EADS N.V.
Unaudited Condensed Consolidated Financial Information for the year ended December 31, 2006

Year 2006 Report

Unaudited Condensed Consolidated
Financial Information of EADS N.V.
for the year 2006

Unaudited Condensed IFRS Consolidated Income Statements ...………………………….…......…2
Unaudited Condensed IFRS Consolidated Balance Sheets….…..………….……………...……...…3
Unaudited Condensed IFRS Consolidated Cash Flow Statements……………....…...…………..…4
Unaudited Condensed IFRS Consolidated Reconciliation of Movement in Equity
attributable to equity holders of the parent and Minority interests…..………….…….…..……...…5
Explanations to the Unaudited Condensed IFRS Consolidated Financial Statements
as at December 31, 2006...….…………………………………………….…………...…………..….....…..5
1. The Company……………………………………………………………………………………..…..5
2. Accounting policies……………….………………………………………………..…………….....6
3. BAE Systems UK pension plans…………………………………………………………………..7
4. Changes in the consolidation perimeter of EADS…………………………....…….……….…8
5. Segment information………………………………..…………..…………………………..………8
6. EBIT pre goodwill impairment and exceptionals…..……..……………………………………97. Significant income statement items………….…………………..………….………..……...…10
8. Significant balance sheet items…………………...…………………………………...……......11
9. Significant cash flow items……………………………………………………..…...…..……….13
10. Number of shares………………………………………………………..........................….....…13
11. Earnings per share……………………………………..……………….………...………,……….13
12. Related party transactions ………………..…………………...…….……………………..……14
13. Number of employees ……………………………….……………….……………..........………14
14. Subsequent events ……………………………….……………………………..…….………..…15

1

08.03.2007

EADS N.V.
Unaudited Condensed Consolidated Financial Information for the year ended December 31, 2006

Unaudited Condensed IFRS Consolidated Income Statements

January 1 December 31, 2006
Revenues
Cost of sales
Gross margin
Selling, administrative & otherexpenses
Research and development
expensesM€
39,434-34,7224,712

January 1 December 31, 2005

%
100
-88
12

M€
34,206-27,530
6,676-2,462-6-2,458

Deviation

%
100
-80
20

M€
5,228
-7,192-1,964%-2,336

-7

-126

5

-6

-2,075

-6

-383

18

297

1

222

0

75

34

15
26
-29

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

189

0

225

1

-36

-16

278
-244
81
115

1
-1
0
0

2,712
-177
-825
1,710

8
-1
-2
5

-2,434-67
906-1,595

-90
38
-110
-93

Attributable to:Equity holders of the parent (Netincome)Minority interests

99
16

0
0

1,676
34

5
0

-1,577
-18

-94
-53

Earnings per share
Basic
Diluted

€

€

€

0.12
0.12

2.11
2.09

-1.99
-1.97

2

08.03.2007

EADS N.V.
Unaudited Condensed Consolidated Financial Information for the year ended December 31, 2006

Unaudited Condensed IFRS Consolidated Balance Sheets
December 31, 2006
M€
Non-current assets
Intangible assets
Property, Plant and Equipment
Investments in associates under theequity method
Other investments and long-term
financial assets
Non-current other assets
Deferred tax assets 1)
Non-current securities

December 31, 2005%

M€

Deviation

%

M€

%

10,855
14,31515
20

11,052
13,951

16
19

-197
364

-2
3

2,095

3

1,908

3

187

10

1,666

2

1,938

3

-272

-14

4,231
2,624
1,294
37,080

6
4
2
52

3,610
2,980
1,011
36,450

5
4
1
51

621
-356
283
630

17
-12
28
2

16,892
4,852
4,545
549
8,143
34,981

23
7
6
1
11
48

15,425
4,802
3,675
4,189
5,386
33,477

22
7
5
6
8
48

1,467
50
870
-3,640
2,757
1,504

10
1
24
-87
51
4

76

0

881

1

-805

-91

Total assets

72,137100

70,808

100

1,329

2

Total equity
Equity attributable to equity holders of
the parent
Capital StockReserves 1)
Accumulated other comprehensive
incomeTreasury shares

816
7,593

1
11

818
8,699

1
12

-2
-1,106

0
-13

4,955

7

3,982

6

973

24

-349
13,015
137
13,152

0
19
0
19

-445
13,054153
13,207

0
19
0
19

96
-39
-16
-55

-22
0
-10
0

9,063
3,561
2,465
12,68027,769

13
5
3
17
38

7,997
4,189
2,376
11,29525,857

11
6
3
16
36

1,066
-628
89
1,385
1,912

13
-15
4
12
7

3,631
2,196
0
7,461
218
17,64631,152

5
3
0
10
0
25
43

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

4
1
5
10
0
25
45

904
1,288
-3,500
827
44
-93
-530

33
142
-100
12
25
-1
-2

64

0

62

0

2

3

72,137100

70,808

100

1,329

2

Current assets
Inventories
Trade receivables
Other current assets
Current securities 2)
Cash and cash equivalents 2)
Non-current assets / disposalgroups classified as held for sale

