. EADS’ overall
financial risk management programme focuses on mitigating
unpredictable financial market risks and their potential
adverse effects on the Group’s operational and financial
performance. The Group uses derivative financial instruments
and to a minor extent non-derivative financial liabilities tohedge certain risk exposures.
The financial risk management of EADS is generally carriedout by the central treasury department at EADS Headquarters
under policies approved by the Board of Directors or by
the Chief Financial Officer. The identification, evaluationand hedging of the financial risks is in the responsibility of
established treasury committees with the Group’s Divisions
and Business Units.

Market risk
Currency risk — Foreign exchange risk arises when futurecommercial transactions or firm commitments, recognised
assets and liabilities and net investments in foreign operations
are denominated in a currency that is not the entity’sfunctional currency.
EADS manages a long-term hedge portfolio with a maturityof several years covering its net exposure to US dollar sales,
mainly from the activities of Airbus Commercial. This hedge
portfolio covers to a large extent the Group’s highly probabletransactions.

Significant parts of EADS’ revenues are denominated in
US dollars, whereas a major portion of its costs is incurredin euros and to a smaller extent in GBP. Consequently, tothe extent that EADS does not use financial instruments tocover its current and future foreign currency exchange rate
exposure, its profits are affected by changes in the euroUS dollar exchange rate. As the Group intends to generate
profits only from its operations and not through speculation
on foreign currency exchange rate movements, EADS uses
hedging strategies to manage and minimise the impact of
exchange rate fluctuations on these profits.
For financial reporting purposes, EADS mostly designates
a portion of the total firm future cash flows as the hedged
position to cover its expected foreign currency exposure.
Therefore, as long as the actual gross foreign currency cash
inflows (per month) exceed the portion designated as being
hedged, a postponement or cancellation of sales transactions
and corresponding cash inflows have no impact on thehedging relationship. As hedging instruments, EADS primarily
uses foreign currency forwards, foreign currency options,some synthetic forwards and at Airbus Commercial to a minor
extent non-derivative financial liabilities.
EADS endeavors to hedge the majority of its exposure basedon firm commitments and forecasted transactions. For
products such as aircraft, EADS typically hedges forecasted
sales in US dollar. The hedged items are defined as first
forecasted highly probable future cash inflows for a given
month based upon final payments at delivery. The amountof the expected flows to be hedged can cover up to 100%of the equivalent of the net US dollar exposure at inception.

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2.5 Other Notes to the Consolidated Financial Statements (IFRS)

1For EADS, a forecasted transaction is regarded as highly
probable if the future delivery is included in the internallyaudited order book or is very likely to materialise in viewof contractual evidence. The coverage ratio is adjusted totake into account macroeconomic movements affecting the
spot rates and interest rates as well as the robustness ofthe commercial cycle. For the non-aircraft business EADS
hedges in- and outflows in foreign currencies from sales
and purchase contracts following the same logic which are
typically contracted in lower volumes.
The Company also has foreign currency derivative
instruments which are embedded in certain purchase andlease contracts denominated in a currency other than thefunctional currency of the significant parties to the contract,
principally USD and GBP. Gains or losses relating to such
embedded foreign currency derivatives are reported in otherfinancial result if not designated as hedging instrument. In
addition EADS hedges currency risk arising from financialtransactions in other currencies than euro, such as fundingtransactions or securities.

Interest rate risk — The Group uses an asset-liability
management approach with the objective to limit its interest
rate risk. The Group undertakes to match the risk profile of its
assets with a corresponding liability structure. The remaining
net interest rate exposure is managed through several typesof interest rate derivatives in order to minimise risks andfinancial impacts. Hedging instruments that are specificallydesignated to debt instruments have at the maximum thesame nominal amounts as well as the same maturity dates
compared to the hedged item.
The cash and cash equivalents and securities portfolio of
the Group is invested mainly in non-speculative financial
instruments, mostly highly liquid, such as certificates ofdeposits, overnight deposits, commercial papers, othermoney market instruments and bonds. For this portfolio,
EADS holds on a regular basis an asset management
committee which aims at limiting the interest rate risk on afair value basis through a value-at-risk approach. EADS ismainly investing in short-term instruments in order to further
minimise any interest risk in this portfolio. The remaining
portion of securities is invested in short to mid-term bonds.
Any related interest rate hedges qualify for hedge accounting
as either fair value hedges or cash flow hedges.

Price risk — EADS is to a small extent invested in equity
securities mainly for operational reasons. Therefore, theGroup assesses its exposure towards equity price risk aslimited.

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Sensitivities of Market Risks — The approach used tomeasure and control market risk exposure within EADS’
financial instrument portfolio is amongst other key indicators
the value-at-risk (“VaR”). The VaR of a portfolio is theestimated potential loss that will not be exceeded on theportfolio over a specified period of time (holding period) froman adverse market movement with a specified confidence
level. The VaR used by EADS is based upon a 95 percent
confidence level and assumes a 5-day holding period. The
VaR model used is mainly based on the so called “MonteCarlo-Simulation” method. Deriving the statistical behaviorof the markets relevant for the portfolio out of market datafrom the previous two years and observed interdependencies
between different markets and prices, the model generates
a wide range of potential future scenarios for market pricemovements.
EADS VaR computation includes the Group’s financial debt,
short-term and long-term investments, foreign currency
forwards, swaps and options, finance lease receivables andliabilities, foreign currency trade payables and receivables,
including intra-group payables and receivables affecting
Group profit and loss.
Although VaR is an important tool for measuring market risk,
the assumptions on which the model is based give rise tosome limitations, including the following:

tt A five-day holding period assumes that it is possible tohedge or dispose of positions within that period. This isconsidered to be a realistic assumption in almost all cases
but may not be the case in situations in which there issevere market illiquidity for a prolonged period.
tt A 95 percent confidence level does not reflect losses that
may occur beyond this level. Even within the model used
there is a five percent statistical probability that losses
could exceed the calculated VaR.
tt The use of historical data as a basis for estimating thestatistical behavior of the relevant markets and finallydetermining the possible range of future outcomes out of
this statistical behavior may not always cover all possible
scenarios, especially those of an exceptional nature.
The Group uses VaR amongst other key figures in order todetermine the riskiness of its financial instrument portfolio andin order to optimise the risk-return ratio of its financial asset
portfolio. Further, the Group’s investment policy defines a
VaR limit for the total portfolio of cash, cash equivalents andsecurities. The total VaR as well as the different risk-factor
specific VaR figures of this portfolio are measured and serve
amongst other measures as a basis for the decisions of theasset management committee.

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A summary of the VaR position of EADS’ financial instruments portfolio at 31 December 2010 and 31 December 2009 is asfollows:(In € million)

Total VaR

Equity price VaR

Currency VaRInterest rate VaR

1,203

0

1,230

160

102

85

53

25

49

0

9

48

31 December 2010
FX hedges for forecast transactions or firm commitments
Financing liabilities, cash, cash equivalents, securities
and related hedges
Finance lease receivables and liabilities, foreign currency
trade payables and receivables
Diversification effect

(186)

0

(106)

(41)

All financial instruments

1,168

85

1,186

192

2

31 December 2009
FX hedges for forecast transactions or firm commitments
Financing liabilities, cash, cash equivalents, securities andrelated hedges
Finance lease receivables and liabilities, foreign currency
trade payables and receivables

908

-

908

115

84

45

49

26

35

-

9

34

Diversification effect

(101)

-

(93)

(14)

All financial instruments

926

45

873

161

The increase of total VaR compared to 31 December 2009is mainly attributed to an increase of the foreign exchange
portfolio and an increase of the investment portfolio incomparison to year end 2009. EADS uses its derivative
instruments almost entirely as well as some of its nonderivative financial liabilities for hedging purposes. As such,the respective market risks of these hedging instruments
are – depending on the hedges’ actual effectiveness – offset
by corresponding opposite market risks of the underlying
forecast transactions, assets or liabilities. Under IFRS 7 theunderlying forecast transactions do not qualify as financial
instruments and are therefore not included in the tables
shown above. The VaR of the FX hedging portfolio in theamount of € 1,203 million (2009: € 908 million) cannot be
considered as a risk indicator for the Group in the economic
sense.

Liquidity risk

Further, EADS also measures VaR of the Group-internaltransaction risk arising on Group entities contracting ina currency different from its functional currency affecting
Group profit and loss. However, these currency risks arise
purely EADS internally and are in economic terms 100%
compensated by the corresponding currency fluctuations
recognised in a separate component of equity whentranslating the foreign entity into EADS functional currency.
At 31 December 2010, the related total VaR amounts to€ 91 million (2009: € 113 million).

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

The Group’s policy is to maintain sufficient cash and cash
equivalents at any time to meet its present and futurecommitments as they fall due. EADS manages its liquidity
by holding adequate volumes of liquid assets and maintains
a committed credit facility (€ 3.0 billion and € 3.0 billion asof 31 December 2010 and 2009, respectively) in addition
to the cash inflow generated by its operating business. The
liquid assets typically consist of cash and cash equivalents. In
addition, the Group maintains a set of other funding sources.
Depending on its cash needs and market conditions, EADS
may issue bonds, notes and commercial papers. EADS
continues to keep within the asset portfolio the focus on low
counterparty risk, however, adverse changes in the capital
markets could increase the Group’s funding costs and limit its
financial flexibility.

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1(In € million)

Carrying
amountContractual
cash flows< 1 year2

3

1 year –2 years

4

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3 years –4 years

4 years –5 years

More than
5 years

31 December 2010
Non-derivative financial liabilities(13,732)(14,567)(10,197)

(365)

(271)

(690)

(424)

(2,620)Derivative financial liabilities(2,930)(2,517)

(781)

(695)

(527)

(314)

(226)

26

Total

(16,662)(17,084)(10,978)(1,060)(798)(1,004)(650)(2,594)(14,642)(15,624)(11,137)

(382)

(329)

(365)

(725)

(2,686)31 December 2009
Non-derivative financial liabilities
Derivative financial liabilities
Total

(952)

(894)

(216)

(275)

(213)

(85)

(59)

(46)

(15,594)(16,518)(11,353)

(657)

(542)

(450)

(784)

(2,732)

The above table analyses EADS financial liabilities by relevant
maturity groups based on the period they are remaining
on EADS statement of financial position to the contractual
maturity date.
The amounts disclosed are the contractual undiscounted
cash flows, comprising all outflows of a liability such as
repayments and eventual interest payments.
Non-derivative financial liabilities comprise financing liabilities
at amortised cost and finance lease liabilities as presented
in the tables of Note 34B) “Carrying amounts and fairvalues of financial instruments”. Due to their specific nature,
namely their risk-sharing features and uncertainty about therepayment dates, the European Governments refundable
advances are not included in the above mentioned table with
an amount of € 6,020 million (2009: € 5,294 million).

Credit risk
EADS is exposed to credit risk to the extent of nonperformance by either its customers (e.g. airlines) or its
counterparts with regard to financial instruments. However,the Group has policies in place to avoid concentrations ofcredit risk and to ensure that credit risk is limited.
As far as central treasury activities are concerned, credit risk
resulting from financial instruments is managed on Grouplevel. Counterparts for transactions on cash, cash equivalents
and securities as well as for derivative transactions arelimited to highly rated financial institutions, corporates orsovereigns. For such financial transactions EADS has set up
a credit limit system to actively manage and limit its credit risk
exposure. This limit system assigns maximum exposure lines
to counterparts of financial transactions, taking into accountthe lowest of their credit ratings as published by Standard &Poors, Moody’s and Fitch IBCA. Besides the credit rating,the limit system takes into consideration fundamental
counterparty data, as well as sectoral and maturity allocations

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and further qualitative and quantitative criteria such as credit
risk indicators. The credit exposure of EADS is reviewed on aregular basis and the respective limits are regularly monitored
and updated. Further, EADS constantly aims for maintaining acertain level of diversification in its portfolio between individual
counterparts as well as between financial institutions,
corporates and sovereigns in order to avoid an increased
concentration of credit risk on only a few counterparts.
The Group is monitoring the performance of the individual
financial instruments and the impact of the credit markets on
their performance. EADS has procedures in place that allow
to hedge, to divest from or to restructure financial instruments
having undergone a downgrade of the counterparts’ credit
rating or showing an unsatisfactory performance. These
measures aim to protect EADS to a certain extent against
credit risks from individual counterparts. Nevertheless, apotential negative impact resulting from a market-driven
increase of systematic credit risks cannot be excluded.
Sales of products and services are made to customers
after having conducted appropriate internal credit risk
assessment. In order to support sales, primarily at Airbus
Commercial and ATR, EADS may agree to participate in thefinancing of customers, on a case-by-case basis, directly or
through guarantees provided to third parties. In determining
the amount and terms of the financing transaction, Airbus
Commercial and ATR take into account the airline’s credit
rating and economic factors reflecting the relevant financial
market conditions, together with appropriate assumptions as
to the anticipated future value of the financed asset.
The booked amount of financial assets represents the
maximum credit exposure. The credit quality of financial
assets can be assessed by reference to external credit
rating (if available) or internal assessment of customers’(e.g. airlines’) creditworthiness by way of internal risk pricing
methods.

