REGISTRATIONDOCUMENT 2012

European Aeronautic Defence
and Space Company EADS N.V.

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 andprotection 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 and estimates 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 under “Risk Factors” below.
This Registration Document was prepared in accordance with Annex 1 of EC Regulation 809/2004, ﬁled in English with, andapproved by, the Autoriteit Financiële Markten (the “AFM”) on 3 April 2013 in its capacity as competent authority under the
Wet op het ﬁnancieel toezicht (as amended) pursuant to Directive 2003/71/EC. This Registration Document may be used insupport of a ﬁnancial transaction as a document forming part of a prospectus in accordance with Directive 2003/71/EC only
if it is supplemented by a securities note and a summary approved by the AFM.

2 — EADS REGISTRATION DOCUMENT 2012

EADS
REGISTRATION DOCUMENT
2012

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

EADS REGISTRATION DOCUMENT 2012 — 3

EADS

REGISTRATION DOCUMENT
2012

Risk Factors

7

1.

Financial Market Risks

8

2.

Business-Related Risks

11

3.

Legal Risks

16

4.

Industrial and Environmental Risks

18

Discussion
2 Management’s
and Analysis of Financial Condition
and Results of Operations

59

2.1

Operating and Financial Review

60

2.1.1

Overview

61

2.1.2 Critical Accounting Considerations,
Policies and Estimates

62

2.1.3 Performance Measures

66
71

1 Information
on EADS’ Activities

21

2.1.4 Results of Operations

1.1

Presentation of the EADS Group

22

2.1.5 Changes in Consolidated Total Equity(Including Non-Controlling Interests)

76

1.1.1

Overview

22

2.1.6 Liquidity and Capital Resources77

1.1.2 Airbus

25

2.1.7 Hedging Activities

84

1.1.3 Eurocopter

34

2.2

Financial Statements

86

1.1.4

37

2.3

Statutory Auditors’ Fees

87

1.1.5 Cassidian

42

2.4

1.1.6

Other Businesses

45

Information Regarding the Statutory
Auditors

87

1.1.7

Investments

47

Astrium

1.1.8 Insurance

48

1.1.9 Legal and Arbitration Proceedings

49

1.1.10 Research and Technology, Intellectual Property

50

Description of the Company
3 Generaland its Share Capital
89

1.1.11 Environmental Protection

52

3.1

General Description of the Company

90

1.1.12 Employees

54

3.1.1

1.1.13 Incorporation by Reference

55

Commercial and Corporate Names,
Seat and Registered Ofﬁce

90

1.2

56

Recent Developments

3.1.2 Legal Form

90

3.1.3 Governing Laws and Disclosures90

3.1.4 Date of Incorporation and Duration of the Company 92

4 — EADS REGISTRATION DOCUMENT 2012

3.1.5 Objects of the Company

92

3.1.6 Commercial and Companies Registry92

3.1.7 Inspection of Corporate Documents

92

3.1.8 Financial Year93

3.1.9 Allocation and Distribution of Income

93

3.1.10 General Meetings

93

3.1.11 Disclosure of Holdings

95

3.1.12 Mandatory Disposal

96

3.1.13 Mandatory Offers

97

GENERAL TABLE OF CONTENTS

3.2

General Description of the Share Capital

98

3.2.1 Issued Share Capital98

3.2.2 Authorised Share Capital

98

3.2.3 Modiﬁcation of Share Capitalor Rights Attached to the Shares

98

3.2.4 Securities Granting Accessto the Company’s Share Capital99

4 Corporate
Governance

117

4.1

Management and Control

118

4.1.1

New Corporate Governance Arrangements

118

4.1.2 Corporate Governance Arrangements in 2012

121

4.1.3 Dutch Corporate Governance Code,“Comply or Explain”

131

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

100

4.1.4 Enterprise Risk Management System

132

3.3

101

4.1.5 Compliance Organisation

137

3.3.1 Shareholding Structure

101

4.2

3.3.2 Relationships with Principal Shareholders

102

3.3.3 Form of Shares

106

Shareholdings and Voting Rights

3.3.4 Changes in the Shareholding of the Company
Since its Incorporation

106

3.3.5 Persons Exercising Control over the Company

108

3.3.6 Simpliﬁed Group Structure Chart

108

3.3.7 Purchase by the Company of its Own Shares

110

3.4

113

Dividends

3.4.1 Dividends and Cash Distributions Paid
Since the Incorporation of the Company

113

3.4.2 Dividend Policy of EADS

114

3.4.3 Unclaimed Dividends

114

3.4.4 Taxation

114

3.5

115

Annual Securities Disclosure Report

Interests of Directors and Principal
Executive Officers

138

4.2.1 Remuneration Granted to Directors and Principal
Executive Ofﬁcers

138

4.2.2 Long-Term Incentives Granted
to the Chief Executive Ofﬁcer

142

4.2.3 Related Party Transactions

142

4.2.4 Loans and Guarantees Granted to Directors

142

4.3

Employee Profit Sharing
and Incentive Plans

143

4.3.1 Employee Proﬁt Sharing and Incentive Agreements 143
4.3.2 Employee Share Ownership Plans

143

4.3.3 Long-Term Incentive Plans

144

Responsible
5 Entity
for the Registration Document

151

5.1

Entity Responsible
for the Registration Document

152

Statement of the Entity Responsible
for the Registration Document

152

5.3

Information Policy

153

5.4

Undertakings of the Company regarding
Information

153

Significant Changes

153

5.2

5.5

EADS REGISTRATION DOCUMENT 2012 — 5

Risk
Factors

6 — EADS REGISTRATION DOCUMENT 2012

Risk Factors
1.

Financial Market Risks

8

2.

Business-Related Risks

11

3.

Legal Risks

16

4.

Industrial and Environmental Risks

18

EADS REGISTRATION DOCUMENT 2012 — 7

Risk Factors
1. Financial Market Risks

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

1.

Financial Market Risks

Global Economic and Sovereign Debt Concerns
As a global company, EADS’ operations and performance depend
signiﬁcantly on market and economic conditions in Europe, theUS and the rest of the world. Market disruptions and signiﬁcanteconomic downturns may develop quickly due to, among otherthings, crises affecting credit or liquidity markets, regional or global
recessions, sharp ﬂuctuations in commodity prices (including oil),currency exchange rates or interest rates, inﬂation or deﬂation,
sovereign debt and bank debt rating downgrades, restructuringsor defaults, or adverse geopolitical events (including those in the
Middle East, North Africa and other regions). Any such disruption
or downturn could affect EADS’ activities for short or extended
periods and have a negative effect on EADS’ future results ofoperation and ﬁnancial condition.
European ﬁnancial markets have, in recent years, experienced
signiﬁcant disruptions as a result of concerns regarding the abilityof certain countries in the euro-zone to reduce their budget deﬁcits
and reﬁnance or repay their sovereign debt obligations as theycome due. These disruptions have contributed to tightened credit
markets, increased volatility in the exchange rate of the euro against
other major currencies and considerable uncertainty regarding thenear-term economic prospects of countries in the EU as well as thequality of loans to sovereign debtors and banks in the EU. Moregenerally, the EU sovereign debt crisis has had an indirect impact
on ﬁnancial markets worldwide and, increasingly, on economic
conditions in Europe and the rest of the world.
In the US, concerns about the increasing budget deﬁcit and thesustainability of sovereign debt will likely have to be addressedover the next several years through a combination of tax increases,
agreed budget cuts or budget sequestration in defence andentitlement spending, combined with an increase in the debt
ceiling to ﬁnance further borrowing. This could negatively affecteconomic growth in the US and worldwide, the creditworthinessof US Treasury securities and the exchange rate of the US dollar
against other major currencies (in particular euro or pound sterling),