Minority interests 1)
Non-current liabilities
Non-current provisions 1)
Long-term financial liabilities
Deferred tax liabilities
Other non-current liabilities
Current liabilities
Current provisions
Short-term financial liabilities
Liability for puttable instruments
Trade liabilities
Current tax liabilities
Other current liabilities
Liabilities directly associated with
non-current assets classified asheld for sale
Total equity and liabilities

1) For retrospective application as of December 31, 2005 of the revised IAS 19 “Employee Benefits” please refer to Note 2“Accounting policies”.
2) Regarding the retrospective change as of December 31, 2005 in presentation of “Cash and cash equivalents” please refer toNote 2 “Accounting policies”.

3

08.03.2007

EADS N.V.
Unaudited Condensed Consolidated Financial Information for the year ended December 31, 2006

Unaudited Condensed IFRS Consolidated Cash Flow Statements
January 1 - December January 1 - December
31, 2006
31, 2005
M€
M€
Profit for the period attributable to equity holders of the parent(Net income)
Profit attributable to minority interests
Adjustments to reconcile profit for the period (net income) to cash
provided by operating activities
Depreciation and amortization
Valuation adjustments and CTA release
Deferred tax (income) / expense
Change in tax assets, tax liabilities and provisions for actual
income tax
Results of disposal of non-current assets
Results of companies accounted for by the equity method
Change in current and non-current provisions
Change in other operating assets and liabilities
Cash provided by operating activities- Purchase of intangible assets, PPE- Proceeds from disposals of intangible assets, PPE- Acquisitions of subsidiaries and joint ventures (net of cash)- Proceeds from disposals of subsidiaries (net of cash)- Payments for investments in associates and otherinvestments and long-term financial assets- Proceeds from disposals of associates and otherinvestments and long-term financial assets- Dividends paid by companies valued at equity- Increase in equipment of leased assets- Proceeds from disposals of leased assets- Increase in finance lease receivables- Decrease in finance lease receivables
Disposals of non-current assets / disposal groups classified asheld for sale and liabilities directly associated with non-current
assets classified as held for sale
Change of securities *)Change in cash from changes in consolidation
Cash provided by (used for) investing activities
Change in long-term and short-term financial liabilities
Cash distribution to EADS N.V. shareholders
Dividends paid to minorities
Payments related to liability for puttable instruments
Capital increase
Purchase of treasury shares
Cash (used for) financing activities
Effect of foreign exchange rate changes and other valuation
adjustments on cash and cash equivalents
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of period *)Cash and cash equivalents at end of period *)

99
16

1,676
34

1,691
426
-193

1,653
261
386

-160
-336
-152
2,150
-143
3,398
-2,708
76
-82
86

63
-170
-210
175
1,239
5,107
-2,818
101
-131
89

-421

-659

813
46
-147
215
-16
79

485
36
-40
256
-219
85

690
3,357
0
1,988
784
-520
-16
-2,87994-35-2,5720
1,008
12-1,795
-344
-396
0
-93
187
-288
-934

-57
2,757

17
2,395

5,386
8,143

2,991
5,386

*) Regarding the retrospective change in 2005 in presentation of “Cash and cash equivalents” please refer to Note 2“Accounting policies”.

As of December 31, 2006, EADS’ cash position (stated as cash and cash equivalents in the unaudited
consolidated cash flow statements) includes 597 M € (579 M € as of December 31, 2005), which
represent EADS’ share in MBDA’s cash and cash equivalents, deposited at BAE Systems and408.03.2007

EADS N.V.
Unaudited Condensed Consolidated Financial Information for the year ended December 31, 2006

Finmeccanica. These funds are available for EADS upon demand. After the acquisition in October
2006 of the BAE Systems stake in Airbus, no cash and cash equivalents from Airbus are any longer
deposited at BAE Systems (1,202 M € as of December 31, 2005).

Unaudited Condensed IFRS Consolidated Reconciliation of Movement inEquity attributable to equity holders of the parent and Minority interests

Balance at January 1, 2005

Equityattributable toequity holders of
the parent
16,210Retrospective adjustments *)in M €

Minority
interests

total
144

16,354

-397

-10

-407

Balance at January 1, 2005, adjusted

15,813

134

15,947

Change in actuarial gains and losses *)

-275

-13

-288

OCI

-3,696-2-3,698

Profit for the period

1,676

34

1,710

Cash distribution to shareholders

-396

-396

Capital Increase

187

187

Purchases of treasury shares

-288

-288

33

33

OthersBalance at December 31, 2005

13,054153

13,207

Change in actuarial gains and losses

-692

-22

-714

OCI

973

2

975

Profit for the period

99

16

115

-520

-16

-536

Cash distribution to shareholders / dividends paid tominorities
Capital Increase

94

94

Purchases of treasury shares

-35

-35

Others42

4

46

13,015

137

13,152

Balance at December 31, 2006

For the purposes of the Unaudited Condensed Consolidated Financial Information for the year 2006, a
Statement of Recognised Income and Expenses is not included.
*) For retrospective adjustments as of January 1, 2005 and in the year 2005 please refer to Note 2 “Accounting policies”.

