EUROPEAN AERONAUTIC DEFENCE AND SPACE COMPANY EADS N.V.
Registration Document – Financial Statements

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

Registration Document 20092009

Registration Document 2009
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European Aeronautic Defence and Space Company EADS N.V. (the “Company” or “EADS” and together with its subsidiaries,
the “Group”) is a Dutch company, which is listed in France, Germany and Spain. The applicable regulations with respect to public
information and protection of investors, as well as the commitments made by the Company to securities and market authorities,
are described in this registration document (the “Registration Document”).
In addition to historical information, this Registration Document includes forward-looking statements. The forward-looking
statements are generally identified by the use of forward-looking words, such as “anticipate”, “believe”, “estimate”, “expect”, “intend”,“plan”, “project”, “predict”, “will”, “should”, “may” or other variations of such terms, or by discussion of strategy. These statements
relate to EADS’ future prospects, developments and business strategies and are based on analyses or forecasts of future results andestimates of amounts not yet determinable. These forward-looking statements represent the view of EADS only as of the dates they
are made, and EADS disclaims any obligation to update forward-looking statements, except as may be otherwise required by law.
The forward-looking statements in this Registration Document involve known and unknown risks, uncertainties and other factors that
could cause EADS’ actual future results, performance and achievements to differ materially from those forecasted or suggested herein.
These include changes in general economic and business conditions, as well as the factors described in “Risk Factors” below.
This Registration Document was prepared in accordance with Annex 1 of EC Regulation 809/2004, ﬁled in English
with, and approved by, the Autoriteit Financiële Markten (the “AFM”) on 21 April 2010 in its capacity as competentauthority under the Wet op het ﬁnancieel toezicht (as amended) pursuant to Directive 2003/71/EC. This Registration
Document may be used in support of a financial transaction as a document forming part of a prospectus in accordancewith Directive 2003/71/EC only if it is supplemented by a securities note and a summary approved by the AFM.

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Risk Factors

1 Information on EADS’ Activities
2 Management’s Discussion

and Analysis of Financial Condition
and Results of Operations

3 General Descriptionof the Company and its Share Capital

4 Corporate Governance
5 Entity Responsible

for the Registration Document

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Registration Document 2009

Risk Factors

7

1.

Financial Market Risks

8

2.

Business-Related Risks

11

3.

Legal Risks

17

4.

Industrial and Environmental Risks

18

2 Management’s Discussion

and Analysis of Financial Condition
and Results of Operations

69

2.1

Operating and Financial Review

70

2.1.1
2.1.2
2.1.3

70
70

1 Information on EADS’ Activities

21

1.1

Presentation of the EADS Group

22

1.1.1
1.1.2
1.1.3
1.1.4
1.1.5
1.1.6
1.1.7
1.1.8
1.1.9
1.1.101.1.11
1.1.12
1.1.13

Overview
AirbusEurocopter
Astrium
Defence & Security
Other Businesses
Investments
Insurance
Legal and Arbitration Proceedings
Research and Technology, Intellectual Property
Environmental Protection
Employees
Incorporation by Reference

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28
38
42
47
53
55
55
56
58
61
64
65

2.1.7
2.1.8

Certain Information
Overview
Critical Accounting Considerations,
Policies and Estimates
Measurement of Management’s Performance
EADS Results of Operations
Changes in Consolidated Total Equity(including Non-controlling Interests)
Liquidity and Capital Resources
Hedging Activities

2.2

Financial Statements

97

2.3

Statutory Auditors’ Fees

98

2.4

Information Regarding
the Statutory Auditors

98

1.2

Recent Developments

66

3.1.1

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2.1.4
2.1.5
2.1.6

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77
82
87
89
95

3 General Description of

the Company and its Share Capital 101

3.1

General Description of the Company

Commercial and Corporate Names,
Seat and Registered Ofﬁce
3.1.2 Legal Form
3.1.3 Governing Laws and Disclosures
3.1.4 Date of Incorporation and Durationof the Company
3.1.5 Objects of the Company
3.1.6 Commercial and Companies Registry
3.1.7 Inspection of Corporate Documents
3.1.8 Financial Year3.1.9 Allocation and Distribution of Income
3.1.10 General Meetings
3.1.11 Disclosure of Holdings
3.1.12 Mandatory Offers

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105
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106
106
108
109

GENERAL TABLE OF CONTENTS

3.2

General Description of the Share Capital 111

3.2.1 Issued Share Capital
3.2.2 Authorised Share Capital
3.2.3 Modiﬁcation of Share Capital or Rights Attachedto the Shares
3.2.4 Securities Granting Accessto the Company’s Capital
3.2.5 Changes in the Issued Share Capital
since Incorporation of the Company

113

3.3

114

Shareholdings and Voting Rights

3.3.1
3.3.2
3.3.3
3.3.4

111
111
112
112

Shareholding Structure
Relationships with Principal Shareholders
Form of Shares
Changes in the Shareholding of the Company
Since its Incorporation
3.3.5 Persons Exercising Control over the Company
3.3.6 Simpliﬁed Group Structure Chart
3.3.7 Purchase by the Company of its Own Shares

121
123
123
125

3.4

129

Dividends

114
116
121

Dividends and Cash Distributions Paid
Since the Incorporation of the Company
3.4.2 Dividend Policy of EADS
3.4.3 Unclaimed Dividends
3.4.4 Taxation

129
129
129
130

3.5

131

4 Corporate Governance

133

4.1

Management and Control

136

4.1.1

Board of Directors, Chairman
and Chief Executive Ofﬁcer
Audit Committee
Remuneration and Nomination Committee
Strategic Committee
Executive Committee
Enterprise Risk Management System
Compliance Organisation

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149
150
150
152
157

4.1.2
4.1.3
4.1.4
4.1.5
4.1.6
4.1.7

Interests of Directors and Principal
Executive Officers

Compensation Granted to Directors
and Principal Executive Ofﬁcers
4.2.2 Long-Term Incentives Granted to
the Chief Executive Ofﬁcer
4.2.3 Related Party Transactions
4.2.4 Loans and Guarantees Granted to Directors

158

4.2.1

4.3

Employee Profit Sharing
and Incentive Plans

Employee Proﬁt Sharing
and Incentive Agreements
4.3.2 Employee Share Ownership Plans
4.3.3 Long-Term Incentive Plans

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161
162
162

162

4.3.1

5 Entity Responsible for

162
163
164

the Registration Document

171

Entity Responsible for
the Registration Document

172

Statement of the Entity Responsible
for the Registration Document

172

5.3

Information Policy

173

5.4

Undertakings of the Company
regarding Information

173

Significant Changes

174

5.1

3.4.1

Annual Securities Disclosure Report

4.2

5.2

5.5

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Risk Factors
1.

Financial Market Risks

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2.

Business-Related Risks

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3.

Legal Risks

17

4.

Industrial andEnvironmental Risks

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EADS is subject to many risks and uncertainties that may affect its financial performance. The business, financial condition or results ofoperations of EADS could be materially adversely affected by the risks described below. These are not the only risks EADS faces. Additionalrisks and uncertainties not presently known to EADS or that it currently deems immaterial may also impair its business and operations.

1.

Financial Market Risks

Impact of Recent Financial Crisis
During the second half of 2009, the global economy started
a fragile recovery at a slow pace following massive liquidity
injections by central banks and substantial support packages
provided by governments worldwide. Although the risk ofa further downward spiral of the financial sector appears tohave been halted, the potential effects of future changes to theregulatory environment and the reduced availability of credit forinvestments cannot yet be quantified. Government interventions
to mitigate the impacts from the economic downturn have also
resulted in a significant deterioration of the fiscal position andincreased public debt levels of the main industrialised countries.
Accordingly, the tenuous economic recovery still faces several
headwinds which may affect the financial markets and in turn
EADS’ business, including but not limited to:> numerous requests by customers to postpone or cancel orders
for aircraft due to, among other things, lack of adequate credit
supply from the market to finance aircraft purchases or weaklevels of passenger demand for air travel and cargo activity
more generally;> an increase in the amount of sales financing that EADS must
provide to its customers to support aircraft purchases, thereby
increasing its exposure to the risk of customer defaults despite
any collateral interests in the underlying aircraft;> strict monitoring of public spending for defence, homeland
security and space due to budget constraints;> economic distress or insolvency of key suppliers, resulting
in product delays;> the default of investment or derivative counterparties andother financial institutions, which could negatively impact
EADS’ treasury operations;* EBIT: earnings before interest and taxes, pre-goodwill impairment and exceptionals.

8 EADS R EG I S TR ATI O N DO C U ME N T 2 0 0 9> continued de-leveraging as well as mergers and bankruptcies
of banks or other financial institutions, resulting in a smaller
universe of counterparties and lower availability of credit,
which may in turn reduce the availability of bank guarantees
needed by EADS for its businesses or restrict its ability to
implement desired foreign currency hedges;> changes in long-term interest rates, credit spreads or inflation,
which may affect the discount rate applicable to the Group’s
pension liabilities, or poor financial performance of certain
asset classes, thereby requiring an increase in the Group’s
provisions for retirement plans;> changes in short-term interest rates, the potential illiquidityof certain asset classes or increases in the prices of raw
materials, which may affect the financial performance of theGroup;> reduced access to capital markets and other sourcesof financing, which may limit EADS’ future ability
to make capital expenditures, fully carry out its
research and development efforts and fund operations.
The not yet self-sustained economic recovery may lead to alonger period with marginal growth rates or even a return torecession, which could have a negative effect on EADS’ future
results of operation and financial condition. Economic weakness
and uncertainty also make it more difficult for EADS to makeaccurate forecasts of revenue, earnings before interest and taxes,
pre-goodwill impairment and exceptionals (“EBIT*”) and cash
flow, and may increase the volatility of EADS’ stock price.

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Exposure to Foreign Currencies
A significant portion of EADS’ revenues is denominated in US
dollars, while a substantial portion of its costs is incurred ineuro, and to a lesser extent, in pounds sterling. Consequently,
to the extent that EADS does not use financial instruments
to hedge its exposure resulting from this foreign currency
mismatch, its profits will be affected by market changes in theexchange rate of the US dollar against these currencies, and to alesser extent, by market changes in the exchange rate of poundsterling against the euro. EADS has therefore implemented along-term hedging portfolio to help secure the rates at which a
portion of its future US dollar-denominated revenues (arising
primarily at Airbus and in the commercial satellite business) areconverted into euro or pound sterling, in order to manage andminimise this foreign currency exposure.
There are complexities inherent in determining whether andwhen foreign currency exposure of EADS will materialise,in particular given the possibility of unpredictable revenue
variations arising from order cancellations, postponements
or delivery delays. EADS may also have difficulty in fully
implementing its hedging strategy if its hedging counterparties
are unwilling to extend further credit, and is exposed to the riskof non-performance or default by these hedging counterparties.
The exchange rates at which EADS is able to hedge its foreign
currency exposure may also deteriorate, as has been the caseduring the past several years with the steady appreciation of theeuro against the US dollar. Accordingly, EADS’ foreign currency
hedging strategy may not protect it from significant changes inthe exchange rate of the US dollar to the euro and the poundsterling, in particular over the longer-term, which could have anegative effect on its results of operation and financial condition.
In addition, the portion of EADS’ US dollar-denominatedrevenues that is not hedged in accordance with EADS’ hedging
strategy will be exposed to changes in exchange rates, which may
be significant.
Currency exchange rate fluctuations in those currencies
other than the US dollar in which EADS incurs its principal
manufacturing expenses (mainly the euro) may have the effectof distorting competition between EADS and competitors whose
costs are incurred in other currencies. This is particularly true
with respect to fluctuations relative to the US dollar, as many of
EADS’ products and those of its competitors (e.g., in the defence
export market) are priced in US dollars. EADS’ ability to competewith competitors may be eroded to the extent that any of EADS’
principal currencies appreciates in value against the principal
currencies of such competitors.
EADS’ consolidated revenues, costs, assets and liabilities
denominated in currencies other than the euro are translated into
the euro for the purposes of compiling its financial statements.
Changes in the value of these currencies relative to the euro
will therefore have an effect on the euro value of EADS’reported revenues, costs, EBIT*, other financial result, assets andliabilities.
See “Management’s Discussion and Analysis of Financial
Condition and Results of Operations — 2.1.8 Hedging
Activities” for a discussion of EADS’ foreign currency hedging
strategy. See “Management’s Discussion and Analysis ofFinancial Condition and Results of Operations — 2.1.3.6
Accounting for Hedged Foreign Exchange Transactions in the
Financial Statements” for a summary of EADS’ accounting
treatment of foreign currency hedging transactions.

Exposure to Sales Financing Risk
In support of sales, EADS may agree to participate in thefinancing of customers. As a result, EADS has a significant
portfolio of leases and other financing arrangements withairlines and other customers. The risks arising from EADS’sales financing activities may be classified into two categories:(i) credit risk, which concerns the customer’s ability to perform
its obligations under a financing arrangement, and (ii) aircraft
value risk, which primarily relates to unexpected decreases in
the future value of aircraft. Measures taken by EADS to mitigate
these risks include optimised financing and legal structures,
diversification over a number of aircraft and customers, credit
analysis of financing counterparties, provisioning for the credit
and asset value exposure, and transfers of exposure to third

parties. No assurances may be given that these measures willprotect EADS from defaults by its customers or significant
decreases in the value of the financed aircraft in the resalemarket.
EADS’ sales financing arrangements expose it to aircraft valuerisk, because it generally retains collateral interests in aircraft
for the purpose of securing customers’ performance of theirfinancial obligations to EADS, and because it guarantees part ofthe market value of certain aircraft during limited periods after
their delivery to customers. Under adverse market conditions,the market for used aircraft could become illiquid and the market
value of used aircraft could significantly decrease below projected* EBIT: earnings before interest and taxes, pre-goodwill impairment and exceptionals.

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1amounts. In the event of a financing customer default at a time
when the market value for a used aircraft has unexpectedly
decreased, EADS would be exposed to the difference between
the outstanding loan amount and the market value of the aircraft,
net of ancillary costs (such as maintenance and remarketing costs,etc.). Similarly, if an unexpected decrease in the market value ofa given aircraft coincided with the exercise window of an asset
value guarantee with respect to that aircraft, EADS would be
exposed to losing as much as the difference between the market
value of such aircraft and the guarantee amount. No assurances
may be given that the provisions taken by EADS will be
sufficient to cover these potential shortfalls. Through the Airbus
Asset Management department or as a result of past financing
transactions, EADS is the owner of used aircraft, exposing it
directly to fluctuations in the market value of these used aircraft.

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Finally, EADS also has several outstanding backstop
commitments to provide financing related to orders on Airbus’
and ATR’s backlog. While past experience suggests it is unlikelythat all such proposed financing actually will be implemented,
the recent financial crisis has resulted in a tightening in
the credit markets and eliminated or reduced the amount ofoutside financing available to customers to fund their aircraft
purchases. Accordingly, such customers may seek to increase
their utilisation of backstop commitments provided by EADS.
Depending on the agreement reached with customers, EADS’sales financing exposure could increase significantly in the
future. Despite the measures taken by EADS to mitigate
the risks arising from sales financing activities described above,
EADS will be further exposed to the risk of defaults by its
customers or significant decreases in the value of the financed
aircraft in the resale market, which may have a negative effecton its future results of operation and financial condition.

Counterparty Credit Risk
In addition to the credit risk relating to sales financing as
discussed above, EADS is exposed to credit risk to the extentof (i) non-performance by its counterparties for financial
instruments, such as hedging instruments and cash investments,and (ii) price risks arising from the credit spreads embedded in
cash investments. However, the Group has policies in place to
avoid concentrations of credit risk and to ensure that credit risk
is limited.
Cash transactions and derivative counterparties are contractedwith a large number of financial institutions worldwide, but only
if they meet certain high credit quality criteria. EADS has set up

a credit limit system to actively manage and limit its credit risk
exposure. This limit system assigns maximum exposure lines tocounterparties of financial transactions, based at a minimum on
their credit ratings as published by Standard & Poor’s, Moody’s
and Fitch Ratings, on a minimum amount of total assets and amaximum tolerable price to buy credit protection against thedefault of such counterparty. The respective limits are regularly
monitored and updated, but there can be no assurances that
despite these limits and the diversification of counterparties,
EADS will not lose the benefit of certain derivatives, orcash investments, in case of a systemic extension of market
disruptions.

Exposure on Equity Investment Portfolio
EADS holds several equity investments for industrial or strategic
reasons, the business rationale for which may vary over the lifeof the investment. Equity investments are either accounted forusing the equity method (associated companies), if EADS has theability to exercise significant influence, or at fair value. If fairvalue is not readily determinable, the investment is measured at
cost.
EADS’ principal investment in associates is Dassault Aviation.
The net asset value of this investment was € 2.4 billion at
31 December 2009. EADS is exposed to the risk of unexpectedmaterial adverse changes in the fair value of Dassault Aviationand that of other associated companies. For equity investments

10 EADS R EG I S TR ATI O N DO C U ME N T 2 0 0 9other than associates, which make up only a fraction of EADS’
total assets, EADS regards the risk of negative changes in fairvalue or impairments on these investments as non-significant.
Treasury shares held by EADS are not considered to be equity
investments. Additionally, treasury shares are not regarded as
being exposed to risk, as any change in value of treasury sharesis recognised directly in equity only when sold to the market andnever affects net income. Treasury shares are primarily held tohedge the dilution risk arising from employee stock ownershipplans and the exercise by employees of stock options.

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Pension Commitments
EADS participates in several pension plans for both executive
as well as non-executive employees, some of which are under
funded. For further information related to these plans, see“Management’s Discussion and Analysis of Financial Condition
and Results of Operations” and “Notes to the Consolidated
Financial Statements (IFRS) — Note 26B: Provisions for
retirement plans”. Although EADS has recorded a provision inits balance sheet for its share of the under funding based on
current estimates, there can be no assurance that these estimates
will not be revised upward in the future, leading EADS to record
additional provisions in respect of such plans.
Necessary adjustments of such provisions are driven by (i) the
discount factor applied to calculate the net present value ofthe pension liabilities, (ii) the performance of the asset classes

2.

which are represented in the pension assets, and (iii) additional
cash injections contributed by EADS from time to time tothe pension assets. EADS has put in place appropriate risk
management systems to limit potential losses in the pension
assets and to better match the characteristics of the pension
liabilities with those of the pension assets as a long-term
objective. Nevertheless, any required additional provisions wouldin turn have a negative effect on EADS’ total equity (net ofdeferred taxes), which could have a negative effect on its futurefinancial condition.
For further information relating to financial market risks and theways in which EADS attempts to manage these risks, see “Notes
to the Consolidated Financial Statements (IFRS) — Note 35A:
Financial risk management”.

Business-Related Risks

Commercial Aircraft Market Cyclicality
Historically, the market for commercial aircraft has shown
cyclical trends, due in part to changes in passenger demand for air
travel and cargo activity, which are in turn primarily influenced
by economic or gross domestic product (“GDP”) growth. Other
factors, however, play an important role in determining themarket for commercial aircraft, such as (i) the average age andtechnical obsolescence of the fleet relative to new aircraft, (ii) the
number and characteristics of aircraft taken out of service andparked pending potential return into service, (iii) passenger loadfactors, (iv) airline pricing policies, (v) airline financial healthand the availability of outside financing for aircraft purchases,(vi) deregulation and (vii) environmental constraints imposed
upon aircraft operations. EADS expects that the market forcommercial aircraft, including the market for civil helicopters,
will continue to be cyclical, and that downturns in broad
economic trends may have a negative effect on its future resultsof operation and financial condition.

In particular, the recent volatility in the oil, financial and credit
markets and overall economic uncertainty – including the highamount of losses recorded by the airline industry in 2009 –increase the risk that customers will seek to postpone or cancel
otherwise binding contractual orders, to which EADS may agree.
In addition, the liquidation or bankruptcy of airline customers
could lead to the cancellation of their existing orders. If any ofthese events were to occur, it could significantly reduce EADS’revenues and ability to generate a profit.
Moreover, EADS may be required to adopt significant changes
to its business plan in response to market conditions, including
production rate changes or the re-configuration of aircraft
originally intended for customers whose orders have been
postponed or cancelled. Failure to successfully implement suchchanges or the incurrence of higher than expected costs in doing
so could have a negative effect on EADS’ future results ofoperation and financial condition.

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Impact of Terrorism, Epidemics and Catastrophic Events on Commercial
Aircraft Market
As the terrorist attacks in New York and Madrid and the spreadof H1N1 flu have demonstrated, terrorism and epidemics
may negatively affect public perception of air travel safety andcomfort, which may in turn reduce demand for air travel andcommercial aircraft. The outbreak of war in a given region
may also affect the willingness of the public to travel by air.
Furthermore, major airplane crashes may have a negative effecton the public’s or regulators’ perceptions of the safety of a givenclass of aircraft, form of design, or airline. As a consequence ofterrorism, epidemics and other catastrophic events, an airline
may be confronted with sudden reduced demand for air traveland be compelled to take costly security and safety measures.
In response to such events, and the resulting negative impact
on the airline industry or particular airlines, EADS may sufferfrom a decline in demand for all or certain types of its aircraft,and EADS’ customers may postpone delivery of new aircraft orcancel orders.

Dependence on Public Spending and on Certain Markets
In any single market, public spending (including defence
spending) depends on a complex mix of geopoliticalconsiderations and budgetary constraints. Public spending may
be subject to significant fluctuations from year to year andcountry to country. Adverse economic and political conditions aswell as downturns in broad economic trends in EADS’ markets
such as those experienced recently may reduce the amount ofpublic spending and have a negative effect on EADS’ future
results of operations and financial condition.
In the case where several countries undertake to enter together
into defence or other procurement contracts, economic, politicalor budgetary constraints in any one of these countries may havea negative effect on the ability of EADS to enter into or perform
such contracts.
Further, a significant portion of EADS (including Airbus)
backlog is concentrated in certain regions or countries, including
the United States of America, China, India and the United ArabEmirates. Adverse economic and political conditions as wellas downturns in broad economic trends in these countries orregions may have a negative effect on EADS’ and Airbus’ future
results of operations and financial condition.

Availability of Government and Other Sources of Financing
Since 1992, the EU and the US have operated under anagreement that sets the terms and conditions of financial support
that governments may provide to civil aircraft manufacturers.
In late 2004, however, the US sought to unilaterally withdraw
from this agreement, which eventually led to the US and theEU making formal claims against each other before the World
Trade Organization (“WTO”). While both sides have expresseda preference for a negotiated settlement that provides for alevel playing field when funding future aircraft developments,
they have thus far failed to reach agreement on key issues. The
terms and conditions of any new agreement, or the outcomeof the formal WTO proceedings, may limit access by EADS
to risk-sharing-funds for large projects, may establish an
unfavourable balance of access to government funds by EADS

12 EADS R EG I S TR ATI O N DO C U ME N T 2 0 0 9

as compared to its US competitors or may theoretically cause theEuropean Commission and the involved governments to analyse
possibilities for a change in the commercial terms of funds
already advanced to EADS.
In prior years, EADS and its principal competitors have each
received different types of government financing of productresearch and development. For example, EADS is in discussions
with or has recently arranged for financing from certain EU
countries for the development of the A350 XWB commercial
aircraft programme. However, no assurances can be given thatgovernment financing will continue to be made available in the
future for the A350 XWB or other projects, in part as a result of
the proceedings mentioned above.

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Moreover, the availability of other outside sources of financing
will depend on a variety of factors such as market conditions,the general availability of credit, EADS’ credit ratings, as wellas the possibility that lenders or investors could develop anegative perception of EADS’ long- or short-term financial
prospects if it incurred large losses or if the level of its business

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activity decreased due to an economic downturn. EADS may
therefore not be able to successfully obtain additional outside
financing on favourable terms, or at all, which may limit EADS’
future ability to make capital expenditures, fully carry out its
research and development efforts and fund operations.

Emergence of Public-Private Partnerships and Private Finance Initiatives
Defence customers, particularly in the UK, increasingly
request proposals and grant contracts under schemes known
as public-private partnerships (“PPPs”) or private financeinitiatives (“PFIs”). PPPs and PFIs differ substantially fromtraditional defence equipment sales, as they often incorporate
elements such as:> the provision of extensive operational services over the lifeof the equipment;> continued ownership and financing of the equipment by
a party other than the customer, such as the equipment
provider;> mandatory compliance with specific customer requirements
pertaining to public accounting or government procurement
regulations; and> provisions allowing for the service provider to seek additionalcustomers for unused capacity.
EADS is party to PPP and PFI contracts, for example throughParadigm with Skynet 5 and related telecommunications services,
and in the AirTanker (FSTA) project. One of the complexities
presented by PFIs lies in the allocation of risks and the timing
thereof among different parties over the lifetime of the project.
There can be no assurances of the extent to which EADS will
efficiently and effectively (i) compete for future PFI or PPP
programmes, (ii) administer the services contemplated under
the contracts, (iii) finance the acquisition of the equipment andthe ongoing provision of services related thereto, or (iv) accessthe markets for the commercialisation of excess capacity. EADS
may also encounter unexpected political, budgetary, regulatory
or competitive risks over the long duration of PPP and PFI
programmes.

Competition and Market Access
Most of EADS’ businesses are subject to significant competition,
and Airbus in particular has been affected by downward pricepressure resulting from such competition. EADS believes thatsome of the underlying causes of such price competition havebeen mitigated by restructuring in the aerospace and defence
industry. Nevertheless, certain customers have had greater
leverage to encourage competition with respect to a variety
of issues, including price and payment terms. Competition
may intensify in the future, particularly in the context of a
prolonged economic downturn. There can be no assurance that
EADS will be able to compete successfully against its current or
future competitors or that the competitive pressures it faces inall business areas will not result in reduced revenues or market
share.

In addition, the contracts for many aerospace and defence
products are awarded, implicitly or explicitly, on the basis ofhome country preference. Although EADS is a multinational
company which helps to broaden its domestic market, it may
remain at a competitive disadvantage in certain countries,
especially outside of Europe, relative to local contractors
for certain products. The strategic importance and politicalsensitivity attached to the aerospace and defence industries
means that political considerations will play a role in the choiceof many products for the foreseeable future.

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Technologically Advanced Products and Services
EADS offers its customers products and services that are often
technologically advanced, the design and manufacturing of
which can be complex and require substantial integration andcoordination along the supply chain. In addition, most of EADS’
products must function under demanding operating conditions.
Even though EADS believes it employs sophisticated design,
manufacturing and testing practices, there can be no assurance
that EADS’ products or services will be successfully developed,
manufactured or operated or that they will be developed or will
perform as intended.
Certain of EADS’ contracts require it to forfeit part of its
expected profit, to receive reduced payments, to provide
a replacement launch or other products or services, or to reduce
the price of subsequent sales to the same customer if its products
fail to be delivered on time or to perform adequately. No
assurances can be given that performance penalties or contract

cancellations will not be imposed should EADS fail to meetdelivery schedules or other measures of contract performance.
For example, certain customers decided to cancel their A380
freighter orders following the production difficulties that
EADS encountered in 2006, while in 2009, South Africa
announced that it would cancel its A400M order following theannouncement of significant delivery delays on the programme.
In addition to any costs resulting from product warranties,
contract performance or required remedial action, suchproblems may result in increased costs or loss of revenues – inparticular as a result of contract cancellations – which could
have a negative effect on EADS’ future results of operation andfinancial condition. Any problems in this respect may also havea significant adverse effect on the competitive reputation of
EADS’ products.

Major Research and Development Programmes
The business environment in many of EADS’ principal
operating business segments is characterised by extensive
research and development costs requiring significant up-front
investments with a high level of complexity. The business plans
underlying such investments often contemplate a long payback
period before these investments are recouped, and assume acertain level of return over the course of this period in order tojustify the initial investment. There can be no assurances that thecommercial, technical and market assumptions underlying suchbusiness plans will be met, and consequently, the payback periodor returns contemplated therein achieved. EADS expects that its
consolidated research and development expenses may increasesignificantly in future years in connection with the ramp-up of
new programmes across all Divisions, in particular developmentof the A350 XWB.

Successful development of new programmes also depends on
EADS’ ability to attract and retain aerospace engineers andother professionals with the technical skills and experience
required to meet its specific needs. Demand for such engineers
may often exceed supply depending on the market, resulting in
intense competition for qualified professionals. There can be noassurances that EADS will attract and retain the personnel it
requires to conduct its operations successfully. Failure to attract
and retain such personnel or an increase in EADS’ employee
turnover rate could negatively affect EADS’ future results ofoperation and financial condition.

“Power8”, “Power8 Plus” and “Future EADS” Restructuring
and Cost Saving Programmes
In 2007, EADS announced the implementation of a significant
cost reduction and restructuring programme at Airbus, referred
to as “Power8”. This programme looks at all aspects of Airbus
to make it leaner, more integrated, more efficient and more

* EBIT: earnings before interest and taxes, pre-goodwill impairment and exceptionals.

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productive. As part of Power8, Airbus management is seeking
to implement strong cost reduction and cash generating efforts
with the goal of achieving EBIT* contributions of € 2.1 billion
from 2010 onwards and an additional € 5 billion of cumulative

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1cash flow from 2007 to 2010. A large part of the cost savings
is expected to be realised through the reduction of Airbus’
headcount by 10,000 employees (with temporary and on-site
subcontractors accounting for approximately 50% of such
reduction).
In addition, in 2008, EADS launched a Group-wide costsavings programme referred to as “Power8 Plus”, with thegoal of achieving gross annual savings of € 1 billion targeted
for the end of 2012. Airbus is expected to contribute roughly
two-thirds of the targeted cost savings, with the remaining
portion to be contributed by the Eurocopter, Astrium andDefence & Security divisions as well as by EADS headquarters.
Finally, EADS is currently working on a further integrationand cost savings programme referred to as “Future EADS”,
with the goal of achieving gross annual savings of € 350 million
targeted for the end of 2012. The programme aims at further
integration, improvement of decision making process andcost savings through the Headquarters, the Divisions and theinteraction between Headquarters and the Divisions. As part ofthis initiative, the former Military Transport Aircraft division
has been integrated into Airbus under the name of “Airbus
Military”. See “Information on EADS’ Activities — 1.1.2 Airbus— Airbus Military” below.
Anticipated cost savings, in particular those related to“Power8 Plus” and “Future EADS”, are based on preliminary
estimates, however, and actual savings under these programmes
may vary significantly. In particular, EADS’ cost reduction
measures are based on current conditions and do not take
into account any future cost increases that could result fromchanges in its industry or operations, including new business

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developments, wage and cost increases or other factors. EADS’
failure to successfully implement these planned cost reduction
measures, or the possibility that these efforts may not generate
the level of cost savings it expects going forward, could
negatively affect its future results of operation and financial
condition.
In addition to the risk of not achieving the anticipated levelof cost savings from the programmes above, EADS may also
incur higher than expected implementation costs, depending on
the outcome of its current negotiations with labour and otherstakeholders. In many instances, there may be internal resistanceto the various organisational restructuring and cost reduction
measures contemplated, including site divestitures by Airbus
and the integration of the Military Transport Aircraft division
into Airbus. Restructuring, closures, site divestitures and job
reductions may also harm EADS’ labour relations and public
relations, and have led and could lead to work stoppages and/or
demonstrations. In the event that these work stoppages and/or
demonstrations become prolonged, or the costs of implementing
the programmes above are otherwise higher than anticipatedfollowing such negotiations, EADS’ future results of operationand financial condition may be negatively affected.
Finally, EADS may fail to fully realise the anticipated benefitsof the programmes above. Divestitures may result in continued
financial involvement in the divested businesses following
the transaction, such as through guarantees or other financial
arrangements. They may also trigger the recording of an
impairment charge at or prior to closing, which would have anegative impact on EADS’ future results of operation. Risksharing partners at divested businesses may also fail to perform
as expected.

Dependence on Certain Suppliers and Subcontractors
EADS is dependent on numerous key suppliers andsubcontractors to provide it with the raw materials, parts andassemblies that it needs to manufacture its products. Certain of
these suppliers have experienced severe financial difficulties inlight of the recent financial crisis. If these difficulties were tointensify, some suppliers could be forced to reduce their output,
shut down their operations or file for bankruptcy protection,
which could disrupt the delivery of supplies to EADS. It may
be difficult for EADS to find a replacement for certain suppliers
without significant delay, which could negatively affect EADS’
future results of operation and financial condition. EADS may
decide in the future to provide financial or other assistance tocertain suppliers to ensure an uninterrupted supply of materials
and parts, which could expose it to credit risk on the part of suchsuppliers.

EADS’ suppliers or subcontractors may also make claims or
assertions against it for higher prices or other contractual
compensation, in particular in the event of significant changes
to development or production schedules, which could negatively
affect EADS’ future profitability.
Finally, if the macro-economic environment leads to higher thanhistoric average inflation, the labour and procurement costs of
EADS may increase significantly in the future. This may leadto higher component and production costs which could in turnnegatively impact EADS’ future profitability and cash flows, tothe extent EADS is unable to pass these costs on to its customers
or require its suppliers to absorb such costs.

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Programme-Specific Risks
In addition to the risk factors mentioned above, EADS also faces
the following programme-specific risks (while this list does not
purport to be comprehensive, it highlights the current risks
believed to be material by management):> A400M programme. For a description of recent developments
related to the A400M programme, including certain
management assumptions made in connection with the
preparation of the 2009 consolidated financial statements,
see “Information on EADS’ Activities — 1.1.2 Airbus —Airbus Military”, “Information on EADS’ Activities — 1.2
Recent Developments”, “Management’s Discussion andAnalysis of Financial Condition and Results of Operations”
and “Notes to the Consolidated Financial Statements (IFRS)— Note 3: Accounting for the A400M programme”. In
addition to the financial and negotiation risks described
therein, the Company also faces the following challenges: (i)managing a flight test programme that differs significantly
from that of commercial Airbus aircraft, (ii) integrating thecivil systems (flight management, navigation, etc.) with thecomplex military systems, (iii) ensuring that the aircraft isboth commercially certified and meets the range of military
qualifications required by programme customers, (iv)managing the anticipated difficulties on the ramp-up, and (v)meeting the new negotiated time schedule;> A380 programme. In connection with the A380 programme,
EADS faces the following main challenges: (i) management ofstress in the supply chain as a result of the steep ramp-up in
production in coming years, (ii) successful implementation ofa digital mock-up for future A380 production, (iii) managing
maturity in service and (iv) avoidance of production
disruptions and related costs, in particular in connection
with the development of new customised versions and theimplementation of Power8. EADS’ ability to successfully
meet these challenges will be critical in ensuring the smooth
production of “Wave 2” aircraft, i.e. those beyond the initial
25 aircraft produced;

16 EADS R EG I S TR ATI O N DO C U ME N T 2 0 0 9> A350 XWB programme. In connection with the A350 XWB
programme, EADS faces the following main challenges:(i) ensuring the maturity of technology, (ii) meeting thetechnical performance targets for the aircraft and respecting
the development schedule, (iii) ensuring the ramp-up
of key skilled personnel, e.g. for composite stress anddesign, (iv) securing the achievement of recurring cost
targets, (v) ensuring that the new industrial organisation
resulting from Power8 supports effective development, and(vi) ensuring the performance of the risk sharing partners,
including those selected for sites divested by Airbus;> NH90 programme. In connection with the NH90 programme,
EADS faces the following main challenges: (i) meeting thedevelopment schedule, the cost objectives and the technicalcontent (full operational configuration of the TTH (Tactical
Transport Helicopter) version and final configuration of
the NFH (NATO Frigate Helicopter) version) of ongoingdevelopment programmes on the numerous versions,(ii) managing the industrial ramp-up on the programme, and(iii) assuring support readiness in connection with multiple
fleets entering into service; and> Saudi border surveillance. In connection with the Saudi
border surveillance programme, EADS faces the following
main challenges: (i) meeting the schedule and cost objectives
with a high number of sites to deliver and the integrationof COTS products (radars, cameras, sensors) with theirinterfaces into the system, (ii) assuring an efficient projectand staffing ramp-up, and (iii) managing the rollout including
subcontractors as well as training and organisational
adaptation of the customer.

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Legal Risks

Dependence on Joint Ventures and Minority Holdings
EADS generates a substantial proportion of its revenues throughvarious consortia, joint ventures and equity holdings. Thesearrangements include primarily:> the Eurofighter and AirTanker consortia;> three principal joint ventures: MBDA, ATR and Atlas
Electronik;> majority interest: Dornier GmbH; and> investment in associates: Dassault Aviation.
The formation of partnerships and alliances with other market
players is an integral strategy of EADS and the proportionof sales generated from consortia, joint ventures and equity
holdings may rise in future years. This strategy may fromtime to time lead to changes in the organisational structure, or
realignment in the control, of EADS’ existing joint ventures.

EADS exercises varying and evolving degrees of control in
the consortia, joint ventures and equity holdings in which it
participates. While EADS seeks to participate only in ventures inwhich its interests are aligned with those of its partners, the riskof disagreement or deadlock is inherent in a jointly controlled
entity, particularly in those entities that require the unanimous
consent of all members with regard to major decisions andspecify limited exit rights. The other parties in these entities
may also be competitors of EADS, and thus may have intereststhat differ from those of EADS.
In addition, in those holdings in which EADS is a minority
partner or shareholder, EADS’ access to the entity’s books andrecords, and as a consequence, EADS’ knowledge of the entity’s
operations and results, is generally limited as compared to entities
in which EADS is a majority holder or is involved in the day-today management.

Product Liability and Warranty Claims
EADS designs, develops and produces a number of high profile
products of large individual value, particularly civil and military
aircraft and space equipment. EADS is subject to the risk of
product liability and warranty claims in the event that any of its

products fails to perform as designed. While EADS believes thatits insurance programmes are adequate to protect it from suchliabilities, no assurances can be given that claims will not arise in
the future or that such insurance cover will be adequate.

Intellectual Property
EADS relies upon patent, copyright, trademark and trade
secret laws, and agreements with its employees, customers,
suppliers and other parties, to establish and maintain its
intellectual property rights in technology and products used in
its operations. Despite these efforts to protect its intellectual
property rights, any of EADS’ direct or indirect intellectual
property rights could be challenged, invalidated or circumvented.
Further, the laws of certain countries do not protect EADS’
proprietary rights to the same extent as the laws in Europe andthe United States. Therefore, in certain jurisdictions EADS may

be unable to protect its proprietary technology adequately against
unauthorised third-party copying or use, which could adversely
affect its competitive position.
In addition, although EADS believes that it lawfully complies
with the intellectual property rights granted to others, it
could have claims asserted against it for infringement of theintellectual property rights of third parties. These claims could
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area, whether EADS ultimately wins or loses, could be timeconsuming and costly, injure EADS’ reputation or require it toenter into licensing arrangements. EADS might not be able to

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enter into these licensing arrangements on acceptable terms. If aclaim of infringement were successful against it, an injunction
might be ordered against EADS, causing further damages.

Export Controls and Other Regulations
The export market is a significant market for EADS. In addition,
many of the products EADS designs and manufactures formilitary use are considered to be of national strategic interest.
Consequently, the export of such products outside of EADS’
domestic markets may be restricted or subject to licensing andexport controls, notably by the UK, France, Germany and Spain,
where EADS carries out its principal military activities as well as
by other countries where suppliers come from, notably, the US.
There can be no assurance (i) that the export controls to which
EADS is subject will not become more restrictive, (ii) that new
generations of EADS products will not also be subject to similar
or more stringent controls or (iii) that geopolitical factors will
not make it impossible to obtain export licenses for one or moreclients or constrain EADS’ ability to perform under previously
signed contracts. Reduced access to military export markets

may have a material adverse effect on EADS’ business, financial
condition and results of operations.
EADS is also subject to a variety of other governmental
regulations that may adversely affect its business and financial
condition, including among others, regulations relating tocommercial relationships, the use of its products and dealings
with foreign officials. In addition, EADS’ ability to market new
products and enter new markets may be dependent on obtaining
government certifications and approvals in a timely manner.
Although EADS seeks to comply with all such regulations,even unintentional violations or a failure to comply could havea material adverse effect on EADS’ business, financial condition
and results of operations.

Litigation
EADS is currently engaged in a number of legal proceedings,
particularly with respect to securities litigation arising out of the
A380 programme delays announced in 2006. See “Information
on EADS’ Activities — 1.1.9 Legal and Arbitration Proceedings”.
Although EADS is unable at this point to predict the outcomeof these proceedings, it is possible that they will result in theimposition of damages, fines or other remedies, which could4.

have a negative effect on EADS’ business, financial condition
and results of operations. An unfavourable ruling could also
negatively impact EADS’ stock price and reputation. In addition,
EADS expects to continue to incur time and expenses associatedwith its defence, regardless of the outcome, and this may divert
the efforts and attention of management from normal business
operations.

Industrial and Environmental Risks

Given the scope of its activities and the industries in which it
operates, EADS is subject to stringent environmental, health andsafety laws and regulations in numerous jurisdictions aroundthe world. EADS therefore incurs, and expects to continue toincur, significant capital expenditure and other operating costs tocomply with increasingly complex laws and regulations covering
the protection of the natural environment as well as occupational
health and safety, including costs to prevent, control, eliminate

18 EADS R EG I S TR ATI O N DO C U ME N T 2 0 0 9or reduce emissions into the environment, releases of air
pollutants into the atmosphere, discharges to surface andsubsurface water and soil, usage of certain substances and thecontent of EADS’ products, the disposal and treatment ofwaste materials, and costs to comply with reporting or warning
regulations. Moreover, new laws and regulations, the impositionof tougher licence requirements, increasingly strict enforcement
or new interpretations of existing laws and regulations may

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cause EADS to incur increased capital expenditure and operating
costs in the future in relation to the above, which could have anegative effect on its results of operation and financial condition.
If EADS fails to comply with these environmental, health andsafety laws and regulations, even if caused by factors beyond
its control, that failure may result in the assessment of civil or
criminal penalties and fines against it. Regulatory authorities
may require EADS to conduct investigations and undertake
remedial activities, curtail operations or close installations or
facilities temporarily, including to prevent imminent risks. In
the event of an industrial accident or other serious incident,
employees, customers and other third parties may file claims for
personal injury, property damage or damage to the environment(including natural resources). Further, liability under someenvironmental laws relating to contaminated sites can be imposed
retroactively, on a joint and several basis, and without any
finding of non-compliance or fault. These potential liabilities
may not always be covered by insurance, or may be only partiallycovered. The obligation to compensate for such damages could
have a negative effect on EADS’ results of operation andfinancial condition.

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In addition, the various products manufactured and sold by
EADS must comply with relevant environmental, health andsafety and substances/preparations related laws and regulations in
the jurisdictions in which they operate. Although EADS seeks
to ensure that its products meet the highest quality standards,
increasingly stringent and complex laws and regulations, newscientific discoveries, delivery of defective products or the
obligation to notify or provide regulatory authorities or otherswith required information (such as under the EU regulation
known as “REACH”, which addresses the production and useof chemical substances) may force EADS to adapt, redesign,
redevelop, recertify and/or eliminate its products from themarket. Seizures of defective products may be pronounced,
and EADS may incur administrative, civil or criminal liability.
In the event of an accident or other serious incident involving
a product, EADS may be required to conduct investigations
and undertake remedial activities. Employees, customers andother third parties may also file claims for personal injury,
property damage or damage to the environment (including
natural resources). Any problems in this respect may also have asignificant adverse effect on the competitive reputation of EADS’
products.

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1
Information
on EADS’ Activities

1.1
1.1.1
1.1.2
1.1.3
1.1.4
1.1.5
1.1.6
1.1.7
1.1.8
1.1.9
1.1.10Presentationof the EADS Group

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1.1.11
1.1.12
1.1.13

Overview
AirbusEurocopter
Astrium
Defence & Security
Other Businesses
Investments
Insurance
Legal and Arbitration Proceedings
Research and Technology, Intellectual
Property
Environmental Protection
Employees
Incorporation by Reference

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38
42
47
53
54
55
56
58
61
64
65

1.2

Recent Developments

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1.1 Presentation of the EADS Group
1.1.1 Overview
Due to the nature of the markets in which EADS operates and theconfidential nature of its businesses, any statements with respect to
EADS’ competitive position set out in paragraphs 1.1.1 through 1.1.7
below have been based on EADS’ internal information sources,
unless another source has been specified below.
With consolidated revenues of € 42.8 billion in 2009, EADS isEurope’s premier aerospace and defence company and the second
largest aerospace and defence company in the world. In termsof market share, EADS is among the top two manufacturersof commercial aircraft, civil helicopters, commercial spacelaunch vehicles and missiles, and a leading supplier of military
aircraft, satellites and defence electronics. In 2009, it generated
approximately 75% of its total revenues in the civil sector and
25% in the defence sector.

2009 HIGHLIGHTS
In 2009, EADS demonstrated resilience in a difficult market
environment. Despite the economic downturn, EADS protected
its capacity to grow and innovate, thanks to a broad businessportfolio, increased defence and institutional activities and a solid
net cash position. EADS also succeeded in maintaining a strong
order backlog, which at €389.1 billion as of 31 December 2009
represents several years of full production. The Group marked
the beginning of its 10th anniversary with a succession ofsignificant milestones in 2009: A400M and EC175 first flights
and celebration of the 30th anniversary of the Ariane launcher.
For the full year 2009, EADS delivered an EBIT* of €-322
million, which was burdened by A400M and A380 provisions
and negative foreign exchange rate impacts. The net cash positionof €9.8 billion at 31 December 2009 benefited from better than
expected free cash flow and remains a strong asset for the Group.
The net cash figure includes customer payments at year-end 2009
which had been expected for 2010.
From an economic standpoint, EADS’ performance continues
to be burdened by a weakening hedge book over time. In 2009,
EADS dollar hedges matured at an average rate of 1€ = US$ 1.26,
compared to a rate of 1€ = US$ 1.18 in 2008.
Within a difficult economic environment, EADS and its
Divisions are pursuing improvement programmes and costsaving actions. Launched early in 2007, Airbus’ turnaround* EBIT: earnings before interest and taxes, pre-goodwill impairment and exceptionals.

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programme Power8 exceeded targets, delivering gross costsavings of € 2 billion in 2009 compared to the projected costbaseline. Power8 Plus, launched in 2008, aims to add a further€650 million in gross annual savings for Airbus and a totalof €1 billion in gross annual savings overall for the Groupagainst the projected cost base by the end of 2012. The “Future
EADS” programme – launched at the end of 2008 with thegoal of achieving gross annual savings of € 350 million against
the projected cost base by the end of 2012 – aims at further
integrating the organisational structure, improving the decision
making processes and saving costs. In 2009, Eurocopter
launched a new corporate transformation programme called
SHAPE in order to adapt the company to the new economic
context while maintaining sustainable growth and aiming tosave €200 million annually compared to the projected cost baseby the end of 2011. The programme includes Eurocopter’s
contribution to Future EADS. Priority is currently being given
to cash protection through focused capital expenditures andresearch and development expenses, in order to protect the Group
while preparing for the future.
As a result of constructive negotiations over several months,
the launch customer nations and EADS/Airbus/AMSL came toan agreement in principle regarding the A400M programme in
March 2010, with the intention to amend the original A400M
launch contract accordingly. As part of this agreement inprinciple (the “A400M Understanding”), the launch customer
nations have agreed to: increase the price of the contract by€2 billion; waive all liquidated damages related to current delays;
provide an additional amount of €1.5 billion in exchange fora participation in future export sales (Export Levy Facilities);and accelerate pre-delivery payments in the period of 2010 to2014 according to a new delivery plan.
Given the progress made on the commercial negotiations
between EADS and the launch customer nations since the fourth
quarter of 2009, the successful first flight of the A400M andthe significantly higher visibility on total expected production
costs on the A400M programme, EADS re-assessed the A400M
loss-making contract provision which led to the recording of anadditional loss-making contract provision and charges totalling€ -1.8 billion in 2009. As the envisaged contractual amendments
currently reflected in the A400M Understanding and its related
documents have not been finalised yet with the launch customer
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provision has been determined based on the best estimate of
EADS’ management and may be subject to changes dependingon the final contracts to be implemented. If substantial changes
on this assessment were to occur, EADS’ future financial
performance could be significantly impacted.
The year 2009 was also characterised by changes in the Board of
Directors and Executive Committee of the Group. Bodo Uebber
was appointed Chairman of the Board of Directors in April 2009,
succeeding Rüdiger Grube. After the annual general meeting ofshareholders held in May 2009, the Board of Directors welcomeda new member (Wilfried Porth) to fill the vacancy. Prior to this,the Board of Directors appointed Domingo Ureña-Raso as the
new Head of Airbus Military. In October 2009, Sean O’Keefe
was appointed as Head of EADS North America, while Ralph
Crosby will concentrate on his role as Chairman of EADS North
America.
Following the financial crisis, the industry finished 2009
faced with some significant challenges to tackle, althoughsome early signs of a recovery were already emerging. The
commercial aviation business experienced the largest ever decline
in passenger demand with a significant impact on airlines’
operations and profitability. Aircraft manufacturers were required
to take strong pro-active efforts to maintain the solid orderbooks built over the preceding years. Defence and institutional
activities proved less vulnerable to the downturn, as government
spending is planned several years in advance.
Given continued uncertainty surrounding the duration of theeconomic downturn and the continuing effects, market actors
need to remain attentive to the full spectrum of value drivers
available. The weak US dollar has disadvantaged EU companies
with a cost base mainly in euros whereas US manufacturers
experienced some benefit as US exports became more attractive.
Despite short–term challenges, air traffic growth forecasts
and indications of consolidation in the airline industry, thecivil business maintained solid order backlogs. Historically, airtraffic follows changes in annual global GDP and consequently
the recession has had an important slowdown effect on airtransport and passenger traffic. Encouraging improvements wererecorded at the end of the year, and longer-term growth in global
passenger demand looks positive.
European defence budgets have been relatively stable over time
but are facing increasing pressure as a result of public debts.
This could limit growth. However, the long-term nature of theinvestments in defence and space makes these segments lessexposed to short term effects. Sustained growth in security
spending both from government and private sectors has been
driven by the continued presence of security and defence
threats as well as an increased awareness of emergency response
requirements (adverse weather conditions, pandemics, etc).

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Airbus delivered a total of 498 aircraft in 2009, 15 more thanin 2008, which represents a new company delivery record fora single year. A380 deliveries fell short of the target set atthe beginning of 2009, due to continued ramp-up difficulties.
In December 2009, the A380’s production was reviewed andimprovement measures have since been introduced to minimise
delays on the final assembly line. Despite challenging market
conditions, Airbus met its order intake target with a total of 310
gross orders worth US$ 34.9 billion at list prices, or 54% of theworldwide market share of aircraft of more than 100 seats. Three
years after its launch the next generation A350XWB passed the
500 orders milestone.
Further company streamlining saw the formation of Airbus
Military, signalling the full integration of military aircraft
programmes within Airbus. In December 2009, the A400M
took off for its maiden flight. Conversion work for the first
A330-based Multi-Role Tanker Transport (“MRTT”) for theRoyal Australian Air Force was completed and the MRTT
received a further incremental order for three aircraft, raising
the total orders to 28 at the end of 2009. The smaller militarytransport aircraft segment won 15 orders from seven customers
in 2009. These include two orders for the C-212, two for the
CN-235 and 11 for the C-295.
Eurocopter met its business and delivery objectives for 2009
with revenues of €4.6 billion, roughly at the same level as in2008. Service activities accounted for 35% of revenues in 2009.
Eurocopter’s key highlights in 2009 were the roll-out of the
KUH (Korean Utility Helicopter) and the maiden flight of theEC175, a joint development with AVIC of China. The Tiger
proved its operational reliability while deployed in Afghanistanwith the French forces. NH90 deliveries continued throughout
2009, with 40 tactical transport version helicopters now inservice in five countries. About 100 UH-72A Lakota havenow been delivered to the US Army and Navy and a further
51 Lakotas were ordered in December 2009.
Regarding order bookings, a net total of 344 new aircraft weresold in 2009 (715 in 2008), which allowed Eurocopter to secure
its leading position in 2009 in a weak civil and parapublic market.
The sharp order decline in the civil market for light helicopters
due to the economic crisis was over-compensated by militaryorders in terms of value. Eurocopter’s total order backlog at theend of 2009 amounted to 1,303 helicopters, or the equivalent of€15.1 billion, an increase of more than €1 billion compared to theend of 2008. Deliveries remained stable with 558 new civil andmilitary helicopters delivered in 2009.
Astrium achieved strong growth in 2009 with revenues of €4.8
billion and new orders totalling €8 billion, including a €4 billion
order from Arianespace to produce 35 Ariane 5 launchers anda €500 million contract from SES ASTRA for 4 multi-purpose
telecommunication satellites. The Ariane 5 launcher continued
to prove its reliability, completing seven launches for the year,

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INFORMATION ON EADS’ ACTIVITIES>1.1 | Presentation of the EADS Group1for a sequence of 35 successful launches in a row. In the defence
sector, Astrium also successfully tested the M51 ballistic missile
and placed both the Spirale demonstrator and the Helios 2B
military surveillance satellite in orbit for France. During arecord year for telecommunications satellites, with seven neworders representing one quarter of the worldwide market, the
COMSATBw-1 military communication satellite was placed inorbit for Germany. Despite missing out on the ESA contract for
the next batch of Galileo satellites, Astrium will be responsible
for a large part of the contract’s value through subcontracting
work for Astrium subsidiaries. Astrium remains committed tocompeting for the next batch.
Revenues at EADS Defence & Security (the “DS Division” or“DS”) remained roughly stable in 2009. The Eurofighter partner
nations awarded the Tranche 3a contract for 112 aircraft, whichstrengthened the Division’s position in the global combat aircraft
market. The year saw the delivery of the 200th Eurofighter. DS
was awarded the border security programme covering the fullborders of the Kingdom of Saudi Arabia. With this contract,
DS confirmed its competitive position as lead systems integrator
for global security projects. Regarding unmanned aerial vehicles(“UAVs”), 2009 was marked by the successful test of the UAV
demonstrator Barracuda and completion of the risk reduction
study for the Talarion UAV on behalf of France, Germany andSpain. Security capabilities developed through the expansion
of TETRA networks in India, China, and Bulgaria. Adapting to
new worldwide threats, DS participated in improving potential
responses to cyber attacks thanks to its pioneering new solution
for supervising information system security, “Cockpit Security”.
The good performance of the military, institutional andspace businesses in 2009 has demonstrated the validity of
the Vision 2020 goal of counterbalancing revenues from theAirbus commercial aviation business with revenues from theother Divisions. EADS will further focus on eco-efficiency andresearch and development to prepare the Company for the future.

STRATEGY
In order to maximise value for its shareholders, management
intends to reinforce EADS’ position as a leader in major global
aerospace and defence markets. Beyond addressing current
operational challenges, EADS will continue to focus on providing
superior value to its customers through innovative product andservice solutions. EADS has defined the following long-term
objectives for the future pursuant to its Vision 2020 plan:> Improve portfolio balance between Airbus Commercial
manufacturing and other EADS activities. In 2009, revenues atAirbus Commercial represented 61.6% of EADS’ consolidated
revenues for the year. As a result, the Group remains highly
vulnerable to commercial aircraft cycles, the financial burden
and risk associated with aircraft programmes and US dollar
exchange rate fluctuation. EADS will therefore seek toincrease the contribution to revenues from other business

24 EADS R EG I S TR ATI O N DO C U ME N T 2 0 0 9

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Back to Contentssegments in future years, while still maintaining long-term
parity with Boeing in the commercial aircraft segment. In
particular, EADS will seek to increase the proportion ofrevenues emanating from its defence, security and services
businesses, which tend to be less cyclical and more predictablein nature. The Group will consider all options for achieving
such growth, including targeted acquisitions or partnershipsthat enhance its overall competitive position and add
capabilities to its portfolio, in particular in Asia, the Middle
East and the Americas;> Increase profitability. Through better internal cost control,
reduced capital intensity, enhanced programme and risk
management and with a more streamlined industrialorganisation, EADS has taken the initial steps towards
restoring its profitability. EADS intends to increasingly focus
on its core activities, which means moving towards a new
business model and reallocating resources away from certain
non-core legacy activities. Through more optimal resource
allocation and stronger development of more profitablesegments, EADS will strive to establish a level of profitability
that is both attractive to its shareholders and sufficient tofund its future development initiatives;> Expand its services offering. Historically, EADS’ growth has
been driven by the sale of technologically advanced products
and solutions. At the same time, management is focusedon increasing EADS’ presence in the high value services
market, given its countercyclical nature and opportunities forsustained growth. Factors supporting this market include therapid expansion of EADS’ in-service commercial and defence
fleet — which will require support throughout its lifecycle— as well as the increasing tendency on the part of defence
and governmental agencies to outsource various key functions.
EADS will seek to provide high value-added services related
to both platforms and systems, including training, advanced
in-service support and air traffic management systems.
Revenue from services activities is targeted to account for 25%
of EADS’ consolidated revenues by 2020. Such ambitions
would require further growth as EADS intends to continue
playing an increasingly important role in Europe;> Become a truly global industrial group. A significant portion of
EADS’ suppliers, facilities and employees are based in Europe,
while the majority of its revenues originate from outsideof Europe. In order to achieve access to certain markets
and technology, optimise costs and hedge against future
US dollar volatility, EADS will aim to implement a long-term
industrial strategy that corrects this imbalance by expanding
its industrial footprint and partnerships in key markets
outside of Europe, including the Americas, China, Russia
and India. In the US, the goal is to establish a firm industrial
and commercial presence in the world’s largest defence andhomeland security market. Consequently, by 2020, EADS isseeking to have 40% of its sourcing and 20% of its employees
based outside of Europe;

INFORMATION ON EADS’ ACTIVITIES>1.1 | Presentation of the EADS Group1> Continue to foster innovation. Innovation in product,
technology, manufacturing and customer offerings willdefine EADS’ future. With development cycles shortening
and new competitors emerging in all fields, EADS must
maintain its technological edge and cover a broad spectrumof capabilities in order to remain a market leader. To maintainits innovative edge, EADS will seek to systematically employ
the latest digital design and engineering tools in order tocomplete major platform developments more quickly, andwill seek to accelerate the pace at which it reviews its coretechnologies so as to close gaps against the competition. These
core technologies are expected to include C4I, network centric
operations and UAV technology, among others;> Focus on the environment. EADS will seek to anticipate
and address future environmental challenges as part of its
commitment to reconciling environmental responsibility witheconomic success. Being greener, cleaner, quieter and smarter,
the A380 has already set new standards for air transport andthe environment. EADS will pursue additional initiatives
in the future – including a comprehensive environmental
management system based on ISO 14001 to cover all EADS
activities – in order to render eco-efficiency a competitive
advantage over the long-term.

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Airbus Commercial
Since it was founded in 1970 and up to the end of 2009,
Airbus has received orders for 9,486 commercial aircraft fromapproximately 316 customers around the world. With 498 aircraft
deliveries in 2009 (483 in 2008), Airbus was for the seventh
consecutive year the largest supplier of commercial aircraft in
the world. Airbus received 310 gross orders in 2009 (compared to
900 gross orders in 2008), or 54% of the worldwide market shareof aircraft beyond 100 seats. After accounting for cancellations,net order intake for 2009 was 271 aircraft (compared to
777 aircraft in 2008). As of 31 December 2009, Airbus’
backlog of commercial orders was 3,488 aircraft, representing
approximately 82% of total EADS worldwide backlog.
See “— 1.1.2 Airbus— Airbus Commercial”.
Airbus Military (former MTA division)
Airbus Military produces and sells special mission aircraft, which
are derived from existing aircraft platforms and are dedicated to
specialised military and security tasks such as in-flight refuellingcapabilities, maritime surveillance and antisubmarine warfare.
Airbus Military also manufactures and sells medium and light
military transport aircraft and is responsible for the European
heavy military transport A400M project. See “— 1.1.2 Airbus —Airbus Military”.

ORGANISATION OF EADS BUSINESSES

Eurocopter

EADS organises its businesses into the following four operating
Divisions: (1) Airbus (including Airbus Military), (2) Eurocopter,(3) Astrium and (4) Defence & Security. The chart set out in“General Description of the Company and its Share Capital —3.3.6 Simplified Group Structure Chart” illustrates the allocationof activities among these four Divisions.

Eurocopter is a global leader in the civil and military helicopter
market, offering one of the most complete and modern rangesof helicopters and related services. With approximately 2,800
operators worldwide, this product range currently includes lightsingle-engine, light twin-engine, medium and heavy helicopterswhich are adaptable to different mission types based on customer
needs. In 2009, Eurocopter recorded revenues of € 4.6 billion,
representing 10.7% of EADS’ total revenues. See “— 1.1.3
Eurocopter”.

AirbusAirbus is one of the world’s leading aircraft suppliers, witha mission to provide the aircraft best suited to the market’s
needs and to support these aircraft with the highest quality ofservice. The Airbus commercial product line comprises a fullrange of aircraft models, from the 107-seat single aisle A318
aircraft to the 525-seat A380 – the largest civil aircraft in service
worldwide.
In 2009, Airbus also integrated the former Military Transport
Aircraft Division (the “MTA Division”) as a new Airbus
business unit under the name “Airbus Military”, in order tomanage all military aircraft activities, including integrated
development of the A400M programme.
Airbus recorded revenues of € 28.1 billion in 2009 – including
revenues of € 2.2 billion at Airbus Military – representing 65.5%
of EADS’ total revenues.

Astrium
Astrium designs, develops and manufactures satellites, orbital
infrastructures and launcher systems and provides space services.
It is the third largest space systems manufacturing company inthe world after Boeing and Lockheed Martin and the leading
European supplier of satellites, orbital infrastructures, launchers
and associated services. Astrium has three main Business Units:
Astrium Satellites, Astrium Space Transportation and Astrium
Services. These include the provision of launch services throughAstrium’s shareholdings in Arianespace (Ariane 5 launcher),Starsem (Soyuz launcher) and Eurockot (Rockot launcher), as well
as services related to telecommunications and earth observation
satellites through wholly or majority owned subsidiaries such as
Paradigm Secure Communications, Infoterra and Spot Image. In
2009, Astrium recorded revenues of € 4.8 billion, representing
11.2% of EADS’ total revenues. See “— 1.1.4 Astrium”.

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Defence & Security
The DS Division serves as the main pillar of EADS’ defence
and security activities. By combining its Defence andCommunications Systems, Defence Electronics, Military Air
Systems and missile systems (consisting of EADS’ 37.5% stakein MBDA) Business Units within one Division, EADS has
streamlined its defence and security business to better meetthe needs of customers that require integrated defence and

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security solutions. In 2009, the DS Division recorded revenuesof € 5.4 billion, representing 12.5% of EADS’ total revenues.
See “— 1.1.5 Defence & Security”.

Investments
Among its significant investments, EADS holds a 46.3% stakein Dassault Aviation, a major participant in the world market for
military jet aircraft and business jets. See “— 1.1.7 Investments”.

SUMMARY FINANCIAL AND OPERATING DATA
The following tables provide summary financial and operating data for EADS for the past three years.
Consolidated Revenues by Division for the years ended 31 December 2009, 2008 and 2007
Year ended 31 December 2009
Amount in € bn

Airbus(2)

Year ended 31 December 2008

In percentage(1)

Amount in € bn

Year ended 31 December 2007

In percentage(1)

Amount in € bn

In percentage (1)

28.1

65.6%

29.0

66.8%

25.2

63.9%

Airbus Commercial

26.4

61.6%

26.5

61.1%

-

-

Airbus Military

2.2

5.2%

2.8

6.4%

-

-

-

-

-

-

1.1

2.9%

4.6

10.7%

4.5

10.3%

4.2

10.5%

Military Transport Aircraft (2)Eurocopter
Astrium

4.8

11.2%

4.3

9.9%

3.6

9.0%

Defence & Security

5.3

12.5%

5.7 (4)

13.0%

5.4

13.7%

42.8

100%

43.5

100%

39.5

100%

Total divisional revenues
Other Businesses

(3)

1.1

1.3

1.4

HQ/Consolidation (5)

(1.1)

(1.5)

(1.8)

Total

42.8

43.3

39.1

(1) Before “Other Businesses” and “Headquarters/Consolidation”.
(2) Following integration of Airbus Military into Airbus, Airbus reports in two segments as of 2009: Airbus Commercial and Airbus Military. The Airbus Commercial perimeter
includes EFW and the completed aerostructures reorganisation but now excludes the A400M. Airbus Military includes the former MTA D ivision as well as all A400M activity.
Eliminations between Airbus Commercial and Airbus Military are treated at the Airbus Division level. Figures for 2008 (but not 2007) have been restated accordingly, except
for the Augsburg site transferred from the DS D ivision . See “Management’s Discussion and Analysis of Financial Condition and Results of Operations —2.1.2 Overview”.
(3) As of 2009, the composition of “Other Businesses” differs compared to 2008. Since EADS currently holds only a minority stake in Socata, this unit is now consolidated
at equity within EADS’ accounts. Also as of 2009, EADS EFW is consolidated within Airbus Commercial. Therefore, “Other Businesses” in 2009 consists of ATR, EADS
Sogerma, EADS North America and 30% of Socata at equity. Figures for 2008 (but not for 2007) have been adjusted to reflect the consolidation of EADS EFW within Airbus
Commercial. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations —2.1.2 Overview”.
(4) Augsburg site’s revenues are included in the DS division in 2008 and amounted to € 438 million. As of 2009, the Augsburg site is consolidated within Airbus Commercial.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations —2.1.2 Overview”.
(5) HQ/Consolidation includes, in particular, adjustments and eliminations for intercompany transactions.

Consolidated Revenues by Geographical Area for the years ended 31 December 2009, 2008 and 2007
Year ended 31 December 2009

Year ended 31 December 2008
(1)

Amount in € bn

21.4

50.1%

North America

6.1

Asia/Pacific

8.6

Rest of the World (2)Amount in € bn

In percentage (1)

18.9

43.6%

17.4

44.4%

14.3%

7.8

18.0%

7.9

20.3%

20.1%

10.8

24.9%

8.8

22.6%

6.7

15.5%

5.8

13.5%

5.0

12.7%

42.8

100%

43.3

100%

39.1

100%

Amount in € bn

EuropeTotal(1) Percentage of total revenues after eliminations.
(2) Including the Middle East.

26 EADS R EG I S TR ATI O N DO C U ME N T 2 0 0 9

Year ended 31 December 2007
(1)

In percentage

In percentage

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Consolidated Orders Booked for the years ended 31 December 2009, 2008 and 2007
Year ended 31 December 2009
Amount in € bn

Orders booked

Year ended 31 December 2008
(1)

Amount in € bn

In percentage

Year ended 31 December 2007

In percentage(1)

Amount in € bn

In percentage (1)(2)

Airbus (3) (4)

23.9

52%

85.5

87%

117.3

86%

Airbus Commercial

23.5

51%

82.1

83%

-

-

Airbus Military

0.6

1%

5.1

5%

-

-

Military Transport Aircraft

(4)

-

-

-

-

0.8

1%

Eurocopter

5.8

13%

4.8

5%

6.6

5%

Astrium

8.3

18%

3.3

3%

4.5

3%

Defence & Security
Total divisional orders
Other Businesses (5)

8.0

17%

5.3

5%

7.5

5%

46.0

100%

98.9

100%

136.7

100%

0.9

1.7

2.0

HQ/Consolidation

(1.1)

(2.0)

(1.9)

Total

45.8

98.6

136.8

(1) Before “Other Businesses” and “Headquarters/Consolidation”.
(2) Without options.
(3) Based on catalogue prices for commercial aircraft activities.
(4) Following integration of Airbus Military into Airbus, Airbus reports in two segments as of 2009: Airbus Commercial and Airbus Military. The Airbus Commercial perimeter
includes EFW and the completed aerostructures reorganisation but now excludes the A400M. Airbus Military includes the former MTA division as well as all A400M activity.
Eliminations between Airbus Commercial and Airbus Military are treated at the Airbus Division level. Figures for 2008 (but not 2007) have been restated accordingly, except
for the Augsburg site transferred from the DS division. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations —2.1.2 Overview”.
(5) As of 2009, the composition of “Other Businesses” differs compared to 2008. Since EADS currently holds only a minority stake in Socata, this unit is now consolidated
at equity within EADS’ accounts. Also as of 2009, EADS EFW is consolidated within Airbus Commercial. Therefore, “Other Businesses” in 2009 consists of ATR, EADS
Sogerma, EADS North America and 30% of Socata at equity. Figures for 2008 (but not for 2007) have been adjusted to reflect the consolidation of EADS EFW within Airbus
Commercial. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations —2.1.2 Overview”.