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2.5 Other Notes to the Consolidated Financial Statements (IFRS)

1

2

3

4

5

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

2010

2009

Receivables, neither past due nor impaired

6,011

5,253

Not past due due to negotiations and not impaired

48

18

Receivables impaired individually

3

17

Receivables not impaired and past due ≤ 3 months

788

767

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

343

129

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

86

156

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

144

255

Receivables not impaired and past due > 12 months

531

328

7,954

6,923

Total

EADS FINANCIAL STATEMENTS 2010

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2.5 Other Notes to the Consolidated Financial Statements (IFRS)

1

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2

3

4

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CARRYING AMOUNTS AND FAIR VALUESOF FINANCIAL INSTRUMENTS
methodologies discussed below. Considering the variabilityof their value-determining factors and the volume of financial
instruments, the fair values presented herein may not be
indicative of the amounts that the Group could realise in acurrent market environment.

The fair value of a financial instrument is the price at which
one party would assume the rights and / or duties ofanother party. Fair values of financial instruments have been
determined with reference to available market information
at the end of the reporting period and the valuation

The following tables present the carrying amounts and fair values of financial instruments according to IAS 39 measurement
categories as of 31 December 2010 and 2009 respectively:
31 December 2010(In € million)

AssetsOther investments and otherlong-term financial assets
uuthereof at amortised
cost
thereof at costuuthereof Fair value
via OCI
Current portion of other longterm financial assets
Non-current and current
other financial assetsuu

Trade receivables
Non-current and current
securities
Cash and Cash Equivalents
Total

Liabilities
Long-term and short-term
financing liabilities
Non-current and current
other financial liabilities
Trade liabilities
Total

Fair Value throughprofit or loss

Fair Valuefor hedge
relations

Available for Sale

Loans and Receivables
and Financial liabilities
at amortised cost

Book
value

Fair
Value

Amortised
Cost

Fair
Value

Held fortrading

DesignatedFair value

-

-

-

-

-

1,265

1,265

-

-

-

291

(1)

-

-

-

-

-

276

276

-

-

-

-

-

-

313

-

752

-

-

-

-

-

-

297

Other (3)Financial
Instruments
Total

Book
Value

Fair
Value

554

1,819

1,819

-

291

(1)

-

-

276

276

38

38

73

111

111

-

1,381

1,381

-

2,446

2,446

-

6,632

6,632

-

6,632

6,632

- 10,869 10,869

-

-

-

11,166

11,166

-

376

313

673

2,725

1,929

1,929

-

5,030

5,030

752 14,161 13,870

-

2,725

11,245

11,245627

27,771

27,480Held fortrading

DesignatedFair value

FV viaOCI At cost

Amortised
Cost

Fair
Value

Book
Value

Fair
Value

-

-

-

-

-

(4,088)(4,314)(190)(4,278)(4,504)(69)-(2,962)--(6,827)(6,827) (2)-(9,858)(9,858)(8,546)(8,546)

-

-

-

-

-

(8,546)(8,546)

-

(69)

-

(2,962)--(19,461)(19,687)(190)(22,682) (22,908)(1) Fair value is not reliably measurable.
(2) The European Governments refundable advances of € 6,020 million are measured at amortised cost; a fair value can not be measured reliably due to their risk
sharing nature and uncertainty about the repayment dates. They may be reassessed as relating programmes approach the end of production.
(3) This includes finance lease receivables and finance lease liabilities, which are not assigned to a measurement category according to IAS 39. The carrying amounts ofthese receivables / payables approximate their fair values.

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

1

31 December 2009(In € million)

AssetsOther investments and otherlong-term financial assets
uuthereof at amortised
cost
thereof at costuuthereof Fair value
via OCI
Current portion of other longterm financial assets
Non-current and current
other financial assets

Fair Value throughprofit or loss

Q

5

Fair Valuefor hedge
relations

Available for Sale

Loans and Receivables
and Financial liabilities
at amortised cost

Book
value

Fair
Value

Amortised
Cost

Fair
Value

Fair value

-

-

-

-

-

1,078

1,078

-

-

-

313

(1)

-

-

-

-

-

199

199

-

-

-

-

-

-

175

-

2,105

-

-

-

-

-

-

604

-

Cash and Cash Equivalents

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Financial
Instruments
Total

Other (3)

Book
Value

Fair
Value

620

1,698

1,698

-

313

(1)

-

-

199

199

96

96

134

230

230

-

1,370

1,370

-

3,650

3,650

-

5,587

5,587

-

5,587

5,587

7,451

7,451

-

-

-

8,055

8,055

3,379

-

1,774

175

2,378

Held fortrading

DesignatedFair value

-

-

-

-

(31)

-

(1,049)

-

-

(31)

-

Trade liabilities
Total

4

DesignatedTrade receivables
Non-current and current
securities

Liabilities
Long-term and short-term
financing liabilities
Non-current and current
other financial liabilities

3

Held fortrading

uu

Total

2

3,379

1,885

1,885

-

7,038

7,038

2,105 11,342 11,029

10,016

10,016754

26,77026,457

FV viaOCI At cost

Amortised
Cost

Fair
Value

Book
Value

Fair
Value

-

(5,114)(5,277)(5,296)(5,459)--(6,295)(6,295) (2)-(7,375)(7,375)---(8,217)(8,217)-(8,217)(8,217)(1,049)--(19,626)(19,789)

(182)

(182)

2

(20,888) (21,051)(1) Fair value is not reliably measurable.
(2) The European Governments refundable advances of € 5,294 million are measured at amortised cost; a fair value can not be measured reliably due to their risk
sharing nature and uncertainty about the repayment dates. They may be reassessed as relating programmes approach the end of production.
(3) This includes finance lease receivables and finance lease liabilities, which are not assigned to a measurement category according to IAS 39. The carrying amounts ofthese receivables / payables approximate their fair values.

The following tables allocate the financial assets and liabilities measured at fair value to the three levels of the fair value
hierarchy as of 31 December 2010 and 2009 respectively:
31 December 2010(In € million)

Level 1

Level 2

Level 3

Total

376

610

-

986

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

-

752

-

752

9,189

4,681

-

13,870

9,565

6,043

-

15,608

-

(69)

-

(69)

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

-

(2,861)(101)(2,962)-(2,930)(101)(3,031)EADS FINANCIAL STATEMENTS 2010

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The development of financial liabilities of Level 3 is as follows:
Total gains or losses in

Financial liabilities on Level 3

Balance at
1 January
2010

profitor lossothercomprehensive
incomePurchases

Issues

(128)

(10)

(8)

-

-

Financial instruments
for hedge relations

31 December 2009(In € million)

Level 1

Settlements

Transfer toliabilities

Balance at
31 December
2010

37

8

(101)

Level 2

Level 3

Total

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

2,097

456

-

2,553

-

2,105

-

2,105

7,401

3,628

-

11,029

9,498

6,189

-

15,687

Financial liabilities measured at fair value through profit or loss

-

(31)

-

(31)

Financial instruments for hedge relations

-

(921)

(128)

(1,049)

-

(952)

(128)

(1,080)Derivative financial instruments for hedge relations
Available for Sale financial assets
Total
Financial liabilities measured at fair value

Total

The fair value hierarchy consists of the following levels:
Level 1: quoted prices (unadjusted) in active markets for identical assets and liabilities;
Level 2: inputs other than quoted prices that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); andLevel 3: inputs for the asset or liability that are not based on observable market data.

Financial Assets and Liabilities — Generally, fair values
are determined by observable market quotations or valuation
techniques supported by observable market quotations.
By applying a valuation technique, such as present valueof future cash flows, fair values are based on estimates.
However, methods and assumptions followed to disclose
data presented herein are inherently judgmental and involve
various limitations like estimates as of 31 December 2010 and2009, which are not necessarily indicative of the amounts that
the Company would record upon further disposal / terminationof the financial instruments. Unquoted other investments
are measured at cost as their fair value is not reliably
determinable.

Securities — The fair value of securities included inavailable-for-sale investments is determined by reference totheir quoted market price at the end of the reporting period. If
a quoted market price is not available, fair value is determinedon the basis of generally accepted valuation methods on
the basis of market information available at the end of thereporting period.

The methodologies used are as follows:

Currency and Interest Rate Contracts — The fair value ofthese instruments is the estimated amount that the Company
would receive or pay to settle the related agreements as of
31 December 2010 and 2009. EADS used standard valuation
methods using standard software. The valuation is basedon freely available market data from different sources using
standard cash flow discounting. For options the BlackScholes formula has been applied.

Short-term investments, cash, short-term loans,
suppliers — The carrying amounts reflected in the annual
accounts are reasonable estimates of fair value because of
the relatively short period of time between the origination of
the instruments and its expected realisation.

The fair value of financing liabilities as of 31 December
2010 has been estimated including all future interest
payments. It also reflects the interest rate as stated in thetables above. The fair value of the EMTN bonds has beenassessed using public price quotations.

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The following types of financial assets held at 31 December 2010 and 2009 respectively are designated at fair value throughprofit or loss:
Nominal amount at
initial recognition as
Fair value as ofof 31 December 2010 31 December 2010(In € million)

Nominal amount at
initial recognition as ofFair value as of
31 December 2009 31 December 2009

Designated at fair value through profit or loss
at recognition:
Money Market Funds (accumulating)

376

376

2,097

2,096

Foreign currency Funds of Hedge Funds

275

247

275

232

uu
uu
uu

50

50

50

49

Total

Uncapped Structured Interest Rate Notes

701

673

2,422

2,378

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

Investments in foreign currency Funds of Hedge Funds havebeen designated at fair value through profit or loss.

In addition, EADS invests in Money Market Funds paying
interest on a monthly basis. The fair value of those funds
corresponds to their nominal amount at initial recognition dateamounting to € 2,281 million (2009: € 2,445 million).

EADS also invests in uncapped Structured Interest Rate
Notes – hybrid instruments combining a zero coupon bondand an embedded interest derivative. As the latter had to be
separated from the host contract EADS opted to designate
the entire hybrid instrument at fair value through profit or loss.

C) NOTIONAL AMOUNTS OF DERIVATIVE FINANCIAL INSTRUMENTS
The contract or notional amounts of derivative financial instruments shown below do not necessarily represent amounts
exchanged by the parties and, thus, are not necessarily a measure for the exposure of the Group through its use of derivatives.
The notional amounts of foreign exchange derivative financial instruments are as follows, specified by year of expected maturity:
Year ended 31 December 2010(In € million)

Remaining period
2011

2012

2013

2014

2015

2016

2017

2018+

Total

12,054

12,166

10,353

7,003

4,057

125

49

(365)

45,442

728

1,230

402

0

0

0

0

0

2,360

Foreign Exchange Contracts:
Net forward sales contracts
Foreign Exchange Options:Purchased USD call optionsuu

Purchased USD put options

2,122

2,585

402

0

0

0

0

0

5,109

Written USD call options

2,122

2,585

402

0

0

0

0

0

5,109

2,679

35

130

225

0

0

0

0

3,069

uu
uu

FX swap contracts

Year ended 31 December 2009(In € million)

Remaining period
2010

2011

2012

2013

2014

2015

2016

2017

Total

10,581

8,796

7,488

6,095

3,282

2,251

38

0

38,531

Purchased USD call options

893

1,412

1,370

0

0

0

0

0

3,675

Purchased USD put options

1,688

2,120

1,370

0

0

0

0

0

5,178

893

1,412

1,370

0

0

0

0

0

3,675

3,809

24

35

130

225

0

0

0

4,223

Foreign Exchange Contracts:
Net forward sales contracts
Foreign Exchange Options:uuuu

Written USD call optionsuu

FX swap contracts

EADS FINANCIAL STATEMENTS 2010

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The notional amounts of interest rate contracts are as follows:
Remaining period

Year ended 31 December 2010(In € million)

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020 +

Total

Interest Rate Contracts

431

188

516

373

163

1,090

109

606

1,229

58

4,763

Interest rate contracts relate to the EMTN bond, Paradigm Secure Communications Ltd., EADS NV and Airbus Operations Ltd.,UK, presented by the year of expected maturity. The previous year’s figures are presented accordingly.
Remaining period

Year ended 31 December 2009(In € million)

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

Total

Interest Rate Contracts

1,500

455

188

501

452

118

1,090

109

606

1,289

6,308

D) DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGE ACCOUNTING DISCLOSURE
The following interest rate curves are used in the determination of the fair value in respect of the derivative financial instruments
as of 31 December 2010 and 2009:31 December 2010
Interest rate in %

EUR

USD

GBP

6 months

1.20

0.54

1.23

1 year

1.48

0.85

1.53

5 years

2.48

2.17

2.65

10 years

3.31

3.35

3.57

31 December 2009
Interest rate in %

EUR

USD

GBP

6 months

0.93

0.63

0.95

1 year

1.21

0.98

1.59

5 years

2.81

2.96

3.42

10 years

3.60

3.95

4.13

The development of the foreign exchange rate hedging instruments recognised in AOCI as of 31 December 2010 and 2009 isas follows:(In € million)

1 January 2009

Equity attributable
to equity ownersof the parent

Non-controllinginterests

Total

(184)

2

(182)

Unrealised gains and losses from valuations, net of tax

2,015

0

2,015

Transferred to profit or loss for the period, net of tax(1,003)0(1,003)

1,012

0

1,012

828

2

830

Unrealised gains and losses from valuations, net of tax(2,090)(1)(2,091)

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

(111)

0

(111)

Changes in fair values of hedging instruments recorded in AOCI, net of tax(2,201)(1)(2,202)31 December 2010

(1,373)

1(1,372)

Changes in fair values of hedging instruments recorded in AOCI, net of tax
31 December 2009 / 1 January 2010

In the year 2010 an amount of € 201 million (in 2009: € 1,456 million) was reclassified from equity mainly to revenues resulting
from matured cash flow hedges.