Explanations to the Unaudited Condensed IFRS Consolidated Financial
Statements as at December 31, 2006
1. The Company
The accompanying Condensed Consolidated Financial Statements (unaudited) present theoperations of European Aeronautic Defence and Space Company EADS N.V. and its subsidiaries(“EADS” or the “Group”), a Dutch public limited liability company (Naamloze Vennootschap) legallyseated in Amsterdam (Le Carré, Beechavenue 130-132, 1119 PR, Schiphol-Rijk, The
Netherlands), and are prepared and reported in Euros (“€”). EADS’ core business is the
manufacturing of commercial aircraft, civil and military helicopters, commercial space launchvehicles, missiles, military aircraft, satellites, defence systems and defence electronics andrendering of services related to these activities.

508.03.2007

EADS N.V.
Unaudited Condensed Consolidated Financial Information for the year ended December 31, 2006

2. Accounting policies
EADS’ Condensed Unaudited Consolidated Financial Statements are prepared in accordance with
International Financial Reporting Standards (“IFRS”), adopted by the International AccountingStandards Board (“IASB”) as endorsed by the European Union (EU). They comprise (i) IFRS, (ii)International Accounting Standards (“IAS”) and (iii) Interpretations originated by the International
Financial Reporting Interpretations Committee (“IFRIC”) or former Standards Interpretation
Committee (“SIC”).
As of January 1st, 2006, EADS adopted the following amendments to existing Standards, newStandards and new Interpretations as required by the following announcements released by the
IASB in December 2004 and throughout 2005:
EADS applies new IFRS 6 “Exploration for and Evaluation of Mineral Resources”, amendments to
IAS 19 “Employee Benefits” (December 2004) and to IAS 21 “The Effects of Changes in Foreign
Exchange Rates” (December 2005) respectively and two amendments to IAS 39 “Financial
Instruments: Recognition and Measurement”: “Fair Value Option” (June 2005) and “Financial
Guarantee Contracts” (August 2005) with the latter also amending IFRS 4. Furthermore, EADS
applies new Interpretations IFRIC 5 “Rights to Interests arising from Decommissioning,
Restoration and Environmental Rehabilitation Funds” and IFRIC 6 “Liabilities arising from
Participating in a Specific Market – Waste Electrical and Electronic Equipment”.
Apart from the policy change regarding the recognition of actuarial gains and losses theapplication of the amendments to existing Standards, new Standards and new Interpretations
mentioned above had no major impact on the Condensed Consolidated Financial Statements.
Amendment to IAS 19 Employee Benefits
The amendment to IAS 19 introduces the recognition of actuarial gains and losses outside theincome statement within retained earnings as a third option (“Equity Option”). It further adds new
disclosure requirements. EADS has decided to apply the newly introduced alternative and tochange its accounting policy regarding the recognition of actuarial gains and losses arising fromdefined benefit plans for its 2006 Consolidated Financial Statements. Actuarial gains and losses
are now directly recognised in equity in the period in which they occur. Prior period figures
presented have been adjusted accordingly as required under IAS 8 “Accounting Policies, Changes
in Accounting Estimates and Errors” (please refer to Note 7 “Significant balance sheet items”).
Compared to the corridor approach, the inclusion of actuarial gains and losses leads to anincrease in pension provision of 866 M € (prior year: 1,118 M €).
The 2006 change in the accounting policy for the recognition of actuarial gains and losses from thecorridor to the equity approach results in the reversal of expensed actuarial gains and losses
under the corridor approach. In 2006, the continuation of the corridor approach would have led tonegative impacts of 45 M € to EBIT and 25 M € to Net Income.
Amendment to IAS 21 The Effects of Changes in the Foreign Exchange Rate
The IAS 21 amendment results in the recognition of all exchange differences arising from amonetary item that is part of the Group’s net investment in a foreign operation in a separate
component of equity regardless of the currency in which the monetary item is denominated.