Consolidated Backlog for the years ended 31 December 2009, 2008 and 2007(1)Year ended 31 December 2009
Amount in € bn

BacklogYear ended 31 December 2008
(2)

Amount in € bn

In percentage

Year ended 31 December 2007

In percentage(2)

Amount in € bn

In percentage (2)

81%

(3)

Airbus (4) (5)

339.7

87%

357.8

90%

283.8

Airbus Commercial

320.3

82%

337.2

84%

-

-

Airbus Military

20.7

5%

22.3

6%

-

-

Military Transport Aircraft (5)

-

-

-

-

19.9

6%

Eurocopter

15.1

4%

13.8

3%

13.5

4%

Astrium

14.6

4%

11.0

3%

12.9

4%

Defence & Security
Total divisional backlog

18.8

5%

17.0

4%

17.8

5%

388.2

100%

399.6

100%

347.9

100%

Other Businesses (6)

2.0

3.2

2.7

HQ/Consolidation

(1.1)

(2.6)

(11.1)

389.1

400.2

339.5

Total

(1) For a discussion on the calculation of backlog, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations — 2.1.4.1 Order Backlog”.
(2) Before “Other Businesses” and “Headquarters/Consolidation”.
(3) Without options.
(4) Based on catalogue prices for commercial aircraft activities.
(5) Following integration of Airbus Military into Airbus, Airbus reports in two segments as of 2009: Airbus Commercial and Airbus Military. The Airbus Commercial perimeter
includes EFW and the completed aerostructures reorganisation but now excludes the A400M. Airbus Military includes the former MTA division as well as all A400M activity.
Eliminations between Airbus Commercial and Airbus Military are treated at the Airbus Division level. Figures for 2008 (but not 2007) have been restated accordingly, except
for the Augsburg site transferred from the DS division. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations —2.1.2 Overview”.
(6) As of 2009, the composition of “Other Businesses” differs compared to 2008. Since EADS currently holds only a minority stake in Socata, this unit is now consolidated
at equity within EADS’ accounts. Also as of 2009, EADS EFW is consolidated within Airbus Commercial. Therefore, “Other Businesses” in 2009 consists of ATR, EADS
Sogerma, EADS North America and 30% of Socata at equity. Figures for 2008 (but not for 2007) have been adjusted to reflect the consolidation of EADS EFW within Airbus
Commercial. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations —2.1.2 Overview”.

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1

RELATIONSHIP BETWEEN EADS N.V. AND THE GROUPEADS N.V. itself does not engage in the core aerospace, defenceor space business of its Group but coordinates related businesses,
sets and controls objectives and approves major decisions
for its Group. As the parent company, EADS N.V. conducts
activities which are essential to the Group activities and which
are an integral part of the overall management of the Group.
In particular, finance activities pursued by EADS N.V. are insupport of the business activities and strategy of the Group.
In connection therewith, EADS N.V. provides or procures theprovision of services to the subsidiaries of the Group. General

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management service agreements have been put in place with thesubsidiaries and services are invoiced on a cost plus basis.
For management purposes, EADS N.V. acts through its Boardof Directors, Executive Committee, and Chief Executive Officer
in accordance with its corporate rules and procedures detailed in“Corporate Governance”.
Within the framework defined by EADS, each Division,
Business Unit and subsidiary is vested with full entrepreneurial
responsibility.

1.1.2 Airbus
Airbus is one of the world’s leading aircraft suppliers, witha mission to provide the aircraft best suited to the market’s
needs and to support these aircraft with the highest quality ofservice. The Airbus commercial product line comprises a fullrange of aircraft models, from the 107-seat single-aisle A318
aircraft to the 525-seat A380 – the largest civil aircraft in service
worldwide.
In 2009, Airbus also integrated the former MTA division as a
new Airbus Business Unit under the name “Airbus Military”,
in order to manage all military aircraft activities, including
integrated development of the A400M programme. This
integration seeks to make the organisation and management ofmilitary programmes more efficient through clear and unified
command lines. A better allocation of industrial and engineeringresources is also one of the crucial goals of this integration. For
further information related to Airbus Military, see “—Airbus
Military” below.
In 2009, Airbus recorded revenues of € 28.1 billion – including
revenues of € 2.2 billion at Airbus Military – representing 65.5%
of EADS’ total revenues.

AIRBUS COMMERCIAL

Introduction and Overview
Since it was founded in 1970 and up to the end of 2009,
Airbus has received orders for 9,486 commercial aircraft fromapproximately 316 customers around the world. With 498 aircraft
deliveries in 2009 (483 in 2008), Airbus was for the seventh
consecutive year the largest supplier of commercial aircraft in theworld. Airbus received 310 gross orders in 2009 (compared to
900 gross orders in 2008), or 54% of the worldwide market shareof aircraft beyond 100 seats. After accounting for cancellations,net order intake for 2009 was 271 aircraft (compared to* EBIT: earnings before interest and taxes, pre-goodwill impairment and exceptionals.

28 EADS R EG I S TR ATI O N DO C U ME N T 2 0 0 9

777 aircraft in 2008). As of 31 December 2009, Airbus’
backlog of commercial orders was 3,488 aircraft, representing
approximately 82% of total EADS worldwide backlog.

Strategy
Airbus’ primary goal is to deliver strong results in a sustainedmanner, while commanding between 40% and 60% of theworldwide commercial aircraft market over the long-term andexpanding its customer services offering. To achieve this goal,
Airbus is actively:
Building a leaner, more fully integrated company
In order to address the challenges posed by persistent US dollar
weakness, increased competitive pressures and the financial
burden related to the A380 and A400M delays, and to meetits future investment needs, Airbus launched a four-year
restructuring programme at the beginning of 2007 referred toas Power8. As part of Power8, Airbus management is seeking
to implement strong cost reduction and cash generating efforts
with the goal of achieving EBIT* contributions of € 2.1 billion
from 2010 onwards against the projected cost base and an
additional € 5 billion of cumulative cash flow from 2007 to 2010.
Savings realised pursuant to Power8 provided gross cost savingsof € 2 billion in 2009 compared to the projected cost baseline.
See “Management’s Discussion and Analysis of Financial
Condition and Results of Operations”.
In addition, a further cost savings programme referred to as“Power8 Plus” was launched in September 2008, with the goalof achieving gross annual savings of € 650 million against the
projected cost base beginning in 2011-2012. Airbus management
intends to achieve the Power8 Plus objectives by extending
the Power8 initiatives up to 2012 (€ 350 million) and throughfurther globalisation of engineering and manufacturing work(€ 300 million).

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Developing the most comprehensive line of products in
response to customer needs
Airbus continuously seeks to develop and deliver new products
to meet customers’ evolving needs. In this regard, Airbus iscurrently pursuing (i) implementation of the current A380
delivery schedule, (ii) the development of the new A350 XWB
family of highly advanced medium capacity long-range aircraft,(iii) the gradual expansion of relevant freighter applications
across the range of Airbus aircraft with the A330-200F and theA320 passenger-to-freighter, (iv) the continuous improvementof existing models’ competitive edge in their respective markets,(v) the entry into the military business through the A400M
or the development of military derivatives products such as
the A330 MRTT, and (vi) research on the development of new
aircraft in the short and medium range sector.
Focusing on key geographic markets
Airbus is seeking to expand its global presence and to increase its
market share in key emerging markets such as China, Russia andIndia. As part of this strategy, Airbus is developing a numberof international industrial partnerships and is building strategic
relationships with strong industry partners. For example, Airbus
signed a contract in 2009 with VSMPO-AVISMA Corporation,
the Russian titanium manufacturer, which covers the supply oftitanium and die forging parts for all existing Airbus aircraft,including new programmes such as the A350XWB.
Expanding its customer services offering
Airbus seeks to remain at the forefront of its industry by
expanding its customer services offering to meet customers’
evolving needs. As a result, Airbus has designed a comprehensive
portfolio of services based on an “à la carte” approach whereby
customers can select the products and services they needaccording to their own business model and outsourcing policy.
This innovative approach helps Airbus operators to significantly
reduce their operating costs, increase their aircraft availability
and enhance the quality of their operations.

MarketCyclicality and Market Drivers
The main factors affecting the commercial aircraft market include
passenger demand for air travel, cargo activity, economic growth
cycles, national and international regulation (and deregulation),
the rate of replacement and obsolescence of existing fleets andthe availability of aircraft financing sources. The performance,competitive posture and strategy of aircraft manufacturers,
airlines, cargo operators and leasing companies as well as wars,
political unrest, pandemics and extraordinary events may alsoprecipitate changes in demand and lead to short-term market
imbalances.
In recent years, China and India have emerged as significant
new aircraft markets. According to internal estimates, they are
expected to constitute the second and fifth most important

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markets for aircraft deliveries respectively, in the next twenty
years. As a result, Airbus has sought to strengthen its
commercial and industrial ties in these countries.
The no-frills/low-cost carriers also constitute a significant
sector, and are expected to continue growing around the world,
particularly in Asia. Airbus single aisle aircraft continue to be a
popular choice for these carriers. As some of these carriers begin
testing the market with new long-range operations, their demandfor Airbus’ range of twin aisle aircraft may also increase.
Overall Growth. The long-term market for passenger aircraft
depends primarily on passenger demand for air travel, which
is itself primarily driven by economic or GDP growth, farelevels and demographic growth. Measured in revenue passenger
kilometres, air travel increased every year from 1967 to 2000,
except for 1991 due to the Gulf War, resulting in an averageannual growth rate of 7.9% for the period. Demand for airtransportation also proved resilient in the years following 2001,
when successive shocks, including 9/11 and SARS in Asia,
dampened demand. Nevertheless, the market quickly recovered.
More recently, the financial crisis and global economic
difficulties witnessed at the end of 2008 and into 2009 resulted
in only the third period of negative traffic growth during thejet age, and a cyclical downturn for airlines in terms of traffic(both passenger and cargo), yields and profitability. By the endof 2009 however, traffic had begun to recover with a number ofindustry participants, including the International Civil Aviation
Organization (ICAO), forecasting a return to positive growth in2010 and 2011.
Beyond the near-term market uncertainties and based oninternal estimates, Airbus believes that air travel remains a
growth business and will grow at 4.7% per annum during theperiod 2009-2028. Airbus therefore expects passenger traffic, as
measured in revenue passenger kilometres, to more than double
in the next twenty years.
Cyclicality. Despite the expected overall long-term growth in
air travel, the market for commercial aircraft has proven to be
cyclical, due to the volatility of airline profitability, cyclicalityof the world economy and occasional unforeseen events which
can further depress demand for air travel, such as the spreadof H1N1 flu. Accordingly, following the peak in new orders
reached in 2007, Airbus recorded significantly fewer new orders
in 2008 and 2009 as a result of the cyclical downturn, withconditions expected to remain challenging in 2010.
When cyclical downturns have occurred in the past, aircraft
manufacturers have typically experienced decreases in aircraft
orders and have made fewer deliveries, with some customers
seeking to postpone or cancel their existing orders. In thepast this has generally been followed by a period of sustained
new order and delivery activity. As with any macro-economic

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development, however, it is difficult to predict how the current
downturn and the next cycle will develop.

current and future market requirements given its complete familyof products, from the 107-seat A318 to the 525-seat A380.

Regulation/Deregulation. National and international regulation(and deregulation) of international air services and majordomestic air travel markets affect demand for passenger aircraft
as well. In 1978, the United States deregulated its domestic airtransportation system, followed by Europe in 1985. The recently
negotiated “Open Skies Agreement” between the United Statesand Europe, which became effective in March 2008, allows any
European or US airline to fly any route between any city inthe EU and any city in the US. Other regions and countries arealso progressively deregulating, particularly in Asia. This trend
is expected to continue, facilitating and in some cases driving
demand. In addition to providing greater market access (which
may have formerly been limited), deregulation may allow for thecreation and growth of new airlines or new airline models, as has
been the case with the no-frills/low-cost airline model, which
has increased in importance throughout major domestic and intra
regional markets since deregulation (e.g., in the US and Europe).

Alliances. The development of world airline alliances has
reinforced the pattern of airline network development describedabove. According to data from Ascend, a UK-based aviationindustry consultancy, more than one third of the world’s
jetliner seats being flown today are operated by just 15 airlines
as of January 2010. In the 1990s, the major airlines began toenter into alliances that gave each alliance member access to theother alliance members’ hubs and routings, allowing airlines toconcentrate their hub investments while extending their productoffering and market access. Airlines have also begun to explore
different merger possibilities in recent years. Examples include
the merger of Air France and KLM, US Airways and America
West and Delta and Northwest, with talks between other airlines
currently ongoing.

Airline Network Development: “Hub” and “Point-to-Point”
Networks. Following deregulation, major airlines have sought totailor their route networks and fleets to continuing changes incustomer demand. Accordingly, where origin and destination
demand prove sufficiently strong, airlines often employ direct,
or “point-to-point” route services. However, where demand
between two destinations proves insufficient, airlines havedeveloped highly efficient “hub and spoke” systems, which
provide passengers with access to a far greater number of air
travel destinations through one or more flight connections.
The chosen system of route networks in turn affects aircraft
demand, as hubs permit fleet standardisation around both
smaller aircraft types for the short, high frequency and lower
density routes that feed the hubs (between hubs and spokes)
and larger aircraft types for the longer and higher density routes
between hubs (hub-to-hub), themselves large point-to-point
markets. As deregulation has led airlines to diversify their route
network strategies, it has at the same time therefore encouraged
the development of a wider range of aircraft in order toimplement such strategies.
Airbus, like others in the industry, believes that route networks
will continue to grow through expansion of capacity on existing
routes and through the introduction of new routes, which will
largely be typified by having a major hub city at least at one
end of the route. These new route markets are expected to bewell served by Airbus’ latest product offering, the A350 XWB,
which has been designed with them in mind. The A380, now
in revenue service, is designed primarily to meet the significant
demand between the major hub cities, very often also the major
centres of population such as London, Paris, New York and
Beijing for example. Airbus has identified 32 such cities in its
market analysis. Airbus believes that it is well positioned to meet

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Governmental Funding. A 1992 bilateral agreement between the
EU and the US provided for ceilings on reimbursable launch
investments (typically used by European governments) of
33% of the total development costs of new large civil aircraft
programmes. It also set a ceiling at 3% of industry revenues forindirect support in relation to the development or productionof large civil aircraft (typically the Department of Defense andNational Aeronautics and Space Administration (“NASA”)
mechanisms used in the US). This bilateral agreement provided alevel playing field for government support, reflecting the needsof both Europe and the US.
However, the unilateral withdrawal from the 1992 agreementby the US government in late 2004 eventually led to formal
claims and counterclaims being made by the US and the EU,
respectively, with the WTO. The EU and the US have conductednegotiations to seek a formal settlement of the issues pending
before the WTO. In the absence of an agreement between
the parties, the WTO tribunal hearing the dispute will issue
reports evaluating the legality of any governmental funding
provided to Boeing and Airbus. These reports and any associatedrecommendations will be addressed to the WTO members(i.e. national governments), and not to Boeing, Airbus or EADS
directly.
Market Structure and Competition
Market Segments. According to a study conducted by Airbus, a
total of 14,016 aircraft with more than 100 seats were in service
with airlines worldwide at the beginning of 2009 (as compared to
13,284 aircraft at the end of 2007). Currently, Airbus competes
in each of the three principal market segments for aircraft withmore than 100 seats.
“Single aisle” aircraft, such as the A320 family, have 100-210
seats, typically configured with two triple seats per row divided
by one aisle, and are used principally for short-range andmedium-range routes.

INFORMATION ON EADS’ ACTIVITIES>1.1 | Presentation of the EADS Group1“Twin aisle” or “wide body” aircraft, such as the A330/A340/
A350 XWB families, have a wider fuselage with more than 210
seats, typically configured with eight seats per row and with
two aisles. The A330/A340/A350 XWB families are capable ofserving all short to long-range markets, with the A340-500/600
designed for ultra-long-range operations in particular.
“Very large aircraft”, such as the A380 family, are designed tocarry more than 400 passengers, non-stop, over very long-range
routes with superior comfort standards and with significant
cost-per-seat benefits to airlines. Freight aircraft, which form afourth, related segment, are often converted ex-passenger aircraft.
See “— 1.1.6 Other Businesses — Aerostructures, Aircraft
Conversion and Floor Panels — EFW”.
Airbus also competes in the corporate, VIP business jet market
with the ACJ, an A319-based Corporate Jetliner, and the A318
Elite. It has also recently sold the A320, A340 and A380 toserve the business jet market in private, corporate shuttle and ingovernment/VIP roles.
Geographic differences. The high proportion of single aisle
aircraft in use in both North America and Europe reflects the
predominance of domestic short-range and medium-range flights,
particularly in North America due to the development of hubs
following deregulation. In comparison with North America
and Europe, the Asia-Pacific region uses a greater proportion oftwin aisle aircraft, as populations tend to be more concentrated
in fewer large urban centres. The tendency towards use of twin
aisle aircraft is also reinforced by the fact that many of theregion’s major airports limit the number of flights, due either
to environmental concerns or to infrastructure constraints that
limit the ability to increase flight frequency. These constraints
necessitate higher average aircraft seating capacity per flight.
However, Airbus believes that demand for single aisle aircraft in
Asia will grow over the next 20 years, particularly as domestic
markets in China and India continue to develop. This is
expected to occur at the same time that Asian demand for larger/
long-range aircraft continues to increase.
Competition. Airbus has been operating in a duopoly since
Lockheed’s withdrawal from the market in 1986 and Boeing’s
acquisition of McDonnell Douglas in 1997. As a result, themarket for passenger aircraft of more than 100 seats is now
effectively divided between Airbus and Boeing. According to the
manufacturers’ published figures, in 2009 Airbus and Boeing,respectively, accounted for 51% and 49% of total deliveries, 54%
and 46% of total gross orders, and 51% and 49% of the total
year-end backlog.
Nevertheless, the high technology and high value nature of thebusiness makes aircraft manufacturing an attractive industry inwhich to participate, and besides Boeing, Airbus faces aggressiveinternational competitors who are intent on increasing their

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market share. Regional jet makers Embraer and Bombardier,
coming from the less than 100-seat commercial aircraft market,
continue to develop larger and more capable airplanes (such as
the new 100- to 149-seat C-Series launched by Bombardier).
Additionally, other competitors from Russia, China, and Japanare likely to enter the 70- to 150-seat aircraft market over the
next few years. This market environment has resulted in intensepressures on pricing and other competitive factors.
Customers
As of 31 December 2009, Airbus had 316 customers,
5,998 Airbus aircraft had been delivered to operators worldwide
since the creation of Airbus, and 3,488 aircraft were on order.
The table below shows Airbus’ largest commitments in terms of
total gross firm orders by customer for the year 2009.
Customer

Firm Orders*

Undisclosed Customer

52

Wizz Air50

Turkish Airlines

34

Lan Airlines

30

Qatar Airways

24

China Eastern

16

Vietnam Airlines

16*

Options are not included in orders booked or year-end backlog.

Products and Services
The Family Concept — Commonality across the Fleet
Airbus’ aircraft families promote fleet commonality. Thisphilosophy takes a central aircraft and tailors it to create
derivatives to meet the needs of specific market segments. Thisapproach means that all new-generation Airbus aircraft sharethe same cockpit design, fly-by-wire controls and handlingcharacteristics. Pilots can transfer among any aircraft within
the Airbus family with minimal additional training. Crosscrew qualification (CCQ) across families of aircraft provides
airlines with significant operational flexibility. In addition,
the emphasis on fleet commonality permits aircraft operators
to realise significant cost savings in crew training, spare parts,
maintenance and aircraft scheduling. The extent of cockpit
commonality within and across families of aircraft is a uniquefeature of Airbus that, in management’s opinion, constitutes asustainable competitive advantage.
In addition, technological innovation has been at the coreof Airbus’ strategy since its creation. Each product in the
Airbus family is intended to set new standards in areas crucial
to airlines’ success, such as cabin comfort, cargo capacity
performance, economic performance, environmental impact
and operational commonality. Airbus innovations often provide
distinct competitive advantages, with many becoming standard

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INFORMATION ON EADS’ ACTIVITIES>1.1 | Presentation of the EADS Group1in the aircraft industry. Key examples include fly-by-wire
controls, aircraft commonality and the introduction of
widebody twin-engine aircraft.
In 2009, for example, Airbus welcomed the latest steps towards
the approval by ASTM International, one of the largest
voluntary standards developing organisations in the world, for
the use of a 50% synthetic jet fuel in commercial aviation. The
Airbus Alternative Fuels roadmap estimates that some 30% of jet
fuel used in 2030 could be sustainable biojet fuel if maturity ofalternative high yield non-food feedstock occurs in the middle ofthe next decade.
A320 Family
Airbus’ family of single aisle aircraft, based on the A320
(which entered service in 1988 following a development
programme launched in 1984), includes the A318, A319 andA321 derivatives, as well as the A319-based Airbus Corporate
Jetliner and A318 Elite business jet, which Airbus launched in
1997 and 2005, respectively. Each aircraft in the A320 family
shares the same systems, cockpit, operating procedures andcross-section. The A320 family covers the market from 100 to
220 seats, flying routes up to 3,000 nm/5,700 km.

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At 3.96 metres diameter, the A320 family has the widest
fuselage cross-section of any competing single aisle aircraft. This
provides a roomy passenger cabin, a high comfort level and amore spacious underfloor cargo volume than its competitors.
The A320 family incorporates digital fly-by-wire controls, anergonomic cockpit and a lightweight carbon fibre composite
horizontal stabiliser. The use of composite material has also
been extended to the vertical stabiliser. The A320 family’scompetitor is the Boeing 737 series.
With more than 6,528 aircraft sold and 4,063 currently inservice, the A320 family has proven extremely popular withcustomers, offering high standards of cabin comfort, technology
and economic performance. Its success with low-cost airlines inparticular demonstrates the economic appeal of the A320 family.
In 2009, Airbus received 207 firm orders for the A320 familyof aircraft, and delivered 402 to customers.

A320 Family Technical Features
Model*

Entry into service

Passenger capacity*

Maximum range (km)

A318

2003

107

A319

1996

124

A320

1988

A321

1994

*

Length (metres)

Wingspan (metres)

6,000

31.4

34.1

6,800

33.8

34.1

150

5,700

37.6

34.1

185

5,600

44.5

34.1

Two-class layout.

A330/A340 FamilyWith approximately 1,435 aircraft sold and 1,025 currently inservice, the A330/A340 family is Airbus’ solution for regional,
long-range and ultra long-range travel, designed to carry between
250 to 350 passengers. The A330/A340 family concept is unique:one airframe is powered by either two or four engines. The
twin-engine A330 offers attractive economic performance forregional up to long-range routes, while the four-engine A340 can
perform on the most demanding long-range and ultra long-range
routes, including non-stop flights such as Los Angeles —Singapore.
The A330/A340 family is composed of six passenger versions.
Each shares the same 222-inch fuselage cross-section, cockpit
and other advanced features, delivering the commonality thatencourages airlines to adopt the most efficient mix of aircraft

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for their networks. The A330/A340 family offers high levels of
passenger comfort as well as large under-floor cargo areas. The
competitors of the A330/A340 family are the Boeing 767, 777
and 787 aircraft series.
In 2009, the new dedicated cargo variant of the successful A330
family, the A330-200F, conducted its first flight, with firstdeliveries targeted to begin in 2010. Well adapted to the current
market dynamics of rising fuel prices and increased pressure on
yields, the new A330-200F will offer cargo customers greater
range, as well as the opportunity to increase services in low
frequency long-range markets currently served with much larger
aircraft, develop new routes and respond to market growth.
In 2009, Airbus received 38 firm orders for the A330/A340
family of aircraft, and delivered 86 to customers.

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A330/A340 Family Technical Features
Model*

Entry into service

Passenger capacity*

Maximum range (km)Length (metres)

Wingspan (metres)

A330-200

1998

253

A330-300

1994

295

12,50059.0

60.3

10,50063.7

A340-300

1992

295

13,700

60.3

63.7

60.3

A340-500

2002

313

16,70067.8

63.6

A340-600

2002

380

14,600

75.3

63.6

*

Three-class layout.

A380
The A380 is the most spacious passenger aircraft on the market,
and represents Airbus’ offering in the very large aircraft
segment. Its cross-section provides flexible and innovative
cabin space, allowing passengers to benefit from wider seats,
wider aisles and more floor space, tailored to the needs ofeach airline. Seating 525 passengers in three classes and witha range of 8,000nm/15,000km, the A380 offers superior
economic performance, lower fuel consumption, less noise andreduced emissions. The A380’s main competitor is the 400-seat
Boeing 747-8.

In 2009, Airbus received 4 firm orders for the A380, for a totalof 202 firm orders from 17 customers at the end of the year. At
the same time, Airbus delivered 10 A380 aircraft to customers
in 2009 (compared to 12 in 2008). Airbus continues to facesignificant challenges as it seeks to ramp-up A380 production,and is currently targeting delivery of approximately 20 aircraftin 2010. See also “Management’s Discussion and Analysis ofFinancial Condition and Results of Operations”.

A380 Technical Features
Model*

Entry into service

Typical capacity*

Maximum range (km)Length (metres)

Wingspan (metres)

2007

525

15,00073.0

79.8

A380-800*

Three-class layout.

New Product Development
A350 XWB Family
At the end of 2006, Airbus launched the A350 XWB Family,
a new extra-wide body medium capacity long-range family,
which will accommodate between 270 to 350 passengers andis expected to enter service in 2013. The A350 XWB features
A380 technology, a wider fuselage than that of competing new
generation aircraft and a greater use of composite material. The
A350 XWB’s main competitor is the Boeing 787 aircraft series.

In January 2009, Airbus started construction work on the final
assembly line for the A350 XWB. This factory will house thefirst stages of final assembly for the A350 XWB: the joining upof the fuselage and wings. Aircraft testing and cabin equipping
will then be completed in the nearby A330/340 facility.
In 2009, Airbus received 22 firm orders for the A350 XWBFamily of aircraft, for a total of 505 firm orders from
32 customers at the end of the year.

A350 XWB Family Technical Features
Model*

A350-800

Entry into service

Passenger capacity*

Maximum range (km)Length (metres)

Wingspan (metres)

2014

270

15,80061.0

64.0

A350-900

2013

314

15,00067.3

64.0

A350-1000

2015

350

14,800

74.3

64.0

*

Three-class layout.

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A400M

Customer Service

For information related to the A400M programme, see “—Airbus
Military” below.

Airbus Customer Services provides a full range of support
services to airlines so that they can operate their Airbus fleet
safely, efficiently and on schedule. The Airbus Customer
Services Directorate heads an engineering and technicalsupport group (including a 24/7 assistance response centre),a flight operations support group, a technical documentation
organisation, a worldwide network of training and spare parts
support centres, customer support teams and field services teams
that are based at customer airlines.

Asset Management
The Airbus Asset Management division was established in
1994 to manage and re-market used aircraft acquired by Airbus,
originally as a result of customer bankruptcies, and subsequently
in the context of certain buy-back commitments. The division
operates with a dedicated staff and manages a fleet comprised ofAirbus aircraft across the range of models. Through its activities,
the Asset Management division helps Airbus respond more
efficiently to the medium and long-term fleet requirements of its
customers.
Its key roles comprise commercial and risk management of
the Airbus portfolio of used aircraft. Most of the aircraft
are available to customers for cash sale, while some can only
be offered on operating lease, depending on the financing
attached to such aircraft. At the end of 2009, the Airbus AssetManagement portfolio contained 10 aircraft (no change from2008). The Asset Management division also provides a full rangeof support services, including assistance with entry into service,interior reconfiguration and maintenance checks.

Customer Finance
Airbus favours cash sales, and does not envisage customer
financing as an area of business development. However, Airbus
recognises the commercial need for manufacturers to assist
customers in arranging financing of new aircraft purchases, andin certain cases to participate in financing those aircraft or theairline itself.
Extension of credit or assumption of exposure is subject tocorporate oversight and monitoring, and follows strict standardsof discipline and caution. Airbus’ dedicated customer financeteam has accumulated decades of expertise in aircraft finance.
When Airbus finances a customer, the financed aircraft generally
serve as collateral, with the engine manufacturer participating in
the financing. These elements assist in reducing the risk borne
by Airbus. Airbus’ customer financing transactions are designed
to facilitate subsequent sell-down of the exposure to the financial
markets, third party lenders or lessors.
Airbus’ financing exposure is counter-cyclical and Airbus wastherefore able to conclude significant sell-down of its exposurein the 2005-2007 period. However, in light of the continuing
volatility in the financial and credit markets, Airbus expects toincrease the amount of financing it provides to customers in
the future. Management believes, in light of its experience, thatthe level of provisioning protecting Airbus from default costs
is adequate and consistent with standards and practice in theaircraft financing industry. See “Management’s Discussion andAnalysis of Financial Condition and Results of Operations”.

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Complemented by offerings from selected partners, Airbus
thereby aims to satisfy all of its customers’ pre-delivery andin-service support and services requirements. Airbus Customer
Services currently supports approximately 5,700 Airbus aircraft,
ranging from the smallest short range A318 to the large double
deck A380.
The development of services is particularly important in the areaof integrated maintenance packages, where Airbus offers a suiteof services, Flight Hours Services (FHS) and Tailored Support
Package (TSP), to assist customers seeking to reduce their spareparts and maintenance investments. Several customers havealready opted for this innovative way of operating their aircraft.
Recently, Airbus has launched several innovations in the areaof customer services, such as AirStart, a consulting service
specifically designed for new operators which offers broad
expertise in flight operations, maintenance and engineering,material and logistics and training. Airbus has also established
a comprehensive fuel efficiency service to optimise aircraft
performance and identify fuel-efficient maintenance tasks.
Improvements have also been made in repair engineering support
through development of a new tool (Repair Manager) to allow
better and faster response times to repair needs.

Production
Industrial Organisation
Each task in the building of Airbus aircraft (from design,
definition and production to product or operational support) is
allocated to a designated Centre of Excellence (“CoE”) according
to its specialised expertise. In connection with the Power8
restructuring programme launched in 2007, Airbus underwent
a major reorganisation and revised its CoEs to ensure that they
were fully transnational. The current CoEs cover Fuselage/Cabin,
Wing/Pylon and Empennage/Aft Fuselage as well as transversal
CoE Industrial Processes & Aerostructures. The development of
CoEs constitutes an essential feature of Airbus manufacturing.
The CoEs are overseen by Airbus’ Head of Operations and his
team, who are in charge of all industrial processes. This includes
ensuring that harmonised and standardised processes, methods
and tools are selected and implemented across the CoEs in order
to increase efficiency and reduce costs.

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Programmes, which is responsible for the work of the final
assembly lines including cabin definition and installation as well
as overall management processes, works closely with the CoEs, tosecure firm commitments from them on what is delivered to thefinal assembly lines.
The CoEs also maintain close links with core functions suchas Engineering, Procurement, Quality, Human Resources andCustomer Services to develop and manage skills, manage policies
and ensure that Airbus employees share knowledge and ideas in across-functional way.
In 2008, EADS and Airbus completed the aerostructures
reorganisation strategy initiated under Power8. This initiative
combines the divestment of non-core activities and sites inorder to establish a network of strong tier one suppliers,
allowing Airbus to concentrate on its core business as an aircraftarchitect and integrator. Accordingly, GKN Aerospace acquired
the Airbus wing component and sub-assembly manufacturing
facility in Filton, UK, and Diehl/Thales acquired Airbus’ site in
Laupheim, Germany. Prior to this, the carve-out process for theformer German Airbus sites in Nordenham and Varel and theformer EADS site in Augsburg was also accomplished to create
the new Premium AEROTEC GmbH. A similar process wasundertaken in France, where Meaulte and St. Nazaire Ville are
now the foundation of Aerolia S.A. Both Premium AEROTEC
and Aerolia commenced full operations on 1 January 2009
under EADS ownership, and are well positioned to become
major players on the global aerostructure market. Not only
will all companies be significantly involved in the A350 XWB
programme, they will also commit to the EADS/Airbus
Power8 targets.
In 2009, further business transfer was performed as part of thePower8 “Reshape Industrial Footprint” process: Saint-Nazaire’s
hydraulic and cabin systems tubes and pipes business wastransferred from Airbus to Aerolia on 1 October 2009 andthe production of sheet metal detailed parts in Bremen wastransferred from Airbus to Premium AEROTEC on 1 January
2010.

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engineers, that a consistent and multi-disciplinary approach isapplied during aircraft development.
The Airbus Engineering testing centre gathers all major systems
and integration laboratories as well as the flight test centre inorder to have a common approach towards testing of the criticalaircraft systems.
Over the course of the last seven years, Airbus has opened
engineering centres in Wichita (Kansas, US), in Mobile(Alabama, US), in Moscow (Russia), in Bangalore (India) and in
Beijing (China), through which it has gained access to a large poolof experienced aerospace engineers.
In 2009, Airbus Engineering advanced the A350 design in termsof specific and component designs and large-scale structural
demonstrators, further fine-tuning of aerodynamic performance,
maturing of systems architecture design, major system supplierselection and propulsion integration studies. Airbus Engineering
also made a major contribution to the successful first flight in2009 of the A330-200F and the A400M.
Manufacturing Facilities and Production Flow
The CoEs are responsible for the design and manufacturing offully equipped and tested deliverables, ranging from specificparts to major aircraft components. Aircraft components aretransferred between the network of sites and the final assemblylines using Airbus’ five custom built A300-600 “Beluga” Super
Transporters. To support the A380 production flow, Airbus
has integrated road, river and sea transport. Typical lead times
between customer definition freeze and industrial delivery
for single aisle aircraft are 7-8 months, and 9-12 months forlong-range twin aisle aircraft.
Targeted Deliveries in 2010
Airbus delivered 498 aircraft in 2009 (compared to 483 in 2008)
and is targeting delivery of up to the same number of aircraft in2010. Any major production or market disruption or economic
downturn could lead to revision of these figures.

Engineering

AIRBUS MILITARYEngineering innovation at Airbus is driven by Centres ofCompetence (“CoCs”), which provide functional design
leadership for the complete aircraft and aircraft components
as well as developing and researching technologies that canbe applied to the next aircraft programme. The CoCs operatetransnationally with engineers from the CoCs present at all 4
Airbus sites. Airbus engineers work on specific and non-specificaircraft designs to create solutions that meet airline customer
needs.

Introduction and Overview

An important part of the Airbus engineering organisation is theArchitect and Integration centre, which ensures, together witha team of senior aircraft architects and the programme chief

In 2009, Airbus Military recorded revenues of € 2.2 billion.

Airbus Military produces and sells special mission aircraft, which
are derived from existing aircraft platforms and are dedicated to
specialised military and security tasks such as in-flight refuellingcapabilities, maritime surveillance and antisubmarine warfare.
Airbus Military also manufactures and sells medium and light
military transport aircraft and is responsible for the European
heavy military transport A400M project.

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Strategy
Airbus Military’s strategy is to further develop its corebusinesses and increase market share by leveraging EADS’technology know-how, while at the same time enhancing
profitability. Accordingly, Airbus Military is actively:
Strengthening its position as a major supplier of special
mission aircraft
As a supplier of special mission aircraft, Airbus Military satisfies
customers’ mission-specific requirements by relying on its own
specialised technologies (refuelling boom system, fully integrated
tactical system (“FITS”), maritime patrol solutions) as well as
those of EADS’ wide range of platforms and systems. Airbus
Military will seek further consolidation of its position in thismarket in the future, in particular through its offering of theA330 MRTT, which is currently under final certification andqualification tests.
Maintaining its leadership for military transport aircraft
Airbus Military is a global leader in the market segments for
medium and light military transport aircraft. Through theaddition of the A400M heavy military transport aircraft—which
successfully performed its maiden flight during 2009—Airbus
Military offers a full range of tactical military transport aircraft
capable of covering all mission needs.

MarketSpecial Mission AircraftSpecial mission aircraft are derived from existing aircraft platforms
and adapted to particular missions, in general for military andsecurity customers. Adaptations to the platform require thoroughknowledge of the basic airframe, which generally only the aircraft
manufacturer possesses. The skills necessary for the overallsystems integration into the aircraft are extensive and the numberof participants in the world market is very limited.
Moreover, modern defence and warfare require independent
access to complex forms of information in various operational
theatres, and customers are therefore increasingly demanding
comprehensive systems tailored to their specific operational
requirements. This development and European defence andsecurity needs are expected to boost demand for special mission
aircraft in the near term. Airbus Military believes that it is well
positioned in this market based on the range of customised
solutions that it offers.
Military Transport Aircraft
Governments and national organisations constitute the main
customers in the market for military transport aircraft. This
market consists of three segments: (i) light transport aircraft,with a payload of one to three tonnes, (ii) medium transport
aircraft, with a payload of four to fourteen tonnes, and (iii) heavy

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transport aircraft, with a payload of fifteen tonnes or more.
According to an analysis by the Teal Group – an independent
aerospace and defence industry consulting firm – the global
market for military transport aircraft during the next ten years is
expected to amount to approximately US$ 52 billion.
Heavy Military Transport. This market segment has been driven
historically by US policy and budget decisions, and therefore has
been dominated by US manufacturers, in particular Lockheed
Martin’s C-130 Hercules. The A400M represents Airbus
Military’s entry into this market, at a time when the US andEurope are expected to begin upgrading and replacing their
existing fleets. In the upper part of the segment, the A400M
could compete against the C-17 from Boeing.
Medium Military Transport. Management believes that thismarket will continue to grow at a moderate rate. Airbus Military
aircraft are leaders in this segment, specifically the CN-235 andC-295 aircraft, which have a combined average market share of
56% over the last ten years according to internal estimates. Theircompetitors are the C-27J Spartan, manufactured by the joint
venture LMATTS (Lockheed Martin Alenia Tactical Transport
System), and the An-32, manufactured by Antonov.
Light Military Transport. This is a mature market that isdiminishing in size as countries develop economically and areable to afford medium military transport aircraft. The C-212
has historically led this market segment, with an average
market share of 27% over the last ten years according tointernal estimates. The C-212’s main competitor is the M-28,
manufactured by Polskie Zaklady Lotnice, Mielec.

Products and Services
Special Mission Aircraft
Multi-Role Tanker Transport — A330 MRTT. The A330 MRTT,a derivative of the successful Airbus A330/A340 family, isthe world’s leading air-to-air refuelling aircraft. Its huge basic
fuel capacity means that no auxiliary tanks are needed to give
air-to-air refuelling performance that far exceeds its nearest
competitors. Fuel is passed through an innovative fly-by-wirerefuelling boom that delivers a larger fuel flow rate, refuellingenvelope and better control than other systems available on themarket. As the A330 MRTT does not need auxiliary fuel tanks,
the entire cargo bay is available for freight, with the possibilityof incorporating standard LD3 or LD6 containers, military pallets
and/or any other type of load device in use today.
The A330 MRTT is being considered for multi-role tanker
transport mission requirements throughout the world. To date,
Airbus Military has won contracts for the A330 MRTT with thegovernments of Australia, Saudi Arabia (including one repeat
order), the UAE and the United Kingdom, with a total backlogof 28 aircraft at the end of 2009. This includes a 27-year contract
with the UK Ministry of Defence (“MoD”) in connection

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with the latter’s Future Strategic Tanker Aircraft (“FSTA”)
programme. The FSTA programme calls for the provision of afleet of 14 new tanker aircraft (based on the latest generation
Airbus A330-200) to enter service from 2011, replacing theprevious fleet of VC-10 and Tristar refuelling aircraft. The
contract also includes provision for all necessary infrastructure,training, maintenance, flight management, fleet management andground services to enable the Royal Air Force to fly air-to-air
refuelling and transport missions worldwide.
In the US, the Air Force has also been conducting a programme
to replace its ageing fleet of air-to-air refuelling aircraft. In early
2008, the US Air Force announced that it had awarded theinitial contract to Northrop Grumman (as prime contractor), withwhich EADS had teamed up. Following a challenge by Boeingof this contract award that was upheld by the Government
Accountability Office, the US Department of Defense publisheda new request for proposal at the end of February 2010, on which
the Northrop Grumman/EADS team decided not to bid. See“—1.2 Recent Developments”.
Finally, Airbus Military has led a technological programme
aimed at developing a new “air-to-air refuelling boom system”(“ARBS”). The new ARBS is designed to provide a refuelling
performance that is substantially faster than that of thecompetition — a considerable advantage given the vulnerabilityof the aircraft during the refuelling procedure. The industrial
planning for serial production of the new ARBS was launched in2009. The ARBS has been successfully flight-tested on the A330
MRTT with both fast jet (F-16) and large (E3 AWACS) types ofreceivers as part of the A330 MRTT certification/qualification
process for the Royal Australian Air Force.
Maritime Patrol Aircraft. Airbus Military provides different
solutions ranging from maritime surveillance to anti-submarine
warfare missions through aircraft based on the C-212, CN-235,
C-295 or P-3 Orion platforms. Airbus Military aircraft,specifically the CN-235 and C-295, have a combined average
market share of 38% over the last ten years according to internal
estimates. Their main competitors are maritime patrol versions of
the Bombardier Dash-8 Q200/Q300 and Alenia ATR 42/72.
Airbus Military also develops FITS, which is the coreof the mission system installed on these maritime patrol
platforms. FITS is a new generation system that enhances
tactical awareness and facilitates decision-making processes andoperations within a network-centric environment.
In 2009, the Colombian Navy ordered one CN-235 aircraft formaritime patrol missions. In terms of deliveries, Airbus Militarydelivered three maritime patrol aircraft in 2009 (one CN-235
for the US Coast Guard, one C-295 for Chile and one C-295 forPortugal). The conversion of the remaining two CN-235 aircraft
on behalf of the Spanish MoD was also finished and the aircraft
delivered in 2009.

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Military Transport Aircraft
Airbus A400M. The A400M is designed to meet the future
large aircraft requirements of seven European nations seeking to
replace their ageing C-130 Hercules and C-160 Transall fleets.
In addition to fast and flexible intercontinental force projection,
the new aircraft is intended to respond to changing geopoliticalrequirements (including increased humanitarian and peacekeeping
missions).
In May 2003, OCCAR signed a contract with Airbus Military toorder 180 A400M aircraft on behalf of seven nations: Germany
committed to 60 aircraft, France to 50, Spain to 27, the UK to
25, Turkey to 10 and Belgium to 8 (including one on behalfof Luxembourg). In addition to the initial 180 aircraft, export
orders (4 for Malaysia) bring the total order book for the A400M
aircraft to 184 at the end of 2009 (following the cancellation by
South Africa of its order for eight aircraft).
In September 2008, EADS announced an undefined delay of
the first flight of the A400M, mainly due to the unavailabilityof the propulsion system and beyond that – but not first flight
critical – due to the fact that other suppliers of mission criticalsystems and of systems integration were severely struggling withthe challenging technical requirements of this aircraft.
In January 2009, EADS announced that it had proposed a newprogramme approach for the A400M to the launch customer
nations, through OCCAR, with the aim to find an appropriate
way forward for this programme. Discussions involved proposedchanges to the programme schedule as well as other areas ofthe original contract, including in particular certain technicalcharacteristics of this military aircraft. During this time, the firstflight of the A400M occurred in December 2009.
On 5 March 2010, EADS announced that it and the launchcustomer nations had come to an agreement in principle
regarding the future of the A400M programme. See “—1.2Recent Developments”, “Management’s Discussion and Analysisof Financial Condition and Results of Operations” and “Notes
to the Consolidated Financial Statements (IFRS) — Note 3:
Accounting for the A400M programme” for further detail.
CN-235 — Medium Military Transport. The first version in
the CN-235 family, the S-10, entered into service in 1987. The
latest one, the Series 300, is a new-generation, twin turboprop,pressurised aircraft. The CN-235-300 is capable of transportinga payload of up to 6,000 kg, accommodating (i) 36 paratroopers,(ii) 18 stretchers plus three medical attendants, (iii) four ofthe most widely used types of freight pallets, or (iv) oversizedloads such as aircraft engines or helicopter blades. Paratrooper
operations can be performed through the two lateral doors in
the rear part of the aircraft or over the rear ramp. Variants of theCN-235-300 are used for other missions such as maritime patrolor pollution control, among others.

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C-295 — Medium Military Transport. Certified in 1999, theC-295 has a basic configuration similar to the CN-235, with astretched cabin to airlift a 50% heavier payload at greater speed
over longer distances. The C-295 is equipped with integrated
avionics incorporating digital cockpit displays and a flight
management system, enabling tactical navigation, planning andthe integration of signals from several sensors.
Both the CN-235 and the C-295 have been designed ascomplements or replacements for the ageing C-130 Hercules,
accomplishing most of their missions at a much lower operatingcost.
In 2009, Airbus Military signed a new contract with Botswana
for the supply of one additional CN-235 aircraft, as well as
contracts with the Czech Republic and Mexico for four and seven
C-295s, respectively. During 2009, Airbus Military delivered
two CN-235s to Botswana, one to L3, a US company, as well as
the first C-295 aircraft to the Czech Republic. In addition, four
C-295 aircraft were delivered to Portugal, two C-295 each to
Mexico and Brazil and one C-295 to Colombia.

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C-212 — Light Military Transport. The C-212 was designed as asimple and reliable unpressurised aircraft able to operate frommakeshift airstrips in order to perform both civilian and militarytasks. The first version, the S-100, entered into service in 1974.
The latest version, the S-400, incorporates several improvements
such as new avionics and engines for enhanced performance in
hot climates and high altitudes, as well as improved short takeoff and landing performance. In addition, the C-212’s rear cargodoor provides multi-mission capability with a configuration thatcan be changed quickly and easily, thereby reducing turnaroundtimes. In 2009, a contract was signed with Thailand for two
C-212 aircraft.

Production
In 2009, a new final assembly line for light and medium aircraft
opened at the San Pablo factory in Seville (southern Spain).
The new facilities – which are shared with the A400M – have asurface area of 600,000 m2 (of which 170,000 m2 are constructedsurface area), which constitutes a doubling of the previous
operational capacity. On 11 June 2009, the old assembly line wastransferred to these new facilities at San Pablo airport.

1.1.3 Eurocopter
INTRODUCTION AND OVERVIEW

STRATEGY

Eurocopter is a global leader in the civil and military helicopter
market, offering one of the most complete and modern rangesof helicopters and related services. With approximately 2,800
operators worldwide, this product range currently includes lightsingle-engine, light twin-engine, medium and heavy helicopterswhich are adaptable to different mission types based on customer
needs. In 2009, Eurocopter recorded revenues of € 4.6 billion,
representing 10.7% of EADS’ total revenues.

Eurocopter aims at strengthening its market position by furtherbalancing its portfolio of military and civil business, andincreasing its share of revenue generated by services activities
in order to achieve sustained profitable growth. To this end,
Eurocopter is actively:

With 558 helicopter deliveries in 2009 (588 in 2008), Eurocopter
met its business and delivery objectives for the year. Due to theglobal economic downturn, order bookings suffered a decline
in 2009 in terms of units sold, but not in value as a result ofgrowth in the military market. After accounting for cancellations,net order intake for 2009 was 344 aircraft (compared to 715 in2008). With approximately 450 gross orders in 2009, Eurocopter
maintained its leadership in the civil and parapublic market. At
31 December 2009, Eurocopter’s backlog of orders was 1,303
aircraft.

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Pursuing internal growth and international expansion
Management is focused on strengthening Eurocopter’s positionin the markets where it has traditionally held a strong position,such as the US civil and homeland security market, and further
developing its presence in potential growth markets such as
China, India, South America and Eastern Europe. Part of its
strategy relies on the offering of leading edge technology
products in all its markets, such as the major contract signedwith Brazil for 50 EC725 helicopters and previously the firstsuccessful sale of large quantities of helicopter systems to the US
Army by a non-US manufacturer. Eurocopter will seek to pursue
this expansion through both organic and external growth, witha focus on services. Eurocopter will also seek to capitalise on its
experience of cooperation with local industries for programme
development and joint production projects such as the EC175
with China or the Korean Helicopter Programme (“KHP”) in
Korea.

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Implementing an ambitious product and services policy
In order to maintain market leadership and technologicalsuperiority, Eurocopter must continuously invest in the
renewal of its comprehensive product line of civil and militaryhelicopters. Accordingly, management is currently focusedon (i) strengthening the market position of key products suchas the Ecureuil family, the Dauphin, the EC135, the EC145
and the EC225/725, (ii) promoting Eurocopter’s most recent
products (Tiger and NH90), and (iii) enhancing its productline (e.g. co-development of the civil medium lift EC175 with
China and partnership with Korean industry to develop the
military utility KHP, as well as the development of the X-series
programme (new Dauphin) and the Bluecopter technology
programme on environmental friendliness). Through the
combination of core technological solutions with high-value
customisation capabilities, Eurocopter seeks to offer a cost efficientsolution to multi mission needs, for both civil and militarycustomers throughout all segments of the helicopter market.
In addition, Eurocopter will seek a significant expansion in its
service offering in order to enhance aircraft availability as well
as mission performance and cost effectiveness for its customers,
while increasing margins on longer-term contracts through theprovision of higher value added services. Eurocopter is also
considering further development on training and software
maintenance activities, which have been identified as key drivers
for the future.

MARKET

Market Drivers
The value of helicopters delivered worldwide grew from anestimated € 8.8 billion in 2008 to an estimated €11.5 billion in
2009, a figure that management believes will decrease in 2010.
According to market forecasts published by The Teal Group,
Honeywell and Rolls Royce, between 7,000 to 9,500 civil
helicopters and 6,500 to 6,800 military helicopters are expected
to be built globally between 2009 and 2018. This forecast,particularly with respect to the military segment, relies to a large
extent on the large US development programmes.
Demand for military helicopters, which are usually larger andhave more sophisticated systems than civil helicopters, is mainly
driven by budgetary and strategic considerations, and the needto replace ageing fleets. Management believes that the advanced
age of current fleets, the emergence of a new generationof helicopters equipped with integrated systems and theongoing introduction of combat helicopters into many nationalarmed forces will contribute to increased military helicopter
procurement over the next years. Recent large-scale military
programmes, such as those conducted by Australia, Brazil, Spain,
UK, Korea and the Nordics Standard Helicopter Project, haveconfirmed this trend. Demand from the military segment hashistorically been subject to large year-to-year variations, due to
evolving strategic considerations.

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The military segment is highly competitive and is characterisedby competitive restrictions on foreign manufacturers’ access tothe domestic defence bidding process, sometimes to the virtual
exclusion of imports. Nevertheless, with the introduction of the
Tiger, NH90 and EC725 and with a more aggressive approach tointernational industrial cooperation, Eurocopter’s share of the
global market for military helicopters has increased. In 2009,
Eurocopter ranked second in the military segment by orders in amarket still dominated by US manufacturers. Eurocopter’s maincompetitors in this segment are Agusta-Westland in Europe,and Sikorsky, Boeing and Bell Helicopter (a division of TextronInc.) in the United States. In addition, Russian manufacturers
have reappeared after a complete commercial and industrial
reorganisation. Recently they have been more aggressive
particularly in the Asian and Latin American markets. Military
sales accounted for 48% of Eurocopter’s revenues in 2009.
Helicopters sold in the civil sector provide transport forcorporate executives, offshore oil operations, diverse commercial
applications and state agencies, including coast guard, police,
medical and fire-fighting services. Market data indicates that in2009, worldwide deliveries of civil turbine helicopters stood at
approximately 831 units. Management expects that the value of
global civil deliveries will likely decrease in 2010 as a result of
the global economic downturn. At Eurocopter, the lower orderintake for light helicopters in 2009 will lead to lower production
rates in 2010, while military helicopter production rates will
increase.
Eurocopter’s main worldwide civil competitors are AgustaWestland, Sikorsky and Bell Helicopter. The civil helicopter
market has grown more competitive in recent years, with
Sikorsky and Agusta-Westland having increased their market
share in the heavy and medium helicopter classes.

Customers and Marketing
Approximately 2,800 operators worldwide currently operate
Eurocopter helicopters in 140 countries, forming a broad basefor Eurocopter’s customer support activities. 85% of Eurocopter’scustomers have fleets of between one and four helicopters.
Eurocopter’s principal military clients are European MoDs, aswell as MoDs in Asia and the US. In the civil and parapublicmarket, Eurocopter has a leading market share in Europe, the US
and Canada.
The versatility and reliability of Eurocopter products have madethem the preferred choice of the most prominent customers.
The world’s largest offshore operators (Bristow, CHC, Era, PHI,etc.) use Eurocopter helicopters for passenger transport andoffshore oil industry support. In the emergency medical services
market segment, Eurocopter helicopters dominate the fleetsof large operators such as Air Methods in the US and ADAC
in Germany. Agencies with high serviceability requirements,
including police and armed forces, also rely on Eurocopter
products.
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Eurocopter’s global marketing strategy is reflected in thescale of its large international network. Eurocopter’s network
currently encompasses 20 foreign subsidiaries, complemented bya network of authorised distributors and service centres aimed
at a large number of existing and potential clients. Eurocopter
strengthened its subsidiary network in 2009 through thecreation of Eurocopter Japan via the acquisition of its former
distributor in the country and the acquisition of a majority
stake in ANAM’s helicopter maintenance business. In addition,
Eurocopter has developed expertise in production licensing,
joint production and subcontracting agreements, and has beendeveloping links with industrial partners and suppliers in morethan 35 countries.

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PRODUCTS AND SERVICES

Existing Products
Eurocopter offers a complete range of helicopters that covers
nearly the entire civil and military market spectrum, which
it updates continuously with leading-edge technologies. This
product range includes light single-engine, light twin-engine,
medium and medium-heavy helicopters, and is based on aseries of new-generation platforms designed to be adaptable toboth military and civil applications. In addition, products sharemultiple technical features as part of a family concept approach.

The following table sets forth Eurocopter’s existing product line, consisting of optimised products for different mission types:
Helicopter TypePrimary Missions

Light Single Engine
EC120 “Colibri”

Corporate/Private, Civil & Military Training

Single Engine (“Ecureuil” Family)
AS350 “Ecureuil”/AS550 “Fennec”
EC130

Parapublic*, Civil & Military Utility**, Corporate/Private
Tourism, Oil & Gas, Corporate/Private

Light Twin Engine
AS355NP/AS555
EC135/EC635
EC145/LUH (UH-72)

Parapublic*, Utility, Corporate/Private
Emergency Medical, Parapublic*, Oil & Gas, Corporate/Private
Civil & Military Utility**, Emergency Medical, Parapublic*, Shuttle

Medium (“Dauphin” Family)
AS365 “Dauphin”/AS565 “Panther”
EC155

Parapublic* (in particular Coast Guard & SAR), Oil & Gas
Corporate/Private, VIP, Oil & Gas, Parapublic*, Shuttle

Medium Heavy
AS332 “Super Puma”/AS532 “Cougar”
EC225/EC725
NH90 (TTH/ NFH)

Military Transport, Oil & Gas, Shuttle
SAR, Combat-SAR, Military Transport, Oil & Gas, VIP
SAR, Combat-SAR, Military Transport, Naval

Specific
Tiger

Combat, Armed reconnaissance/Escort* Parapublic includes homeland security, law enforcement, fire fighting, border patrol, coast guard and public agency emergency medical services.
** Civil Utility includes different kinds of commercial activities such as aerial works, ENG (Electrical New Gathering), passenger and cargo transport.

Civil range. Eurocopter has consistently made strong efforts to
update and renew its civil product line in order to enhance andmaintain its competitive edge in the civil segment. Over theyears Eurocopter has successfully introduced internationally new
products such as the light single-engine EC120 and the lighttwin-engine EC135, and major product upgrades such as theEC155 latest evolution of the medium-class Dauphin, as well as
the EC145. The latest addition to the heavy-class family is theEC225. It is designed for passenger transport, in particular Oil &Gas and VIP, but also for public service missions, such as searchand rescue (SAR).

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In 2009, Eurocopter received 322 firm orders for its civil range ofhelicopters (including the respective military derivative versions),
and delivered 536 to customers.
Light Utility Helicopter (LUH) programme. The US Armyhas selected the UH-72A Lakota (a military derivative of
the commercial EC145) as its next-generation LUH, with arequirement for up to 345 aircraft over a 10-year span with a total
life-cycle value of more than $ 2 billion. The US Army ordered
42 aircraft in 2006, followed by additional orders for 43 aircraftin 2007, 39 aircraft in 2008 and 51 in 2009. There were 40
LUH deliveries in 2009, for a total of 96 deliveries done all onschedule as of the end of 2009. All deliveries were made from
American Eurocopter’s new facility in Columbus, Mississippi.

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New Product Development
Current product development programmes in the militaryand civil segment include (i) the NH90, a military transport
helicopter with more than 20 versions for tactical, naval andcombat-search and rescue applications, (ii) the HAD version of
the Tiger helicopter, (iii) the KHP for military applications, and(iv) the EC175, as described below.
NH90. Designed for modern multi-mission capabilities andcost effectiveness throughout its lifecycle, the NH90 has beendeveloped as a multi-role helicopter for both tactical transport(TTH) and naval (NFH) applications. The programme, mainly
financed by the governments of France, Germany, Italy and
the Netherlands, has been jointly developed by Eurocopter,
Agusta-Westland of Italy and Fokker Services of the Netherlands
as joint partners in Nato Helicopter Industries (“NHI”) in
direct proportion to their countries’ expressed procurement
commitments. Eurocopter’s share of NHI is 62.5%. Production
started in 2000, with 15 deliveries in 2009 (five to Germany, two
to Italy, two to Finland, two to Sweden and four to Australia)
for a total of 40 cumulative deliveries as of the end of 2009. In
2009, Eurocopter received an order from the French Defence
Procurement Agency (DGA) for a second batch of 22 aircraft,bringing the NH90’s backlog to 489 firm orders at the end of
2009.
The NH90 has rapidly become the reference military tacticalhelicopter for armed forces worldwide, with orders for
23 different versions from 14 countries. The strong commercial
success of the NH90, combined with the complexity of such amodern aircraft and the management of relationships between
industry and customers has generated a significant increase inprogramme management challenges and margin pressure. In order
to better manage these challenges, Eurocopter implemented an
action plan in 2008 to change programme governance (including
industry re-organisation), reframe contract management, andrestructure industry processes (with a focus on simplification,clearer allocation of responsibility and increased responsiveness)with positive results in 2009.
Tiger. The Tiger combat attack helicopter programme includes
four variants based on the same airframe: the HAP (turreted gun,rockets and air-to-air missile), 40 of which have been ordered by
France; the UHT (antitank missile, air-to-air missile, axial gun
and rockets), 80 of which have been ordered by Germany; theARH (antitank missile, turreted gun and rockets), 22 of whichhave been ordered by Australia; and the HAD (antitank missile,
air-to-air missile, turreted gun, rockets and upgraded avionics
and engines), 24 and 40 of which have been ordered by Spainand France, respectively. In 2009, the Tiger was deployed in
Afghanistan by the French Armed Forces, proving unparalleledreliability and serviceability in the operational theatre.

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There were seven Tiger deliveries in 2009 (five to France, one toGermany and one to Australia), for a total of 55 deliveries as ofthe end of 2009.
KHP. The Korean government chose Eurocopter as the prime
partner of Korea Aerospace Industries (“KAI”) in the new
KHP programme for the development of Korea’s first militarytransport helicopter in the 8 metric ton class. The 6-year
KHP development phase will run from 2006 to 2011. In thefollowing 10-year production phase, 245 helicopters are to be
manufactured. As the primary partner of KAI, Eurocopter
has a stake of 30% in the development phase and 20% in the
production phase. Eurocopter and KAI intend to establish a
subsidiary to market the export version of the KHP. In 2009,
the successful roll-out of the first prototype showed that the
programme was on schedule.
EC175. Eurocopter and Chinese AVIC II Corporation launched
the joint development and production (on a 50/50 basis) of
the EC175, a civil helicopter in the 6-ton category, which will
broaden both partners’ product ranges. The 5-year development
phase began in 2006. In 2008, the EC175 was unveiled at the
US-based Heli-Expo, which led to the signature of letters ofintent with 13 operators for a total of 111 aircraft. Assemblyof the first prototype began at the end of 2008 in Marignane
following the delivery of the first airframe structure from the
Chinese partner. In 2009, the EC175 made its maiden flighton schedule, on performance and on cost. Delivery of the first
EC175 helicopter is expected to take place in 2012.

Customer Support
As of 31 December 2009, Eurocopter products constituted theworld’s second largest manufacturer fleet, with more than 10,500
helicopters in service worldwide. As a result, customer support
activities to service this large fleet generated 35% of Eurocopter’srevenues for 2009. Eurocopter’s customer support activities
consist primarily of training, technical support, maintenance,
repairs and spare parts supply. To provide efficient worldwide
service, Eurocopter has established an international networkof subsidiaries, authorised distributors and service centres.
Furthermore, in order to meet globalising customer demand,
Eurocopter is extending the range of services it provides to its
customers.
In 2009, Eurocopter inaugurated two customer service centres:
one in Hong-Kong for the Asia-Pacific region, and one in Dallas
for the Americas. On the training front, following the creation ofa Eurocopter training services company in 2004 in Bueckeburg,
Germany, to develop, produce and operate the NH90 fullmission flight simulators for pilot training, the simulators were
declared “Ready for acceptance” in 2009. In parallel, various
other flight simulators were launched or went into operation
throughout the year.

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Eurocopter seeks to continuously improve the quality of its
service offering, such as spares delivery performance, which in2009 recorded an on-time delivery ratio of approximately 85%.

PRODUCTION
Eurocopter’s industrial activities are conducted in five primarylocations, two in France, two in Germany and one in Spain.
The French sites are Marignane, in southern France, and
La Courneuve, near Paris. The German sites are located in
Donauwörth and Ottobrunn, near Munich. The Spanish site
is located in Albacete.
Inaugurated in 2007, the new Eurocopter España plant in
Albacete is responsible for the production of the rear fuselagesof the EC135 and Tiger as well as the front fuselage of theNH90. The plant houses the final assembly lines for the EC135
intended for the Spanish market, the Spanish HAD versionof the Tiger from 2008 and the NH90 in TTH version for the
Spanish MoD.

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Following major expansion in 2008, the Columbus plant ofAmerican Eurocopter in Mississippi continued to ramp-up
LUH production, assembly and delivery. Industrial activity hadcommenced in 2006 with LUH assembly and delivery and is now
at full-scale production following the production authorisation
granted by the Federal Aviation Administration. Activities at
the Columbus plant also include production and assembly of
the AS350 and EC120 for US Customs and Border Patrol aswell as the support of the US Coast Guard’s programme ofmodernisation of its Dolphin helicopter fleet.
Overall, serial helicopter deliveries decreased by approximately
5% in 2009 and are expected to further decrease in 2010
(although remaining above 500 units per year) before picking up
again in 2011. Eurocopter will continue to pursue international
expansion of its global supply chain with an emphasis on dollarbased and low-cost sourcing in particular, while also seeking
to rationalise its supply network and streamline its internalindustrial organisation.

1.1.4 Astrium
INTRODUCTION AND OVERVIEW
Astrium designs, develops and manufactures satellites, orbital
infrastructures and launcher systems and provides space services.
It is the third largest space systems manufacturing company inthe world after Boeing and Lockheed Martin and the leading
European supplier of satellites, orbital infrastructures, launchers
and associated services. In 2009, Astrium recorded revenues of€ 4.8 billion, representing 11.2% of EADS’ total revenues.
Astrium has three main business units: Astrium Satellites,
Astrium Space Transportation and Astrium Services. These
include the provision of launch services through Astrium’s
shareholdings in Arianespace (Ariane 5 launcher), Starsem (Soyuz
launcher) and Eurockot (Rockot launcher), as well as services
related to telecommunications and earth observation satellites
through wholly or majority owned subsidiaries such as Paradigm
Secure Communications, Infoterra and Spot Image.

STRATEGY
With its established presence in five European countries
that have active space programmes (France, Germany, United
Kingdom, Spain and the Netherlands), Astrium is the only
European company to offer comprehensive expertise in all areasof the space industry (satellites, launchers, orbital infrastructureand services). Astrium’s strategy is to build on these key strategic
assets and to strengthen its position in the market. In particular,
with the launchers and satellites markets being flat, Astrium has

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successfully built a services activity which is expected to provide
the largest part of its development in the coming years.

Generate profitable growth in a flat market
Institutional and military spending on space activities is flatin Europe due to existing budget constraints. There is also
intense competition in commercial markets for launchers andtelecommunication satellites, in particular given the lows reachedby the US dollar against the euro during most of 2009. Within
this difficult market context, Astrium is pursuing the following
strategy:> with respect to the Ariane launcher and M51 missile systems,
Astrium Space Transportation has sought to rationalise
and streamline its activities by assuming the role of prime
contractor (as opposed to a main supplier and industrial
architect only). This has strongly contributed to increasing
the reliability and cost effectiveness of these products. In
addition, Astrium is currently the second largest shareholder
of Arianespace with a 30.5% stake after the French space
agency (“CNES”). Astrium Space Transportation will seek tobuild on this leadership to better serve its customers; and> with respect to satellites and services, Astrium has sought
in recent years to move from being solely a systems supplier
to a leading satellite service provider in the areas of securecommunications, earth observation and navigation. The
achievement of the full operational service milestone of asecure global military satellite communications system toINFORMATION ON EADS’ ACTIVITIES>1.1 | Presentation of the EADS Group1

primarily serve the UK MoD, and the successful in-orbit
delivery of the first secure communication satellite for theGerman Armed Forces (Bundeswehr), represent important
steps forward in 2009. In the future, Astrium will seek toexpand its offering of innovative, highly competitive end-toend tailored solutions in the field of secure communications.
It will also seek to strengthen its position in earth observation
services and to enhance its presence in satellite navigation
services.

Attain European benchmark profitability
Management is committed to the implementation of additional
measures to enhance profitability and innovation (“Inovex” forAstrium Satellites, “Boost+” for Astrium Space Transportation
and “Services Improvement” for Astrium Services), within thecontext of the “Power8 Plus” and “Future EADS” integrationand cost savings initiatives launched by EADS. These measurestarget continued margin improvement over time.

ASTRIUM SATELLITES
Astrium Satellites is a world leader in the design andmanufacture of satellite systems, payloads, ground infrastructureand space equipment for a wide range of civil and military
applications. Prime contractor for nearly 90 communications
satellites, Astrium Satellites is a partner of choice for manyof the world’s most prestigious operators. Astrium Satellites’
business covers the four categories of satellite systems described
below:> telecommunications satellites, which have multiple applications,such as long-distance and mobile telephone links, televisionand radio broadcasting, data transmission, multimedia andInternet trunking. They may be used for civil or military
applications;> observation satellites, which allow the collection of
information for various fields, such as cartography, weather
forecasting, climate monitoring, agricultural and forestry
management, mineral, energy and water resource management
and military surveillance applications;> scientific satellites, which are tailor-made products adapted tothe specific requirements of the mission assigned to them.
They have applications such as astronomical observation ofradiation sources within the universe, planetary explorationand earth sciences; and> navigation satellite systems, which deliver signals that enable
users to determine their geographic position with highaccuracy, and are increasingly significant in many sectorsof commercial activity, such as airlines, transport operatorson land, sea and air, emergency services, agriculture andfisheries, tourism and telecommunications networks.

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At the end of 2008, Astrium acquired Surrey Satellite
Technology Limited (SSTL), the innovative University of Surrey
spin-out company, expanding its product range to the small
satellites and subsystems end of the market.

Market
The commercial telecommunications satellite market isextremely competitive, with customer decisions based on price,technical expertise and track record. Astrium Satellites has aworldwide market share of approximately 23% according tointernal estimates, and its main competitors are Loral, Boeing
and Lockheed Martin of the United States, Thales Alenia Space(TAS) of France and Italy, and Information Satellite Systems
Reshetnev of Russia. Management views the telecommunications
satellite market as one of slow but sustained growth, supported
by factors such as (i) increased telecommunications demand,
including Internet, multimedia and military needs, and(ii) greater demand to replace aging products. In the face ofcontinued strong competition, Astrium Satellites will seek toconsolidate its position in this market.
In the market for observation, scientific and navigation satellites,
competition in Europe is organised either on a national or
multinational (European Space Agency (“ESA”), Eumetsat) level.
In the latter instance, a fair return principle pursuant to which
contracts are awarded to national suppliers in proportion to therespective financial contribution made by their governments
is often employed. There is also sizable export demand forearth observation systems, for which EADS is currently thesole significant European provider. Furthermore, civil stateagencies, including ESA, have displayed increased needs forearth observation satellites in the framework of European
environmental programmes. Management expects this market toremain stable over the medium term.
Finally, within the market for military satellites, demand fortelecommunications and observation satellites has increased. In
recent years, the shortcomings of European military capabilities
in these areas have become apparent, while the need for
preparedness in the face of elusive threats has only grown. The
Skynet 5/Paradigm contract in the United Kingdom, the Satcom
BW contract in Germany, the Yahsat contract in the UAE andother development contracts in France demonstrate the growthtrend in this market.