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Corresponding with its carrying amounts, the fair values of each type of derivative financial instruments is as follows:
31 December 2010(In € million)

Foreign currency contracts – Cash Flow Hedges
Foreign currency contracts – not designated in a hedge
relationship
Interest rate contracts – Cash Flow Hedges

31 December 2009

AssetsLiabilities

AssetsLiabilities

603(2,617)

2,016

(811)

202

(64)

130

(28)

0

(15)

0

0

Interest rate contracts – Fair Value Hedges
Embedded foreign currency derivatives – Cash Flow
HedgesEmbedded foreign currency derivatives – not designatedin a hedge relationship

149

(138)

89

(110)

0

(91)

0

0

12

(5)

9

(3)

Total

966

(2,930)

2,244

(952)

At 31 December 2010, the Group has interest swap
agreements in place with notional amounts totalling€ 1,500 million (as at 31 December 2009: € 2,500 million). The
swaps are used to hedge the exposure to changes in the fairvalue of its EMTN bonds (see Note 26 “Financing liabilities”).
The fair value profit on the interest rate swaps of € 34 million(2009: € 15 million) has been recognised in financial result andoffset against an equal reduction on its EMTN bonds.

liability if the remaining maturity of the hedged item is morethan 12 months and, as a current asset or liability, if thematurity of the hedged item is less than 12 months in case ofserial production. In case of long-term production, a hedging
derivative is classified as non-current when the hedged items’remaining maturity is beyond EADS’ normal operating cycle;
and as a current asset or liability when the remaining maturityof the hedged item is in EADS’ normal operating cycle.

Derivatives which are not designated for hedge accounting
are classified as a current asset or liability. The full fair valueof a hedging derivative is classified as a non-current asset or

No material ineffectiveness arising from hedging relationshiphas been determined.

E)

NET GAINS OR LOSSESEADS net gains or losses recognised in profit or loss in 2010 and 2009 respectively are as follows:
2010

2009

Held for trading

35

(100)

Designated on initial recognition

22

12

(123)

(179)

97

83

(In € million)

Financial assets or financial liabilities at fair value through profit or loss:uu
uuLoans and receivables
Financial liabilities measured at amortised cost

Interest income from financial assets or financial liabilities through profit or loss is included in net gains or losses.
Net gains or losses of loans and receivables contain among others results from currency adjustments from foreign operations
and impairment losses.
Net gains or losses of € 12 million (2009: € 136 million) are recognised directly in equity relating to available-for-sale financial
assets.

F)

TOTAL INTEREST INCOME AND TOTAL INTEREST EXPENSES

In 2010, the total interest income amounts to € 309 million (in 2009: € 344 million) for financial assets which are not measured
at fair value through profit or loss. For financial liabilities which are not measured at fair value through profit or loss € -415 million(in 2009: € -503 million) are recognised as total interest expenses. Both amounts are calculated by using the effective interest
method.

EADS FINANCIAL STATEMENTS 2010

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The following impairment losses on financial assets are recognised in profit or loss in 2010 and 2009 respectively:(In € million)

2010

2009

Available-for-sale financial assets

(39)

(12)

Loans and receivables

(60)

(76)

Other

(1)

Total

(6)

(3)

(105)

(91)

(1) Concerns finance lease receivables.

35. Share-based Payment
A)

STOCK OPTION PLANS (SOP) AND LONG TERM INCENTIVE PLANS (LTIP)

Based on the authorisation given to it by the Shareholders’Meetings (see dates below), the Group’s Board of Directors
approved (see dates below) stock option plans in 2006,
2005, 2004, 2003, 2002, 2001 and 2000. These plansprovide to the Members of the Executive Committee as wellas to the Group’s senior management the grant of options forthe purchase of EADS shares.

At its 10 November 2010 and 13 November 2009 meetings,
the Board of Directors of the Company approved the grantingof performance units and restricted units in the Company.
The grant of so called “units” will not physically be settled inshares but represents a cash settled plan in accordance withIFRS 2.

For all of EADS’ Stock Option Plans, the granted exercise
price was exceeding the share price at grant date.
In 2010, compensation expense for Stock Option and Long Term Incentive Plans was recognised for an amount of € 47 million(in 2009: € 35 million). The fair value of units granted per vesting date is as follows (LTIP plan 2010):
In € (per unit granted)

FV of restricted and performance units to be settled in cash

May 2014

16.93

November 2014

16.86

May 2015

16.79

November 2015

16.72

As of 31 December 2010 provisions of € 61 million (2009: € 27 million) relating to LTIP have been recognised.
The lifetime of the performance and restricted units (2010) is contractually fixed (see within the description of the “twelfth
tranche”). The measurement is based on the share price as of the end of the reporting period (€ 17.44 as of 31 December 2010)
and also takes into account the present value of the expected dividend payments.

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2.5 Other Notes to the Consolidated Financial Statements (IFRS)

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The following major input parameters were used in order to calculate the fair value of the stock options granted:

Input parameters for the Black Scholes Option Pricing Model
SOP 2006

Share price (€)

25.34

Exercise price (€)

25.65 (1)Risk-free interest rate (%) (2)4.13

Expected volatility (%)

30.7

Estimated Life (years)

5.5(1) The exercise price for the performance and restricted shares is 0 €.
(2) The risk-free interest rate is based on a zero coupon yield curve that reflects the respective life (years) of the options.

EADS uses the historical volatilities of its share price as
an indicator to estimate the volatility of its stock options
granted. To test whether those historical volatilities
sufficiently approximate expected future volatilities, they arecompared to the implied volatilities of EADS options, which
are traded at the market as of grant date. Such options
typically have a shorter life of up to two years. In case of
only minor differences between the historical volatilities andthe implied volatilities, EADS uses historical volatilities as
input parameters to the Black Scholes Option Pricing Model(please refer to Note 2 “Summary of significant accounting
policies”). For measurement purposes performance criteria
are considered to be met.
The estimated option life of 5.5 years was based on historicalexperience and incorporated the effect of expected early
exercises.

The principal characteristics of the options, performance and restricted shares as well as performance and restricted units as at
31 December 2010 are summarized in the various tables below:
First tranche

Second tranche

Date of Shareholders’ Meeting

24 May 2000

24 May 2000

Date of Board of Directors Meeting (grant date)

26 May 2000

20 October 2000

5,324,884

240,000

0

0

850

34

Number of options granted
Number of options outstanding
Total number of eligible employees
Exercise date
Expiry dateConversion right

50% of options may be exercised after a period of two years and four weeks fromthe date of grant of the options; 50% of options may be exercised as of the third
anniversary of the date of grant of the options (subject to specific provisions containedin the Insider Trading Rules — see “Part 2 / 3.1.3 Governing Law — Dutch Regulations”).
8 July 2010

8 July 2010

One option for one share

One option for one share

Vested100%

100%

Exercise price€ 20.90€ 20.90

Exercise price conditions
Number of exercised options

110% of fair market value of the shares at the date of grant
2,892,020

188,000

EADS FINANCIAL STATEMENTS 2010

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Third tranche

Fourth tranche

Date of Shareholders’ Meeting

10 May 2001

10 May 2001

Date of Board of Directors Meeting (grant date)

12 July 2001

9 August 2002

Number of options granted

8,524,250

7,276,700

Number of options outstanding

3,031,759

2,283,470

1,650

1,562

Total number of eligible employees
Exercise date
Expiry date

50% of options may be exercised after a period of two years and four weeks from thedate of grant of the options; 50% of options may be exercised as of the third anniversaryof the date of grant of the options (subject to specific provisions contained in the Insider
Trading Rules — see “Part 2 / 3.1.3 Governing Law — Dutch Regulations”).
12 July 2011

Conversion right
VestedExercise price
Exercise price conditions
Number of exercised options

Date of Shareholders’ Meeting
Date of Board of Directors Meeting (grant date)

8 August 2012
One option for one share

100%

100%

€ 24.66€ 16.96

110% of fair market value of the shares at the date of grant
3,492,831

4,393,947

Fifth tranche

Sixth tranche

6 May 2003

6 May 2003

10 October 2003

8 October 2004

Number of options granted

7,563,980

7,777,280

Number of options outstanding

4,238,953

5,597,026

1,491

1,495

Total number of eligible employees
Exercise date
Expiry date

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

Conversion right

7 October 2014
One option for one share

Vested100%

100% (1)

Exercise price€ 15.65€ 24.32

Exercise price conditions
Number of exercised options

110% of fair market value of the shares at the date of grant
2,726,403

2,400(1) As regards to the sixth tranche, vesting of part of the options granted to EADS top Executives was subject to performance conditions. As a result, part of these
conditional options have not vested and were therefore forfeited during the year 2007.

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Seventh tranche

Date of Shareholders’ Meeting

11 May 2005

Date of Board of Directors Meeting (grant date)

9 December 2005

Number of options granted

7,981,760

Number of options outstanding

6,096,391

Total number of eligible beneficiaries

Exercise date

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

Expiry date

8 December 2015

Conversion right

One option for one share

Vested100% (1)

Exercise price
Exercise price conditions€ 33.91
110% of fair market value of the shares at the date of grant

Number of exercised options

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

Eighth tranche

Date of Shareholders’ Meeting

4 May 2006

Date of Board of Directors Meeting (grant date)18 December 2006
Stock option plan

Number of options granted

1,747,500

Number of options outstanding

1,650,500

Total number of eligible beneficiaries
Date from which the options may be exercised

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

Date of expiration

16 December 2016

Conversion right

One option for one share

Vested100%

Exercise price€ 25.65

Exercise price conditions

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

Number of exercised options

0
Performance and restricted shares plan

Number of shares granted
Number of shares outstanding

Performance shares

Restricted shares

1,344,625

391,300

00

Total number of eligible beneficiaries

Vesting date

Number of vested shares

1,637
The performance and restricted shares will vest if the participant is still employedby an EADS company and, in the case of performance shares, upon achievementof mid-term business performance. The vesting period will end at the dateof publication of the 2009 annual results, expected in March 2010.
Transfer of ownership made on 2 June 2010
902,907372,675

EADS FINANCIAL STATEMENTS 2010

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Ninth tranche

Date of Board of Directors Meeting (grant date)

7 December 2007
Performance and restricted unit plan
Performance units

Restricted units

Number of units granted

1,693,940

506,060

Number of units outstanding

1,603,280

486,720

Total number of eligible beneficiaries

Vesting dates

Number of vested units

1,617
The performance and restricted units will vest if the participant is still employedby an EADS company at the respective vesting dates and, in the caseof performance units, upon achievement of mid-term business performance.
Vesting schedule is made up of four payments over two years:
uu25% expected in May 2011
uu25% expected in November 2011
uu25% expected in May 2012
uu25% expected in November 2012
4,240

640

Tenth tranche

Date of Board of Directors Meeting (grant date)

13 November 2008
Performance and restricted unit plan
Performance units

Restricted units

Number of units granted

2,192,740

801,860

Number of units outstanding

2,138,700

781,960

Total number of eligible beneficiaries

Vesting dates

Number of vested units

1,684
The performance and restricted units will vest if the participant is still employedby an EADS company at the respective vesting dates and, in the caseof performance units, upon achievement of mid-term business performance.
Vesting schedule is made up of four payments over two years:
uu25% expected in May 2012
uu25% expected in November 2012
uu25% expected in May 2013
uu25% expected in November 2013
3,640

2,940

Eleventh tranche

Date of Board of Directors Meeting (grant date)

13 November 2009
Performance and restricted unit plan
Performance units

Restricted units

Number of units granted

2,697,740

928,660

Number of units outstanding

2,664,090

926,860

Total number of eligible beneficiaries

Vesting dates

Number of vested units

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1,749
The performance and restricted units will vest if the participant is still employedby an EADS company at the respective vesting dates and, in the caseof performance units, upon achievement of mid-term business performance.
Vesting schedule is made up of four payments over two years:
uu25% expected in May 2013
uu25% expected in November 2013
uu25% expected in May 2014
uu25% expected in November 2014
4,250