8 — EADS REGISTRATION DOCUMENT 2012

which may in turn adversely impact EADS’ sales in the defence
sector, the market value of EADS’ investments or the exchange
rates at which EADS is able to hedge its foreign currency exposure.
If economic conditions were to deteriorate, or if more pronounced
market disruptions were to occur, there could be a new orincremental tightening in the credit markets, low liquidity, andextreme volatility in credit, currency and equity markets. This could
have a number of effects on EADS’ business, including:— 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 weak levelsof passenger demand for air travel and cargo activity moregenerally;— 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 security interests EADS might have in the underlying aircraft;— further reductions in public spending for defence, homeland
security and space activities, which go beyond those budget
consolidation measures already proposed by governments
around the world;— financial instability, inability to obtain credit or insolvency of
key suppliers and subcontractors, thereby impacting EADS’ability to meet its customer obligations in a satisfactory andtimely manner;— continued de-leveraging as well as mergers, rating downgrades
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 ofbank guarantees needed by EADS for its businesses or restrict
its ability to implement desired foreign currency hedges; andRisk Factors
1. Financial Market Risks— default of investment or derivative counterparties and otherfinancial institutions, which could negatively impact EADS’
treasury operations including the cash assets of EADS.
EADS’ ﬁnancial results could also be negatively affected dependingon gains or losses realised on the sale or exchange of ﬁnancial
instruments; impairment charges resulting from revaluations ofdebt and equity securities and other investments; interest rates;
cash balances; and changes in fair value of derivative instruments.
Increased volatility in the ﬁnancial markets and overall economic
uncertainty would increase the risk of the actual amounts realisedin the future on EADS’ ﬁnancial instruments differing signiﬁcantly
from the fair values currently assigned to them.

Foreign Currency Exposure
A signiﬁcant portion of EADS’ revenues is denominated in US dollars,
while a major portion of its costs is incurred in euro, 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 affectedby market changes in the exchange rate of the US dollar against
these currencies. EADS has therefore implemented a long-term
hedging portfolio to help secure the rates at which a portion of its
future US dollar-denominated revenues (arising primarily at Airbus
Commercial) are converted into euro or pound sterling, in order tomanage and minimise this foreign currency exposure.
There are complexities inherent in determining whether and when
foreign currency exposure of EADS will materialise, in particulargiven the possibility of unpredictable revenue variations arising fromorder cancellations, postponements or delivery delays. EADS may
also have difﬁculty in fully implementing its hedging strategy if its
hedging counterparties are unwilling to increase derivatives risk
limits with EADS, and is exposed to the risk of non-performanceor 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 case during the past several
years with the steady appreciation of the euro against the US
dollar. Accordingly, EADS’ foreign currency hedging strategy may
not protect it from signiﬁcant changes in the exchange rate of the
US dollar to the euro and the pound sterling, in particular overthe long-term, which could have a negative effect on its resultsof operation and ﬁnancial condition. In addition, the portion of
EADS’ US dollar-denominated revenues that is not hedged inaccordance with EADS’ hedging strategy will be exposed tochanges in exchange rates, which may be signiﬁcant.
Currency exchange rate ﬂuctuations in those currencies other thanthe US dollar in which EADS incurs its principal manufacturing
expenses (mainly the euro) may affect the ability of EADS to competewith competitors whose costs are incurred in other currencies. Thisis 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 compete with 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, earnings before interest and taxes, pre-goodwill
impairment and exceptionals (“EBIT*”), other ﬁnancial result, assets
and liabilities.
See “— Management’s Discussion and Analysis of Financial
Condition and Results of Operations — 2.1.7 Hedging Activities”
for a discussion of EADS’ foreign currency hedging strategy. See“— Management’s Discussion and Analysis of Financial Condition
and Results of Operations — 2.1.2.6 Accounting for Hedged
Foreign Exchange Transactions in the Financial Statements” fora summary of EADS’ accounting treatment of foreign currency
hedging transactions.

Sales Financing Arrangements
In support of sales, EADS may agree to participate in the ﬁnancing
of selected customers. As a result, EADS has a signiﬁcant portfolioof leases and other ﬁnancing arrangements with airlines and othercustomers. 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. Measurestaken 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
will protect EADS from defaults by its customers or signiﬁcantdecreases in the value of the ﬁnanced aircraft in the resale market.
EADS’ sales ﬁnancing arrangements expose it to aircraft valuerisk, because it generally retains security interests in aircraft forthe purpose of securing customers’ performance of their ﬁnancial
obligations to EADS, and because it may guarantee a portion of
the market value of certain aircraft during limited periods afterUnless otherwise indicated, EBIT* ﬁgures presented in this report are Earning before Interest and Taxes, pre goodwill impairment and exceptionals.

EADS REGISTRATION DOCUMENT 2012 — 9

Risk Factors
1. Financial Market Risks

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 projectedamounts. 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 of agiven 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 ofsuch aircraft and the guarantee amount. No assurances may be
given that the provisions taken by EADS will be sufﬁcient to coverthese 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.
In addition, EADS has outstanding backstop commitments toprovide ﬁnancing related to orders on Airbus’ and ATR’s backlog.
While past experience suggests it is unlikely that all such proposed
ﬁ nancing actually will be implemented, EADS’ sales ﬁ nancing
exposure could rise in line with future sales growth depending on
the agreement reached with customers. Despite the measurestaken by EADS to mitigate the risks arising from sales ﬁnancing
activities as discussed above, EADS remains exposed to the risk ofdefaults by its customers or signiﬁcant decreases in the value of the
ﬁnanced aircraft in the resale market, which may have a negative
effect on its future results of operation and ﬁnancial condition.