Products
Astrium offers turnkey satellite systems to its customers throughan array of wholly owned subsidiaries such as (i) Astrium Spain,
which supplies platforms, space-borne antennas, deployment
mechanisms and harness subsystems for telecommunication
satellites, (ii) Tesat (Germany), which is in charge oftelecommunication electronic equipment and subsystems,(iii) EADS Sodern (France), which provides satellites sensors, and(iv) Dutch Space (Netherlands), which provides solar arrays andother specialised items.
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1INFORMATION ON EADS’ ACTIVITIES>1.1 | Presentation of the EADS Group1

Telecommunications Satellites. Astrium Satellites produces
telecommunication satellites for fixed and mobile applications
and direct-to-home broadcast services. EADS’ geostationary
telecommunications satellites are based on the EUROSTAR
family platforms (63 ordered to date), the latest version of which
is EUROSTAR 3000.
Astrium Satellites won seven commercial satellite orders in 2009
(for a 23% worldwide market share), all based on the EUROSTAR
platform (Arabsat 5C & 6B for Arabsat, Atlantic Bird 7 forEutelsat, Astra 2E/2F/2G & 5B for SES). Two commercial andone military telecommunication satellites were successfullylaunched in 2009: Hotbird 10 for Eutelsat (February 2009),
Amazonas 2 for Hispasat (October 2009) and SatCom BW1 forGerman Army (October 2009).
Observation and Science Satellites. Astrium Satellites is theleading European supplier of earth observation satellite systems
for both civil and military applications. In this field, customers
derive significant benefits from the common elements ofAstrium Satellites’ civil and military programmes.
Astrium Satellites designs and manufactures a wide rangeof highly versatile platforms, optical and radar instruments,
and ground segment equipment for the complete scope of
remote-sensing applications, operations and services. Astrium
Satellites is the prime contractor for most of ESA’s and CNES’
principal observation programmes. In particular, it is the prime
contractor for (i) the Spot multi-mission platform series, in use
in 15 European earth observation satellites and recognised as anindustry standard, (ii) Metop, a next-generation polar-orbiting
meteorological satellite, with the first one out of three having
been launched in 2006, (iii) Pleiades, two small and highly agile
earth observation satellites for civil and military applications,
expected to be launched in 2010, (iv) Swarm, a climatology
satellite monitoring the evolution of the earth’s magnetic fields,(v) Cryosat 2, a radar satellite designed to monitor the thicknessof polar ice caps, (vi) Tandem X, an imagery satellite, (vii) Bepi
Colombo, an observation mission to Mercury, and (viii) Seosatand Seosar, a radar earth observation system for the Spanish
government.
In 2009, one observation satellite (Seosat) was sold to the
Spanish Center for the Development of Industrial Technology
and two earth observation satellites (Spot 6 and Spot 7) toSpot Image, a subsidiary of Astrium Services. The militaryearth observation satellite for the French Defence Procurement
Agency (DGA), Helios 2B, was also successfully launched in
December 2009.
In addition, in October 2009 Astrium and KGS, the national
Kazakh space company, signed a contract for two earth
observation satellites and the foundation documents to create a
joint venture for the construction of an assembly integration andtest facility in Astana.

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Navigation Satellites. Following the decision reached by theEuropean Union at the end of 2007 to move ahead with thedevelopment of a European global satellite navigation system,“Galileo”, ESA has been placed in charge of direct procurementof the various necessary components (space segment, groundsegment, system support, launchers, etc.). With respect to thesatellites needed for the validation phase of the programme,
Astrium successfully launched the Giove B satellite, which will
have completed its second year in orbit in April 2010. Astrium isalso responsible for the Galileo in-orbit validation phase (“IOV”)
to test the new satellite navigation system under real mission
conditions. The IOV phase covers the construction of thefirst four satellites of the constellation and part of the groundinfrastructure for Galileo, followed by the testing of this partial
system.
Military Satellites. In addition to military earth observation
activity, Astrium Satellites is active in the market for various
other advanced applications. These systems demonstrate
Astrium’s leading role in complex systems offers, reflecting theefficient use of synergies between Astrium’s space and defence
activities.

ASTRIUM SPACE TRANSPORTATION
Astrium Space Transportation is the European space
infrastructure and space transportation specialist. It designs,
develops and produces Ariane 5 launchers, the Columbus
laboratory and the ATV cargo carrier for the International Space
Station (“ISS”), ballistic missiles for France’s deterrence forces,
propulsion systems and space equipment.

Orbital Infrastructure
The orbital infrastructure segment in which Astrium SpaceTransportation operates comprises manned and unmanned
space systems. The ISS, together with related vehicle andequipment development programmes and services, constitutes
the predominant field of activity in this segment. Astrium SpaceTransportation is the prime contractor under an ESA contract
relating to two key elements of the ISS: the Columbus Orbital
Facility laboratory (“COF”) and the ATV cargo carrier.
MarketDemand for orbital infrastructure systems originates solely
from publicly funded space agencies, in particular from ESA,
NASA, Roscosmos (Russia) and NASDA (Japan). Such systems
are usually built in cooperation with international partners. In
addition to the COF and ATV projects, ESA is responsible for
additional ISS components for the station’s construction andoperational phases. National space agencies, such as DLR and
CNES, are also involved in the development of experimental
facilities to be used on the ISS.

INFORMATION ON EADS’ ACTIVITIES>1.1 | Presentation of the EADS Group1

Products
Astrium Space Transportation is the prime contractor forthe development and integration of the COF. The COF is apressurised module with an independent life-support system.
The COF was lifted to the ISS on the shuttle flight of
7 February 2008. It provides a full-scale research environment
under microgravity conditions (material science, medicine,human physiology, biology, earth observation, fluid physics andastronomy) and serves as a test-bed for new technologies.
Astrium Space Transportation is also the prime contractor forthe development and construction of the ATV, designed to carryfuel and supplies to the ISS and to provide reboost capability
and a waste disposal solution. The first ATV, “Jules Vernes”,
was launched in March 2008 and docked to the ISS. After six
months in orbit, it was de-docked from the ISS and burned
upon re-entering the atmosphere. The second ATV, “Johannes
Kepler”, is currently undergoing its first flightworthinessand functionality tests, with a delivery date scheduled for
November 2010. The production of ATV units two to five, as
well as mission preparation and operations support, is coveredby the contract which governs the operation and provision ofEuropean components to the ISS.

Launchers & Launch Services
Space systems (including satellites, orbital infrastructureelements and interplanetary probes) depend on rocket propelled
multi-stage launchers, which are consumed during the launch
process, to place them into orbit. Astrium Space Transportation is
active in two distinct businesses: (i) designing and manufacturing
launchers for both civil and military purposes, and (ii) providing
launch services through its interests in Arianespace, Starsem andEurockot.
Astrium Space Transportation is the sole prime contractor for
the Ariane 5 system, with responsibility for the delivery to
Arianespace of a complete and fully tested vehicle. Astrium
Space Transportation also supplies all Ariane 5 stages, theequipment bay, the flight software, as well as numerous subassemblies. Additionally, Astrium Space Transportation is theprime contractor for ballistic missile systems to the French
State. It is responsible for the development, manufacturing andmaintenance of the M45 and M51 submarine-launched missiles
and related operating systems.
Market
The market for commercial launch services has changed
significantly in recent years. Russian companies and stateagencies have increased their prices dramatically, thereby making
other launchers more competitive in the market. Management
believes that the available market for commercial launch services
will likely remain stable at 20/25 payloads per year, relating

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primarily to the launch of geostationary telecommunications
satellites. However, due to various factors (such as technology
advances and consolidation of customers), this figure remains
volatile. This market does not include institutional launchservices for the US, Russian and Chinese military andgovernmental agencies.
In the area of national defence, Astrium Space Transportation
has been the exclusive supplier of ballistic missiles to the
French State since the early 1960s. In addition to conducting
production and state-financed development work, Astrium SpaceTransportation performs substantial maintenance work on theballistic missile arsenal to ensure system readiness over the life
span of the equipment, which may stretch over several decades.
Astrium Space Transportation also provides on-site support to
the French military. Finally, Astrium Space Transportation is
working in partnership with others on a NATO contract relating
to theatre missile defence architecture.
Products and Services
Launch Services. Astrium Space Transportation is active in thefield of launch services through its shareholdings in Arianespace(for heavy-lift launchers), Starsem (for medium-lift launchers)
and Eurockot (for small-lift launchers).
> Arianespace. Astrium Space Transportation is Arianespace’s
second largest shareholder (after CNES) with a 30.5% stake(direct and indirect), and its largest industrial shareholder.
Arianespace is the world’s largest commercial launch service
provider in terms of total order book. At the end of 2009,
Ariane had launched a total of 277 satellites. Arianespacemarkets and sells the Ariane launcher worldwide and carries
out launches from the Kourou space centre in French Guyana.
In 2009, Arianespace won 13 new commercial contracts,
representing more than 50% of the available market, and three
institutional contracts. Arianespace conducted seven Ariane
launches, which placed nine commercial satellites and three
institutional satellites into orbit. Since 1999, when the first
Ariane 5 commercial launch occurred, 49 Ariane 5 rockets
have been successfully launched.
> Starsem. Astrium Space Transportation directly owns 35% ofStarsem, a French corporation, along with Arianespace (15%),
the Russian space agency (25%) and the Russian state-owned
Central Specialised Design Bureau “Progress” (25%). ThroughArianespace, Starsem markets launch services by Soyuz
launchers for medium-weight spacecrafts into low or sunsynchronous orbits as well as for interplanetary missions.
Work is progressing on the Kourou launch pad, with the firsttwo launches (to be operated by Arianespace) scheduled in2010.

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1INFORMATION ON EADS’ ACTIVITIES>1.1 | Presentation of the EADS Group1> Eurockot. Astrium Space Transportation (51%) and Khrunichev(49%) jointly control Eurockot Launch Services, which
provides launch services for small, low-earth orbit satellites
with Rockot launchers derived from SS-19 ballistic missiles.
Commercial Launchers. Astrium Space Transportation
manufactures launchers and performs research and development
for the Ariane programmes. Member states, through ESA,
fund the development cost for Ariane launchers and associatedtechnology.
Astrium Space Transportation has been the sole prime contractor
for the Ariane 5 system since 2004. Given the commercial
success of Ariane 5, Astrium Space Transportation signed
a contract with Arianespace in 2009 for the production of
35 Ariane 5 launchers, in addition to the batch of 30 Ariane 5
launchers ordered in 2004.
Ballistic Missiles. Astrium Space Transportation is the only
company in Europe which designs, manufactures, tests andmaintains ballistic missiles. Under its contracts with the French
State, Astrium Space Transportation has produced the submarine
launched MSBS family (M1, M2, M20, M4 and M45) anddeveloped the launch facilities at the Brest naval base. The M45
is deployed onboard France’s new-generation nuclear-poweredballistic missile submarine. Astrium Space Transportation
manages the operational maintenance of the M45 missile system,
assisting the French armed forces until the end of its operational
service.
Astrium Space Transportation is also under contract to develop
the M51, a new submarine-based strategic missile system withincreased technical and operational capabilities. The third and last
test flight of this new missile was conducted in November 2008
and was fully successful. At the end of 2004, the French MoD
awarded Astrium Space Transportation a contract for the M51
production phase and test range facilities with a frame-contract
in excess of € 3 billion. At the end of 2006, a contract for anenhanced upper-stage was awarded by the French MoD for an
amount of more than € 200 million, helping to secure Astrium
Space Transportation’s technical capabilities in this field for the
long-term.

ASTRIUM SERVICES
Astrium Services offers innovative, highly competitive end-toend tailored solutions in the fields of secure communications,
earth observation and satellite navigation. The European“one-stop-shop” provider for military satellite communications
services, Astrium Services delivers secure military satellite
services to a number of countries. In addition, it intends to bea major player in the satellite navigation field through work on“Galileo”, following the renewed commitment to the programme
made by the EU.

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Products and Services
Military Communications. In 2003, the UK MoD selected
Paradigm to deliver a global military satellite communications
service for its next-generation Skynet 5 programme. This
contract, pursuant to which Paradigm currently owns andoperates the UK military satellite communications infrastructure,
allows the UK MoD to place orders and to pay for services as
required. Offering a catalogue of services, Paradigm delivers
tailored in-theatre and back-to-base communication solutions
for voice, data and video services, ranging from a single voicechannel to a complete turnkey system incorporating terminals
and network management. Paradigm also provides welfare
services, ensuring that deployed troops can call home and can use
the Internet. The first two Skynet 5 satellites were launched in2007 and the third was lifted in 2008, enabling the UK MoD topronounce full operational service in 2009.
In Germany, a team led by Astrium Services will be providing
Germany’s first dedicated satellites for a secure communications
network. Two military-frequency satellites and a comprehensive
user ground terminal segment will give the German Armed
Forces (Bundeswehr) a secure information resource for use byunits on deployed missions, with voice, fax, data, video andmultimedia applications. The first satellite (ComSat BW1) was
launched in November 2009, and the second satellite (ComSat
BW2) is scheduled for launch in early 2010. The entire system
including the ground stations is scheduled to commence
operations from the end of 2010. Astrium Services, througha joint venture with ND Satcom (Astrium Services: 75%, ND
Satcom: 25%) will operate the system on a long-term basis andprovide additional capacity from commercial operators.
In Abu Dhabi, Astrium Services (together with Thales
Alenia Space) is working on a contract signed with Mubadala
Development Company in 2007 for the construction of a securesatellite communications system. Astrium Services is managing
the programme and will supply the space segment (except for the
payload) and 50% of the ground segment. Work is ongoing andfull delivery is expected in 2011.
Navigation. Following extensive negotiation and discussion, theEU decided at the end of 2007 to move ahead with developmentof the Galileo programme. The ESA has been placed in charge ofdirect procurement of the various necessary components (spacesegment, ground segment, system support, launchers, etc.) withfull deployment targeted for 2013. This process has begun, andAstrium Services intends to be a major player in the reorganised
programme. The Galileo programme is a major step forward forEurope, representing the first major European-level infrastructure
procurement programme with a global dimension that willbring numerous benefits to the continent and the rest of theworld. The market potential is promising, as global demand forsatellite navigation services and derivative products is growing at
approximately 25% a year according to internal estimates.

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Earth Observation Services. Infoterra provides geoinformation
products and services to customers including international
corporations, governments and authorities around the world.
The successful launch of TerraSAR-X in 2007 – a new radarbased earth observation satellite that provides high-quality
topographic information – enabled Infoterra to significantly
expand its capabilities by proposing new kinds of images basedon radar. In 2008, Astrium, Infoterra’s parent company, increased
its shareholding in Spot Image, a provider of satellite-based
geographic information and services, from 40% to 81% and thento 96.3% in 2009.
In 2009, Spot Image started work on the “Astroterra
programme”, which is designed to replace Spot 5 (owned by

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the French state with an exclusive operating license granted to
Spot Image) before the end of its lifetime with a constellation of
two earth observation satellites (Spot 6 and Spot 7) in order tomaintain high resolution capability through to 2023.

PRODUCTION
Astrium currently operates production facilities located in France(Vélizy, Les Mureaux, Bordeaux, Toulouse, Limeil-Brévannes,
Orléans, les Ulis), Germany (Backnang, Bremen, Friedrichshafen,
Lampoldshausen, Ottobrunn, Rostock, Trauen), Spain (Madrid),
the United Kingdom (Portsmouth, Stevenage, Leicester,
Newcastle), the Netherlands (Leiden) and French Guyana(Kourou).

1.1.5 Defence & Security
INTRODUCTION AND OVERVIEWThe DS division serves as the main pillar of EADS’ defence
and security activities. By combining its Defence andCommunications Systems, Defence Electronics, Military Air
Systems and missile systems (consisting of EADS’ 37.5% stakein MBDA) business units within one division, EADS has
streamlined its defence and security business to better meet theneeds of customers that require integrated defence and security
solutions.
In 2009, the DS division recorded revenues of € 5.4 billion,
representing 12.5% of EADS’ total revenues.

STRATEGY
The DS division is seeking to actively support theimplementation of EADS’ Vision 2020 plan, by:> strongly growing defence and security revenues to balanceGroup commercial aircraft exposure;> improving profitability above benchmark level;> increasing its services business; and> transforming itself into a truly global division.

Supporting the transformation process of customers
Through already existing programmes with NATO, the European
Defence Agency (EDA) and the defence ministries of its homecountries (in particular France, UK, Germany and Spain), theDS division actively supports the transformation of European
and NATO defence and security forces. The DS divisionalso participates in the Network Centric Operations Industry
Consortium (NCOIC), an industry-based collaborative forum

formed to recommend an architectural approach for system andplatform developers within a global network environment.
Going forward, the DS division will continue to work closelywith industry and customer working groups to help define anddeliver solutions that further support the transformation processof defence and security forces in both Europe and abroad.

Pursuing future growth areas
Within a difficult budget environment for its governmental
customers, the DS division will seek to maintain its leadershipin core areas (such as combat aircraft, defence electronics, defence
and security systems and missiles) and simultaneously target fast
growing markets such as:> the UAV market, where the DS division will seek to develop aleading position based on its strong experience and projects todate (e.g., Euro Hawk®, Harfang, Barracuda, DRAC); and> the global security market, where the DS division offers
solutions such as integrated systems for global security,
comprehensive security communications solutions andsecurity electronics. Recent project awards in the Middle East
make the DS division a world leader in integrated nationwide
security solutions.

Improving profitability
Through rigorous implementation of cost reduction programmes
and re-focusing on its core business, the DS division has
strongly improved its profitability over the past five years inorder to attain European benchmark levels. Through dedicatedimprovement programs and further integration of the Division,
the DS division targets further enhancement of its profitability
in the future.

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Developing customer services

MarketWhile already a significant player in the services market, theDS division will seek to enhance its offering of comprehensive
packages of mission-critical services to its customers, in andoutside EADS home countries. This service portfolio ranges
from consultancy, concept development and simulation, tothrough-life support of aerial platforms, fleet service/flight
service, training, operation and outsourcing.

DCS faces competition from large US and European companies
that also specialise in its markets. Major competitors are Lockheed
Martin, Thales, Motorola and General Dynamics. Key customers
for DCS’ business primarily include governmental customers,such as MoDs and Ministries of Interior in its home markets ofFrance, Germany and the UK, with an increasing focus on other
European countries, the Middle East, South Africa, Asia and theUS.

Consolidating in home markets while becoming a global
player
The DS division will seek to consolidate its position in its
European home markets (France, Germany, Spain and the UK)
in order to sustain future growth. Within these markets, the DS
division will aim to leverage its technology and skills in the areasof electronics, airborne platform, missiles and system businesses
in particular.
In parallel, the DS division will strive to increase its market
share in the key US market – in close coordination with EADS
North America – by offering superior products and technologies,
such as the HELLAS obstacle avoidance system for helicopters,
the TRS 3D radar system or the Professional Mobile Radio P25
technology. DS is also building strong transatlantic industrial
partnerships with US prime contractors to explore newopportunities, including Northrop Grumman (Euro Hawk®),
Lockheed Martin (MEADS, Deepwater, Littoral Combat Ship,COBRA, Missile Defence) and Raytheon (Missile Defence).
DS will also seek to develop in other markets with significant
growth potential, such as the Middle East, Brazil and India. DS
is targeting not only wins of key campaigns, like the contracts
for border surveillance in Qatar and Saudi Arabia, but also
development of a long-term industrial presence through organicor external growth in order to be considered as a trusted local
player by potential customers.

DEFENCE AND COMMUNICATIONS SYSTEMS (“DCS”)
DCS is the EADS “Systems House”. Its mission is to develop
complete communication and information system solutions(including platforms) and provide the means for theirimplementation. DCS offers its customers comprehensive andtailored solutions, including the ability to design, develop andimplement Lead Systems Integration (LSI) and link the widest
possible range of individual platforms and subsystems intoa single effective network. Systems integration has become
increasingly important for customers engaged in border control
and coastal surveillance, as well as for non-military customers inareas such as homeland security, all of which are areas of major
focus for DCS.
In 2009, DCS generated 26.0% of the DS division’s total
revenues.

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Products and Services
Defence. DCS offers comprehensive mission systems andsolutions in the areas of air dominance, battle space systems,
intelligence solutions and naval systems, as well as overallsystems support. It is a leading provider for full systems
design architecture and systems integration responsibility for
military land-, sea-, air- and space-based systems. DCS delivers
airspace dominance systems for defensive, offensive and support
operations in a combined, joint environment, thereby realising
flexible, network enabled capabilities. DCS designs, integrates
and implements secure fixed, tactical, theatre and mobile
information infrastructure solutions, including all of the services
needed to support integrated mission systems and solutions.
DCS is also a major designer and supplier of Command, Control,
Communications and Intelligence (C3I) systems to the armed
forces in France and Germany, and the Joint Staffs in France,
Germany and NATO.
The business unit is focused on customers’ need for information
infrastructure solutions. Its expertise includes a detailed
understanding of the technology necessary to achieve this,including interfaces, gateways and the use of open systemarchitectures.
Global security/Nationwide security. DCS provides fully integrated
global security solutions and services in the areas of bordersecurity, maritime security, crisis and emergency management,
critical infrastructure protection and large event protection. Dueto the increased connections between different areas of threat andin light of the growing interdependence of internal and external
security in particular, the seamless collaboration of different
security organisations has become increasingly important. The
DS division seeks to maximise efficiencies through the optimised
use of data and information together and across these different
security organisations. With the national security programme
for the Kingdom of Saudi Arabia in 2009, DS won the largest
contract ever awarded in this area.
Professional Mobile Radio. DCS is a leading provider of digital
Professional Mobile Radio (“PMR”) and secure networks.
DCS solutions for PMR enable professional organisations invarious areas – such as public safety, civil defence, transport andindustry – to communicate effectively, reliably and securely.
DCS offers its customers specialised PMR solutions based on
TETRAPOL, TETRA and P25 technologies, amongst others.

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APSYS: Safety Engineering

DEFENCE ELECTRONICS (“DE”)

APSYS is a DS division subsidiary and is managed by the DCS
business unit. In 2009, APSYS strengthened its position in
the French market for consulting, training and studies services
in technical risk management. New expertise was developed
to address specific markets and maintain the competitive edgeof APSYS, such as software quality insurance, communication
systems security, 3D phenomena modelling and transportation
scheme performance analysis.

As the “Electronics House” of the DS division, DE provides
mission-critical elements for data gathering, data processing anddistribution for defence and civil security systems. Its main businessis focused on high-end security electronic equipment and subsystems
addressing the market for surveillance and reconnaissance, military
mission management, protection of own forces and criticalinfrastructures, as well as testing systems and services.
In 2009, DE generated 18.6% of the DS division’s total revenues.

Dornier Consulting GmbH
Dornier Consulting GmbH is a DS division subsidiary andis managed by the DCS business unit. Dornier Consulting is
a company for future-oriented transportation and technology
consulting with a focus on traffic, transportation and logistic
concepts, system specification and integration, modern
technologies for the management of natural resources aswell as professional full-service project management. It is anindependent consulting and engineering company with clientsin the public and private sector in Germany, Central andEastern Europe, Central Asia and the Middle East. Major clients
include national and international institutions (World Bank,
UNDP, EU, KfW, GTZ), governments, authorities, the German
Railways (Deutsche Bundesbahn), Daimler and EADS as well asa spectrum of private companies. As part of its future strategy,
Dornier Consulting will seek to develop additional opportunities
for other EADS units while also focusing on international
growth.

Sofrelog
Sofrelog is a DS division subsidiary and is managed by the DCS
business unit. Sofrelog provides integrated mission criticalreal-time systems using radar and other wide area sensors, mostly
for maritime applications, typically vessel traffic services andcoastal surveillance. These systems are based on Sofrelog’s unique
SYTAR™ product, which has set the technical standard in themaritime world: more than 450 radars have been connected, with
Sofrelog having design responsibility on more than 50 control
centres in 30 different countries around the world. Sofrelog iswell positioned for growth in its core markets: building on theaward of Qatar and Tanger Med port security in 2007, Sofrelog
plans to further contribute to DS’ global security growth.

Atlas Elektronik
Atlas Elektronik GmbH, headquartered in Bremen (Germany),
is a joint venture of ThyssenKrupp (51%) and EADS (49%).
In 2009, Atlas Elektronik achieved important successes,
including the largest deal in its company history. With anorder for equipping six South Korean submarines with a stateof the art combat system, Atlas Elektronik reinforced its
position as a global leader in submarine technology. In addition,
the company took important steps to assert itself firmly in amarket that – although growing – is characterised by increasing
competition and cost pressures.

MarketDE’s main competitors in defence electronics are large andmedium-sized US and European companies (i.e., Raytheon,
Northrop Grumman, Thales, BAE Systems, Galileo Avionica,
Indra and Saab) as well as competitors from Israel. DE’s key
customers include MoDs, interior ministries, military services,
security forces, the in-house EADS systems suppliers and other
LSI’s worldwide. Through various joint ventures, participations
and partnerships, DE has access to customers in every NATOcountry, in particular in Germany, France, the UK, Spain and
Italy, and to important export markets, such as the US, Turkey,
India and South Africa.

Products and Services
Electronic Warfare and Self Defence. Growth in electronic
warfare (“EW”) and self-defence is a key strategic goal for DE.
DE supplies electronic self-protection systems for aircraft,ships and armoured vehicles, such as laser warning, missile
warning and active electronic countermeasure units, including
directed infrared countermeasures, self-protection jammers andtowed decoys. For example, DE delivers jammers to counterthe increasing threat of roadside bombs. It has subsystem
responsibility for the A400M’s self-protection system, also
supplying core EW equipment such as the infrared missile
warning system MIRAS. For military mission aircraft,
helicopters (NH90, Tiger) and VIP aircraft, DE is developing
solutions to counter threats posed by infrared-guided missiles inparticular. To date, DE has sold approximately 6,000 units of its
missile warning sensor (MILDS), which is deployed on a varietyof helicopters and transport aircraft.
Avionics. As a major partner in the field of military mission
avionics for the A400M, DE assumes subsystem responsibility for
mission management and defensive aids. The DE portfolio also
comprises avionics equipment, such as digital map units (EuroGrid),
flight data recording units and obstacle warning systems forhelicopters. In addition, DE is developing multi-sensor integrationand data fusion technology, which is a key future technology
for network-enabled capabilities. For example, DE is in charge ofsensor fusion software on the NATO AWACS E3A and the similar
Australian “Wedgetail” and the Turkish “Peace Eagle” programmes.
Additional products offered by DE in the field of communicationand identification include wide-band modular data links.

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Sensors. DE is a principal partner in the development of
airborne multi-mode radars such as the Captor radar in theEurofighter programme, and also provides integrated logistics
support, maintenance and upgrades. DE is also heavily involvedin the technological development and application of nextgeneration active electronically scanning (AESA) radars for air,naval and ground applications. In the field of fighter radars,
DE successfully concluded two European AESA radar technology
research programmes in 2009. In the area of air defence,
DE produces mid-range radars for ship (TRS-3D) and land
(TRML-3D) applications. DE also takes a lead role in developing
and manufacturing synthetic aperture radars (SAR), which areconsidered essential for future reconnaissance and surveillance
operations. In this field, DE has developed the European standoff SAR sensor for wide-area surveillance (SOSTAR-X) andprovides the Tandem-X space-borne Earth observation satellites
with unique radar components.
With its newly developed Airport Surveillance Radar (ASR-S),
DE won the competition in 2009 to provide Swiss military air
fields with an advanced air traffic control system.
Test & Services. The Test & Services product range covers
the entire life cycle of equipment and systems and includes
comprehensive solutions that rely on test services and systems.
The solutions are either integrated or sold as stand-alone elements:
instrumentation, system software and application software. The
versatility of Test & Services systems means that a multitude ofequipment and systems can be tested. Accordingly, the same airline
can use a single model test bench for maintaining both its Airbus
and Boeing fleets, while the French Army uses the same test
system for numerous weapon systems. Already present worldwide
with its civil and military equipment testers, Test & Services is
consolidating its development strategy on the international stage
with new locations in France, Germany, Spain, the UK and theUnited States, as well as a global distribution network.

MILITARY AIR SYSTEMS (“MAS”)
The MAS business unit specialises in the field of combat air
systems — in particular development, production and deliveryof the Eurofighter combat aircraft (46% owned by EADS). In
addition, MAS produces and tests mission air systems, including
UAVs. MAS offers corresponding product support, including
maintenance, repair and overhaul, modernisation, logistics
optimisation, product-specific training and integrated system
support centres.
The new Military Air Systems Centre in Manching is fosteringsynergies with other parts of the DS division and reinforces
customer relationships, especially with The Bundeswehr
Technical and Airworthiness Center for Aircraft (WTD 61) and
the German Air Force.
In 2009, MAS generated 37.6% of the DS division’s total
revenues.

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Products and Services
Combat Air Systems. Eurofighter, known as “Typhoon” forexport outside of Europe, is a network-enabled, extremely agile,high-performance multi-role combat aircraft optimised forswing-role operations in complex air-to-air and air-to-surface
combat scenarios. Eurofighter is designed to enhance fleet
efficiency through a single flying weapon system capable offulfilling supersonic, beyond-visual-range combat, subsonicclose-in air combat, air interdiction, air defence suppression
and maritime and littoral attack roles. The tactical requirementsof the aircraft include all-weather capability, short take-off andlanding capability, high survivability and operational readiness.
The Eurofighter was designed to be adapted and improved overthe long-term, as new avionics and weapons evolve, to provide
for an extended service life.
The Eurofighter programme is organised through the NATOEurofighter and TORNADO Management Agency (“NETMA”)
for the participating nations. NETMA contracts with
Eurofighter GmbH, the programme management company for
the Eurofighter programme. The Eurofighter GmbH shareholders
and subcontractors are EADS (46% share), BAE Systems(33% share) and Alenia Aerospazio, a division of Finmeccanica(21% share). With regard to series production, the respective
production workshares of the participating partners within theEurofighter consortium stand at 43% for EADS, 37.5% for BAE
Systems and 19.5% for Alenia, reflecting the relative numberof aircraft ordered by each country’s programme participant.
EADS is responsible for the centre fuselage, the flight control
system, the manufacturing of the right wing and leading edge
slats for all aircraft ordered under the programme, as well as
the final assembly of the 180 aircraft ordered by the German
Air Force and 87 aircraft ordered by the Spanish Air Force.
The final assembly of the Eurofighter takes place in the relevant
contracting country: Manching in Germany, Getafe in Spain,
Warton in the UK and Torino in Italy.
In January 1998, NETMA signed an umbrella Eurofighter
contract for 620 aircraft: UK 232 (with 65 options);
Germany 180; Italy 121 (with 9 options); and Spain 87 (with
16 options). The umbrella contract, while fixing a maximum
price for the overall programme, also stipulates that production
agreements are to be awarded in three tranches, with production
expected to continue until 2015. The programme includes
the development, production investment and series productionof the aircraft. Currently, 496 aircraft are firmly on order within
the core programme.
Delivery of the first tranche of 148 aircraft (including six
instrumented production aircraft) was completed in 2008 andfinal assembly of the second tranche of 236 aircraft is currently
ramping up. Outside the core programme, Eurofighter completed
its delivery of 15 aircraft sold to Austria (with 6 deliveries in2009), and further export opportunities are believed to exist in
Europe, Asia and the Far East. A government-to-government

INFORMATION ON EADS’ ACTIVITIES>1.1 | Presentation of the EADS Group1agreement has been reached between the UK and Saudi Arabia
on the purchase of Eurofighter aircraft, marking the firstexport success of the aircraft outside Europe. The respective
contract between the two governments regarding the delivery of
72 aircraft was signed in 2007. Delivery of the first Eurofighter
aircraft for the Royal Saudi Air Force (RSAF) started inJune 2009.
Mission Air Systems - Advanced UAV Systems. In response
to Germany’s need for wide-area surveillance and stand-off
reconnaissance, MAS and its US partner Northrop Grumman
are, through their joint venture EuroHawk GmbH, supplying itwith the HALE-UAV System Euro Hawk. Euro Hawk is a highaltitude unmanned aerial system for signal intelligence (SIGINT)
that has been specially equipped to meet national requirements.
It is based on the Global Hawk RQ4-B platform developedby Northrop Grumman. MAS is responsible for the overall
mission system including situation analysis and report, as well
as sensor-payload and modifications. In October 2009, MAS andNorthrop Grumman unveiled the first Euro Hawk in Palmdale,
California. The German air force plans to start operational flying
with the Euro Hawk FSD (First System Demonstrator) by 2011.
The European countries Germany, France and Spain havecommissioned the programme “Advanced UAV” to analyseand more closely define the system needed to fulfil therequirements placed by the military customer for future
unmanned surveillance and reconnaissance missions. The novel
aspect of this approach is a modular system-of-systems design
and the integration of the proposed TALARION MALE UAV
in a network-enabled operations scenario. The three countries
awarded a 15-month risk-reduction study in 2007 for highperformance UAVs which was successfully delivered by MAS in
May 2009. Harfang/SIDM (Système Intérimaire de Drone MALE)
is a Medium Altitude Long Endurance (MALE) UAV system thathas been developed for the French Air Force. Harfang – basedon the IAI (Israel Aeronautic Industries) Eagle 1 platform – is alatest-generation system in the MALE category of UAVs and isdedicated to reconnaissance and tracking operations in the depthof the battlefield. The first SIDM systems were successfully
delivered to the French customer in summer 2008 and wereoperated at a high rate in Afghanistan throughout 2009.
MAS is also working on the “Generic System Demonstrator
Agile UAV in Network Centric Environment” (Agile UAV-NCE).
It is a German Armed Forces’ Research and Technology (R&T)
programme aimed at demonstration of technologies andoperational aspects with emphasis on network enabled operations.
The major contribution from MAS is the Barracuda demonstrator
UAV system – Europe’s largest UAV ever built – which passed aweek of successful test flights in Goose Bay, Canada in 2009.
Atlante is the long endurance tactical unmanned aerial vehicle
that MAS provides to the Spanish customer. The unmanned
aerial system is designed by MAS in Spain and will be operated

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by the Ejército de Tierra to carry out target identification, shootcorrection and damage evaluation operations, among other
ISTAR missions (intelligence, surveillance, target acquisition
and reconnaissance).
DRAC (Drone de Renseignement Au Contact) tactical UAV isbased on the TRACKER, developed in partnership between
MAS and SurveyCopter, which is providing the aerial vehicle
and the cameras. After having delivered 25 DRAC systems
to DGA, initial operator training was completed at the end ofJune 2008 paving the way for operational use of the systemby the French Army. A second batch of 35 DRAC systems
was ordered by DGA in June 2008 and delivered throughout
2009. In addition, a couple of systems were delivered to export
customers.
Support Services and Upgrades. MAS offers its customers afull suite of services associated with operating their military
air systems, including maintenance, repair and overhaul,
modernisation, logistics optimisation, product-specific training
and integrated system support centres.
In addition to these services, MAS offers its clients thepossibility of upgrading their military air systems. If thepurchase of new aircraft is either politically or economicallyunfeasible, conducting an upgrade of existing airframes is themost cost-effective solution. MAS has developed expertise inthis area through upgrade programmes for such aircraft as the
Tornado, F-4 Phantom, F-18, F-5, MiG-29, Mirage F-1, C101
Aviojet, Harrier AV-8B, E-3A AWACS, P-3C Orion, C-160
Transall and Breguet Atlantic 1.
Pilot Training and Training Aircraft and Services. MAS offers apilot training programme for European fighter jets: in 2007, it
launched the new European Advanced Training Jet Pilot Schoolat Talavera together with the Spanish Air Force. The school
provides comprehensive jet pilot training using an upgradedF-5 with near latest-generation combat aircraft performance
characteristics and sophisticated ground equipment. Pursuant
to a ten-year multi-services contract signed in 2006, MASalso manages “ab-initio” pilot training for future military
aircrews at the French Air Force’s flying school in Cognac.
The Ecats (EADS Cognac Aviation Training Services) contract
includes the procurement of new aircraft, line and base aircraft
maintenance as well as ground-based training devices. In
June 2009, Ecats celebrated its 50,000th flight hour.
Finally, MAS offers training for air defence crews. MAS
develops, produces and maintains aerial target systems andcoordinates aerial target services worldwide.

MISSILE SYSTEMSMBDA (a joint venture between EADS, BAE Systems andFinmecannica with stakes of 37.5%, 37.5% and 25% respectively) is
the missile systems group within the DS division. MBDA offers
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superior capabilities in missile systems and covers the whole
range of solutions for air superiority, land control and sea power
missions, while also providing the most advanced technologicalsolutions in strike weapons and missile defence. The further
integration of the four home markets (France, Germany, Italy andthe UK), the consolidation of the business and increased efforts
in the export market remain the principal goals for 2010.
In 2009, MBDA generated 17.8% of the DS division’s total
revenues.

MarketMBDA has a geographically diverse customer portfolio. Beyond
its four national home markets, the Group has direct access to theother important European markets, Spain, Greece and Sweden.
It also has a stable foothold in growing export markets such as
Asia, the Gulf region and Latin America, and benefits fromtransatlantic cooperation on programmes such as MEADS, asdiscussed below.
Four principal defence contractors are active in the worldwide
market for tactical missiles and missile systems. The current
worldwide market for missile systems is estimated to exceed€ 12 billion, with a downward trend forecast until 2010/2011.
Thereafter, the worldwide market is nevertheless expected tostrengthen due to:> the need to replace older generation missile systems and todevelop new capabilities (such as ground-based air defence
systems, precision and deep strike weapons and naval
superiority integrated combat systems);> the entry into service of new missile carrying platforms(Rafale, Eurofighter/Typhoon, Gripen, Tiger helicopter, newfrigates and aircraft carriers and in due course other new
platforms such as the F-35 Lightning II Joint Strike Fighterand UCAVs); and> the appearance of new requirements for future weapon
systems based on new operational tasks and lessons learned
from past conflicts, in particular Network Centric Warfare
related systems as well as indirect line of sight or beyond
visual range target acquisition systems.

Products and Services
The broad range of MBDA products covers all six principal
missile system categories: air-to-air, air-to-surface, ground-to-air,surface-to-air, anti-ship and surface-to-surface. MBDA’s productrange also includes a portfolio of airborne countermeasures suchas missile warning and decoying systems and decoy dispensers,
airborne combat training and countermining systems. The
most significant programmes currently under development are
the Aster Paams naval air defence system, the METEOR air
superiority missile system, the Medium Extended Air Defence

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System MEADS and the Scalp NAVAL ship and submarine
launched deep strike weapon, while those in production
include Aster SAMP/T air defence, Storm Shadow/SCALP
and Taurus stand-off missile systems.
Aster Family. The FSAF Phase 3 contract signed with OCCAR(Organisation Conjointe de Coopération en matière d’Armement)
in 2003 is worth € 3 billion (€ 2.3 billion thereof to be allocatedto MBDA). This contract covers the series production of
approximately 1,400 Aster missiles and associated missile systems
and represents Europe’s first advanced naval and ground-based
air defence missile system with Anti-Tactical Ballistic Missiles(ATBM). Aster missiles are now in series production.
METEOR. METEOR is a highly flexible, visual and beyond
visual range, agile, air-to-air weapon system that provides acomprehensive operational capability in the most complex combat
scenarios. METEOR was ordered by the UK MoD and five other
European nations (France, Germany, Italy, Spain and Sweden)
to meet their future air-to-air requirements. In 2006, the first
air-launched demonstration firings of METEOR were carriedout. The test firing programme continued in 2007 and 2008 witha high altitude supersonic launch that successfully demonstrated
the missile’s integrated boost, ramjet sustain motor and control
systems during extended free flight and manoeuvring.
Scalp NAVAL. Benefiting from the effort already invested
in development of the Storm Shadow/SCALP European
air-launched cruise missile programme, MBDA is developing
Scalp NAVAL to provide the French Navy’s FREMM frigates andBarracuda class submarines with superior deep strike capability.
In 2007, MBDA received the contract notification from the
French DGA for 250 of these missiles.
Storm Shadow/SCALP. Already in service in the UK, France and
Italy, the Storm Shadow/SCALP was also selected by Greece in
2004. The Hellenic Air Force has ordered 34 Storm Shadow/
Scalp missile systems. Deliveries have also been made to the
UAE air force, where the missile is known as “Black Shaheen”.
Taurus KEPD 350. MBDA Deutschland and SAAB Bofors areworking together through Taurus Systems GmbH to create anddeliver the Taurus KEPD 350, a precision stand-off guided
missile system for Tornado, Gripen and Eurofighter aircraft.
Taurus KEPD 350 is in series production for the German
Air Force, with which the weapon is now in service. During
2007, the 300th Taurus missile left the production line in
Schrobenhausen, marking the production halfway mark for theGerman Air Force. In 2005, Spain also announced its intention
to procure 43 Taurus KEPD 350 missiles for its F/A-18 andEurofighter aircraft, with the first two missiles delivered in 2007.
In June 2009, the Spanish Air Force successfully integrated the
Taurus KEPD 350 onto their EF-18 strike aircraft.
MEADS. MEADS (Medium Extended Air Defence System),a ground-based tactical air defence system, is a good example

INFORMATION ON EADS’ ACTIVITIES>1.1 | Presentation of the EADS Group1of dynamic and successful cooperation on a transatlantic level.
MEADS will protect troops during out-of-area missions within
the scope of homeland defence. The financial share of the
programme is 58% US, 42% European (German and Italian).
The technical workshare of the companies involved – MBDA
Deutschland, MBDA Italia and Lockheed Martin (UnitedStates) – corresponds to the respective cost contribution
percentages. MBDA’s activities are coordinated through thejoint venture company euroMeads GmbH, which, like Lockheed
Martin, has a 50% share in MEADS International Inc. (MI).
On 1 June 2005, MI formally signed a contract to designand develop MEADS. The contract value is approximately
US$ 2 billion plus € 1.4 billion for the programme’s designand development (D&D) phase.

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PRODUCTION
The DS division operates several offices worldwide in order
to secure close relationships with customers and partners. As
the Division’s portfolio also covers product development andconsultancy services – mainly in the field of global security – DS
has several facilities in the European home countries of Germany,
France, Spain and the UK. The main production sites are locatedin Germany (Manching, Ulm) and Spain (Getafe).

1.1.6 Other Businesses
REGIONAL AIRCRAFT — ATR
ATR (Avions de Transport Régional) is a world leader in themarket for regional turboprop aircraft of 40 to 74 seats. ATR
Integrated is a consortium composed of EADS and Alenia
Aeronautica, in which each hold a 50% stake. The EADS ATR
business unit, which represents EADS’ 50% share of ATR, isunder the responsibility of Airbus. Headquartered in Blagnac
near Toulouse in the south of France, ATR employs morethan 800 people across Europe, with major operations in theMidi Pyrénées and Aquitaine regions of France.

Market
The regional turboprop aircraft industry has experienced growing
concentration over the years. During the 1990s, a number ofmanufacturers merged, closed or ceased production of regional
aircraft, leading to the withdrawal from the market of BAe,
Beechcraft, Fokker, Saab and Shorts, among others. Currently,
the worldwide market for turboprop aircraft of 40-70 seats
in production is dominated by two manufacturers: ATR and
Bombardier.
After a number of years of relatively low activity, the regional
turboprop market has experienced sustained growth since 2005,
due to the advantages of turboprop aircraft over jet aircraft interms of fuel efficiency and CO2 emissions. In the last five years,
turboprops have received more orders than jets in the regional
market and represented nearly 80% of total orders in the 40–70
seat segment according to internal estimates. In 2009, ATR
delivered 54 new aircraft (compared to 55 in 2008) and recorded
orders for 40 new aircraft (compared to 42 in 2008). In addition,
50% of the orders were booked for the newest member of the
ATR family: the “-600 series” aircraft. As of 31 December 2009,
ATR had a backlog of 136 aircraft (compared to 169 in 2008).
The current backlog represents more than two years of deliveries.

The relative fuel efficiency and reduced CO2 emissions ofturboprop engines are expected to lead to sustained market
activity over the coming years.

Products and Services
ATR 42 and ATR 72 Series Aircraft. Commencing with the ATR
42, which entered service in 1985, ATR has developed a familyof high-wing, twin turboprop aircraft in the 40-74 passenger
market that are designed for optimal efficiency, operational
flexibility and comfort. In 1996, in order to respond to operators’
increasing demands for comfort and performance, ATR launched
the ATR 72-500 and ATR 42-500 series. Like Airbus, the ATR
range is based on the family concept, which provides for savingsin training, maintenance operations, spare parts supply and CCQ.
In 2009, the ATR 72-600 pre-series aircraft started its flighttest campaign, while the first ATR 42-600 was powered-on andbegan its ground tests. An entry into service is expected in 2011.
Customer Service. ATR has established a worldwide customer
support organisation committed to supporting the aircraft over its
service life. Service centres and spare parts stocks are located at
Toulouse, in the vicinity of Washington D.C. and in Singapore.
ATR Asset Management also responds to the market for secondhand aircraft by assisting in the placement and financing of usedand end-of-lease aircraft. By providing quality reconditioned
aircraft at attractive prices, ATR Asset Management has helped
both to broaden ATR’s customer base, in particular in emerging
markets, and to maintain the residual values of used aircraft.
In the past, clients for such used aircraft have subsequently
purchased new aircraft as they have gained experience in theoperation of ATR turboprops. Returned aircraft generally remainout of service for approximately five months as they await
reconditioning and resale or leasing, subject to market conditions.

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Production

Aerolia

The ATR production facilities are located near Naples, Italy
and at Merignac, Bordeaux and Saint-Martin near the Toulouse
airport in France. Final assembly, flight-testing, certification anddelivery occurs at the Toulouse site. ATR outsources certain
areas of responsibility to Airbus, such as wing design andmanufacture, flight-testing and information technology.

Aerolia is a wholly owned subsidiary of EADS (consolidated
within Airbus) which was formed from the spin-off of theformer French Airbus sites in Méaulte and St-Nazaire Ville
pursuant to the aerostructures reorganisation strategy initiatedunder Power8. Having commenced operations as of 1 January
2009, Aerolia has 2,200 employees who work on the design andmanufacture of 4 million detail parts and 500 work packagesof the Airbus nose fuselage. The standalone company operates
with four operational Directorates (Engineering, Operations,
Procurement, Programmes & Commercial) and four support
Directorates (Quality, Finances, Human Resources, Strategy &Communications), which are geographically located on threesites: Méaulte, St-Nazaire and Toulouse. In 2009, a fourthsite was launched in Tunisia. The design office, based inToulouse, combines the skills of approximately 250 engineersand employees, coming for the most part from the Airbus
design offices.

AEROSTRUCTURES, AIRCRAFT CONVERSION AND FLOORPANELSEADS Sogerma
EADS Sogerma is a wholly owned subsidiary of EADS whichis specialised in aerostructures and cabin interior activities. The
company designs and manufactures major aerostructure elements
in metal and composite for commercial and military aircraft andis also a leading provider of cockpit and passenger seats (first andbusiness class) for commercial and military aircraft as well as forbusiness jets and helicopters.
In the aerostructures field, EADS Sogerma engages in the design,
manufacturing and assembly of Airbus aircraft sections (A318/
A320/A330/A340), manufacturing and assembly of ATR wings,
design and manufacturing of the A400M ramp door as well as
design and manufacturing of pilot and co-pilot seats. In the cabininterior segment, EADS Sogerma designs and manufactures firstand business class seats for large commercial aircraft.
EADS Sogerma owns three sites in France (Rochefort, Bordeaux
and Toulouse) and benefits from a low cost subsidiary in
Morocco (Maroc Aviation) as well as two subsidiaries specialisedin composites: CAQ (Composite Aquitaine) in France and CAL(Composite Atlantic) in Canada.

EADS Elbe Flugzeugwerke GmbH — EFW
EFW is a wholly owned subsidiary of EADS (consolidated
within Airbus) and a core centre for Airbus passenger to freighter
conversion, a centre of excellence for the manufacture offibre-reinforced furnishing components as well as an importantpartner for special programmes such as the conversion of the
MRTT.
The conversion of passenger aircraft into freighter aircraft is acommon heavy modification undertaken on behalf of commercial
aircraft owners. The market for aircraft freighter conversion
encompasses freight service airlines such as FedEx, airlines withsmall aircraft fleets and finance groups. In the aerostructures
field, EFW is the supplier of fibre reinforced flat sandwich
panels for all Airbus models. Its product range covers floor andceiling panels, cargo linings and bullet-proof cockpit doors.
EFW’s engineering department is a certified design organisationthat works to develop future products.

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The activities integrated in Aerolia will maintain and develop
commercial and industrial relations mainly with Airbus, while
continuing to develop relations with others such as Bombardier,
ATR, Latecoere, Sonaca, Sogerma, Stork Fokker, Piaggio, SAAB
and SABCA.

Premium AEROTEC
Premium AEROTEC is a wholly owned subsidiary of EADS
(consolidated within Airbus) which was formed from thespin-off of the former German Airbus sites in Nordenham and
Varel and the former EADS site in Augsburg pursuant to theaerostructures reorganisation strategy initiated under Power8.
Premium AEROTEC has its own development unit with its
main facilities at its Augsburg site and offices in Bremen,
Hamburg, Munich/Ottobrunn and Manching. The management
headquarters for the operational units are in Varel, while thecompany itself is headquartered in Augsburg.
Having commenced operations as of 1 January 2009, the corebusiness of Premium AEROTEC is focused on structures andmanufacturing systems for aircraft construction and related
development activities. The aim of Premium AEROTEC over the
coming years is to further expand its position as the leading tier
1 supplier of civil and military aircraft structures.
Premium AEROTEC is a partner in all major European aircraft
development programmes, such as the commercial Airbus aircraft
families, the A400M military transport aircraft programme andthe Eurofighter Typhoon. It plays a significant role in the designof new concepts in such fields as carbon composite technologies.

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1.1.7 Investments
DASSAULT AVIATIONEADS holds a 46.3% stake in Dassault Aviation (listed on theEurolist of Euronext Paris), with Groupe Industriel Marcel
Dassault holding a 50.6% stake and a free float of 3.1%.
Dassault Aviation is a leader in the world market for military jet
aircraft and business jets. Founded in 1945, Dassault Aviation
has delivered more than 7,300 military and civil aircraft topurchasers in more than 70 countries. On the basis of its
experience as designer and industrial architect of complex
systems, Dassault Aviation designs, develops and produces
a wide range of military aircraft and business jets. In order toavoid any potential conflict between the military products ofDassault Aviation and EADS (Rafale and Eurofighter) and to
facilitate a “Chinese wall” approach, EADS’ Dassault Aviation
shareholding is managed by EADS Corporate, whereas theEurofighter programme is managed by EADS’ Defence &Security division.
In 2009, Dassault Aviation recorded orders totalling € -1.3 billion(compared to € 5.8 billion in 2008), including cancellation of 163
orders for Falcon business jets (compared to 115 new orders in2008). Consolidated revenues amounted to € 3.4 billion in 2009
(compared to € 3.7 billion in 2008), with consolidated net incomeof € 257 million (compared to € 384 million in 2008).

Military Jet Aircraft
Dassault Aviation offers wide expertise in the design andmanufacture of the latest generation military combat aircraft.
Rafale. The Rafale is a twin-engine, omni-role combat aircraft
developed for both air force and navy applications. According
to decisions made based on the Livre Blanc of the French MoD,
France will be acquiring 286 Rafale, 228 for the air force and58 for the navy, for a total programme cost of € 39.6 billion.
180 aircraft have already been ordered; of these, 133 are reserved
for the air force, and 47 for the navy.

Mirage 2000. The Mirage 2000 family reached the end of its
production phase in 2006. Today, approximately 600 Mirage
2000 aircraft are in service worldwide.
nEUROn. Dassault Aviation is the prime contractor for thedevelopment of the UCAV (Unmanned Combat Air Vehicle)
demonstrator, nEUROn. The programme was open to European
cooperation and five countries have decided to join in and sharethe skills of their aerospace industries: EADS CASA (Spain),
SAAB (Sweden), HAI (Greece), RUAG (Switzerland) and Alenia
Aeronautica (Italy). The nEUROn demonstrator is scheduled
to fly in mid-2012.

Business Jets
Dassault Aviation offers a wide range of products at the top
end of the business jet sector. Over 1,700 Falcon business jets
have been delivered since the first Falcon 20 delivery in 1965.
In-service Falcons currently operate in over 65 countries
worldwide, filling corporate, VIP and government transportation
roles. The family of Falcon jets currently includes four tri-jets:
the Falcon 50EX, 900C, 900EX and 7X, the twin-engine Falcon
2000 and the Falcon 2000EX EASy.

DAHER-SOCATA
In January 2009, EADS sold a 70% stake in Socata to Daher,
while retaining the remaining 30% stake.
DAHER-SOCATA specialises in the aerospace, nuclear, defence
and industry sectors and offers manufacturing and services
solutions combining three areas of expertise (manufacturing,
services and transport) built into a global offer. In aerospace anddefence, DAHER-SOCATA is both a manufacturer and a tier-1
supplier of equipment and services, producing aerostructuresand systems, fitted sections and airframes. In the under 8.6-ton
category, it produces aircraft with options dedicated to the civil(business aircraft) and military (multi-role aircraft) markets.

1.1.8 Insurance
EADS Corporate Insurance Risk Management (“IRM”),
centralised at EADS headquarters, is responsible for all corporate
insurance activities and related protection for the Group. It
includes continuous and consistent identification, evaluation,
prevention and protection of insurable risks. Insurance
techniques are used to manage these risks professionally andto protect the assets and liabilities of EADS against financial

consequences due to unexpected events. Harmonised insurance
policies and standards are in place for all insurable risks
underwritten by the Group.
An integrated reporting and information system is in place
to enable IRM, in close relationship with insurance managers
named by the EADS divisions and business units, to respond to

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insurance related risks of the Group. EADS pursues an insurance
risk management strategy that includes operating procedures aswell as policies regarding procurement and sales agreements.

Non-Core Insurance Policies cover risks such as:

A systematic review and monitoring procedure is in place to asses
the exposure and protection systems applicable to all EADS sites,
helping to ensure (i) comprehensive and timely identification andevaluation of risks, (ii) the initiation of appropriate mitigation
and risk avoidance measures (iii) and/or related adjustments of
insurance coverage.

> Company Automobiles; andEADS’ insurance programmes cover high risk (Core) and low risk
(Non-Core) exposure.

EADS follows a policy of obtaining external insurance
coverage for all main and individual risks that can be insured
at reasonable rates, on sufficient terms and limits provided by
the international insurance markets. All insurance policies are
required to satisfy EADS’ mandatory standards of insurance
protection.

Core insurance policies underwritten by IRM for the Group
cover risks such as:> Property Damage and Business Interruption;> Aviation Third Party Liabilities including Product Liabilities;> Manufacturer’s Aviation Hull Insurance up to the replacement
value of each aircraft;> Space Third Party Liabilities including Product Liabilities;> Commercial General Liabilities including non-aviationand non-space Product Liabilities and risks related toenvironmental accidents; and> Directors & Officers Liability.
Claims related to Property Damage and Business Interruption
are covered up to a limit of € 2.5 billion per occurrence. Aviation
Liability Coverage is provided up to a limit of € 2.5 billion per
occurrence, with an annual aggregate cap of € 2.5 billion for
product liability claims. Certain sub-limits are applicable for Core
Insurance Policies as outlined above.

> Personal Accidents;> Personal and property exposure during business trips.
Amounts insured for Non Core Insurance Lines adequately cover
the respective exposure.

However, to be more independent from the volatilitiesof the insurance markets, EADS uses the capabilities ofa corporate-owned reinsurance captive as a strategic toolwith respect to the Property Damage, Business Interruption
Programme and the Aviation Insurance Programme. The
captive is capitalised and protected according to European legal
requirements so as to help ensure its ability to reimburse claims,
without limiting the scope of coverage of the original insurance
policies or additionally exposing the financial assets of EADS.
The insurance industry, which has been affected by the
recent financial crisis, is still undertaking efforts to reduce its
overall exposure. These efforts include increasing premiums,
raising deductible amounts and limiting the scope of coverage.
Furthermore, the number of insurers having the capabilities andfinancial strength to underwrite large industrial risks is limited.
No assurance can be given that EADS will be able to maintainits current levels of coverage on similar financial terms in the
future.

1.1.9 Legal and Arbitration Proceedings
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 thanas 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 atleast the previous twelve months which may have, or have hadin the recent past significant effects on EADS’ or the Group’s
financial position or profitability.

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In 2005, a liquidator representing the special purpose vehicle
GFAC (a joint venture between Swissair and GATX) sued
Airbus before a New York court to recover USD 227 million
in pre-delivery payments, together with interest and costs. The
lawsuit followed Airbus’ termination of a purchase agreementwith GFAC in October 2001 for 38 single-aisle and long-range
aircraft, in the context of Swissair’s bankruptcy. On 6 February
2009, a judge rendered a summary judgment in favour of GFAC.
In March 2009, GFAC submitted arguments on the amount of
its alleged damages and requested entry of judgment. In parallel,

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Airbus has filed an appeal of the February 2009 decision, which
was heard by the appellate court on 17 September 2009. Bothplaintiff’s request and defendant’s appeal are currently pending,with the risk that Airbus may ultimately be required to pay anamount equal to the pre-delivery payments plus legal interest as
damages.
In 2006, a liquidator representing the special purpose vehicle
FlightLease No. 7 (a wholly-owned subsidiary of the bankrupt
Swissair Group) sued Airbus before a Paris court to recover
USD 319 million in pre-delivery payments, together withinterest and costs. The lawsuit followed Airbus’ termination ofa purchase agreement with FlightLease No. 7 in October 2001,
in the context of Swissair’s bankruptcy. The case is at an earlyprocedural stage.
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 EU launched a parallel WTO case against the
US in relation to its subsidies to Boeing. On 31 May 2005, theUS and the EU each requested the establishment of a panel.
At its meeting on 20 July 2005, the Dispute Settlement Body
established the panels. Between November 2005 and the present,
the parties filed numerous written submissions and attended
several oral hearings in both cases. On 23 March 2010, a nonbinding confidential report was issued in the case brought by the
US. The decision will be released publicly in the second quarterof 2010, and will likely be appealed by both sides. A draft
decision in the case brought by the EU concerning subsidies to
Boeing is expected in June 2010. Exact timing of further steps in
the WTO litigation process is subject to ruling of the panels andto negotiations between the US and the EU. Unless a settlement,
which is currently not under discussion, is reached between theparties, the litigation is expected to continue 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, theAMF announced the notification of charges against EADS andcertain of its current and former executives for breach of suchmarket regulations and insider trading rules, respectively. On
22 July 2009, the Rapporteur of the Sanction Commission of
the AMF issued a report regarding the charges notified by theAMF, which contained various recommendations to the Sanction
Commission on the merits of the charges. Following oral
hearings before the Sanction Commission which took place from
23-27 November 2009, the Sanction Commission decided, in adecision published on 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

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market information duties, in particular in respect of risk ofdelays affecting the A380 programme and its development, andthat there had been no breach of insider trading rules. Following
criminal complaints filed by a shareholders’ association and by
an individual shareholder (including a civil claim for damages), a
French investigating judge is still carrying out an investigation on
the same facts.
In Germany, criminal proceedings regarding suspected insider
trading offences have not established any wrongdoing and aremeanwhile mostly terminated. Furthermore, in Germany, several
shareholders have filed civil actions against EADS since 2006 torecover their alleged losses in connection with the disclosure of
A380 programme delays. Several plaintiffs have filed motions
for “model proceedings”, which would allow common issues offact or law in multiple individual securities actions to be decided
together with binding effect in all such actions. The proceedings
are in their preliminary stage and the amounts claimed are
relatively small.
On 12 June 2008, two actions were initiated in the United States
District Court for the Southern District of New York, one ofwhich has since been voluntarily withdrawn. The remaining
action purports to be a class action brought on behalf of all
persons and entities residing in the United States who purchased
or otherwise acquired EADS’ common stock during the period
from 27 July 2005 through 9 March 2007. Named as defendants
are EADS and four current or former executives of EADS and
Airbus. The action seeks damages in an unspecified amount,with interest and attorneys’ fees, for alleged violations of the US
securities laws in connection with financial disclosures issued
by EADS in 2005, 2006 and 2007 and public statements madeduring that same time frame relating to A380 programme delays.
On 26 March 2010, the Court granted defendants’ motion todismiss for lack of subject matter jurisdiction.
On 9 September 2009 and 4 December 2009, respectively, twoseparate requests were filed by institutional shareholders with
the Enterprise Chamber (Ondernemingskamer) of the Court ofAppeal in Amsterdam to open an inquiry into the management
and affairs of EADS. The applicants allege in their requests that
there are serious reasons to doubt proper management by EADS,
primarily with respect to the A380 programme delays announced
in 2006 and the related disclosures to the market. A hearing on
the requests was held on 28 January 2010 before the Enterprise
Court, with a decision currently pending.
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.

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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,
and on 23 February 2010, EPI sent notice of its intent to seek
arbitration, and of its sending of a request for arbitration to theInternational Chamber of Commerce (ICC) on the same day.
AMSL will respond to EPI’s claims in the light of the overall
claims and position under the A400M programme.

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Regarding EADS’ provisions policy, EADS recognises provisions
for litigation and claims when (i) it has a present obligationfrom 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 of resources embodying
economic benefits will be required to settle such obligation and(iii) a reliable estimate of the amount of such obligation can be
made. EADS believes that it has made adequate provisions tocover current or contemplated general and specific litigation
risks. For the amount of provisions for litigation and claims,
see “Notes to the Consolidated Financial Statements (IFRS) —Note 26C. Other provisions”.

1.1.10 Research and Technology, Intellectual Property
RESEARCH AND TECHNOLOGY

Corporate Technical Office Organisation

In 2009, the EADS Corporate Technical Office continued
to pursue many measures needed to achieve the research andtechnology (“R&T”) goals associated with Vision 2020. These
included pursuing roadmaps for key technologies, continuinga group-wide “green” technologies group, increasing efforts torecruit sufficient engineering talent and further improving R&T
management.

The Chief Technical Officer’s (“CTO”) mission is to be the
R&T focal point for the entire Group. The CTO ensures thatbusiness strategy and technology strategy are closely linked. He
is responsible for the development of design and manufacturing
tools and innovation across EADS. The CTO is a member of the
EADS Executive Committee and has responsibility for the entire
R&T budget and R&T production within EADS. The CTO seeks
to deliver shareholder value through a disciplined, leading-edge
R&T portfolio that enables the introduction of new technologies
on future products with strong returns-on-investment. The CTO
also aims at maximising customer satisfaction by providing highvalue solutions that meet technological, performance, safety andcost-competitive requirements. In addition, the CTO addresses
broader public concerns with solutions that encompass safety,
security, environmental compatibility and energy efficiency.

EADS has an R&T leadership team across the Divisions,
implementing a streamlined approach to capture synergies. For
example, EADS Innovation Works, the research arm of theGroup, and the DS division now operate a common researchfacility in Newport, Wales (UK).
Management focuses R&T spending on a number of larger
projects, thereby ensuring more concentrated investment of
R&T funds in strategic directions. To maximise the resourcesof the R&T budget, EADS continued to increase its contracting
activities with European governments. In addition, R&T
operations targets are to increase efficiency by approximately 10%
and to reinvest the proceeds in technology development.
Global R&T collaboration continued to grow outside Europe
in order to access a diverse pool of scientific and engineeringexpertise. Partnerships with leading research institutes expanded
in Canada, India, Russia, Singapore, China and the United States.
Across EADS, 2009 was a significant year for technology
development, with notable innovations ranging from civil aircraft
fuel cell research, to synthetic fuel testing, low emission diesel
helicopter propulsion and technologies for public security.

The EADS Executive Technical Council (“ETC”), chaired by the
CTO, is made up of the technical directors of each division. The
ETC is responsible for ensuring alignment with the Group’s
technology strategy and implementation through the Group R&T
road map. The ETC ensures that a balance is maintained between
the top-down strategic guidance and bottom-up activities.
Group Innovation Networks and their leaders in the CTO’s teamreport to the Chief Operating Officer Innovation to ensure thatR&T synergies are exploited throughout EADS divisions and
EADS Innovation Works. The COO Innovation is chairperson of
the R&T Council (RTC), which is made up of the R&T directorsof the Divisions and business units, and the head of EADS
Innovation Works.
The CTO steers the EADS-wide harmonisation of transversal
technical processes, methods and tools, and skills development
programmes, such as systems engineering, common tools for
product life-cycle management (PLM/Phenix) and systems

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INFORMATION ON EADS’ ACTIVITIES>1.1 | Presentation of the EADS Group1engineering training and qualification. The CTO team also
carries out technical assessments on behalf of the CEO and the
EADS Executive Committee.

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Back to Contents> Upstream contribution to successful on-time, on-quality,
on-price introduction of new products and processes;> Technology leadership to fuel business growth; andThe head of EADS Innovation Works reports to the CTO. EADS
Innovation Works manages the corporate R&T production thatdevelops the Group’s technical innovation potential. Driven
by the EADS R&T strategy, EADS Innovation Works seeks to
identify new technologies that will create long-term innovation
value for the Group. EADS Innovation Works operates two mainsites near Munich and Paris and employs approximately 700
people including doctorates and university interns. Proximity
centres are maintained in Toulouse, Nantes, Hamburg and Stadeto support knowledge transfer to business units. A liaison office
operates in Moscow, which coordinates relations with leading
Russian scientific institutes. EADS operates R&T centres in the
UK, Spain and Singapore, and established a presence in India
in 2009 through the opening of EADS Innovation Works India
in Bangalore. The new centre, which is located within Airbus’
Indian engineering centre, will look at developing software andalso develop technology for homeland security.
EADS Innovation Works and the EADS R&T community in
the Divisions maintain and continually grow partnerships withleading universities and high-tech engineering schools throughemployment of thesis students, post-graduate interns anddoctorates, and through research contracts.

Performance and Best Practices> Societal responsibility: R&T solutions that contributeto mobility, environmental protection, safety and security
requirements.
R&T Production and Management
EADS R&T activities cover a wide spectrum of technologicaldomains, are targeted at different levels of the value chain, andare structured according to the timelines of short-term committed
programmes, medium-term optional programmes and long-term
advanced concepts for the introduction of new technologies into
the company’s product and manufacturing pipeline:
R&T for Advanced Concepts – Integrated Demonstrators
Technological/Operational Studies
All EADS divisions work to generate new product concepts
in line with the R&T strategy to maximise future businesspotential. These concepts explore and generate new ideas, while
pushing the limits of what is technically possible currently.
The portfolio is currently focused around four growth axes:
Mobility (e.g. air traffic management), Environmental Protection(e.g. energy solutions, optimised platforms), Defence, Safety
and Security (e.g. illicit materials detection and aircraft
communications protection), and Services.

The R&T Strategic Approach
Strategic obligations for EADS include the development of corecompetencies and technologies for platform and platform-based
systems architecture and integration. In parallel, EADS strives tokeep the innovation pipeline flowing in order to replace ageing
technologies and processes.
Building on the identification, evaluation and clear prioritisationof critical technologies for the Group, EADS is shaping atechnological policy that strengthens group synergies and is
aimed at maintaining and when needed, increasing EADS R&T
efforts. Each division is responsible for proposing its own targets,and for securing public and private R&T funding.
The EADS R&T strategy is driven by:> Shareholder value: a stringent, leading-edge R&T portfoliothat seeks to enable seamless introduction of new technology
on future products and a strong return-on-investment;> Customer satisfaction: high-value solutions that meet
the technological, performance, safety and cost-competitive
pressures that challenge the future;

EADS Corporate Foundation for Research
Created in 2004, the EADS Research Foundation’s ambition is todevelop ties between the public sector research communities andthe aeronautics and space industrial and technical communities.
The EADS Research Foundation also participates as a founderor donor in other public interest foundations and associations.
Over the past five years, the EADS Research Foundation has
sponsored 75 research programmes, created six research andteaching chairs and honoured 69 researchers. The EADS Research
Foundation supports 10 upstream original frontier research
projects conducted by public research organisations.
One of the EADS Research Foundation’s goals is to build ties
between the public research community and the education
sectors. To this end, each year it honours excellence in the
research field by scientists who achieve milestones in theirresearch work in collaboration with the industrial sector. It also
hands out annually six “Best Thesis” awards in mathematics,
engineering sciences, earth sciences, physics, information
technologies and interdisciplinary disciplines.
The EADS Research Foundation supports other organisations
with which it shares common objectives, namely the French

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Aeronautics and Space Research Foundation, the Institutefor Higher Scientific Studies (IHES), which is dedicated toadvanced research in mathematics and theoretical physics, andthe C. Génial Foundation, which helps to increase scientific andtechnical interest, particularly among young people. Throughthis latest effort, the EADS Research Foundation supports
the “Science in Schools” initiative, aimed at creating a new image
for teaching science in middle schools, grammar schools andfoundation courses.
Bauhaus Luftfahrt (an Aviation Research Think Tank)
EADS and the government of the German state of Bavaria
have joined forces with two other German aerospacecompanies to fund Bauhaus Luftfahrt, a think tank forcreative and interdisciplinary research activities in the field of
aeronautics. Bauhaus Luftfahrt enables EADS to consider new,groundbreaking research in the field of aeronautics by adopting
an innovative approach to future-oriented, visionary solutions.
Competence Management
In 2005, EADS implemented an expert policy in order to
identify and promote employees mastering the Group’s criticaltechnical capabilities. Experts are indeed a cornerstone of
EADS’ policy to reinforce its technological leadership. About
1,150 experts, senior and executive experts from EADS’ divisions
and covering all technical fields contribute to:> supporting customers with complex problem solving;> implementing innovations into new products and services;> increasing and sharing technical knowledge; and> securing intellectual property.
Recognising Talent as a Strategic Human Capital
The EADS Hall of Fame was instituted by the CTO together
with the Head of Human Resources, with the objective of
encouraging innovation within EADS, sharing best practices,
promoting intellectual property and instilling pride andrecognition among the EADS workforce by recognising andhonouring employees who have made outstanding contributions
to the Company.
In November 2007 and September 2009, EADS hosted Hallof Fame ceremonies, which awarded prizes to employees fromacross the Group. There were four categories of awards: the best
inventors, for those who develop and patent new technologicalinventions; the best innovators, for those who implement
innovative projects which generate a significant revenue increaseor competitive advantage; the craftsmen, for those who possess
unique skills that give the company a valuable competitive
advantage; and a “Special Prize” to a team, in order to recognise
the best improvement initiatives to generate savings, to deliver

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on time or to increase quality (in 2007 and 2009: the “Best Lean
Manufacturing Team”).