400

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Twelfth tranche

Date of Board of Directors Meeting (grant date)

10 November 2010
Performance and restricted unit plan
Performance units

Restricted units

Number of units granted

2,891,540

977,780

Number of units outstanding

2,890,140

977,320

Total number of eligible beneficiaries

1,711
The performance and restricted units will vest if the participant is still employedby an EADS company at the respective vesting dates and, in the caseof performance units, upon achievement of mid-term business performance.
Vesting schedule is made up of four payments over two years:
uu25% expected in May 2014
uu25% expected in November 2014
uu25% expected in May 2015
uu25% expected in November 2015

Vesting dates

Number of vested units00

The following table summarizes the development of the number of stock options, shares as well as units:
Number of OptionsFirst & Second Tranche

Options granted

Balance at
1 January

Exercised

Forfeited

Balance at
31 December

2000

5,564,884--(189,484)

5,375,400

2001-

5,375,400--

5,375,400

2002-

5,375,400--

5,375,400

2003-

5,375,400-(75,000)

5,300,400

2004-

5,300,400(90,500)(336,000)

4,873,900

2005-

4,873,900(2,208,169)(121,000)

2,544,731

2006-

2,544,731(746,242)(23,000)

1,775,489

2007-

1,775,489(35,109)(37,000)

1,703,380

2008-

1,703,380-(116,160)

1,587,220

2009-

1,587,220-(105,500)

1,481,720

2010-

1,481,720-(1,481,720)

0Options granted

Balance at
1 January

Exercised

Forfeited

Balance at
31 December

Number of Options
Third Tranche

2001

8,524,250--(597,825)

7,926,425

2002-

7,926,425--

7,926,425

2003-

7,926,425-(107,700)

7,818,725

2004-

7,818,725-(328,500)

7,490,225

2005-

7,490,225(2,069,027)(132,475)

5,288,723

2006-

5,288,723(1,421,804)(10,400)

3,856,519

2007-

3,856,519(2,000)(81,350)

3,773,169

2008-

3,773,169-(273,250)

3,499,919

2009-

3,499,919-(200,260)

3,299,659

2010-

3,299,659-(267,900)

3,031,759

EADS FINANCIAL STATEMENTS 2010

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Number of Options
Fourth Tranche

2002

Options granted

Balance at
1 January

Exercised

Forfeited

Balance at
31 December

7,276,700

-

-

(600)

7,276,100

2003-

7,276,100-(70,125)

7,205,975

2004-

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

6,777,828

2005-

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

2006-

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

2007-

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

2,706,434

2008-

2,706,434-(159,313)

2,547,121

2009-

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

2010-

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

2,283,470

Options granted

Balance at
1 January

Exercised

Forfeited

Balance at
31 December

7,563,980---

7,563,980

Number of Options
Fifth Tranche

2003
2004

-

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

7,456,440

2005-

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

6,493,005

2006-

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

5,229,965

2007-

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

4,818,873

2008-

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

4,729,593

2009-

4,729,593-(113,740)

4,615,853

2010-

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

4,238,953

Options granted

Balance at
1 January

Forfeited

Balance at
31 December

Number of Options
Sixth Tranche

Exercised

2004

7,777,280---

7,777,280

2005-

7,777,280-(78,220)

7,699,060

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

7,599,700-

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

6,240,986

2006
2007
2008

-

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

2009-

6,057,766-(41,060)

6,016,706

2010-

6,016,706-(419,680)

5,597,026

Options granted

Balance at
1 January

Exercised

Forfeited

Balance at
31 December

2005

7,981,760---

7,981,760

2006-

7,981,760-(74,160)

7,907,600

Number of Options
Seventh Tranche

2007

-

7,907,600-(142,660)

7,764,940

2008-

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

6,294,951

2009-

6,294,951-(49,520)

6,245,431

2010-

6,245,431-(149,040)

6,096,391

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Number of Options
Eighth Tranche

2006

Options granted

Balance at
1 January

Exercised

Forfeited

Balance at
31 December

1,747,500---

1,747,500

2007-

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

2008-

1,742,000-(64,000)

1,678,000

2009-

1,678,000-(11,000)

1,667,000

2010-

1,667,000-(16,500)

1,650,500

46,436,354

25,785,645(13,695,601)(9,842,654)

22,898,099

Shares granted

Balance at
1 January

VestedForfeited

Balance at
31 December

1,344,625---

1,344,625

Total options for all Tranches

2

Number of Shares
Performance / restricted shares plan 2006

Performance shares in 2006
Performance shares in 2007-

1,344,625(875)(15,375)

1,328,375

Performance shares in 2008-

1,328,375(875)(36,125)

1,291,375

Performance shares in 2009-

1,291,375(1,750)(6,625)

1,283,000

Performance shares in 2010-

1,283,000(899,407)(383,593)

0

Restricted shares in 2006

391,300---

391,300

Restricted shares in 2007-

391,300-(4,550)386,750

Restricted shares in 2008-

386,750-(8,275)

378,475

Restricted shares in 2009-

378,475(175)(1,450)376,850

Restricted shares in 2010-

376,850(372,500)(4,350)0

1,735,925

1,659,850(1,275,582)(460,343)

0Units granted

Balance at
1 January

VestedForfeited

Balance at
31 December

1,693,940---

1,693,940

Total shares

Number of Units
Ninth Tranche

Performance units in 2007
Performance units in 2008-

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

1,653,500

Performance units in 2009-

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

1,634,100-

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

1,603,280

506,060---

506,060

Performance units in 2010
Restricted units in 2007
Restricted units in 2008-

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

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

Restricted units in 2010
Total units-

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

2,200,000

2,127,420(4,880)(105,120)

2,090,000

EADS FINANCIAL STATEMENTS 2010

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Number of Units
Tenth Tranche

Performance units in 2008

Units granted

Balance at
1 January

VestedForfeited

Balance at
31 December

2,192,740---

2,192,740

Performance units in 2009-

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

2,170,340

Performance units in 2010-

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

2,138,700

Restricted units in 2008

801,860---

801,860

Restricted units in 2009-

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

Restricted units in 2010
Total units-

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

781,960

2,994,600

2,965,720(6,580)(67,360)

2,920,660

Units granted

Balance at
1 January

VestedForfeited

Balance at
31 December

2,697,740---

2,697,740-

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

2,664,090

928,660---

928,660

Number of Units
Eleventh Tranche

Performance units in 2009
Performance units in 2010
Restricted units in 2009
Restricted units in 2010
Total units-

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

3,626,400

3,626,400(4,650)(30,800)

3,590,950

Units granted

Balance at
1 January

VestedForfeited

Balance at
31 December

Number of Units
Twelfth Tranche

Performance units in 2010

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

Restricted units in 2010

977,780

-

-

(460)

977,320

3,869,320--(1,860)3,867,460

Total unitsB)

EMPLOYEE STOCK OWNERSHIP PLAN (ESOP)In 2010, the normal ESOP plan was replaced through aworldwide 10 Years EADS – Special Anniversary Free SharePlan for about 118,000 employees in 29 countries. Eacheligible employee was granted ten free shares in EADS,
resulting in the distribution of 1,184,220 shares in total. Suchshares were bought from the capital market and therefore
had no impact on the issued share capital. This exceptional
free share grant was implemented in order to celebrate theinitial public offering of EADS ten years ago and to strengthen
each employee’s sense of belonging to EADS. Compensation
expense of € 21 million (in 2009: € 4 million) was recognised inconnection with the Special Anniversary Free Share Plan 2010.
In 2009, the Board of Directors approved an additional ESOP
following eight ESOPs established in 2008, 2007, 2005,
2004, 2003, 2002, 2001 and in 2000. For the 2009 ESOP,
eligible employees were able to purchase a maximum of90

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500 shares per employee of previously unissued shares.
The offer was broken down into two tranches which wereavailable for all employees to choose. The subscription pricefor tranche A was € 10.76. The subscription price for tranche
B was the highest of the subscription price for tranche A or
80% of the average opening market prices for EADS shareson the Paris stock exchange over the twenty trading days
preceding 19 November 2009, resulting in a subscription
price of € 10.76. During a lockup period of at least one year
under tranche A or five years under tranche B, employees are
restricted from selling the shares, but have the right to receive
all dividends paid. Employees who subscribed to tranche A
have in addition the ability to vote at the annual Shareholder
Meetings. EADS issued and sold 1,358,936 ordinary shareswith a nominal value of € 1.00 under both tranches.

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36. Related party transactions
Related parties — The Group has entered into varioustransactions with related companies in 2010 and 2009 thathave all been carried out in the normal course of business.
As is the Group’s policy, related party transactions have to
be carried out at arm’s length. Transactions with relatedparties include the French State, Daimler AG, Lagardère and
SEPI (Spanish State). Except for the transactions with the
French State and SEPI, the transactions are not consideredmaterial to the Group either individually or in the aggregate.
The transactions with the French State include mainly sales

from the Eurocopter, Astrium and Cassidian Divisions for
programmes like Tiger, M51 / M45 ballistic missiles and
SCALP naval cruise missiles. The transactions with the
Spanish State include mainly sales from Airbus Military
and Cassidian for military programmes. With regard to the
French and Spanish State as customers of the A400M
programme please refer to Note 3 “Accounting for the A400M
programme”. The transactions with the joint ventures mainly
concern the Eurofighter programme.

2

The following table discloses the related party transactions on a full EADS’ share as of 31 December 2010:(In € million)

French State

Sales of goods
and services andother income in2010

Purchasesof goods andservices andother expense in2010

Receivables
due as of
31 December
2010

Payablesdue as of
31 December
2010

Other
Liabilities / Loans
received as of
31 December
2010 (1)

1,365

102

1,021

6

2,665

Spanish State (SEPI)

53

0

24

0

221

Daimler AG

3

14

1

3

0

Lagardère group

0

0

0

0

15

Total transactions with shareholder

1,421

116

1,046

9

2,901

Total transactions with joint ventures

2,002

21

816

14

1,394

Total transactions with associates

815

30

330

11

0

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

As of 31 December 2010, EADS granted guarantees to the Spanish State in the amount of € 211 million mainly relating toadvance payments received and performance bonds and in the amount of € 325 million to Air Tanker group in the UK as well asa loan to Daher-Socata SA in the amount of € 24 million.
The following table discloses the related party transactions on a full EADS’ share as of 31 December 2009:
Payablesdue as of
31 December
2009

Other
Liabilities / Loans
received as of
31 December
2009 (1)

1,342

3

2,329

107

0

764

Purchasesof goods andservices andother expense in2009

Receivables
due as of
31 December
2009

1,173

1

94

0

Daimler AG

6

14

1

1

0

Lagardère group

0

0

0

0

15

Total transactions with shareholder

1,273

15

1,450

4

3,108

Total transactions with joint ventures

1,858

24

745

0

1,431

Total transactions with associates

1,171

1

327

9

0

(In € million)

French State
Spanish State (SEPI)Sales of goods
and services andother income in
2009(1) Including European Governments refundable advances from the French and Spanish State.

As of 31 December 2009, EADS granted guarantees to the
Spanish State in the amount of € 250 million mainly relating
to advance payments received and performance bonds

and in the amount of € 328 million to Air Tanker group in the
UK as well as a loan to Daher-Socata SA in the amount of€ 24 million.

EADS FINANCIAL STATEMENTS 2010

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Remuneration — The annual remuneration and related compensation costs of all of key management personnel, i.e. Nonexecutive Board Members, Executive Board Members and Members of the Executive Committee, can be summarised asfollows:
2010

Compensation expense

Defined benefit obligation (1)Pension expense (2)

1.7

-

-

2.6

2.3

0.6

15.7

27.0

2.7

(In € million)

Non-executive Board Members (3)Executive Board Member(4)

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

(5)

Amount of the net pension defined benefit obligation.
Aggregated amount of current service and interest costs related to the defined benefit obligation accounted for during fiscal year 2010.
Non-executive Board Members in office as at 31 December 2010.
The Chief Executive Officer was the sole Executive Board Member in office as at 31 December 2010.
Executive Committee Members in office as at 31 December 2010, including specific exceptional bonus if any and EADS N.V. compensation.

2009

Compensation expense(In € million)

Non-executive Board Members (3)Executive Board Member(4)

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

Pension

1.4

PensionDefined benefit obligation (1)Pension expense (2)--0.9 (2.0)*

1.8

0.7

12.8

23.3

2.9

At CEO’s request his annual variable pay of € 1,141,250 was waived.
Amount of the net pension defined benefit obligation.
Aggregated amount of current service and interest costs related to the defined benefit obligation accounted for during fiscal year 2009.
Non-executive Board Members in office as at 31 December 2009.
The Chief Executive Officer was the sole Executive Board Member in office as at 31 December 2009.
Executive Committee Members in office as at 31 December 2009, including specific exceptional bonus if any and EADS N.V. compensation.