Counterparty Credit
In addition to the credit risk relating to sales ﬁnancing as discussed
above, EADS is exposed to credit risk to the extent of nonperformance by its counterparties for ﬁnancial instruments, suchas hedging instruments and cash investments. However, the Grouphas policies in place to avoid concentrations of credit risk and toensure that credit risk exposure is limited.
Counterparties for transactions in cash, cash equivalents andsecurities as well as for derivative transactions are limited tohighly rated financial institutions, corporates or sovereigns.
EADS’ credit limit system assigns maximum exposure lines tosuch counterparties, based on a minimum credit rating thresholdas published by Standard & Poor’s, Moody’s and Fitch Ratings.
Besides the credit rating, the limit system also takes into accountfundamental counterparty data, as well as sector and maturity
allocations and further qualitative and quantitative criteria such as
credit risk indicators. The credit exposure of EADS is reviewed ona regular basis and the respective limits are regularly monitored
and updated. EADS also seeks to maintain a certain level ofdiversiﬁcation in its portfolio between individual counterparties
as well as between ﬁnancial institutions, corporates and sovereignsin order to avoid an increased concentration of credit risk on only
a few counterparties.
However, there can be no assurance that EADS will not lose thebeneﬁ t of certain derivatives or cash investments in case of asystemic market disruption. In such circumstances, the value andliquidity of these ﬁnancial instruments could decline and result ina signiﬁcant impairment, which may in turn have a negative effecton EADS’ future results of operation and ﬁnancial condition.
Moreover, the progressive implementation of new financial
regulations (Basel III, EMIR, CRD4, Bank Restructuring Resolution
Directive, Dodd Frank Act, Volcker Rules, etc.) will have an impact
on the business model of banks (for example, the split between
investment banking and commercial banking activities) and on thecapital cost of such banks’ activities in relation to over-the-counter
derivatives, and therefore on the funding consequences of central
clearing and collateralisation of over-the-counter derivatives forcorporates like EADS. This may ultimately increase the cost andreduce the liquidity of EADS’ long-term hedges, for example, asbanks seek to either pass-on the additional costs to their corporate
counterparties or withdraw from low-proﬁt businesses altogether.

Equity Investment Portfolio
EADS holds several equity investments for industrial or strategic
reasons, the business rationale for which may vary over the life of
the investment. Equity investments are either accounted for using
the equity method (associated companies), if EADS has the ability
to exercise signiﬁcant inﬂuence, or at fair value. If fair value is notreadily determinable, the investment is measured at cost.
EADS’ principal investment in associates is Dassault Aviation.
The net asset value of this investment was € 2.5 billion as of
31 December 2012. EADS is exposed to the risk of unexpectedmaterial adverse changes in the fair value of Dassault Aviation andthat of other associated companies. For equity investments other
10 — EADS REGISTRATION DOCUMENT 2012

than associates, which make up only a fraction of EADS’ total
assets, EADS regards the risk of negative changes in fair value 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.

Risk Factors
2. Business-Related Risks

Pension Commitments
EADS participates in several pension plans for both executive as
well as non-executive employees, some of which are underfunded.
For information related to these plans, see “— Management’s
Discussion and Analysis of Financial Condition and Results ofOperations” and “Notes to the Consolidated Financial Statements(IFRS) — Note 25B: Provisions for retirement plans”. Although
EADS has recorded a provision in its balance sheet for its shareof the underfunding based on current estimates, there can be noassurance that these estimates will not be revised upward in the
future, leading EADS to record additional provisions in respectof such plans.

inﬂ ation rate applied to calculate the net present value of thepension liabilities, (ii) the performance of the asset classes which
are represented in the pension assets, and (iii) additional cash
injections contributed by EADS from time to time to the pension
assets. EADS has taken measures to limit potential losses on
the pension assets and to better match the characteristics of thepension liabilities with those of the pension assets as a long-term
objective. Nevertheless, any required additional provisions would
have a negative effect on EADS’ total equity (net of deferred taxes),
which could in turn have a negative effect on its future ﬁnancial
condition.

Necessary adjustments of such provisions are driven by (i) the
discount factor (dependent in part on interest rates) and theTax Issues
As a multinational Group with operations in numerous jurisdictions
and sales around the world, EADS is subject to tax legislation
in a number of countries. EADS manages its business so as
to create value from the synergies and commercial capacities
of its different entities, and therefore endeavours to structure
its operations and transactions in a tax-efﬁ cient manner. The
structure of EADS’ organisation and of the transactions it enters
into are based on its own interpretations of applicable tax laws andregulations, generally relying on opinions received from internal or
independent tax counsel, and, to the extent necessary, on rulingsor speciﬁc guidance from competent tax authorities. There can be
no assurance that the tax authorities will not seek to challenge suchinterpretations, in which case EADS or its afﬁliates could become
subject to tax claims. Moreover, the tax laws and regulations that
apply to EADS’ business may be amended by the tax authorities—
for example as a result of changes in ﬁ scal circumstances or
priorities—which could affect the overall tax efﬁciency of EADS.
Any additional tax exposure could have a negative effect on EADS’
future results of operation and ﬁnancial condition.

For further information relating to ﬁnancial market risks and the ways in which EADS attempts to manage these risks, see “— Notes to
the Consolidated Financial Statements (IFRS) — Note 34A: Financial risk management”.

2. Business-Related Risks
Commercial Aircraft Market Cyclicality
Historically, the market for commercial aircraft has shown cyclicaltrends, 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 the market
for commercial aircraft, such as (i) the average age and technicalobsolescence of the ﬂeet relative to new aircraft, (ii) the number
and characteristics of aircraft taken out of service and parked

pending potential return into service, (iii) passenger and freightload factors, (iv) airline pricing policies, (v) airline ﬁnancial healthand the availability of outside ﬁnancing for aircraft purchases,(vi) deregulation and (vii) environmental constraints imposed uponaircraft operations. EADS expects that the market for commercial
aircraft 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.

EADS REGISTRATION DOCUMENT 2012 — 11

Risk Factors
2. Business-Related Risks

Terrorism, Pandemics and Other Catastrophic Events
As past terrorist attacks and the spread of pandemics (such as
H1N1 ﬂ u) have demonstrated, terrorism and pandemics may
negatively affect public perception of air travel safety and comfort,
which may in turn reduce demand for air travel and commercial
aircraft. The outbreak of wars, riots or political unrest 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, airline or air trafﬁc. As a result ofterrorism, geopolitical instability, pandemics and other catastrophic
events, an airline may be confronted with sudden reduced demand
for air travel and be compelled to take costly security and safetymeasures. 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 orother products, and EADS’ customers may postpone delivery orcancel orders.
In addition to affecting demand for its products, the occurrence ofcatastrophic events could disrupt EADS’ internal operations or its
ability to deliver products and services to customers. Disruptions
may be related to threats to physical security and infrastructure,
information technology or cyber-attacks or failures, damaging
weather or acts of nature and other crises. Any significant
production delays, or any destruction, manipulation, theft or
improper use of EADS’ data, information systems or networks
could have a signiﬁcant adverse effect on EADS’ future results ofoperations and ﬁnancial condition as well as on the reputation of
EADS and its products and services.

Dependence on Key Suppliers and Subcontractors
EADS is dependent on numerous key suppliers and subcontractors
to provide it with the raw materials, parts and assemblies that itneeds to manufacture its products. Certain of these suppliers
may experience ﬁ nancial or other difﬁ culties in the future, inparticular those with a signiﬁ cant foreign currency mismatch
between revenues denominated in US dollars and a substantial
portion of costs incurred in euro. Depending on the severity ofthese difﬁculties, some suppliers could be forced to reduce their
output, shut down their operations or ﬁle for bankruptcy protection,
which could disrupt the supply of materials and parts to EADS.
It may be difﬁcult for EADS to ﬁnd a replacement for certain suppliers
or subcontractors without signiﬁcant delay, thereby impacting its
ability to meet its customer obligations in a satisfactory and timely
manner. These events could in turn have a negative impact on
EADS’ future results of operation and ﬁnancial condition. To theextent that EADS decides in the future to provide ﬁnancial or otherassistance to certain suppliers in ﬁnancial difﬁculty in order toensure an uninterrupted supply of materials and parts, it could be
exposed to credit risk on the part of such suppliers.
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 lead tohigher component and production costs which could in turnnegatively impact EADS’ future proﬁtability and cash ﬂows, to theextent EADS is unable to pass these costs on to its customers
or require its suppliers to absorb such costs. EADS’ suppliers or
subcontractors may also make claims or assertions against it forhigher 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.