PROTECTING INNOVATION: INTELLECTUAL PROPERTYIntellectual Property (“IP”), including patents, trademarks,
copyrights and know-how, plays an important role in the
production and protection of EADS’ technologies and products.
The use of IP rights enables EADS to remain competitive in themarket and to manufacture and sell its products freely, and toprevent competitors from exploiting protected technologies. It
is EADS’ policy to establish, protect, maintain and defend its
rights in all commercially significant IP and to use those rights
in responsible ways.

Organisation
The general management of IP in EADS is conducted throughan IP Council led by the EADS Chief IP Counsel. Executives
responsible for IP at the main subsidiaries sit on this council.
Each of the subsidiary companies of the Group owns the IP
which is specific to its particular business and has been generated
by this subsidiary. Where IP is of common interest throughout
the Group, the subsidiary that generated it may issue a licenceallowing its use elsewhere (respecting the interests of the othershareholders when appropriate). EADS also owns IP directly or
under licence agreements with its subsidiaries. EADS centralises
and coordinates the Group’s IP portfolio, participates withthe subsidiaries in its management and promotes licensingof common IP between the subsidiaries. EADS controls theprotection of its IP made in the strategic countries.

Performance and Best Practices
To increase the added value of the Group, the EADS CTO teampromotes sharing within the Group of all the knowledge of thebusiness units and the sharing of resources, skills, research andbudget to develop new knowledge, while respecting existing
contractual and legal frameworks. For example, all of thecontracts between business units of the Group concerning shared
R&T must have provisions allowing for the flow of knowledge(EADS R&T network rules).
In 2009, the EADS IP portfolio comprised approximately
8,000 inventions (approximately 7,000 in 2008), which arecovered by more than 29,000 patents throughout the world. The
number of patents filed during 2009 gives a good indicationof the greater momentum in R&T and product development:
1,073 patents were filed in 2009.
For international patent protection, EADS uses the Patent
Cooperation Treaty, which provides a simplified system
for international patent filing. In 2009, 564 international
applications were published for EADS and its divisions according
to World Intellectual Property Organization’s annual report.

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2008

2007

New inventions filed by EADS (some of which covered by several patents)

1,073

1,088

957

EADS patent portfolio (year end)

29,123

25,66520,653

In 2009, EADS launched a technology licensing initiative.
EADS Technology Licensing provides access to a wide range oftechnologies that are available to help companies outside theGroup to develop new products, improve production methods

and expand their market opportunities. EADS Technology
Licensing seeks to generate revenues by exploiting EADS’ large
patent portfolio and related know-how.

1.1.11 Environmental Protection
Protection of the environment is a global priority that requires
engagement and responsibility by citizens, politicians andindustry, often working in partnership. A key focus for EADSis the fulfilment of its mission to provide individual mobility,communication and security, which are the essence of ourmodern societies.
Eco-efficiency is a major goal of the Company’s “Vision 2020”
strategic roadmap. It aims at maximising the benefits of EADS’
products and services to its customers and other stakeholders
while minimising the environmental impact of manufacturing
and operating these products throughout their life cycle.
Therefore, the pursuit of further innovative and eco-efficienttechnologies and processes is a key factor in helping to ensure
the Company’s sustainability, increase the attractivenessof its products and its overall competitiveness, benefit
growth, safeguard employment and create added value for all
stakeholders.

ORGANISATION
While each EADS division, business unit, entity and corporate
function remains fully responsible and accountable for theoperational implementation of the EADS environmental policy
in pursuit of eco-efficiency, the consistency of the various
initiatives is ensured through an overall Group-wide coordination
provided by the EADS Environmental Network. This network
is composed of representatives of the main business areas andplaced under the responsibility of the Corporate Secretary.
The mission of the Environmental Network is to seek continuous
improvement of EADS’ environmental performance, to promotesharing of best practices, to monitor opportunities and risks andto anticipate regulatory changes. Sub-working groups on specifictopics that are important to the Company have been establishedin areas such as Climate Change/Energy, Environmental
Reporting, “REACH” and Hazardous Substances, Designfor Environment/Life Cycle Practices. Corporate objectives
are periodically reviewed at various levels thanks to a set ofindicators and advanced reporting tools and processes, within theframework of the corporate Environmental Management Systems(“EMS”) that are currently being implemented.
EADS strives to develop joint initiatives within the industry
in order to improve the overall environmental performance of thesector in the most effective, consistent and cost-efficient way.
EADS is already leading or participating in various European andinternational sector environment-related committees or working
groups such as:> ICCAIA (International Coordinating Council of Aerospace
Industries Associations — Aircraft Noise & Engine Emissions
Environment Committee: Vice-Chaired by Airbus);> ASD (REACH Working Groups Chairmanships).
EADS also participates in the environmental working groupsof national industry organisations such as the GIFAS in
France, TEDAE in Spain, BDLI in Germany and ADS in the
UK. Cooperation has also been initiated with AIA (Aerospace
Industries Association of Americas) and SAE to develop
appropriate standards to facilitate the supply chain’s compliancewith the REACH regulation (the EU regulation which addresses
the production and use of chemical substances) and otheremerging requirements.

PERFORMANCE AND BEST PRACTICESEADS strives to continuously improve the environmental
performance not only of its facilities but also of its products
throughout their life cycle, from design to end of life. EADS
aspires to make the environment a true driver for cultural change
and relevant value creation for the Company.
While promoting an environmentally friendly culture andeco-efficient behaviour within the Company, EADS also
pursues several research efforts to ensure the cleanest andgreenest technologies and products are constantly proposed
to its customers, in line with a recently established Corporate
Environmental Roadmap.

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EADS ENVIRONMENTAL ROADMAP TOWARDS
ECO-EFFICIENCYEADS is committed to moving towards an eco-efficiententerprise. In order to substantiate this vision through aneffective series of concrete projects and actions, a Corporate
Environmental Roadmap has been established. Establishedat each business unit, it provides a general framework andtimeline of aggressive management, operational and productoriented performance goals to be achieved by 2020, including inparticular:

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will be further continued. Life cycle oriented EMS allows to set
the appropriate actions to efficiently minimise the environmental
impacts where it makes sense in the life cycle.
Monitoring of the various achievements against objectives isbeing performed through the collection of a carefully chosen
set of indicators. Consistency and reliability of the reporting
exercise is being ensured through corporate procedure andguidelines derived from GRI requirements combined with anadvanced Environmental Management Information System(ENABLON) that is fully operational within EADS worldwide.

Environmental management goals:> Full EADS coverage with ISO 14001 with a life cycle
orientation and a single corporate certification; and> Integration of eco-efficiency within the development of any
new product or technology as well as in the supply chain.

Performance operational goals:> 80% reduction of water discharge;> 50% reduction of waste, water consumption, CO2 and VOCemissions;> 30% reduction of energy consumption;> 20% of energy from renewable sources;> Pursuing ACARE (Advisory Council for Aeronautics Researchin Europe) research goals for Aviation and the various definedgoals for other products portfolio; and> Developing eco-efficient solutions for core and adjacentcustomer segments, which provide sustainable value creation
for the Company.

ENVIRONMENTAL MANAGEMENT ISO 14001/EMASEADS encourages not only the environmental certificationof its operations but also the development of a full life cycle
orientation, as this remains the most cost-efficient and practical
way to effectively reduce the environmental impact. Robust
certified EMS have been already progressively implemented
across EADS manufacturing sites, with the objective to achieve
full coverage of EADS and a single corporate certification against
ISO 14001.
Implementing an EADS group-wide EMS allows the Company tofacilitate its path to eco-efficiency. As of 31 December 2009, 85
sites representing approximately 90% of EADS’ total workforce
now operates according to a certified ISO 14001 (or registered
EMAS) EMS.
The Site and Product oriented EMS, as established by Airbus
since 2006, has been expanded to US and China locations and

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CLIMATE CHANGE AND ENERGY RELATED ISSUES
Recognising that climate change and energy related issues aresome of the main environmental challenges to be addressed,a climate change and energy initiative has been launched. Thisinitiative, which mobilises a wide range of complementary
expertise from all EADS business areas, provides EADS witha robust and detailed assessment of EADS challenges andopportunities in a “low carbon economy”.
In order to meet stakeholders’ increasing demands for carbon
related information, and in anticipation of more stringent
regulation (e.g., emission trading schemes, taxation and carbon
labelling), a carbon footprint including both scope 1 and scope
2 emissions has been performed according to the Green House
Gas Protocol (GHG protocol) with key international partnership.
This allows the identification of the various risks, but also of
the opportunities to further reduce GHG emission and relevant
carbon dependencies. Further testing is being pursued to estimate
the amount of carbon contained within EADS’ supply chain aspart of the GHG road testing experimentation.
A potential climate change risk to EADS operations also relates
to the expected scarcity of fossil fuel and the subsequent
upward pressure on energy costs, combined with the planned
construction of new infrastructure and increase in air traffic overthe coming years. Accordingly, both from a cost, operational
efficiency and sustainability perspective, the Group recognisesthat it has a responsibility to massively reduce energy usage
where possible. This is why numerous improvement programmes
have been already initiated across EADS to reduce the overall
energy footprint of its infrastructure and install some renewablesources of energy, such as solar panels, geothermal heating or
power stations. As a result of the measures implemented, andcompared to the same perimeter of activity, the total energy
consumption of EADS has decreased approximately 10% from
2008.
Some of EADS’ facilities are already part of the EU Emission
Trading Scheme and have implemented strong energy reduction
initiatives. Recent inclusion of aviation into the EU Emission
Trading Scheme (EC directive 2008/101) is also being addressedin close relation with the stakeholders of the air transport sector,
which calls for a fair internationalisation of the EU Emission

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Trading Scheme under the supervision of International Civil
Aviation Organisation.
Whereas EADS operations have a relatively limited impact interms of overall GHG emissions (e.g. according to the IPCC
(Intergovernmental Panel on Climate Change), air transport
currently causes 2% of the total CO2 man-made world emissions),
the Group is committed to mobilising all necessary expertise andsignificantly increasing its research and technology efforts fordesigning, developing and manufacturing the cleanest, greenest
and lowest energy demanding technologies and products.
In the research and technology area, EADS participates or leads
major international and European technology programmes toaddress climate change related matters such as the EU “Clean
Sky” Joint Technology Initiative (JTI). The Clean Sky JTI is thelargest research project ever set up jointly with the European
Commission and will run over a seven-year period with a
total budget of € 1.6 billion (half financed by the European
Commission and half by the industry). Supporting the ACARE
goals, “Clean Sky” intends to radically improve the impactof air transport on the environment in delivering innovativetechnologies and solutions, supporting step changes in the
reduction of noise (50% reduction in perceived noise), emissions(50% reduction of CO2 and 80% of NOX) and consumption for
the next generation of aircraft by 2020. It also covers researchon green product lifecycle design including manufacturing,
maintenance and disposal.
While Airbus, Eurocopter and EADS CASA each co-leada specific integrated technology demonstrator (respectively
smart fixed-wing aircraft, green rotorcraft and green regional
aircraft), EADS Innovation Works and ATR participate asassociate companies. Other initiatives dedicated to reduce theemissions of CO2 in which EADS participates include the
SESAR (Single European Sky ATM Research) programme,
which aims at improving EU air traffic management through theimplementation of the “Single European Sky”.
Substantial research efforts are being devoted within Airbus
in joint cooperation with key external partnerships to movetowards environmentally friendly alternatives to fossil fuels. An
alternative fuel advisory board has been implemented grouping
all necessary internal stakeholders. Airbus and Eurocopter
have been working with universities, existing fuel companies
and start-up companies, as well as with certification bodies,
to develop “drop-in” bio-jet fuels and ensure their availability
for commercial aviation. “Drop-in” fuels do not require eithera change of the aircraft systems or any specific infrastructure.
Certification is expected for a sustainable biofuel mix by 2011
(from certification bodies ASTM and DEF-STAN). Airbus,
Qatar Airways, Qatar Science & Technology Park (QSTP)and Qatar Petroleum (QP) have recently joined forces to carryout engineering and economic analysis into the development,
production and supply of sustainable bio jet fuel.

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As a member of the aviation industry, and together its peers,
Airbus promotes the view that use of sustainable biofuels should
be reserved for the aviation industry. Unlike other industries,
aviation has no other efficient alternative way of significantly
limiting its carbon impact, despite the major reduction in fuelconsumption already achieved through recent programmes suchas the Airbus A380.
As part of the COP15 framework, the aviation sector has
committed to reaching CO2 neutral growth from 2020, and will
also work towards halving net CO2 emissions by 2050 (referenced
to 2005).
Complementary research is being heavily developed in this field:
EADS Astrium is exploring how to harvest solar energy fromsatellites and to ease its restitution on earth. All of these studies
demonstrate Airbus and EADS’ dedication to more eco-efficientand carbon neutral aviation and industry as a whole.

WASTE AND NATURAL RESOURCES
Various initiatives have been implemented across the Group to
further reduce the level of total waste produced or eliminated.
Considering the expected scarcity of some raw materials as wellas the volatility of their relevant prices, reverse supply chain
might certainly become of growing interest.
Despite efforts in recycling and recovery paths developedwith the main waste management companies, the total waste
production compared to ISO perimeter has significantly
increased. Recycling of cured and uncured CFR composites
has been carefully studied with the aim to separate and reuserecovered carbon fibres in some aerospace or secondary industry
applications; various efficient technologies have been tested andsome are being industrialised such as pyrolysis. Airbus has set
up a three step approach to develop environmentally friendly
dismantling practices. Following experimentation throughthe PAMELA project (Process for Advanced Managementof End of Life Aircraft), it has been shown that significant
improvements can be obtained compared to current dismantlingpractices. The optimised combination of advanced 3D techniques(Decommissioning, Disassembling and Dismantling) allows fora materials recovery rate of over 80% compared to less than 60%
today. An industrial platform for dismantling has now been
installed with partners; the TARMAC-AEROSAVE Company
now effectively offers appropriate industrial services in this endof life management field.

AIR POLLUTANTS
Reducing air pollutants from operations and processes andthroughout the life cycle has been a key priority for years. The
main emissions are currently associated with volatile organic
compounds (“VOC”) as well as with other air pollutants emitted
at ground level from infrastructures or products. Major reductionin VOC has been obtained due to the development and the
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implementation of new VOC smart painting techniques. In alldivisions, ambitious programmes to substitute some criticalsolvents such as trichloroethylene have been conducted, andpaint schemes now generally incorporate low VOC.

REACH AND HAZARDOUS SUBSTANCES MANAGEMENTThe European REACH (Registration, Evaluation andAuthorisation of Chemicals) regulation (EU No. 2007/1906)
came into force on 1 June 2007. REACH aims at improving
the protection of human health and the environment throughcloser regulation of chemical use by industry; it replaces thepre-existing EU regulatory framework on chemicals. REACH
introduces a range of new obligations over a period of 11 years
which are intended to reduce risk that the 30,000 mostfrequently used chemicals may cause. The regulation will also
bring about the phased withdrawal from use of some of thesubstances that are considered to be of very high concern forhuman health and environment.
Taking on board the lessons learned from the management of the
RoHS and WEE directives and in order to provide a consistentcompliance approach for the whole Company and support its

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supply chain, a dedicated working group has been created aspart of the EADS Environmental Network, bringing together all
EADS business areas.
EADS, Airbus and other divisions are also joining forces at
the international level (ASD, etc.) together with other major
aerospace companies to further structure the entire sector’scompliance approach. Following pre-registration, additional
intensive efforts were devoted in 2009 to identify the various
usages associated with substances and ensure participation incertain SIEFs (Substance Information Exchange Forum) whenrequired. In anticipation of possible disruptions that might
result from restrictions, ambitious elimination plans have been
initiated to get rid of the most critical substances for the sector,
including chromate-free, cadmium-free or lead-free projects.
Strong exchanges within the business units, industrial peers
and the supply chain are necessary to allow the qualificationof most standardised possible solutions. While proactively
moving towards the elimination of these substances, EADS and
its divisions are committed to the highest achievable controlof emissions, in full compliance with the applicable regulatory
framework.

1.1.12 Employees
At 31 December 2009, the EADS workforce amounted to
119,506 employees (compared to 118,349 employees in 2008
and 116,493 employees in 2007), 96.7% of which consisted offull time employees. Depending on country and hierarchy level,
the average working time is between 35 and 40 hours per week.
In 2009, 5,663 employees worldwide joined EADS
(compared to 7,081 in 2008 and 6,860 in 2007). At the sametime, 3,308 employees left EADS (compared to 5,078 in 2008
and 4,648 in 2007).
Employees by division

Airbus*In total, 94.9% of EADS’ active workforce is located in Europe on
more than 100 sites.

WORKFORCE BY DIVISION AND GEOGRAPHIC AREA
The tables below provide a breakdown of EADS employees bydivision and geographic area, including the percentage of parttime employees. Employees of companies accounted for by the
proportionate method (such as ATR, MBDA) are included in thetables on the same proportionate basis.
31 December 200931 December 2008

31 December 2007

56,02961,98753,906Former MTA division

-

4,910

4,459

Defence & Security

21,09322,787

22,113

Eurocopter

16,316

15,667

14,658Astrium

14,624

13,674

12,587

Headquarters and Others

5,486

7,405

6,647

119,506

118,349

116,493

Total EADS*

Figures for 2009 include Airbus Military, following integration of the former MTA division into Airbus. Figures for 2008 and 2007 have not been restated.

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Employees by geographic area

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31 December 200931 December 2008

31 December 2007

France44,76044,38044,022Germany

43,81442,98743,438Spain

10,46910,104

9,315

UK

12,733

13,826

13,652

Italy

483

455

474

US

2,512

2,555

1,777

Other
Total EADS% Part time employees

4,735

4,042

3,815

119,506

118,349

116,49331 December 200931 December 2008

31 December 2007

France

4.1%

3.9%

4.0%

Germany

3.4%

3.7%

3.1%

Spain

1.0%

0.9%

0.5%

UK

2.0%

1.8%

1.5%

US

1.3%

0.1%

1.9%

Other

3.0%

3.2%

3.2%

Total EADS

3.3%

3.3%

3.0%

1.1.13 Incorporation by Reference
The English versions of the following documents shall bedeemed to be incorporated in and form part of this Registration
Document:> “Part 2/1.1 Presentation of the EADS Group” of theRegistration Document filed in English with, and approved
by, the AFM on 24 April 2008;> “Section 1.1 Presentation of the EADS Group” of theRegistration Document filed in English with, and approved
by, the AFM on 22 April 2009;> the Consolidated Financial Statements (IFRS) and theCompany Financial Statements of EADS for the year
ended 31 December 2007, together with the related notes,
appendices and Auditors’ reports, as included in “Part 1/1.2
Financial Statements” of the Registration Document filed in
English with, and approved by, the AFM on 24 April 2008
and filed in English with the Chamber of Commerce ofAmsterdam;

appendices and Auditors’ reports, as attached to andincorporated by reference in the Registration Document filed
in English with, and approved by, the AFM on 22 April
2009 and filed in English with the Chamber of Commerce of
The Hague; and> the Consolidated Financial Statements (IFRS) andthe Company Financial Statements of EADS for the year
ended 31 December 2009, together with the related notes,
appendices and Auditors’ reports (as attached hereto).
Copies of the above-mentioned documents are available free ofcharge upon request in English, French, German and Spanish at
the registered office of the Company and on www.eads.com.
Copies of the above-mentioned Registration Documents
are also available in English on the website of the AFM on
www.afm.nl. The above-mentioned financial statements are alsoavailable in English for inspection at the Chamber of Commerceof The Hague.

> the Consolidated Financial Statements (IFRS) and theCompany Financial Statements of EADS for the year
ended 31 December 2008, together with the related notes,

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1.2 Recent Developments
US Tanker Programme
On 8 March 2010, EADS confirmed that the Northrop
Grumman/EADS team would not bid for the US Air Force
Tanker replacement programme, following the announcement by
its partner Northrop Grumman that it had decided not to bid.
The team had expressed serious concerns to the US Departmentof Defense (DoD) and the US Air Force that the acquisition
methodology outlined in the request for proposal (RFP) would
heavily weigh the competition in favour of the smaller, lesscapable Boeing tanker. Northrop Grumman’s analysis of the RFP
reaffirmed those concerns and prompted its decision not to bid.

On 20 April 2010, EADS North America announced that it
intended to submit a proposal on 9 July 2010 for the tanker
competition and would offer the KC-45 – the most capable,
American-built solution that is flown, proven and in production
now.
EADS North America is progressing in discussions withpotential U.S. partners to build a winning team in order toprovide the most capable, best value solution to the Air Force.

On 19 March 2010, EADS announced that the US DoD had
indicated that it would welcome a proposal from EADS North
America as prime contractor for the tanker competition.

Airbus to Increase A320 Family Production Rate
On 9 March 2010, Airbus announced that it would increase themonthly production rate for its single-aisle A320 Family fromthe current rate of 34 to 36, starting in December 2010. The
production rate for the long-range A330/A340 Family will bemaintained at the current level of eight per month.

Airbus’ decision to raise its single-aisle production rate is driven
by the continuing demand for its eco-efficient aircraft and abacklog in excess of some 2,300 A320 Family aircraft.

Launch Customer Nations and EADS Come to Agreement in Principle on A400M
On 5 March 2010, EADS announced that it and the launchcustomer nations had come to an agreement in principle
regarding the A400M military transport aircraft with theintention to amend the original contract accordingly in the
coming weeks. As part of this agreement in principle, the launchcustomer nations have agreed to:> increase the price of the contract by € 2 billion;> waive all liquidated damages related to current delays;> provide an additional amount of € 1.5 billion in exchange fora participation in future export sales (Export Levy Facilities);and

66 EADS R EG I S TR ATI O N DO C U ME N T 2 0 0 9> accelerate pre-delivery payments in the period of 2010 to2014, a new schedule of which will be finalised in theamended contract.
Based on this agreement, an estimate at completion of updated
revenues and costs including an assessment of risks, reviewed
by the Board of Directors, leads to an increase of the A400M
loss provision of € 1.8 billion pre tax for the full year 2009. The
update of the provision is based on a management assessment
taking into consideration the agreement in principle between
EADS and the seven customer nations.
If substantial changes on the assessment were to occur, EADS
performance could be significantly impacted. EADS will
provide further information on the amended contract once thenegotiations are finalised.

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The A400M cash flow profile for the coming years is still to benegotiated in the contract amendment; all parties are willing to
mitigate negative cash impacts as far as possible.
EADS considers that this agreement provides a sound basis fora successful evolution of the A400M programme. EADS will
strive to identify opportunities to significantly reduce risks in
the A400M programme and to deliver a state of the art productwithin the new frame of the contract.

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For further information relating to the A400M programme, see“Management’s Discussion and Analysis of Financial Condition
and Results of Operations” and “Notes to the Consolidated
Financial Statements (IFRS) — Note 3: Accounting for the
A400M programme”.

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2Management’s
Discussion and Analysisof Financial Condition
and Results ofOperations

2.1
2.1.1
2.1.2
2.1.3

Operating and
Financial Review

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2.1.7
2.1.8

Certain Information
Overview
Critical Accounting Considerations,
Policies and Estimates
Measurement of Management’s
Performance
EADS Results of Operations
Changes in Consolidated Total Equity(including Non-controlling Interests)
Liquidity and Capital Resources
Hedging Activities

2.2

Financial Statements

97

2.3

Statutory Auditors’ Fees

98

2.4

Information Regarding
the Statutory Auditors

98

2.1.4
2.1.5
2.1.6

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70
73
77
82
87
89
95

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2.1 Operating and Financial Review
The following discussion and analysis is derived from and should be read together with the audited Consolidated Financial Statements(IFRS) of EADS as of and for the years ended 31 December 2009, 2008 and 2007 incorporated by reference herein. These financial
statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) issued by the International
Accounting Standards Board as endorsed by the European Union, and with Part 9 of Book 2 of the Netherlands Civil Code.

2.1.1 Certain Information
EXCHANGE RATE INFORMATION
The financial information presented in this document is expressed in euros, US dollars or pounds sterling. The following table setsout, for the periods indicated, certain information concerning the exchange rate between the euro and the US dollar and poundsterling, calculated using the official European Central Bank fixing rate:
Average

Period End

Year ended

€-US$

€-£

€-US$

€-£

31 December 2007

1.37020.6842

1.47210.733431 December 2008

1.47080.7963

1.39170.952531 December 2009

1.39480.89091.44060.8881RATINGS
EADS is currently rated A1 with a stable outlook by Moody’s Investors Service, BBB+ with a stable outlook by Standard and Poor’s
and BBB+ with a stable outlook by Fitch Ratings.

2.1.2 Overview
With consolidated revenues of € 42.8 billion in 2009, EADS isEurope’s premier aerospace and defence company and one of thelargest aerospace and defence companies in the world. In termsof market share, EADS is among the top two manufacturersof commercial aircraft, civil helicopters, commercial spacelaunch vehicles and missiles, and a leading supplier of military
aircraft, satellites and defence electronics. In 2009, it generated
approximately 75% of its total revenues in the civil sector(compared to 75% in 2008) and 25% in the defence sector(compared to 25% in 2008). As of 31 December 2009, EADS’
active headcount was 119,506.

> Airbus Military: Development, manufacturing, marketingand sale of military transport aircraft and special mission
aircraft; this includes the former MTA division as well as all
Airbus A400M activities.
Airbus Commercial and Airbus Military together form
the Airbus division;> Eurocopter: Development, manufacturing, marketing and saleof civil and military helicopters and provision of maintenanceservices;

As of the end of 2009, EADS organises its businesses into thefollowing five reportable segments:> Astrium: Development, manufacturing, marketing and sale ofsatellites, orbital infrastructures and launchers and provisionof space services; and> Airbus Commercial: Development, manufacturing,marketing and sale of commercial jet aircraft of more than 100
seats and aircraft conversion;> Defence & Security: Development, manufacturing,marketing and sale of missile systems, military combat aircraft

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and training aircraft; provision of defence electronics anddefence-related telecommunications solutions and logistics;
training, testing, engineering and other related services.
As discussed above, Airbus has integrated the former MTA
division under the name “Airbus Military” from 2009 onwards.
Figures for Airbus Military accordingly include the former MTA
division as well as all Airbus A400M operations to reflect theprime contractor responsibility over the programme; figuresfor 2008 have been restated accordingly, while figures for 2007
remain unchanged. The effect of internal subcontracting iseliminated in the consolidated figures of the Airbus division(with respect to the work share of Airbus Commercial) andfurther at EADS group level (with respect to the work share ofother EADS divisions).
“Other Businesses” mainly consist of the development,
manufacturing, marketing and sale of regional turboprop aircraft,light commercial aircraft and aircraft components. EADS EFW(previously consolidated within “Other Businesses”) has been
consolidated within Airbus Commercial from 2009 onwards;
figures for 2008 have been restated accordingly, while figuresfor 2007 remain unchanged. Following EADS’ sale of 70% of theshares in Socata to Daher in January 2009, the remaining 30% ofSocata is accounted for using the equity method and presented
within “Other Businesses”; figures for 2007 and 2008 have notbeen restated.
Finally, in connection with the aerostructures reorganisation
strategy initiated under Power8, the Augsburg site (previously
consolidated within the DS division) has been consolidated
within Airbus Commercial from 2009 onwards. Figures for 2007
and 2008 have not been restated.

2.1.2.1 SIGNIFICANT PROGRAMME AND RESTRUCTURING
DEVELOPMENTS IN 2007, 2008 AND 2009
A400M programme. Just before the end of 2007, EADS
announced that the first deliveries of the A400M would bedelayed by six to twelve months. In terms of financial impact,
Airbus recorded an additional loss-making contract provision andcharges totalling € -1.2 billion in 2007, in addition to provisions
and charges of € -0.2 billion recorded at EADS group level and€ -0.1 billion recorded at other divisions. The provisions wereintended to cover, among other things, cost overruns on the
programme and the risk of penalty payments to customers.
In September 2008, EADS announced an undefined delay of
the first flight of the A400M, mainly due to the unavailabilityof the propulsion system and beyond that – but not first flight
critical – due to the fact that other suppliers of mission criticalsystems and of systems integration were severely struggling withthe challenging technical requirements of this aircraft. As a resultof this undefined delay and the uncertain technical environment
which eventually led to the proposal of a new A400M
programme approach to the European launch nations (through

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OCCAR), EADS applied the early stage method of accounting
on the A400M programme beginning in September 2008. Under
this method, all A400M related work-in-progress, which would
have been expensed upon the completion of technical milestones
according to the estimate at completion method of accounting,was expensed as incurred, with related revenues recognised up
to the recoverable part of these costs as per the initial A400M
launch contract. At the same time, the A400M loss-making
contract provision was updated on the basis of the probable
excess contract costs over remaining contract revenues that could
be estimated at year-end 2008, which led to the recording of anadditional loss-making contract provision and charges totalling€ -0.7 billion in 2008.
During 2009, negotiations among EADS, OCCAR and thelaunch nations addressed various aspects of a new programmeapproach for the A400M. Given the progress made on thecommercial negotiations between EADS and the launch nations
since the fourth quarter of 2009, the successful first flightof the A400M and the significantly higher visibility on total
expected production costs on the A400M programme, EADS has
decided to discontinue the early stage method of accounting on
the A400M programme as of the end of 2009 and to re-assess
the A400M loss-making contract provision as part of the related
year-end closing procedures.
The re-assessment of the need and amount of additional
provisions for the continuation and completion of the A400M
programme is based on the “Understanding on the Continuationof the A400M Programme” signed between the launch nations
and EADS/Airbus/AMSL on 5 March 2010, following ongoing
discussion since the fourth quarter of 2009. As part of thisagreement in principle, the launch nations have agreed to:> increase the price of the contract by €2 billion;> waive all liquidated damages related to current delays;> provide an additional amount of €1.5 billion in exchange fora participation in future export sales (Export Levy Facilities);and> accelerate pre-delivery payments in the period of 2010 to2014, a new schedule of which will be finalised in theamended contract.
Based on these elements and the current best estimate of EADS’management, an estimate at completion of updated revenues
and costs including an assessment of risks on the A400M
programme leads to the recording of an additional loss-making
contract provision and charges totalling € -1.8 billion in 2009.
The A400M cash flow profile for the coming years is still to benegotiated in the envisaged contractual amendments; all parties
are willing to mitigate negative cash impacts as far as possible.

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However, there is no certainty that the envisaged contractual
amendments to the initial A400M launch contract will be
implemented, including any necessary parliamentary approval
processes by the launch nations. Consequently, and in particularwith regard to the envisaged export levy facilities, there may
be a need for EADS’ management to re-assess its assumptions
regarding the consideration of the elements described above inthe computation of the A400M loss-making contract provision
as soon as the negotiations are concluded. In case of such a
re-assessment, EADS future financial performance could besignificantly impacted.
For further information on the A400M programme, see “Notes
to the Consolidated Financial Statements (IFRS) — Note 3:
Accounting for the A400M programme” and “Information on
EADS’ Activities — 1.2 Recent Developments”.

A380 programme. In 2007, Airbus incurred significant costs
in respect of the A380 programme, due primarily to excess
costs above the initially expected learning curve and ongoing
fleet support. Nevertheless, the impact on EBIT* represented a€ 1.5 billion improvement over 2006.
In 2008, the business update of the A380 programme led to
the recording of an additional loss-making contract provisionof € -1.1 billion (before foreign exchange effects). This charge
incorporated changes to the A380 production plan to be
implemented in 2009 and certain higher recurring costs
reflecting the ramp-up challenges faced by EADS. In addition,
ongoing support costs were reflected in the underlying EBIT*
performance in 2008.
In 2009, the A380 continued to weigh significantly onunderlying performance. Following completion of an industrial
and financial review on the programme, certain deliveries
have been rescheduled and an additional loss-making contract
provision of € -0.2 billion (before foreign exchange effects) has
been recorded to reflect both this shift as well as an increase inrecurring costs. Beyond the adjustment of the provision, ongoing
fleet support, inefficiencies and under absorption of fixed costs
had a negative impact on 2009 performance.

A350 XWB programme. In 2007, EBIT* at Airbus wasburdened by charges with respect to the A350 XWB programme,
which amounted to approximately € -1.0 billion. These charges
related in particular to the recording of loss-making contract
provisions on the first orders for the A350 XWB, the margins
of which were weighed down by launch-order pricing and initial
learning curve costs.
Following passage of the detailed definition freeze milestone on
the A350 XWB programme at the end of 2008, development
continued to progress in 2009. In March 2010, Airbus* EBIT: earnings before interest and taxes, pre-goodwill impairment and exceptionals.

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indicated that it had used up some of the previous buffers in
the development of the A350 programme, but that the targeted
date for entry into service remained unchanged.

Power8, Power8 Plus and Future EADS programmes. At the
beginning of 2007, Airbus launched a four-year restructuring
programme referred to as “Power8”, with the goal of achieving
annual EBIT* contributions of € 2.1 billion from 2010 onwards
and an additional € 5 billion of cumulative cash flow from 2007
to 2010. As part of the planned measures under Power8 to reduce
overhead costs, and specifically headcount, EADS recorded a
restructuring expense of € -624 million in EBIT* in 2007. In 2008
and 2009, € 194 million and € 140 million of this provision werereversed, respectively, to reflect a lower level of restructuring
obligation than originally anticipated.
Savings realised pursuant to Power8 provided gross cost savingsof € 2 billion in 2009 compared to the projected cost baseline.
Given the progress and prospects achieved on the Power8
programme so far, EADS maintains the previously communicatedPower8 targets regarding EBIT* and cash savings.
In 2008, EADS launched a Group-wide cost savings programme
referred to as “Power8 Plus”, with the goal of achieving grossannual savings of € 1 billion against the projected cost basetargeted for the end of 2012. Airbus is expected to contributeroughly two-thirds of the targeted cost savings, with the remaining
portion to be contributed by the Eurocopter, Astrium andDefence & Security divisions as well as by EADS headquarters.
Finally, EADS is currently working on a further integrationand cost savings programme referred to as “Future EADS”,
with the goal of achieving gross annual savings of € 350 million
against the projected cost base targeted for the end of 2012. The
different cost savings initiatives are being consolidated at divisionlevel as they mature.

2.1.2.2 TRENDS
Based on a number of active sales campaigns at Airbus which are
expected to lead to 250-300 gross aircraft orders in 2010, as well
as a stable and overbooked backlog on its A320 Family single
aisle aircraft, Airbus has announced that it will increase themonthly production rate for the A320 Family from the current
rate of 34 to 36, starting in December 2010. The production rate
for the long-range A330/A340 Family will be maintained at thecurrent level of around eight per month.
Airbus delivered 498 aircraft in 2009 and is targeting delivery of
up to the same number of aircraft in 2010. Eurocopter is expected
to deliver approximately 6% fewer helicopters than in 2009
(which consisted of 558 deliveries). Any major production ormarket disruption or economic downturn could lead to revisionof these figures.

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1Furthermore, EADS will be faced with significant currency
deterioration in 2010 linked to the declining dollar rate in thehedge portfolio. A380, while slightly improving, will continue
to weigh substantially on EBIT* as in 2009. Cost savingsand some improvement in aircraft pricing should contribute
positively while weaker helicopter deliveries, some increase

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in research and development expenses and cost inflation will
weigh on profitability. Going forward, the EBIT* performanceof EADS will be dependent on the Group’s ability to executeon the A400M, A380 and A350 programmes in line with thecommitments made to its customers.

2.1.3 Critical Accounting Considerations, Policies and Estimates
2.1.3.1 SCOPE OF AND CHANGES IN CONSOLIDATIONPERIMETER
Disposals and acquisitions of interests in various businesses canaccount, in part, for differences in EADS’ results of operations
for one year as compared to another year.

Acquisitions and Disposals
On 1 October 2009, Atlas Elektronik GmbH, a joint ventureof EADS and ThyssenKrupp, acquired via its subsidiary Atlas
Elektronik UK, the underwater systems business of QinetiQ
based in Winfrith, Dorset (United Kingdom). The acquired
business “Synge” will primarily serve as a contributor inadvancing Atlas Elektronik’s market position for sonar andhydro-acoustic solutions. This purchase led to the recognitionof preliminary goodwill of € 13 million (not yet finallydetermined).
On 7 January 2009, EADS sold 70% of the shares in Socata to
Daher. The remaining 30% of Socata is accounted for using theequity method and presented in “Other Businesses”.
On 5 January 2009, EADS sold its Airbus site in Filton (UK) to
GKN.
During 2009, EADS increased its share in Spot Image based inToulouse (France), a world leader in the provision of satellite
imagery and geo-information value-added services, from 81%
to 90% by acquiring further shares from non-controllingshareholders. These transactions increased goodwill by€ 1 million.
On 22 April 2008, EADS acquired PlantCML based in California(US), a leading provider of emergency response solutions, which
is fully consolidated from that date in the DS division. The
difference between the purchase price and the acquired net assets
led to the recognition of final goodwill of US$ 278 million.
On 28 July 2008, EADS increased its share in Spot Image from
40% to 81%, but had been consolidating it fully in Astrium
since 1 January 2008 based on effective control since that date.
This additional purchase increased goodwill by € 4 million.

On 7 April 2008, EADS acquired Surrey Satellite Technology
Limited (SSTL) based in the UK, which is specialised in thedesign and manufacture of small and micro satellites. The
acquisition was approved by the European Commission in
December 2008 leading to consolidation of the SSTL balance
sheet as at 31 December 2008 in Astrium. This purchase led to
the recognition of final goodwill of £38 million.
In January 2007, EADS increased its share in the Atlas
Elektronik group from 40% to 49% in connection with thecontribution in kind of EADS’ naval business to Atlas
Elektronik. Atlas Elektronik is proportionately consolidated
and the final determination of the difference between thepurchase price and the acquired net assets then led to therecognition of € 42 million of goodwill.
On 10 January 2007, EADS sold its remaining 60% stake inSogerma Services, as well as its remaining stakes in Sogerma
America Barfield B.C. (100%) and EADS Sogerma Tunisie(50.1%).
See “Notes to the Consolidated Financial Statements (IFRS) —Note 5: Acquisitions and disposals”.

2.1.3.2 UK PENSION COMMITMENTS
In the UK, EADS participates in several funded trusteeadministered pension plans for both executive and 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 UK and MBDA UK. For
Airbus, this remains the case even subsequent to the acquisitionof BAE Systems’ 20% non-controlling interest in Airbus on
13 October 2006. Participating Airbus UK employees havecontinued to remain members in the BAE Systems UK pension
plans due to the UK pension agreement between EADS andBAE Systems and a change in UK pension legislation enacted in
April 2006.

* EBIT: earnings before interest and taxes, pre-goodwill impairment and exceptionals.

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Generally, based on the funding situation of the respective
pension plans, the pension plan trustees determine thecontribution rates to be paid by the participating employers toadequately fund the plans. The different UK pension plans inwhich EADS investments participate are currently underfunded.
BAE Systems has agreed with the trustees to undertake various
measures in order to remedy such underfunding. These include:(i) making regular contribution payments for active employees
at levels well above those that would prevail in the case of
adequately funded plans and (ii) making extra employers’
contributions.
Due to contractual arrangements between EADS and BAE
Systems, the contributions that EADS must make in respectof its participation in the two largest pension plans 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. During
the period of the contribution caps, EADS is therefore neither
exposed to increased regular contribution payments resulting
from the pension plans’ underfunding, nor to a participationin extra contribution payments. Even after the expiry of thecontribution caps, the unique funding arrangements between
BAE Systems and EADS create a situation for EADS different
from common UK multi-employer plans, with special regulations
limiting the regular contributions that must be paid by Airbus
UK and MBDA UK to rates applicable to all participating
employers.
Based on the information that BAE Systems has provided
regarding the various pension plans, EADS has prepared an
estimate of its share in plan assets, defined benefit obligations
and related underfunding, which takes into account the impactsof the contribution caps’ mechanism described above as well as
those of future extra contributions agreed by BAE Systems withplan trustees. Accordingly, EADS has recorded a provision of€ 839 million as of 31 December 2009 (compared to € 578 million
as of 31 December 2008) for its current share of the net pension
underfunding in these plans. A related amount of actuarial
gains and losses of € -1,013 million has been recorded in total
equity (net of deferred taxes) as of 31 December 2009 (comparedto € -804 million as of 31 December 2008) in accordance with
IAS 19.
For further information related to EADS’ participation in
multi-employer pension plans in the UK, see “Notes to
the Consolidated Financial Statements (IFRS) — Note 26B:
Provisions for retirement plans”.

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assets and liabilities, mainly property, plant and equipment andinventories, was adjusted by an aggregate amount of € 1.8 billion,
net of income taxes, to allocate a portion of the respective fairmarket values of DaimlerChrysler Aerospace and Construcciones
Aeronáuticas S.A. at the time of the merger (the “fair value
adjustments”). These aggregate additions in value are generally
being depreciated over four to fifteen years for fixed assets andwere amortised over approximately 24 months for inventories.
In addition, in 2001 in connection with the formation of Airbus
S.A.S., EADS adjusted the book value of Airbus fixed assets
and inventories by an aggregate amount of € 0.3 billion, net ofincome taxes, to reflect their fair market values. The fair value
adjustments lead to a depreciation expense that is recordedin cost of sales in the consolidated income statement. For
management reporting purposes, EADS treats these depreciation
charges as non-recurring items in EBIT pre-goodwill impairment
and exceptionals. See “— 2.1.4.2 Use of EBIT*”.

2.1.3.4 IMPAIRMENT/WRITE-DOWN OF ASSETS
When a triggering event, such as an adverse material market
event or a significant change in forecasts or assumptions, occurs,
EADS performs an impairment test on the assets, group ofassets, subsidiaries, joint ventures or associates likely to beaffected. In addition, EADS tests goodwill for impairment in
the fourth quarter of each financial year, whether or not there is
any indication of impairment. An impairment loss is recognisedin the amount by which the asset’s carrying amount exceeds its
recoverable amount.
Generally, the discounted cash flow method is used to determine
the value in use of the assets. The discounted cash flow
method is particularly sensitive to the selected discount rates
and estimates of future cash flows by EADS’ management.
Consequently, slight changes to these elements can materiallyaffect the resulting asset valuation and therefore the amount of
the potential impairment charge.
The discount rates used by EADS are derived from the weighted
average cost of capital of the businesses concerned. See “Notes
to the Consolidated Financial Statements (IFRS) — Note 2:
Summary of significant accounting policies — Significant
Accounting Policies — Impairment of non-financial assets” and“— Note 14: Intangible assets”.
The impairment of goodwill has an effect on profitability, as
it is recorded in the line item “Other expenses” on EADS’
consolidated income statement. No goodwill was impaired in
2007, 2008 or 2009.

2.1.3.3 FAIR VALUE ADJUSTMENTS
The merger of the operations of Aerospatiale-Matra,
DaimlerChrysler Aerospace and Construcciones Aeronáuticas
S.A., leading to the creation of EADS in 2000, was recorded
using the purchase method of accounting with AerospatialeMatra as the acquirer. Accordingly, the book value of certain

74 EADS R EG I S TR ATI O N DO C U ME N T 2 0 0 9

2.1.3.5 RESEARCH AND DEVELOPMENT EXPENSES
Pursuant to the application of IAS 38 “Intangible Assets”, EADS
assesses whether product-related development costs qualify forcapitalisation as internally generated intangible assets. Criteria for
capitalisation are strictly applied. All research and development

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costs not meeting the IAS 38 criteria are expensed as incurred in
the consolidated income statement.

probable future cash inflows for a given month based upon final
payments at delivery. See “— 2.1.8.1 Foreign Exchange Rates”.

In 2007, € 93 million of product-related development costs
were capitalised in accordance with IAS 38. € 87 million were
capitalised in 2008, and € 53 million were capitalised in 2009.

Cash flow hedges associated with transactions that arecancelled are generally deemed terminated for accounting
purposes. The sum of (i) changes in the fair value of thesehedges since 1 January and (ii) a reversal of the portion of
AOCI corresponding to these hedges prior to 1 January, arethen generally recorded in revenues and deferred tax benefits(expenses) in the consolidated income statement.

Capitalised development costs are generally amortised over theestimated number of units produced. If the number of units
produced cannot be estimated reliably, capitalised development
costs are amortised over the estimated useful life of theinternally generated intangible asset. Amortisation of capitalised
development costs is recognised within “Cost of sales”.
Amortisation of capitalised development costs amounted to€ -46 million in 2007, € -56 million in 2008 and € -146 million in
2009, most of which related to the MRTT and the Airbus A380
programme.
Internally generated intangible assets are reviewed for
impairment annually when the asset is not yet in use andsubsequently whenever events or changes in circumstancesindicate that the carrying amount may not be recoverable.

2.1.3.6 ACCOUNTING FOR HEDGED FOREIGN EXCHANGE
TRANSACTIONS IN THE FINANCIAL STATEMENTS
More than 60% of EADS’ revenues are denominated in US
dollars, whereas a substantial portion of its costs is incurredin euros and, to a lesser extent, pounds sterling. EADS uses
hedging strategies to manage and minimise the impact of
exchange rate fluctuations on its profits. See “— 2.1.8.1 Foreign
Exchange Rates” and “Risk Factors — 1. Financial Market Risks— Exposure to Foreign Currencies”.

Cash flow hedges. The Group generally applies cash flow
hedge accounting to foreign currency derivative contracts that
hedge the foreign currency risk on future sales as well as tocertain interest rate swaps that hedge the variability of cash
flows attributable to recognised assets and liabilities. Changes infair value of the hedging instruments related to the effective partof the hedge are reported in accumulated other comprehensive
income (“AOCI”), a separate component of total consolidated
equity, net of applicable income taxes and recognised in the
consolidated income statement in conjunction with the resultof the underlying hedged transaction, when realised. See“— 2.1.6 Changes in Consolidated Total Equity (including Noncontrolling Interests)”. The ineffective portion is immediately
recorded in “Profit (loss) for the period”. Amounts accumulated
in equity are recognised in profit or loss in the periods when
the hedged transaction affects the income statement, such as
when the forecast sale occurs or when the finance income or
finance expense is recognised in the income statement. If hedgedtransactions are cancelled, gains and losses on the hedging
instrument that were previously recorded in equity are generally
recognised in “Profit (loss) for the period”. For products suchas aircraft, EADS typically hedges the first forecasted highly

Revenues in currencies other than the euro that are not hedged
through financial instruments are translated into euro at the spot
exchange rate at the date the underlying transaction occurs.

2.1.3.7 FOREIGN CURRENCY TRANSLATIONEADS’ consolidated financial statements are presented in euros.
The assets and liabilities of foreign entities whose reporting
currency is other than euro are translated using period-end
exchange rates, while the corresponding income statements
are translated using average exchange rates during the period.
All resulting translation differences are included as a componentof AOCI.
Transactions in foreign currencies are translated into euro at theexchange rate prevailing on transaction date. Monetary assets andliabilities denominated in foreign currencies at period-end aretranslated into euro using the period-end exchange rate. Foreignexchange gains and losses arising from translation of monetary
assets are recorded in the consolidated income statement, except
when deferred in equity as qualifying hedging instruments incash flow hedges.
Non-monetary assets and liabilities denominated in foreign
currencies, which are stated at historical cost, are translated into
euro at the exchange rate in effect on the date of the transaction.
Translation differences on non-monetary financial assets andliabilities are reported as part of the fair value gain or loss.
Translation differences of non-monetary financial assets suchas equity securities classified as available for sale are includedin AOCI.
Goodwill and fair value adjustments arising on the acquisitionof a foreign entity that was acquired after 31 December 2004
are treated as assets and liabilities of the acquired company
and are translated into euro at the period-end exchange rate.
Regarding transactions prior to that date, goodwill, assets andliabilities acquired are treated as those of the acquirer.
The accumulated amount of translation differences recorded
in AOCI is released to profit or loss when the associated foreign
entity is disposed of or liquidated or the associated asset or
liability is disposed of, respectively.

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Currency Translation Adjustment and Translation
Mismatch Related to Airbus
Following the signing of an Advance Pricing Agreementwith tax authorities in April 2004, Airbus GIE (a US dollardenominated entity) was merged into Airbus S.A.S. (a eurodenominated entity) with retrospective effect as of 1 January
2004. Consequently, as from such date, operations of the former
Airbus GIE are treated as “foreign currency operations” andaccounted for in accordance with EADS’ consistently applied
accounting principles.
Prior to the merger, Airbus GIE operations, with the exceptionof those hedged with financial instruments, were recorded at
the exchange rate prevailing at the time of aircraft delivery,
with outstanding operations being re-valued in the balance
sheet at each period end using the closing exchange rate ofsuch period. From 1 January 2004, all non-hedged US dollardenominated operations, including outstanding operations of theformer Airbus GIE, are recorded on the basis of exchange rates
prevailing at the date of receipt or payment of US dollars.
In particular, customer advances (and the corresponding revenues
recorded when sales recognition occurs) are now translated at
the exchange rate prevailing on the date they are received. US
dollar-denominated costs are converted at the exchange rate
prevailing on the date they are incurred. To the extent that US
dollar-denominated customer advances differ, in terms of timingof receipt or amount, from corresponding US dollar-denominatedcosts, there is a foreign currency exchange impact (mismatch) on
EBIT*. Additionally, the magnitude of any such difference, andthe corresponding impact on EBIT*, is sensitive to variations in
the number of deliveries.

2.1.3.8 ACCOUNTING FOR SALES FINANCING
TRANSACTIONS IN THE FINANCIAL STATEMENTS
In order to support product sales, primarily at Airbus, Eurocopterand ATR, EADS may agree to participate in the financing ofcustomers, on a case-by-case basis, directly or through guarantees
provided to third parties. Certain sales contracts may include theprovision of an asset value guarantee (“AVGs”), whereby EADS
guarantees a portion of the market value of an aircraft during
a limited period, starting at a specific date after its delivery(in most cases, 12 years post-delivery). See “— 2.1.7.4 Sales
Financing” and “Notes to the Consolidated Financial Statements(IFRS) — Note 34: Commitments and contingencies”. The
accounting treatment of sales financing transactions varies basedon the nature of the financing transaction and the resulting
exposure.

On Balance Sheet. When, pursuant to a financing transaction,
the risks and rewards of ownership of the financed aircraft residewith the customer, the transaction is characterised as either a* EBIT: earnings before interest and taxes, pre-goodwill impairment and exceptionals.

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loan or a finance lease. In such instances, revenues from the saleof the aircraft are recorded upon delivery, while financial interestis recorded over time as financial income. The outstandingbalance of principal is recorded on the statement of financial
position (on balance sheet) in long-term financial assets, net ofany accumulated impairments. See “Notes to the Consolidated
Financial Statements (IFRS) — Note 17: Investments in associates
accounted for under the equity method, other investments andother long-term financial assets”.
By contrast, when the risks and rewards of ownership remain
with the Group, the transaction is characterised as an operatinglease. EADS’ general policy is to avoid, whenever possible,
operating leases for new aircraft to be delivered to customers.
Therefore, new operating leases primarily arise in connection
with the future re-marketing of aircraft. Rather than recording
100% of the revenues from the “sale” of the aircraft at thetime of delivery, rental income from such operating leases isrecorded in revenues over the term of the respective leases. The
leased aircraft are recorded at production cost on the statementof financial position (on balance sheet) as property, plant andequipment, and the corresponding depreciation and potential
impairment charges are recorded in cost of sales. See “Notes
to the Consolidated Financial Statements (IFRS) — Note 15:
Property, plant and equipment”.
If the present value of an AVG exceeds 10% of the sales price of
the aircraft, the sale of the underlying aircraft is accounted foras an operating lease in the consolidated financial statements. In
this case, upon aircraft delivery, the cash payment received fromthe customer is recognised on the consolidated balance sheet asdeferred income and amortised straight-line up to the amount,
and up to the last exercise date, of the AVG. The production
cost of the aircraft is recorded on the balance sheet as property,
plant and equipment. Depreciation expenses are recorded in costof sales in the consolidated income statement. See “Notes to theConsolidated Financial Statements (IFRS) — Note 15: Property,
plant and equipment” and “Note 31: Deferred income”.

Off Balance Sheet — Contingent Commitments. Certain
sales financing commitments, such as lease in/lease out
structures and AVGs the present value of which is below the
10% threshold, are not recorded on the statement of financial
position (on balance sheet).
As a result, transactions relating to such AVGs are accounted for
as sales, with the related exposure deemed to be a contingent
commitment. To reduce exposure under AVGs and to minimise
the likelihood of their occurrence, the Group extends themwith prudent guaranteed asset values and restrictive exercise
conditions, including limited exercise window periods.

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Under lease in/lease out structures, which Airbus and ATR
applied in the past to allow investors to take advantage of certain
jurisdictions’ leasing-related tax benefits, the risks and rewardsof ownership of the aircraft are typically borne by a third party,
usually referred to as the head lessor. The head lessor leases theaircraft to Airbus or ATR, which in turn sub-leases it to thecustomer. To the extent possible, the terms of the head lease andsub-lease match payment streams and other financial conditions.
Such commitments by Airbus or ATR are reported as off-balance
sheet contingent liabilities. See “Notes to the Consolidated
Financial Statements (IFRS) — Note 34: Commitments
and contingencies”.

Provisions and Allowances. Under its provisioning policy forsales financing risk, EADS records provisions to fully cover its
estimated financing and asset value net exposure. Provisions
pertaining to sales financing exposure, whether on-balance sheet
or off-balance sheet, are recorded as impairments of the related
assets or in provisions. Provisions recorded as liabilities relate
primarily to off-balance sheet commitments. See “Notes to theConsolidated Financial Statements (IFRS) — Note 26C: Other
provisions”. Provisions are recorded as impairments of the related
assets when they can be directly related to the corresponding

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asset. See “Notes to the Consolidated Financial Statements (IFRS)— Note 15: Property, plant and equipment” and “— Note 17:
Investments in associates accounted for under the equity method,other investments and other long-term financial assets”. While
management views its estimates of valuations of collateral asconservative, changes in provisions reflecting revised estimates
may have a material impact on net income in future periods.

2.1.3.9 PROVISIONS FOR LOSS-MAKING CONTRACTS
EADS records provisions for loss-making contracts when it
becomes probable that total contract costs will exceed total
contract revenues. Due to the size, length of time and nature ofmany of EADS’ contracts, the estimation of total revenues andcosts at completion is complicated and subject to many variables
and estimates, including penalties to be paid to customers related
to contract performance. Loss-making contract provisions are
therefore reviewed and reassessed regularly. However, futurechanges in the assumptions used by EADS or a change in theunderlying circumstances, such as the fluctuation of certain
foreign exchange rates, may lead to a revaluation of EADS’
loss-making contract provisions and adversely or positively affectits future financial performance.

2.1.4 Measurement of Management’s Performance
2.1.4.1 ORDER BACKLOG
Year-end order backlog (valued at catalogue prices for commercial
aircraft activities) consists of contracts signed up to that date.
Only firm orders are included in calculating order backlog – forcommercial aircraft, a firm order is defined as one for which
EADS receives a non-refundable down payment on a definitive
contract not containing a “walk-away” provision. Defence-relatedorders are included in the backlog upon signature of the related
procurement contract (and the receipt, in most cases, of anadvance payment). Commitments under defence “umbrella” or“framework” agreements by governmental customers are notincluded in backlog until they are officially notified to EADS.

For civil market contracts, amounts of order backlog reflectedin the table below are derived from catalogue prices, escalated
to the expected delivery date and, to the extent applicable,
converted into euro (at the corresponding hedge rate for thehedged portion of expected cash flows, and at the period-end
spot rate for the non-hedged portion of expected cash flows).
The amount of defence-related order backlog is equal to thecontract values of the corresponding programmes.

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Consolidated Backlog for the years ended 31 December 2009, 2008 and 2007 (1)Year ended 31 December 2009

Year ended 31 December 2008
(2)

Amount in € bn

339.7

87%

Airbus Commercial

320.3

Airbus Military

20.7

Year ended 31 December 2007
(2)

Amount in € bn

In percentage (2)

357.8

90%

283.8

81%

82%

337.2

84%

-

-

5%

22.3

6%

-

-

-

-

-

-

19.9

6%

Eurocopter

15.1

4%

13.8

3%

13.5

4%

Astrium

14.6

4%

11.0

3%

12.9

4%

Defence & Security

18.8

5%

17.0

4%

17.8

5%

388.2

100%

399.6

100%

347.9

100%

Amount in € bn

Airbus(3) (4)

Military Transport Aircraft (4)Total divisional backlog

In percentage

In percentage

Other Businesses (5)

2.0

3.2

2.7

HQ/Consolidation

(1.1)

(2.6)

(11.1)

389.1

400.2

339.5

Total

(1) Without options.
(2) Before “Other Businesses” and “Headquarters/Consolidation”.
(3) Based on catalogue prices for commercial aircraft activities.
(4) Following integration of Airbus Military into Airbus, Airbus reports in two segments as of 2009: Airbus Commercial and Airbus Military. The Airbus Commercial perimeter
includes EFW and the completed aerostructures reorganisation but now excludes the A400M. Airbus Military includes the former MTA division as well as all A400M activity.
Eliminations between Airbus Commercial and Airbus Military are treated at the Airbus Division level. Figures for 2008 (but not 2007) have been restated accordingly, except
for the Augsburg site transferred from the DS division. See “—2.1.2 Overview”.
(5) As of 2009, the composition of “Other Businesses” differs compared to 2008. Since EADS currently holds only a minority stake in Socata, this unit is now consolidated atequity within EADS’ accounts. Also as of 2009, EADS EFW is consolidated within Airbus Commercial. Therefore, “Other Businesses” in 2009 consists of ATR, EADS Sogerma,
EADS North America and 30% of Socata at equity. Figures for 2008 (but not for 2007) have been adjusted to reflect the consolidation of EADS EFW within Airbus Commercial.
See “—2.1.2 Overview”.

The € -11.1 billion decrease in the 31 December 2009 orderbacklog, to € 389.1 billion, primarily reflects the impact of a
weaker US dollar spot rate used for conversion of the non-hedged
portion of the backlog into euro (€-US$ 1.44 at the end of 2009
as compared to €-US$ 1.39 at the end of 2008), which had anegative impact of approximately € 11 billion at year end. Orderintake at EADS in 2009 (€ 45.8 billion) roughly equalled therevenues accounted for in the same year (€ 42.8 billion).
Airbus’ backlog decreased by € -18.1 billion from 2008, to€ 339.7 billion, reflecting a decline at both Airbus Commercialand Airbus Military. Airbus Commercial’s backlog decreased by€ -16.9 billion from 2008, to € 320.3 billion, primarily reflecting
the negative net foreign currency adjustment to the non-hedged
portion of the order backlog and a book-to-bill ratio of less than
one with new orders of € 23.5 billion. This order intake consistedof 271 net orders in 2009 (as compared to 777 in 2008). Total
order backlog at Airbus Commercial amounted to 3,488 aircraftat the end of 2009 (as compared to 3,715 aircraft at the end of2008). Airbus Military’s backlog decreased by € -1.6 billion from2008, to € 20.7 billion, primarily reflecting a book-to-bill ratio ofless than one with new orders of € 0.6 billion. This order intake
consisted of 10 new net orders in 2009, including 15 orders for
medium and light military aircraft and three MRTT, partially
offset by South Africa’s cancellation of eight A400M aircraft.

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Total order backlog at Airbus Military amounted to 250 aircraftat the end of 2009 (as compared to 256 aircraft at the end of2008).
Eurocopter’s backlog increased by € 1.3 billion from 2008,
to € 15.1 billion, reflecting a book-to-bill ratio of more than
one with new orders of € 5.8 billion, primarily for militaryhelicopters. This order intake consisted of 344 net orders in2009 (as compared to 715 in 2008). Total order backlog amounted
to 1,303 helicopters at the end of 2009 (as compared to 1,515
helicopters at the end of 2008).
Astrium’s backlog increased by € 3.6 billion from 2008,
to € 14.6 billion, reflecting a book-to-bill ratio of more than
one with new orders of € 8.3 billion. This record order intake wasdriven by orders for 35 Ariane 5 launchers, a third production
tranche of M51 missiles and telecommunications satellites.
The DS division’s backlog increased by € 1.8 billion from 2008,
to € 18.8 billion, reflecting a book-to-bill ratio of more than one
with new orders of € 8.0 billion. Order intake was driven byorders for production tranche 3a of Eurofighter and the Saudi
border surveillance programme.

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The table below illustrates the proportion of civil and defence backlog at the end of each of the past three years.
Year ended 31 December 2009

Year ended 31 December 2008

Year ended 31 December 2007

Amount in € bn (1)In percentage

Amount in € bn (1)In percentage

Amount in € bn (1)In percentage

Civil Sector

332

85%

345

86%

285

84%

Defence Sector

57

15%

55

14%

55

16%

389

100%

400

100%

340

100%

Backlog:

Total(1) Including “Other Businesses” and “Headquarters/Consolidation”.

2.1.4.2 USE OF EBIT*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 expensesof fair value adjustments relating to the EADS merger, theAirbus combination and the formation of MBDA, as well(in €m)Profit (loss) before finance costs and income taxes

as impairment charges thereon. It also comprises disposal
impacts related to goodwill and fair value adjustments resulting
from these transactions.
Set forth below is a table reconciling EADS’ profit (loss)
before finance costs and income taxes (as reflected in EADS’
consolidated income statement) with EADS’ EBIT*.
Year ended
31 December 2009

Year ended
31 December 2008

Year ended
31 December 2007

(380)

2,772

(33)

Disposal of goodwill/subsequent adjustment to goodwill

-

-

12

Exceptional depreciation

56

52

49

Exceptional disposal (fixed assets)

2

6

24

(322)

2,830

52

EBIT*

* EBIT: earnings before interest and taxes, pre-goodwill impairment and exceptionals.

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2.1.4.3 EBIT* PERFORMANCE BY DIVISION
Set forth below is a breakdown of EADS’ consolidated EBIT* by division for the past three years.

(in €m)Year ended
31 December 2009

Year ended
31 December 2008

Year ended
31 December 2007

Airbus (1)(1,371)

1,815

(881)

Airbus Commercial
Airbus Military
Military Transport Aircraft (1)

386

2,306

--

(1,754)

(493)

--

--

--

(155)
211

Eurocopter

263

293

Astrium

261

234

174

Defence & Security

449

408

345
(306)

Total divisional EBIT*

(398)

2,750

Other Businesses (2)

21

43

84

HQ/Consolidation (3)

52

37

274

(322)

2,830

52

Total

(1) Following integration of Airbus Military into Airbus, Airbus reports in two segments as of 2009: Airbus Commercial and Airbus Military. The Airbus Commercial perimeter
includes EFW and the completed aerostructures reorganisation but now excludes the A400M. Airbus Military includes the former MTA division as well as all A400M activity.
Eliminations between Airbus Commercial and Airbus Military are treated at the Airbus Division level. Figures for 2008 (but not 2007) have been restated accordingly, except
for the Augsburg site transferred from the DS division. See “—2.1.2 Overview”.
(2) As of 2009, the composition of “Other Businesses” differs compared to 2008. Since EADS currently holds only a minority stake in Socata, this unit is now consolidated atequity within EADS’ accounts. Also as of 2009, EADS EFW is consolidated within Airbus Commercial. Therefore, “Other Businesses” in 2009 consists of ATR, EADS Sogerma,
EADS North America and 30% of Socata at equity. Figures for 2008 (but not for 2007) have been adjusted to reflect the consolidation of EADS EFW within Airbus Commercial.
See “—2.1.2 Overview”.
(3) HQ/Consolidation includes results from headquarters, which mainly consist of the “share of profit from associates accounted for under the equity method” from EADS’
investment in Dassault Aviation.

2009 compared to 2008. EADS’ consolidated EBIT* decreased
from € 2.8 billion for 2008 to € -0.3 billion for 2009, primarilyreflecting the decreased EBIT* at Airbus. Partially offsetting thedecrease was an improvement in EBIT* at Astrium and the DS
division in 2009.
Airbus’ EBIT* decreased from € 1.8 billion for 2008
to € -1.4 billion for 2009, due to a decline at both Airbus
Commercial and Airbus Military. Airbus Commercial’s EBIT*
decreased from € 2.3 billion for 2008 to € 0.4 billion for 2009,
primarily due to (i) an approximate € -2.5 billion negative impact
of exchange rate effects compared to 2008, (ii) an approximate€ -0.4 billion deterioration in the price of delivered aircraftnet of escalation, and (iii) cost increases, including an increase
in research and development costs in connection with the
ramp-up on the A350 programme. The negative exchange
rate effects related to (x) revaluation of loss-making contract
provisions which had a negative effect of € -0.9 billion compared
to 2008, (y) generally less favourable rates of hedges thatmatured in 2009 as compared to 2008, which had a negative
effect of € -0.9 billion, and (z) other currency translation
adjustments, including those related to the mismatch between
US dollar-denominated customer advances and corresponding
US dollar-denominated costs, which had a negative effect of€ -0.7 billion compared to 2008. See “— 2.1.3.7 Foreign Currency
Translation”. This decrease in 2009 EBIT* at Airbus Commercial
was partially offset by (i) good underlying business performance,* EBIT: earnings before interest and taxes, pre-goodwill impairment and exceptionals.

80 EADS R EG I S TR ATI O N DO C U ME N T 2 0 0 9

including an increase in the number of aircraft delivered(498 in 2009, as compared to 483 in 2008), although A380
continued to weigh significantly on underlying performancedue to inefficiencies and excess capacity due to the lower levelof deliveries, (ii) lower loss-making contract provision charges
on A380 in 2009, and (iii) savings from Power8. See “— 2.1.2.1
Significant Programme and Restructuring Developments in 2007,2008 and 2009”.
Airbus Military’s EBIT* decreased from € -0.5 billion for 2008
to € -1.8 billion for 2009, primarily due to the A400M chargesof € -1.8 billion in 2009 compared to charges of € -0.5 billion in2008 and a weaker mix in medium and light aircraft activities.
The decrease was partially offset by higher tanker activity in2009.
Eurocopter’s EBIT* decreased by 10.2%, from € 293 million
for 2008 to € 263 million for 2009, primarily due to (i) higher
research and development expenses for innovation and productinvestment, (ii) margin pressure on the NH90 programme
reflecting qualification and acceptance difficulties despite
first process improvements, and (iii) negative foreign exchange
impact. The decrease in EBIT* was partially offset by positive
contributions from services and cost savings initiatives.
Astrium’s EBIT* increased by 11.5%, from € 234 million for2008 to € 261 million for 2009, primarily due to the increased
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production as well as growth in telecommunications services.
The increase was partially offset by negative exchange rate effects
as a result of the decline in the pound sterling versus the euro.
The DS division’s EBIT* increased by 10.0%, from € 408 million
for 2008 to € 449 million for 2009, primarily due to a
combination of growth and margin improvements on core andexport in the areas of military aircraft systems and missile
programmes as well as operational improvements. The increase
was partially offset by higher research and development expenses
in areas such as radar and unmanned aerial vehicles, as well as by
the carve-out of the Augsburg aerostructures activity from the
DS division in 2009.
The EBIT* of Other Businesses decreased by 51.2%, from€ 43 million for 2008 to € 21 million for 2009. A positive costevolution at Sogerma was more than offset by negative exchange
rate effects at ATR and a lower EBIT* at EADS North America.