608.03.2007

EADS N.V.
Unaudited Condensed Consolidated Financial Information for the year ended December 31, 2006

Amendments to IAS 39 Financial Instruments: Recognition and Measurement(i)

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

(ii)

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

For the year ended December 31, 2006, EADS restricted its interpretation of the cash
equivalents’ definition as provided by IAS 7 “Cash Flow Statements” to better reflect its shortterm investment strategy. IAS 7 states that “cash equivalents are held for short-term cash
commitments […], must be readily convertible to a known amount of cash and be subject to an
insignificant risk of changes in value. Therefore, an investment normally qualifies as a cash
equivalent only when it has a short-term maturity of, say, three months or less from the date ofacquisition.” EADS now strictly limits its cash equivalents to investments having a maturity of threemonths and less from acquisition date. Prior period figures have been adjusted accordingly as
required under IAS 8 (please refer to Note 8 “Significant balance sheet items”).
Besides consequential changes as mentioned above, the accounting policies used in the
preparation of the Condensed Consolidated Financial Statements are consistent with those used
for the annual Consolidated Financial Statements for the year ended December 31, 2005 which
are disclosed as an integral part of the Group’s Annual Report 2005. The annual Consolidated
Financial Statements 2006 were authorised for issue by EADS’ Board of Directors on March 8,
2007.
3. BAE Systems UK pension plans
In the UK, EADS participates in several funded trustee administered pension plans for both
executive as well as non-executive employees with BAE Systems being the principal employer.
These plans qualify as multi-employer defined benefit plans under IAS 19 “Employee Benefits”.
EADS’ most significant investments in terms of employees participating in these BAE Systems UK
pension plans are Airbus and MBDA. For Airbus, this remains the case even subsequent to theacquisition of BAE Systems’ 20% minority interest on October 13, 2006.
Due to contractual arrangements between EADS and BAE Systems, company contributions in
respect of EADS’ investments for the most significant pension scheme (Main Scheme) are capped
for a defined period of time (until July 2011 for Airbus and until December 2007 for MBDA).
Contributions exceeding the respective capped amounts are paid by BAE Systems.
Since January 1, 2005, BAE Systems prepares its Consolidated Financial Statements under IFRS.
Before that date, BAE Systems accounted under UK GAAP and as such did not prepare
information required under IAS 19 to apply defined benefit accounting. Consequently, EADS
accounted for its participation in BAE Systems UK defined benefit schemes as if they were defined

708.03.2007

EADS N.V.
Unaudited Condensed Consolidated Financial Information for the year ended December 31, 2006

contribution schemes in accordance with IAS 19. In 2005, EADS requested detailed informationfrom BAE Systems about the different multi-employer pension schemes in order to appropriately
and reliably estimate the share of its investments in the schemes’ plan assets, defined benefit
obligations (“DBO”) and pension costs. For accounting purposes, the information provided by BAE
Systems in 2005 was judged not to be sufficient to identify EADS’ share in the UK pension
schemes. Consequently, EADS continued in 2005 to expense the contributions made to thepension schemes as if the plans were defined contribution plans. Additional information wasprovided until 2005 in the contingent liabilities section of the notes.
Upon further request in 2006, BAE Systems shared more detailed information for each individualplan in which EADS investments participate. This new information results in a change inaccounting estimates for 2006 year-end closing and is accounted for accordingly under IAS 8“Accounting Policies, Changes in Accounting Estimates and Errors”. The new information now
enables EADS to derive keys per plan to allocate for accounting purposes an appropriate
proportion in plan assets, DBO and pension costs to its investments as of December 31st, 2006.
The inclusion of EADS’ share in BAE System pension schemes leads to an increase of pension
provision of 897 M € as of December 31, 2006.
4. Changes in the consolidation perimeter of EADSOn February 28, 2006, LFK GmbH and TDW GmbH, which had been fully consolidated by EADS,
were sold to the European Missile Group MBDA. MBDA is jointly owned by BAE Systems (37.5%), EADS (37.5 %) and Finmeccanica (25 %). In EADS consolidated financial statements, MBDA
Group is proportionately consolidated with 50 %.
EADS acquired on August 3, 2006 40% of the shares of the Atlas Elektronik group, specialised inequipment and systems for naval forces, which is consolidated proportionally. The difference
between the purchase price and the acquired net assets led to a goodwill of 41 M €.
On October 13, 2006, EADS acquired BAE Systems’ 20% minority share in Airbus after BAE
Systems had exercised the put option it held on its Airbus stake in June 2006. Before thetransaction, EADS had already controlled Airbus and consequently fully consolidated thissubsidiary.
Apart from these transactions, other acquisitions or disposals by the Group are not material.
5. Segment information
The Group operates in five divisions (segments) which reflect the internal organizational andmanagement structure according to the nature of the products and services provided.
• Airbus — Development, manufacturing, marketing and sale of commercial jet aircraft of morethan 100 seats and the development and manufacturing of aircraft for military use.
• Military Transport Aircraft — Development, manufacturing, marketing and sale of militarytransport aircraft and special mission aircraft.
• Eurocopter — Development, manufacturing, marketing and sale of civil and military helicoptersand maintenance services.
• Defence & Security — Development, manufacturing, marketing and sale of missiles systems;
military combat and training aircraft; provision of defence electronics, defence-related
telecommunications solutions; and logistics, training, testing, engineering and other related
services.