Industrial Ramp-Up
As a result of the large number of new orders for aircraft recorded
in recent years, EADS intends to accelerate its production in order
to meet the agreed upon delivery schedules for such new aircraft(including helicopters). As it nears full capacity, EADS’ ability tofurther increase its production rate will be dependent upon a variety
of factors, including execution of internal performance plans,availability of raw materials, parts (such as aluminium, titanium
and composites) and skilled employees given high demand by
EADS and its competitors, conversion of raw materials into parts
and assemblies, and performance by suppliers and subcontractors

12 — EADS REGISTRATION DOCUMENT 2012

(particularly suppliers of buyer-furnished equipment) who may
experience resource or ﬁ nancial constraints due to ramp-up.
Management of such factors is also complicated by thedevelopment of new aircraft programmes in parallel, in particularat Airbus, which carry their own resource demands. Therefore,
the failure of any or all of these factors could lead to missed
delivery commitments, and depending on the length of delay inmeeting delivery commitments, could lead to additional costs andcustomers’ rescheduling or terminating their orders.

Risk Factors
2. Business-Related Risks

Technologically Advanced Products and Services
EADS offers its customers products and services that aretechnologically 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 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, to provide cancellation rights,
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 orcontract cancellations will not be imposed should EADS fail to meetdelivery schedules or other measures of contract performance –in particular with respect to new development programmes suchas the A350 XWB or A400M. See “— Programme-Speciﬁc Risks”
below.

In addition to the risk of contract cancellations, EADS may also incur
signiﬁcant costs or loss of revenues in connection with remedialaction required to correct any performance issues detected inits products or services. For example, following the discovery ofhairline cracks in the wing rib feet of certain in-service A380 aircraftin 2011, EADS recorded charges for estimated warranty and repair
costs for delivered aircraft. See “— Management’s Discussion
and Analysis of Financial Condition and Results of Operations —2.1.1.3 Signiﬁcant Programme Developments and Related Financial
Consequences in 2010, 2011 and 2012”. Moreover, to the extent
that a performance issue is considered to have a possible impact
on safety, regulators could suspend the authorisation for theaffected product or service.
Any signiﬁcant problems with the development, manufacturing,
operation or performance of EADS’ products and services could
have a significant adverse effect on EADS’ future results ofoperations and ﬁnancial condition as well as on the reputation of
EADS and its products and services.

Dependence on Public Spending and on Certain Markets
In any single market, public spending (including defence andsecurity spending) depends on a complex mix of geopoliticalconsiderations and budgetary constraints, and may therefore be
subject to signiﬁcant ﬂuctuations from year to year and country tocountry. Due to the overall economic environment and competingbudget priorities, several countries have sought recently to reduce
their level of public spending. This is especially true with respect
to defence and security budgets, where certain countries have
either proposed or already implemented substantial reductions.
Any termination or reduction of future funding or cancellations ordelays impacting existing contracts may have a negative effecton 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, political orbudgetary 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’ backlog is concentrated incertain regions or countries, including the US, China, India and theUnited Arab Emirates. Adverse economic and political conditions
as well as downturns in broad economic trends in these countries
or regions may have a negative effect on EADS’ future results ofoperation and ﬁnancial condition.

Availability of Government and Other Sources of Financing
Since 1992, the EU and the US have operated under an agreementthat sets the terms and conditions of financial support thatgovernments may provide to civil aircraft manufacturers. In late2004, however, the US sought to unilaterally withdraw from thisagreement, which eventually led to the US and the EU making formal
claims against each other before the World Trade Organization(“WTO”). While both sides have expressed a preference for anegotiated settlement that provides for a level playing ﬁeld whenfunding future aircraft developments, they have thus far failed
to reach agreement on key issues. The terms and conditionsof any new agreement, or the ﬁnal outcome of the formal WTO

proceedings, may limit access by EADS to risk-sharing-funds forlarge projects, may establish an unfavourable balance of accessto government funds by EADS as compared to its US competitors
or may in an extreme scenario cause the European 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. However, no assurances can be giventhat government ﬁnancing will continue to be made available in

EADS REGISTRATION DOCUMENT 2012 — 13

Risk Factors
2. Business-Related Risks

the future, in part as a result of the proceedings mentioned above.
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 well as
the possibility that lenders or investors could develop a negative
perception of EADS’ long- or short-term ﬁnancial prospects if it

incurred large losses or if the level of its business 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.

Competition and Market Access
The markets in which EADS operates are highly competitive.
In some areas, competitors may have more extensive or more
specialised engineering, manufacturing and marketing capabilities
than EADS. In addition, some of EADS’ largest customers may
develop the capability to manufacture products or provide services
similar to those of EADS. This would result in these customers
supplying their own products or services and competing directlywith EADS for sales of these products or services, all of which
could signiﬁ cantly reduce EADS’ revenues. There can be noassurance that EADS will be able to compete successfully against
its current or future competitors or that the competitive pressures

it faces in all 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 of home 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 political sensitivity attached to the aerospace anddefence industries means that political considerations will play arole in the choice of many products for the foreseeable future.

Major Research and Development Programmes
The business environment in many of EADS’ principal operating
business segments is characterised by extensive research anddevelopment costs requiring signiﬁcant up-front investments witha high level of complexity. The business plans underlying suchinvestments often contemplate a long payback period before theseinvestments are recouped, and assume a certain level of return
over the course of this period in order to justify the initial investment.
There can be no assurances that the commercial, technical andmarket assumptions underlying such business plans will be met,
and consequently, the payback period or returns contemplated
therein achieved. EADS expects that its consolidated research anddevelopment expenses may increase signiﬁcantly in future years
in connection with the ramp-up of new programmes across all
Divisions, in particular development of 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
no assurances 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.

Restructuring, Transformation and Cost Saving Programmes
In order to improve competitiveness, offset rising procurement costs
and achieve proﬁtability targets, among other things, EADS and
its Divisions have launched several restructuring, transformationand cost saving programmes over the past several years. These
include group-wide programmes such as “Future EADS”, as well
as Division-speciﬁc programmes such as “AGILE” at Astrium and“Simplify” at Cassidian.
Anticipated cost savings under these programmes are based on
estimates, however, and actual savings under these programmes

14 — EADS REGISTRATION DOCUMENT 2012

may vary signiﬁcantly. In particular, EADS’ cost reduction measures
are based on current conditions and do not take into accountany future cost increases that could result from changes in its
industry or operations, including new business 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 ofcost savings it expects going forward, could negatively affect its
future results of operation and ﬁnancial condition.

Risk Factors
2. Business-Related Risks

In addition to the risk of not achieving the anticipated level of costsavings from these programmes, EADS may also incur higher than
expected implementation costs. In many instances, there may beinternal resistance to the various organisational restructuring andcost reduction measures contemplated. Restructuring, closures,site divestitures and job reductions may also harm EADS’ labour

relations and public relations, and have led and could lead towork stoppages and/or demonstrations. In the event that thesework stoppages and/or demonstrations become prolonged, orthe costs of implementing the programmes above are otherwise
higher than anticipated, EADS’ future results of operation andﬁnancial condition may be negatively affected.