2008 compared to 2007. EADS’ consolidated EBIT* increased
from € 0.1 billion for 2007 to € 2.8 billion for 2008, primarilyreflecting the increased EBIT* at Airbus. Also contributing to theincrease was an improvement in EBIT* at the Group’s otheroperating divisions.
Airbus’ EBIT* increased from € -0.9 billion for 2007 (excluding
the former MTA division) to € 1.8 billion for 2008 (as restated),primarily reflecting (i) good underlying business performance,
including an increase in the number of aircraft delivered (483
in 2008, as compared to 453 in 2007) and savings from Power8,and (ii) lower programme and restructuring charges than in 2007.
Also contributing to the increase in EBIT* was an approximate€ 0.7 billion positive impact of exchange rate effects compared
to 2007 relating to (x) revaluation of loss-making contract
provisions which had a positive effect of € 1.3 billion compared
to 2007, partially offset by (y) generally less favourable rates ofhedges that matured in 2008 as compared to 2007 which had anegative effect of € -0.1 billion and (z) other currency translation
adjustments (€ -0.5 billion), including those related to themismatch between US dollar-denominated customer advancesand corresponding US dollar-denominated costs. The increase in2008 EBIT* was partially offset by (i) the impact of the A400M
programme, (ii) an increased level of recurring costs recorded
in respect of the A380 programme, reflecting the continued
challenges that Airbus faces on the ramp-up in industrial
production, and (iii) approximately € -0.3 billion deterioration in
the price of delivered aircraft. Airbus’ EBIT* in 2008 reflecteda negative contribution of € -16 million from the former MTA
division.
The Eurocopter division’s EBIT* increased by 38.9%, from€ 211 million for 2007 to € 293 million for 2008, primarilyreflecting strong growth in deliveries (588 in 2008, as compared

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to 488 in 2007) and a favourable mix effect. The increase in
EBIT* was partially offset by negative foreign exchange rate
effects and higher research and development expenses, mainly
related to the joint development of the EC175 civil helicopter
with China.
Astrium’s EBIT* increased by 34.5%, from € 174 million for2007 to € 234 million for 2008, primarily reflecting increased
productivity and a ramp-up in production at Astrium SpaceTransportation, as well as an increased contribution fromservices due to the consolidation of Spot Image within Astrium’s
accounts (see “— 2.1.3.1 Scope of and Changes in Consolidation
Perimeter”) which had a positive EBIT* impact of € 16 million,
as well as a decrease in research and development expenses in2008 as a result of R&D tax credits. The increase in EBIT* waspartially offset by negative foreign exchange rate effects as aresult of the decline in the pound sterling versus the euro.
The DS division’s EBIT* increased by 18.3%, from € 345 million
for 2007 to € 408 million for 2008, due primarily to profitability
improvement across all businesses. Maturing programmes – suchas missiles, radar and secure networks – drove such improvement,
as did further cost reduction initiatives and lower restructuringcosts.
The EBIT* of Other Businesses decreased from € 84 million for2007 to € 43 million for 2008, due primarily to the consolidationof EADS EFW within Airbus Commercial from 2009 onwards(with 2008 figures restated), as well as negative foreign exchange
effects. EBIT* decreased at ATR and Socata in 2008 while
increasing at EADS Sogerma.

Foreign Currency Impact on EBIT*. More than 60% of EADS’
consolidated revenues in 2009 were denominated in US dollars.
Given the long-term nature of its business cycles (evidenced byits multi-year backlog), EADS hedges a significant portion of its
net foreign exchange exposure to mitigate the impact of exchange
rate fluctuations on its EBIT*. See “— 2.1.8.1 Foreign Exchange
Rates” and “Risk Factors – 1. Financial Market Risks – Exposure
to Foreign Currencies”. In addition to the impact that hedging
activities have on EADS’ EBIT*, the latter is also affected by
the impact of revaluation of certain assets and liabilities at theclosing rate.
During 2009, cash flow hedges covering approximately
US$ 16.5 billion of EADS’ US dollar-denominated revenues
matured. In 2009, the compounded exchange rate at which
hedged US dollar-denominated revenues were accounted for was€-US$ 1.26, as compared to €-US$ 1.18 in 2008. This difference
resulted in an approximate € -0.9 billion decrease in EBIT*
from 2008 to 2009, of which approximately € -0.9 billion was
at Airbus. In addition, the revaluation of loss-making contract
provisions had a negative effect of € -0.9 billion on EBIT** EBIT: earnings before interest and taxes, pre-goodwill impairment and exceptionals.

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compared to 2008, while other currency translation adjustments,
including those related to the mismatch between US dollardenominated customer advances and corresponding US dollardenominated costs, had a negative effect of € -0.7 billion on
EBIT* compared to 2008.
During 2008, cash flow hedges covering approximately
US$ 16.4 billion of EADS’ US dollar-denominated revenues
matured. In 2008, the compounded exchange rate at which
hedged US dollar-denominated revenues were accounted for was€-US$ 1.18, as compared to €-US$ 1.16 in 2007. This difference

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resulted in an approximate € -0.2 billion decrease in EBIT* from2007 to 2008, of which approximately three-quarters was at
Airbus. In addition, foreign currency effects on EBIT*, including
those related to the mismatch between US dollar-denominatedcustomer advances and corresponding US dollar-denominatedcosts, resulted in an approximate € -0.5 billion decrease in EBIT*
compared to 2007. These decreases were more than offset by
the revaluation of loss-making contract provisions related to thesignificant impact of US dollar and pound sterling which had apositive effect of € 1.3 billion compared to 2007.

2.1.5 EADS Results of Operations
The following table sets forth a summary of EADS’ consolidated income statements for the past three years.
Consolidated Income Statements (IFRS) for the years ended 31 December 2009, 2008 and 2007
Year ended
31 December 2009

Year ended
31 December 2008

Year ended
31 December 2007

Revenues

42,82243,265

39,123

Cost of sales(38,383)(35,907)(34,802)

Gross margin

4,439

7,358

4,321

Selling and administrative expenses(2,196)(2,186)(2,178)

Research and development expenses(2,608)(in €m, except for earnings (losses) per share)(2,825)(2,669)Other income

170

189

233

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

(102)

(131)

(97)

134

211

296

Profit (loss) before finance costs and income taxes

(380)

2,772

(33)

Interest result

(147)

36

(199)

Other financial result

(445)

(508)

(538)

Income taxes

220

(703)

333

(752)

1,597

(437)

(763)

1,572

(446)

11

25

9

Earnings (losses) per share (basic) (in €)(0.94)

1.95(0.56)

Earnings (losses) per share (diluted) (in €)(0.94)

1.95(0.55)

Profit (loss) for the period
Attributable to:Equity owners of the parent (Net Income (loss))
Non-controlling interests

Set forth below are year-to-year comparisons of results of operations, based upon EADS’ consolidated income statements.

* EBIT: earnings before interest and taxes, pre-goodwill impairment and exceptionals.

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CONSOLIDATED REVENUES
Consolidated revenues decreased by 1.0% in 2009 to € 42.8 billion, as compared to € 43.3 billion for 2008. The decrease was primarily
due to lower revenues at Airbus and Other Businesses during 2009, partially offset by revenue increases at Astrium and Eurocopter.
Set forth below is a breakdown of EADS’ consolidated revenues by division for the past three years.

(in €m)Year ended
31 December 2009

Year ended
31 December 2008

Year ended
31 December 2007

Airbus (1)28,06728,991

25,216

Airbus Commercial

26,37026,524-

Airbus Military

2,235

2,759

-

-

-

1,140

Eurocopter

4,570

4,486

4,172

Astrium

4,799

4,289

3,550

Defence & Security

5,363

5,668 (4)5,392

Military Transport Aircraft (1)Total divisional revenues
Other Businesses(2)

42,79943,434

39,470

1,096

1,338

1,407

HQ/Consolidation (3)(1,073)(1,507)(1,754)

Total

42,82243,265

39,123(1) Following integration of Airbus Military into Airbus, Airbus reports in two segments as of 2009: Airbus Commercial and Airbus Military. The Airbus Commercial perimeter
includes EFW and the completed aerostructures reorganisation but now excludes the A400M. Airbus Military includes the former MTA division as well as all A400M activity.
Eliminations between Airbus Commercial and Airbus Military are treated at the Airbus Division level. Figures for 2008 (but not 2007) have been restated accordingly, except
for the Augsburg site transferred from the DS division. See “—2.1.2 Overview”.
(2) As of 2009, the composition of “Other Businesses” differs compared to 2008. Since EADS currently holds only a minority stake in Socata, this unit is now consolidated atequity within EADS’ accounts. Also as of 2009, EADS EFW is consolidated within Airbus Commercial. Therefore, “Other Businesses” in 2009 consists of ATR, EADS Sogerma,
EADS North America and 30% of Socata at equity. Figures for 2008 (but not for 2007) have been adjusted to reflect the consolidation of EADS EFW within Airbus Commercial.
See “—2.1.2 Overview”.
(3) HQ/Consolidation includes, in particular, adjustments and eliminations for intercompany transactions.
(4) Augsburg site’s revenues are included in the DS division in 2008 and amounted to € 438 million. As of 2009, the Augsburg site is consolidated within Airbus Commercial.
See “—2.1.2 Overview”.

AirbusAirbus’ consolidated revenues decreased by 3.2% in 2009 to € 28.1 billion, as compared to € 29.0 billion for 2008. The decrease wasprimarily due to lower revenues at Airbus Military, as well as a small decrease in revenues at Airbus Commercial.
Airbus Commercial
Set forth below is a breakdown of deliveries of commercial aircraft by product type for the past three years.
Year ended
31 December 2009

Year ended
31 December 2008

Year ended
31 December 2007

Single Aisle

402

386

367

Widebody--

6Long-Range

86

85

79

Large Aircraft

10

12

1

498

483

453

Number of aircraft

Total

Airbus Commercial’s consolidated revenues decreased by
0.6%, from € 26.5 billion for 2008 to € 26.4 billion for 2009.
This slight decrease was primarily due to (i) an approximate€ -0.4 billion deterioration in the price of delivered aircraft netof escalation, (ii) an approximate € -0.4 billion negative impact of
exchange rate effects and (iii) a decrease in Hawker activity. Fora discussion of the impact of exchange rate variations on EADS’
results of operations, see “— 2.1.3.6 Accounting for Hedged

Foreign Exchange Transactions in the Financial Statements”,“— 2.1.3.7 Foreign Currency Translation”, “— 2.1.8.1— Foreign
Exchange Rates” and “Risk Factors — 1. Financial Market Risks— Exposure to Foreign Currencies”.
Partially offsetting this revenue decrease were higher aircraft
deliveries (498 in 2009 as compared to 483 in 2008), in particularsingle-aisle A318/A319/A320/A321 aircraft.

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Airbus Military
Set forth below is a breakdown of deliveries of military transport aircraft by product type for the past three years.

Number of aircraftYear ended
31 December 2009

Year ended
31 December 2008

Year ended
31 December 2007

7

CN-235

4

7

C-212

-

1

-

C-295

12

11

7

P-3

-

-

1

Total

16

19

15

Airbus Military’s consolidated revenues decreased by 19.0%,
from € 2.8 billion for 2008 to € 2.2 billion for 2009. The decrease
was primarily due to € -1.0 billion in lower revenue recognitionon the A400M programme in 2009, with 2008 figures benefitingfrom the A400M power-on milestone and the initial applicationof early stage accounting. Partially offsetting this decrease was anincrease in revenues from tanker and medium and light aircraft
activities during 2009.

Eurocopter
Set forth below is a breakdown of deliveries of helicopters by product type for the past three years.

Number of aircraftYear ended
31 December 2009

Year ended
31 December 2008

Year ended
31 December 2007

Tiger

7

15

10

Light

284

302

275

Medium

219

229

172

Heavy

48

42

31

of which NH90
Total

For 2009, consolidated revenues of Eurocopter increased by 1.9%,
from € 4.5 billion for 2008 to € 4.6 billion for 2009, despite
an overall decrease in helicopter deliveries from 588 in 2008
to 558 in 2009. The increase was primarily due to a favourable
mix in serial helicopter deliveries and growth in customer
services, partially offset by lower governmental and development
revenues.

15

14

8

558

588

488

For 2008, consolidated revenues of Eurocopter increased by 7.5%,
from € 4.2 billion for 2007 to € 4.5 billion for 2008, primarilyreflecting an overall increase in helicopter deliveries from 488 in2007 to 588 in 2008, as well as growth in customer services anddevelopment activities.

Astrium
Set forth below is a breakdown of deliveries of telecommunications satellites for the past three years.

Telecommunications Satellites

For 2009, consolidated revenues of Astrium increased by 11.9%,
from € 4.3 billion for 2008 to € 4.8 billion for 2009. The increase
was due to revenue growth across all business units and included
a non-operational catch-up effect (€ +0.2 billion) for in-orbit
incentive schemes on commercial telecommunication satellites
with low margin recognition.

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Year ended
31 December 2009

Year ended
31 December 2008

Year ended
31 December 2007

4

6

2

For 2008, consolidated revenues of Astrium increased by
20.8%, from € 3.6 billion for 2007 to € 4.3 billion for 2008. The
increase was primarily due to higher deliveries of commercial
telecommunication satellites, ramp-up in Ariane 5 production
and an increase in earth observation services. The increase inrevenues also reflects the consolidation of Spot Image in 2008.

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Defence & Security
For 2009, consolidated revenues of the DS division decreased
by 5.4%, from € 5.7 billion for 2008 to € 5.4 billion for2009. The decrease primarily reflects the carve-out of the
Augsburg aerostructures activity from the DS division in 2009(€ -0.4 billion). This was partially offset by higher revenues froma ramp-up in tranche 2 production and export deliveries forEurofighter as well as integrated logistics support.
For 2008, consolidated revenues of the DS division amounted
to € 5.7 billion. Eurofighter, radar and missiles businesses
represent the majority of the revenues. The increase of 5.1% from€ 5.4 billion for 2007 primarily reflects further development ofintegrated security systems, secure networks and UAVs, as wellas the shift to early stage accounting for the A400M programme
which yielded a revenue increase of € 171 million compared to2007. The increase in revenues also reflects the acquisition of
PlantCML in 2008.

Other Businesses
For 2009, consolidated revenues of Other Businesses decreased
by 18.1%, from € 1.3 billion for 2008 to € 1.1 billion for 2009.
The decrease mainly reflects the change in consolidation
perimeter following the sale of 70% of Socata to Daher
in January 2009. See “—2.1.3.1 Scope of and Changes
in Consolidation Perimeter”.

CONSOLIDATED COST OF SALES

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capitalised development costs pursuant to IAS 38, whichamounted to € -56 million in 2008. Mainly as a result of theabove stated items and despite a negative dollar effect at Airbus
in respect of revenues, the gross margin increased from 11.0% in2007 to 17.0% in 2008.

CONSOLIDATED SELLING AND ADMINISTRATIVE EXPENSES
For 2009, consolidated selling and administrative expenses
remained stable, at the 2008 level of € 2.2 billion. Higher
expenses at Airbus and Astrium (primarily related toconsolidation effects) were largely offset by lower expenses at the
DS division and at Other Businesses. See “— 2.1.2.1 Significant
Programme and Restructuring Developments in 2007, 2008
and 2009”.
For 2008, consolidated selling and administrative expenses
remained stable, at the 2007 level of € 2.2 billion. Higher
expenses at Astrium (primarily related to services growth and theconsolidation of Spot Image), the former MTA division (related
to activity growth) and other areas were largely offset by theabsence of Power8 restructuring expenses recorded at Airbus
in 2007.

CONSOLIDATED RESEARCH AND DEVELOPMENT EXPENSES
For 2009, consolidated research and development (“R&D”)
expenses increased by 5.8%, from € 2.7 billion for 2008 to€ 2.8 billion for 2009. The increase was primarily due to higher
expenses at Airbus, due to development on the A350 XWB
programme, and to a lesser extent, higher expenses at Eurocopter
and the DS division for innovation and product investment.
This increase was partially offset by less R&D for the A380
programme. See “— 2.1.3.5 Research and Development expenses”.

For 2009, consolidated cost of sales increased by 6.9%, from€ 35.9 billion for 2008 to € 38.4 billion for 2009. The increase
was primarily due to the higher loss-making contract provision
recorded in respect of the A400M programme and negative
foreign exchange effects, partially offset by the lower lossmaking contract charges recorded in respect of the A380
programme, additional Power8 savings in 2009 and positive
contributions from the DS division and Astrium. See “— 2.1.2.1
Significant Programme and Restructuring Developments in
2007, 2008 and 2009. Consolidated cost of sales also includes
the amortisation of capitalised development costs pursuant to
IAS 38, which amounted to € -146 million in 2009 comparedto € -56 million in 2008. Mainly as a result of the above stateditems as well as a deterioration in prices for delivered A330
aircraft and a negative dollar effect at Airbus in respect ofrevenues, the gross margin decreased from 17.0% in 2008 to
10.4% in 2009.

For 2008, consolidated R&D expenses increased by 2.3%, from€ 2.6 billion for 2007 to € 2.7 billion for 2008. Most of theincrease was attributable to higher expenses at Airbus andEurocopter, due to development on the A350 XWB and various
helicopter programmes. This increase was partially offset by less
R&D for the A380 programme and at the other divisions as wellas higher R&D tax credits.

For 2008, consolidated cost of sales increased by 3.2%, from€ 34.8 billion for 2007 to € 35.9 billion for 2008. The increase
was primarily due to the higher number of aircraft deliveries andthe shift to early stage accounting for the A400M programme,
partially offset by lower programme and restructuring charges
than in 2007 and foreign exchange effects from natural hedging.
Consolidated cost of sales also includes the amortisation of

For 2009, the net of other income and other expenses was
positive € 68 million as compared to positive € 58 million
for 2008. The increase was mainly attributable to the gain from
disposal of the Filton site in 2009, partially offset by various
other items.

CONSOLIDATED OTHER INCOME AND OTHER EXPENSES
Consolidated other income and other expenses represent gains
and losses on disposals of investments in fixed assets and income
from rental properties.

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For 2008, the net of other income and other expenses was
positive € 58 million as compared to positive € 136 million
for 2007. The decrease was mainly attributable to gains from saleof land and buildings in France and Germany recorded in 2007.

CONSOLIDATED SHARE OF PROFIT FROM ASSOCIATESACCOUNTED FOR UNDER THE EQUITY METHODAND OTHER INCOME FROM INVESTMENTS
Consolidated share of profit from associates accounted forunder the equity method and other income from investments
principally includes results from companies accounted forunder the equity method and the results attributable to nonconsolidated investments.
For 2009, EADS recorded € 134 million in consolidated shareof profit from associates accounted for under the equity method
and other income from investments as compared to € 211 million
for 2008. The € -77 million decrease primarily reflects the
reduced contribution from EADS’ equity investment in Dassault
Aviation. See “Notes to the Consolidated Financial Statements(IFRS) — Note 11: Share of profit from associates accounted forunder the equity method and other income from investments”.
For 2008, EADS recorded € 211 million in consolidated shareof profit from associates accounted for under the equity method
and other income from investments as compared to € 296 million
for 2007. The € -85 million decrease primarily reflects the
reduced contribution from EADS’ equity investment in Dassault
Aviation, including the absence of an IFRS catch-up in 2008, as
well as the one-off gain from EADS’ sale of its 2.13% interest in
Embraer in 2007.

CONSOLIDATED INTEREST RESULT
Consolidated interest result reflects the net of interest income
and expense arising from financial assets and liabilities, includinginterest expense on refundable advances provided by European
governments to finance R&D activities.
For 2009, EADS recorded a consolidated net interest expense of€ -147 million, as compared to a consolidated net interest resultof € 36 million for 2008. The decrease is due primarily to a
decline in interest rates paid on EADS’ net cash balance during
2009, partially offset by lower interest expense paid on theGroup’s financing liabilities.
For 2008, EADS recorded a consolidated net interest result of€ 36 million, as compared to a consolidated net interest expenseof € -199 million for 2007. The improvement is due primarily to ahigher average net cash balance held during 2008 and an increase
in investments in short- and medium-term securities.

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CONSOLIDATED OTHER FINANCIAL RESULTFor 2009, consolidated other financial result improved to€ -445 million from € -508 million for 2008. This positive€ 63 million change results from the improvement in theimpact of revaluation changes of US dollar- and pound sterlingdenominated cash balances on the euro-denominated balance
sheets of Group companies, as well as from the effect of themark-to-market valuation of “embedded derivatives”. “Embedded
derivatives” are financial instruments that, for accounting
purposes, are deemed to be embedded in US dollar-denominatedpurchase orders of equipment, where the US dollar is notconclusively the currency in which the price of the related
equipment is routinely denominated in international commerce
and is not the functional currency of any of the parties to thetransaction. See “Notes to the Consolidated Financial Statements(IFRS) — Note 12: Total finance costs”. This line item also
includes the negative effects from the unwinding of discounts onprovisions, as well as the valuation of the premium paid for US
dollar options used for foreign exchange hedging.
For 2008, consolidated other financial result improved to€ -508 million from € -538 million for 2007. This positive€ 30 million change primarily results from (i) a € -28 million
negative effect in 2008 from valuation changes of US
dollar- and pound sterling-denominated cash balances on
the euro-denominated balance sheets of Group companies,
compared to a € -274 million negative effect in 2007, (ii) the€ -230 million negative effect in 2008 from the unwinding of
discounts on provisions recorded primarily at Airbus, compared
to a € -202 million negative effect in 2007, and (iii) a negative€ -121 million effect from the mark-to-market valuation of“embedded derivatives”, compared to a negative € -5 million
effect in 2007.

CONSOLIDATED INCOME TAXESFor 2009, income taxes yielded a € 220 million benefit, compared
to a € -703 million expense in 2008. The benefit was due to thetaxable loss of € -972 million recorded in 2009, as compared tothe taxable income of € 2,300 million recorded in the previous
year. The effective tax rate was 23% in 2009 reflecting some
impairment of tax assets. See “Notes to the Consolidated
Financial Statements (IFRS) — Note 13: Income taxes”.
For 2008, income taxes yielded a € -703 million expense,
compared to a € 333 million benefit in 2007. The expense wasdue to the taxable income of € 2,300 million recorded in 2008,
as compared to a taxable loss of € -770 million recorded in theprevious year. The effective tax rate was 31% in 2008.

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CONSOLIDATED NON-CONTROLLING INTERESTSEARNINGS PER SHARE (EPS)For 2009, consolidated non-controlling interests were
€ 11 million, as compared to € 25 million for 2008. The decreaseof non-controlling interests for 2009 primarily relates to thedecrease in non-controlling interest in the results of subsidiaries
of Airbus Financial Services.

Basic earnings per share decreased by € -2.89 per share, from a
profit of € 1.95 per share in 2008 to a loss of € -0.94 per share in2009. The number of outstanding shares at 31 December 2009
was 810,908,611. The denominator used to calculate EPS was
809,698,631 shares, reflecting the weighted average number ofshares outstanding during the year. In 2007, EADS reported abasic loss per share of € -0.56.

For 2008, consolidated non-controlling interests were
€ 25 million, as compared to € 9 million for 2007. The increaseof non-controlling interests for 2008 primarily relates to theincrease in non-controlling interest in the results of Airbus
Financial Services, and the non-controlling interest recorded
in respect of Spot Image following its initial consolidation. See“— 2.1.3.1 Scope of and Changes in Consolidation Perimeter”.

CONSOLIDATED NET INCOME (LOSS) (PROFIT (LOSS) FOR
THE PERIOD ATTRIBUTABLE TO EQUITY OWNERS OF THE
PARENT)As a result of the factors discussed above, EADS recorded aconsolidated net loss of € -763 million for 2009, as compared
to a consolidated net income of € 1,572 million for 2008 and aconsolidated net loss of € -446 million for 2007.

Diluted earnings per share decreased by € -2.89 per share, froma profit of € 1.95 per share in 2008 to a loss of € -0.94 per sharein 2009. The denominator used to calculate diluted EPS was
811,190,113, reflecting the weighted average number of shares
outstanding during the year, adjusted to assume the conversionof all potential ordinary shares. In 2007, EADS reported adiluted loss per share of € -0.55.
See “Notes to the Consolidated Financial Statements (IFRS) —Note 24: Total equity” and “— Note 39: Earnings per share”.

2.1.6 Changes in Consolidated Total Equity (including Non-controlling Interests)
The following table sets forth a summary of the changes in consolidated total equity for the period 1 January 2009 through31 December 2009.
(in €m)Balance at 31 December 2008

11,126

Actuarial gains and losses(483)

Accumulated other comprehensive income

890

Thereof currency translation adjustments(262)

Profit (loss) for the period(752)

Capital increase

17

Share-based payments (IFRS 2)

19

Cash distribution to EADS N.V. shareholders/dividends paid to non-controlling interests
Change in non-controlling interests
Change in treasury shares
Balance at 31 December 2009

The decrease in consolidated total equity in 2009 primarilyreflects the loss for the period and changes in actuarial gains andlosses. These were partially offset by changes in accumulated
other comprehensive income (“AOCI”). Set forth below is a
discussion of AOCI and its impact on consolidated total equity.
For a discussion of the other line items affecting consolidated
total equity, see “Consolidated Financial Statements (IFRS) of
EADS — Consolidated Statements of Changes in Equity (IFRS)
for the years ended 31 December 2009, 2008 and 2007”.

(166)
(5)
(5)
10,641

In 2009, AOCI increased by € 890 million. The change in AOCI
was primarily due to the positive variation (net of tax) of theyear-end mark-to-market valuation of that portion of EADS’
hedge portfolio qualifying for cash flow hedge accounting under
IAS 39.

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IAS 39 RELATED IMPACT ON AOCI
At 31 December 2009, the notional amount of the outstanding
portfolio of hedges qualifying for IAS 39 hedge accounting
treatment (“cash flow hedges”) amounted to approximately
US$ 60.8 billion hedged against the euro and the pound sterling.
The year-end mark-to-market valuation of EADS’ portfolio ofcash flow hedges resulted in a positive pre-tax AOCI valuation
change of € 1.5 billion from 31 December 2008, based on aclosing rate of €-US$ 1.44, as compared to a negative pre-tax
AOCI valuation change of € -5.4 billion at 31 December 2008
from 31 December 2007, based on a closing rate of €-US$ 1.39.

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Positive pre-tax mark-to-market values of cash flow hedges areincluded in other financial assets, while negative pre-tax mark-tomarket values of cash flow hedges are included in other financial
liabilities. Year-to-year changes in the mark-to-market valueof cash flow hedges are recognised as adjustments to AOCI.
These adjustments to AOCI are net of corresponding changes todeferred tax assets (for cash flow hedges with negative markto-market valuations) and deferred tax liabilities (for cash flow
hedges with positive mark-to-market valuations). Set out below is
a graphic presentation of cash flow hedge related movements in
AOCI over the past three years (in €m).

Related movements in AOCI in €m

OCI Net Asset

5,135
-292
1,191

Net Deferred Taxes-1,582110

31 December 2007: US$ 1.47

-361

Net Equity OCI

3,553

31 December 2008: US$ 1.39
31 December 2009: US$ 1.44

-182
830

As a result of the positive change in the fair market valuation of
the cash flow hedge portfolio in 2009, AOCI amounted to a net
asset of € 1.2 billion for 2009, as compared to a net liability of€ -0.3 billion for 2008. The corresponding € -0.5 billion tax effectled to a net deferred tax liability of € -0.4 billion at 31 December
2009 as compared to a net deferred tax asset of € 0.1 billion at
31 December 2008.

CURRENCY TRANSLATION ADJUSTMENT IMPACT ON AOCIThe € -262 million currency translation adjustment (CTA) related
impact on AOCI in 2009 mainly reflects the negative effect of
the weakening US dollar and the strengthening pound sterling(in total negative € -154 million), as well as the consequences(negative € -75 million) of the merger of Airbus GIE (a US dollar-

88 EADS R EG I S TR ATI O N DO C U ME N T 2 0 0 9

denominated entity) into Airbus S.A.S. (a euro-denominatedentity). Before the merger, Airbus GIE operations were recordedat the current exchange rate of the period except for those hedged
with financial instruments. As from 1 January 2004, former
Airbus GIE operations are recorded on the basis of historicalexchange rates. As a result, no additional CTA is generated byformer Airbus GIE operations. The portion of outstanding CTA
as at 31 December 2003, booked in respect of non-monetarybalance sheet items relating to transactions realised as from
1 January 2004 (i.e., mainly aircraft deliveries), is gradually
released to the consolidated income statement, in line with suchdeliveries. See “— 2.1.3.7 Foreign Currency Translation”.

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2.1.7 Liquidity and Capital Resources> implementing measures designed to generate cash;

This cash position is further supported by a € 3.0 billion
syndicated back-up facility, undrawn as at 31 December
2009 with no financial covenants, as well as a Euro medium
term note programme and commercial paper programme, as
described below. The factors affecting EADS’ cash position, andconsequently its liquidity risk, are discussed below.

> developing and maintaining access to the capital markets; and2.1.7.1 CASH FLOWSThe Group’s objective is to maintain sufficient cash and cash
equivalents at all times to meet its present and future cash
requirements and maintain a favourable credit rating. It attempts
to achieve this policy objective by:> containing its exposure to customer financing.
EADS benefits from a strong positive cash position, with€ 15.1 billion of consolidated gross cash (including securitiesof € 8.1 billion) at 31 December 2009. EADS defines its
consolidated net cash position as the difference between (i) cash
and cash equivalents, (ii) securities, and (iii) financing liabilities(as recorded in the consolidated statement of financial position).
The net cash position at 31 December 2009 was € 9.8 billion(€ 9.2 billion at 31 December 2008).

EADS generally finances its manufacturing activities and productdevelopment programmes, and in particular the developmentof new commercial aircraft, through a combination of flows
generated by operating activities, customer advances, risk-sharing
partnerships with sub-contractors and European government
refundable advances. In addition, EADS’ military activities
benefit from government-financed R&D contracts. If necessary,
EADS may raise funds in the capital markets.

The following table sets forth the variation of EADS’ consolidated net cash position over the periods indicated.
Year ended
31 December 2009

Year ended
31 December 2008

Year ended
31 December 2007

Consolidated net cash position at 1 January

9,193

7,024

4,229

Gross cash flow from operations (1)

2,423

4,571

3,862
1,236

(in €m)Changes in other operating assets and liabilities (working capital)

(2)

15

(172)

Thereof customer financing

(406)

(327)

61

Thereof Paradigm refinancing

(22)

58

1,158

Cash used for investing activities (3)(1,853)(1,840)(1,744)

Thereof industrial capital expenditures(1,957)(1,837)(2,028)Thereof others

104

(3)

284

Cash distribution to shareholders/non-controlling interests

(166)

(107)

(98)

Capital increase

17

24

46

Change in treasury shares

(5)

39

-

Contribution to plan assets of pension schemes

(173)

(436)

(303)

Other changes in financial position

346

90

(204)

9,797

9,193

7,024

585

2,559

3,354

991

2,886

3,293

Consolidated net cash position at 31 December
Free cash flow

(3)

Thereof free cash flows before customer financing(1) Represents cash flow from operations, excluding variations in working capital.
(2) Including cash outflows of € 302 million for option premiums in 2008.
(3) Does not reflect (i) investments in, or disposals of, available-for-sale securities (addition of € (2,641) million for 2007; addition of € (2,676) million for 2008; additionof € (821) million for 2009), which are classified as cash and not as investments solely for the purposes of this net cash presentation; (ii) changes in cash from changes
in consolidation (€ (249) million for 2007); or (iii) contribution to plan assets of pension schemes (€ (303) million for 2007; € (436) million for 2008; € (173) million for 2009).

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The consolidated net cash position at 31 December 2009was € 9.8 billion, a 6.6% increase from 31 December 2008. The
increase primarily reflects the € 2.4 billion gross cash flow fromoperations, partially offset by cash used for investing activities(€ -1.9 billion) as well as other items.

Gross Cash Flow from Operations
Gross cash flow from operations decreased by 47.0%
to € 2.4 billion for 2009, primarily as a result of the lower
earnings generated during the year.

Changes in Other Operating Assets and Liabilities(Working Capital)
Working capital is comprised of inventory, trade receivables,
other assets and prepaid expenses netted against trade liabilities,
other liabilities (including customer advances), deferred income
and customer financing. Changes in working capital resulted
in a slight positive impact on the net cash position for 2009(€ 15 million) and a negative impact on the net cash position
for 2008 (€ -0.2 billion). In 2009, the main net contributor to thepositive working capital variation was pre-delivery paymentsfrom customers (€ 2.9 billion), which decreased moderately at
Airbus compared to 2008 as expected due to lower commercial
activity while increasing across the other divisions due to thestrong inflow of institutional orders. This positive variation
within the year was almost entirely offset by (i) the change

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in inventory (€ -2.0 billion), reflecting inventory growthacross all divisions, in particular at Airbus, (ii) the change
in trade receivables (€ -0.5 billion), and (iii) customer financing(€ -0.4 billion).
In 2008, the main net contributors to the negative working
capital variation were (i) the change in inventory (€ -1.2 billion),reflecting inventory growth in Airbus, Eurocopter and the
DS division, and (ii) the change in other assets and liabilities(€ -1.0 billion), primarily reflecting the payment for option
premiums (€ -0.3 billion) and (iii) customer financing(€ -0.3 billion). The negative working capital variation within theyear was almost entirely offset by pre-delivery payments from
customers (€ 2.4 billion), approximately half of which resulted
from customer payments at non-Airbus divisions.

European Government Refundable Advances. As of
31 December 2009, total European government refundable
advances received, recorded on the statement of financial positionin the line items “non-current other financial liabilities” and“current other financial liabilities”, amounted to € 5.3 billion,
including accrued interest.
For 2009, new receipts of European government refundable
advances totalled € 0.4 billion and reimbursements totalled€ -0.4 billion. Related accrued interest of € -0.2 billion wasrecorded in 2009.

Set out below is a breakdown of the total amount of European government refundable advances outstanding, by product/project.
(in € bn)

2009

2008

2007

Long Range & Wide Body

1.2

1.1

1.3

A380

3.6

3.4

3.5

Eurocopter

0.2

0.1

0.2

Others

0.3

0.3

0.3

Total

5.3

4.9

5.3

Management categorises cash used for investing activities
into two components: (i) industrial capital expenditures, and(ii) others.

For the period 2010 to 2011, it is expected that the majority
of EADS’ capital expenditures will occur in connection with
Airbus activities – in particular, for the A350 XWB programme– and be broadly distributed across EADS’ home markets ofFrance, Germany, Spain and the UK.

Industrial Capital Expenditures. Industrial capital
expenditures (investments in property, plant and equipment
and intangible assets) amounted to € 2.0 billion for 2009,
as compared to € 1.8 billion for 2008 and € 2.0 billion for2007. Capital expenditures in 2009 related to programmes atAirbus of € 1.3 billion (relating primarily to the A350 XWB)
and additional projects in the other divisions of € 0.7 billion,
including Astroterra at Astrium and the EC175 at Eurocopter.

Others. In 2009, the € 104 million figure primarily reflects
the sale of the Airbus site in Filton (UK) to GKN. In 2008,€ -3 million was recorded in this category. In 2007, the€ 284 million figure primarily reflects the sale of buildings andparticipations in small entities as well as the sale of Embraer
shares.

Cash Used for Investing Activities

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2.1.7.2 CONSOLIDATED CASH AND CASH EQUIVALENTS
AND SECURITIESFree Cash Flow
As a result of the factors discussed above, positive free cash flow
amounted to € 0.6 billion for 2009, as compared to € 2.6 billion
for 2008 and € 3.4 billion for 2007. Positive free cash flow before
customer financing was € 1.0 billion for 2009, as compared to€ 2.9 billion for 2008 and € 3.3 billion for 2007.

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 ofdeposit, overnight deposits, commercial paper, other money
market instruments and bonds. See “— 2.1.8.2 Interest Rates”
and “Notes to the Consolidated Financial Statements (IFRS) —Note 35A: Financial risk management”.

Contribution to Plan Assets of Pension Schemes
The cash outflow of € -0.2 billion in 2009 primarily relates
to plan assets in the UK and to German benefit funds. In
2008, the cash outflow of € -0.4 billion primarily relates toa contribution to the Contractual Trust Arrangement (CTA)
for allocating and generating pension plan assets in accordancewith IAS 19. In 2007, the cash outflow of € -0.3 billion relates tothe implementation of the CTA. See “Notes to the Consolidated
Financial Statements (IFRS) — Note 26B: Provisions for
retirement plans”. EADS may make additional contributions
to plan assets over time in order to reduce the provision for
retirement plans on its balance sheet.

EADS has a fully automated cross-border cash pooling system(covering France, Germany, Spain, the Netherlands, the UK and
the US). The cash pooling system enhances management’s ability
to assess reliably and instantaneously the cash position of eachsubsidiary within the Group and enables management to allocate
cash optimally within the Group depending upon shifting
short-term needs.
Total cash and cash equivalents (including available-for-salesecurities) in 2009 included € 0.8 billion from the 37.5%
consolidation of MBDA, compared to € 0.7 billion in 2008 and€ 0.6 billion in 2007.

Other Changes in Financial Position
In 2009, the positive change of € 346 million reflects among
others currency effects on financing liabilities. In 2008, thepositive change of € 90 million generally mirrors the currency
effects on financing liabilities. In 2007, the cash outflow of€ -204 million primarily reflects the change in the percentage of
proportional consolidation of MBDA from 50% in 2006 to 37.5%
in 2007.

2.1.7.3 CONSOLIDATED FINANCING LIABILITIESThe following table sets forth the composition of EADS’
consolidated financing liabilities, including both short-and longterm debt, as of 31 December 2009:31 December 2009(in €m)Not exceeding 1 year

Over 1 year up to 5 years

More than 5 years

Total

Bonds

974

-

1,500

2,474

Liabilities to financial institutions

90

629

182

901

Loans

205

237

154

596

Finance Leases

17

49

116

182 (1)Others

1,143

-

-

Total

2,429

915

1,952

1,143
5,296(2)(1) This figure reflects the € 306 million effect of the netting of defeased bank deposits against finance lease liabilities.
(2) Financing liabilities include non-recourse Airbus debt for € 652 million.

The outstanding balance of financing liabilities increased from€ 4.5 billion at 31 December 2008 to € 5.3 billion at 31 December
2009. Financing liabilities include liabilities connected withsales financing transactions amounting to € 733 million at
31 December 2009, most of which bore interest at variable rates.
See “— 2.1.7.4 Sales Financing”.

EMTN Programme. EADS currently has a € 3 billion Euro
Medium Term Note (“EMTN”) Programme in place. In 2003,
it conducted an initial € 1.0 billion issue of notes maturing
in 2010 and bearing interest at 4.625% (effective interest rate:4.7%), which was later swapped into a variable rate of 3-month
EURIBOR plus 1.02%. Later in 2003, it issued an additional€ 0.5 billion of notes maturing in 2018 and bearing interest at
5.5% (effective interest rate: 5.6%), which was swapped during
2005 into a variable rate of 3-month EURIBOR plus 1.72%.
In 2009, in order to refinance the first EMTN tranche of€ 1.0 billion that matures in 2010, EADS issued € 1.0 billion ofnotes maturing in 2016 and bearing interest at 4.625% (effective
interest rate: 4.6%), which was later swapped into a variable rateof 3-month EURIBOR plus 1.57%.

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European Investment Bank Loan. In 2004, the European
Investment Bank granted a long-term loan to EADS in theamount of US$ 421 million at an interest rate of 5.1% (effective
interest rate: 5.1%).
Commercial Paper Programme. EADS has the ability to issuecommercial paper on a rolling basis, under a so-called “billet detrésorerie” programme. This commercial paper would bear interest
at fixed or floating rates with individual maturities ranging from1 day to 12 months. The programme has been in place since 2003
and has a maximum authorised volume limit of € 2 billion. As of
31 December 2009, there was no commercial paper outstanding
under the programme.

2.1.7.4 SALES FINANCINGEADS favours cash sales, and encourages independent financing
by customers, in order to avoid retaining credit or asset risk inrelation to delivered products. However, in order to support
product sales, primarily at Airbus, Eurocopter and ATR, EADS
may agree to participate in the financing of customers, on a caseby-case basis, directly or through guarantees provided to third
parties.
In response to the continued demand by its customers forfinancing and the recent volatility in the financial and credit
markets, EADS expects to increase its outlays in connection(in €m)Finance Leases
Liabilities to financial institutions

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with customer financing of commercial aircraft, mostly throughfinance leases and secured loans. Nevertheless, it intends to keep
the amount as low as possible.
Dedicated and experienced teams structure such financing
transactions and closely monitor total EADS finance and asset
value exposure and its evolution in terms of quality, volume
and intensity of cash requirements. EADS aims to structure all
financing it provides to customers in line with market-standard
contractual terms so as to facilitate any subsequent sale or
reduction of such exposure.
In determining the amount and terms of a financing transaction,
Airbus and ATR take into account the airline’s credit rating
as well as risk factors specific to the intended operating
environment of the aircraft and its expected future value. Market
yields and current banking practices also serve to benchmark thefinancing terms offered to customers.
Approximately 14% of the € 5.3 billion of total consolidated
financing liabilities as at 31 December 2009 are derived from thefunding of EADS’ sales financing assets, which are of a longterm nature and have predictable payment schedules.
Set out below is a breakdown of the total amount of sales
financing liabilities outstanding.

2009

2008

2007

1

14

35

590

664

742

Loans

142

158

183

Total sales financing liabilities

733

836

960

The amounts of total sales financing liabilities at 31 December
2009, 2008 and 2007 reflect the offsetting of sales financing
liabilities by € 306 million (for 2009), € 373 million (for 2008)and € 677 million (for 2007). Of the remaining € 733 million
total sales financing liabilities at 31 December 2009,€ 652 million is in the form of non-recourse debt, where
EADS’ repayment obligations are limited to its receipts fromtransaction counterparties. A significant portion of financial
assets representing non-cancellable customer commitments haveterms closely matching those of the related financing liabilities.
See “Notes to the Consolidated Financial Statements (IFRS) —Note 27: Financing liabilities”. See also “— 2.1.3.8 Accounting
for Sales Financing Transactions in the Financial Statements”.
Furthermore, in 1999, Airbus received a reinvestment notefrom Deutsche Bank AG in the amount of US$ 800 million,
with an outstanding debt of € 305 million at 31 December 2009(2008: € 372 million, 2007: € 396 million).

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Sales financing transactions are generally collateralised by theunderlying aircraft. Additionally, Airbus, Eurocopter and ATR
benefit from protective covenants and from security packages
tailored according to the perceived risk and the legal environmentof each transaction.
EADS classifies the exposure arising from its sales financing
activities into two categories: (i) Customer Financing Exposure,
where the customer’s credit – its ability to perform its
obligations under a financing agreement – constitutes the risk;and (ii) Asset Value Exposure, where the risk relates to decreases
in the future value of the financed aircraft. See also “Risk Factors— 1. Financial Market Risks — Exposure to Sales Financing
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Customer Financing Exposure
Gross Exposure: Gross Customer Financing Exposure is computed
as the sum of (i) the net book value of aircraft under operatingleases; (ii) the outstanding principal amount of finance leases
or loans; and (iii) the net present value of the maximum
commitment amounts under financial guarantees.
Gross Customer Financing Exposure from operating leases,
finance leases and loans differs from the value of related
assets on EADS’ balance sheet and related off-balance sheet
contingent commitments for the following reasons: (i) assets arerecorded in compliance with IFRS, but may relate to transactions
where there is limited recourse to Airbus, Eurocopter or ATR;

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Back to Contents(ii) the value of the assets is impaired or depreciated on the
consolidated balance sheet; (iii) off-balance sheet gross exposure
is calculated as the net present value of future payments,
whereas the financial statements present the total future
payments in nominal terms; and (iv) exposure related to certain
AVGs recorded as operating leases in the financial statements iscategorised under Asset Value Exposure, not Customer Financing
Exposure.
Airbus’ Gross Customer Financing Exposure amounted
to US$ 1.8 billion (€ 1.3 billion) as of 31 December 2009.
The chart below illustrates the evolution of this exposure during
2009 (in US$ million).

Evolution of Airbus Gross Exposure during 2009

1,464

December 2008

Additions602

Disposals-149

Amortisation-101

December 2009

Airbus Gross Customer Financing Exposure as of 31 December
2009 is distributed over 92 aircraft, operated at any time byapproximately 25 airlines. In addition, the level of exposure may
include other aircraft-related assets, such as spare parts. 90% of
Airbus Gross Customer Financing Exposure is distributed over 9
airlines in 6 countries (this excludes backstop commitments).
ATR’s Gross Customer Financing Exposure amounted to
US$ 0.2 billion (€ 0.2 billion) as of 31 December 2009. This
exposure is distributed over 164 aircraft. EADS proportionallyconsolidates only 50% of ATR and shares the risk with its
partner, Alenia.
Eurocopter’s Gross Customer Financing Exposure amounted
to € 0.1 billion as of 31 December 2009. This exposure is
distributed over approximately 50 helicopters.

1,816

Net Exposure. Net exposure is the difference between gross
exposure and the estimated value of the collateral security.
Collateral value is assessed using a dynamic model based on the
net present value of expected future rentals from the aircraft in
the leasing market and potential cost of default. This valuation
model yields results that are typically lower than residual value
estimates by independent sources in order to allow for whatmanagement believes is its conservative assessment of market
conditions, as well as for repossession and transformation costs.
See “— 2.1.3.8 Accounting for Sales Financing Transactions in
the Financial Statements”.
The table below shows the transition from gross to net financing
exposure (which does not include AVGs) as at 31 December
2009, 2008 and 2007. It includes 100% of Airbus’ andEurocopter’s customer financing exposure and 50% of ATR’s
exposure, reflecting EADS’ stake in ATR.

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2

Airbus(in €m)

Note*

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EC

Total EADS

31/12/2009 31/12/2008 31/12/2007 31/12/2009 31/12/2008 31/12/2007 31/12/2009 31/12/2009 31/12/2008 31/12/2007

Operating Lease

15

341

366

506

-

67

94

-

341

433

600

Finance leases & loans

17

1,569

1,329

1,017

4

23

19

29

1,602

1,352

1,036

-

-

-

108

88

81

-

108

88

81

1,910

1,695

1,523

112

178

194

29

2,051

1,873

1,717

446

484

526

47

46

42

47

540

530

568

(985)

(1,012)

(931)

-

-

-

-

(985)

(1,012)

(931)

(111)

(115)

(128)

-

-

-

-

(111)

(115)

(128)

OthersOn Balance sheet
customer financing
Off Balance sheet
customer financing
Non-recourse
transactions
on balance sheet
Off balance sheet
adjustments
Gross customer
financing exposure

34

1,260

1,052

990

159

224

236

76

1,495

1,276

1,226

Collateral Values

34

(772)

(476)

(411)

(145)

(203)

(211)

(55)

(972)

(679)

(622)

488

576

579

14

21

25

21

523

597

604

34

Net exposure
Asset impairments
and provisions on:
Operating Lease

34

(70)

(52)

(102)

-

-

-

-

(70)

(52)

(102)

Finance leases & loans
On balance sheet
commitments
Off balance sheet
commitments
Asset impairments
and provisions

34

(158)

(244)

(191)

-

-

-

-

(158)

(244)

(191)

34

-

-

-

(14)

(21)

(25)

(21)

(35)

(21)

(25)

34

(260)

(280)

(286)

-

-

-

-

(260)

(280)

(286)

(488)

(576)

(579)

(14)

(21)

(25)

(21)

(523)

(597)

(604)

-

-

-

-

-

-

-

-

-

Residual exposure*

The indicated numbers refer to the number of the Notes to the Consolidated Financial Statements (IFRS).

The gross value of consolidated operating leases shown in thetable above (€ 341 million in 2009, € 433 million in 2008 and€ 600 million in 2007) is accounted for in “Property, plantand equipment” at net book value of operating leases before
impairment. Corresponding accumulated asset impairments(€ -70 million in 2009, € -52 million in 2008 and € -102 million
in 2007) are charged against this net book value. See “Notes
to the Consolidated Financial Statements (IFRS) — Note 15:
Property, plant and equipment” and “— Note 34: Commitments
and contingencies”.
Also shown in the table above is the gross value for consolidated
finance leases and loans (€ 1,602 million in 2009, € 1,352 million
in 2008 and € 1,036 million in 2007). Consolidated finance leases(€ 845 million in 2009, € 848 million in 2008 and € 690 million
in 2007) are accounted for as long-term financial assets, recordedat their book value before impairment. Loans (€ 757 million in
2009, € 504 million in 2008 and € 346 million in 2007) are also
accounted for as long-term financial assets, recorded at theiroutstanding gross amount. Corresponding overall accumulated
impairments (€ -158 million in 2009, € -244 million in 2008and € -191 million in 2007) are charged against the book values.
See “Notes to the Consolidated Financial Statements (IFRS) —94 EADS R EG I S TR ATI O N DO C U ME N T 2 0 0 9

Note 17: Investments in associates accounted for under the equity
method, other investments and other long-term financial assets”.
Off-balance sheet customer financing exposure at Airbus,
ATR (accounted for at 50% by EADS) and Eurocopter was€ 540 million in 2009, € 530 million in 2008 and € 568 million
in 2007. These amounts reflect the total nominal value of future
payments under lease in/lease out structures. The corresponding
net present value of future payments (discounted and net of
mitigating factors) is included in total Gross Financing Exposure
for an amount of € 429 million in 2009, € 415 million in 2008and € 440 million in 2007. A provision of € 260 million has been
accrued for in EADS’ balance sheet as of 31 December 2009
to cover the full amount of the corresponding net exposure.
See “Notes to the Consolidated Financial Statements (IFRS) —Note 34: Commitments and contingencies”.

Asset Value Exposure. A significant portion of EADS’ asset
value exposure arises from outstanding AVGs, primarily at
Airbus. Management considers the financial risks associatedwith such guarantees to be manageable. Three factors contributeto this assessment: (i) the guarantee only covers a tranche of theestimated future value of the aircraft, and its level is considered
prudent in comparison to the estimated future value of each

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aircraft; (ii) the AVG-related exposure is diversified over a large
number of aircraft and customers; and (iii) the exercise periodsof outstanding AVGs are distributed through 2021, resulting in
low levels of exposure maturing in any year. Because exercise
dates for AVGs occur on average in the 12th year following
aircraft delivery, AVGs issued in 2009 will generally not be
exercisable prior to 2021, and, therefore, an increase in near-term
exposure is not expected. In addition, these AVGs must generally
be exercised during a pre-defined window and contain specificconditions that must be met in order for them to be exercisable.
Gross Exposure. Gross Asset Value Exposure is defined as thesum of the maximum guaranteed tranche amounts (as opposed tothe sum of the maximum guaranteed asset value amounts) underoutstanding AVGs. At 31 December 2009, Gross Asset Value
Exposure was US$ 2.5 billion (€ 1.8 billion). The off-balance
sheet portion of Gross Asset Value Exposure, representing
AVGs with net present values of less than 10% of the sales priceof the corresponding aircraft, was € 1,015 million, excluding€ 430 million where the risk is considered to be remote. In manycases, the risk is limited to a specific portion of the residual
value of the aircraft. The remaining Gross Asset Value Exposure
is recorded on-balance sheet.
Net Exposure. The present value of the risk inherent to the given
asset value guarantees, where a settlement is considered to beprobable, is fully provided for and included in the total amountof provisions for asset value risks of € 657 million. This provision
covers a potential expected shortfall between the estimated valueof the aircraft of the date upon which the guarantee can be
exercised and the value guaranteed on a transaction basis taking
counter guarantees into account. See “Notes to the Consolidated
Financial Statements (IFRS) — Note 26C: Other provisions”.

Backstop Commitments. While backstop commitments toprovide financing related to orders on Airbus’ and ATR’s
backlog are also given, such commitments are not considered
to be part of gross exposure until the financing is in place,

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which occurs when the aircraft is delivered. This is due to thefact that (i) past experience suggests it is unlikely that all suchproposed financings actually will be implemented (although it ispossible that customers not benefiting from such commitments
may nevertheless request financing assistance ahead of aircraft
delivery), (ii) until the aircraft is delivered, Airbus or ATR retain
the asset and do not incur an unusual risk in relation thereto(other than the corresponding work-in-progress), and (iii) third
parties may participate in the financing.
Orders and Backstop Commitments. Over the last three years(2007, 2008 and 2009), the average number of newly orderedaircraft in respect of which a backstop commitment has beenoffered amounted to 5% of the average orders recorded over thesame period, i.e. 42 supported aircraft per year out of 796 orders
per year on average. These financing commitments may or may
not materialise at the contractual delivery date of the aircraft. In
addition, the level of financing support together with the terms
and conditions offered to customers will vary.
Deliveries and Financing Support Implemented at Delivery. Overthe last three years (2007, 2008 and 2009), the average number ofaircraft delivered in respect of which financing support has been
provided by Airbus amounted to 3% of the average number ofdeliveries over the same period, i.e. 12 aircraft financed per year
out of 478 deliveries per year on average. This financing support
may take the form of senior or junior loans or guarantees. Suchsupport may have originated from EADS’ contractual backstop
commitments provided at signing of the purchase agreement (seeabove) or may be the result of a request for financing assistancemade by the customer ahead of aircraft delivery.
See “Notes to the Consolidated Financial Statements (IFRS) —Note 34: Commitments and contingencies” for further discussionof EADS’ sales financing policies and accounting procedures.

2.1.8 Hedging Activities
2.1.8.1 FOREIGN EXCHANGE RATESMore than 60% of EADS’ revenues are denominated in US
dollars, with approximately half of such currency exposure“naturally hedged” by US dollar-denominated costs. The
remainder of costs is incurred primarily in euros, and to alesser extent, in pounds sterling. Consequently, to the extent
that EADS does not use financial instruments to hedge its
net current and future exchange rate exposure from the timeof a customer order to the time of delivery, its profits will

be affected by market changes in the exchange rate of the US
dollar against these currencies, and to a lesser extent, by market
changes in the exchange rate of pound sterling against the euro.
As EADS intends to generate profits only from its operations
and not through speculation on foreign currency exchange rate
movements, EADS uses hedging strategies solely to mitigate theimpact of exchange rate fluctuations on its EBIT*. See “— 2.1.4.3
EBIT* Performance by Division — Foreign Currency Impact on
EBIT*”. See also “Risk Factors — 1. Financial Market Risks —Exposure to Foreign Currencies”.

* EBIT: earnings before interest and taxes, pre-goodwill impairment and exceptionals.

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As EADS uses financial instruments to hedge its net foreign
currency exposure, the portion of its US dollar-denominatedrevenues not hedged by financial instruments (approximately
30% of total consolidated revenues) is exposed to changes inexchange rates. Of this non-hedged portion of revenues, acertain percentage (relating to customer pre-delivery payments)
is converted into euro at the spot rate effective at the time thepayment was received by EADS. The remainder of non-hedged
US dollar-denominated revenues (corresponding to payments
upon delivery) are subject to changes in the spot rate at the timeof delivery. See “— 2.1.3.7 Foreign Currency Translation”.

Exposure on aircraft sales. For products such as aircraft, EADS
typically hedges forecasted sales in US dollars. The hedged
items are defined as the first forecasted highly probable future
cash inflows for a given month based upon final payments atdelivery. The amount of the expected flows to be hedged cancover up to 100% of the equivalent of the net US dollar exposure
at inception. For EADS, a forecasted transaction is regarded ashighly probable if the future delivery is included in the firm
order book or is very likely to materialise in view of contractual
evidence (e.g., a letter of intent). The coverage ratio is adjusted totake into account macroeconomic movements affecting the spot
and interest rates as well as the robustness of the commercial
cycle.
Exposure on non-aircraft business. For the non-aircraftbusiness, EADS typically hedges inflows and outflows of foreign
currencies from sales and purchase contracts following the same
logic, typically in lower volumes.
Exposure on treasury operations. In connection with its
treasury operations, EADS enters into foreign exchange swaps(notional amount of € 4.2 billion at 31 December 2009) to adjust
for short-term fluctuations of non-euro cash balances at thebusiness unit level. Year-to-year changes in the fair market valueof these swaps are recorded in the consolidated income statement

Total Hedges (in US$ bn)

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in the line item “other financial result”. These changes may havea material impact on EADS’ net income.

Embedded derivatives. EADS also has foreign currency
derivative instruments which are embedded in certain purchaseand lease contracts denominated in a currency other than thefunctional currency of the significant parties to the contract,
principally US dollar and pound sterling. Gains or losses relating
to such embedded foreign currency derivatives are reported in
the line item “other financial result”. These changes may havea material impact on EADS’ net income. In addition, EADS
hedges currency risk arising from financial transactions in othercurrencies than euro, such as funding transactions or securities.
Hedge Portfolio. EADS manages a long-term hedge portfoliowith a maturity of several years covering its net exposure to US
dollar sales, mainly relating to the activities of Airbus (and to alesser extent, of ATR, Eurocopter, Astrium and the DS division).
The net exposure is defined as the total currency exposure (USdollar-denominated revenues), net of the part that is “naturally
hedged” by US dollar-denominated costs. The hedge portfolio
covers the vast majority of the Group’s hedging transactions.
For financial reporting purposes, EADS mostly designates
a portion of the total firm future cash flows as the hedged
position to cover its expected net 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 the hedging
relationship. As hedging instruments, EADS primarily uses
foreign currency forwards and synthetic forwards, as well as
options.
The table below sets forth the notional amount of foreignexchange hedges in place as of 31 December 2009, and theaverage US dollar rates applicable to corresponding EBIT*.

2010

2011

2012

2013

2014

2015+

Total

16.8 (1)

15.6 (1)

12.4

8.5

4.5

3.0

60.8

Forward Rates (in US$) (2)
€-US$

1.35

1.39

1.40

1.41

1.42

1.42

£-US$

1.73

1.85

1.69

1.60

1.64

1.71

(1) Including US $ 0.9 billion and US $ 1.0 billion of options in 2010 and 2011, respectively.
(2) Excluding options.

For further information regarding the notional amounts of the Group’s foreign exchange derivative financial instruments, see“Notes to the Consolidated Financial Statements (IFRS) — Note 35C: Notional amounts of derivative financial instruments”.

* EBIT: earnings before interest and taxes, pre-goodwill impairment and exceptionals.

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2.1.8.2 INTEREST RATESEADS uses an asset and liability management approach withthe objective of limiting its interest rate risk. EADS attempts tomatch the risk profile of its assets with a corresponding liability
structure. The remaining net interest rate exposure is managed
through several types of instruments in order to minimise risks
and financial impacts. Therefore, EADS may use interest rate
derivatives for hedging purposes.
Hedging instruments that are specifically related to debt
instruments (such as the notes issued under the EMTN
programme) have at most the same nominal amounts, as well as
the same maturity dates, as the corresponding hedged item.

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Regarding the management of its cash balance, EADS invests
mainly in short-term instruments and/or floating rate
instruments in order to further minimise any interest risk in its
cash and securities portfolio.
For information regarding the notional amounts of the Group’s
interest rate derivative financial instruments, see “Notes to theConsolidated Financial Statements (IFRS) — Note 35C: Notionalamounts of derivative financial instruments”.
For further information relating to market risk and the ways inwhich EADS attempts to manage this risk, see “Notes to theConsolidated Financial Statements (IFRS) — Note 35A: Financial
risk management”.

2.2 Financial Statements
The Consolidated Financial Statements (IFRS) and the Company
Financial Statements of EADS for the year ended 31 December
2009, together with the related notes, appendices and Auditors’
reports, are attached hereto and shall be deemed to beincorporated in and form part of this Registration Document.

appendices and Auditors’ reports, as attached to andincorporated by reference in the Registration Document filed
in English with, and approved by, the AFM on 22 April 2009
and filed in English with the Chamber of Commerce of The
Hague.

In addition, the English versions of the following documents
shall be deemed to be incorporated in and form part of this
Registration Document:

Copies of the above-mentioned documents are available free ofcharge upon request in English, French, German and Spanish at
the registered office of the Company and on www.eads.com.

> the Consolidated Financial Statements (IFRS) and theCompany Financial Statements of EADS for the year
ended 31 December 2007, together with the related notes,
appendices and Auditors’ reports, as included in “Part 1/1.2
Financial Statements” of the Registration Document filed in
English with, and approved by, the AFM on 24 April 2008
and filed in English with the Chamber of Commerce ofAmsterdam; andCopies of the above-mentioned Registration Documents
are also available in English on the website of the AFM on
www.afm.nl. The above-mentioned financial statements are alsoavailable in English for inspection at the Chamber of Commerceof The Hague.

> the Consolidated Financial Statements (IFRS) and theCompany Financial Statements of EADS for the year
ended 31 December 2008, together with the related notes,

EADS confirms that the reports of the Auditors attached hereto(as well as those incorporated by reference herein) have been
accurately reproduced and that as far as EADS is aware and isable to ascertain from the information provided by the Auditors,
no facts have been omitted which would render such reports
inaccurate or misleading.

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2.3 Statutory Auditors’ Fees
Services provided to the Group by statutory Auditors and members of their network for the financial years 2009, 2008 and 2007:
KPMG Accountants N.V.
2009

Audit
Audit process, certification,
examination of individualand consolidated accounts

Amount
in €K

5,238

2008
%

Amount
in €K

72.3

4,872

Ernst & Young Accountants
2007%

Amount
in €K

67.5

5,291

2009
%

Amount
in €K

73.2

4,389

2008
%

Amount
in €K

79.9

4,684

2007
%

Amount
in €K

%

84.7

4,571

86.7

Additional tasks

1,258

17.4

821

11.4

491

6.8

969

17.6

548

9.9

284

5.4

Sub-total

6,496

89.7

5,693

78.9

5,782

80.0

5,358

97.5

5,232

94.6

4,855

92.1

Legal, tax, employment

354

4.9

1,191

16.5

897

12.4

137

2.5

160

2.9

333

6.3

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

200

2.7

251

3.5

117

1.6

-

-

-

-

-

-

194

2.7

82

1.1

428

6.0

-

-

138

2.5

82

1.6

748

10.3

1,524

21.1

1,442

20.0

137

2.5

298

5.4

415

7.9

7,244

100.0

7,217

100.0

7,224

100.0

5,495

100.0

5,530

100.0

5,270

100.0

Other services as relevant

Sub-total
Total

2.4 Information Regarding the Statutory Auditors

KPMG Accountants N.V.
Fascinatio Boulevard 200, 3065 WB Rotterdam — The Netherlands
Represented by L.A. Blok
Ernst & Young Accountants LLP
Antonio Vivaldistraat 150, 1083 HP Amsterdam — The Netherlands Represented by F.A.L. van der Bruggen*

Date of First
Appointment

Expiration of Current
Term of Office*

10 May 2000

1 June 201024 July 2002

1 June 2010

A resolution will be submitted to the annual s hareholders’ m eeting to be held on 1 June 2010, in order to appoint Ernst & Young Accountants LLP and KPMG Accountants N.V.
as the Company’s a uditors for the 2010 financial year.

KPMG Accountants N.V., Ernst & Young Accountants LLP and their respective representatives are registered with the Royal NIVRA(Nederlands Instituut van Register Accountants).

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3.1
3.1.1
3.1.2
3.1.3
3.1.4

3
General Descriptionof the Company
and its Share Capital

3.1.5
3.1.6
3.1.7
3.1.8
3.1.9
3.1.103.1.11
3.1.12

3.2
3.2.1
3.2.2
3.2.3
3.2.4
3.2.5

3.3
3.3.1
3.3.2
3.3.3
3.3.4
3.3.5
3.3.6
3.3.7

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General Descriptionof the Company
Commercial and Corporate Names,
Seat and Registered Ofﬁce
Legal Form
Governing Laws and Disclosures
Date of Incorporation and Duration of theCompany
Objects of the Company
Commercial and Companies Registry
Inspection of Corporate Documents
Financial Year
Allocation and Distribution of Income
General Meetings
Disclosure of Holdings
Mandatory Offers

105
105
105
105
105
106
106
108
109

General Descriptionof the Share Capital

111

Issued Share Capital
Authorised Share Capital
Modiﬁcation of Share Capital or Rights
Attached to the Shares
Securities Granting Access to theCompany’s Capital
Changes in the Issued Share Capital
since Incorporation of the Company

Shareholdings
and Voting Rights
Shareholding Structure
Relationships with Principal Shareholders
Form of Shares
Changes in the Shareholding of theCompany Since its Incorporation
Persons Exercising Control over theCompany
Simpliﬁed Group Structure Chart
Purchase by the Company of its Own
Shares

3.4

Dividends

3.4.1

Dividends and Cash Distributions Paid
Since the Incorporation of the Company
Dividend Policy of EADS
Unclaimed Dividends
Taxation

3.4.2
3.4.3
3.4.4

3.5

102

Annual Securities
Disclosure Report

102
102
102

111
111
112
112
113

114
114
116
121
121
123
123
125

129
129
129
129
130

131

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3.1 General Description of the Company
3.1.1 Commercial and Corporate Names, Seat and Registered Ofﬁce
Commercial Name: EADS

Seat (statutaire zetel): Amsterdam

Corporate Name: European Aeronautic Defence and Space
Company EADS N.V.

Tel: + 31 (0)71 5245 600
Fax: +31 (0)71 5232 807

Registered Office: Mendelweg 30, 2333 CS Leiden,
the Netherlands

3.1.2 Legal Form
The Company is a public limited liability company (naamloze
vennootschap) organised under the laws of the Netherlands.

As a company operating worldwide, EADS is subject to, andoperates under, the laws of each country in which it conducts
business.

3.1.3 Governing Laws and Disclosures
The Company is governed by the laws of the Netherlands (inparticular Book 2 of the Dutch Civil Code) and by its Articles of
Association (the “Articles of Association”).
The Company is subject to various legal provisions of the Dutch
Financial Supervision Act (Wet op het financieel toezicht) (the“WFT”). In addition, given the fact that its shares are admitted
for trading on a regulated market in France, Germany andSpain, the Company is subject to certain laws and regulationsin these three jurisdictions. A summary of the main regulations
applicable to the Company in relation to information to be madepublic in these three jurisdictions, as well as the Netherlands, is
set out below.

3.1.3.1 PERIODIC DISCLOSURE OBLIGATIONS
Pursuant to Directive 2004/109/EC on the harmonisationof transparency requirements in relation to information about
issuers whose securities are admitted to trading on a regulated
market (the “Transparency Directive”), EADS is required
to disclose certain periodic and ongoing information (the“Regulated Information”).

102 EADS R EG I S TR ATI O N DO C U ME N T 2 0 0 9

Pursuant to the Transparency Directive, EADS must disseminate
such Regulated Information throughout the European
Community in a manner ensuring fast access to such information
on a non-discriminatory basis. For this purpose, EADS may use
a professional service provider (wire). In addition, RegulatedInformation must be filed at the same time with the relevant
competent market authority. EADS must then ensure that
Regulated Information remains publicly available for at least five
years.
Finally, Regulated Information must be made available for central
storage by a mechanism that is to be officially designated by theissuer’s home member state.

Dutch Regulations
For the purpose of the Transparency Directive, supervision
of EADS is effected by the member state in which it maintains
its registered office, which is the Netherlands. The competentmarket authority that assumes final responsibility for supervisingcompliance by EADS in this respect is the AFM.

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Under the Transparency Directive as implemented underDutch law, EADS is subject to a number of periodic disclosure
requirements, such as:> publishing an annual financial report, together with an audit
report drawn up by the statutory Auditors, within fourmonths after the end of each financial year;> publishing a semi-annual financial report, within two months
after the end of the first six months of the financial year; and> publishing quarterly financial reports, within a period
between ten weeks after the beginning and six weeks before
the end of the first or second six-month period of thefinancial year.
In addition, the Company must file with the AFM, within fivedays following their adoption by the Company’s shareholders, its
audited consolidated annual financial accounts, the management
report, the Auditors’ report and other information related to thefinancial accounts.
The Company has also provided in this Registration Document
a list of certain corporate and financial documents and otherinformation that it has published or made available to the public
over the last 12 months and details of where these documents
can be obtained (see “— 3.5 Annual Securities Disclosure
Report”).

French Regulations
Since the Transparency Directive was implemented in France on
20 January 2007, EADS is no longer required to comply withcertain disclosure obligations pursuant to the general regulationsof the AMF.
In accordance with the requirement set forth in the Transparency
Directive to disseminate Regulated Information throughout
the European Community, EADS is required to provide
simultaneously in France the same information as that provided
abroad.

German Regulations
Since the Transparency Directive was implemented in Germany
on 20 January 2007, EADS is no longer required to comply withcertain disclosure obligations pursuant to the German Stock
Exchange Act (Börsengesetz) and the German Stock Exchange
Admissions Regulation (Börsenzulassungs-Verordnung).
Due to the listing of the Company’s shares in the regulierter
Markt (specifically, in the sub-segment of the regulierter Markt,
the Prime Standard) of the Frankfurt Stock Exchange, theCompany is subject to the post-listing obligations described
below. In addition, the Company is included in the selection
index MDAX, the MidCap index of Deutsche Börse AG.

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According to sections 65 and 66 of the Exchange Rules(Börsenordnung) of the Frankfurt Stock Exchange, the listingin the Prime Standard of the regulierter Markt results in the
obligation of the Company to publish consolidated annual
accounts as well as quarterly reports.
In addition, the Company is required as a result of its listing in
the regulierter Markt (Prime Standard) to prepare an update of acorporate action timetable at the beginning of each fiscal year.
The Company is also required to hold a meeting of analysts atleast once a year in addition to the press conference regarding thebalance sheet.
Save for certain exceptions, the Company has to apply foradmission of shares issued at a later date to the regulierter Marktof the Frankfurt Stock Exchange, see section 69 of the German
Stock Exchange Admissions Regulation.