808.03.2007

EADS N.V.
Unaudited Condensed Consolidated Financial Information for the year ended December 31, 2006

• Astrium — Development, manufacturing, marketing and sale of satellites, orbital infrastructuresand launchers; and provision of space services.
The following table presents information with respect to the Group’s business segments.
Consolidation effects, the holding function of EADS headquarters and other activities not allocableto the divisions are disclosed in the column “HQ/ Conso.”. “Other Businesses” comprises thedevelopment, manufacturing, marketing and sale of regional turboprop aircraft and lightcommercial aircraft, aircraft components as well as civil and military aircraft conversion andmaintenance services.

in M €

AirbusMilitary
Transport
AircraftEurocopter

Defence &Security

Astrium

Other
HQ/ Conso.
Businesses

Consolidated

Year ended December 31, 2006
Revenues

25,190

2,200

3,803

5,864

3,212

1,257

-2,09239,434

Research anddevelopment
expenses-2,035

-13

-78

-195

-71

-6

-60

-2,458

-572

75

257

348

130

-288

449

399

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

Year ended December 31, 2005
Revenues

22,179

763

3,211

5,636

2,698

1,155

-1,43634,206

Research anddevelopment
expenses-1,659

-18

-70

-207

-58

-6

-57

-2,075

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

2,307

48

212

201

58

-171

197

2,852

The “EBIT pre-goodwill impairment and exceptionals” includes on HQ/Conso. level the eliminationof an addition to the provision for loss making contracts -352 M € recognised in the Airbus Divisionin order to account for the positive margin of the A 400M contract on EADS group level. Due to thecost increase of the contract, a negative catch-up in 2006 in the amount of -66 M € had to berecognized on group level to adjust EBIT for the years 2003 to 2006.
6. EBIT pre goodwill impairment and exceptionals
EADS uses EBIT pre goodwill impairment and exceptionals as a key indicator of its economic
performance. The term “exceptionals” refers to such items as depreciation expenses of fair value
adjustments relating to the EADS merger, the Airbus combination and the formation of MBDA, as
well as impairment charges thereon. EBIT pre goodwill impairment and exceptionals is treated bymanagement as a key indicator to measure the segments’ economic performances.
A reconciliation from Profit before finance costs and income taxes to EBIT pre goodwill impairment
and exceptionals is set forth in the following table (in M €):908.03.2007

EADS N.V.
Unaudited Condensed Consolidated Financial Information for the year ended December 31, 2006
January 1Dec. 31, 2006

January 1Dec. 31, 2005

Profit before finance costs and income taxes

278

2,712

Subsequent adjustments of Goodwill

640

Fair value adjustments

57

140

399

2,852

in M €EBIT pre goodwill impairment and exceptionals

In the current year a tax audit of DASA for the years 1994 until 1999 was finalised. According to
the EADS shareholders agreement the related tax expense was reimbursed by DaimlerChrysler
AG. Thus deferred tax assets and goodwill have been adjusted as of December 31, 2006 in
Defence & Security by 52 M € and in Headquarters by 12 M €.

7. Significant income statement items
Revenues of 39,434 M € (2005: 34,206 M €) increase by 15 % contributed by all divisions, mostly
by Airbus, MTA and Eurocopter.
The Gross Margin decreases by -1,964 M € to 4,712 M € compared to 6,676 M € in 2005. The
decrease mainly results from Airbus (in particular due to the negative impact resulting fromcharges for the A 380 and A 350 programs) whereas Defence & Security, Eurocopter, Astrium and
MTA record increasing gross margins.
Research and development expenses of 2,458 M € (2005: 2,075 M €) mainly increase becauseof aircraft programs and more research & technology efforts. Additionally, EADS capitalized 335 M€ of development costs for A380 in 2006 (in 2005: 259 M €) in accordance with IAS 38.
Other income increases by +75 M € to 297 M €, mainly due to the gain of 111 M € as a result of
the sale of LFK GmbH and TDW GmbH to MBDA Group.
Share of profit from associates and other income from investments of 189 M € (2005: 225 M€) is mainly influenced by the result of Dassault Aviation of 130 M € (2005: 205 M €). The Dassault
Aviation Group reported for the year 2006 a net income of 281 M € of which EADS recognised anamount of 130 M € according to its share of 46.3 %. The result in 2005 of Dassault Aviation
included positive catch up adjustments amounting to +64 M €.
Finance costs deteriorate to -244 M € (2005: -177 M €) mainly due to negative effects in theamount of -136 M € (2005: +147 M €) from foreign exchange rate revaluations on US dollar-cash
balance. These effects are partly offset by a lower net interest charge of -121 M € (2005: -155 M€), mainly due to more favourable interest rates.
Income taxes of +81 M € (2005: -825 M €) are impacted - among others - by a tax-free gain fromthe sale of LFK GmbH and TDW GmbH to MBDA Group and DASSAULT result.
Profit for the period attributable to minority interests of +16 M € (2005: +34 M €) mainly
relates to interests of Finmeccanica in MBDA Group and DCLRH in EADS Deutschland GmbH,partly offset by a consolidation impact from the sale of LFK GmbH and TDW GmbH to the MBDA
Group.