Acquisitions, Joint Ventures & Strategic Alliances
As part of its business strategy, EADS may acquire businesses andform joint ventures or strategic alliances. Acquisitions are inherently
risky because of difﬁculties that may arise when integrating people,
operations, technologies and products. There can be no assurance
that any of the businesses that EADS acquires can be integrated
successfully and as timely as originally planned or that they will
perform well and deliver the expected synergies once integrated. In

addition, EADS may incur signiﬁcant acquisition, administrative andother costs in connection with these transactions, including costs
related to integration of acquired businesses. While EADS believes
that it has established appropriate and adequate procedures andprocesses to mitigate these risks, there is no assurance that thesetransactions will be successful.

Public-Private Partnerships and Private Finance Initiatives
Defence customers, particularly in the UK, increasingly request
proposals and grant contracts under schemes known as publicprivate partnerships (“PPPs”) or private ﬁnance initiatives (“PFIs”).
PPPs and PFIs differ substantially from traditional defence
equipment sales, as they often incorporate elements such as:

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.

— the provision of extensive operational services over the life of

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 on-going 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.

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.

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 exhaustive, it highlights the current risks believed
to be material by management):
A350 XWB programme. In connection with the A350 XWB
programme, EADS faces the following main challenges: ensuring
the maturity of technology linked to the use of composite
materials; meeting the technical performance targets for theaircraft and respecting the development schedule; ensuring the
production ramp-up and the ramp-up of key skilled personnel,e.g. for composite stress and design; securing the achievementof recurring cost targets; ensuring the performance of the risk

sharing partners, including those selected for sites divested by
Airbus and those involved in the extended enterprise framework;
maintaining customer satisfaction with a new customisation policy
which is a key enabler for the production ramp-up; managing
customer contracts in coherence with the industrial delivery plan;and ensuring a successful A350-1000 industrial phase.
A380 programme. In connection with the A380 programme,
EADS faces the following main challenges: management of stressin the supply chain as a result of the steep ramp-up in production
in coming years; making continued improvements to lower the
resources and costs associated with designing each customised“head of version” aircraft for new customers, in order to allow a

EADS REGISTRATION DOCUMENT 2012 — 15

Risk Factors
3. Legal Risks

higher number of heads of version to be completed each year;
managing maturity in service; and mastering the root causesof, and launching the required action to ﬁx, the hairline cracks
discovered in the wing rib feet of certain A380 aircraft, and limiting
associated costs to repair costs only. Additionally, commercial
activity is focused on booking additional sales in order to securea minimum of 30 deliveries in 2015. No assurances can be giventhat this objective will be met.
A400M programme. In connection with the A400M programme,
EADS faces the following main challenges: ﬁ nalising the lastdevelopment tests and associated documentation to enable both
civil and military certiﬁcation and qualiﬁcation requirements (initial
operating clearance (IOC)); ﬁnishing development of a full set of inservice support goods and services that deliver mission successto programme customers; preparing entry into service of the ﬁrst
aircraft together with the necessary set of support elements;
pursuing further aircraft development (engine, cargo systems,
military systems); managing the anticipated difﬁ culties on the
production ramp-up concurrently with the delivery of progressively
enhanced aircraft capabilities (standard operational clearance(SOC1 to 3)); and meeting the contractual time schedule for the
next programme milestones.
A320neo programme. In connection with the A320neo programme,
EADS faces the following main challenges: management of stressin the supply chain as a result of the industrial ramp-up; meetingthe engine development status including performance targets,and its schedule; and ensuring the availability of skilled personnel
for the programme.

NH90 and Tiger programmes. In connection with the NH90 and
Tiger programmes, EADS faces the following main challenges:
continuing to proceed with the industrial ramp-up on the NH90
programme including retroﬁts; mastering the contract renegotiations
with governments and addressing requests to reduce contractuallybinding orders; and assuring support readiness in connection withmultiple ﬂeets entering into service.
EC225 programme. In connection with the EC225 programme,
EADS faces the following main challenges: working on the root
causes of the main gear box shaft failure that occurred during two
incidents in 2012, in close coordination with oil and gas operatorsand customers, while respecting the conﬁdentiality of the ofﬁcial
accident investigation; dealing with interim corrective measures
to put the ﬂeet back into ﬂight operation, potential subsequent
redesign in the main gear box, retroﬁts and claims.
Lead systems integration. In connection with lead systems
integration projects (in particular Saudi border surveillance contract
and National Security Shield Qatar), EADS faces the following main
challenges: meeting the schedule and cost objectives with a highnumber of sites with complex local infrastructure to deliver and theintegration of COTS products (radars, cameras, sensors) with theirinterfaces into the system; assuring an efﬁcient project and stafﬁng
ramp-up; and managing the rollout including subcontractors aswell as training and organisational adaptation of the customer.

3. 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;and— investment in associates: Dassault Aviation.
The formation of partnerships and alliances with other market
players is an integral strategy of EADS, and the proportion ofsales generated from consortia, joint ventures and equity holdings
may rise in future years. This strategy may from time to time leadto changes in the organisational structure, or realignment in thecontrol, of EADS’ existing joint ventures.

16 — EADS REGISTRATION DOCUMENT 2012

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 risk ofdisagreement 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 and specify limited exit
rights. The other parties in these entities may also be competitors of
EADS, and thus may have interests that differ from those of EADS.
In addition, in those holdings in which EADS is a minority partner orshareholder, EADS’ access to the entity’s books and records, andas a consequence, EADS’ knowledge of the entity’s operations andresults, is generally limited as compared to entities in which EADS
is a majority holder or is involved in the day-to-day management.

Risk Factors
3. Legal Risks

Product Liability and Warranty Claims
EADS designs, develops and produces a number of high proﬁleproducts 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 arisein the future or that such insurance coverage will be adequate.

Intellectual Property
EADS relies upon patent, copyright, trademark and trade secretlaws, 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 thelaws in Europe and the US. 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 has beenaccused of infringement on occasion and could have additional
claims asserted against it in the future. These claims could harm
its reputation, cost it money and prevent it from offering certain
products or services. Any claims or litigation in this area, whether
EADS ultimately wins or loses, could be time-consuming andcostly, injure EADS’ reputation or require it to enter into licensing
arrangements. EADS might not be able to enter into these licensing
arrangements on acceptable terms. If a claim of infringement weresuccessful against it, an injunction might be ordered against EADS,
causing further damages.