Spanish Regulations
Since the entering into force of the law and regulation
implementing the Transparency Directive in Spain in April
and December 2007, respectively, EADS is no longer required
to comply with certain disclosure obligations pursuant to the
Spanish Securities Act as developed by Royal Decree 1362/2007
of 19 October 2007.
In accordance with the requirement set forth in the Transparency
Directive to disseminate Regulated Information throughout theEuropean Community, EADS is required to provide simultaneously
in Spain the same information as that provided abroad.

3.1.3.2 ONGOING DISCLOSURE OBLIGATIONS
Pursuant to the Transparency Directive, Regulated Information
includes in particular inside information as defined pursuant
to Article 6 of Directive 2003/6/EC on insider dealing andmarket manipulation (the “Market Abuse Directive”). Suchinformation must be disseminated throughout the European
Community (see introduction to section “— 3.1.3.1 Periodic
Disclosure Obligations”).
Inside information shall mean information of a precise nature
which has not been made public, relating, directly or indirectly,
to one or more issuers of financial instruments or to one ormore financial instruments and which, if it were made public,
would be likely to have a significant effect on the prices of
those financial instruments or on the price of related derivative
financial instruments.
Inside information must be disclosed to the markets as soon as
possible. However, an issuer may under its own responsibility
delay the public disclosure of inside information so as not toprejudice its legitimate interests provided that such omission
would not be likely to mislead the public and provided that theissuer is able to ensure the confidentiality of that information.

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Dutch Regulations
Following the implementation of the Transparency Directive into
Dutch law, EADS must publicly disclose Regulated Information
and also file Regulated Information with the AFM, which willkeep all relevant Regulated Information in a publicly available
register. EADS will, whenever it discloses inside information
pursuant to applicable mandatory law as part of the RegulatedInformation, disclose and disseminate throughout the European
Community any such information.
Under Dutch law, the Company must also publish any change
in the rights attached to its shares, as well as any changes in therights attached to any rights issued by the Company to acquire
the Company’s shares.

French Regulations
Any inside information as defined above will be disclosed in
France by means of dissemination throughout the European
Community, as it will be organised under Dutch law
implementing the Transparency Directive so as to provide
simultaneously in France equivalent information to that provided
abroad.

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relevant event on its website. EADS must try to ensure that therelevant information is disclosed simultaneously to all types ofinvestors in the member States of the European Union where it
is listed.
An order dated 1 June 2009 requires that EADS appoint at least
one official spokesperson to respond to any inquiries that the
CNMV may have in relation to a relevant event disclosed by
EADS. This spokesperson must be able to officially reply onbehalf of EADS and must have access to senior management inorder to verify any information requested by the CNMV.
A circular dated 4 November 2009 further specifies theprocess for communicating the appointment of the CNMV
spokesperson and any subsequent replacement. It also provides
that the publication of any relevant event must be made via
the CIFRADOC system (the CNMV’s electronic system for
notifications and communications) and that publication by adifferent means is only possible under exceptional circumstances,subject to approval by the General Markets Directorate (Dirección
General de Mercados).
Pursuant to the Spanish Securities Act and its developing rules
and regulations, EADS is also required:

German Regulations
Any inside information as defined above will be disclosed
in Germany by means of dissemination throughout theEuropean Community, as it will be organised under Dutch
law implementing the Transparency Directive so as to provide
simultaneously in Germany equivalent information to thatprovided abroad.

Spanish Regulations
Pursuant to Article 82 of the Spanish Securities Act, theCompany is required to make public, as soon as possible, any
fact or decision that may substantially affect the quotation ofits shares (“a relevant event”). Any relevant event must be
notified to the CNMV simultaneously with its diffusion by
any other means, as soon as the relevant fact is known, therelevant decision has been made or, the relevant agreement
has been executed, as the case may be. EADS may, under its
own responsibility, delay the publication of any relevant event
if it considers that such publication damages its legitimate
interests, provided that such lack of publication does not mislead
the public and that EADS is in a position to guarantee theconfidentiality of the relevant information. Nonetheless, EADS
will immediately inform the CNMV should it decide to delay
the publication of any relevant event. Furthermore, pursuant
to the Spanish Securities Act, EADS must post details of any

104 EADS R EG I S TR ATI O N DO C U ME N T 2 0 0 9(i) to have rules of the Board of Directors which must be filedwith the CNMV and published on EADS’ website;(ii) to file with the CNMV a description of the relevant Dutch
law provisions and provisions in the Articles of Association
governing the conduct of shareholders’ meetings and postsuch description on its website;(iii) to have a website which must contain as a minimum theinformation specified by Spanish regulations;(iv) to file a corporate governance report with the CNMV on anannual basis; and(v) in respect of the provisions of any shareholders’ agreement
which relate to the exercise of voting rights at shareholders’meetings or restrictions or conditions on the freetransferability of shares or convertible bonds, to (a) provided
EADS is a party to the shareholders’ agreement, file suchprovisions with the CNMV who will then publish theprovisions as a relevant event, (b) post the provisions on
EADS’ website, unless the CNMV exempts EADS fromdoing so, and (c) set out details of the provisions in theannual corporate governance report referred to in (iv) above.

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3.1.4 Date of Incorporation and Duration of the Company
The Company was incorporated on 29 December 1998 for an unlimited duration.

3.1.5 Objects of the Company
Pursuant to Article 2 of the Articles of Association, theobjects of the Company are to hold, co-ordinate and manage
participations or other interests and to finance and assume
liabilities, provide for security and/or guarantee debts of legal
entities, partnerships, business associations and undertakingsthat are involved in:> the aeronautic, defence, space and/or communication industry;or> activities that are complementary, supportive or ancillary
thereto.

3.1.6 Commercial and Companies Registry
The Company is registered with the Registry of the Chamber of Commerce of The Hague (Handelsregister van de Kamer van
Koophandel en Fabrieken voor Den Haag) under number 24288945.

3.1.7 Inspection of Corporate Documents
The Articles of Association are available for inspection in Dutchat the Chamber of Commerce of The Hague.
In France, the Articles of Association are available at the head
office of EADS in France (37, boulevard de Montmorency, 75016
Paris, France, Tel.: + 33 1 42 24 24 24).

In Germany, the Articles of Association are available at thehead office of EADS in Germany (Willy-Messerschmitt-Str. −Tor 1, 81663 Munich, Germany, Tel.: + 49 89 60 70).
In Spain, the Articles of Association are available at the CNMV
and at the head office of EADS in Spain (Avda. Aragón 404,
28022 Madrid, Spain, Tel.: + 34 91 585 70 00).

3.1.8 Financial YearThe financial year of the Company starts on 1 January and ends on 31 December of each year.

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3.1.9 Allocation and Distribution of Income
3.1.9.1 DIVIDENDS
The Board of Directors shall determine which part of the profits
of the Company shall be attributed to reserves. The remaining
distributable profit shall be at the disposal of the shareholders’meeting.
The shareholders’ meeting may resolve (if so proposed by the
Board of Directors) that all or part of a dividend shall be paid inshares of the Company as opposed to cash.
The declaration of a dividend, an interim dividend or another
distribution to the shareholders shall be made known to themwithin seven days after such declaration. Declared dividends
shall be payable within four weeks of such declaration unless

another date for payment is proposed by the Board of Directors
and approved by the shareholders’ meeting.
Dividends, interim dividends and other distributions on sharesshall be paid by bank transfer to the bank or giro accounts
designated in writing to the Company by, or on behalf of,shareholders at the latest 14 days after their announcement.

3.1.9.2 LIQUIDATIONIn the event of the dissolution and liquidation of the Company,
the assets remaining after payment of all debts and liquidation
expenses shall be distributed amongst the holders of the sharesin proportion to their shareholdings.

3.1.10 General Meetings
3.1.10.1 CALLING OF MEETINGS
Shareholders’ meetings are held as often as the Board of
Directors deems necessary or upon the request of shareholders
holding, individually or together, at least 10% of the total issued
share capital of the Company.
The Board of Directors must give notice of general meetings in
at least one of the Netherlands’ national daily newspapers, atleast one international daily newspaper and at least one daily
newspaper in each of the countries in which the Company’s
shares are listed. Such publication must be made at least
15 days before the day of the meeting, not counting the dayon which notice was given, and shall state either the mattersto be considered at such meeting or that the agenda is open to
inspection by the shareholders at the offices of the Company andat such other locations as may be specified in the notice.
The annual shareholders’ meeting of the Company is held within
six months of the end of the financial year.

representing at least 1% of the issued share capital (or shares
having an aggregate market value of € 50 million), to put itemson the agenda for the annual shareholders’ meeting, must be
effected by the Board of Directors, if such requests to the Boardof Directors have been made at least six (6) weeks prior to thedate scheduled for the meeting except if, in the opinion of theBoard of Directors, important interests of the Company prevailover the insertion of such items into the agenda.
A request as referred to in the preceding paragraph may only
be made in writing. The Board of Directors can decide that in“writing” is understood to include a request that is recorded
electronically.

3.1.10.2 RIGHT TO ATTEND MEETINGS
Each holder of one or more shares may attend shareholders’meetings, either in person or by written proxy, to speak and tovote according to the Articles of Association. See “— 3.1.10.4
Conditions of Exercise of Right to Vote”.

Shareholders’ meetings are held in Amsterdam, The Hague,
Rotterdam or Haarlemmermeer (Schiphol Airport). The Boardof Directors may decide that shareholders’ meetings may beattended by means of electronic or video communication devices
from the locations mentioned in the convening notice.

A shareholder or person who has the right to attend a meetingcan see to it that he is represented by more than one proxyholder, provided that only one proxy holder can be appointed foreach share.

The Board of Directors must announce the date of the annual
shareholders’ meeting at least two months before the meeting.
Requests made by one or more shareholders collectively

In relation to holders of registered shares, the Board of Directors
may provide in the convening notice that those persons arerecognised as authorised to exercise the rights to attend, speak
and vote at the shareholders’ meetings, who at the point in

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time mentioned in the convening notice are authorised toexercise those rights and as such have been registered in theregister appointed for the purpose by the Board of Directors,
irrespective of who is authorised to exercise those rights
on the day of the meeting.

In order to exercise their voting rights, the shareholders will
also be able, by contacting their financial intermediary or
accountholder, to give their voting instructions to Euroclear
France S.A. or to any other person designated for this purpose, as
specified by the Company in the convening notice.

Any person who is entitled to exercise the rights set out inthe above paragraph (either in person or by means of a writtenproxy) and is attending the meeting from another location(see “— 3.1.10.1 Calling of Meetings”) in such a manner that theperson acting as Chairman of the meeting is convinced that sucha person is properly participating in the meeting, shall be deemed
to be present or represented at the meeting, shall be entitled tovote and shall be counted towards a quorum accordingly.

Pursuant to the Articles of Association, EADS may set a“registration date” at which the persons entitled to attend andvote at the shareholders’ meetings are recorded for this purpose
irrespective of who is shareholder at the time of the meeting. It
may also provide for electronic means of convocation, attendance
and voting at the shareholders’ meetings. The introduction ofsuch electronic means will depend on the availability of thenecessary technical means and the market practice.

As a prerequisite to attending the shareholders’ meeting andto casting votes, the holders of bearer shares and those who
derived the aforementioned rights from these shares shall beobliged to deposit their share certificate or the documents
evidencing their rights against receipt, at such locations as
shall be determined by the Board of Directors and stated in
the convening notice.
Such convening notice shall also state the day that has been
fixed as the final day on which the share certificates andthe documents evidencing the aforementioned rights may
be deposited. That day may not be earlier than five businessdays, but in each case not earlier than the seventh day, prior
to the meeting.
As far as registered shares are concerned, the Board of Directors
should be informed in writing within the timeframe mentioned
in the two preceding sentences of the intention to attend
the meeting (the Board must receive such written information
ultimately on the date specified in the notice by which themeeting is convened).
Holders of shares that are registered in the shareholders’ register
kept in Amsterdam have the option of holding them throughEuroclear France S.A. In this case the shares are registered in thename of Euroclear France S.A.
Shareholders holding their EADS shares through Euroclear
France S.A. who wish to attend general meetings will have torequest from their financial intermediary or accountholder anadmission card and be given a proxy to this effect from Euroclear
France S.A. in accordance with the instructions specified by
the Company in the convening notice. For this purpose, ashareholder will also be able to request that it be registereddirectly (and not through Euroclear France S.A.) in the registerof the Company. However, only shares registered in the name ofEuroclear France S.A. may be traded on stock exchanges.

3.1.10.3 MAJORITY AND QUORUM
All resolutions are adopted by means of a simple majority of thevotes cast except when a qualified majority is prescribed by the
Articles of Association or by Dutch law. No quorum is required
for any shareholders’ meeting to be held. Dutch law requires a
special majority for the passing of certain resolutions: inter alia,
capital reduction, exclusion of pre-emption rights in connection
with share issues, statutory mergers or statutory de-mergers; thepassing of such resolutions requires a majority of two-thirds ofthe votes cast if 50% of the share capital with voting rights is
not present at the meeting (or otherwise a simple majority). In
addition, resolutions to amend the Articles of Association or todissolve the Company may only be adopted with a majority of atleast two-thirds of the valid votes cast at a shareholders’ meeting,whatever the quorum present at such meeting.
Pledgees of shares and beneficiaries of a usufruct, which do nothave voting rights, do not have the right to attend and to speak atshareholders’ meetings. The owners of shares which are subject
to a pledge or a usufruct, which do not have voting rights, areentitled to attend and to speak at shareholders’ meetings.

3.1.10.4 CONDITIONS OF EXERCISE OF RIGHT TO VOTE
In all shareholders’ meetings, each shareholder has one votein respect of each share it holds. The major shareholders of
EADS – as set forth in “— 3.3.2 Relationships with Principal
Shareholders” – do not enjoy different voting rights from thoseof the other shareholders.
A shareholder whose shares are subject to a pledge or usufruct
shall have the voting rights attaching to such shares unlessotherwise provided by law or by the Articles of Association
or if, in the case of a usufruct, the shareholder has granted
voting rights to the usufructuary. Pursuant to the Articles of
Association and subject to the prior consent of the Board of
Directors, a pledgee of shares in the Company may be granted
the right to vote in respect of such pledged shares.

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Article 25 (paragraph 2 and 3) of the Articles of Association
provides that “The right to vote can be granted to an usufructuary.
The right to vote can be granted to a pledgee, but only with the priorconsent of the Board of Directors. No vote may be cast at the general
meeting of shareholders on a share that is held by the Company or a

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subsidiary; nor for a share in respect of which one of them holds thedepositary receipts. Usufructuaries and pledgees of shares that areheld by the Company or its subsidiaries are, however, not excluded
from their voting rights, in case the right of usufruct or pledge wasvested before the share was held by the Company or its subsidiary.”

3.1.11 Disclosure of Holdings
Pursuant to the WFT, any person who, directly or indirectly,
acquires or disposes of an interest in the capital or voting rights
of EADS must immediately give written notice to the AFM
by means of a standard form, if, as a result of such acquisition
or disposal, the percentage of capital interest or voting rights
held by such person meets, exceeds or falls below the following
thresholds: 5%, 10%, 15%, 20%, 25%, 30%, 40%, 50%, 60%, 75%
and 95%. Any person whose interest in the capital or voting
rights of EADS meets, exceeds or falls below one or severalof the above-mentioned thresholds due to a change in EADS’
outstanding capital, or in voting rights attached to the shares as
notified to the AFM by EADS, should notify the AFM no later
than the fourth trading day after the AFM has published thenotification by EADS. Among other things, EADS is required to
notify the AFM immediately if its outstanding share capital or
voting rights have changed by 1% or more since the Company’s
previous notification.
If at the end of a calendar year the composition of an investor’sholding differs from its previous disclosure as a result of theconversion of certain types of securities or following the exerciseof rights to acquire voting rights, this investor must then provide
an update of its previous disclosure within four weeks of theend of each calendar year by giving written notice thereof to
the AFM. The disclosures are published by the AFM on its
website (www.afm.nl). Pursuant to the Articles of Association,
shareholders must also notify the Company when crossing
the thresholds above.
The Articles of Association also require that any person
acquiring directly or indirectly or with others with whom it isacting in concert more than one tenth of the issued share capitalor voting rights of the Company must notify the Company of
its intentions (i) to buy or sell shares of the Company in thefollowing 12 months; (ii) to continue or to stop acquiring sharesor voting rights of the Company; (iii) to acquire control of theCompany; or (iv) to seek to designate a member of the Boardof Directors of the Company. The Company will provide theAMF with the information received in this context.

Failure to comply with the legal obligation to notify a change
in shareholding under the WFT is a criminal offence punishable
by criminal and administrative penalties as well as civil law
penalties, including the suspension of voting rights.

DISCLOSURE REQUIREMENTS FOR MEMBERS
OF THE BOARD OF DIRECTORS AND THE EXECUTIVECOMMITTEE

Disclosure of holdings
In addition to the requirements under the WFT regarding thedisclosure of holdings in case the specified thresholds are met
or exceeded or if holdings fall below these thresholds, membersof the Board of Directors must report to the AFM the numberof shares in EADS and attached voting rights(1) held by him or
an entity controlled by him, within two weeks following their
appointment as director, whether or not such shareholdings meetor exceed any of the specified thresholds. Subsequently, any
member of the Board of Directors is required to notify the AFMof any changes in such number of shares in EADS and attachedvoting rights.

Disclosure of transactions carried out on any securities
issued by the Company
Based on Section 5:60 of the WFT, certain persons discharging
managerial responsibilities within the Company and, whereapplicable, persons closely associated with them (together“Insiders”, as defined below), notify the AFM of all transactions
conducted for their own account involving shares of theCompany, or derivatives or other financial instruments related tosuch shares. These persons notify the AFM of the transactions
within five trading days unless the aggregate amount of suchtransactions does not exceed € 5,000 in respect of all transactions
in a calendar year.
“Insiders” for EADS include (i) members of the Board of
Directors and the Executive Committee of the Company,(ii) persons closely associated with any person mentioned undercategory (i) (including their spouses, dependent children and(1) In this context, the term “shares“ also includes for example depositary receipts for shares and rights resulting from an agreement to acquire shares or depositary receipts for shares, speciﬁcally call options,warrants, and convertible bonds. Equally, the term “voting rights“ also includes actual or contingent rights to voting rights (e.g., embedded in call options, warrants or convertible bonds).

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1other relatives who have shared the same household), and(iii) legal entities, trusts or partnerships whose managerial
responsibilities are discharged by any person referred to in
categories (i) or (ii) or which are directly or indirectly controlled
by such a person, or that have been set up for the benefit ofsuch a person, or whose economic interests are substantiallyequivalent to those of such a person.
EADS has adopted specific internal insider trading rules (the“Insider Trading Rules”) in order to ensure compliance withthe above requirements and with other share trading regulations
applicable in the Netherlands, France, Germany and Spain.
Pursuant to the Insider Trading Rules, (i) all employees anddirectors are prohibited from conducting transactions in EADS
shares or stock options if they have inside information, and(ii) certain persons are only allowed to trade in EADS sharesor stock options within very limited periods and have specificinformation obligations to the ITR Compliance Officer of theCompany and the competent financial market authorities withrespect to certain transactions. The updated version of the Insider
Trading Rules effective from 1 January 2007 is available on the
Company’s website.
Hans Peter Ring, Chief Financial Officer of EADS, has been
appointed as the ITR Compliance Officer by the Board of
Directors of EADS. The ITR Compliance Officer is responsible

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for the implementation of the Insider Trading Rules and forreporting to the AFM.
Pursuant to section 5:59 paragraph of the WFT, the Company
must maintain a list of all persons working for it by virtue ofa labour relationship or otherwise, who may have access to
inside information. Equivalent requirements exist under French,
German and Spanish law.
According to paragraph 15a of the German Securities Trading
Act, persons with significant managerial responsibility within
the Company (i.e., for EADS, the members of the Board of
Directors and of the Executive Committee), or the persons
closely associated with them, must disclose transactions
conducted for their own account involving shares of theCompany or financial instruments that relate to those shares,
especially derivatives. These persons have to notify the Company
and the German Federal Financial Supervisory Authority ofthe transactions within five trading days unless the aggregate
amount of such transactions does not exceed € 5,000 in respectof all transactions in a calendar year. Upon implementation of
the Transparency Directive into German law on 20 January 2007,
EADS is no longer required to publish such notifications on its
website or in a German supra-regional mandatory stock exchange
newspaper.

3.1.12 Mandatory Offers
3.1.12.1 TAKEOVER DIRECTIVE
The Directive 2004/25/EC on takeover bids (the “Takeover
Directive”) sets forth the principles governing the allocationof laws applicable to EADS in the context of a takeover bid
for the shares of the Company. The Takeover Directive refers
to the rules of the Netherlands and the rules of the European
Union Member State of the competent authority that must
be chosen by EADS from among the various market authorities
supervising the markets where its shares are listed.

undertake any action which might result in the frustration of
the bid, the applicable rules and the competent authority will
be governed by Dutch law (see “— 3.1.12.2 Dutch Law” and“— 3.1.12.3 Articles of Association”). Dutch law also contains
provisions on the consideration offered, in particular the priceand determination of a fair price by the Enterprise Chamber ofthe Amsterdam Court of Appeals at the request of the bidder,
the target company or any holder of shares.

3.1.12.2 DUTCH LAW
For EADS, matters relating to, inter alia, the consideration
offered in the case of a bid, in particular the price, and mattersrelating to the bid procedure, in particular the information on
the offeror’s decision to make a bid, the contents of the offer
document and the disclosure of the bid, shall be determinedby the laws of the European Union Member State having thecompetent authority, which will be selected by EADS at a futuredate.
Matters relating to the information to be provided to theemployees of EADS and matters relating to company law, inparticular the percentage of voting rights which confers control
and any derogation from the obligation to launch a bid, theconditions under which the Board of Directors of EADS may

The bill implementing the Takeover Directive (the “TakeoverAct”) in Dutch Law entered into force on 28 October 2007. In
accordance with the Takeover Act, shareholders are required tomake an unconditional public offer for all issued and outstanding
shares in the Company’s share capital if they – individually or
acting in concert (as such term is defined below), directly or
indirectly – have 30% or more of the voting rights (significant
control) in the Company. In addition to the other available
exemptions listed below, the requirement to make a public
offer does not apply to persons, who at the time the Takeover
Act came into force, already held – individually or acting inconcert – 30% or more of the voting rights in the Company.

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Under the Takeover Act, natural persons, legal entities orcompanies are “acting in concert” if they cooperate on the basisof an agreement with the objective to acquire significant control(as defined above) in the target company, or if they cooperatewith the target company with the objective to prevent thesuccess of an announced public offer for the shares in suchtarget company. The following categories of natural persons,legal entities or companies are deemed to be “acting in concert”
under the Takeover Act: (i) legal entities or companies that forma group of companies as defined in section 2:24b of the Dutch
Civil Code, (ii) legal entities or companies and their subsidiaries,and (iii) natural persons and their subsidiary companies.
In addition to the exemption stated above, the obligation to makea public offer does not apply to the natural person, legal entity orcompany that, amongst others:> acquires significant control as a result of declaring
unconditional (gestand doen) a public offer made for all shares(or depositary receipts) in the target company;> is a legal entity, independent from the target company, that
acquires significant control after a public offer has beenannounced by a third party, provided that such entity (i) holds
the shares in the target company for a maximum period of two
years and for purposes of protection of the target company
and (ii) the corporate objects of such entity are to preserve
the interests of the target company;> is a legal entity, independent from the target company, which
has issued depositary receipts for the shares in the target
company;> acquires significant control as a result of: (i) an intra-grouptransfer of the shares representing significant control; or(ii) a transfer between a parent company and its subsidiary;> acquires significant control acting in concert with one or moreother natural persons, legal entities or companies, in whichcase the obligation to make a public offer lies with the natural
person, legal entity or company that can exercise most of thevoting rights in the general meeting of shareholders of thetarget company; and> acts as a custodian (if and to the extent it cannot exercise any
voting rights in its sole discretion).
The obligation to make a public offer also does not apply if:> the natural person, legal entity or company, after acquiring
significant control, loses such control within a thirty day
grace period, unless (i) loss of control is due to a transfer to anatural person, legal entity or company to which one of the
exemptions set out above applies, or (ii) the acquirer of thesignificant control has exercised its voting rights during thisthirty day period; or

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Back to Contents> the target company’s general meeting of shareholders agrees
upfront with the acquisition of significant control - and any
subsequent acquisition of shares - by a third party with 95%
of votes cast in favour of such proposal, excluding any votes
by such third party and any of its concert parties.
Under the Takeover Act, a minority shareholder may also make arequest for his shares to be purchased by an offeror who holds atleast 95% of the issued share capital and the voting rights. This
claim must be brought before the Enterprise Chamber of the
Court of Appeals in Amsterdam within the three-month period
after the closing of the acceptance period of the public offer.

3.1.12.3 ARTICLES OF ASSOCIATION
Without prejudice to the provisions of the Takeover Act as
set out in section — 3.1.12.2 above, the Company’s Articles
of Association contain a number of provisions that could also
trigger the requirement to make a public offer for the shares in
the Company.
Pursuant to Article 15 of the Articles of Association, in theevent that a direct or indirect acquisition of shares in the
Company results in a person acting alone or in concert (as set
out in Section 5:45 of the WFT) holding shares or voting rights
where the control over the number of shares or votes reaches
or exceeds 33 1/3% of the issued share capital of the Company
then such person(s) is (are) required to make an unconditional
public offer to all shareholders to acquire all of their shares or to
procure that such an offer is made. Such offer must comply withall of the applicable regulatory or other legal requirements ineach jurisdiction in which the Company’s shares are listed.
Pursuant to Article 16 of the Articles of Association, in theevent of a failure to launch such an offer (or if the offer does notsatisfy the relevant legal or regulatory requirements in each of
the jurisdictions where the Company’s shares are listed) within
two months after notification to the Company of shareholdings
reaching or exceeding 33 1/3% or failing such notification,
within a period of 15 days of receipt of notice from the Boardof Directors confirming the obligation to make the public offer,then any person(s) who is (are) required to make the offer shallwithin the period specified by the notice sent by the Board of
Directors exchange for depositary receipts to be issued by the
Stichting Administratiekantoor EADS (the “Foundation”), such
percentage of shares they hold over and above the 33 1/3% of theshares issued by the Company (the “Excess Percentage”). From
the date specified in the notice sent by the Board of Directors,
the right to attend meetings, to vote and to receive dividends
shall be suspended in respect of the Excess Percentage. If, withina period of 14 days from a further notice from the Board of
Directors, the person required to exchange his shares representing
his Excess Percentage for depositary receipts still has not doneso, then the Company is irrevocably authorised to exchangesuch shares for depositary receipts issued by the Foundation.
The constitutive documents of the Foundation provide that

GENERAL DESCRIPTION OF THE COMPANY AND ITS SHARE CAPITAL>3.2 | General Description of the Share Capital1

the Foundation shall not have the right to attend shareholders’meetings of the Company as a shareholder, to speak at suchmeetings and to exercise the voting rights attached to the shares
it holds, except if, in the view of the Board of Directors of theFoundation, such action is required for the performance of themandatory offer provisions in the Articles of Association.
Pursuant to Article 17 of the Articles of Association, theobligation to make a public offer does not apply in the following
situations:> to a transfer of shares to the Company itself or to theFoundation;> to a securities custody, clearing or settlement institution
acting in that capacity, provided that the provisions ofArticle 16 of the Articles of Association described above
shall be applicable where shares are held for persons acting inbreach of the provisions of Articles 15 and 16 of the Articles
of Association described above;

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31 December 2000 (as amended, supplemented or replaced
by a new agreement by the admission of one or more newparties or the exclusion of one or more parties), except that
this exemption will not apply to a new party that individuallyor with its subsidiaries and/or group companies holds atleast 33 1/3% of the control over shares or votes in the
Company; this exemption is intended to exclude the parties
to the Participation Agreement (See “— 3.3.2 Relationships
with Principal Shareholders”) (as amended, supplemented or
replaced by a new agreement by the admission of one or more
new parties or the exclusion of one or more parties) fromthe obligation to make the mandatory offer in the event of atransfer of shares between themselves; or> to a transfer by a shareholder to a subsidiary in which it holds
more than 50% or by a shareholder to a company which holds
more than 50% in such transferring shareholder.

> to a transfer of shares by the Company or to an issue of sharesby the Company on a merger or on an acquisition by theCompany of another company or business;> to a transfer of shares from one party to another party who isa party to an agreement as envisaged in the WMZ to define

3.2 General Description of the Share Capital
3.2.1 Issued Share Capital
As at 31 December 2009, the Company’s issued share capital amounted to € 816,105,061, consisting of 816,105,061 fully paid-up
shares of a nominal value of € 1.0 each.

3.2.2 Authorised Share Capital
As at 31 December 2009, the Company’s authorised share capital amounted to € 3 billion, consisting of 3,000,000,000 sharesof € 1.0 each.

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3.2.3 Modiﬁcation of Share Capital or Rights Attached to the Shares
Unless such right is limited or eliminated by the shareholders’meeting as described below, holders of shares have a
pre-emptive right to subscribe for any newly issued shares pro
rata to the aggregate nominal value of shares held by them,
except for shares issued for consideration other than cash andshares issued to employees of the Company or of a Group
company. For the contractual position as to pre-emption rights,
see “— 3.3.2 Relationships with Principal Shareholders”.

thirds majority of the votes cast during the shareholders’ meetingin the case where less than half of the capital issued is present or
represented at said meeting.

The shareholders’ meeting has the power to issue shares.
The shareholders’ meeting may also authorise the Board of
Directors for a period of no more than five years, to issue sharesand to determine the terms and conditions of share issuances.

In accordance with the seventh resolution passed by the annual
shareholders’ meeting of EADS held on 27 May 2009, the Boardof Directors was granted the powers (i) to issue shares and to
grant rights to subscribe for shares which are part of EADS’
authorised share capital, provided that such powers shall belimited to 1% of the Company’s authorised share capital fromtime to time and (ii) to limit or exclude preferential subscription
rights, in both cases for a period expiring at the annual
shareholders’ meeting to be held in 2011.

The shareholders’ meeting also has the power to limit or to
exclude pre-emption rights in connection with new issues ofshares, and may authorise the Board of Directors for a periodof no more than five years, to limit or to exclude pre-emption
rights. All resolutions in this context must be approved by a two-

The shareholders’ meeting may reduce the issued share capitalby cancellation of shares or by reducing the nominal value of theshares by means of an amendment to the Articles of Association,
the latter requiring the approval of at least two-thirds of thevotes cast at the general meeting.

3.2.4 Securities Granting Access to the Company’s Capital
Except for stock options granted for the subscription of EADS
shares (See “Corporate Governance — 4.3.3 Long-Term Incentive
Plans”), there are no securities that give access, immediately orover time, to the share capital of EADS.

Total number of EADS shares issued as of 31 December 2009
Total number of EADS shares which may be issued following
exercise of stock options
Total potential EADS share capital*

The table below shows the total potential dilution that would
occur if all the stock options issued as at 31 December 2009 were
exercised:

Number of shares% of diluted capital

Number of voting rights% of diluted voting rights*

816,105,061

96.9%

812,989,265

96.9%

25,785,645

3.1%

25,785,645

3.1%

841,890,706

100%

838,774,910

100%

The potential dilutive effect on capital and voting rights of the exercise of these stock options may be limited as a result of the Company’s share purchase programmes
and in the case of subsequent cancellation of repurchased shares. See “— 3.3.7.1 Dutch l aw and information on share repurchase programmes”.

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3.2.5 Changes in the Issued Share Capital since Incorporation of the Company

Nature of Transaction

Nominalvalue pershare

29 December 1998

Incorporation

NLG 1,000

100

-

100

NLG 100,000

3 April 2000

Conversion into €Issue of shares in exchange for contributions by
Aerospatiale Matra, DASA AG and SEPI
Issue of shares for the purpose of the initial public
offering and listing of the Company
Issue of shares for the purpose of the employee
offering carried out in the context of the initial public
offering and listing of the Company
Issue of shares for the purpose of an employee
offering (note d’opération approved by the COB**
on 13 October 2001 under number 01-1209)
Issue of shares for the purpose of an employee
offering (note d’opération approved by the COB
on 11 October 2002 under number 02-1081)
Issue of shares for the purpose of an employee
offering (note d’opération approved by the COB
on 25 September 2003 under number 03-836)
Cancellation of shares upon authorisation granted by
the annual shareholders’ meeting held on 6 May 2004
Issue of shares for the purpose of an employee
offering (note d’opération approved by the AMF
on 10 September 2004 under number 04-755)
Issue of shares following exercise of options granted
to employees***
Cancellation of shares upon authorisation granted by
the annual shareholders’ meeting held on 11 May 2005
Issue of shares for the purpose of an employee
offering (note d’opération approved by the AMF
on 4 May 2005 under number 05-353)
Issue of shares following exercise of options granted
to employees***
Cancellation of shares upon authorisation granted by
the annual shareholders’ meeting held on 4 May 2006
Issue of shares following exercise of options granted
to employees***
Cancellation of shares upon authorisation granted by
the annual shareholders’ meeting held on 4 May 2007

€1

50,000-50,000€ 50,000€1

715,003,828€ 1,511,477,044

715,053,828€ 715,053,828€1

80,334,580€ 1,365,687,860

795,388,408€ 795,388,408€1

11,769,259€ 168,300,403

807,157,667€ 807,157,667€1

2,017,894€ 19,573,571.80

809,175,561€ 809,175,561€1

2,022,939€ 14,470,149.33

811,198,500€ 811,198,500€11,686,682€ 19,363,109.36

812,885,182€ 812,885,182€1

5,686,682-

807,198,500€ 807,198,500€12,017,822€ 34,302,974

809,216,322€ 809,216,322€1

362,747€ 6,133,436

809,579,069€ 809,579,069€1

1,336,358-

808,242,711€ 808,242,711€1

1,938,309€ 34,618,198.74

810,181,020€ 810,181,020€17,562,110€ 144,176,031.61

817,743,130€ 817,743,130€1

6,656,970-

811,086,160€ 811,086,160€1

4,845,364€ 89,624,589

815,931,524€ 815,931,524€14,568,405-

811,363,119€ 811,363,119

Issue of shares for the purpose of an employee offering
Issue of shares following exercise of options granted
to employees***
Cancellation of shares upon authorisation granted by
the annual shareholders’ meeting held on 26 May 2008

€1

2,037,835€ 33,482,173

813,400,954€ 813,400,954€1

613,519€ 9,438,683

814,014,473€ 814,014,473

Date

8 July 2000
13 July 2000

21 September 2000

5 December 2001

4 December 2002

5 December 2003
20 July 2004

3 December 2004
In 2004
25 July 2005

29 July 2005
In 2005
20 July 2006
In 2006
In 2007
9 May 2007
In 2007
In 2008
25 July 2008

31 July 2009

Issue of shares for the purpose of an employee offering
Issue of shares following exercise of options granted
to employees***
Cancellation of shares upon authorisation granted by
the annual shareholders’ meeting held on 27 May 200918 December 2009

Issue of shares for the purpose of an employee offering

In 2008

Number ofshares issued/
cancelled

Premium*

Total number
of issued shares
after transaction

Total issued
capital after
transaction€1

1,291,381-

812,723,092€ 812,723,092€1

2,031,820€ 22,084,500

814,754,912€ 814,754,912€1

14,200€ 208,030

814,769,112€ 814,769,112€1

22,987-814,746,125€ 814,746,125€1

1,358,936€ 13,263,215

816,105,061€ 816,105,061* The costs (net of taxes) related to the initial public offering of the shares of the Company in July 2000 have been offset against share premium for an amount of € 55,849,772.
** Predecessor of the AMF.
*** For information on stock option plans under which these options were granted to EADS employees, see “Corporate Governance — 4.3.3 Long-Term Incentive Plans”.

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3.3 Shareholdings and Voting Rights
3.3.1 Shareholding Structure
EADS combined the activities of Aerospatiale Matra(“Aerospatiale Matra” or “ASM”), Daimler Aerospace AG(“DASA AG”) (with the exception of certain assets andliabilities) and Construcciones Aeronauticas SA (“CASA”)
pursuant to a series of transactions completed in July 2000.
In this document, the term “Completion” relates to theJuly 2000 completion of the contributions made by Aerospatiale
Matra, DASA AG and Sociedad Estatal de Participaciones
Industriales (“SEPI”) (a Spanish state holding company) to EADS
to combine such activities into EADS.
The term “Indirect EADS Shares” relates to the EADS shares
held by Daimler AG (“Daimler”), SEPI and Société de Gestion
de l’Aéronautique, de la Défense et de l’Espace (“Sogeade”), forwhich EADS Participations B.V. exercises all the attached voting
rights, as well as, for Lagardère SCA (“Lagardère”) and Sociétéde Gestion de Participations Aéronautiques (“Sogepa”), or thecompanies of their group, the number of EADS shares held
indirectly via Sogeade, reflecting by transparency, their respective
interest in Sogeade.
Unless the context requires otherwise, the shareholdingsof DASA AG in EADS are referred to in this document asshareholdings of Daimler, and the rights and obligations of
DASA AG pursuant to the agreements described herein arereferred to as rights and obligations of Daimler.

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As at 31 December 2009, 22.46% of EADS’ share capital washeld by DASA AG, which is a 66.67% subsidiary of Daimler
Luft- und Raumfahrt Holding AG (“DLRH”), a 99.90%
subsidiary of Daimler. The remaining 33.33% of DASA AG
is held by a consortium of private and public-sector investors.
Sogeade, a French partnership limited by shares (société encommandite par actions) whose share capital, as at 31 December
2009, is held 66.67% by Sogepa (a French state holding company)
and 33.33% by Désirade (a French société par actions simplifiée
wholly owned by Lagardère), held 22.46% of EADS’ sharecapital. Thus, 44.92% of the share capital of EADS was heldby Daimler and Sogeade who jointly control EADS througha Dutch law contractual partnership managed by EADSParticipations B.V. (the “Contractual Partnership”). SEPI,
which is a party to the Contractual Partnership, held 5.48%
of the share capital of EADS. The public (including EADS
employees) and the Company held, respectively, 49.15% and0.39% of the share capital of EADS. The République française
(the “French State”) directly held 0.06% of EADS’ share capital,such shareholding being subject to certain specific provisions.
The diagram below shows the ownership structure of EADS as at
31 December 2009 (% of capital (voting rights) before exercise ofoutstanding stock options granted for the subscription of EADS
shares). See “Corporate Governance — 4.3.3 Long-Term Incentive
Plans”.

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Ownership Structure of EADS as at 31 December 2009

French StateSOGEPA

Spanish State

Lagardère

Daimler

99.90%

100%

Private and public sector investors

Désirade

33.33%
66,67%SOGEADEDLRH****

100%

66.67%
33.33%SEPI

DASA

22.46%

5.48%

22.46%(22.55%)(5.50%)(22.55%)(Managed by
SOGEADE Gérance)

Contractual partnership(Managed by EADS Participations B.V.)

50.40%(50.60%) *0.06%(0.06%) **/***EADS N.V.

49.15%(49.34%)

Public0.39%(-) ********EADS Participations B.V. exercises the voting rights attached to these EADS shares pledged by Sogeade, Daimler and SEPI who retain title to their respective shares.
The French State exercises the voting rights attached to these EADS shares (such shares being placed with the Caisse des Dépôts) in the same way that EADS Participations B.V. exercises the voting rights
pooled in the Contractual Partnership.
*** Shares held by the French State following the distribution without payment of consideration to certain former shareholders of Aerospatiale Matra as a result of its privatisation in June 1999. All the shares
currently held by the French State will have to be sold on the market.
**** DLRH is 99.90% held by Daimler; the balance is held by individual minority shareholders.
***** As at 31 December 2009, the Company holds, directly or indirectly through another company in which the Company holds directly or indirectly more than 50% of the share capital, 3,115,796 of its own
shares. The EADS shares owned by the Company itself do not carry voting rights.

For the number of shares and voting rights held by members of
the Board of Directors and Executive Committee, see “Corporate
Governance — 4.2.1 Compensation Granted to Directors andPrincipal Executive Officers”.

Approximately 2.0% of the share capital (and voting rights) are
held by EADS employees as of 31 December 2009.

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3.3.2 Relationships with Principal Shareholders
The principal agreements governing the relationships between
the founders of EADS are an agreement (the “Participation
Agreement”) entered into on Completion between Daimler,
DASA AG, Lagardère, Sogepa, Sogeade and SEPI, and a
Dutch law Contractual Partnership agreement entered into
on Completion between Sogeade, DASA AG, SEPI andEADS Participations B.V. (the “Contractual Partnership
Agreement”), which repeats certain terms of the Participation
Agreement and a certain number of other agreements (inparticular, a shareholder agreement (the “Sogeade Shareholders’
Agreement”) entered into on Completion between Sogepa andLagardère and an agreement between the French State, Daimler
and DLRH). EADS Participations B.V. is a Dutch privatecompany with limited liability (besloten vennootschap met beperkte
aansprakelijkheid) and is the managing partner of the ContractualPartnership. The Indirect EADS Shares held by Daimler, Sogeadeand SEPI have been pledged to EADS Participations B.V., which
has been granted the exclusive power to exercise the voting rights
attached to the pledged shares (including the right to attend
and speak at shareholders’ meetings) in accordance with theContractual Partnership Agreement.
The agreements above contain, among other things, provisions
relating to the following matters:> the composition of the boards of directors of EADS, EADSParticipations B.V. and Sogeade Gérance (gérant commandité of
Sogeade);> restrictions on the transfer of EADS shares and Sogeade
shares;> pre-emptive and tag-along rights of Daimler, Sogeade, Sogepa
and Lagardère;> defences against hostile third parties;> consequences of a change of control of Daimler, Sogeade,
Lagardère, Sogepa or SEPI;> a put option granted by Sogeade to Daimler over its EADS
shares in certain circumstances;> specific rights of the French State in relation to certain
strategic decisions, regarding among other issues, EADS’ballistic missiles activity; and> certain limitations on the extent of the French State’sownership of EADS.
Further details on the agreements among the principal
shareholders of EADS are set out below.

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ORGANISATION OF EADS PARTICIPATIONS B.V.
The board of directors of EADS Participations B.V. has an equal
number of directors nominated by Daimler and by Sogeade,respectively (taking into account proposals made by Lagardère
in respect of the Sogeade-nominated directors). Daimler andSogeade each nominate two directors, unless otherwise agreed,
and the Daimler-directors and the Sogeade-directors jointly havethe right to nominate and to remove the chairman and the chief
executive officer. In addition, SEPI has the right to nominate a
director, as long as the shareholding of SEPI in EADS is 5% ormore but in any case until the annual shareholders’ meeting to beheld in 2012. The chairman shall either have French or German
nationality and the chief executive officer shall have the othernationality.
This structure gives Daimler and Sogeade equal nominatingrights in respect of the majority of the directors of the decisionmaking body of EADS Participations B.V. All decisions of EADSParticipations B.V.’s board of directors shall require the vote infavour of at least four directors, including the vote in favour of
all Sogeade-directors and all Daimler-directors. The quorum fortransacting any business at a meeting of the board of directorsof EADS Participations B.V. is one Sogeade director and one
Daimler director being present.

TRANSFER OF EADS SHARES
Daimler, Sogeade, SEPI, Lagardère and Sogepa each have the rightto sell its EADS shares on the market, subject to the following
conditions:> if a party wishes to sell any EADS shares, it shall first sell its
shares other than its Indirect EADS Shares before exercising
its right to sell its Indirect EADS Shares in accordance withthe provisions set out below;> on the sale of Indirect EADS Shares, Daimler (in the case of asale by Sogeade), Sogeade (in the case of a sale by Daimler) or
Sogeade and Daimler (in the case of a sale by SEPI) may either
exercise a pre-emption right or sell their respective Indirect
EADS Shares on the market in the same proportions as therespective Indirect EADS Shares of the relevant parties bear toeach other;> any transfer of Indirect EADS Shares by either Sogepa or
Lagardère is subject to a pre-emption right in favour of
Lagardère or Sogepa, as the case may be. In the event thatsuch pre-emption right is not exercised, the Indirect EADS
Shares may be sold (a) to an identified third party subject toLagardère’s or Sogepa’s consent (as the case may be) and also to
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Indirect EADS Shares may be sold on the market, subject toDaimler’s pre-emption right referred to above;

DISSOLUTION OF CONTRACTUAL PARTNERSHIP AND EADSPARTICIPATIONS B.V.

> Lagardère and Sogepa shall each have a proportional right totag-along on a sale of its Indirect EADS Shares; andThe Contractual Partnership and EADS Participations B.V. will
be dissolved and wound up upon the occurrence of certain events(each, a “Termination Event”) including:> the pre-emption and tag-along rights of Lagardère and Sogepa
referred to above do not apply to a transfer of EADS shares
directly held by one of them.
Any sale on the market of EADS shares in accordance with theParticipation Agreement shall be conducted in an orderly mannerso as to ensure the least possible disruption to the market of
EADS shares. To this effect, the parties shall consult with eachother before any such sale.

(i) if the proportion which the Indirect EADS Shares of either
Daimler or Sogeade bears to the total number of EADS
shares is less than 10%, unless the difference between theholdings of Daimler and Sogeade (calculated as a percentage
by reference to the number of Indirect EADS Shares held by
each of them as against the total number of EADS shares)
is 5% or less, in which case the dissolution and winding up
shall only occur if the proportion which the Indirect EADS
Shares of Daimler or Sogeade bears to the total number of
EADS shares is 5% or less; or

CONTROL OF EADSIn the event that a third party to which Daimler or Sogeade
objects (a “Hostile Third Party”) has a direct or indirect interest
in EADS shares equal to 12.5% or more of the number of such
EADS shares the voting rights of which are pooled through theContractual Partnership (a “Qualifying Interest”), then, unlessa Hostile Offer (as defined below) has been made by the Hostile
Third Party or until such time as Daimler and Sogeade agree
that the Hostile Third Party should no longer be considered a
Hostile Third Party or the Hostile Third Party no longer holds a
Qualifying Interest, the parties to the Participation Agreement
shall exercise all means of control and influence in relation to
EADS to avoid such Hostile Third Party increasing its rights or
powers in relation to EADS.
The parties to the Participation Agreement may accept an offer(whether by way of tender offer or otherwise) by a Hostile Third
Party which is not acceptable to either Daimler or Sogeade (a“Hostile Offer”), subject to provisions requiring, inter alia,
the party wishing to accept, to first offer its EADS shares toDaimler and/or Sogeade, in which case Daimler and/or Sogeade
may exercise their pre-emption rights in respect of some or all of
the EADS shares held by the party wishing to accept the Hostile
Offer.
Any sale of EADS shares, other than the EADS Indirect Shares,
by Daimler, Sogeade or Lagardère, at a time when a Hostile Third
Party is a shareholder and purchaser of EADS shares on themarket, is subject to the pre-emption right of Sogeade, Daimler
and Sogepa respectively. In the case of a sale by Lagardère, if
Sogepa does not exercise its right of pre-emption, Daimler has inturn a pre-emption right.

(ii) if, on a change of control of either Lagardère, Sogepa, Sogeade
or Daimler, no notice of an offer by a third party to purchase
the Sogeade shares or the Indirect EADS Shares held by
the party undergoing the change of control (the “Changed
Party”) (which offer the Changed Party wishes to accept) has
been served in accordance with the Participation Agreement(see below “Change of Control”) within 12 months of thedate of the change of control occurring (the absence of noticeof an offer by a third party to purchase the Indirect EADS
Shares held by SEPI upon a change of control of SEPI does
not trigger a dissolution of the Contractual Partnership or
EADS Participations B.V. but shall cause SEPI to lose its
main rights or liabilities under the Participation Agreement
or the Contractual Partnership Agreement).
On the occurrence of a Termination Event, EADS Participations
B.V. is prohibited from conducting further business except as isnecessary to its liquidation or the liquidation of the ContractualPartnership.

CHANGE OF CONTROLThe Participation Agreement provides, inter alia, that if(a) Lagardère or Sogepa undergoes a change of control andDaimler so elects (b) Sogeade undergoes a change of control
and Daimler so elects (c) Daimler undergoes a change of control
and Sogeade so elects (d) SEPI undergoes a change of control
and Sogeade or Daimler so elects then:(i) the party undergoing the change of control shall use its
reasonable efforts to procure the sale of its Sogeade interest(if the party undergoing the change of control is Lagardère or
Sogepa) or of its Indirect EADS Shares (if the party undergoingthe change of control is Daimler, Sogeade or SEPI) to a third
party purchaser on bona fide arm’s length terms. When theparty subject to the change of control is Lagardère or Sogepa,
the third party purchaser shall be nominated with Daimler’s
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1(ii) in the event that a third party offers to purchase the Sogeadeinterest held by Lagardère or Sogepa or the Indirect EADS
Shares held by Daimler, Sogeade or SEPI as the case may be,
is received and the party undergoing the change of control
wishes to accept that offer, such offer shall immediately be
notified to (a) Daimler in the case of a change of control
occurring to Lagardère or Sogepa, (b) Sogeade in the case of
the change of control occurring to Daimler, (c) Daimler inthe case of the change of control occurring to Sogeade, or(d) Daimler or Sogeade in the case of the change of control
occurring to SEPI (the party notified under (a), (b), (c) or (d)being the “Non-Changed Party”). The Non-Changed Party
shall have a first right to purchase the Sogeade interest or
the Indirect EADS shares being offered for sale at the pricebeing offered by the third party. In relation to (d), if Daimler
and Sogeade have both elected that SEPI procure a third party
purchaser, then they shall each have the right to acquire
SEPI’s Indirect EADS Shares in the respective proportions
which the number of their EADS shares bear to one anotherat that time. In the event that the Non-Changed Party does
not give notice of its intention to purchase the Sogeadeinterest or the Indirect EADS Shares within 30 days of theoffer being made, then the Changed Party is obliged to sellsuch Sogeade interest or Indirect EADS Shares to the third
party on the terms of the third party’s original offer.
The third party purchaser may not be a competitor of EADS,
Sogeade or Daimler (as the case may be) nor a member of theGroup which has taken control of the Changed Party.

EVENTS OF DEFAULT OTHER THAN CHANGE OF CONTROLThe Participation Agreement provides for certain actions
following events of default (other than a change of control)(i.e., insolvency-related or a material breach of the Participation
Agreement). In particular, if such an event of default occurs in
relation to Daimler, Sogeade or SEPI, the non-defaulting party(respectively Sogeade, Daimler and Sogeade and Daimler acting
together) has a call option over the defaulting party’s EADS
shares and interest in EADS Participations B.V. If such an eventof default occurs in relation to Lagardère or Sogepa, such party
is obliged to use its best efforts to sell its interest in the capitalof Sogeade on bona fide arm’s length terms to a third party
purchaser (who must not be a competitor of EADS or Daimler).
In the case of a sale by Lagardère, the third party purchaser must
be nominated by Sogepa with Daimler’s consent (which may not
be unreasonably withheld). In the case of such a sale by Sogepa,
Daimler must consent to the sale (again, such consent may not be
unreasonably withheld).

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SPECIFIC RIGHTS AND UNDERTAKINGS OF
THE FRENCH STATEThe French State, not being a party to the Participation
Agreement, entered into a separate agreement, governed by
French law, with Daimler and DLRH on 14 October 1999 (asamended) pursuant to which:> the French State undertakes to hold an interest of no morethan 15% of the entire issued share capital of EADS throughSogepa, Sogeade and EADS Participations B.V.;> the French State undertakes that neither it nor any of its
undertakings will hold any EADS shares directly; and> in each case disregarding (i) those EADS shares held by the
French State following the distribution without payment ofconsideration to certain former shareholders of Aerospatiale
Matra as a result of its privatisation in June 1999 and which
will have to be sold on the market; (ii) those shares held bySogepa or the French State which may be sold or acquired
pursuant to the Participation Agreement or the Sogeade
Shareholders’ Agreement (see below); and (iii) those shares
held for exclusively investment purposes.
Moreover, pursuant to an agreement entered into between EADS
and the French State (the “Ballistic Missiles Agreement”),
EADS has granted to the French State (a) a veto right andsubsequently a call option on the ballistic missiles activity
exercisable in the event that (i) a third party which is notaffiliated to the Daimler and/or Lagardère Groups acquires,directly or indirectly, either alone or in concert, more than 10%
or any multiple thereof of the share capital or voting rights of
EADS or (ii) the sale of the ballistic missiles assets or of theshares of such companies carrying out such activity is consideredafter the termination of the Sogeade Shareholders’ Agreementand (b) a right to oppose the transfer of any such assets or shares
during the duration of the Sogeade Shareholders’ Agreement.

SOGEADE
Sogeade is a French partnership limited by shares (société encommandite par actions) the share capital of which is split
between Sogepa (66.67%) and Désirade, a French société paractions simplifiée (33.33%). The share capital of Désirade is itself
wholly owned by Lagardère. Lagardère hence owns indirectly
33.33% of Sogeade.
The general partner (associé commandité) of Sogeade, Sogeade
Gérance, is a French société par actions simplifiée which is the
manager of Sogeade and the share capital of which is split equally
between Sogepa and Lagardère SCA.
Sogeade Gérance’s board of directors consists of eight directors,
four of them nominated by Lagardère (among whom one shallbe designated as the chairman of the board) and four by Sogepa.
Decisions of Sogeade Gérance’s board shall be approved by a

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simple majority of directors except for the following matterswhich require the approval of a qualified majority of six ofthe eight directors: (a) acquisitions or divestments of sharesor assets the individual value of which exceeds € 500 million;(b) agreements establishing strategic alliances, or industrial or
financial co-operation; (c) a capital increase of EADS of morethan € 500 million to which no preferential right to subscribe
for the shares is attached; (d) any decision to divest or createa security interest over the assets relating to prime contractor
status, design, development and integration of ballistic missiles
or the majority shareholdings in the companies Cilas, Sodern,
Nuclétudes and the GIE Cosyde (each a “Sogeade Reserved
Matter”). The decisions contemplated under (d) above are also
governed by the Ballistic Missiles Agreement (see above “Specific
Rights and Undertakings of the French State”).
When a vote of Sogeade Gérance’s board on such matters does
not reach the qualified majority of six directors by reasonof any of the Sogepa-nominated directors casting a negative
vote, the Sogeade-nominated directors on the board of EADSParticipations B.V. are obliged to vote against the proposal. Thismeans that the French State as the owner of Sogepa can vetoany decisions on these matters within EADS Participations B.V.
and in turn within EADS as long as the Sogeade Shareholders’
Agreement remains in existence.
In addition, in the case where the board of directors of EADSParticipations B.V. and/or the Board of Directors of EADS would
be called to address the following matters:(a) appointment/removal of the Chairman and the Chief
Executive Officer of EADS and appointment/removal of
the Chief Executive Officer of Airbus;(b) investments, projects, launch of new products or divestments
within the Group with an individual value/amount exceeding€ 500 million;(c) strategic and cooperation agreements;(d) modifications of the authorised share capital of EADS andincrease in the issued capital of EADS, with the exceptionof capital increases for the purposes of ESOP or othersecurities issuances in favour of employees for an amount,
per year or per plan, less than 2% of the issued capital;(e) modifications of (1) the Articles of Association of EADS,(2) the internal rules for the Board of Directors and (3)the internal rules for the Executive Committee;(f) change of name, place of incorporation and nationality
of EADS; and(g) significant decisions in connection with the ballistic missiles
activities of EADS.

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Sogeade Gérance’s board shall previously meet to come to adecision on the appropriateness of any of the above-mentioned
matters. In this respect, the decision of Sogeade Gérance’s
board shall be in writing and require the approval of a qualified
majority of six of the eight directors; it being understoodthat the Sogeade-nominated directors on the board of EADSParticipations B.V. shall in no event be bound by such decision.
Such procedure shall not apply in the case where the relevant
matter will have been examined as a Sogeade Reserved Matter inaccordance with the above.
The shareholding structure of Sogeade shall reflect at all times
the indirect interests of all the shareholders of Sogeade in EADS.
In certain circumstances, in particular in the event of a changeof control of Lagardère, Lagardère shall grant a call option overits Sogeade shares to any non-public third party designated by
Sogepa and approved by Daimler. This option may be exercised
during the term of the Sogeade Shareholders’ Agreement on thebasis of the market price for the EADS shares.
The Sogeade Shareholders’ Agreement shall terminate if
Lagardère or Sogepa ceases to hold at least 20% of the capitalof Sogeade, except that: (a) the provisions relating to the call
option granted by Lagardère described above shall remain inforce as long as the Participation Agreement is in force, (b)as long as Sogepa holds at least one Sogeade share, it willremain entitled to nominate a Sogeade Gérance director whose
approval will be required with respect to any decision to divest
or create a security interest over the assets relating to prime
contractor status, design, development and integration ofballistic missiles activity or the majority shareholdings in thecompanies Cilas, Sodern, Nuclétudes and the GIE Cosyde; and(c) the Sogeade Shareholders’ Agreement will be terminated in
the event of a dissolution of EADS Participations B.V. caused
by Daimler. In the latter case, the parties have undertaken tonegotiate a new shareholders’ agreement in the spirit of theshareholders’ agreement between them dated 14 April 1999
relating to Aerospatiale Matra and with regard to their respective
shareholdings in Sogeade at the time of the dissolution of EADSParticipations B.V.

PUT OPTION
Under the Participation Agreement, Sogeade has granted aput option to Daimler over its EADS shares which shall be
exercisable by Daimler, (i) in the event of a deadlock arising fromthe exercise by Sogepa of its rights relating to certain strategic
decisions (listed above under the description of Sogeade) otherthan those relating to the ballistic missiles activity or (ii) duringcertain periods provided that in both cases the French State stillholds any direct or indirect interest in EADS shares. The put
option may only be exercised in respect of all and not some onlyof Daimler’s EADS shares.

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The exercise price of the option will be calculated on the basis ofan average market price for EADS shares.
In the event that Daimler exercises the put option granted to it
by Sogeade, Sogeade will acquire the EADS shares from Daimler.
However, Lagardère has the right to require Sogepa to substituteitself for Sogeade in relation to the acquisition of Daimler’s
EADS shares following the exercise by Daimler of the put
option. Such substitution right has been accepted by Daimler.
In the event that Lagardère does not exercise such substitution
right, Lagardère would have to provide its pro rata part of thefinancing necessary for such acquisition. Sogepa undertakes
to provide its pro rata part of the financing corresponding to
its rights in Sogeade. Should Lagardère decide not to take partin the financing, (a) Sogepa undertakes to substitute itself
for Sogeade to buy the shares sold by Daimler as a result of
the exercise of its put option and (b) Sogepa or Lagardère may
request the liquidation of Sogeade and EADS Participations B.V.
and the termination of the Sogeade Shareholders’ Agreement(notwithstanding the termination provisions of the Sogeade
Shareholders’ Agreement described under the paragraph“Sogeade” above). In that case, Lagardère could freely sell its
EADS shares on the market or in a block sale to a third party.

PLEDGE OVER EADS’ SHARES GRANTED TO EADSPARTICIPATIONS B.V.
Upon Completion and in order to secure their undertakings
under the Contractual Partnership Agreement and theParticipation Agreement, Sogeade, Daimler and SEPI granted
a pledge over their respective Indirect EADS Shares to EADSParticipations B.V. for the benefit of EADS Participations B.V.
and the other parties to the Contractual Partnership Agreement.

DADC
EADS holds 75% of the shares in DADC Luft- und Raumfahrt
Beteiligungs AG (“DADC”) (the other 25% being held by
DLRH). The share capital of Dornier GmbH is held as to 97.1%
by DADC and as to 2.9% by the Dornier family. In shareholders’meetings, DADC is entitled to more than 95.2% and the Dornierfamily to less than 4.8% of the voting rights in Dornier GmbH.
DADC and Dornier GmbH have entered into a control and profit
and loss transfer agreement.
A considerable number of shareholders’ resolutions in
Dornier GmbH require a majority of 100% of the votes castin the shareholders’ meeting notably resolutions to dissolve
the Company, alterations of the Articles of Association if
they terminate, limit or have an impact on the rights of theminority shareholders, reduction of share capital, mergers (unlessDornier GmbH is the surviving entity), the transfer of holdings
in other enterprises or the transfer of whole areas of enterprise
activities with the exception of transfers of assets in return forshares or as a contribution in kind or to a company associatedwith Daimler, which is assumed to be the case if Daimler

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controls at least 20% of its share capital. The same requirement
applies with regard to all transfers of shares of Dornier GmbHheld by the Daimler Group (including associated enterprises)
subject to certain exceptions including the transfer to otherDaimler Group companies (including associated enterprises).
Furthermore, the Dornier family receives a guaranteed dividend
from Dornier GmbH (depending on the nature of the shares)of 8.7% or 15% of the nominal amount of their shares plus any
corporation tax credits. The guaranteed dividend is indexed.
Daimler has guaranteed the payment of the minimum dividend
to the Dornier family shareholders. In the case of the profit andloss transfer agreement, which presently exists between DADC
and Dornier GmbH, the Dornier family shareholders are entitled
to receive payments corresponding at least to the amount which
they would be entitled to in the absence of such profit and losstransfer agreement. Internally DADC has assumed this obligation.
On 30 November 1988 Daimler and the Dornier family enteredinto a separate agreement to strengthen the rights of Daimler
and, simultaneously, to protect the economic interests of theminority shareholders. The latter can, in particular, demandthat their shares in Dornier GmbH be bought (i) for cash
consideration or (ii) in exchange for Daimler shares or (iii) in
exchange for shares in a company in which, or under which,Daimler concentrates its aerospace activities by Daimler oranother company associated with Daimler and nominatedby Daimler. On 29 March 2000 Daimler, DLRH, DADC,EADS Deutschland GmbH and DASA AG entered into anagreement according to which Daimler has the right to demand
from DADC to buy the shares so offered by the Dornierfamily shareholders. Daimler shall reimburse DADC for any
amount to be paid being above the fair market value of theshares. Moreover, DADC will assume certain other rights andobligations relating to the protection of the interests of theDornier family.
On 29 December 2004, Silvius Dornier and Daimler enteredinto an agreement to transfer all of the remaining shares ofSilvius Dornier in Dornier GmbH (3.58%) to Daimler or anothercompany of the Daimler Group nominated by Daimler and tosettle all of the rights and potential claims of Silvius Dornier
resulting from or in connection with his shareholding in
Dornier GmbH. None of the other family shareholders exercised
their three month right of first refusal to acquire these shares
so that the legal transfer became effective on 17 April 2005.
According to the above mentioned agreement between Daimler,
DLRH, DADC, EADS Deutschland GmbH and DASA AG(“Handhabungsvereinbarung”), DADC had irrevocably offered toDaimler to buy these shares at market value upon effectivenessof their sale to Daimler, which offer was accepted by Daimler
and the deal being brought to closure on 3 May 2005.
Under the terms of the business combination agreements
entered into in the context of the creation of EADS, DLRH hasundertaken to indemnify Lagardère (for itself and on behalf ofGENERAL DESCRIPTION OF THE COMPANY AND ITS SHARE CAPITAL>3.3 | Shareholdings and Voting Rights

1each member of the Lagardère Group) and SEPI and shall keepthem indemnified, against (save in respect of any consequential
loss not foreseeable by DLRH (or any member of the Daimler
Group)) all or any costs, claims, demands, expenses, losses
or liabilities that they (or any of them) may suffer or incurfrom the date of the business combination agreements enteredinto in the context of the creation of EADS as a result of allor any of the shareholders of Dornier GmbH other than amember of the DASA Group obtaining or seeking to obtain
any rights or remedies against Lagardère (or any member of theLagardère Group), SEPI, the Contractual Partnership, EADS

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Participation B.V., DASA AG, EADS or any entity contributedby or on behalf of Daimler which is to become a member of theGroup or any member of the DASA AG Group. This indemnity
shall also extend to EADS to the extent that such protection is
not provided for in the transfer of the DASA business to EADS.
Other than the relationships between the Company and its
principal shareholders described above in this Section 3.3.2, there
are no potential conflicts of interest between the duties to theCompany of the Directors and their respective private interests
or other duties.

3.3.3 Form of Shares
The shares of EADS are in registered form. The Board of
Directors may decide with respect to all or certain shares, onshares in bearer form.
Shares shall be registered in the shareholders’ register without
the issue of a share certificate or, should the Board of Directors

so decide, with respect to all or certain shares, with the issue ofa certificate. Share certificates shall be issued in such form as
the Board of Directors may determine. Registered shares shallbe numbered in the manner to be determined by the Board of
Directors.

3.3.4 Changes in the Shareholding of the Company Since its Incorporation
The Company was founded with an authorised share capital of
500,000 Netherlands Guilders (“NLG”) divided into 500 shareseach having a nominal value of 1,000 NLG, of which 100 were
issued to Aerospatiale Matra on 29 December 1998. These shareswere transferred to DASA AG by way of notarised transfer
certificate on 28 December 1999.
The changes in the shareholding of the Company since its initialpublic offering and listing are set forth below (for a descriptionof the changes in the issued share capital of the Company since
its incorporation, see “— 3.2.5 Changes in the Issued Share
Capital Since Incorporation of the Company”).
Since July 2000, 4,293,746 EADS shares have been distributed
without payment of consideration by the French State to certain
former shareholders of Aerospatiale Matra as a result of its
privatisation in June 1999. The last distribution took place inJuly 2002.
In addition, in January 2001, the French State and Lagardère soldon the market all of their EADS shares (respectively 7,500,000
and 16,709,333 EADS shares) other than their Indirect EADS
Shares (and, in the case of the French State, other than the EADS
shares to be distributed to former shareholders of Aerospatiale
Matra, see “— 3.3.2 Relationships with Principal Shareholders— Specific Rights and Undertakings of the French State”) thatthey held as a result of the non-exercise of the over-allotment
option granted to the underwriters in the context of the initialpublic offering carried out by the Company for the purpose of
its listing in July 2000 (including, in the case of Lagardère, thoseshares other than its Indirect EADS Shares purchased from the
French Financial Institutions at the end of the exercise period of
the over-allotment option).
On 8 July 2004, Daimler announced that it had placed on themarket (in the context of a hedging transaction) all of its EADS
shares (22,227,478 EADS shares), representing 2.73% of thecapital and 2.78% of the EADS voting rights at that date, except
for its Indirect EADS Shares.
On 11 November 2005, DASA AG transferred its entire interest
in EADS to its wholly owned subsidiary DaimlerChrysler
Luft-und Raumfahrt Beteiligungs GmbH & Co. KG (“DC KG”).
However, in November 2006, DC KG then transferred its entire
interest in EADS back to DASA AG.
On 4 April 2006, Daimler and Lagardère announced the entry
into simultaneous transactions aimed at reducing by 7.5% each
their respective shareholdings in EADS. Daimler entered into aforward sale agreement of approximately 61 million EADS shareswith a group of investment banks. Daimler indicated that it had
lent these shares to the banks in anticipation of the settlement

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2of the forward sale. Lagardère issued mandatory exchangeablebonds. The EADS shares deliverable at the maturity of the bonds
represented a maximum of 7.5% of the share capital of EADS,
or approximately 61 million EADS shares, and were deliveredin three equal tranches representing 2.5% of the share capital of
EADS. The first two tranches were delivered in June 2007 andJune 2008, with delivery of the third tranche brought forwardfrom June 2009 to March 2009, as discussed below.
On 8 September 2006, the Company was notified that JSC
Vneshtorgbank (formerly Bank of Foreign Trade) acquired
41,055,530 shares of EADS, representing 5.04% of the sharecapital of EADS at that date.
On 9 February 2007, Daimler reached an agreement with aconsortium of private and public-sector investors by which
it effectively reduced its shareholding in EADS from 22.5%
to 15%, while keeping and maintaining the balance of voting
rights between German and French controlling shareholders.
Pursuant to this agreement, on 13 March 2007, Daimler has
placed its entire 22.5% equity interest in EADS into a newcompany controlled by Daimler, in which the consortium ofinvestors has acquired a one-third interest through a specialpurpose entity. This effectively represents a 7.5% stake in EADS.
Daimler continues to control the voting rights of the entire
22.5% package of EADS shares. Daimler has the option ofdissolving the new structure on 1 July 2010 at the earliest. If thestructure is dissolved, Daimler has the right either to provide
the investors with EADS shares or to pay cash compensation.
If EADS shares are provided, the German State, and the French
State and Lagardère through Sogeade, will be entitled to pre-empt

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to the agreements described in “— 3.3.2 Relationships with
Principal Shareholders”.
On 26 December 2007, JSC Vneshtorgbankhas sold andtransferred 41,055,530 EADS shares to the Bank forDevelopment and Foreign Economic Affairs (Vnesheconombank).
EADS was notified of such transaction thereafter.
On 26 January 2009, Lagardère and Natixis, the sole subscriber
to and sole holder of the outstanding mandatory exchangeablebonds issued by Lagardère in 2006, signed an amendment to thesubscription contract whereby they agreed, on the initiative of
Natixis, to bring forward the redemption date of the mandatoryexchangeable bonds – and consequently, the delivery date of thethird tranche of EADS shares – from 25 June 2009 to 24 March
2009. Under the terms of this amendment, Lagardère delivered
20,370,000 EADS shares, representing 2.5% of the capital andvoting rights of EADS, to Natixis on 24 March 2009.
On 19 March 2010, Daimler and the consortium of private andpublic-sector investors confirmed to continue the agreement
reached on 9 February 2007 concerning the equity interestsand voting rights in EADS (as discussed above). At Germany’s
Federal Chancellery on 16 March 2010, Daimler and theinvestors stated their willingness to continue the existing
agreement without any changes. As a result, Daimler continues
to hold 22.5% of the voting rights in EADS while its economic
interest is still 15%. Thus, the existing balance of voting rights
between German and French shareholders remains unchanged.