Additionally, performance units granted in 2010 to the Chief
Executive Officer and to the other Executive Committee
Members represented 416,000 units.

decision by the Company. The Board has decided to reducethe maximum termination indemnity from 24 months to
18 months of annual total target salary.

The amounts detailed above do neither comprise thetermination package nor the estimated cost of long-term
incentives granted to Executive Committee Members.

This new rule is applicable to nearly all of the Executive
Committee Members since they have renewed their mandate
contracts.

For more information in respect of remuneration of Directors,
see “Notes to the Company Financial Statements — Note 11:
Remuneration”.

The indemnity could be reduced pro rata or would even not
be applicable depending on age and date of retirement.

EADS has not provided any loans to / advances
to / guarantees on behalf of Directors, former Directors
or Executive Committee Members except for salary andreimbursement advances and an undertaking to potentiallyassume certain legal defence costs for certain of its Executive
Committee Members in relation with certain regulatory or
judicial proceedings.
The Executive Committee Members are furthermore entitledto a termination indemnity when the departure results from a

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Under the LTIP 2010, the Chief Executive Officer, as well as all
Executive Committee Members will have to own EADS shares
equal to a minimum of 20% of the number of vested units
until the end of their mandate.
The Company grants the Members of the Executive
Committee appropriate insurance coverage, in particular D&O
insurance.
Executive Committee Members are also entitled to acompany car.

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

2010

2009

Non-current assets

528

588

2,989

3,013

Current assets
Non-current liabilities

437

473

Current liabilities

2,608

2,628

Revenues

1,783

1,645

144

95

Profit for the period

The Group’s proportional share in contingent liabilities of these joint ventures as of 31 December 2010 amounts in aggregate to€ 333 million (2009: € 280 million).

38. Earnings per Share
Basic earnings per share — Basic earnings per share arecalculated by dividing profit (loss) for the period attributable
to equity owners of the parent (Net income (loss)) by theweighted average number of issued ordinary shares during
the year, excluding ordinary shares purchased by the Groupand held as treasury shares.

2010

2009

2008

Profit (loss) for the period attributable to equity owners of the parent(Net income (loss))€ 553 million€ (763) million€ 1,572 million

Weighted average number of ordinary shares

810,693,339

809,698,631

806,978,801€ 0.68€ (0.94)€ 1.95

Basic earnings (losses) per share

Diluted earnings per share — For the calculation of thediluted earnings per share, the weighted average numberof ordinary shares is adjusted to assume conversion of all
potential ordinary shares. After the end of the vesting periodof the performance and restricted shares granted underthe 8th tranche, the Group’s only remaining category of
dilutive potential ordinary shares is stock options. In 2010,
the average share price of EADS exceeded the exercise
price of the 5th stock option plan (in 2009 and 2008: noneof the stock option plans). Hence, 242,591 shares related
to stock options (in 2009 and 2008: no shares) wereconsidered in the calculation of diluted earnings per share.
Since the average price of EADS shares during 2009 and2008 exceeded the price for performance and restricted
shares, 1,491,482 shares (in 2008: 618,141 shares) related
to performance and restricted shares granted under the
8th tranche were considered in the calculation.

2010

2009

2008

Profit (loss) for the period attributable to equity owners of the parent(Net income (loss))€ 553 million€ (763) million€ 1,572 million

Weighted average number of ordinary shares (diluted)

810,935,930

811,190,113

807,596,942€ 0.68€ (0.94)€ 1.95

Diluted earnings (losses) per share

EADS FINANCIAL STATEMENTS 2010

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39. Number of Employees
The number of employees at 31 December 2010 is 121,691 as compared to 119,506 at 31 December 2009.

40. Events after the reporting date
The progress of the negotiations with the A400M launchcustomer nations regarding the export levy facility schemes
for the A400M was reflected during January 2011 by theauthorisation of the German budgetary Committee toproceed with the German export levy facility scheme on
26 January 2011 as well as the signature of the export levy
facility scheme with France on 31 January 2011.
On 28 February 2011 Astrium Services GmbH obtained
control of ND SatCom GmbH, Immenstaad (Germany),

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a supplier of satellite and ground systems equipment andsolutions, by acquiring 75.1% of the shares and votinginterests in the company. The preparation of the closing
financial statements of ND SatCom has not been finalised yet.
These Consolidated Financial Statements have beenauthorised for issuance by the Board of Directors on
8 March 2011.

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2.6 Appendix “Information on principal
investments” — Consolidation Scope
2010

%

2009

%

Company

Head officeF

100.00F

100.00AD Grundstückgesellschaft mbH & Co. KG

Pöcking (Germany)F

100.00F

100.00Aerolia S.A.S.

FranceF100.00F

100.00AFS Cayman 11 Ltd.

Cayman Islands

F

100.00F

100.00

AIFS (Cayman) Ltd.

Cayman Islands

F

100.00F

100.00

AIFS Cayman Liquidity Ltd.

Cayman Islands

F

100.00F

100.00

AIFS Leasing Company Ltd.

Ireland

Airbus Commercial

F

70.00

Airbus (Beijing) Engineering Centre Company Limited

Beijing (China)F100.00F

100.00Airbus (TIANJIN) Delivery Center Ltd.

Tianjin (China)

P

51.00

P

51.00

Airbus (TIANJIN) Final Assembly Company Ltd.

Tianjin (China)

P

51.00

P

51.00

Airbus (TIANJIN) Jigs & Tools Company Ltd.

Tianjin (China)F100.00F

100.00Airbus America Sales, Inc.

USA

F

100.00F

100.00Airbus Americas, Inc.

USA

F

100.00F

100.00Airbus China Ltd.

Hong KongF

100.00F

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

Toulouse (France)F

100.00Airbus Finance Company Ltd.

Dublin (Ireland)

F

100.00F

100.00Airbus Financial Service Unlimited

Ireland

E

50.00

E

50.00

Airbus Freighter Center GmbH

Dresden (Germany)F

100.00F

100.00Airbus Invest

Toulouse (France)F

100.00F

100.00Airbus Americas Customer Services, Inc.

USA

F

100.00F

100.00Airbus Americas Engineering, Inc.

USA

F

100.00F

100.00Airbus Operations GmbH (ex Airbus Deutschland GmbH)

Hamburg (Germany)F

100.00F

100.00Airbus Operations Ltd. (Airbus UK Ltd.)

United Kingdom

F

100.00F

100.00Airbus Operations S.A.S. (ex Airbus France S.A.S)

Toulouse (France)F

100.00F

100.00Airbus Operations S.L. (ex Airbus España SL)

Madrid (Spain)F

100.00F

100.00Airbus Real Estate Premium AEROTEC Nord GmbH

Augsburg (Germany)F

100.00F

100.00Airbus S.A.S

Toulouse (France)F

100.00F

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

Blagnac (France)

F

0.00

F

100.00Avaio Ltd.

Isle Of Man

F

100.00Aviateur Aerospace Ltd.

Ireland

E

18.18

E

18.18

Aviateur Capital Ltd. (In 2006: Avion Capital Ltd.)

IrelandF

100.00Aviateur Eastern Ltd.

IrelandF

100.00F

100.00Aviateur Finance Ltd.

IrelandF

100.00F

100.00Aviateur International Ltd.

IrelandF

100.00F

100.00Aviateur Leasing Ltd.

IrelandF

100.00F

100.00CIMPA GmbHGermanyF

100.00F

100.00CIMPA Ltd.

United Kingdom

F

100.00F

100.00CIMPA S.A.S.

FranceF100.00F

100.00CTC GmbH

Stade (Germany)

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

EADS FINANCIAL STATEMENTS 2010

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2010

%

2009

%

Company

Head officeF

100.00F

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

Augsburg (Germany)F

100.00F

100.00Elbe Flugzeugwerke GmbH

Dresden (Germany)

P

50.00

Hua – Ou Aviation Support Centre Limited

Beijing (China)

P

50.00

Hua – Ou Aviation Training Centre Limited

Beijing (China)

E

30.00

E

30.00

OnAIR N.V.

Netherlands

F

100.00F

100.00Premium AEROTEC GmbH

Augsburg (Germany)F

100.00F

100.00Star Real Estate S.A.S.

Toulouse (France)F

100.00F

100.00Total Airline Service Company

United Arab Emirates

90.00

Airbus Military S.L.

Madrid (Spain)

Additionally consolidated are 28 SPEs.
Airbus Military
F

90.00

F

E

40.00

E

40.00

AirTanker Holdings Ltd.*

London (UK)F

100.00F

100.00Chantilly, VA (USA)F

100.00F

100.00EADS CASA North America, Inc.
EADS CASA S.A. (Unit: EADS CASA
Military Transport Aircraft)

F

77.21

F

77.21

EADS PZL “WARSZAWA-OKECIE” S.A.

Warsaw (Poland)

F

100.00F

100.00AA Military Maintenance Pty. Ltd.

Brisbane (Australia)

F

100.00F

100.00AA New Zealand Pty. Ltd.

Bankstown (Australia)

F

100.00F

100.00American Eurocopter Corp.

Dallas, TX (USA)

F

60.00

F

60.00

American Eurocopter LLC

Dallas, TX (USA)F

100.00F

100.00Australian Aerospace Ltd.

Bankstown (Australia)

F

90.00

EC Japan Co. Ltd.

Tokyo (Japan)

F

90.00

EC Japan RG Co.Ltd.

Tokyo (Japan)

F

100.00F

100.00EIP Holding Pty. Ltd.

Bankstown (Australia)

F

75.00

F

75.00

Eurocopter South East Asia Pte. Ltd.

Singapore (Singapore)F

100.00F

100.00Eurocopter Canada Ltd.

Ontario (Canada)F

100.00F

100.00Eurocopter de Mexico S.A.

Mexico D.F. (Mexico)F

100.00F

100.00Eurocopter Deutschland GmbH

Donauwörth (Germany)F

100.00F

100.00Eurocopter España S.A.

Madrid (Spain)F

100.00Eurocopter Financial Services Ltd.

Dublin (Ireland)

F

100.00F

100.00

F

54.00

F

100.00F

100.00F

100.00Madrid (Spain)

EurocopterF

100.00F

100.00Eurocopter Holding S.A.

Paris (France)

Eurocopter Japan T&E Co. Ltd.

Osaka (Japan)

Eurocopter S.A.S.

Marignane (France)

Eurocopter South Africa Pty. Ltd.

Lansaria (South Africa)

Eurocopter Training Services S.A.S

Marignane (France)

F

85.66

F

85.66

Helibras – Helicopteros do Brasil S.A.

Itajuba (Brazil)

E

25.00

E

25.00

HFTS Helicopter Flight Training Services GmbH

Hallbergmoos (Germany)F

100.00F

100.00

Korean Helicopter Development Support Ltd.

Sacheon-si (South Korea)

F

100.00Aircraft Services Lemwerder GmbH

Lemwerder (Germany)F

100.00F

100.00

Apsys

Suresnes (France)

E

16.20

E

16.20

Arbeitsgemeinschaft Marinelogistik

Bremen (Germany)

E

14.70

E

14.70

Atlas Defence Technology SDN.BHD

Kuala Lumpur (Malaysia)

P

49.00

P

49.00

Atlas Elektronik Finland Oy

Helsinki (Finland)

P

49.00

P

49.00

Atlas Elektronik GmbH

Bremen (Germany)

Cassidian

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

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Company

Head office

2010

%

2009

%

P

49.00

P

49.00

Atlas Elektronik Pty. Ltd.

St. Leonards (Australia)

P

49.00

P

49.00

Atlas Elektronik UK (Holdings) Ltd.

Newport, Wales (UK)

P

49.00

P

49.00

Atlas Elektronik UK Ltd.

Newport, Wales (UK)

P

49.00

Atlas Hydrographic Holdings Pty. Ltd.

St. Leonards (Australia)

Atlas Hydrographics GmbH

Bremen (Germany)
Horsholm (Denmark)

P

49.00

P

49.00

P

49.00

P

49.00

Atlas Maridan ApS

P

49.00

P

49.00

Atlas Maritime Security GmbH

Bremen (Germany)

P

49.00

P

49.00

Atlas Naval Engineering Company

Kyungnam (South Korea)

P

49.00

P

49.00

Atlas Naval Systems Malaysia SDN.BHD.

Kuala Lumpur (Malaysia)

P

49.00

Atlas North America LLC.

Virginia Beach (USA)

F

43.89

F

43.89

Saint-Gilles (France)

P

37.50

P

37.50

Aschau / Inn (Germany)F

100.00F

100.00Aviation Defense Service S.A.
Bayern-Chemie Gesellschaft
für flugchemische Antriebe mbH
Cassidian Ltd.
(ex EADS Defence & Security Systems Ltd.)