Export Controls and Other Laws and Regulations
The export market is a signiﬁcant market for EADS. In addition, manyof the products EADS designs and manufactures for military use
are considered to be of national strategic interest. Consequently,
the export of such products outside of the jurisdictions in which
they are produced 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 or changing
international circumstances will not make it impossible to obtain
export licenses for one or more clients or constrain EADS’ ability
to perform under previously signed contracts. Reduced accessto military export markets may have a signiﬁcant adverse effecton EADS’ business, results of operation and ﬁnancial condition.
EADS is also subject to a variety of other laws and regulations,
including among others, those relating to commercial relationships,
the use of its products and anti-bribery provisions. In addition,

EADS’ ability to market new products and enter new markets
may be dependent on obtaining government certiﬁcations andapprovals in a timely manner. Although EADS seeks to comply
with all such laws and regulations, even unintentional violations ora failure to comply could result in administrative, civil or criminal
liabilities including signiﬁcant ﬁnes and penalties, suspension or
debarment of EADS from government contracts for some periodof time or suspension of EADS’ export privileges, or preclude
EADS from bidding on certain government contracts (even in theabsence of a formal suspension or debarment).
In addition, EADS is sometimes subject to government inquiries
and investigations of its business and competitive environmentdue, among other things, to the heavily regulated nature of its
industry. In addition to the risk of an unfavourable ruling against
EADS, any such inquiry or investigation could negatively affect
EADS’ reputation and its ability to attract and retain customers,
which could have a negative effect on its business, results ofoperation and ﬁnancial condition.

EADS REGISTRATION DOCUMENT 2012 — 17

Risk Factors
4. Industrial and Environmental Risks

Legal and Regulatory Proceedings
EADS is currently engaged in a number of active legal and regulatory
proceedings. See “— Information on EADS’ Activities — 1.1.9
Legal and Arbitration Proceedings”. EADS expects to continue toincur time and expenses associated with its defence, regardlessof the outcome, and this may divert the efforts and attention ofmanagement from normal business operations. Although EADS isunable to predict the outcome of these proceedings, it is possiblethat they will result in the imposition of damages, ﬁnes or otherremedies, which could have a negative effect on EADS’ business,
results of operation and ﬁnancial condition. An unfavourable ruling
could also negatively impact EADS’ stock price and reputation.

4. 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 around theworld. EADS therefore incurs, and expects to continue to incur,
signiﬁcant capital expenditure and other operating costs to comply
with increasingly complex laws and regulations covering theprotection of the natural environment as well as occupational healthand safety, including costs to prevent, control, eliminate or reduce
emissions into the environment, releases of air pollutants into theatmosphere, discharges to surface and subsurface water and soil,
usage of certain substances and the content of EADS’ products,
the disposal and treatment of waste materials, and costs to comply
with reporting or warning regulations. Moreover, new laws andregulations, the imposition of tougher licence requirements,
increasingly strict enforcement or new interpretations of existinglaws and regulations may cause EADS to incur increased capital
expenditure and operating costs in the future in relation to theabove, which could have a negative effect on its results of operationand 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
to prevent imminent risks. In the event of an industrial accident
or other serious incident, employees, customers and other third
parties may ﬁ le claims for personal injury, property damage
or damage to the environment (including natural resources).

18 — EADS REGISTRATION DOCUMENT 2012

Further, liability under some environmental laws relating tocontaminated sites can be imposed retroactively, on a joint andseveral basis, and without any ﬁnding of non-compliance or fault.
These potential liabilities may not always be covered by insurance,or may be only partially covered. The obligation to compensate
for such damages could have a negative effect on EADS’ resultsof operation and ﬁnancial condition.
In addition, the various products manufactured and sold by EADS
must comply with relevant environmental, health and safety andsubstances/preparations related laws and regulations in thejurisdictions in which they operate. Although EADS seeks to ensurethat its products meet the highest quality standards, increasingly
stringent and complex laws and regulations, new scientificdiscoveries, delivery of defective products or the obligation to
notify or provide regulatory authorities or others with required
information (such as under the EU regulation known as “REACH”,
which addresses the production and use of chemical substances)
may force EADS to adapt, redesign, redevelop, recertify and/or eliminate its products from the market. 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 and other 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 havea signiﬁcant adverse effect on the reputation of EADS and its
products and services.

EADS REGISTRATION DOCUMENT 2012 — 19

1
20 — EADS REGISTRATION DOCUMENT 2012

Information on EADS’ Activities
1.1

Presentation of the EADS Group

22

1.1.1 Overview

22

1.1.2 Airbus

25

1.1.3 Eurocopter

34

1.1.4 Astrium

37

1.1.5 Cassidian42

1.1.6 Other Businesses

45

1.1.7 Investments

47

1.1.8 Insurance

48

1.1.9 Legal and Arbitration Proceedings

49

1.1.10 Research and Technology, Intellectual Property

50

1.1.11 Environmental Protection

52

1.1.12 Employees

54

1.1.13 Incorporation by Reference55

1.2 Recent Developments

56

New Board Approves Launch of Share Buyback Programme

56

EADS’ New Board of Directors

56

Airbus Activates “Plan B” for the A350 XWB Batteries

57

EADS REGISTRATION DOCUMENT 2012 — 21

Information on EADS’ Activities
1.1 Presentation of the EADS Group

1.1 Presentation of the EADS Group
1.1.1

Overview

Due to the nature of the markets in which EADS operates and the conﬁdential
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 € 56.5 billion in 2012, EADS isEurope’s premier aerospace and defence company and one of
the largest aerospace and defence companies in the world. In
terms of 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 2012, it generated
approximately 79% of its total revenues in the civil sector (comparedto 76% in 2011) and 21% in the defence sector (compared to 24%
in 2011). As of 31 December 2012, EADS’ active headcount was
140,405 employees.

Strategy
EADS is currently engaged in a comprehensive strategy review, andthe conclusions are expected to be announced in mid-2013. EADS
expects its strategy to remain focused on providing superior value
to its customers through innovative product and service solutions.
Through more optimal resource allocation and cost control,enhanced programme execution and stronger development of
more proﬁtable segments, EADS will strive to deliver its solutions
with a level of proﬁtability that is both attractive to its shareholders
and sufﬁcient to fund its future development initiatives.
EADS seeks to drive enhanced value creation and shareholder
return along the following axis:— 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 focused onincreasing EADS’ presence in the high value services market,
given its countercyclical nature, opportunities for sustained
growth and EADS’ competitive advantage as the designer of the
products. The rapid expansion of EADS’ in-service commercial
and defence fleet will require support throughout its lifecycle.
Customers, both governmental and commercial, increasingly
look for new ways to gain efficiency with respect to in-servicesupport, and EADS can play a key role in enabling such gains.
Hence, EADS will seek to provide high value-added services
related to both platforms and systems, including advanced inservice support, air traffic management systems and training.

— Become a truly global industrial Group. A significant portionof EADS’ suppliers, facilities and employees are based in Europe,
22 — EADS REGISTRATION DOCUMENT 2012

while the majority of its revenues originate from customers
outside of Europe. In order to achieve access to certain markets
and technologies, optimise costs and hedge against future US
dollar volatility, EADS will aim to implement long-term industrial
development that brings the Group’s industrial footprint andits services offerings closer to its future customer base. For
example, in the US, Airbus announced in 2012 that it would
expand its presence with a new A320 family final assembly line
to be built in Mobile, Alabama (US), which is expected to begin
producing A319s, A320s and A321s in 2016.