10

08.03.2007

EADS N.V.
Unaudited Condensed Consolidated Financial Information for the year ended December 31, 2006

8. Significant balance sheet items
Non-current assets
Intangible assets of 10,855 M € (prior year: 11,052 M €) include 9,565 M € (prior year: 10,167 M€) of Goodwill. It mainly stems from Airbus (6,374 M €), Defence & Security (2,476 M €), Astrium(575 M €) and Eurocopter (111 M €). The annual impairment tests, which were performed at theend of the year, did not lead to any impairment. On June 7, 2006 BAE Systems exercised a put
option to sell its 20% stake in Airbus at a fair value of 2,750 M € to EADS (prior year: 3,500 M €).
The transaction became effective as of October 13, 2006. In accordance with the Airbus
shareholders’ agreement, an independent bank has determined the purchase price. Compared to2005’s amount recognised as liability for puttable instruments, the acquisition cost of the 20%
stake in Airbus was reduced, leading to a decrease in goodwill by 613 M € taking into
consideration a dividend payment to BAE Systems of 129 M € in 2006 and transaction costs.
Eliminating foreign exchange-rate effects of -127 M €, property, plant and equipment increaseby +491 M € to 14,315 M € (prior year: 13,951 M €), including leased assets of 1,992 M €. The
main increase comes from Astrium for Skynet V (+375 M €). Property, plant and equipment
comprises “Investment property” amounting to 137 M € (prior year: 134 M €).
Investments in associates under the equity method of 2,095 M € (prior year: 1,908 M €) mainly
increase due to the change in the equity investment in Dassault Aviation, amounting to 1,985 M €(prior year: 1,867 M €).
Other investments and long-term financial assets of 1,666 M € (prior year: 1,938 M €) areallocated to Airbus in the amount of 1,012 M € (prior year: 1,242 M €), mainly concerning the noncurrent portion of aircraft financing activities with a foreign exchange-rate effect of -102 M €.
Non-current other assets mainly comprise “Non-current derivative financial instruments” and“Non-current prepaid expenses”. The increase by +621 M € to 4,231 M € (prior year: 3,610 M €) ismainly caused by the variation of the non-current portion of fair values of financial instruments(+473 M €).
Deferred tax assets of 2,624 M € (prior year: 2,980 M €) are presented as non-current assets as
required by IAS 1.
The fair values of derivative financial instruments are included in non-current other assets with
an amount of 3,235 M € (prior year: 2,762 M €), in current other assets (2,007 M €, prior year:
1,191 M €), in non-current provisions (152 M €, prior year: 472 M €) and in current provisions (79M €, prior year: 449 M €) which corresponds to a net fair value of 5,011 M € (prior year: 3,032 M€). The volume of hedged US dollar-contracts decreased from 47.1 bn US dollar to 45.1 bn US
dollar. The US dollar exchange rate became less favourable (USD / € spot rate of 1.32 at
December 31, 2006 vs. 1.18 at December 31, 2005). The average US dollar hedge rate for thehedge portfolio of the Group as at December 31, 2006 moved from 1.12 as at December 31, 2005
to 1.16 as at December 31, 2006 (US dollar / € rate respectively).
Current assets
Inventories of 16,892 M € (prior year: 15,425 M €) increase by 1,467 M € in all divisions except
for Military Transport. This is mainly driven by a higher level of unfinished goods and services(mainly Airbus for A380 (+987 M €)), the progress of several serial production programs in
Eurocopter (+368 M €) and higher advance payments made especially in Astrium (+231 M €).
Other current assets include “Current portion of long-term financial assets”, “Current otherassets”, “Current tax assets” and “Current prepaid expenses”. The increase of +870 M € to 4,545
M € (prior year: 3,675 M €) comprises a +816 M € variation of the current portion of fair values ofderivative financial instruments (see “Derivative financial instruments” under “Non-current assets”).