The evolution in ownership of the share capital and voting rights of the Company over the past three years is set forth in the tablebelow:
Position as at 31 December 2009

Position as at 31 December 2008

Position as at 31 December 2007

Shareholders% ofcapital% ofvoting rights

Numberof shares% ofcapital% ofvoting rights

Numberof shares% ofcapital% ofvoting rights

Numberof shares

DASA AG

22.46%

22.55%

183,337,704

22.50%

22.59%

183,337,704

22.52%

22.64%

183,337,704

Sogeade22.46%

22.55%

183,337,704

25.00%

25.10%

203,707,704

27.53%

27.67%

224,077,704

SEPI
Sub-total ContractualPartnership

5.48%

5.50%

44,690,871

5.49%

5.51%

44,690,871

5.49%

5.52%

44,690,871

50.40%

50.60%

411,366,279

52.99%

53.20%

431,736,279

55.54%

55.83%

452,106,279

French State*

0.06%

0.06%

502,746

0.06%

0.06%

502,746

0.06%

0.06%

502,746

Public**49.15%

49.34%

401,120,240

46.56%

46.74%

379,388,329

43.88%

44.11%

357,198,446

Own share buy-back***

0.39%

-

3,115,796

0.39%

-

3,141,758

0.52%

-

4,207,002

Total

100%

100%

816,105,061

100%

100%

814,769,112

100%

100%

814,014,473*

Shares held by the French State following the distribution without payment of consideration of 4,293,746 shares to certain former shareholders of Aerospatiale Matraas a result of its privatisation in June 1999. All of the shares currently held by the French State will have to be sold on the market.
** Including EADS employees. As at 31 December 2009, EADS employees held 2.0% of the share capital (and voting rights).
*** The shares owned by the Company do not carry voting rights.

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To the knowledge of the Company, except as disclosed previously
in “— 3.3.2 Relationships with Principal Shareholders”, there are
no pledges over the shares of the Company.
The Company requested a disclosure of the identity ofthe beneficial holders of its shares held by identifiable holders(“Titres au porteur identifiables”) holding more than 2,000 shares
each. The study, which was completed on 31 December 2009,

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resulted in the identification of 1,987 shareholders holding
a total of 353,399,213 EADS shares (including 6,862,789
shares held by Iberclear on behalf of the Spanish markets and42,041,242 shares held by Clearstream on behalf of the Germanmarket).
The current shareholding structure of the Company is as shownin the diagram in “— 3.3.1 Shareholding Structure”.

3.3.5 Persons Exercising Control over the Company
See “— 3.3.1 Shareholding Structure” and “— 3.3.2 Relationships with Principal Shareholders”.

3.3.6 Simpliﬁed Group Structure Chart
The following chart illustrates the simplified organisational
structure of EADS as of 31 December 2009, comprising four
divisions and the main business units. For ease of presentation,intermediate holding companies have been omitted. The
coloured boxes denote entities forming part of one of EADS’
four divisions. The non-coloured boxes denote entities that areholding companies or participations not within one of EADS’

four divisions and do not directly form part of the management
responsibility of a specified director. EFW, Sogerma, ATR,
Aerolia and Premium AEROTEC are allocated to “Other
Businesses” and do not form part of EADS’ four divisions.
See “Information on EADS’ Activities — 1.1.1 Overview —Organisation of EADS Businesses”.

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EADS’ interest in Eurofighter is jointly held by EADS Deutschland and EADS CASA.

4*** EADS North America, ATR, Sogerma and Socata are consolidated within “Other Businesses” for purposes of segment reporting; EFW, Aerolia and Premium AEROTEC are consolidated within Airbus.
In early January 2009, EADS sold a 70% stake in Socata to Daher, while retaining the remaining 30% stake.

3

EADS holds its interest in Dassault Aviation through EADS France.

2

**

1

*

EADS Group Main Shareholdings

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3.3.7 Purchase by the Company of its Own Shares
3.3.7.1 DUTCH LAW AND INFORMATIONON SHARE REPURCHASE PROGRAMMES
Pursuant to EC Regulation No. 2273/2003, the Company issubject to conditions for share repurchase programmes anddisclosure relating thereto, as described below.
Under Dutch Civil law, the Company may acquire its own shares,
subject to certain provisions of the law of the Netherlands andthe Articles of Association, if (i) the shareholders’ equity lessthe payment required to make the acquisition does not fall below
the sum of paid-up and called portion of the share capital andany reserves required by the law of the Netherlands and (ii) the
Company and its subsidiaries would not thereafter hold or holdin pledge shares with an aggregate nominal value exceeding
one-half (50%) of the Company’s issued share capital. Shareacquisitions may be effected by the Board of Directors only if
the shareholders in general meeting have authorised the Boardof Directors to effect such repurchases. Such authorisation may
apply for a maximum period of 18 months.
Shares held by the Company do not carry voting rights.
Usufructuaries and pledgees of shares that are held by theCompany are, however, not excluded from their voting rights
in such cases where the right of usufruct or pledge was vested
before the share was held by the Company.
The annual shareholders’ meeting of EADS held on 27 May
2009 authorised the Board of Directors, in a resolution that
renewed the previous authorisation given by the annual
shareholders’ meeting of EADS held on 26 May 2008, fora period of 18 months from the date of such meeting, torepurchase shares of the Company, by any means, including
derivative products, on any stock exchange or otherwise, as longas, upon such repurchase, the Company will not hold morethan 10% of the Company’s issued share capital and at a pricenot less than the nominal value and not more than the higherof the price of the last independent trade and the highest current
independent bid on the trading venues of the regulated marketof the country in which the purchase is carried out.
A resolution will be submitted to the annual shareholders’meeting of EADS called for 1 June 2010 in order to renew theauthorisation given by the annual shareholders’ meeting held
on 27 May 2009 and authorise the Board of Directors, for a
new period of 18 months as from the date of such meeting, torepurchase shares of the Company, by any means, including
derivative products, on any stock exchange or otherwise, as longas, upon such repurchase, the Company will not hold morethan 10% of the Company’s issued share capital and at a pricenot less than the nominal value and not more than the higherof the price of the last independent trade and the highest current
independent bid on the trading venues of the regulated marketof the country in which the purchase is carried out.
As of the date of this document, the Company held 3,116,846 of
its own shares, representing 0.38% of its share capital.

3.3.7.2 FRENCH REGULATIONS
As a result of its listing on a regulated market in France, theCompany is subject to the regulations summarised below.
Pursuant to Articles 241-1 to 241-6 of the AMF General
Regulations, the purchase by a company of its own sharesrequires the publication of the description of the share
repurchase programme. Such description must be published prior
to the implementation of the share repurchase programme.
Under Articles 631-1 to 631-4 of the AMF General Regulations,a company may not trade in its own shares for the purpose ofmanipulating the market. Articles 631-5 and 631-6 of the AMF
General Regulations also define the conditions for a company’s
trading in its own shares to be valid.
After purchasing its own shares, the Company is required
to disclose on its website specified information regarding such
purchases within at least seven trading days.
Additionally, the Company must notably report to the AMF,
on at least a monthly basis, all the specified information
regarding such purchases previously published on its
website and information concerning the cancellation of such
repurchased shares.

3.3.7.3 GERMAN REGULATIONS
As a foreign issuer, the Company is not subject to German rules
on repurchasing its own shares, which only apply to German
issuers.

3.3.7.4 SPANISH REGULATIONS
As a foreign issuer, the Company is not subject to Spanish rules
on trading in its own shares, which only apply to Spanish issuers.
However, according to the Conduct Rules under the Spanish
Securities Act 24/1988 of 28 July 1988, the Company may
not trade in its own shares for the purpose of manipulating
the market.

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3.3.7.5 DESCRIPTION OF THE SHARE REPURCHASEPROGRAMME TO BE AUTHORISED BY THE ANNUAL
SHAREHOLDERS’ MEETING TO BE HELD
ON 1 JUNE 2010
Pursuant to Articles 241-2-I and 241-3 of the AMF General
Regulations, below is a description of the share repurchaseprogramme (“descriptif du programme”) to be implemented
by the Company:> Date of the shareholders’ meeting to authorise the share
repurchase programme: 1 June 2010.
> Intended use of the EADS shares held by the Company asat the date of this document: the reduction of share capital bycancellation of all or part of the repurchased shares, in particular
to avoid the dilution effect related to certain share capitalincreases for cash (i) reserved or to be reserved for employeesof the EADS Group and/or (ii) carried out or to be carried out
in the context of the exercise of stock options granted or to be
granted to certain EADS Group employees: 3,116,846 shares.
For information on shares held by EADS at the date of theentry into force of EC Regulation No. 2273/2003 and still
held by EADS at the date of this document, see below.
> Purposes of the share repurchase programme to be
implemented by the Company (by order of decreasingpriority, without any effect on the actual orderof use of the repurchase authorisation, which will
be determined on a case-by-case basis by the Board of
Directors based on needs and possibilities):> the reduction of share capital by cancellation of all orpart of the repurchased shares, in particular to avoid the
dilution effect related to certain share capital increases forcash (i) reserved or to be reserved for employees of the
EADS Group and/or (ii) carried out or to be carried out
in the context of the exercise of stock options granted or
to be granted to certain EADS Group employees, it being
understood that the repurchased shares shall not carryany voting or dividend rights;> the owning of shares for the performance of obligations
related to (i) debt financial instruments convertible into
EADS shares, or (ii) employee share option programmes
or other allocations of shares to EADS Group employees;> the purchase of shares for retention and subsequent use
for exchange or payment in the framework of potential
external growth transactions; and> the liquidity or dynamism of the secondary market of the
EADS shares carried out pursuant to a liquidity agreement
to be entered into with an independent investment services
provider in compliance with the decision of the AMF dated
1 October 2008 related to approval of liquidity agreements
recognised as market practices by the AMF.

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Back to Contents> Procedure:> maximum portion of the issued share capital that may be
repurchased by the Company: 10%;> maximum number of shares that may be repurchasedby the Company: 81,610,506 shares, based on an issued
share capital of 816,105,061 shares as of the date of thisdocument. Assuming the exercise of all stock options
outstanding as of the date of this document, the thresholdof 10% would represent 84,130,257 shares based on the841,302,571 shares which would make up the entire
fully-diluted share capital of the Company;> the amounts to be paid in consideration for the purchaseof the treasury shares must not, in accordance withapplicable Dutch law, exceed the equity components which
are repayable or distributable to the shareholders. “Equity
components repayable or distributable to the shareholders”
means the contribution premiums (in relation tocontributions in kind), the issue premiums (in relation to
cash contributions) and the other reserves as set out in thefinancial statements of EADS, from which the repurchaseprice for the treasury shares must be deducted.
As at 31 December 2009, the respective values of eachof these EADS equity components which are by nature
repayable or distributable to the shareholders were:€ 7,683,000,000 (contribution premiums), € -2,360,000,000(other reserves and retained earnings, including net profit
for the year) and € -109,000,000 (treasury shares), i.e., anaggregate amount of € 5,214,000,000.
EADS reserves the right to implement the share purchaseprogramme to its full extent and undertakes not to exceed,
directly or indirectly, the threshold of 10% of the issued
share capital as well as the amount of € 5,214,000,000
throughout the term of the programme.
Finally, EADS undertakes to maintain at any time asufficient number of shares in public hands to meet thethresholds of NYSE Euronext;> shares may be bought or sold at any time (including
during a public offering) to the extent authorised by thestock exchange regulations and by any means, including,
without limitation, by means of block trades and including
the use of options, combinations of derivative financial
instruments or the issue of securities giving rights inany way to EADS shares within the limits set out in thisdocument. Moreover, EADS will use call options andswaps that have been acquired pursuant to the agreements
it had entered into during the previous share repurchaseprogramme (see below) and does not exclude the possibilityof using a structure of transaction similar to the one that
had been used in the previous share repurchase programme
in order to repurchase its own shares.

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The portion of shares repurchased through the use of blocktrades may amount to all the shares to be repurchased in
the context of this programme.
In addition, in the event that derivative financial
instruments are used, EADS will ensure that it does notuse mechanisms which would significantly increase thevolatility of the shares in particular in the context of call
options;> characteristics of the shares to be repurchased by theCompany: shares of EADS, a company listed on Euronext
Paris, on the regulierter Markt of the Frankfurt Stock
Exchange and on the Madrid, Bilbao, Barcelona andValencia Stock Exchanges;> Daimler, DASA AG, the French State, Lagardère, SEPI,
Sogeade and Sogepa will retain all of their rights,
depending on the circumstances, to sell their available
EADS shares to EADS as part of this share repurchaseprogramme;> maximum purchase price per share: € 50.
> Term of the share repurchase programme: this share
repurchase programme shall be valid until 1 December
2011 inclusive, i.e., the date of expiry of the authorisation
requested from the annual shareholders’ meeting to be heldon 1 June 2010. As one of the main aims of this EADS share
repurchase programme is related to the possible exercise
by EADS Group employees of stock options granted tothem from 2000 to 2006, it is currently intended (i) thatsuch a programme be continued and renewed until at least
17 December 2016 (16 December 2016 being the latest dateupon which an employee of the EADS Group may exercise allor part of his/her stock options granted in 2006) and (ii) that
the EADS annual shareholders’ meeting be asked to renew theauthorisations until such date.

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Back to Contents> Declaration by the Company of transactions carriedout in relation to its own shares from 27 May 2009
to the date of this document: on 31 July 2009, EADS
cancelled 22,987 repurchased shares to compensate thedilution effect resulting from the issuance of shares in 2008
following the exercise of stock options under the 2000 and2002 stock option plans.
The 1,843,814 EADS shares held by EADS at the dateof the entry into force of EC Regulation No. 2273/2003
of 22 December 2003 on 13 October 2004 and still held
by EADS at the date of this document shall be, in orderof decreasing priority, either (i) cancelled pursuant to adecision to be made, according to Dutch law, by an annual
shareholders’ meeting, to avoid the dilution effect related
to certain share capital increases for cash carried out, during
the fiscal year preceding such annual shareholders’ meeting,in the context of an EADS employee share ownershipprogramme and/or upon the exercise of stock options granted
to certain EADS Group employees, or (ii) retained in order
to allow the performance of certain obligations describedwithin the aims of the share repurchase programme referred
to in this document, or (iii) used for exchange or payment in
the framework of a potential external growth transaction, or(iv) sold in the context of a liquidity agreement.
As of the date of this document, EADS has not entered into
any liquidity agreement with an independent investment
services provider in the context of the share repurchaseprogramme.
In the context of the share repurchase programme, EADS
has used derivative financial instruments (see below).
These derivative financial instruments (call options) havethe characteristics set out in the table below.

Opening positions as of the date of this document
Opening position on the purchase

Number of Shares
Average Maximum Maturity Date*

Call purchased 8,686,633

Opening position on the sale

Call purchased

Sale

9 August 2012

-

-

-

-

-

-

-

Average Exercise Price**

Forward sale

See “Corporate Governance — 4.3.3 Long-Term Incentive Plans“

In order to compensate for the dilution effect related to theshare capital increases in cash which would result from theexercise of the stock options granted to certain employeesof the EADS Group in 2000, 2001 and 2002, EADS has
implemented a share repurchase programme according to theneutral delta method. In this regard, EADS has entered into
the following agreements: (i) call options agreements allowing
EADS to acquire from a top ranking French bank a number
of EADS’ shares equal to the number of shares to be createdas a result of the exercise of stock options granted to certain

employees of the EADS Group in 2000, 2001 and 2002,
and (ii) swap agreements for the periodical adjustment of anamount in cash equal to the premiums paid by EADS to a top
ranking French bank pursuant to the call options agreements,
in accordance with the neutral delta method.
Pursuant to these agreements, the call options which EADS
acquired from a top ranking French bank, have the same terms(as to exercise prices, exercise dates, quantities and expiry
dates) as the stock options granted pursuant to the 2000,

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2001 and 2002 stock option plans. If the EADS share priceincreases, the top ranking French bank must buy the number
of EADS shares which then derived from the increase in
price according to the delta neutral method formula. The
total amount paid for these shares by the top ranking Frenchbank corresponds to the financial charge borne by EADS, as
determined from the variable amounts in the swap agreement.
On the other hand, in the case of a reduction in the EADS
share price, the top ranking French bank must sell a number
of EADS shares which derived from the reduction in theshare price according to the neutral delta method formula.
The total amount received by the top ranking French bank forthe sale of these shares corresponds to the financial revenues
received by EADS as determined from the variable amounts
in the swap contract. Under these conditions, the final
amount due as a result of the purchases of the call options isonly known at the time of the payment as determined fromthe last variable amount of the swap contract.
The structure of the transaction aims at covering the dilution
effect and the price risk for EADS linked to the exercise ofstock options granted to certain EADS Group employees in
2000, 2001 and 2002.
Within this context, EADS uses the internal control
procedures put in place by the Company in order to ensure
the reliability of the management of the risks linked to thesecall options and swap. The procedures and tools for reporting

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have been set up, the responsibility and powers have beendelegated to the Finance and Treasury department of EADS
which has responsibility for all operational decisions andall activities within its competence. The relevant competentbodies within the organisation must be made aware of all
substantial transactions, activities and risks.
From an accounting standpoint, the call options qualify as
equity instruments, provided that they are physically settled
in EADS’ own stock (IAS 32.16). The initial accounting led
to a reduction in cash balances for the premiums paid andin stockholder’s equity for the same corresponding amount.
With each variable payment made in application of the deltaneutral method formula, there is a corresponding impact on
cash and on equity to reflect the cumulative premiums paidon the call options. Upon exercise of the call options, EADS
decreases cash by the amount paid (strike price times numberof options) and deducts treasury shares from shareholder’sequity. Variations in the market value of the call options
are not recognised in the financial statements. All suchtransactions are therefore neutral on the income statement.
The top ranking French bank has contractually undertaken tocomply with the regulations in force in relation to repurchaseprocedures applicable to EADS and in particular theprovisions of Articles 241-1 to 241-6 and 631-1 et seq. of the
AMF General Regulations.

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3.4 Dividends
3.4.1 Dividends and Cash Distributions Paid Since the Incorporationof the Company
Cash distributions paid to the shareholders since the incorporation of the Company are set forth in the table below:
Financial Year

Date of the cash distribution payment

Gross amount per share*

2000

27 June 2001

€ 0.502001

28 June 2002

€ 0.502002

12 June 2003

€ 0.302003

4 June 2004

€ 0.402004

8 June 2005

€ 0.502005

1 June 2006

€ 0.652006

16 May 2007

€ 0.122007

4 June 2008

€ 0.12

2008

8 June 2009

€ 0.20*Note: figures have not been adjusted to take into account changes in the number of shares outstanding.

3.4.2 Dividend Policy of EADSEADS’ dividend policy is determined by the Board of Directors,
which may consider a number of factors, including the Group’s
financial performance, future cash needs as well as the dividends
paid by other international companies in the same sector. EADS
cannot guarantee the amount of dividends that may be paid inrespect of any financial year.

Exceptionally, due to the significant loss in 2009, the Board of
Directors has recommended no dividend payment in respect ofsuch year.

3.4.3 Unclaimed Dividends
Pursuant to Article 31 of the Articles of Association, the claim
for payment of a dividend or other distribution approved by thegeneral meeting shall lapse five years after the day on whichsuch claim becomes due and payable. The claim for payment

of interim dividends shall lapse five years after the day on which
the claim for payment of the dividend against which the interim
dividend could be distributed becomes due and payable.

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3.4.4 Taxation
The statements below represent a broad analysis of the current
Netherlands tax laws. The description is limited to the material
tax implications for a holder of the Company’s shares (the“Shares”) who is not, or is not treated as, a resident of theNetherlands for Netherlands tax purposes (a “Non-Resident
Holder”). Certain categories of holders of the Company’s shares
may be subject to special rules which are not addressed below
and which may be substantially different from the general rules
described below. Investors who are in doubt as to their tax
position in the Netherlands and in their state of residence should
consult their professional advisors.

WITHHOLDING TAX ON DIVIDENDS
In general, a dividend distributed by the Company in respectof Shares will be subject to a withholding tax imposed by
the Netherlands at a statutory rate of 15%. Dividends include
dividends in cash or in kind, deemed and constructive dividends,
repayment of paid-in capital not recognised as capital for
Netherlands dividend withholding tax purposes, and liquidation
proceeds in excess of the average paid-in capital recognised ascapital for Netherlands dividend withholding tax purposes. Stock
dividends paid out of the Company’s paid-in-share premium,recognised as capital for Netherlands dividend withholding tax
purposes, will not be subject to this withholding tax.
A Non-Resident Holder of Shares can be eligible for a partial
or complete exemption or refund of all or a portion of the above
withholding tax under a tax convention that is in effect between
the Netherlands and the Non-Resident Holder’s country ofresidence. The Netherlands has concluded such conventions with
the US, Canada, Switzerland, Japan, almost all European Union
member states and other countries.

> such income or gain is attributable to an enterprise orpart thereof which is either effectively managed in the
Netherlands or carried on through a permanent establishment(“vaste inrichting”) or permanent representative (“vaste
vertegenwoordiger”) in the Netherlands;> the Non-Resident Holder is not an individual and the NonResident Holder has, directly or indirectly, a substantial
interest (“aanmerkelijk belang”) or a deemed substantial
interest in the Company and such interest does not form
part of the assets of an enterprise; or> the Non-Resident Holder is an individual and (i) the NonResident Holder has, directly or indirectly, a substantial
interest (“aanmerkelijk belang”) or a deemed substantial
interest in the Company and such interest does not form
part of the assets of an enterprise, or (ii) such income or gain
qualifies as income from miscellaneous activities (“belastbaar
resultaat uit overige werkzaamheden”) in the Netherlands
as defined in the Dutch Income Tax Act 2001 (“Wetinkomstenbelasting 2001”).
Generally, a Non-Resident Holder of Shares will not have asubstantial interest in the Company’s share capital, unless the
Non-Resident Holder, alone or together with certain related
persons holds, jointly or severally and directly or indirectly,
Shares in the Company, or a right to acquire Shares in the
Company representing 5% or more of the Company’s total issued
and outstanding share capital or any class thereof. A deemed
substantial interest exists if all or part of a substantial interest
has been or is deemed to have been disposed of with applicationof a roll-over relief.

GIFT OR INHERITANCE TAXESWITHHOLDING TAX ON SALE OR OTHER DISPOSITIONSOF SHARES
Payments on the sale or other dispositions of Shares will not
be subject to Netherlands withholding tax, unless the sale orother disposition is, or is deemed to be, made to the Company
or a direct or indirect subsidiary of the Company. A redemption
or sale to the Company or a direct or indirect subsidiaryof the Company will be treated as a dividend and will in
principle be subject to the rules set forth in “Withholding Tax
on Dividends” above.

TAXES ON INCOME AND CAPITAL GAINSA Non-Resident Holder who receives dividends distributedby the Company on Shares or who realises a gain from the sale ordisposition of Shares, will not be subject to Netherlands taxation
on income or capital gains unless:

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Netherlands gift or inheritance taxes will not be leviedon the transfer of Shares by way of gift, or upon the death of a
Non-Resident Holder, unless:> the transfer is made by or on behalf of a person who, at
the time of the gift or death, is or is deemed to be resident in
the Netherlands; or> the Shares are attributable to an enterprise or part thereof
that is either effectively managed in the Netherlands or
carried on through a permanent establishment or a permanent
representative in the Netherlands.

VALUE-ADDED TAXNo Netherlands value-added tax is imposed on dividends on
the Shares or on the transfer of the Shares.

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OTHER TAXES AND DUTIESRESIDENCE

There is no Dutch registration tax, transfer tax, capital tax,
stamp duty or any other similar tax or duty other than court
fees payable in the Netherlands in respect of or in connection
with the execution, delivery and/or enforcement by legal
proceedings (including any foreign judgment in the courtsof the Netherlands) with respect to the dividends relating
to the Shares or on the transfer of the Shares.

A Non-Resident Holder will not become resident, or be deemed
to be resident, in the Netherlands solely as a result of holding
a Share or of the execution, performance, delivery and/or
enforcement of rights in respect of the Shares.

3.5 Annual Securities Disclosure Report
The list of the following announcements comprises the disclosures made pursuant to Section 5:25f of the WFT and constitutes
the annual securities disclosure report in application of Article 10 of Directive 2003/71/EC. The announcements and underlying
information are on display and may be inspected during the life of this Registration Document on www.eads.com:
Press release – First Quarter 2009 Results
Press release – First Half 2009 Results
Press release – Third Quarter 2009 Results

12 May 200928 July 200916 November 2009

Press release – A400M--Additional Provision to be Booked

5 March 2010

Press release – 2009 Annual Results

9 March 2010

In addition, EADS publishes announcements made in the ordinary course of business which are also available on www.eads.com.

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4
Corporate Governance
4.1

Management and Control

136

4.1.1

Board of Directors, Chairman
and Chief Executive Ofﬁcer
Audit Committee
Remuneration and Nomination Committee
Strategic Committee
Executive Committee
Enterprise Risk Management System
Compliance Organisation

136
148
149
150
150
152
157

4.1.2
4.1.3
4.1.4
4.1.5
4.1.6
4.1.7

4.2

Interests of Directors andPrincipal Executive Officers 158

4.2.1

Compensation Granted to Directors
and Principal Executive Ofﬁcers
Long-Term Incentives Granted to
the Chief Executive Ofﬁcer
Related Party Transactions
Loans and Guarantees Granted to Directors

4.2.2
4.2.3
4.2.4

4.3
4.3.1
4.3.2
4.3.3

Employee Profit Sharing
and Incentive Plans
Employee Proﬁt Sharing
and Incentive Agreements
Employee Share Ownership Plans
Long-Term Incentive Plans

158
161
162
162

162
162
163
164

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In accordance with Dutch law and with the provisions of the
Dutch Corporate Governance Code as amended at the end of2008 (the “Dutch Code”), which includes a number of nonmandatory recommendations, the Company either applies theprovisions of the Dutch Code or, if applicable, explains andgives sound reasons for their non-application. While EADS, in
its continuous efforts to adhere to the highest standards, applies
most of the current recommendations of the Dutch Code,it must, in accordance with the “apply or explain” principle,
provide the explanations below.
For the full text of the Dutch Code, please referto www.commissiecorporategovernance.nl.

1.

EADS IS A CONTROLLED COMPANY AND,
THEREFORE, A NUMBER OF THE MEMBERS OF
THE BOARD OF DIRECTORS, AUDIT COMMITTEE,REMUNERATION AND NOMINATION COMMITTEEAND STRATEGIC COMMITTEE ARE DESIGNATED
AND CAN BE REMOVED BY ITS CONTROLLINGSHAREHOLDERS

Nevertheless, it should be noted that a self-assessment of theBoard of Directors confirmed that the members of the Boardof Directors designated by the controlling shareholders holdopinions and defend positions that are in all relevant aspectsaligned with the economic interests of individual shareholders.
Given the absence of material conflicting business interests
between EADS and its controlling shareholders, and the
independence of the controlling shareholders from one another,
the members of the Board of Directors designated by thecontrolling shareholders are deemed to fairly represent the interestof all shareholders in acting critically and independently of one
another and of any particular interests. Furthermore, the Board of
Directors’ composition, as reshaped in October 2007 to increasein particular the number of independent Board members, witha wide range of different experiences represented in the Boardof Directors and the running of meetings is conducive to theexpression of autonomous and complementary views.
Accordingly:(a) four members of the Board of Directors out of eleven
are independent (whereas provision III.2.1 of the Dutch
Code recommends that there be no more than one nonindependent Board member);(b) members of the Board of Directors retire simultaneously ona five-year basis (whereas provision III.3.6 of the Dutch Coderecommends that there be a retirement schedule to avoid,as far as possible, a situation in which many non-executive
members of the Board of Directors retire at the same time);

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Back to Contents(c) the Board of Directors is headed by the Chairman of theBoard of Directors. In case of dismissal or resignation of
the Chairman, the Board shall immediately designate a new
Chairman. There is therefore no need for a vice-Chairman
to deal with the situation when vacancies occur (whereas
provision III.4.1(f) of the Dutch Code recommends that there
be a vice-Chairman);(d) EADS’ Audit Committee does not meet without the Chief
Executive Officer being present (whereas provision III.5.9 of
the Dutch Code recommends this);(e) EADS’ Audit Committee includes two members of theBoard of Directors designated by the controlling shareholders(whereas provision III.5.1 of the Dutch Code recommends
that there be no more than one non-independent Audit
Committee member);(f) EADS’ Remuneration and Nomination Committee includes
two members of the Board of Directors designated by thecontrolling shareholders (whereas provision III.5.1 of the
Dutch Code recommends that there be no more than one
non-independent Committee member);(g) EADS’ Remuneration and Nomination Committee is not
the relevant body responsible for the selection procedureand nomination proposals for members of the Board of
Directors (whereas provision III.5.14 (a) of the Dutch
Code recommends that such Committee focus on drawing
up selection criteria and the appointment procedures formembers of the Board of Directors; and provision III.5.14 (d)recommends that such Committee focus on making proposals
for appointments and reappointments).

2.

AS FOR REMUNERATION OF MEMBERS
OF THE BOARD OF DIRECTORSEADS applies different rules for the remuneration of Executive(the Chief Executive Officer) and non-executive members of theBoard of Directors, as explained in “— 4.2.1.2 Compensation of
the members of the Board of Directors”.
In case of dismissal from the Company of the Chief Executive
Officer, a termination indemnity equal to one and a half time
the annual total target salary would be paid subject to thefollowing conditions (whereas provision II.2.8 of the Dutch
Code recommends that the maximum remuneration in the eventof dismissal be one year’s salary (the “fixed” remuneration
component), and that if the maximum of one year’s salary would
be manifestly unreasonable for an Executive Board member who
is dismissed during his first term of office, such board member
be eligible for severance pay not exceeding twice the annual
salary): the Board of Directors has concluded that the Chief

CORPORATE GOVERNANCE

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Executive Officer can no longer fulfil his position as a result ofchange of EADS’ strategy or policies or as a result of a change incontrol of EADS. The termination indemnity would only be paid
provided that the performance conditions assessed by the Boardof Directors had been fulfilled by the Chief Executive Officer.
However, this termination indemnity is no longer applicable,
since the Chief Executive Officer has reached the age of 65.

3.

EADS IS LISTED ON THE FRANKFURT, PARIS ANDSPANISH STOCK EXCHANGES AND ENDEAVOURSTO STRICTLY COMPLY WITH THE RELEVANTREGULATIONS AND TAKE INTO ACCOUNTTHE GENERAL PRINCIPLES ON THESE MARKETSPROTECTING ALL OF ITS STAKEHOLDERS(a) Moreover, EADS has adopted Insider Trading Rules
providing for specific internal rules, inter alia, governing
members’ of the Board of Directors holding and trading ofshares in EADS and other companies. Therefore, in line withthese rules and these regulations and common practices in
the jurisdictions in which the Company is listed:(b) EADS does not require members of the Board of Directors
to hold their securities in the Company as a long-term
investment (whereas provision III.7.2 of the Dutch Coderecommends such a treatment);(c) The term of the office of members of the Board of Directors
is five years without limitation on renewal (whereas
provisions II.1.1 and III.3.5 of the Dutch Code recommendthat there be no more than three four-year terms for nonexecutive members of the Board of Directors and that there
be four-year terms (without limitation on renewal) for
Executive members of the Board of Directors);

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the Board of Directors does not set a “registration date”,
the shareholders must be shareholders at the date of themeeting to exercise their voting rights and other rights at
the meeting (whereas provision IV.1.7 of the Dutch Coderecommends that the Company set a “registration date” prior
to the shareholder’s meeting and that the shareholders must
be shareholders on the date of such “registration date” toexercise their voting rights at the shareholders’ meetings even
if those persons are no longer shareholders on the date ofsuch meeting).

4.

ETHICS ALERT SYSTEMEADS is finalising the implementation of an alert systemprocedure for employees to raise, in strict confidentiality,
concerns relating to business ethics, compliance and financial
reporting. The Board of Directors and the Audit Committee havedecided to implement such an alert system procedure as part of
the EADS Ethics and Compliance Programme, which falls under
the authority of the EADS Group Chief Compliance Officer(“CCO”).
Accordingly, EADS intends to comply by the end of 2010
with provision II.1.7 of the Dutch Code, which recommends
that a company ensure that its employees have the possibilityof reporting alleged irregularities of a general, operational andfinancial nature in the company or concerning the functioning of
the Executive member of the Board of Directors to the Chairmanof the Board of Directors or to an official designated by him,
and that such arrangements for whistleblowers be posted on the
Company’s website.

(d) EADS does not follow various recommendations for
dealings with analysts, including allowing shareholders tofollow meetings with analysts in real time and publishingpresentations to analysts on the website as set out inprovision IV.3.1 of the Dutch Code;EA DS REGIS T RAT ION DOCU ME NT 2 0 0 9

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4.1 Management and Control
Since its creation in 2000 and until 22 October 2007, EADS was
led by a dual-headed management structure, with two Chairmen
and two co-Chief Executive Officers, which provided thenecessary balance and stability required for a company with sucha unique industrial and multi-national heritage.
On 16 July 2007, Daimler (formerly DaimlerChrysler), theFrench Government and Lagardère decided, together with the
EADS management team, to implement a new management
and leadership structure. The German Government wasalso consulted. Guiding principles of this modification
were efficiency, cohesiveness and simplification of EADS’management and leadership structure, towards corporate
governance best practices while maintaining a balance between
the French and the German core shareholders. Under thesimplified management structure, EADS is now led by a single
Chairman and a single Chief Executive Officer.

number of independent members on the Board of Directors toappropriately reflect the global profile of EADS by conforming
to international corporate governance best practices.
In this respect, both Daimler and Sogeade relinquished twoseats on the Board of Directors and four independent Directors
were elected during the Extraordinary General Meeting of
Shareholders held on 22 October 2007. Apart from the Chief
Executive Officer, the Board of Directors no longer comprises
executive directors.
The core shareholders have also decided to amend the
responsibilities assumed by the Board of Directors, theChairman, the Chief Executive Officer and the Executive
Committee, as described below. These modifications were fully
implemented and became effective from the Extraordinary
General Meeting of Shareholders and Board of Directors’
meeting both held on 22 October 2007.

The core shareholders also concluded that it was in thebest interest of the Group to recommend an increase in the

4.1.1 Board of Directors, Chairman and Chief Executive Ofﬁcer
4.1.1.1 COMPOSITION, POWERS AND RULES
Pursuant to the Articles of Association, the Board of Directors is
responsible for the management of the Company.
The Board of Directors consists of a maximum of elevenmembers appointed and removed by the shareholders’ meeting.
The Board of Directors adopted rules governing its internalaffairs (the “Rules”) at a Board of Directors’ meeting held on
7 July 2000. The Rules were amended at a Board of Directors’
meeting held on 5 December 2003 to take into accountrecommendations for changes to corporate governance. These
Rules were further amended at a Board of Directors’ meeting
held on 22 October 2007, to take into account the corporate
governance modifications approved during the Extraordinary
General Meeting of Shareholders held the same day.
The Rules specify the composition, the role and the key
responsibilities of the Board of Directors, and also determine
the manner of appointment and the responsibilities of the
Chairman and the Chief Executive Officer. The Rules also
specify the creation of three committees (the Audit Committee,
the Remuneration and Nomination Committee and the Strategic
Committee) and specify their composition, role and operating
rules.

136 EADS R EG I S TR ATI O N DO C U ME N T 2 0 0 9

The Board of Directors has also adopted specific Insider Trading
Rules, which restrict its members from trading in EADS sharesin certain circumstances (for more information, please see“General Description of the Company and its Share Capital —3.1.3 Governing Laws and Disclosures”).
The parties to the Participation Agreement (as amended on
22 October 2007 and as defined in the opening paragraph of“General Description of the Company and its Share Capital —3.3.2 Relationships with Principal Shareholders”) have agreed
that the voting rights attached to the Indirect EADS Shares shallbe exercised by EADS Participations B.V. to ensure that theBoard of Directors of EADS comprises the directors of EADSParticipations B.V. and four additional independent directors.
According to the Rules, an independent director is defined
as “a director who is not an officer, director, employee, agent orotherwise has any significant commercial or professional connection
with either the DASA Group, the Lagardère Group, the Sogepa
Group, the SEPI Group, the French State, the German State, theSpanish State or the EADS Group”.

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Pursuant to the Participation Agreement, the Board of Directors
comprises eleven members as follows (the “Board of Directors”,
the members of the Board of Directors being referred to as the“Directors”):> one non-executive Chairman, appointed on joint proposal by
the Daimler-Directors and the Sogeade-Directors;> the Chief Executive Officer of EADS, appointed on joint
proposal by the Daimler-Directors and the Sogeade-Directors;> two Directors nominated by Daimler;> two Directors nominated by Sogeade;> one Director nominated by SEPI, so long as the Indirect
EADS Shares held by SEPI represent 5% or more of the total
number of EADS Shares but in any case until the annual
shareholders’ meeting of EADS to be held in 2012; and> four independent Directors, jointly proposed by the Chairman
and the Chief Executive Officer of EADS and individually
approved by the Board.
Pursuant to the Articles of Association, each member of theBoard of Directors holds office for a term that expires at theannual shareholders’ meeting of EADS to be held in 2012.
Members of the Board of Directors will be elected at each fifth
annual shareholders’ meeting thereafter.
The shareholders’ meeting may at all times suspend or dismiss
any member of the Board of Directors. There is no limitation on
the number of terms that a Director may serve.
The Board of Directors appoints a Chairman, upon the joint
proposal of the Daimler-Directors and the Sogeade-Directors.
The Chairman ensures the smooth functioning of the Boardof Directors in particular with respect to its relations with theChief Executive Officer with whom he teams up for top levelstrategic discussions with outside partners, which are conductedunder his supervision.
The Chairman shall have either French or German nationality,
provided that the Chief Executive Officer is of the othernationality.
The Chairman can submit his resignation as Chairman to theBoard of Directors or can be dismissed as Chairman by the Boardof Directors, upon the joint proposal of the Daimler-Directors
and the Sogeade-Directors. The appointment further terminates
if the Chairman is dismissed or resigns as Director. Immediately
following the dismissal or resignation of the Chairman, andif the Daimler-Directors and the Sogeade-Directors do not
immediately jointly designate a new Chairman, the Board of
Directors appoints by simple majority a Director (with the same

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citizenship as the former Chairman) as interim Chairman fora period which expires at the earlier of either (i) twenty clear
days after the Daimler-Directors and the Sogeade-Directors
jointly designate a new Chairman (during which period, aBoard of Directors meeting is called in order to appoint the new
Chairman, upon the joint proposal of the Daimler-Directors andthe Sogeade-Directors), or (ii) two months from that interim
Chairman’s appointment.
Upon request by any member of the Board of Directors madethree years after the beginning of the Chairman’s term andalleging that significant adverse deviation(s) from objectives
and/or failure(s) to implement the strategy defined by the
Board of Directors occurred, the Board of Directors shall meet,to decide whether deviations and/or failures actually occurred
during this period and if so, to decide whether to renew its
confidence in the Chairman (the “Vote of Confidence”). The
Board of Directors resolves upon such Vote of Confidence bysimple majority. The Chairman is removed if he does not obtainsuch Vote of Confidence, a new Chairman being then appointed
in accordance with the above.
Upon the joint proposal by the Daimler-Directors and the
Sogeade-Directors. the Board of Directors has appointed a
Chief Executive Officer to be responsible for the day-to-day
management of the Company. The way the Chief Executive
Officer can resign or be dismissed and the way the Chief
Executive Officer would, if any, be replaced are identical to those
applying to the Chairman. The Vote of Confidence procedurestated above is also applicable to the Chief Executive Officer
under the same conditions as for the Chairman.

Powers of the Board of Directors
The Company is represented by the Board of Directors or by the
Chief Executive Officer. The Chief Executive Officer may notenter into transactions that form part of the key responsibilitiesof the Board of Directors unless these transactions have been
approved by the Board of Directors.
The key responsibilities of the Board of Directors include
amongst others:> approving any change in the nature and scope of the businessof the Group;> approving any proposal to be submitted to the general meetingof shareholders in order to amend the Articles of Associationof EADS (Qualified Majority, as defined below);> approving the overall strategy and the strategic plan of theGroup;> approving substantial changes to the business plan and theyearly budget of the Group;

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1> setting the major performance targets of the Group;> designating or removing the Chairman and the Chief
Executive Officer and deciding upon the designation
or removal of the Chief Executive Officer of Airbus(Qualified Majority);> appointing the members of the Executive Committee (seebelow), as a whole team, not on an individual basis;> establishing and approving amendments to the Rules and to
the rules for the Executive Committee (Qualified Majority);> deciding upon the appointments of the Airbus Shareholder
Committee, the EADS Corporate Secretary and the chairmenof the Supervisory Board (or similar organ) of other importantGroup companies and business units;> approving material changes to the organisational structureof the Group;> approving investments, projects or product decisions
or divestments of the Group with a value exceeding€ 350,000,000 (it being understood that this item shall require
the Qualified Majority only for investments, projects or
product decisions or divestments of the EADS Group with avalue exceeding € 500,000,000);> approving strategic alliances and co-operation agreementsof the Group (Qualified Majority);> approving matters of shareholder policy, major actions or
major announcements to the capital markets;> approving any material decision regarding the ballistic missiles
business of the Group (Qualified Majority);> approving other measures and business of fundamental
significance for the Group or which involve an abnormal
level of risk;> approving any proposal by the Chairman and the Chief
Executive Officer as to the appointment of the independent
Directors, for submission to the general meeting ofshareholders; and> approving of principles and guidelines governing the conductof the Group in matters involving non-contractual liabilities(like environmental matters, quality assurance, financial
announcement, integrity) as well as the corporate identity of
the Group.

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Voting and rules
Each Director has one vote, provided that, if there are more
Sogeade-nominated Directors than Daimler-nominated Directors
present or represented at the meeting, the Daimler-nominatedDirector who is present at the meeting can exercise the same
number of votes as the Sogeade-nominated Directors whoare present or represented at the meeting, and vice versa.
All decisions of the Board of Directors are taken by a simple
majority of votes (six Directors, present or represented, voting
in favour of the decision), except for the votes relating to certain
matters which can only be validly resolved upon a majorityof votes including the unanimous vote of the two Sogeadenominated Directors and the two Daimler nominated Directors(the “Qualified Majority”). The quorum for the transactionof business at meetings of the Board of Directors requires thepresence of at least one of the Sogeade-nominated Directors
and one of the Daimler-nominated Directors. A Director canauthorise another Director to represent him or her at a Board
meeting and to vote on his or her behalf. Such authorisationmust be in writing.
In the event of a deadlock in the Board of Directors, otherthan a deadlock giving Daimler the right to exercise the put
option granted to it by Sogeade (see “General Description of
the Company and its Share Capital — 3.3.2 Relationships
with Principal Shareholders — Put Option”), the matter shallbe referred to Arnaud Lagardère (or such person as shall be
nominated by Lagardère) as representative of Sogeade and to theChief Executive Officer of Daimler. In the event that the matterin question, including a deadlock giving Daimler the right toexercise the put option (but in this case with the agreement ofSogepa and Daimler) is a matter within the competence of thegeneral meeting of EADS, a resolution on the issue shall be
put to the general meeting, with the voting rights of Sogeade,
Daimler and SEPI being negated.
Pursuant to the Rules, the Board of Directors may form
committees from its members. In addition to the Audit
Committee, the Remuneration and Nomination Committee andthe Strategic Committee, the Board of Directors may form othercommittees to which it may transfer certain minor or ancillarydecision-making functions although such assignment does notnegate the joint responsibility of all Directors. The quorum
for the transaction of business at any meeting of a committee
requires the presence of at least one of the Sogeade-nominatedDirectors and one of the Daimler-nominated Directors. Alldecisions of a committee require the simple majority of themembers.
In addition to the Rules, the work of the Board of Directors
is governed by internal directors’ guidelines (the “Directors’
Guidelines”) adopted in light of corporate governance bestpractices. The Directors’ Guidelines are composed of a directors’
charter (the “Directors’ Charter”) detailing the rights andduties of the members of the Board of Directors, an Audit

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Committee charter (the “Audit Committee Charter”),
a Remuneration and Nomination Committee charter (the“Remuneration and Nomination Charter”) and a Strategic
Committee charter (the “Strategic Committee Charter”), witheach such charter setting forth the respective committees’ roles.

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The Directors’ Charter sets out core principles that bind eachand every Director, such as acting in the best interest of theCompany and its stakeholders, devoting necessary time andattention to the carrying out of their duties and avoiding any andall conflicts of interest.

Composition of the Board of Directors
Name

Age

Term started (as memberof the Board of Directors)

Termexpires

Principal function

StatusBodo Uebber

50

2007

2012

Chairman of EADS

Non-Executive

Louis Gallois

66

2000, re-elected in 2005 and 20072012

Chief Executive Officer of EADS

Executive

Rolf Bartke

63

2007

2012

Chairman of Keiper-Recaro-Group

Nominated by Daimler

Dominique D’Hinnin

50

2007

2012

Co-Managing Partner of Lagardère

Nominated by Sogeade

Juan Manuel Eguiagaray Ucelay

64

2005, re-elected in 20072012

Director of Studies at Fundación Alternativas

Nominated by SEPI

Arnaud Lagardère

49

2003, re-elected in 2005 and 2007

2012

Nominated by Sogeade

Hermann-Josef Lamberti

54

2007

2012

Lakshmi N. Mittal

59

2007

2012

General Partner and CEO of Lagardère
Member of the Management Boardof Deutsche Bank AG
President and Chief Executive Officer
of ArcelorMittal

Sir John Parker

67

2007

2012

Chairman of National Grid

Independent

Michel Pébereau

68

2007

2012

Independent

Wilfried Porth

51

2009

2012

Chairman of BNP Paribas
Member of Board of Managementof Daimler AG

Independent
Independent

Nominated by Daimler

Note: The professional address of all members of the Board of Directors for any matter relating to EADS is Mendelweg 30, 2333 CS Leiden, The Netherlands.

Within EADS, each Director must have the required mix ofexperience, qualifications, skills and industrial knowledge
necessary to assist the Company in formulating and achieving
its overall strategy, together with the specific expertise required
to fulfil the duties assigned to him or her as member of one of
the Board’s committees. The Board of Directors recognises thathaving a diverse composition among its members with respect togender, experience, national origin, etc. is valuable for the quality
and efficiency of its work.
The Board of Directors will propose candidates who can, in
combination with the other Directors, manage EADS in a waythat strengthens its position as a leader in the aerospace anddefence industry. In this regard, the Board of Directors will takediversity—in particular with respect to gender— into accountwhen assessing and proposing candidates for the upcoming
renewal of the entire Board of Directors in 2012.
The Company has not appointed observers to the Board of
Directors. Pursuant to applicable Dutch law, the employees are
not entitled to elect a Director. There is no minimum numberof shares that must be held by a Director.

CURRICULUM VITAE AND OTHER MANDATESAND DUTIES PERFORMED IN ANY COMPANY
BY THE MEMBERS OF THE BOARD OF DIRECTORS

Bodo Uebber
Mr Bodo Uebber was appointed Chairman of EADS in
April 2009. He has been a member of the Board of Managementof Daimler AG since 16 December 2003 and is responsible
for finance and controlling and the Daimler Financial Services
Division (since 16 December 2004), and for mergers andacquisitions (since April 2009). He previously held various
leadership positions in finance within Dornier Luftfahrt GmbH,DASA AG and MTU Aero Engines GmbH. Mr Uebber was bornon 18 August 1959 in Solingen. He graduated in 1985 with adegree in engineering and economics at the Technical Universityof Karlsruhe. In the same year, he joined Messerschmitt-BölkowBlohm GmbH (MBB).
Current mandates in addition to the one listed in the chart above
are set forth below:> Member of the Board of Management of Daimler AG;> Chairman of the Board of Directors of EADS Participations
B.V.;> Chairman of the Supervisory Board of Daimler Financial
Services AG;

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1> Member of the Supervisory Board of Mercedes-Benz BankAG;
> Member of the Supervisory Board of Stiftung Deutsche
Sporthilfe;> Member of the Supervisory Board of Talanx AG;> Member of the Advisory Board of Daimler
Unterstützungskasse GmbH;> Member of the Advisory Board of Deutsche Bank AG in
Munich; and

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and President and CEO of Airbus since 2006. Previously,
he served successively as Chairman and CEO of SNECMA,
Chairman and CEO of Aerospatiale and Chairman of SNCF.
Earlier in his career, he held positions in the French Ministry of
Economy and Finance, the Ministry of Research and Industry,
and the Ministry of Defence. Mr Gallois graduated from the
École des Hautes Etudes Commerciales in economic sciences and isan alumnus of the École Nationale d’Administration.
Current mandates in addition to the one listed in the chart above
are set forth below:> Chief Executive Officer of EADS Participations B.V.;> Member of the Advisory Board of Landesbank BadenWürttemberg.

> Member of the Board of Directors of Stichting
Administratiekantoor EADS;Former mandates for the last five years:> Member of the Supervisory Board of Michelin;> Chairman of the Board of Directors of debis Air Finance B.V.
(resigned April 2005);> Member of the Board of Directors of École Centrale des Arts
et Manufactures; and> Chairman of the Board of Directors of DaimlerChrysler Japan
Holding, Ltd. (resigned 1 December 2005);> President of the Fondation Villette-Entreprises.

> Member of the Supervisory Board of Hannover
Rückversicherungs AG (resigned 12 May 2006);> Member of the Board of Directors of DaimlerChrysler México
Holding S.A. de C.V. (resigned 31 July 2007);> Chairman of the Board of Directors of DaimlerChrysler
North America Holding Corporation (DCNAH)(resigned 3 August 2007);> Chairman of the Board of Directors of DaimlerChrysler
Corporation (DCC) (resigned 3 August 2007);> Chairman of the Board of Directors of DC UK Holding plc(resigned 1 November 2007);> Member of the Supervisory Board of Daimler España
Holding S.A. (resigned 30 June 2008);> Chairman of the Supervisory Board of Daimler France
Holding S.A.S. (resigned 31 October 2008);> Member of the Board of Directors of Freightliner LLC(resigned 30 September 2009); and> Member of the Supervisory Board of McLaren (resigned
10 November 2009).

Louis Gallois
Mr Louis Gallois has been Chief Executive Officer (CEO) of
EADS since August 2007, after having been co-CEO of EADS,

140 EADS R EG I S TR ATI O N DO C U ME N T 2 0 0 9

Former mandates for the last five years:> Member of the Board of Directors of Thales (resigned 30 June
2005);> President of SNCF (resigned 2 July 2006); and> Member of the Board of Directors of Dassault Aviation(resigned 26 November 2008).

Rolf Bartke
Mr Rolf Bartke is Chairman of Keiper-Recaro-Group. He was
Chairman of Kuka AG until 2009 after being Head of thevans business unit at DaimlerChrysler AG from 1995 to 2006.
Previously, he was Mercedes Benz’s Managing Director in thefields of commercial vehicle planning and projects, commercial
vehicle development, marketing and sales planning for Unimog
and MB-trac. He started his career in 1976 as Managing Director
of commercial agents of Unimat GmbH in Düsseldorf. Mr Bartke
holds a PhD in economics from the University of Karlsruhe.
Current mandates in addition to the one listed in the chart above
are set forth below:> Chairman of the Supervisory Board of SFC Smart Fuel CellAG;
> Member of the Board of Directors of J&R Carter PartnershipFoundation;> Member of the Board of Directors of SORTIMO North
America Inc.;CORPORATE GOVERNANCE>4.1 | Management and Control

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Back to Contents> Member of the Board of Directors of EADSParticipations B.V.; and> Member of the Supervisory Board of Financièrede Pichat & CIE SCA;

> Member of the Advisory Board of HUF Hülsbeck & Fürst
GmbH & Co. KG.

> Member of the Supervisory Boardof Matra Manufacturing & Services S.A.S.;

Former mandates for the last five years:> Chairman of the Supervisory Board of the“Club des Normaliens dans l’Entreprise”;> Chairman of the Supervisory Board of Daimler
Ludwigsfelde GmbH (resigned 31 March 2006);> Member of the Supervisory Board of Daimler Manufacturing
International LLC (resigned 31 March 2006);> Member of the Supervisory Board of Daimler España S.A.
(resigned 31 March 2006);> Chairman of the Board of Directors of SAF-Holland S.A.
(resigned 31 January 2009); and> Chairman of Kuka AG (resigned 18 September 2009).

Dominique D’Hinnin
Mr Dominique D’Hinnin was appointed Co-Managing Partnerof Lagardère SCA in March 2010. He joined Lagardère in 1990
as advisor to the Chairman of the Finance Committee of theGroup. After that, he held different positions within the Group,
first being appointed as Internal Audit Manager, and then CFO
Hachette Livre in 1993, before being appointed Executive Vice
President of Grolier Inc in the United States and Chief Financial
Officer of Lagardère SCA in 1998. Mr D’Hinnin is an alumnusof the École Normale Supérieure and is an Inspecteur des Finances.
Current mandates in addition to the one listed in the chart above
are set forth below:> Chairman and Managing Director of Ecrinvest 4 S.A.;> Administrator of Hachette S.A.;> Member of the Supervisory Board of Lagardère Active S.A.S.;> Permanent representative of Hachette S.A. at the Supervisory
Board of Lagardère Active Broadcast;> Administrator of Lagardère Entertainment S.A.S.;> Administrator of Lagardère Services S.A.S;> Administrator of Hachette Livre S.A.;> Administrator of Lagardère Ressources S.A.S.;> Member of the Supervisory Board of Lagardère Sports S.A.S.;> Administrator of Sogeade Gérance S.A.S.;

4> Member of the Trustee Board and Treasurer of“Fondation de l’École Normale Supérieure”;> Chairman of the “Institut d’expertise et de prospective
de l’École Nationale Supérieure”;> Chairman of the “Club des Trente”;> Vice-Chairman of Atari S.A. (former Infogrames
Entertainment S.A.) and Chairman of the Audit Committeeof Atari S.A.;> Member of the Supervisory Board and Chairman of the Audit
Committee of Le Monde S.A.;> Administrator of Le Monde Interactif S.A.;> Member of the Supervisory Board and of the Audit
Committee of CANAL + France S.A.;> Director of Lagardère North America, Inc; and> Member of the Board of Directors of EADS Participations B.V.
Former mandates for the last five years:> Permanent representative of Lagardère Active Broadcast
in the Supervisory Board of Multithématiques(resigned February 2005);> Permanent representative of Lagardère SCA
in the Supervisory Board of Hachette Filipacchi Medias(transformed in S.A.S. on 25 October 2006);> Chairman and Managing Director of Lagardère Télévision
Holdings S.A. (resigned January 2007);> Administrator of Legion Group S.A. (resigned May 2007);> Director of Lagardère Management, Inc (resigned
October 2007);> Member of the Supervisory Board of Hachette Holdings
S.A.S. (resigned December 2007);> Member of the Supervisory Board of Financière Pichat S.A.S.
(resigned April 2008);

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Back to Contents> Chairman of the Supervisory Board of Newsweb S.A.
(resigned June 2008); andCurrent mandates in addition to the one listed in the chart above
are set forth below:> Chairman of Eole S.A.S (resigned February 2009).

> Chairman and Chief Executive Officer of Lagardère Media(corporate name: Hachette S.A.);

Juan Manuel Eguiagaray Ucelay
Mr Juan Manuel Eguiagaray Ucelay is Director of Studies at the
Madrid-based think tank Fundación Alternativas. He has been afull time Professor of Economics at Deusto University in Bilbao(1970-1982), and Associate Professor of Economics at Carlos III
University in Madrid. Mr Eguiagaray Ucelay holds degrees in
economics and law, as well as a Ph.D, from Deusto University.
Formerly Spain’s Minister for Public Administration (1991-1993)
and Minister for Industry and Energy (1993-1996), he resigned
from Parliament in 2001 to devote himself to economic and social
activities.
Current mandates in addition to the one listed in the chart above
are set forth below:> President of Solidaridad Internacional (NGO);> Member of the Council Adviser of EPTISA (former
Fundación Grupo EP);
> Member of the Council Adviser of Cap Gemini Spain;and> Member of the Board of Directors of EADSParticipations B.V.
Former mandates for the last five years:> Member of the Advisory Board of Futurspace S.A.
(resigned 5 July 2004);> Associate Professor of Macroeconomics at the University ofCarlos III in Madrid (resigned 30 September 2006);> Member of the Council Adviser of Creation, Advising andDevelopment (Creade), S.L. (resigned 1 July 2007); and> Director of Hachette Livre (S.A.);> Chairman of the Supervisory Board of Lagardère Services(S.A.S.) (ex Hachette Distribution Services);> Chairman of the Supervisory Board of Lagardère Active(S.A.S.);> Chairman of the Supervisory Board of Lagardère Sports(S.A.S.);> Director of Lagardère Ressources (S.A.S.);> President, Lagardère Unlimited INC;
> Permanent Representative of Lagardère Unlimited INC,
Managing member of Lagardère Unlimited LLC;
> Chairman and Chief Executive Officer of SOGEADE Gérance(S.A.S.);> Member of the Board of Directors of EADS Participations
B.V.;> Chairman of Fondation Jean-Luc Lagardère;> President of the sports association, Lagardère Paris Racing
Ressources (Association loi 1901);> President of the sports association Lagardère Paris Racing(Association loi 1901);> President of the “Association des Amis de Paris Jean-Bouin
C.A.S.G.” (Association loi 1901);> Chairman and Chief Executive Officer of Lagardère (S.A.S.);> Economic Adviser of Arco Valoraciones S.A.
(resigned 1 November 2007).

> Chairman and Chief Executive Officer of Lagardère Capital &Management (S.A.S.);

Arnaud Lagardère> Chairman and Chief Executive Officer of Arjil Commanditée— ARCO (S.A.); andMr Arnaud Lagardère has been General Partner and Chief
Executive Officer (CEO) of Lagardère since 2003. He has been
Managing Partner of Lagardère since 1998, being appointed
CEO of both Lagardère Media and Lagardère Active in 1999.
Previously he was CEO of Grolier Inc. in the United States,
Head of emerging activities and electronic media for Matra andVice President of the Supervisory Board of Arjil bank. He began
his career in 1986 as General Manager of MMB, the holding
company of Hachette and Europe 1. Mr Lagardère graduated ineconomics from the University of Paris Dauphine.

142 EADS R EG I S TR ATI O N DO C U ME N T 2 0 0 9> Member of the Supervisory Board of Daimler (AG).
Former mandates for the last five years:> Chairman and Chief Executive Officer of Lagardère Images(S.A.S) (resigned October 2004);

CORPORATE GOVERNANCE>4.1 | Management and Control

1> Chairman and Chief Executive Officer of Lagardère
Thématiques (S.A) (resigned November 2004);

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Back to Contents> Permanent Representative of Lagardère Active Publicité to theBoard of Directors of Lagardère Active Radio International(S.A.) (resigned May 2009).

> Manager of Lagardère Elevage (resigned March 2003);> Vice-President of the Supervisory Board, Arjil & Compagnie(SCA) (resigned April 2004);> President of the Association “Club des Entreprises Paris2012” (resigned January 2006);> Director of Fimalac (S.A.) (resigned January 2006);> Chairman and Chief Executive Officer of Lagardère Active(S.A.S.) (resigned October 2006);> Director of Hachette Filipacchi Medias (S.A.) (resigned
October 2006);> Permanent Representative of Hachette S.A. to theManagement Board of SEDI TV-TEVA (SNC) (resigned
December 2006);> Chairman and Chief Executive Officer (Président Délégué)of Lagardère Active Broadcast (S.A Monégasque) (resigned
March 2007);> Member of the Supervisory Board of Lagardère Sports (S.A.S.)(resigned April 2007);> Director of Lagardère Management, Inc (resigned
October 2007);> Chairman of the Board of Directors of Lagardère Active North
America, Inc (resigned October 2007);> Chairman of the Supervisory Board of Hachette Holding(S.A.S.) (ex Hachette Filipacchi Medias) (resigned
December 2007);> Director of France Télécom (S.A.) (resigned January 2007);> Member of the Supervisory Board of Virgin Stores (S.A.)(resigned February 2008);> Member of the Supervisory Board of Le Monde (S.A.)(resigned February 2008);> President (Chief Executive Officer) of Lagardère Active
Broadband (S.A.S.) (resigned June 2008);> Director of LVMH-Moet Hennessy Louis Vuitton (S.A.)(resigned May 2009); andHermann-Josef Lamberti
Mr Hermann-Josef Lamberti is a member of the Management
Board of Deutsche Bank AG since 1999 and is the bank’s Chief
Operating Officer. From 1985, he held various management
positions within IBM, working in Europe and the United States,in the fields of controlling, internal application development,
sales, personal software, marketing and brand management.
In 1997, he was appointed Chairman of the Management of
IBM Germany. He started his career in 1982 with Touche Ross
in Toronto, before joining the Chemical Bank in Frankfurt.
Mr Lamberti studied business administration at the Universities
of Cologne and Dublin, and graduated with a Master’s degree.
Current mandates in addition to the one listed in the chart above
are set forth below:> Member of the Supervisory Board of BVV Pensionsfonds desBankgewerbes AG;> Member of the Supervisory Board of BBV
Versicherungsverein des Bankgewerbes A.G. und BVV
Versorgungskasse des Bankgewerbes e.V.;> Member of the Supervisory Board of Carl Zeiss AG;> Member of the Supervisory Board of Deutsche Börse AG;> Chairman of the Supervisory Board of Deutsche Bank Privatund Geschäftskunden AG;> Member of the Board of Management of Arbeitgeberverband
des privaten Bankgewerbes e:V.;> Member of the Board of Trustees of Baden-Badener
Unternehmergespräche — Gesellschaft zur Förderung desUnternehmensnachwuchses e.V. (Mr Lamberti will resign in
May 2010);> Member of the Advisory Board of Barmenia VersicherungenWuppertal;> Deputy member of the Deposit Insurance Committee of
Bundesverband deutscher Banken e:V.;> Delegate of the Delegatesassembly of Bundesverband
deutscher Banken e.V.;> Member of the Financial Community Germany Committee of
Bundesverband deutscher Banken e.V.;> Member of the Board of Management of Deutsches
Aktieninstitut e.V.;
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1> Member of the Board of Trustees of e-Finance Lab Frankfurt
am Main;> Member of the Stock Exchange Council of Eurex
Deutschland;> Member of the Stock Exchange Council of Frankfurter
Wertpapierbörse AG;> Chairman of the Society of Freunde der Bachwoche
Ansbach e.V.;> Member of the Board of Trustees of Institute for Law and
Finance Frankfurt;> Member of the Advisory Board of Institut fürUnternehmensplanung — IUP;
> Member of the Board of Trustees of Junge Deutsche
Philharmonie;> Deputy Chairman of the Board of Trustees of the Societyof Promotion of Kölner Kammerorchester e.V.;

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Börsensachverständigenkommission(Bundesfinanzministerium);> Member of the Board of Management ofFrankfurt Main Finance e.V.;> Member of the Senate of Fraunhofer Gesellschaft;> Member of the Advisory Board of Franhofer-IUK-Verbund;> Member of the University Council of the University of
Cologne;> Member of the Board of Directors of Stichting
Administratiekantoor EADS;> Member of the Board of Directors of Wirtschaftsinitiative
FrankfurtRheinMain e.V.; and> Member of the Executive Committee of FrankfurtRheinMain
e.V. (i.G).
Former mandates for the last five years:> Member of the Programme Advisory Board of LOEWE
Landes-Offensive zur Entwicklung Wissenschaftlichökonomischer Exzellenz des Hessischen Ministeriums
für Wissenschaft und Kunst;> Member of the Supervisory Board of SupplyOn AG(resigned 1 January 2003);> Member of the Advisory Circle of Münchner Kreis;> Chairman of the Board of Directors of Deutsche Bank
S.A./N.V. (resigned 21 April 2004);> Deputy member of the Advisory Board and the Examination
Board of Prüfungsverband deutscher Banken e.V.;> Chairman of the Supervisory Board of European transaction
bank AG (resigned 9 June 2004);> Executive Customer of the Advisory Council of Symantec
Corporation;> Chairman of the Board of Directors Deutsche Bank S.A.E.
(resigned 16 June 2004);> Member of the Board of Trustees of The Frankfurt
International School e.V.;> Chairman of the Supervisory Board of Deutsche Bank
Payments Projektgesellschaft AG (resigned 1 July 2004);> Member of the managing Committee of the Institut fürWirtschaftsinformatik der HSG of the Universität St. Gallen;> Chairman of the Advisory Council of Deutsche
Clubholding GmbH (resigned 1 May 2005);> Member of the Administrative Council of
Universitätsgesellschaft Bonn-Freunde, Förderer, Alumni;> Chairman of the Supervisory Board of E-Millennium
1 GmbH & Co. KG (resigned 1 May 2005);> Member of the Founder Council of Wallraf-RichartzMuseum;> Member of the Privat and Business Clients Committee of
Bundesverband Deutscher Banken e.V. (resigned 1 July 2005);> Member of the Board of Trustees of Wallraf-RichartzMuseum und Museum Ludwig e.V.;> Non-Executive Director of the Board of Directors of Euroclear
S.A./N.V. (resigned 19 September 2005);> Member of the Advisory Board in the centre for marketorientated corporate management of WHU;

> Non-Executive Director of the Board of Directors of Euroclearplc (resigned 19 September 2005);> Member of the Steering Committee and of
the Federal Committee of Wirtschaftsrat der CDU e.V.;> Member of the Supervisory Board of Schering AG (resigned
20 March 2006);

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Back to Contents> Member of the Board of Directors of Fiat S.p.A. (resigned
24 July 2007);> Member of the Prime Minister of India’s Global Advisory
Council;> Member of the Verband der Sparda-Banken e.V. (resigned
30 September 2007);> Member of the Board of Commonwealth Business Council
Limited;> Member of the Foundation Board of Otto A. WipprechtStiftung (resigned 31 May 2008); and> Member of Board of Trustees of Cleveland Clinic;> Member of the Advisory Board of Universität Augsburg(resigned 30 September 2008).

> Member of the Board of ArcelorMittal USA Inc.;> President of Ispat Inland ULC;

Lakshmi N. Mittal> Member of the Board of ONGC Mittal Energy Ltd.;

Lakshmi N. Mittal is the Chairman and CEO of ArcelorMittal.
He founded Mittal Steel Company in 1976 and led its 2006
merger with Arcelor to found the world’s largest steel maker.
He is widely recognised for his leading role in restructuring the
global steel industry, and has over 35 years’ experience working
in steel and related industries. Mr Mittal was awarded Fortune
magazine’s “European Businessman of the year 2004”, “Business
Person of 2006” by Sunday Times, “International Newsmakerof the year 2006” by Time Magazine, “Person of the year 2006”
by Financial Times, “2007 Dwight D. Eisenhower Global
Leadership Award”, “Grand Cross of Civil Merit from Spain”,“Padma Vibushan” by the President of India and “Fellowshipfrom King’s College”.

> Member of the Board of ONGC Mittal Energy Services Ltd.;

Current mandates in addition to the one listed in the chart above
are set forth below:> Member of the Board of Directors of ArcelorMittal S.A.;> Member of the Board of Directors of Goldman Sachs;> Member of the Board of Directors of ICICI Bank Limited;> Vice Chairman and Executive Committee member of World
Steel Association (earlier named International Iron and SteelInstitute);> Member of the Foreign Investment Council in Kazakhstan;> Member of the International Investment Council in South
Africa;> Member of the Presidential International Advisory Boardof Mozambique;> Member of the World Economic Forum’s International
Business Council;> Member of the Advisory Board of the Kellogg Schoolof Management;> Member of the Prime Minister’s Advisory Board of Ukraine;> Gouverneur of ArcelorMittal Foundation;> Trustee of Gita Mittal Foundation;> Trustee of Gita Mohan Mittal Foundation;> Member of Executive Board of Indian School of Business;> Trustee of Lakshmi and Usha Mittal Foundation;> Member of the Managing Committee of Lakshmi Niwas andUsha Mittal Foundation;> Chairman of Governing Council of LNM Institute ofInformation Technology;> Trustee of Mittal Champion Trust;> Golden Patron of Prince’s Trust; and> Trustee of Mittal Children’s Foundation.
Former mandates for the last five years:> Member of the International Advisory Board of Citigroup(resigned June 2008).