— Continue to foster innovation. EADS aims to remain a driving
force in the industry by keeping the spirit of an innovator anda challenger. Maintaining its technological edge and coveringa broad spectrum of capabilities is the key to remain a market
leader over the long-term. The Group takes a truly global
approach to cooperation, working with the innovators of today
and tomorrow, inside and outside of the Company, in supporting
the Company’s vision of a world that is more mobile, secure andeco-efficient. EADS invests to deliver shareholder value througha deliberate, leading-edge portfolio enabling the introductionof new technologies. The target of its innovation efforts is tofoster long-term customer relationships by developing highvalue solutions which meet the technological, performance,
safety, and cost competitive pressures that the Company faces.
The strategy is also driven by the need for successful on time,on quality, on price introduction of new products and processes
that include IT technology, quality and services.

— 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 – inorder to render eco-efficiency a competitive advantage overthe long-term.

— Develop its people. EADS needs motivated and competentemployees. EADS’ leadership culture is based on mutual trust,empowerment, recognition and accountability. Employee
development is a core activity of EADS managers. To this end, itInformation on EADS’ Activities
1.1 Presentation of the EADS Groupis the duty of EADS and its management to provide employeeswith the opportunities to meet their professional expectations,develop their professional skills and realise their personalpotential. This requires active management development basedon a new leadership model. EADS will also encourage stronger
mobility and greater internal diversity in its teams.

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

AirbusAirbus is one of the world’s leading aircraft manufacturers, offeringmodern and efﬁcient passenger aircraft on the more than 100-seatmarket. The Airbus commercial product line comprises aircraft that
range in size from the 107-seat single-aisle A318 aircraft to the 525seat A380 widebody aircraft. Airbus also continues to broaden its
scope and product range by applying its expertise to the military
market, as well as extending its portfolio of freighter aircraft.
In 2012, Airbus recorded total revenues of € 38.6 billion – including
total revenues of € 2.1 billion at Airbus Military – representing 68.3%
of EADS’ revenues.

Airbus Commercial
Since it was founded in 1970 and up to the end of 2012, Airbus hasreceived orders for 12,312 commercial aircraft from 348 customers
around the world. In 2012, Airbus delivered 588 aircraft (compared
to 534 deliveries in 2011) and received 914 gross orders (comparedto 1,608 gross orders in 2011), or 41% of the gross worldwide
market share (in value terms) of aircraft with more than 100 seats.
After accounting for cancellations, net order intake for 2012 was
833 aircraft (compared to 1,419 aircraft in 2011). As of 31 December
2012, Airbus’ backlog of commercial orders was 4,682 aircraft(compared to 4,437 aircraft in 2011). See “— 1.1.2 Airbus — Airbus
Commercial”.

includes light single-engine, light twin-engine, medium andmedium-heavy helicopters which are adaptable to all kinds of
mission types based on customer needs.
Eurocopter delivered 475 helicopters in 2012 (503 in 2011) andreceived 492 gross orders in 2012 (compared to 472 gross orders
in 2011). After accounting for cancellations, net order intake for2012 was 469 helicopters (compared to 457 helicopters in 2011).
Civil contracts accounted for 69% of this order volume, with military
sales representing the remaining 31%. As of 31 December 2012,
Eurocopter’s backlog of helicopter orders was 1,070 aircraft(compared to 1,076 aircraft in 2011). In 2012, Eurocopter recorded
total revenues of € 6.3 billion, representing 11.1% of EADS’revenues. See “— 1.1.3 Eurocopter”.

Astrium
Astrium designs, develops and manufactures satellite systems,
orbital infrastructures and launchers, and provides satellite
telecommunication and geo-information services on behalf ofcommercial and government customers. Astrium conducts its
activities through three main Business Units: Astrium Satellites,
Astrium Space Transportation and Astrium Services. These
Business Units also provide launch services through Astrium’s
shareholdings in Arianespace (Ariane 5 launcher), Starsem (Soyuz
launcher) and Eurockot (Rockot launcher). In 2012, Astrium
recorded total revenues of € 5.8 billion, representing 10.3% of
EADS’ revenues. See “— 1.1.4 Astrium”.

CassidianCassidian is a worldwide leader in global security solutions andsystems, providing lead systems integration and value-added
products and services to civil and military customers around theglobe: air systems (combat aircraft, military transport, mission
aircraft and unmanned aerial systems), land, naval and joint
systems, intelligence and surveillance, cyber security, securecommunications, test systems, missiles, services and support
solutions. As a lead systems integrator, Cassidian combines
the know-how to design, develop and implement overall systemsolutions by integrating across platforms, equipment and services.
In 2012, Cassidian recorded total revenues of € 5.7 billion,
representing 10.2% of EADS’ revenues. See “— 1.1.5 Cassidian”.

Airbus Military
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 light and medium
military transport aircraft and is responsible for the European
heavy military transport A400M project. See “— 1.1.2 Airbus —Airbus Military”.

Eurocopter
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. This product range currently

Other Businesses
Other Businesses include turboprop manufacturer ATR,
aerostructure and aircraft seat business Sogerma, US operating
unit EADS North America and 30% (consolidated at equity) ofDaher-Socata. Other Businesses do not form part of EADS’ four
Divisions. In 2012, the recorded total revenues of Other Businesses
amounted to € 1.5 billion. See “— 1.1.6 Other Businesses”.

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”.

EADS REGISTRATION DOCUMENT 2012 — 23

1

Information on EADS’ Activities
1.1 Presentation of the EADS Group

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 2012, 2011 AND 2010
Year ended 31 December 2012

Year ended 31 December 2011

Year ended 31 December 2010

Amount in €bn

In percentage(1)Amount in €bn

In percentage(1)Amount in €bn

In percentage(1)

38.6

68.4%

33.1

67.1%

30.0

65.5%

Airbus Commercial

36.9

65.5%

31.2

63.2%

27.7

60.5%

Airbus Military

2.1

3.8%

2.5

5.1%

2.7

5.9%

Airbus(2)Eurocopter

6.3

11.1%

5.4

11.0%

4.8

10.6%

Astrium

5.8

10.3%

5.0

10.1%

5.0

10.9%

Cassidian

5.7

10.2%

5.8

11.8%

5.9

13.0%

Total Divisional revenues

56.4

100%

49.3

100%

45.7

100%

Other Businesses

1.5

1.2

1.2

HQ/Consolidation(3)

(1.4)

(1.4)

(1.1)

Total

56.5

49.1

45.8

(1) Before “Other Businesses” and “HQ/Consolidation”.
(2) Airbus reports in two segments: Airbus Commercial and Airbus Military. Eliminations between Airbus Commercial and Airbus Military are treated at the Airbus Division level.
(3) HQ/Consolidation includes, in particular, adjustments and eliminations for intercompany transactions.