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EADS N.V.
Unaudited Condensed Consolidated Financial Information for the year ended December 31, 2006

In order to align the presentation of cash and cash equivalents (maturities of three months or lessfrom the date of acquisition), a reclassification of 4,160 M € in the prior year’s figure from cash
and cash equivalents (prior year: from 9,546 M € to 5,386 M €) to current securities (prior year:
from 29 M € to 4,189 M €) has been made (please refer to Note 2 “Accounting policies”).
Total equity
Equity attributable to equity holders of the parent (including treasury shares) amounts to 13,015 M€ (prior year: 13,054 M €). The variation is mainly resulting from the first time inclusion of the
proportionate share of the UK pension liability for EADS’ investments in Airbus UK and MBDA andchanges in net actuarial gains and losses (-692 M €) and a cash distribution to shareholders (-520M €). These reductions were partly compensated by an increase in other comprehensive income(OCI) of +973 M €, primarily resulting from changes in fair values as well as consumption ofderivative financial instruments and the profit for the period attributable to equity holders of theparent (Net Income) of +99 M €. Prior year’s figure was adjusted retrospectively by -672 M €because of the application of the Equity option of IAS 19 as amended in 2006 (please refer to Note
2 “Accounting policies”).
Minority interests of 137 M € (prior year: 153 M €) mainly represent shares of Finmeccanica in
MBDA. Due to the application of the equity approach (IAS 19 amended in 2006), the prior year’s
figure was adjusted retrospectively by -23 M € (please refer to Note 2 “Accounting policies”).
Non-current liabilities
Non-current provisions of 9,063 M € (prior year: 7,997 M €) comprise the non-current portion ofpension provisions of 5,602 M € (prior year: 5,018 M €). Due to the retrospective application ofamended IAS 19, prior year figure of the non-current portion of pension provisions was adjusted by+1,118 M €. As of December 31, 2006, EADS included its share (non-current portion) in the BAE
Systems UK pension schemes of 869 M €.
Moreover, other provisions are included in non-current provisions, which increase by +482 M € to
3,461 M €. Other provisions include among others aircraft financing activities with a decrease of 132 M € to 1,021 M € (thereof foreign exchange rate effects of -125 M €) and constructive
obligations for settlement charges for the A380 and A350 programs. Provisions for derivative
financial instruments according to IAS 39 decreased by -320 M € to 152 M €.
Long-term financial liabilities of 3,561 M € (prior year: 4,189 M €), excluding foreign exchangerate effects of -169 M €, decrease by -459 M € in particular due to lower Airbus loans.
Other non-current liabilities comprise “Non-current other liabilities” and “Non-current deferredincome” and increase in total by +1,385 M € to 12,680 M € (prior year: 11,295 M €). They mainly
include non-current customer advance payments received of 6,308 M € (prior year: 4,911 M €) andthe non-current portion of European Government refundable advances amounting to 5,029 M €(prior year: 4,950 M €). Advance payments received mainly increased at Airbus (+1.378 M €). The
main part of non-current deferred income of 1,110 M € (prior year: 1,324 M €) is linked to deferred
revenues of Airbus and ATR according to Residual Value Guarantee clauses. The remaining
portfolio, which is included in non-current deferred income, is depreciated over the guaranteed
period.
Current liabilities
Current provisions increase by +904 M € to 3,631 M € (prior year: 2,727 M €) and comprise thecurrent portions of pensions (281 M €) and other provisions (3,350 M €). The increase mainlyreflects constructive obligations for settlement charges for the A380 program.

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EADS N.V.
Unaudited Condensed Consolidated Financial Information for the year ended December 31, 2006

Short-term financial liabilities of 2,196 M € (prior year: 908 M €), excluding foreign exchangerate effects of -29 M €, increase by +1,317 M €, mainly due to the issue of commercial papers with
an amount of 1,157 M €.
EADS has adopted in 2005 revised IAS 32 and accounted for a liability for puttable instruments
for the 20% interest of BAE Systems in Airbus SAS. This liability was stated at fair value of 3,500
M € as at December 31, 2005. In the course of the exercised put option by BAE Systems, a third
party investment bank has determined on July 2, 2006, that the price to be paid by EADS was
2,750 M €. The liability was derecognized from EADS Consolidated Balance Sheet after thetransaction had been verified and approved by BAE Systems’ shareholders in October 2006.
Trade liabilities increase by +827 M € to 7,461 M € (prior year: 6,634 M €), mainly coming from
Airbus (+422 M €), Astrium (+207 M €) and Military Transport Aircraft (+115 M €).
Other current liabilities include “Current other liabilities” and “Current deferred income”. They
decrease by -93 M € to 17,646 M € (prior year: 17,739 M €). Other current liabilities mainlycomprise current customer advance payments of 14,172 M € (prior year: 14,078 M €).
9. Significant cash flow items
Cash provided by operating activities decreases by -1,709 M € to 3,398 M € (2005: 5,107 M €).
Gross cash flow from operations (excluding working capital change) with 3,541 M € nearly remains
on prior year’s level (2005: 3,868 M €), while changes in other operating assets and liabilities(working capital change) amounts to -143 M € (2005: 1,239 M €).
Cash provided by (used for) investing activities increases by +3,783 M € to 1,988 M € (2005:-1,795 M €). This is mainly caused by positive effects from customer financing activities of Airbus.
Changes of securities mainly reflect preparation for the payment of EADS for 20% stake in Airbus.
Cash (used for) financing activities increases by -1,638 M € to -2,572 M € (2005: -934 M €).
The outflow mainly contains the repayment of the liability for puttable instruments to BAE Systems
and a cash distribution paid to shareholders, which are partly offset by a net increase of financial
liabilities.
10. Number of shares
The total number of shares outstanding is 802,130,993 and 797,140,426 as of December 31, 2006
and 2005, respectively. EADS’ shares are exclusively ordinary shares with a par value of 1.00 €.
During 2006, the number of treasury shares held by EADS decreased from 20,602,704 as ofDecember 31, 2005 to 13,800,531 as of December 31, 2006.
4,845,364 new shares (in 2005: 7,562,110 shares) were issued as a result of the exercise of stock
options in compliance with the implemented stock option plans.
11. Earnings per share
Basic earnings per share are calculated by dividing profit for the period attributable to equity
holders of the parent (Net income) by the weighted average number of issued ordinary shares
during the period, excluding ordinary shares purchased by the Group and held as treasury shares:

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EADS N.V.
Unaudited Condensed Consolidated Financial Information for the year ended December 31, 2006

January 1 to
December 31,
2006
Net income attributable to equity holders of the parent
Weighted average number of ordinary shares outstanding
Basic earnings per share

January 1 to
December 31,
2005

99 M €

1,676 M €800,185,164

794,734,2200.12 €

2.11 €The effect from applying in 2006 the IAS 19 equity approach instead of the corridor approachcontributes 0.03 € to basic earnings per share. For further details please refer to Note 2“Accounting policies”.

For calculation of the diluted earnings per share, the weighted average number of ordinary
shares is adjusted to assume conversion of all potential ordinary shares. The Group’s only
category of dilutive potential ordinary shares is stock options. Since the average price of EADS
shares during 2006 exceeded the exercise price of the stock options under the 1st, 2nd, 3rd, 4th, 5th
and 6th stock option plans (in 2005: the 1st, 2nd, 3rd, 4th, 5th and 6th stock option plan) initiated by theGroup, the inclusion of the related potential ordinary shares increases the weighted average
number of shares. 4,130,499 shares (2005: 5,482,133 shares) are considered dilutive according to
IAS 33.
January 1 to
December 31,
2006
Net income attributable to equity holders of the parent
Weighted average number of ordinary shares outstanding(diluted)
Diluted earnings per share

January 1 to
December 31,
2005

99 M €

1,676 M €804,315,663

800,216,353

0.12 €

2.09 €The effect from applying in 2006 the IAS 19 equity approach instead of the corridor approachcontributes 0.03 € to diluted earnings per share. For further details please refer to Note 2“Accounting policies”.
12. Related party transactions
The Group has entered into various transactions with related companies in 2006 and 2005 thathave all been carried out in the normal course of business. As is the Group’s policy, all related
party transactions have to be carried out at arm’s length. Transactions with related parties include
the French State, DaimlerChrysler, Lagardère, and SEPI (Spanish State). Except for thetransactions with the French State, such transactions are not considered material to the Groupeither individually or in the aggregate. The transactions with the French State include mainly sales
from the Eurocopter, Defence & Security Systems and Astrium divisions.
13. Number of employees
The number of employees at December 31, 2006 is 116,805 as compared to 113,210 at
December 31, 2005.

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EADS N.V.
Unaudited Condensed Consolidated Financial Information for the year ended December 31, 2006

14. Subsequent events
Following an agreement dated January 10, 2007, EADS sold the remaining 60% shares ofSogerma Services as well as the shares of the subsidiaries Barfield and Sogerma Tunisia.
EADS sold on February 12, 2007 its 2.1% share in EMBRAER Empresa Brasileira de Aeronáutica
S.A. for a total proceed (before taxes and bank fees) of 124 M €.
On February 28, 2007 the Airbus management disclosed the restructuring program called “Power
8“ to the public and to the Airbus European Works Council. The Airbus management will
implement strong cost reduction and cash generating efforts leading to expected EBIT
contributions of 2.1 bn € from 2010 onwards and additional 5 bn € of cumulative cash flow from2007 to 2010. The restructuring program includes a progressive headcount reduction of 10,000
overhead positions over four years of which 5,000 are temporary or on-site subcontractors.
Regarding the expected restructuring expenses for the Power 8 program, Airbus will set upprovisions in the first quarter of 2007.
EADS published on March 2, 2007 that the A380F program has been re-scheduled but remains anactive part of the A380 aircraft family. Therefore, activities for the A380F program have beeninterrupted, including activities of the suppliers. The US logistics company UPS subsequently
cancelled the remaining order of ten A380F aircraft.

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