E

19.60

E

19.60

F

100.00

Pullach i. Isartal (Germany)F

100.00F

100.00

CybiCOM Atlas Defence Pty. Ltd.
Defence & Security Real Estate Manching
GmbH & Co. KG
Defence & Security Real Estate Ulm /Unterschleissheim GmbH & Co. KG

F

100.00F

100.00FF

100.00FF

100.00F
F

Newport, Wales (UK)
Umhlanga Rocks(South Africa)

Pöcking (Germany)
Friedrichshafen (Germany)

100.00Dornier Consulting GmbH
Dornier Flugzeugwerft GmbH (merged to EADS
Deutschland GmbH – Military Aircraft TB 51)

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

Madrid (Spain)F

100.00EADS Cognac Aviation Training Services

Paris (France)

100.00F

100.00EADS Defence & Security Systems Limited – Holding

Newport, Wales (UK)100.00F

100.00EADS Defence & Security Systems S.A.

Elancourt (France)F

100.00F

100.00EADS Defence & Security Solutions España S.A.U.

F

100.00F

100.00EADS Defence and Security Saudi Ltd.

Madrid (Spain)
Riyadh Olaya District(Saudi Arabia)

F

100.00F

100.00EADS Deutschland GmbH – Defence Headquarter

Unterschleißheim (Germany)F

100.00F

100.00

Munich (Germany)F

100.00F

100.00EADS Deutschland GmbH – Military Aircraft TB 51
EADS Deutschland GmbH – Verteidigung
und Zivile Systeme

F

100.00F

100.00EADS Operations & Services UK

Newport, Wales (UK)F

100.00F

100.00EADS Secure Networks Deutschland GmbHUlm (Germany)F

100.00F

100.00EADS Secure Networks Oy

Helsinki (Finland)

F

100.00F

100.00EADS Secure Networks S.A.S.

Elancourt (France)F

100.00F

100.00EADS System & Defence Electronics Belgium

Oostkamp (Belgium)

F

100.00F

100.00

Mexico DF (Mexico)F

100.00F

100.00EADS Telecom Mexico SA de CV
EADS Test & Services (UK) Ltd.
(ex Racal Instruments Group UK Ltd.)

Wimborne, Dorset (UK)

E

30.00

E

30.00

ESG Elektroniksystem- und Logistikgesellschaft

Munich (Germany)

E

24.50

E

24.50

ET Marinesysteme GmbH

Wilhelmshaven (Germany)F

100.00F

100.00Fairchild Controls Corporation

Frederick Maryland (USA)F

100.00F

100.00FmElo Elektronik- und Luftfahrtgeräte GmbHUlm (Germany)F

100.00F

100.00Gesellschaft für Flugzieldarstellung mbH

Hohn (Germany)F

100.00F

100.00Get Electronique S.A.

Castres (France)

E

45.00

E

45.00

Grintec Ewation Pty. Ltd.

Pretoria (South Africa)

Friedrichshafen (Germany)

Ulm (Germany)

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

EADS FINANCIAL STATEMENTS 2010

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%

2009

P

49.00

F

100.00

P

37.50

F

100.00

P

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Company

Head office

P

49.00

Hagenuk Marinekommunikation GmbH

Flintbek (Germany)F

100.00IFR France S.A.

Blagnac (France)

P

37.50

LFK – Lenkflugkörpersysteme GmbH

Schrobenhausen (Germany)F

100.00

M.P. 13

Paris (France)

50.00

P

50.00

Maîtrise d’Œuvre Système

Issy-les-Moulineaux (France)

P

37.50

P

37.50

Matra Electronique

La Croix Saint-Ouen (France)

E

49.00

E

49.00

Matrium GmbH

Munich (Germany)

P

37.50

P

37.50

MBDA France

Velizy (France)

P

75.00

P

75.00

MBDA Holding

Velizy (France)

P

37.50

P

37.50

MBDA Inc.

Westlack, CA (USA)

P

37.50

P

37.50

MBDA International

Stevenage (UK)

P

37.50

P

37.50

MBDA Italy SpA

Roma (Italy)

P

37.50

P

37.50

P

37.50

P

37.50

P

37.50

P

P

37.50

P

P

37.50

P
E
F

80.00

F

100.00MBDA M.S.A. Chatillon-sous-Bagneux (France)
MBDA Reinsurance Ltd.

Dublin (Ireland)

37.50

MBDA S.A.S.

Velizy (France)

37.50

MBDA Services

Velizy (France)

P

37.50

MBDA Treasury

Jersey (UK)

37.50

P

37.50

MBDA UK Ltd.

Stevenage, Herts (UK)

26.80

E

26.80

Patria Oyj

Helsinki (Finland)

F

80.00

Pentastar S.A. (ex Pentastar Holding)Paris (France)

E

18.75

F

100.00

Plant Holdings, Inc. (ex PlantCML)

Temecula, CA (USA)F

100.00

Proj2

E

18.75

Roxel

Paris (France)
Saint-Médard-en-Jalles(France)F

100.00F

100.00

Sofrelog S.A.

Bozons (France)

P

49.00

P

49.00

Sonartech Atlas Pty. Ltd.

St. Leonards (Australia)

P

25.13

P

25.13

Schrobenhausen (Germany)

P

37.50

P

37.50

TAURUS Systems GmbH
TDW – Ges. für verteidigungstechnische
Wirksysteme GmbHF

100.00F

100.00

Test & Services France

Velizy (France)

E

50.00

E

50.00

United Monolithic Semiconductors Holding*Orsay (France)

F

90.00

F

90.00

UTE CASA A.I.S.A.

Madrid (Spain)F

100.00F

100.00Astrium GmbH – Satellites

Munich (Germany)F

100.00F

100.00Astrium GmbH – Space Transportation

Munich (Germany)F

100.00F

100.00Astrium Holding S.A.S.

Paris (France)F

100.00F

100.00Astrium Ltd. – Satellites

Stevenage (UK)F

100.00F

100.00Astrium Ltd. – Services

Stevenage (UK)F

100.00F

100.00Astrium S.A.S. – Satellites

Toulouse (France)F

100.00F

100.00Astrium S.A.S. – Services

Paris (France)F

100.00F

100.00Astrium S.A.S. – Space Transportation

Les Muraux (France)F

100.00F

100.00Ottobrunn (Germany)F

100.00Astrium Services GmbH
Astrium Services S.A.S(merged to Astrium S.A.S. – Services)

Schrobenhausen (Germany)

Astrium

F

100.00F

100.00Astrium Services UK Ltd.

Stevenage (UK)

F

70.00

F

70.00

Axio-Net GmbHHannover (Germany)

F

54.40

F

53.00

Beijing Spot Image Co Ltd.

Beijing (China)

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

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2010

%

2009

%

Company

Head officeF

100.00F

100.00Computadoras, Redes e Ingenieria SA (CRISA)

Madrid (Spain)

F

99.99

F

99.99

DMC International Imaging Ltd.

Surrey (UK)F

100.00F

100.00Dutch Space B.V.

Leiden (Netherlands)

F

100.00F

100.00EADS Astrium N.V.

The Hague (Netherlands)

F

100.00F

100.00EADS Astrium S.L.

Madrid (Spain)F

100.00F

100.00EADS CASA Espacio S.L.

Madrid (Spain)F

100.00F

100.00EADS Deutschland GmbH – Space Services

Munich (Germany)F

100.00F

100.00GPT Special Project Management Ltd.

Riyadh (Saudi Arabia)

E

25.58

E

25.58

I-Cubed (I3C)

Fort Collins (USA)F

100.00F

100.00Imass Holding Limited Group

Newcastle (UK)F

100.00F

100.00Imass Ltd.

Newcastle (UK)F

100.00F

100.00

Infoterra GmbHFriedrichshafen (Germany)F

100.00F

100.00

Infoterra Ltd.

Southwood (UK)F

100.00F

100.00

Infoterra S.A.S.

Toulouse (France)F

100.00Jena-Optronik GmbH

Jena (Germany)F

100.00F

100.00

Matra Marconi Space UK Ltd.

Stevenage (UK)

F

74.90

F

74.90

MilSat Services GmbH

Bremen (Germany)

E

57.10

E

47.40

Nahuelsat S.A.

Buenos Aires (Argentina)

F

100.00F

100.00

Paradigm Secure Communications Ltd.

Stevenage (UK)F

100.00F

100.00

Paradigm Services Ltd.

Stevenage (UK)

F

89.98

F

89.98

Limeil Brevannes (France)F

100.00Sodern S.A.
Space Management & Services S.A.S.
(merged to Astrium Services S.A.S)

F

69.23

F

67.44

Spot Asia Pte Ltd.

Singapore (Singapore)

F

98.91

F

96.34

Spot Image Brasil Servicios en Image

Sao Paulo (Brazil)

F

98.91

F

96.34

Spot Image Corporation, Inc.

Chantilly, VA (USA)

F

98.91

F

96.34

Spot Image S.A.S.

Toulouse (France)

F

98.90

F

96.34

Spot Imaging Services Pty. Ltd.

Weston Creek (Australia)

F

99.99

F

99.99

Surrey Satellite Investments Ltd.

Surrey (UK)

F

99.99

F

99.99

Surrey Satellite Services Ltd.

Surrey (UK)

F

99.99

F

99.99

Surrey Satellite Technology Holdings Inc.

Delaware (USA)

F

99.99

F

99.99

Surrey Satellite Technology Ltd.

Surrey (UK)

F

99.99

F

99.99

Surrey Satellite Technology US LLC

Delaware (USA)F

100.00F

100.00TESAT-Spacecom Geschäftsführung GmbH

Backnang (Germany)F

100.00F

100.00TESAT-Spacecom GmbH & Co. KG

Backnang (Germany)

F

50.44

F

49.13

Tokyo Spot ImageTokyo (Japan)

P

50.00

P

50.00

ATR Eastern Support

Singapore (Singapore)

P

50.00

P

50.00

ATR G.I.E.

Toulouse (France)

P

50.00

P

50.00

ATR India Customer Support

Bangalore (India)

P

50.00

P

50.00

ATR International S.A.R.L.

Toulouse (France)

P

50.00

P

50.00

ATR North America, Inc.

Washington, D.C. (USA)

P

50.00

P

50.00

ATR Training Center S.A.R.L.

Toulouse (France)

P

50.00

P

50.00

ATRiam Capital Ltd.

Dublin (Ireland)

F

50.10

F

50.10

Composites Aquitaine S.A.

Salaunes (France)

F

50.00

F

50.00

Composites Atlantic Ltd.

Halifax (Canada)

E

30.00

E

30.00

Daher – Socata S.A.*

Louey (France)

Paris (France)

Other Businesses

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

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2.6 Appendix “Information on principal investments” — Consolidation Scope

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2010

%

2009

%

Company

Head officeF

100.00F

100.00Toulouse (France)F

100.00F

100.00F

100.00F

100.00EADS ATR S.A.
EADS North America Defense Security Systems
Solutions, Inc.
EADS North America Defense Test and Services, Inc.
(merged to EADS North America, Inc.)EADS North America Defense Test and Services(integrated in EADS North America, Inc.)EADS North America Tankers, LLC(merged to EADS North America, Inc.)EADS North America Tankers(integrated in EADS North America, Inc.)F

100.00F

100.00F

100.00F

100.00F

100.00FF

100.00FF

100.00FF

100.00San Antonio, TX (USA)
Irvine, CA (USA)

Arlington, VA (USA)EADS North America, Inc.

Arlington, VA (USA)100.00EADS Seca S.A.

Le Bourget (France)

100.00EADS Sogerma S.A.

Mérignac (France)

100.00

Maroc Aviation S.A.

Casablanca (Morocco)F

100.00Noise Reduction Engineering B.C.

Washington, D.C. (USA)F

100.00TYX Corp.

Reston, VA (USA)

Additionally consolidated are 4 SPEs.
Headquarters
F

100.00F

100.00

Aero Reassurance

Luxembourg

F

100.00F

100.00Paris (France)

F

99.73

F

99.73

Aeroassurance
AL Objekt Taufkirchen GrundstücksVerwaltungsgesellschaft mbH & Co. KG

Grünwald (Germany)

F

75.00

F

75.00

DADC Luft- und Raumfahrt Beteiligungs AG

Munich (Germany)

E

46.32

E

46.32

Dassault Aviation*

Paris (France)

F

99.12

F

99.12

Dornier GmbH – Zentrale

Friedrichshafen (Germany)F

100.00F

100.00EADS CASA France

Paris (France)F

100.00F

100.00EADS CASA S.A. (Headquarters)

Madrid (Spain)F

100.00F

100.00EADS Deutschland GmbH – Zentrale

Munich (Germany)F

100.00F

100.00EADS Deutschland GmbH, Innovation Works

Munich (Germany)F

100.00F

100.00EADS Finance B.V.

Amsterdam (Netherlands)

F

100.00F

100.00Paris (France)F

100.00F

100.00EADS France HQ
EADS France Innovation Works(integrated in EADS HQ France)

Suresnes (France)F

100.00F

100.00EADS Management Service GmbH

Munich (Germany)F

100.00F

100.00EADS North America Holdings Inc.

Arlington, VA (USA)

F

99.12

F

99.12

EADS Real Estate Dornier Grundstücke GmbH & Co. KG

Taufkirchen (Germany)F

100.00F

100.00EADS Real Estate Taufkirchen GmbH & Co. KG

Taufkirchen (Germany)F

100.00F

100.00EADS UK Ltd.