Sir John Parker
Sir John Parker is Chairman of National Grid PLC and Anglo
American PLC, Deputy Chairman of DP World (Dubai),
Non-Executive Director of Carnival PLC and Carnival
Corporation, a member of the International Advisory Board of
Citigroup and Chancellor of the University of Southampton.
His career has spanned the engineering, shipbuilding anddefence industries, including some 25 years’ experience asa Chief Executive Officer with Harland & Wolff and theBabcock International Group. He studied Naval Architecture andMechanical Engineering at the College of Technology, Queens
University, Belfast.

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Current mandates in addition to the one listed in the chart above
are set forth below:> Member of the Supervisory Board of Banque Marocaine pourle Commerce et l’Industrie, Morocco;> Director of Carnival plc and Carnival Corporation;> Censor of Galeries Lafayette S.A.;> Deputy Chairman of D.P. World (Dubai);> Chairman of the European Financial Round Table;> Member of the International Advisory Board of Citigroup;> Chairman of the European Banking Federation;> Chancellor of the University of Southampton;> Chairman of the Investment Banking and Financial Markets
Committee of Fédération Bancaire Française;> Director of White Ensign Association Limited;> Member of the Prime Ministers Business Council for Britain;and> Member of the Board of Directors of Stichting
Administratiekantoor EADS.
Former mandates for the last five years:> Chairman of the Management Board of Institut d’Études
Politiques de Paris;> Chairman of the Supervisory Board of Institut Aspen France;> Chairman of the Institut de l’Entreprise;> Member of the Executive Committee of Mouvement desEntreprises en France;> Senior non-executive Director of Bank of England (resigned
June 2009); and> Member of the Haut Conseil de l’Éducation;> Joint Chairman Mondi Group (resigned August 2009).

> Member of the Institut International d’Études Bancaires;

Michel Pébereau> Member of the International Advisory Panel of Monetary
Authority of Singapore;

Mr Michel Pébereau has been BNP Paribas’ Chairman of theBoard since 2003. He presided over the merger that created
BNP Paribas in 2000, becoming Chairman and Chief Executive
Officer (CEO). In 1993, he was appointed Chairman and CEOof the Banque Nationale de Paris and privatised it. Previously,
he was Chairman and CEO of the Crédit Commercial de France.
He started his career in 1967 at the Inspection Générale desFinances. In 1970 he joined the French Treasury where he held
various high ranking posts. Mr Pébereau is an alumnus of the
École Nationale d’Administration and of the École Polytechnique.

> Member of the International Capital Markets Advisory
Committee of Federal Bank of New York;> Member of the International Business Leaders’ Advisory
Council for the Mayor of Shanghai (IBLAC);> Member of the European Financial Round Table; and> Member of the “Académie des sciences morales et politiques”.

Current mandates in addition to the one listed in the chart above
are set forth below:

Former mandates for the last five years:> Member of the Board of Directors of Lafarge;> Member of the Board of Directors of EADSParticipations B.V. (resigned 22 October 2007).

> Member of the Board of Directors of Saint-Gobain;

Wilfried Porth> Member of the Board of Directors of Total;> Member of the Board of Directors of Pargesa Holding S.A.,
Switzerland;> Member of the Board of Directors of BNP Paribas (Suisse)
S.A.;> Member of the Supervisory Board of Axa;

146 EADS R EG I S TR ATI O N DO C U ME N T 2 0 0 9

Mr Wilfried Porth is a member of the Board of Management ofDaimler AG and the Director of Labor Relations, responsiblefor Human Resources, IT-management and Procurement of
Non-Production Material and Services. Until 2006, he was
Executive Vice President, MB Van and prior to that, he was
Chief Executive Officer of Mitsubishi Fuso Truck & Bus Corp.
He previously held various engineering management positions
within the Daimler Group, including several years of experienceabroad. Mr Porth graduated in engineering at the University of
Stuttgart.

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Current mandates in addition to the one listed in the chart above
are set forth below:

4.1.1.2 OPERATION OF THE BOARD OF DIRECTORS IN 2009

> Member of the Supervisory Board of Daimler Financial
Services AG;

The Board of Directors met eleven times during 2009 and wasregularly informed of developments through business reports
from the Chief Executive Officer, including rolling forecasts aswell as strategic and operational plans. The average attendance
rate at such meetings was 84%.

> Member of the Board of Directors of EADSParticipations B.V.; and> Member of the Advisory Board of Daimler
Unterstützungskasse GmbH.
Former mandates for the last five years:> Member of the Board of Directors of Mitsubishi Fuso Truck
and Bus Corporation (resigned June 2005);> Member of the Advisory Board of Westfalia Van Conversion
GmbH (resigned November 2007);> Member of the Supervisory Board of Mercedes-Benz
Ludwigsfelde GmbH (resigned March 2009);> Member of the Advisory Board of Mercedes-Benz España,
S.A. (resigned June 2009);> Member of the Board of Directors of Daimler Vans
Manufacturing, LLC (resigned August 2009); and> Officer of Daimler Vans Manufacturing,
LLC (resigned August 2009).

Independent Directors
The four independent Directors appointed pursuant tothe criteria of independence set out above are HermannJosef Lamberti, Lakshmi N. Mittal, Sir John Parker andMichel Pébereau.

Prior Offences and Family Ties
To the Company’s knowledge, none of the Directors (in either
their individual capacity or as director or senior manager of
any of the entities listed above) has been convicted in relation
to fraudulent offences, been the subject of any bankruptcy,
receivership or liquidation, nor been the subject of any official
public incrimination and/or sanction by a statutory or regulatory
authority, nor been disqualified by a court from acting as amember of the administrative, management or supervisory
bodies of any issuer or conduct of affairs of any company, during
at least the last five years. As of the date of this document, there
are no family ties among any of the Directors.

Board of Directors meetings

On 14 April 2009, Rüdiger Grube resigned from thechairmanship of the Board of Directors, and the Board of
Directors designated Bodo Uebber as his successor in thisposition. Rüdiger Grube also resigned as a member of the Boardof Directors, and for the remaining term of his appointment(i.e. until the annual shareholders’ meeting to be held in 2012)
the Board of Directors proposed as his replacement Mr Wilfried
Porth, who was elected by the annual shareholders’ meeting
held on 27 May 2009. In addition, on 2 February 2009, theBoard of Directors appointed Domingo Ureña-Raso as memberof the Executive Committee and new Head of Airbus Military,
and in November 2009, Sean O’Keefe as new Head of EADS
North America. The latter became a member of the Executive
Committee on 1 January 2010. The Board of Directors also
approved the contract renewals of other Executive Committee
members.
Overall, in 2009, seven Board of Directors meetings covered
A400M related matters. Other topics intensively discussed,
and operations authorised at the Board of Directors meetings
included: EADS’ strategy (including M&A matters and thecompetitive environment), major business issues such as
the A350 development and the Saudi border surveillance
programme, regular updates on the other major programmes,
progress of Vision 2020, the approval of the operational plan,
the Group’s financial results and forecasts. In times of economiccrisis, the Board of Directors focused on Enterprise Risk
Management, the Corporate Audit Plan and on progress of theCompliance Organisation, created in 2008. Ongoing legal cases
and litigations were discussed as well. The Board of Directors
also dealt with topics regarding personnel and Human Resources,
such as compensation policy, management qualification,
remuneration (including the long-term incentive plan and an
employee share ownership plan) as well as attracting, retaining
and developing individuals with high potential in order to ensure
the future quality of EADS’ management and the multinational
leadership structure. Moreover, the Board tasked management toincrease its efforts regarding diversity amongst its employees.

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Assessment of the Performance of the Board of
Directors
The Board of Directors carries out a self-assessment of its
performance on an annual basis and a more thorough assessment
every three years conducted by independent consultants. Due tothe reconfiguration of the Board of Directors in October 2007,
the Board selected Egon Zehnder International for a board
effectiveness review in 2010.
The Board review was conducted by Egon Zehnder Internationalin February 2010. The discussion of the result was planned
for subsequent Board of Directors’ meetings in March andJune 2010. The evaluation explored the role of the Board of
Directors, the correlation of its operations with its mission, andthe instruments and processes that affect its performance.
The assessment concluded that the Board of Directors is
generally satisfied with its ability to work as a team and to tackle
relevant matters openly in the best interest of the Company.
While there is room for improvement, there is no need to alter
the setup after 28 months of operation.
The Directors consider the frequency and the length of the Board
meetings adequate and feel that issues are covered thoroughly.
Supporting documentation contains all necessary information but
needs to be better focused in support of decision-making. The
comprehensiveness of information arises from the complexity ofthe business, and the proportion of information delivery relative
to discussion reflects this fact.
With regards to the Board of Directors’ teamwork, attendance isadequate and the unanimous opinion is that conflicting views
are expressed, discussions are open and dissent can be voiced
constructively. Overall, the Board of Directors considers that it
assembles a very international, diverse and relevant set of skills,
with strong finance competencies; in 2009, these skills wereapplied to discussing key programmes, the A400M contract
re-negotiation, the risks inherent to the economic crisis and

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their impact on commerce operations and profitability. A closer
working relationship between the Board of Directors and the
Executive Committee was deemed conducive to better efficiency.
In addition, the Directors feel that the Board-work allows themto fulfil their duty, and attention to compliance permeates thework of the Board of Directors. But they sense that the Boardof Directors is still absorbed in operational matters – especially
A400M – at the expense of the longer term questions. Therefore,
the majority of Board members require more time devoted tolong lead questions, such as shared values and strategy, structureand efficiency. Steps in that direction were taken, however, andfor the first time, the Board of Directors devoted a full day
meeting to strategy in 2009, including an assessment of Vision2020 goals in a changing environment. This practice will be
continued.
Committees are very thorough and professional, and thearticulation of the Audit Committee and of the Remuneration
and Nomination Committee with the rest of the Board of
Directors is satisfactory; however, Committee work should
increasingly be held on dates separate from the Board of
Directors’ meeting, and results of the Committee work should be
more intensively discussed by the whole Board.
Finally, the Chairmanships of the Board and the Committees arerecognised as very competent and dedicated.
Since the last self-assessment, in 2009, the dedication of a
specific Board of Directors’ meeting to strategic matters, thediversity of the skill set and experience in the Board room, andthe focus on the agenda are the most tangible improvements. The
Board Secretary has taken measures so that Board of Directors’
documentation be better suited to support decisions in 2010.
Continuous improvement, competitiveness and effectiveness ofgovernance and management of the Group will remain a prime
focus and key success factor of EADS.

4.1.2 Audit Committee
Pursuant to the Rules, the Audit Committee makes
recommendations to the Board of Directors on the appointment
of Auditors and the determination of their remuneration,
as well as the approval of the annual financial statements
and the interim accounts, it discusses with the Auditors
their audit programme and the results of their audit of theaccounts and it monitors the adequacy of the Group’s internal
controls, accounting policies and financial reporting. The Audit
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matters are given due importance at meetings of the Board of
Directors. The rules and responsibilities of the Audit Committee
have been set out in the Audit Committee Charter.
The Audit Committee reviews the quarterly, half and full year
accounts on the basis of the documents distributed in advanceand its discussions with the Auditors. It also surveys theGroup’s Enterprise Risk Management (ERM) and the Compliance
Organisation.

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In 2009, the Audit Committee:> was chaired by Hermann-Josef Lamberti, and also included
Dominique D’Hinnin, Sir John Parker and Bodo Uebber as
members until 14 April 2009; and> has since then been chaired by Hermann-Josef Lamberti, andalso includes Rolf Bartke, Dominique D’Hinnin and Sir John
Parker as members.

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Accounting and the Chief Financial Officer are requested toattend meetings of the Audit Committee to answer questions.
The Audit Committee must meet four times a year, or more
frequently depending on need. It met five times during 2009,
with a 90% average attendance rate, to review the 2008 results aswell as the first half-year results for 2009 of the Company, thequarterly financial reviews, and topics such as ERM, complianceand internal audit matters.

The Chairman and the Chief Executive Officer are invited
as guests to each meeting of the Committee. The Head of

4.1.3 Remuneration and Nomination Committee
Pursuant to the Rules, the Remuneration and Nomination
Committee makes recommendations to the Board of Directors
regarding the appointment of the EADS Corporate Secretary,
the members of the Airbus Shareholder Committee, andthe chairmen of the Supervisory Board (or similar organ)of other important Group member companies and business
units. The Remuneration and Nomination Committee also
makes recommendations to the Board of Directors regarding
remuneration strategies and long-term remuneration plans anddecides on the service contracts and other contractual mattersin relation to the Board of Directors and Executive Committee
members. Once approved by the Chairman, it also reviews the
proposals by the Chief Executive Officer for the appointmentof members of the Executive Committee and of the Airbus
Chief Executive Officer. The rules and responsibilities of theRemuneration and Nomination Committee have been set out in
the Remuneration and Nomination Charter.
The guiding principle governing management appointmentsin the Group is that the best candidate should be appointed tothe position (“best person for the job”), while at the same timeseeking to achieve a diverse composition with respect to gender,
experience, national origin, etc.
In 2009, the Remuneration and Nomination Committee:> was chaired by Sir John Parker, and also included Rolf
Bartke, Dominique D’Hinnin and Hermann-Josef Lamberti as
members until 27 May 2009; and> has since then been chaired by Sir John Parker, and also
includes Dominique D’Hinnin, Hermann-Josef Lamberti and
Wilfried Porth as members.
The Chairman and the Chief Executive Officer are invited asguests to each meeting of the Committee.
The Remuneration and Nomination Committee must meet
twice a year, or more frequently depending on need. It met
four times during 2009, with a 94% average attendance rate. In
addition to making recommendations to the Board of Directors
for major appointments within the Group, the Remuneration
and Nomination Committee reviewed the compensation policy(including pension schemes), variable pay for 2008, the longterm incentive plan and the employee share ownership plan for
2009/2010, the salaries of Executive Committee members for2009 and general succession planning.
In early 2010, a thorough benchmark study of the compensationof EADS’ Board of Directors and executives was conducted, inorder to analyse its appropriateness in terms of structure andamounts. The results showed that the overall remuneration
was adequate and compliant with governance recommendations
and with industry practice. As an outcome, the Remuneration
and Nomination Committee has recommended an enhancementof the overall compensation structure for EADS executives
during 2010, so that it better supports company objectives ofsustainability and profitability.

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4.1.4 Strategic Committee
The Strategic Committee was created in October 2007. It is
not a decision making body but a resource available to theBoard of Directors for the preparation of decisions on strategic
matters. Pursuant to the Rules, the Strategic Committee makes
recommendations to the Board of Directors regarding strategic
developments, corporate strategies, major merger and acquisition
projects, major investments, projects or product decisions ordivestments, as well as major research and development projects.
The rules and responsibilities of the Strategic Committee havebeen set out in the Strategic Committee Charter.

> has since then been chaired by Bodo Uebber, and also includes
Louis Gallois, Arnaud Lagardère, Michel Pébereau andWilfried Porth (following his appointment as a Director on
27 May 2009) as members.
The Strategic Committee must meet twice a year, or more
frequently depending on need. It met twice during 2009 withan 80% average attendance rate. In addition to monitoring major
strategic initiatives of the Group, it made recommendations to
the Board of Directors on merger and acquisition projects andreviewed EADS’ Research & Technology (R&T) policy.

In 2009, the Strategic Committee:> was chaired by Rüdiger Grube, and also included Louis
Gallois, Arnaud Lagardère, Michel Pébereau and Bodo Uebber
as members until 14 April 2009; and4.1.5 Executive Committee
The Chief Executive Officer, supported by an Executive
Committee (the “Executive Committee”), is responsible formanaging the day-to-day operations of the Company. The
Executive Committee, chaired by the Chief Executive Officer,
also comprises the Heads of the major Functions and divisions of
the Group. The Executive Committee met 12 times during 2009.

the joint responsibilities as defined above, each member ofthe Executive Committee is individually responsible for the
management of his portfolio and must abide by decisions takenby the Chief Executive Officer and the Executive Committee, as
the case may be.

> investment approvals up to € 350,000,000;

The Chief Executive Officer endeavours to reach consensus
among the members of the Executive Committee on the matters
discussed at the Executive Committee meetings. In the event a
consensus is not reached, the Chief Executive Officer is entitledto decide the matter. If there is a fundamental or significant
disagreement with respect to any undecided matter, thedissenting Executive Committee member may request that theChief Executive Officer submit such matter to the Chairman for
his opinion.

> setting up and control of the implementation of the strategy
for EADS businesses;

The term of office for the Executive Committee members is five
years.

> management, organisational and legal structure of the Group;

The Executive Committee members are appointed by the Boardof Directors on the proposal of the Chief Executive Officer first
approved by the Chairman after review by the Remuneration
and Nomination Committee. The appointment of the Executive
Committee should be approved as a whole team, not on an
individual basis, with the exception of the Chief Executive
Officer of Airbus, who shall be appointed by the Board of
Directors individually.

The following matters are discussed, amongst others, at the
Executive Committee meetings:> appointment approvals of their management teams by theheads of the Group divisions (with the exception of the
Airbus Chief Operating Officer);> performance level of the Group’s businesses and support
functions; and> all business issues, including the operational plan of theGroup and its divisions and Business Units.
The internal organisation of the Executive Committee is definedby the business allocation among the members under thesupervision of the Chief Executive Officer. Notwithstanding

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COMPOSITION OF THE EXECUTIVE COMMITTEE
Name

Age

Term started

Term expires

Principal Occupation

Louis Gallois

66

2007

2012

Chief Executive Officer EADS

François Auque

53

2005

2010

Head of Astrium and Coordination Space & Defence

Lutz Bertling

47

2006

2011

Head of Eurocopter

Jean J. Botti

53

2006

2011

Chief Technical Officer

Fabrice Brégier

48

2005

2012

EADS Operational Performance

Thomas Enders

51

2007

2012

Head of Airbus

Jussi Itävuori

54

2008

2012

Head of Human Resources

Marwan Lahoud

44

2007

2012

Chief Marketing and Strategy Officer

Sean O’Keefe

54

2010

2014

Head of EADS North America

Hans Peter Ring

59

2007

2012

Chief Financial Officer EADS

Domingo Urena-Raso

51

2009

2014

Head of Airbus Military

Stefan Zoller

52

2005

2010

Head of Defence & Security

Note: The professional address of all members of the Executive Committee for any matter relating to EADS is Mendelweg 30, 2333 CS Leiden, The Netherlands.

Louis Gallois, Chief Executive Officer EADS

Fabrice Brégier, EADS Operational PerformanceSee “— 4.1.1 Board of Directors, Chairman and Chief Executive
Officer — Curriculum Vitae and other Mandates and Duties
Performed in any Company by the members of the Board of
Directors”.

Mr Brégier was appointed Airbus COO in 2006, with additional
responsibility for EADS operational performance. He became
President and Chief Executive Officer (CEO) of Eurocopter
in 2003. Previously, he was CEO of MBDA. He joined Matra
Défense in 1993 as Chairman of the Apache MAW andEurodrone GIEs. He is alumnus of École Polytechnique and École
des Mines.

François Auque, Head of Astrium
and Coordination Space & Defence
Mr Auque was appointed in 2000. He was previously Chief
Financial Officer (CFO) of Aerospatiale then Aerospatiale Matraand Managing Director for satellites of Aerospatiale Matra. He
spent his earlier career with the Suez Group and the French Courdes Comptes. Mr Auque graduated from École des Hautes Études
Commerciales, Institut d’Études Politiques and is an alumnus of
École Nationale d’Administration.

Thomas Enders, Head of Airbus
Mr Enders was appointed in August 2007. Previously, since2005, he was co-CEO of EADS. From 2000 to 2005 he was Headof the Defence & Security Division at EADS. Prior to that hehad been a Director Corporate Development and Technology at
DASA. He joined DASA in 1991. Mr Enders holds a Doctorate
degree from the University of Bonn.

Lutz Bertling, Head of Eurocopter
Mr Bertling was appointed in 2006, following a year as CEO
of Eurocopter Deutschland. He joined Eurocopter in 2003 as
Head of Governmental Programmes, coming from the Defence& Security division. Previously, he held various positions at
DaimlerChrysler Rail Systems and Braunschweig University. He
earned a PhD in Engineering at the Braunschweig University.

Jussi Itävuori, Head of Human Resources
Mr Itävuori joined EADS in 2001 and became a member of the
Executive Committee in 2003. Previously, he had worked for
KONE Corporation from 1982, being appointed Head of Human
Resources and member of the Executive Committee of KONE
Corporation in 1995. Mr Itävuori graduated from the Vaasa
School of Economics, Finland in 1982.

Jean J. Botti, Chief Technical Officer
Mr Botti was appointed in 2006. He joined from General
Motors, where he was Chief Technologist and then BusinessLine Executive of the Delphi Powertrain business. He started
his career in 1978 as product engineer for Renault. Mr Botti
holds a degree from INSA Toulouse, an MBA from Central
Michigan University and a PhD from the Conservatoire des Artset Métiers and is an SAE fellow.

Marwan Lahoud, Chief Marketing and Strategy Officer
Mr Lahoud was appointed in June 2007. Previously, he was CEO
of MBDA. He worked for Aerospatiale on its merger with Matraand on the foundation of EADS. Within EADS, he served as
Senior Vice President Mergers & Acquisitions. Mr Lahoud is
an alumnus of École Polytechnique and graduated from the École
Nationale Supérieure de l’Aéronautique et de l’Espace.

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Sean O’Keefe, Head of EADS North America

Domingo Urena-Raso, Head of Airbus Military

Mr O’Keefe was appointed to the Executive Committee in 2010.
Previously, he was a corporate officer of the General ElectricCompany. Before that, he was Chancellor of the Louisiana State
University, administrator of NASA, Secretary of the US Navyand CFO of the US Defense Department. Between public service
appointments, he held professorships at US universities. Mr
O’Keefe holds advanced degrees from Syracuse University’s
Maxwell School and Loyola University.

Mr Urena-Raso was appointed in February 2009. He waspreviously in charge of the Power8 and “Future EADS”
programmes. Since 1989, he has held various positions, amongst
others at CASA, EADS PZL, Defence & Security Division andAirbus. Mr Urena-Raso holds degrees from the Polytechnic
University of Madrid, from ESSEC in Paris and has an MBA.

Hans Peter Ring, Chief Financial Officer EADSMr Ring was appointed EADS CFO in 2002, Chief Operating
Officer in 2005 and Airbus CFO in dual role in 2007. In 1996,
he was made Senior Vice President of Controlling at DASA
and, subsequently, EADS. From 1992, he was CFO and Board
member of Dornier Luftfahrt. He holds a degree in Business
Administration from the University of Erlangen-Nuremberg.

Stefan Zoller, Head of Defence & Security
Mr Zoller was appointed in 2005, having held top management
positions within the Division since 2000. Previously, he held
various management positions within DASA, DaimlerChrysler,
Dornier and Senstar/Canada. Mr Zoller graduated from the
University Tübingen and holds a PhD.

4.1.6 Enterprise Risk Management System
OVERVIEW

Developments in 2009 and Outlook

One of management’s fundamental goals is to foster an
effective Internal Control (“IC”) and Risk Management (“RM”)
environment at EADS. In 2008, EADS began implementationof a new Group-wide Enterprise Risk Management (“ERM”)
system which seeks to address these two subjects in parallel,
while further developing and building upon the achievementsof the previous IC and RM system in place. The resulting ERM
system seeks to provide management with an enhanced toolfor effectively managing the uncertainty and associated risks
and opportunities inherent in EADS’ business. In addition, theERM system seeks to satisfy compliance requirements for aneffective IC and RM system. EADS’ ERM system is based on theInternal Control and Enterprise Risk Management Frameworksof the Committee of Sponsoring Organisations of the Treadway
Commission (COSO II).

During 2009, EADS sought to foster the Group-wide ERM
system integration. Regular “top management discussions” took
place on the major risks and opportunities that could affect theGroup in reaching its objectives. The discussions were basedon the self-assessment results of divisions, business units andheadquarters departments.

The ERM system serves as the basis for all sub-ERM, sub-IC
and sub-RM procedures present throughout EADS at the variousorganisational levels such as the Divisions, business units andheadquarters departments. It encompasses a hierarchical bottomup and top-down reporting procedure to help ensure greatertransparency of the risks and opportunities faced by the Group.
At the top, the Board of Directors and the Audit Committee
discuss all major issues, significant changes and planned
improvements in relation to the ERM system.
For a discussion of the main risks to which the Group is exposed
and which the ERM system is designed to control, as described
below, see “Risk Factors”.

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In addition, reviews of the ERM systems of selected departments
were performed by corporate audit during 2009 to substantiatethese departments’ self-assessments. As a result of the ongoing
monitoring activities of the ERM system’s effectiveness—
including by the Board and Audit Committee over the course of
2009—further modifications to the ERM system and integration
efforts are expected throughout 2010. Among other things, theERM effectiveness measurement criteria and means for testing
will be further developed and common ERM procedures will befurther embedded in big programmes like the A380 and A400M
to increase the robustness and reliability of the ERM system.

Board declaration – Limitations
The Board of Directors believes to the best of its knowledge thatthe internal risk management and control system over financial
reporting has worked properly in 2009 and provides reasonableassurance that the financial reporting does not contain any errorsof material importance.

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No matter how well designed, all ERM systems have inherent
limitations, such as vulnerability to circumvention or
management overrides of the controls in place. Consequently, no
assurance can be given that EADS’ ERM system and procedures
are or will be, despite all care and effort, entirely effective.

EADS ERM POLICY
The core policy, objectives and procedures that define EADS’ERM system are communicated throughout the Group in amanual referred to as the “EADS ERM Policy”, which sets forth:> the ERM policy and objectives;> the ERM procedures adopted by EADS including astandardised ERM monitoring system:> to ensure a uniform understanding of a comprehensive
enterprise-wide risk and opportunity management and IC
system,> to comprehensively cover risk and opportunity
management in programmes/projects, functions andprocesses, with both internal and external sources,> to satisfy compliance requirements for an effective IC andRM system.
The EADS ERM Policy constitutes the framework for all existing
IC and RM guidance and practice throughout EADS. The EADSERM Policy is applicable throughout EADS to all divisions,business units and headquarters’ departments. Joint ventures
may also operate separate ERM systems, though the fundamental
principles of the EADS ERM Policy generally apply.
The “EADS ERM Policy” is supplemented by:> codes of conduct (e.g. EADS Code of Ethics, Corporate Social
Responsibility);> handbooks (e.g. “EADS Corporate Management Principles andResponsibilities”, the “Financial Control Handbook”);> manuals (e.g. Treasury Procedures, “Accounting Manual”,“Reporting Manual”); and> guidelines (e.g. “Funding Policy”, “quality handbooks”).
External standards influencing the EADS ERM System include
the IC and ERM frameworks of COSO, as well as industryspecific standards as defined by the International Standards
Organisation (ISO).

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Responsibility for the ERM System
Responsibility for the ERM system is as follows:> the Board of Directors assumes overall responsibility for the
ERM system and defines the level of risk that EADS wishes
to accept on a corporate level;> the Divisions, business units and headquarters’ departments
assume responsibility for the operation and monitoringof the ERM system. They seek to ensure transparency
and effectiveness of the ERM system and adherence to its
objectives. They take responsibility for the implementationof appropriate response activities to reduce probability
and impact of risk exposures, and conversely for the
implementation of appropriate response activities to increaseprobability and impact of opportunity exposures. They are
responsible for the communication of risks and opportunities
which affect others within EADS;> corporate objectives are defined and cascaded throughout thewhole organisation along the chain of management. Each levelwithin the business adopts business objectives that link intoand support EADS’ corporate objectives; and> EADS uses its employees’ knowledge of the business to identify
and assess key risks that might prevent EADS from achieving its
objectives and to identify and assess new opportunities. EADS
strives to do this on a regular basis through normal businessprocesses to ensure it focuses on identifying and managing risks
that might undermine its performance.

Objectives of ERM
The ERM system is designed to provide reasonable assurance
to the Board of Directors, the Chief Executive Officer andthe Chief Financial Officer regarding the achievement of thefollowing objectives:> the delivery of products on time and in accordance with costand quality objectives;> the reliability of financial reporting and the achievementof financial targets;> the adequate identification, assessment, response, control
action and monitoring of risks and opportunities on a timely
basis throughout the Group, consistent with EADS objectives;> the compliance with applicable external laws and regulations
and with internal policies and guidelines;> the effectiveness and efficiency of operations; and> the transparency and quality of risk and opportunity
monitoring and reporting (e.g. internal management reporting,financial statements, etc.).
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ERM SYSTEM DESIGNTo enhance its effectiveness and operational reliability as well as
to satisfy compliance requirements, the ERM system comprises
certain mandatory ERM procedures:> Risk and Opportunity Management procedures, to enhance
operational risk and opportunity management throughout
EADS by using ERM methodology;> Financial risk measurement procedures, for consistent risk andopportunity quantification;> ERM reporting procedures, for the status reporting of the
ERM system and the risk and opportunity situation;> ERM compliance and monitoring procedures, to substantiate
to the Chief Executive Officer and Chief Financial Officer
assessment of the effectiveness of the EADS ERM system;
and> ERM support procedures, covering important topics like ERM
training, knowledge transfer, change management and the roleof corporate audit.
ERM at EADS seeks to cover all types of risk such as
operational, functional (e.g. strategic, compliance, reputationalrisks) and process risks, both quantifiable and unquantifiable,potentially affecting EADS short-, middle- and long-term as well
as opportunities.

Risk and Opportunity Management procedures
The recurring Risk and Opportunity Management procedures
comprise several components:> setting of objectives and definition of risk tolerances;> identification and assessment of risks and opportunities;> determination of risk and opportunity responses and control
activities (i.e. policies, procedures and other activities);> monitoring and reporting of risks and opportunities.
The detailed processes and associated procedures will vary
according to the size and nature of the programme/project orfunction, but the principles apply in any case. Local tailoring
may be performed according to the internal business constraints
and/or customer specific requirements.

ERM compliance and monitoring procedures
EADS has established formal ERM self-assessment mechanisms,
to be applied by each identified process/control owner on aregular basis, who must assess his operational and functionalrisks as well as the operating and design effectiveness of

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the internal controls in place for his process. The progress
is monitored by the respective division, business unit andheadquarters department and reported to EADS headquarters. To
verify the successful implementation of the remediation actions,the remedied controls are periodically re-assessed. The relevantrisks are subject to a management discussion process at the Grouplevel. Each year, corporate audit provides an independent reviewof the status of the ERM systems in selected divisions, business
units and headquarters departments (headquarters functions).
Based on the ERM self-assessments, management of eachdivision, business unit and headquarters department prepares
every year a formal representation letter as to the adequacyand effectiveness of the ERM systems within their scope of
responsibility (including any identified significant deficiencies
and material weaknesses), which is provided to the Chief
Executive Officer and Chief Financial Officer.
In addition to regular monitoring activities and ad hoc reportingat the Divisional, business unit and headquarters levels,
assessments about the adequacy and effectiveness of the ERM
system are systematically discussed between the Chief Executive
Officer and Chief Financial Officer and the respective division,business unit or headquarters department heads. These “topmanagement discussions” serve to prioritise potential issues
at the EADS level, define and implement appropriate actions,
if needed, and derive conclusions for the overall EADS ERM
report.
Joint ventures, such as MBDA, operate separate IC and RM
systems. Alignment with the EADS ERM system is facilitated,inter alia, through EADS’ presence on such affiliates’
supervisory and management bodies (e.g. Board of Directors,
Audit Committee).
The yearly ERM sign-off process requires the Chief Executive
Officer and Chief Financial Officer to provide an assessment
to the Board of Directors, to the best of their knowledge, thatthey are reasonably assured about the effectiveness of the ERM
system including a confirmation of whether:> the IC system is adequate to provide reasonable assurance
regarding the reliability of financial reporting as well ascompliance with applicable laws and regulations;> the control objectives are being achieved by controls that are
documented, adequately designed for their business and areoperating effectively, in all material respects;> the owner of each control activity is clearly identified; and> the RM system is designed and operated to identify, assess,
respond to, design controls and monitor/report on risks on atimely basis.

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The Chief Executive Officer’s and Chief Financial Officer’s
ERM statement is mainly substantiated by the self-assessments
and confirmation letters, ERM reviews (including internal audits)and the “top management discussions”, as described above.

BUSINESS PROCESSES COVERED BY THE ERM SYSTEM
Based on EADS’ activities, 18 high-level business processes havebeen identified within EADS. They are categorised into core
processes (research and development, production, sales, after-sales
and programme management), support processes (corporate
sourcing, Human Resources, accounting, fixed assets, treasury,
information technology, mergers and acquisitions, legal andinsurance) and management processes (strategy, corporate audit,
controlling and management controls). These business processes,
together with the corresponding ERM procedures, are designed tocontrol process risks that have a significant potential of affecting
the Group’s financial condition and results of operations. Below
is a description of the main business processes at the respective
headquarters’ level which were in place during 2009.

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timely basis as an up-to-date decision-making tool to control theoperational performance of the Group. This information includes
regular cash and treasury reports, as well as other financial
information used for future strategic and operative planningand control and supervision of economic risks arising from theGroup’s operations.
During the course of each reporting cycle, the business unit
chief financial officers are in regular contact with the Division
chief financial officers, and frequently meet with the CAO
and his responsible staff to discuss the financial information
generated by the Divisions and business units.
Prior to being disclosed to the public and subsequently
submitted for approval to the shareholders, the consolidated yearend financial statements are audited by EADS’ external Auditors,
reviewed by the Audit Committee and submitted for approvalby the Board of Directors. A similar procedure is used for thesemi-annual and quarterly closing. Group Auditors are involved
before EADS financial statements are submitted to the Board of
Directors.

Accounting
At the core of EADS’ ERM system are accounting processes andcontrols designed to provide reasonable assurance regarding thereliability of financial reporting and the preparation of financial
statements and other financial information used by managementand disclosed to EADS’ investors and other stakeholders. The
integrated approach to planning and reporting aims to improve
internal communication and transparency across departments andorganisational units within EADS.

Treasury

The EADS financial control model defines the planning andreporting procedures that apply to all operational units of theGroup, as well as the responsibilities of the Chief Financial
Officer, who is charged with developing, implementing andmonitoring these procedures. Among the Chief Financial
Officer’s primary tasks is oversight of the preparation of theconsolidated financial statements of EADS, which are prepared
under the direct supervision of the Chief Accounting Officer(“CAO”). The CAO is responsible for the operation of theGroup’s consolidation systems and rules and for the definitionof Group-wide accounting policies which comply with IFRS,
reporting rules and financial guidelines that ensure theconsistency and quality of financial information reported by theDivisions and business units. EADS’ accounting policies are set
out in a written accounting manual, which is agreed with theCompany’s external Auditors. Changes to the EADS accounting
manual require approval by the CAO, and, where significant
changes are involved, the Chief Financial Officer or the Boardof Directors (based upon the advice of the Audit Committee).

Cash Management

Control of the financial planning and reporting processes isachieved not only through the development of Group-wideaccounting systems and policies, but also through an organised
process for providing information from the reporting units on a

Treasury management procedures, defined by EADS’central treasury department at Group headquarters, enhance
management’s ability to identify and assess risks relating toliquidity, foreign exchange rates and interest rates. Controlledsubsidiaries fall within the scope of the centralised treasury
management procedures, with similar monitoring procedures
existing for jointly controlled affiliates, such as MBDA.

Management of liquidity to support operations is one of the
primary missions of the EADS central treasury department.
Regular cash planning, in conjunction with the planning/
reporting department, as well as monthly cash reporting by
the central treasury department, provide management with theinformation required to oversee the Group’s cash profile andto initiate necessary corrective action in order to ensure overallliquidity. To maintain targeted liquidity levels and to safeguardcash, EADS has implemented a cash pooling system withdaily cash sweeps from the controlled subsidiaries to centrally
managed accounts. Payment fraud prevention procedures havebeen defined and communicated throughout the Group.
Hedge Management
Commercial operations generate material foreign exchange andinterest rate exposures. A Group hedging policy is defined andupdated regularly by the Board of Directors. In order to ensurethat all hedging activity is undertaken in line with the Group
hedging policy, the central treasury department executes all
hedging transactions. The central treasury department conducts
ongoing risk analysis and proposes appropriate measures to theDivisions and business units with respect to foreign exchange

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and interest rate risk. Subsidiaries are required to calculate,
update and monitor their foreign exchange and interest rate
exposure with the EADS central treasury department on amonthly basis, in accordance with defined treasury procedures.
See “Management’s Discussion and Analysis of Financial
Condition and Results of Operations — 2.1.8 Hedging
Activities”.
Sales Financing
In connection with certain commercial contracts, EADS may
agree to enter into sales financing arrangements. In respect ofsales financing at Airbus, an annual sales financing budget isdefined as part of the EADS operative planning process. Sales
financing transactions are approved on a case-by-case basis with
the involvement of top management, in line with certain risk
assessment guidelines and managed by a Group-wide integratedorganisation.

Sales
Commercial contracts entered into by EADS’ operating
subsidiaries have the potential to expose the Group to significant
financial, operational and legal risks. To control these risks,Management has implemented contract proposal review
procedures that seek to ensure that EADS does not enter intomaterial commercial contracts that expose it to unacceptablerisk or are not in line with the Group’s overall objectives. These
procedures include (i) Board of Directors-approved thresholds
and criteria for determining the risk and profitability profilesand (ii) a mandated pre-approval process for contracts defined
as “high-risk”. Contracts falling within the defined thresholdcategories require approval by the respective divisional chief
financial officer. Contracts that are deemed “high-risk” and/or
exceed certain thresholds must be submitted to a standing
Commercial Committee (with the Chief Financial Officer andthe Chief Strategy and Marketing Officer serving as chairmen,
and a possible escalation to the Chief Executive Officer whenneeded). This committee is responsible for reviewing the proposal
and giving recommendations when necessary, based on which theconcerned business unit is allowed to remit its offer. In the caseof Airbus, contracts are approved in accordance with Airbus’ own
corporate governance policy, based on EADS guidelines which
follow the same principle. In general, where EADS shares control
of a subsidiary with a third party, the Commercial Committee
is responsible for developing the EADS position on proposedcommercial contracts.

Legal
EADS is subject to myriad legal requirements in each jurisdictionin which it conducts business. The mission of the EADS Legal
department, in coordination with the Division and business unit
legal departments, is to actively promote and defend the interestsof the Group on all legal issues and to ensure its legal security
at all times. By carrying out this mission it is responsible for
implementing and overseeing the procedures designed to ensure

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that EADS’ activities comply with all applicable laws, regulations
and requirements. It is also responsible for overseeing all major
litigation affecting the Group, including intellectual property.
The EADS Legal department, together with the Corporate
Secretary, also plays an essential role in the design andadministration of (i) the EADS corporate governance proceduresand (ii) the legal documentation underlying the delegation of
powers and responsibilities which define the EADS management
and its IC environment.

Corporate Audit
The EADS Corporate Audit department, under the direction of
the Corporate Secretary, provides Management with a risk-based
evaluation of the effectiveness of the Group’s ERM procedures.
Based upon a risk-oriented approved annual audit plan, theCorporate Audit department (i) reviews operational processes
for risk management and operating efficiency improvement
opportunities and (ii) reviews compliance with legal requirements
and internal policies, process guidelines and procedures.
Corporate Audit also involves ad hoc reviews, performed at therequest of management, focusing on current (e.g., suspectedfraudulent activities) and future (e.g., contract management andprogramme management) risks.

Corporate Sourcing
The performance of EADS is to a large extent determinedthrough its supply chain. Therefore, sourcing is a key lever for
EADS in its marketplace.
EADS’ size and complexity requires a common approach tomaximise market levers and to avoid inefficiencies in the
procurement process. To help ensure that sourcing is carriedout in the most effective, efficient and ethical manner, a setof common procurement processes, which support a common
sourcing strategy and ultimately the Group strategy and vision,is defined by the head of Corporate Sourcing and the Chief
Procurement Officers Council.
The common approach and processes are then implemented acrossall divisions through the sourcing networks. These sourcing
networks comprise representatives from all EADS divisions.
They are tasked by the EADS Chief Procurement Officers
Council to define and roll out across EADS strategic sourcing
topics such as Supplier Relationship Management, Common
Processes and Tools, Global Sourcing, Joint Procurement,
Corporate Social Responsibility, and Procurement Performance
Management. The procurement processes are regularly reviewed
by means of audits and self-assessments and thus consistently
challenged and optimised.

Compliance
See “— 4.1.7 Compliance Organisation” below.

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4.1.7 Compliance Organisation
In 2008, the Board of Directors decided to create a Group-wide
Compliance Organisation and to appoint an EADS Group CCO.
The EADS Group CCO is in charge of the design andimplementation of the EADS Ethics and Compliance Programme,
which supports the Group’s commitment to adhering to thehighest ethical and compliance standards in order to sustain
the Group’s global competitiveness. The EADS Ethics andCompliance Programme seeks to ensure that Group businesspractices conform to applicable laws and regulations as well as toethical business principles endorsed by the Group. It also seeks
to promote a culture of integrity internally.
The Compliance Organisation consists of complianceresources appointed across the Group, in a set-up that balances
proximity to day-to-day business activities with the necessary
independence. To achieve this dual objective, compliance officers
throughout the Group report to both compliance and to executive
management. This is reflected at the very top of the organisation,with the EADS Group CCO reporting to both the Chief
Executive Officer and the Audit Committee.
The compliance officers appointed at each of the four divisions
are charged with helping divisional management to performbusiness activities in accordance with the EADS Ethics andCompliance Programme. Divisional compliance officers mustensure that they have sufficient resources within the Divisions
to carry out their roles effectively. They report to both the EADSGroup CCO and to the Divisional heads.
At Group level, permanent compliance officers are appointed
to departments where the main compliance risks exist, duly
empowered to issue compliance directives applicable throughout
the Group. For example, the Group International Compliance
Officer is in charge of developing and implementing EADS’Business Ethics Policy and Rules to prevent corruption. The
Group Export Compliance Officer seeks to ensure that themarketing activities of the Group comply with all relevant export
control rules, and with the internal “sensitive countries” policy.
In 2009, a new compliance officer was appointed to supervise
compliance in the supply chain.
In order to achieve the objectives set by the Chief Executive
Officer and discussed with the Audit Committee, the EADSGroup CCO has established a compliance roadmap based oninternational standards. As part of its ongoing objectives, theCompliance Organisation has also developed a new assessment of
the main compliance risks which was integrated into the EADSERM system and reviewed by the Audit Committee and theBoard of Directors in 2009.
The compliance roadmap provides an overview of complianceactivities such as:> the monitoring of ethics and compliance policies, startingwith the update of the EADS Code of Ethics;> communication and training activities across the Group; and> implementation of an alert system for employees to be able toraise ethical and compliance concerns in strict confidentiality,
targeted for the end of 2010.
EADS is leading efforts to establish consistent global standards
for compliance in the aerospace and defence industry, inparticular business ethics, which helped lead to the adoption in2009 of “Global Principles of Business Ethics” by European and
US industry associations. As business ethics standards become
more consistent globally with a more level playing field for all,
EADS will seek to turn its commitment to ethics and integrity
into a sustainable competitive advantage.
In 2009, compliance programme progress reports were presented
twice to the Board of Directors and Audit Committee.

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4.2 Interests of Directors and Principal
Executive Ofﬁcers
4.2.1 Compensation Granted to Directors and Principal Executive Ofﬁcers
4.2.1.1 GENERAL PRINCIPLES
Shareholders expect a strong commitment from members of
the Board of Directors; the compensation policy is therefore
designed to focus efforts on what the Group wants to value andreward. To meet these objectives, a significant portion of thecompensation is variable and linked to key performance measuresand individual objectives. The remuneration is benchmarked

Compensation element

Base salary

Short-termMid- and Long-term

regularly against the practice of other global companies based inEurope and the USA to ensure fairness and competitiveness.
The compensation of the executive member of the Board (theChief Executive Officer) and of the members of the Executive
Committee combines short-term and long-term reward and issummarised as follows:

Main drivers

Performance measures

Position/job value

Individual performance/
Market practice

Variable pay

Achievement of Groupbusiness and financial yearlyobjectives and reward
of individual performance

Performance unit plan

Achievement of long-term
operational profit, measured
through cumulative EBIT*
achievement

Collective part (50% of target
variable pay): EBIT* (50%),
cash (25%) and capital employed(25%) achievement
Individual bonus (50% of target
variable pay): achievementof annual individual objectives
The number of performance
units which will vest is based
on 2nd and 3rd year cumulative
EBIT* achievement

Variation of payment
as% of total target income/% of vesting

EADS CEO and Airbus CEO:
45% of total target income
Other members of the Executive
Committee: 50% of total target income
EADS CEO and Airbus CEO:
55% of total target income(range from 0% to 175%)
Other members of the Executive
Committee: 50% of total target income(range from 0% to 175%)
Vested performance units will range
from 50% to 150% of initial grant(1)(1) In case of negative cumulative EBIT* during the performance period, the Board of Directors can decide to review the vesting of the performance units including
the 50% portion which is not subject to performance conditions (additional vesting condition).
* EBIT: earnings before interest and taxes, pre-goodwill impairment and exceptionals.

4.2.1.2 COMPENSATION OF THE MEMBERS OF THE BOARD
OF DIRECTORS
Each non-executive member of the Board will receive an annual
fixed fee of € 80,000 and a fee for participation in Board meetingsof € 5,000 per meeting attended.
The Chairman of the Board will receive an annual fixed fee of€ 180,000 for carrying out this role and a fee for participation in
Board meetings of € 10,000 per meeting attended.
The Chairmen of each of the Board Committees will receive anadditional annual fixed fee of € 30,000. The members of eachof the Board Committees will receive an additional annual fixed
fee of € 20,000 for each Committee membership.

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Since 1 January 2008, non-executive members of the Board are
no longer entitled to variable pay.
Committee Chairmanship and Committee membership annual
fees are cumulative if the concerned non-executive members of
the Board belong to two different Committees.
The Chief Executive Officer receives neither fees forparticipation in Board of Directors’ meetings nor any dedicatedcompensation as member of the Board of Directors in addition
to his compensation as member of the Executive Committee(see below “— 4.2.1.3 Compensation of the Members of the
Executive Committee”). The Chief Executive Officer is eligible
for benefits under Long-Term Incentive Plans including theperformance unit plan (see “— 4.3.3 Long-Term Incentive Plans”)

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1and under employee share ownership plans in his capacity
as qualifying employee (see also “— 4.3.2 Employee ShareOwnership Plans”). Additionally, the Chief Executive Officer
is entitled to pension benefits.
The amounts of the various components constituting thecompensation granted to the Chief Executive Officer and

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to Non-Executive directors during 2009, together with additional
information such as the number of performance units (see “—
4.3.3 Long-Term Incentive Plans”) and details of the pension
benefits entitlements of the Chief Executive Officer are set
out in “Notes to the Company Financial Statements — Note 11:
Remuneration”.

They are summarised below as well:

Total remuneration and related compensation costs
The total remuneration and related compensation costs of the members of the Board of Directors and former directors related to 2009
and 2008 (pro rata in accordance with their periods of membership) can be summarised as follows:
Non Executive members of the Board of Directors

Fixum****
Bonus (related to reporting period)
Fees

Executive members of the Board of Directors

2009

2008

in €

in €

1,075,000

1,090,000

Not applicableNot applicable

455,000

360,000

2009

2008

in €

in €

Fixum

900,000

900,000

Bonus (related to reporting period including part paid by EADS NV)

1,141,250

Waived at CEO’s request

The cash remuneration of the Non Executive members of the Board of Directors was as follows:

Fixum in €Bonus in €related to 2009

Fees*** in €Total in €Bodo Uebber

183,750

N/A

90,000273,750

Rolf Bartke

100,000

N/A

55,000155,000

Dominique D’Hinnin

120,000

N/A

50,000170,000

Juan Manuel Eguiagaray Ucelay

80,000N/A

55,000135,000

Arnaud Lagardère

100,000

N/A

10,000110,000

Hermann-Josef Lamberti

130,000

N/A

35,000165,000

-

-

-

-

Sir John Parker

130,000

N/A

45,000175,000

Michel Pébereau

100,000

N/A

50,000150,000

Wilfried Porth**

70,000N/A

25,00095,00061,250

N/A

2009

Directors

Lakshmi N. Mittal*

Former directors**
Rüdiger Grube
Total

1,075,000

40,000101,250455,000

1,530,000* Remuneration waived at the D irector’s request.
** Pro rata in accordance with their periods of membership with the Board of Directors .
*** Fees for 2 nd half year 2009 included, but paid in January 2010.
**** The Fixum related to 2008 was paid in 2009; the Fixum related to 2009 will be paid in 2010.

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The cash remuneration of the Executive member of the Board of Directors was as follows:2009

Fixum in €Bonus in € related to 2009

900,000

1,141,250

Directors
Louis Gallois

In previous years, the part of the Executive Board members’ compensation which is paid by EADS NV was disclosed within the
fixum. The EADS NV compensation is now disclosed as a component of the variable compensation related to the reporting period.

Long-term incentives
The table below gives an overview of the Long-term Incentive Plans (performance units) granted by EADS in 2009 to the Chief
Executive Officer:
Unit plan: number of performance units*

Louis Gallois*

Granted in 2009

Vesting dates

46,000

Vesting schedule is made up of 4 payments over 2 years:(a) 25% expected in May 2013;(b) 25% expected in November 2013;(c) 25% expected in May 2014;(d) 25% expected in November 2014.

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

Pension benefits
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 their annual base salary
upon reaching 5 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.
These pension schemes have been implemented throughcollective executive pension plans in France and Germany. These
pension promises have also separate rules e.g. for minimum
length of service and other conditions to comply with national
regulations.
For the Chief Executive Officer, the amount of the pension
defined benefit obligation amounted to € 1.8 million as of
31 December 2009, while the amount of current service andinterest cost related to his pension promise accounted for during
fiscal year 2009 represented an expense of € 0.7 million. Thisobligation has been accrued for in the Consolidated Financial
Statements.

change in the Company’s strategy. Payment of the terminationindemnity is also subject to performance conditions as fixed andassessed by the Board of Directors. The termination indemnity, if
applicable, would amount to a maximum of 18 months of annual
total target salary.
However this termination indemnity is not applicable, since theChief Executive Officer has reached the age of 65.
Apart from the Chief Executive Officer, no other Director who
is in office is entitled to a termination indemnity.

Non-competition clause
A non-competition clause is included in the contract of the Chief
Executive Officer. This clause is applicable for a one-year period,
starting at the end of the mandate contract, and is renewable forone year at the Company’s initiative.
The Chief Executive Officer will receive compensation basedon 50% of the last target annual monthly salary in return of theapplication of the non-competition clause. The monthly salary isdefined as base salary and 1/12 of the annual performance bonus
recently paid.

Other benefits
Termination indemnity
As part of his mandate contract, the Chief Executive Officer
is entitled to a termination indemnity when the parting resultsfrom a decision by the Company in case of change in control or

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The Chief Executive Officer is entitled to a company car. The
value of his company car as at 31 December 2009 is € 24,120.

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4.2.1.3 COMPENSATION OF THE MEMBERS
OF THE EXECUTIVE COMMITTEE
The members of the Executive Committee, including the Chief
Executive Officer, are entitled to receive for the year 2009 an
accumulated total target compensation on a full year basis of€ 14,137,200. This compensation is divided for the EADS Chief
Executive Officer and Airbus Chief Executive Officer into a 45%
fixed part and a 55% variable part on target and for the othermembers of the Executive Committee into a 50% fixed part and a
50% variable part on target.
The members of the Executive Committee including the Chief
Executive Officer receive the majority of their compensationfrom their relevant national Group entity (under the terms of
their employment or mandate contract) and the remaining partfrom EADS N.V (“NV compensation”, under the terms of theN.V letter of agreement).
The variable part is calculated on the basis of two equal
components:> collective part (50% of the variable part) to reward businessperformance at Group level or division level (if applicable).
Cash, EBIT* and Capital Employed are the financial indicators
chosen to measure collective performance (EBIT* represents
50%, Cash represents 25% and Capital Employed represents
25% of the collective part in 2009);

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The Group is committed to setting individual and financial
targets, the achievement of which would reflect the real
performance of EADS. Since 2009, the collective part (50% of
the variable pay) is based on EBIT* (50%), Cash (25%) and Capital
Employed (25%). The new choice of EBIT*, Cash and Capital
Employed as financial indicators ensures the alignment of the
Chief Executive Officer with EADS priorities and long-term
objectives.
Based on the level of performance, the collective as well as
the individual payout can vary from 0% to 175% of the target
payment.
On target payment at 100% for both individual and financial
targets would indicate strong personal and company performance.
The Remuneration and Nomination Committee reviews andmakes recommendations to the Board of Directors on bonus
payments to the Chief Executive Officer and to the members of
the Executive Committee; the Board of Directors makes the final
decision.
The total compensation paid by EADS and all its Group
companies to Mr Louis Gallois, Chief Executive Officer,
during the year 2009, was € 900,000 (this sum includes only
the payments of his January to December 2009 fixum and novariable pay for 2008, as he waived such variable pay in 2008).

> individual bonus (50% of the variable part) to reward
individual performance measured against the achievementof individual objectives, which are also set on the basis of
non-financial indicators that are relevant to the Company’s
long-term value creation.

4.2.2 Long-Term Incentives Granted to the Chief Executive Ofﬁcer
See “— 4.3.3 Long-Term Incentive Plans”.

* EBIT: earnings before interest and taxes, pre-goodwill impairment and exceptionals.

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4.2.3 Related Party Transactions
Article 2:146 of the Dutch Civil Code provides as follows:“Unless the Articles of association provide otherwise, a company(naamloze vennootschap) shall be represented by its board of
supervisory directors in all matters in which it has a conflictof interest with one or more of the members of its Board of
Directors. The shareholders’ meeting shall at all times havepowers to designate one or more persons for this purpose”.
In the case of EADS, the Articles of Association do provide
otherwise since they enable the Board of Directors to have power
to represent the Company in matters where the Company has aconflict of interest with one or more members of the Board of
Directors.
During the years 2007, 2008 and 2009, no agreement wasentered into by the Company with one of its Directors or
principal officers or a shareholder holding more than 5% of thevoting rights of the Company outside the ordinary course ofbusiness and in conditions other than arm’s length conditions.
See “Notes to the Consolidated Financial Statements (IFRS)— Note 37: Related party transactions” for the year ended
31 December 2009 and “Notes to the Consolidated Financial
Statements (IFRS) — Note 37: Related party transactions” forthe year ended 31 December 2008, as incorporated by reference
herein.
For a description of the relationships between the Company
and its principal shareholders, see “General Description of theCompany and its Shareholders — 3.3.2 Relationships with
Principal Shareholders”. Other than the relationships between
the Company and its principal shareholders described therein,
there are no potential conflicts of interest between the duties
to the Company of the Directors and their respective privateinterests or other duties.

4.2.4 Loans and Guarantees Granted to Directors
EADS has not granted any loans to its Directors or members of the Executive Committee.

4.3 Employee Proﬁt Sharing and Incentive Plans
4.3.1 Employee Proﬁt Sharing and Incentive Agreements
EADS’ remuneration policy is strongly linked to the achievementof individual and Company objectives, both for each division andfor the overall Group. In 2009, a performance and restricted unit
plan was established for the senior management of the Group(see “— 4.3.3 Long-Term Incentive Plans”), and employees were
offered shares at favourable conditions within the context ofa new employee share ownership plan (see “— 4.3.2 Employee
Share Ownership Plans”).

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Since 2005, the success sharing schemes which are implemented
at EADS in France, Germany, Spain and the UK follow one setof common rules of the Group, ensuring a consistent applicationin these four countries.

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4.3.2 Employee Share Ownership Plans
EADS supports employee share ownership. Since its creation, EADS has regularly offered qualifying employees the opportunity topurchase EADS shares on favourable terms through employee share ownership plans (“ESOPs”).
The following table summarises the main terms of the ESOPs conducted from 2000-2008:
Year

Price per shareNominal value per share

Number of shares issued

Date of issuance2000€ 15.30€1

11,769,259

21 September 2000

2001

€ 10.70€12,017,894

5 December 2001

€1

2,022,939

4 December 2002

2002

€ 8.86*/ € 7.93**

2003€ 12.48€1

1,686,682

5 December 2003

2004

€ 18

€1

2,017,822

3 December 20042005

€ 18.86€1

1,938,309

29 July 20052007

€ 19.62*/€ 17.16**€12,037,835

9 May 20072008

€ 12.79*/€ 11.70**€12,031,820

25 July 2008

* Shares purchased within context of Group employee savings plan** Shares purchased directly

ESOP 2009
In November 2009, EADS again offered to qualifying employees
a maximum of 0.25% of its total issued share capital before theoffering. This employee offering was for up to 2,035,000 sharesof a nominal value of € 1 each.
The employee offering was open only to employees who:
> had at least three months’ seniority;> were employed by (i) EADS or (ii) one of its subsidiaries or(iii) companies in which EADS holds at least 10% of the sharecapital and over whose management it has a determining
influence and whose registered offices are located inGermany, Australia, Belgium, Canada, Spain, the UnitedStates, Finland, France, the United Kingdom, Mexico, theNetherlands and Singapore.
The employee offering was divided into two tranches:> shares subscribed for by qualifying employees in Group
employee savings plan were offered for a price of€ 10.76 per share;> shares subscribed for by qualifying employees directly were
offered for a price of € 10.76 per share.
The employees are generally restricted from selling the shares
offered in this employee offering for one year and sometimes
more in certain countries.
A total number of 1,358,936 shares were subscribed for in
the employee offering. Shares were delivered on 18 December
2009.

FUTURE ESOPSEADS intends to implement an ESOP in 2010, subject toapproval by the Board of Directors. The 2010 ESOP is expected
to have the following main characteristics: offering of up to
approximately 2 million shares of the Company, i.e., up to
0.25% of its issued share capital, with discount to the market
price (- 20%), to all qualifying employees. In addition, EADS isevaluating alternative models for an ESOP, which might have an
impact on the current plan design.

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4.3.3 Long-Term Incentive Plans
At its 26 May 2000, 20 October 2000, 12 July 2001, 9 August
2002, 10 October 2003, 8 October 2004, 9 December 2005
and 18 December 2006 meetings, the Board of Directors of theCompany, using the authorisation given to it by the shareholders’meetings of 24 May 2000, 10 May 2001, 6 May 2003, 11 May
2005, and 4 May 2006 approved the granting of stock options forsubscription of shares in the Company.
At its 18 December 2006 meeting, the Board of Directorsof the Company, using the authorisation given to it by theshareholders’ meeting of 4 May 2006 approved the grantingof performance shares and restricted shares in the Company.

At its 7 December 2007, 13 November 2008 and 13 November
2009 meetings, the Board of Directors of the Company approved
the granting of performance units and restricted units in the
Company.
The principal characteristics of these options, performanceand restricted shares and performance and restricted units as at
31 December 2009 are set out in the “Notes to the Consolidated
Financial Statements (IFRS) — Note 36: Share-based payment”.
They are also set out in the table 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

Number of options granted

5,324,884

240,000

Number of options outstanding

1,451,720

30,000

Options granted to directors and officers

720,000

60,000Total number of eligible employees

Exercise date

Expiry dateConversion right
VestedExercise price850
34
50% of options may be exercised after a period of two years and four weeks
from the 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
contained in the Insider Trading Rules – see “General Description of the Company
and its Share Capital — 3.1.11 Disclosure of Holdings”).
8 July 2010

8 July 2010

One option for one share

One option for one share

100%

100%

€ 20.90€ 20.90

Exercise price conditions

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

Number of exercised options

2,892,020

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188,000

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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

3,299,659

2,459,276

Options granted to:> Mr Philippe Camus

135,000

135,000> Mr Rainer Hertrich

135,000

135,000> the 10 employees having being granted the highest numberof options during the year 2001 (third tranche) and 2002
(fourth tranche)

738,000

808,000

Total number of eligible employees

Exercise date

Expiry dateConversion right

1,650
1,562
50% of options may be exercised after a period of two years and four weeks
from the 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
contained in the Insider Trading Rules – see “General Description of the Company
and its Share Capital — 3.1.11 Disclosure of Holdings”).
12 July 2011

8 August 2012

One option for one share

One option for one share

Vested100%

100%

Exercise price€ 24.66€ 16.96

Exercise price conditions
Number of exercised options

Date of shareholders’ meeting

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

4,305,066

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

4,615,853

6,016,706> Mr Philippe Camus

135,000

135,000> Mr Rainer Hertrich

135,000

135,000> the 10 employees having being granted the highest numberof options during the year 2003 (fifth tranche) and 2004
(sixth tranche)

808,000

808,000

Date of Board of Directors meeting (grant date)

Options granted to:

Total number of eligible employees

Exercise date

Expiry dateConversion right

1,491
1,495
50% of options may be exercised after a period of two years and four weeks
from the 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
contained in the Insider Trading Rules – see “General Description of the Company
and its Share Capital — 3.1.11 Disclosure of Holdings”).
9 October 20137 October 2014

One option for one share

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
2,517,623

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
Date of Board of Directors meeting

11 May 2005
9 December 2005

Number of options granted

7,981,760

Number of options outstanding

6,245,431 (1)Options granted to:> Mr Thomas Enders

135,000> Mr Noël Forgeard

135,000> the 10 employees having being granted the highest numberof options during the year 2005 (seventh tranche)

940,000

Total number of eligible beneficiaries

Exercise date

Expiry dateConversion right
VestedExercise price
Exercise price conditions
Number of exercised options

1,608
50% of options may be exercised after a period of two years
from the 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
contained in the Insider Trading Rules – see “General Description of the Company
and its Share Capital — 3.1.11 Disclosure of Holdings”). As regards to the seventh tranche,
part of the options granted to the top EADS Executives was performance related.
8 December 2015
One option for one share
100% (1)€ 33.91
110% of fair market value of the shares at the date of grant0(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.

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Eighth tranche

Date of shareholders’ meeting

4 May 2006

Date of Board of Directors meeting

18 December 2006
Stock option plan

Number of options granted

1,747,500

Number of options outstanding

1,667,000

Options granted to:> Mr Thomas Enders

67,500> Mr Louis Gallois> the 10 employees having being granted the highest numberof options during the year 2006 (eighth tranche)

67,500Total number of eligible beneficiaries

Date from which the options may be exercised

425,000
221
50% of options may be exercised after a period of two years
from the date of grant of the options; 50% of options may be exercised asof the third anniversary of the date of grant of the options(subject to specific provisions contained in the Insider Trading Rules– see “General Description of the Company and its Share Capital— 3.1.11 Disclosure of Holdings”)

Date of expiration

16 December 2016

Conversion right

One option for one share

Vested50%

Exercise price
Exercise price conditions€ 25.65
110% of fair market value of the shares at the date of grant

Number of exercised options

0
Performance and restricted shares plan
Performance shares

Restricted shares

Number of shares granted

1,344,625

391,300

Number of shares outstanding

1,283,000

376,850

Shares granted to:> Mr Thomas Enders

16,875-> Mr Louis Gallois> the 10 employees having being granted the highest numberof shares during the year 2006 (eighth tranche)

16,875-

137,500

28,200Total 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.
3,500

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Ninth tranche

Date of Board of Directors meeting

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

1,634,100

493,320> Mr Louis Gallois

33,700-> the 10 employees having being granted the highest numberof units during the year 2007 (ninth tranche)

239,900

43,500

Units granted to:

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 case of performance units,
upon achievement of mid-term business performance.
Vesting schedule is made up of 4 payments over 2 years:> 25% expected in May 2011;> 25% expected in November 2011;> 25% expected in May 2012;> 25% expected in November 2012.
2,520

0

Tenth tranche

Date of Board of Directors meeting

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

2,170,340

795,380> Mr Louis Gallois*

40,000-> the 10 employees having being granted the highest numberof units during the year 2008 (tenth tranche)

304,000

68,200

Units granted to:

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 case of performance units,
upon achievement of mid-term business performance.
Vesting schedule is made up of 4 payments over 2 years:> 25% expected in May 2012;> 25% expected in November 2012;> 25% expected in May 2013;> 25% expected in November 2013.
1,120

For more information in respect of units granted to the Chief Executive Officer, see “Notes to the Company Financial Statements — Note 11: Remuneration”.

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Eleventh tranche

Date of Board of Directors meeting

13 November 2009
Performance and restricted unit plan

Number of units granted

Performance units

Restricted units

2,697,740

928,660

46,000-356,000

96,000

Units granted to:> Mr Louis Gallois*> the 10 employees having being granted the highest numberof units during the year 2009 (eleventh tranche)
Total number of eligible beneficiaries

Vesting dates

*

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 case of performance units,
upon achievement of mid-term business performance.
Vesting schedule is made up of 4 payments over 2 years:> 25% expected in May 2013;> 25% expected in November 2013;> 25% expected in May 2014;> 25% expected in November 2014.

For more information in respect of units granted to the Chief Executive Officer, see “Notes to the Company Financial Statements — Note 11: Remuneration”.

The information in respect of stock options and performance andrestricted shares cancelled and exercised during the year are set
out in “Notes to the Consolidated Financial Statements (IFRS) —Note 36: Share-based payment”.

For information on the transactions carried out by the membersof the Board of Directors and the Executive Committee see
EADS’ website and/or the relevant stock exchange authorities’
website.

Shareholding in the Company of the members of the Board of Directors
Member of the Board of Directors> Mr Louis Gallois

Shareholding

5 ordinary shares
67,500 stock options*
16,875 performance shares*> Mr Dominique d’Hinnin

61 ordinary shares> Mr Arnaud Lagardère

2 ordinary shares*

See eighth tranche as set forth in the above table.

The other members of the Board of Directors do not hold shares or other securities in the Company.

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5
Entity Responsible
for the Registration
Document

5.1

Entity Responsible for
the Registration Document 172

5.2

Statement of
the Entity Responsible
for the Registration
Document

172

5.3

Information Policy

173

5.4

Undertakingsof the Company
regarding Information

173

Significant Changes

174

5.5

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ENTITY RESPONSIBLE FOR THE REGISTRATION DOCUMENT>5.1 | Entity Responsible for the Registration Document

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5.1 Entity Responsible for the Registration Document
EADS

5.2 Statement of the Entity Responsible
for the Registration Document
The Company declares that, having taken all reasonable care to ensure that such is the case, the information contained in theRegistration Document is, to the best of the Company’s knowledge, in accordance with the facts and contains no omission likely toaffect its import.
EADS represented by:Louis Gallois
Chief Executive Officer

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ENTITY RESPONSIBLE FOR THE REGISTRATION DOCUMENT>5.4 | Undertakings of the Company regarding Information

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5.3 Information Policy
Contact details for information:> the Registration Document filed in English with,and approved by, the AFM on 24 April 2008;

Ms Nathalie Errard
Head of Investor Relations and Financial Communication
EADS
37, boulevard de Montmorency
75781 Paris cedex 16 France
Telephone: +33 1 42 24 28 00
Fax: +33 1 42 24 28 40
E-mail: ir@eads.com
A website, www.eads.com, provides a wide range of
information on the Company, including the Board of Directors
Report. Additionally, for the life of this Registration Document,
copies of:> the Articles of Association;> the Registration Document filed in English with,and approved by, the AFM on 22 April 2009, and> the Consolidated Financial Statements (IFRS)
and the Company Financial Statements of EADS for the years
ended 31 December 2007, 2008 and 2009, together withthe related Auditors’ reports, may be inspected at EADS’registered office at: European Aeronautic Defence andSpace Company EADS N.V., Mendelweg 30, 2333 CS
Leiden, the Netherlands, Seat (statutaire zetel) Amsterdam,
Tel: + 31 (0)71 5245 600.
Special toll-free hotlines are available to shareholders
in France (0 800 01 2001), Germany (00 800 00 02 2002)
and Spain (00 800 00 02 2002). An e-mail box is dedicatedto shareholders’ messages: ir@eads.com.

5.4 Undertakings of the Company
regarding Information
Given the fact that the shares of the Company are listed onEuronext Paris, on the regulierter Markt (in the sub-segment
Prime Standard) of the Frankfurt Stock Exchange and on the
Madrid, Bilbao, Barcelona and Valencia Stock Exchanges, theCompany is subject to certain laws and regulations applicable inFrance, Germany and Spain in relation to information, the mainones of which are summarised in “General Description of theCompany and its Share Capital — 3.1.3 Governing Laws andDisclosures”.

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ENTITY RESPONSIBLE FOR THE REGISTRATION DOCUMENT>5.5 | Significant Changes

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5.5 Signiﬁcant Changes
As of the date of this registration document, there has been no significant change in EADS’ financial or trading position since
31 December 2009.

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EUROPEAN AERONAUTIC DEFENCE AND SPACE COMPANY EADS N.V.

European Aeronautic Defence
and Space Company EADS N.V.
Mendelweg 302333 CS Leiden
The Netherlands

Registration Document – Financial Statements

WWW.EADS.COM

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

Registration Document 2009
FINANCIAL STATEMENTS

2009