London (UK)F

100.00F

100.00Manhattan Beach Holding Company

Arlington, VA (USA)F

100.00F

100.00

Matra Aerospace, Inc.

Arlington, VA (USA)F

100.00F

100.00

Matra Défense

Velizy (France)F

100.00F

100.00

Matra Holding GmbH

Frankfurt (Germany)F

100.00F

100.00OBRA Grundstücks-Verwaltungsgesellschaft GmbH

Grünwald (Germany)F

100.00F

100.00OOO “EADS”

Moscow (Russia)

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

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To: The EADS N.V. Shareholders:

Report on the Consolidated Financial Statements
We have audited the accompanying consolidated financial statements 2010 which are part of the financial statementsof European Aeronautic Defence and Space Company EADS N.V., Amsterdam, and comprise the Consolidated Income
Statements (IFRS) for the years ended 31 December 2010, 2009 and 2008, the Consolidated Statements of Comprehensive
Income (IFRS) for the years ended 31 December 2010, 2009 and 2008, the Consolidated Statements of Financial Position(IFRS) as at 31 December 2010 and 2009, the Consolidated Statements of Cash Flows (IFRS) for the years ended
31 December 2010, 2009 and 2008, the Consolidated Statements of Changes in Equity (IFRS) for the years ended 2010, 2009
and 2008 and notes, comprising a summary of the significant accounting policies and other explanatory information.

MANAGEMENT’S RESPONSIBILITYManagement is responsible for the preparation and fair presentation of these consolidated financial statements in accordancewith International Financial Reporting Standards as adopted by the European Union and with Part 9 of Book 2 of the Dutch Civil
Code and for the preparation of the report of the Board of Directors (issued as of 8 March 2011) in accordance with Part 9 ofBook 2 of the Dutch Civil Code. Furthermore management is responsible for such internal control as it determines is necessary
to enable the preparation of the consolidated financial statements that are free from material misstatement, whether due tofraud or error.

AUDITOR’S RESPONSIBILITY
Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our
audit in accordance with Dutch law, including the Dutch Standards on Auditing. This requires that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial
statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated
financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks ofmaterial misstatement of the consolidated financial statements, whether due to fraud or error.
In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentationof the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but notfor the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating
the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as
well as evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

OPINION WITH RESPECT TO THE CONSOLIDATED FINANCIAL STATEMENTS
In our opinion, the consolidated financial statements give a true and fair view of the financial position of European Aeronautic
Defence and Space Company EADS N.V. as at 31 December 2010 its result and its cash flows for the year then ended inaccordance with International Financial Reporting Standards as adopted by the European Union and with Part 9 of Book 2 of
the Dutch Civil Code.

EMPHASIS OF MATTER
We draw your attention to all of the specific disclosures made by the Company in its Notes to the Consolidated Financial
Statements under Note 3 “Accounting for the A400M programme” in relation with the risks and uncertainties attached to the
A400M programme. Our opinion is not qualified in respect of this matter.

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Report on other legal and regulatory requirements
Pursuant to the legal requirement under Section 2:393 sub 5 at e and f of the Dutch Civil Code, we have no deficiencies toreport as a result of our examination whether the report of the Board of Directors (issued as of 8 March 2011), to the extent
we can assess, has been prepared in accordance with Part 9 of Book 2 of this Code, and whether the information as required
under Section 2:392 sub 1 at b-h has been annexed. Further we report that the report of the Board of Directors (issued
as of 8 March 2011), to the extent we can assess, is consistent with the consolidated financial statements as required by
Section 2:391 sub 4 of the Dutch Civil Code.
Rotterdam, 8 March 2011

KPMG Accountants N.V.

Ernst & Young Accountants LLP

L.A. Blok RA

C.T. Reckers RA

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Company Financial Statements
Balance Sheet of the Company Financial Statements

108

Income Statement of the Company Financial Statements

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

AssetsNote

At 31 December 2010

At 31 December 2009

Goodwill

2

4,354

4,354

Financial fixed assets

2

7,960

9,578

Non-current securities

4

5,172

3,809

17,486

17,741

Fixed assets

Non-fixed assets
Receivables and other assets

3

4,874

4,383

Securities

4

5,756

4,045

Cash and cash equivalents

4

3,199

5,377

13,82913,80531,31531,546

Total assets
Liabilities and stockholders’ equity
Stockholders’ equity (1)5Issued and paid up capital

816

816

Share premium

7,645

7,683

Revaluation reserves

(989)

1,389

Legal reserves

3,532

3,116

Treasury shares

(112)

(109)

Retained earnings(2,604)(1,597)

Result of the year

553

(763)

8,841

10,535

2.194

1.941

2,194

1,941

Non-current liabilities
Financing liabilities

6

Current liabilities
Financing liabilities

7

29

0

Other current liabilities

7

20,251

19,07020,28019,07031,31531,546

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

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Income Statement of the Company Financial Statements
2010

2009

Income from investments

463

(953)

Other results

90

190

553

(763)

(In € million)

Net result

Note

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Contents

1.

Basis of presentation

113

2.

Fixed assets

113

3.

Receivables and other assets

114

4.

Securities, Cash and cash equivalents

114

5.

Stockholders’ equity

115

6.

Non-current financing liabilities

116

7.

Current liabilities

116

8.

Net result

116

9.

Financial instruments

116

10. Commitments and contingent liabilities

116

11. Remuneration

117

12. Employees

120

13. Related party transactions120

14. Auditor Fees

120

Supplementary Information

121

Auditors’ report on
the Company Financial Statements121

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122

1.

Appropriation of result

122

2.

Subsequent events

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1. Basis of presentation
1.1 GENERALEADS N.V., having its legal seat in Amsterdam, theNetherlands, is engaged in the holding, coordinating andmanaging of participations or other interests in and to financeand assume liabilities, provide for security and / or guarantee
debts of legal entities, partnerships, business associations
and undertakings that are involved in the aeronautic, defence,
space and / or communication industry or activities that arecomplementary, supportive or ancillary thereto.
The Company Financial Statements are part of the 2010
financial statements of EADS N.V.

the Netherlands Civil Code. As from 2005, the Netherlands
Civil Code allows that the principles for the recognition andmeasurement of assets and liabilities and determination of
the result (hereinafter referred to as principles for recognition
and measurement) of the Company Financial Statements of
EADS N.V. are the same as those applied for the consolidated
EU-IFRS financial statements. These consolidated EU-IFRS
financial statements are prepared according to the standards
laid down by the International Accounting Standards Boardand adopted by the European Union (herein referred to as
EU-IFRS). Please see Note 2 of the consolidated financial
statements for a description of these principles.
Participating interests including subsidiaries, over whichsignificant influence is exercised, are stated on the basis of
the Net Asset Value.

The description of the Company’s activities and the Groupstructure, as included in the notes to the consolidated
financial statements, also apply to the Company Financial
Statements. In accordance with Article 402 Book 2 of the
Dutch Civil Code the income statement is presented inabbreviated form.

The share in the result of participating interests consists ofthe share of EADS N.V. in the result of these participatinginterests. Results on transactions, where the transfer ofassets and liabilities between EADS N.V. and its participatinginterests and mutually between participating interests
themselves, are not incorporated insofar as they can bedeemed to be unrealised.

1.2 PRINCIPLES FOR THE MEASUREMENT
OF ASSETS AND LIABILITIES AND
THE DETERMINATION OF THE RESULT
For setting the principles for the recognition andmeasurement of assets and liabilities and determination of
the result for its Company Financial Statements, EADS N.V.
makes use of the option provided in Section 2:362 (8) ofUndistributed results from investments are included in theother legal reserves to the extent the Company cannot
enforce dividend distribution.

2. Fixed assets
At the end of 2010, goodwill acquisition cost amounts to € 5,676 million (2009: € 5,676 million) and the cumulative amortisationand impairments to € 1,322 million (2009: € 1,322 million).
The movements in financial fixed assets are detailed as follows:(In € million)

Balance at 31 December 2009

Subsidiaries

Participations

Loans

Total

7,805

127

1,646

9,578

305

305

(102)

(102)

Additions
Redemptions
Share based payments

43

Net income from investments

462

43
1

463

Actuarial gains / losses IAS 19

(32)

(32)

Dividends received

(182)

(182)

Translation differences / other changes(2,194)21

60(2,113)

Balance at 31 December 2010

5,902

149

1,909

7,960

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1

The investments in subsidiaries are included in the balance
sheet based on their net asset value in accordance with theaforementioned accounting principles of the consolidated
financial statements. The participations include availablefor-sale securities measured at fair value and investments inassociated companies accounted for using the Net Asset
Value.
The translation differences / other changes reflect mainly the
impact in the other comprehensive income related to theapplication of IAS 39.

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Significant subsidiaries, associates and joint ventures arelisted in the Appendix “Information on principal investments”
to the consolidated financial statements.
The loans provided to subsidiaries decreased to€ 1,476 million (2009: € 1,488 million) and the loans provided
to participations increased to € 44 million (2009: € 24 million).
The item redemptions mainly reflects the redemptions ofloans provided to the subsidiaries MilSat Services GmbHand to EADS Astrium N.V An amount of € 421 million has
a maturity between five and ten years and an amount of€ 309 million matures after ten years. On average, the interest
rate of the loans is 4%.

3. Receivables and other assets(In € million)

2010

2009

Receivables from subsidiaries

4,619

4,126

255

257

4,874

4,383

Other assets
Total receivables and other assets

The receivables from subsidiaries include mainly receivables in connection with the cash pooling in EADS N.V.
The receivables and other assets in the current year and in the previous year are due within one year.

4. Securities, Cash and cash equivalents
The securities comprise mainly available-for-sale securities.
The available-for-sale security portfolio contains a non-current
portion of € 5,172 million (2009: € 3,809 million). For further
information please see Note 22 of the consolidated financial
statements.

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

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5. Stockholders’ equity(In € million)

Balance at 31 December 2008
Capital increase

Capital
stock

Share
premiums

Revaluation
reserves

Legal
reserves

TreasurysharesRetainedearnings

Result of
the yearTotal
equity

815

7,836

237

3,379

(109)

(2,708)

1,572

11,0221

14

15

Net loss(763)

Share based payments
Cash distribution

(162)
1

Purchase of treasury shares

(1)
(5)

Cancellation of shares

(5)
1,152

(264)

(479)

Appropriation of result
816

Capital increase(5)

5

Others
7,683

1,389

3,116

(109)

409

1,572

(1.572)(1,597)(763)

10,535

553

553

5

5

Net income
Share based payments

(43)

23

Transfer to legal reserves

(20)

(239)

239

Purchase / sale of treasury shares(3)

Others(2,378)

177

816

(989)

3,532

7,645

For further information to the Stockholders’ equity, please see
Note 23 of the consolidated financial statements.
As of 31 December 2010, the item ‘Revaluation reserves’
relates to € 384 million (2009: € 561 million) resulting fromunrealised positive fair values of securities classified asavailable for sale and fair values of cash flow hedges,
recognised directly in equity with an negative amount of€ 1,373 million (2009: € 828 million positive fair values). The
cash flow hedges are included in “Subsidiaries”.
The legal reserves are related to EADS’ share in theundistributed results from investments for € 1,152 million(2009: € 1,062 million), internally generated capitalised
development costs of € 946 million (2009: € 797 million) and€ 1,434 million (2009: € 1,257 million) resulting from currencytranslation effects of affiliated companies.

(3)
(28)

Appropriation of result
Balance at 31 December 2010

19

(162)

Transfer to legal reserves

Balance at 31 December 2009

(763)

19

(112)

(2,229)

(763)

763

(2,604)

553

8,841

The retained earnings include actuarial losses arising fromdefined benefit plans, recognised in equity, with an amount of€ 1,781 million (2009: € 1,750 million).
Pursuant to Dutch law, limitation exist relating to the
distribution of stockholders’ equity with an amount of€ 4,732 million (2009: € 5,321 million). The limitations relate
to capital stock of € 816 million (2009: € 816 million) andto legal reserves of € 3,532 million (2009: € 3,116 million).
In 2010, unrealised gains related to revaluation reserveswith an amount of € 384 million (2009: € 1,389 million) were
not distributable. In general, gains related to available forsale securities, fair values of cash flow hedges, currencytranslation effects of affiliated companies and capitalised
development costs reduce the distributable stockholders’equity.

The internally generated development costs reflect capitalised
development costs in the consolidated subsidiaries andare allocated to other legal reserves in accordance with
Article 2:389 paragraph 6 of the Dutch Civil Code.

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6. Non-current financing liabilities
The non-current financing liabilities include a long-term loan,
granted by the European Investment Bank to EADS with
an amount of US$ 421 million and a loan granted by EADS

Finance B.V. with an amount of € 1,492 million. For further
details, please see Note 26 of the consolidated financial
statements.

7. Current liabilities
2010(In € million)

Financing Liabilities

2009

29

0

Liabilities to subsidiaries

18,651

17,497

Liabilities to participations

1,437

1,472

163

101

20,28019,070

Other liabilities
Total

The financing liability of € 29 million relates to a Shareholder loan granted by SOGEADE.
The liabilities to subsidiaries comprise mainly liabilities in connection with the cash pooling in EADS N.V.

8. Net result
The net income in 2010 amounts to € 553 million (2009: net loss of € 763 million).

9. Financial instruments
By the nature of the activities carried out, EADS is exposed
to a variety of financial risks, especially foreign currency
exchange rate risks and interest risks. EADS uses financial
instruments in order to limit these financial risks. Information

to the terms and conditions of the financial instruments
and the respective fair values is provided in Note 34 of theconsolidated financial statements.

10. Commitments and contingent liabilities
EADS N.V. issues guarantees on behalf of consolidated
companies with an amount of € 1,220 million. The
commitments of these companies to third parties mainly
relate to their operating business as described in Note 33
and Note 36 to the consolidated financial statements.

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The Company is heading a fiscal unity, which also includes
EADS Finance B.V., EADS Astrium N.V. and Dutch Space
B.V. and therefore the Company is several and jointly liable forincome tax liabilities of the fiscal unity as a whole.

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11. Remuneration
The total remuneration of the non-executive and the Executive Members of the Board of Directors and former Directors
related to the reporting periods 2010 and 2009 can be summarized as follows:

Non-executive Members of the Board
2010

2009

Fixum

1,170,000

1,075,000

Fees

520,000

455,000

2010

2009

(In €)

Executive Members of the Board(In €)

Base Salary
Annual Variable Pay*

900,000

900,000

1,732,500(1,141,250)*

Waived at CEO’s request.

The remuneration of the non-executive Members of the Board of Directors was as follows:

Summary table of the remuneration of the non-executive Directors
Directors’ remuneration related to 2010*

Directors’ remuneration related to 2009*

Fixum

Attendance Fees

Fixum(in €)(in €)(in €)(in €)

Bodo Uebber

210,000

120,000

183,750

90,000Rolf Bartke

100,000

50,000100,000

55, 000

Dominique D’Hinnin

120,000

60,000120,000

50, 000

Juan Manuel Eguiagaray Ucelay

80,00060,00080,00055, 000

Arnaud Lagardère

100,000

20,000100,000

10, 000

Hermann-Josef Lamberti

130,000

45,000130,000

35, 000

Lakshmi N. Mittal**

80,00040,000--Sir John Parker

130,000

45,000130,000

45, 000

Michel Pébereau

100,000

35,000100,000

50, 000

Wilfried Porth

120,000

45,00070,00025,000--61,25040,0001,170,000

520,000

1,075,000

455, 000

Current non-executive Board Members*

Attendance Fees

Former non-executive Board Members***
Rüdiger Grube
Total*
The Fixum related to 2009 was paid in 2010; the Fixum related to 2010 will be paid in 2011.
** Remuneration 2009 waived at the Director’s request.
*** Pro rata in accordance with the period of Membership with the Board of Directors.

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The remuneration of the Executive Member of the Board of Directors was as follows:

Summary table of the remuneration of the current and former Executive Directors
Directors’ remuneration in respect of 2010
Base Salary

Annual Variable Pay

Base Salary(in €)(in €)(in €)(in €)

900,000 €(1,141,250)
Waived at CEO’srequestExecutive Board Members

Louis Gallois

Directors’ remuneration in respect of 2009

900,000

1,732,500

Annual Variable Pay

The bonus conditions are disclosed in the Board report, chapter 4.5.1.2.
The table below gives an overview of the interests of the current Executive Board Directors under the various long-term
incentive plans of EADS:Stock option plans
Number of options
Year of plan

Initially
granted

As at
1 Jan 2010

Granted in2010

Exercisedduring 2010

As at 31 Dec,
2010

Exercise
price in euro

Expirydate

67,50067,500--67,50025.65

16 Dec. 2016

Initially
granted

As at
1 Jan 2010

Forfeited in
2010

Vestedduring 2010

As at 31 Dec
2010

Vesting
date

16,875

16,875

3,375

13,500-2 June 2010Louis Gallois
2006

Performance shares plan
Number of performance shares*
Year of planLouis Gallois
2006*

Vesting of all performance shares granted to the Chief Executive Officer is subject to performance conditions.

Performance units plan
Number of Performance units**

Louis Gallois

Louis Gallois

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EADS FINANCIAL STATEMENTS 2010

Granted in 2007

Vesting date

33,700

Vesting schedule is made up of four payments over two years:
uu25% expected in May 2011
uu25% expected in November 2011
uu25% expected in May 2012
uu25% expected in November 2012

Granted in 2008

Vesting date

40,000

Vesting schedule is made up of four payments over two years:
uu25% expected in May 2012
uu25% expected in November 2012
uu25% expected in May 2013
uu25% expected in November 2013

Notes to the Company Financial Statements

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Louis Gallois

**

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Granted in 2009

Vesting date

46,000

Vesting schedule is made up of four payments over two years:
uu25% expected in May 2013
uu25% expected in November 2013
uu25% expected in May 2014
uu25% expected in November 2014

Granted in 2010

Vesting date

54,400

Vesting schedule is made up of four payments over two years:
uu25% expected in May 2014
uu25% expected in November 2014
uu25% expected in May 2015
uu25% expected in November 2015

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

STOCK OPTION PLANS
To the other current Members of the Executive Committee
and to the Group’s senior management, the number ofoutstanding stock options amounted to 22,898,099 at
31 December 2010 (2009: 25,785,645).
During the year 2010, none of the Executive Committee
Members, including former Executive Board Directors, haveexercised options granted under the various EADS stock
option plans. Exercises of options by the EADS Executive
Committee Members are disclosed on the EADS internet
website in accordance with the applicable regulations.

PERFORMANCE AND RESTRICTED SHARE PLANS
To the current Members of the Executive Committee and to
the Group’s senior management, the number of outstanding
performance and restricted shares amounted to nil at
31 December 2010 (2009: 1,659,850).

PERFORMANCE AND RESTRICTED UNIT PLANS
To the current Members of the Executive Committee and to
the Group’s senior management, the number of outstanding
performance and restricted units amounted to 12,458,890 at
31 December 2010 (2009: 8,719,540).
The expense accounted for in 2010 for stock options,performance shares and performance units granted to theChief Executive Officer was € 0.9 million (2009: € 0.6 million).
For further information on these various plans, please see
Note 35 of the consolidated IFRS financial statements.
The pension benefit obligation for the Executive Committee
Members is as follows:
The Members of the Executive Committee have pension
promises as part of their employment agreements. The
general policy is to give them annual pensions of 50% of theirannual base salary upon reaching five years of service in the
Executive Committee of EADS at the age of 60 or 65.
These rights can gradually increase to 60% after a second
term, usually after ten years of service in the EADS Executive
Committee. However, in order to reach the replacement ratioof 60% as mentioned before, the respective member of the
Executive Committee needs additionally to have a seniority in
the Company of 12 years.
These pension schemes have been implemented throughcollective executive pension plans in France and Germany.
These pension promises have also separate rules e.g. forminimum length of service and other conditions to comply
with national regulations.
For the Chief Executive Officer, the amount of the pension
defined benefit obligation (DBO, being the book cash value)amounted to € 2.3 million as of 31 December 2010, while
the amount of current service and interest cost related tohis pension promise accounted for the fiscal year 2010
represented an expense of € 0.6 million. This obligation has
been accrued in the financial statements.

OTHER BENEFITS
All amounts reported above for the Executive Board Directors(current and former) are free of benefits in kind, as explained
below, they are entitled to, as well as all national social andincome tax impacts. The Company grants to the members of
the Executive Committee appropriate insurance coverage, inparticular a Directors and Officers liability insurance.
The Chief Executive Officer is entitled to a company car. The
value of his company car is € 24,120 (excluding VAT).
EADS has not provided any loans to / advances
to / guarantees on behalf of Directors.
For further information on the remuneration, please see
Note 37 of the consolidated financial statements.

EADS FINANCIAL STATEMENTS 2010

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12. Employees
The number of persons employed by the Company at year end 2010 was two (2009: two).

13. Related party transactions
In 2007, Lagardère and the French State granted to EADS their received dividend for 2006 in the amount of € 29 million as aninterest free loan.

14. Auditor Fees
Services of Statutory Auditors and members of their Network rendered to the Group for the financial years 2010 and 2009:
KPMG Accountants N.V.

Audit
Audit process, certification,
examination of individual andconsolidated accounts

2010
Amount
in €K

%

2009
Amountin €K

Ernst & Young Accountants LLP%

2010Amount
in €K

%

2009
Amount
in €K

%

5,710

81.1

5,238

72.3

4,493

70.8

4,390

79.9

Additional tasks

516

7.4

1,258

17.4

1,607

25.4

969

17.6

Sub-total

6,226

88.5

6,496

89.7

6,100

96.2

5,359

97.5

Legal, tax, employment

628

8.9

354

4.9

123

1.9

137

2.5

Information Technology
Other (to be specified if >10% of
the fees for the audit)

12

0.2

200

2.7

121

1.9

0

0

172

2.4

194

2.7

0

-

0

0

Other services as relevant

Sub-total
Total

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812

11.5

748

10.3

244

3.8

137

2.5

7,038

100.0

7,244

100.0

6,344

100.0

5,496

100.0

EADS FINANCIAL STATEMENTS 2010

Notes to the Company Financial Statements
Supplementary Information

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Supplementary Information
Auditors’ report on the Company Financial Statements
To: The EADS N.V. Shareholders:

REPORT ON THE COMPANY FINANCIAL STATEMENTS
We have audited the accompanying Company Financial Statements 2010 which are part of the financial statements ofEuropean Aeronautic Defence and Space Company EADS N.V., Amsterdam, and comprise the Balance Sheet of the Company
Financial Statements as at 31 December 2010, the Income Statement of the Company Financial Statements for the year
then ended and the Notes to the Company Financial Statements, comprising a summary of the accounting policies and otherexplanatory information.

Management’s responsibility
Management is responsible for the preparation and fair presentation of these Company Financial Statements and for the
preparation of the report of the Board of Directors (issued as of 8 March 2011), both in accordance with Part 9 of Book 2 of the
Dutch Civil Code. Furthermore management is responsible for such internal control as it determines is necessary to enable thepreparation of the Company Financial Statements that are free from material misstatement, whether due to fraud or error.

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

Opinion with respect to the Company Financial Statements
In our opinion, the Company Financial Statements give a true and fair view of the financial position of European Aeronautic
Defence and Space Company EADS N.V. as at 31 December 2010 and of its result for the year then ended in accordance withPart 9 of Book 2 of the Dutch Civil Code.

Emphasis of matter
We draw your attention to all of the specific disclosures made by the Company in its Notes to the Consolidated Financial
Statements under Note 3 ‘Accounting for the A400M programme’ in relation with the risks and uncertainties attached to the
A400M programme. Our opinion is not qualified in respect of this matter.

EADS FINANCIAL STATEMENTS 2010

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Other Supplementary Information

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REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
Pursuant to the legal requirement under Section 2:393 sub 5 at e and f of the Dutch Civil Code, we have no deficiencies toreport as a result of our examination whether the report of the Board of Directors (issued as of 8 March 2011), to the extent
we can assess, has been prepared in accordance with Part 9 of Book 2 of this Code, and whether the information as required
under Section 2:392 sub 1 at b-h has been annexed. Further we report that the report of the Board of Directors (issued as of
8 March 2011), to the extent we can assess, is consistent with the Company Financial Statements as required by Section 2:391
sub 4 of the Dutch Civil Code.
Rotterdam, 8 March 2011

KPMG Accountants N.V.

Ernst & Young Accountants LLP

L.A. Blok RA

C.T. Reckers RA

Other Supplementary Information
1. Appropriation of result
Articles 30 and 31 of the Articles of Association provide thatthe Board of Directors shall determine which part of the result
shall be attributed to the reserves. The General Meeting of
Shareholders may dispose of a reserve only upon a proposalof the Board of Directors and to the extent it is permitted
by law and the Articles of Association. Dividends may only
be paid after adoption of the annual accounts from which itappears that the Shareholders’ equity of the Company is morethan the amount of the issued and paid-in part of the capitalincreased by the reserves that must be maintained by law.

It will be proposed at the Annual General Meeting of
Shareholders that the net income of € 553 million as shownin the income statements for the financial year 2010 isto be added to retained earnings and that a payment ofa gross amount of € 0.22 per share shall be made to the
Shareholders.

2. Subsequent events
For further information please see Note 40 of the consolidated financial statements.

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European Aeronautic Defence
and Space Company EADS N.V.
Mendelweg 302333 CS Leiden
The Netherlands
In France
37, boulevard de Montmorency
75781 Paris cedex 16 – France
In Germany
81663 Munich – Germany
In Spain
Avenida de Aragón 404
28022 Madrid – Spain