CONSOLIDATED REVENUES BY GEOGRAPHICAL AREA FOR THE YEARS ENDED 31 DECEMBER 2012, 2011 AND 2010
Year ended 31 December 2012

Year ended 31 December 2011

Year ended 31 December 2010

Amount in €bn

In percentage(1)Amount in €bn

In percentage(1)Amount in €bn

In percentage(1)

21.0

37.2%

20.7

42.1%

21.4

46.8%

EuropeNorth America

7.7

13.6%

5.8

11.9%

3.5

7.6%

Asia/Pacific

18.3

32.5%

14.3

29.1%

11.4

24.8%

Rest of the World(2)

9.5

16.7%

8.3

16.9%

9.5

20.8%

Total

56.5

100%

49.1

100%

45.8

100%

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

CONSOLIDATED ORDERS BOOKED FOR THE YEARS ENDED 31 DECEMBER 2012, 2011 AND 2010
Year ended 31 December 2012

Year ended 31 December 2011

Year ended 31 December 2010

Amount in €bn

In percentage(1)Amount in €bn

In percentage(1)Amount in €bn

In percentage(1)

88.1

86%

117.9

90%

68.2

83%

Airbus Commercial

86.5

85%

117.3

90%

68.2

83%

Airbus Military

1.9

2%

0.9

1%

0.2

0%

Eurocopter

5.4

5%

4.7

4%

4.3

5%

Astrium

3.8

4%

3.5

3%

6.0

7%

Orders booked(2)Airbus(3) (4)CassidianTotal Divisional orders

5.0

5%

4.1

3%

4.3

5%

102.3

100%

130.2

100%

82.8

100%

Other Businesses

1.6

2.0

1.7

HQ/Consolidation

(1.4)

(1.2)

(1.4)

102.5

131.0

83.1

Total
(1)
(2)
(3)
(4)

Before “Other Businesses” and “HQ/Consolidation”.
Without options.
Based on catalogue prices for commercial aircraft activities.
Airbus reports in two segments: Airbus Commercial and Airbus Military. Eliminations between Airbus Commercial and Airbus Military are treated at the Airbus Division level.

24 — EADS REGISTRATION DOCUMENT 2012

Information on EADS’ Activities
1.1 Presentation of the EADS Group1

CONSOLIDATED BACKLOG FOR THE YEARS ENDED 31 DECEMBER 2012, 2011 AND 2010 (1)Year ended 31 December 2012

BacklogYear ended 31 December 2011

Year ended 31 December 2010

Amount in €bn

In percentage(2)Amount in €bn

In percentage(2)Amount in €bn

In percentage(2)

523.4

93%

495.5

92%

400.4

89%

503.2

89%

475.5

88%

378.9

85%

(3)

Airbus(4) (5)Airbus Commercial
Airbus Military

21.1

4%

21.3

4%

22.8

5%

13.0

2%

13.8

2%

14.5

3%

Astrium

12.7

2%

14.7

3%

15.8

4%

Cassidian

15.6

3%

15.5

3%

16.9

4%

Total Divisional backlog

564.7

100%

539.5

100%

447.6

100%

Eurocopter

Other Businesses

2.9

3.0

2.5

HQ/Consolidation

(1.1)

(1.5)

(1.6)

566.5

541.0

448.5

Total
(1)
(2)
(3)
(4)
(5)

For a discussion on the calculation of backlog, see “— Management’s Discussion and Analysis of Financial Condition and Results of Operations — 2.1.3.1 Order Backlog”.
Before “Other Businesses” and “HQ/Consolidation”.
Without options.
Based on catalogue prices for commercial aircraft activities.
Airbus reports in two segments: Airbus Commercial and Airbus Military. Eliminations between Airbus Commercial and Airbus Military are treated at the Airbus Division level.

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, ﬁnanceactivities pursued by EADS N.V. are in support of the businessactivities and strategy of the Group. In connection therewith,
EADS N.V. provides or procures the provision of services to

1.1.2

the subsidiaries of the Group. General management service
agreements have been put in place with the subsidiaries andservices are invoiced on a cost plus basis.
For management purposes, EADS N.V. acts through its Board of
Directors, Executive Committee, and Chief Executive Ofﬁcer inaccordance with its corporate rules and procedures as described
below under “Corporate Governance”.
Within the framework defined by EADS N.V., each Division,
Business Unit and subsidiary is vested with full entrepreneurial
responsibility.

AirbusAirbus is one of the world’s leading aircraft manufacturers, offeringmodern and efﬁcient passenger aircraft on the more than 100-seatmarket. The Airbus commercial product line comprises aircraft that
range in size from the 107-seat single-aisle A318 aircraft to the 525seat A380 widebody aircraft. Airbus also continues to broaden its
scope and product range by applying its expertise to the military
market, as well as extending its portfolio of freighter aircraft.
In 2012, Airbus recorded total revenues of € 38.6 billion – including
total revenues of € 2.1 billion at Airbus Military – representing 68.3%
of EADS’ revenues.

Airbus Commercial
Introduction and Overview
Since it was founded in 1970 and up to the end of 2012, Airbus hasreceived orders for 12,312 commercial aircraft from 348 customers
around the world. In 2012, Airbus delivered 588 aircraft (compared
to 534 deliveries in 2011) and received 914 gross orders (comparedto 1,608 gross orders in 2011), or 41% of the gross worldwide
market share (in value terms) of aircraft with more than 100 seats.
After accounting for cancellations, net order intake for 2012 was
833 aircraft (compared to 1,419 aircraft in 2011). As of 31 December
2012, Airbus’ backlog of commercial orders was 4,682 aircraft(compared to 4,437 aircraft in 2011).

EADS REGISTRATION DOCUMENT 2012 — 25

Information on EADS’ Activities
1.1 Presentation of the EADS Group

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 these goals,
Airbus is actively:

Building a Leaner, More Fully Integrated Company
In order to build a leaner, more fully integrated company and thereby
bolster its competitiveness, Airbus is adapting its organisation tofoster an entrepreneurial spirit and empower more teams, while
maintaining harmonised processes across all sites. For series
programmes, additional responsibilities and means have beendelegated to plants for delivery at increased rates.

Developing the Most Comprehensive Line of Products
in Response to Customer Needs
Airbus continuously seeks to develop and deliver new products tomeet customers’ evolving needs, while also improving its existingproduct line. For example, the A320neo (new engine option) is thelatest of many upgrades to the A320 single-aisle aircraft family
to help maintain its leading position in terms of technology andfuel-efﬁciency. In the long-range segment, Airbus announced in2012 a new variant of the A330. The upgraded A330, which offers
increased range, is scheduled to enter service in 2015.
Airbus is also currently pursuing (i) development and production
on the new A350 XWB programme, (ii) the gradual expansion of
relevant freighter applications with the A330-200F, (iii) additional
opportunities in the military business through the A400M andmilitary derivatives products such as the A330 MRTT (see “— Airbus
Military” below), and (iv) research on the development of new
aircraft in the short- and medium-range segments.

Expanding its Customer Services Offering
Airbus seeks to remain at the forefront of the industry by expanding
its customer services offering to meet customers’ evolving needs.
As a result, Airbus has developed a wide range of value-added andcustomised services which customers can select based on theirown outsourcing policy and needs. This approach provides Airbus
operators with solutions to signiﬁcantly reduce their operating
costs, increase aircraft availability and enhance the quality of theiroperations.

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, politicalunrest, pandemics and extraordinary events may also precipitatechanges in demand and lead to short-term market imbalances.

26 — EADS REGISTRATION DOCUMENT 2012

In recent years, China and India have emerged as signiﬁcant new
aircraft markets. According to internal estimates, they are expected
to constitute the ﬁrst and fourth most important markets by aircraft
delivery value, respectively, in the next twenty years. As a result,
Airbus has sought to strengthen its commercial and industrial ties
in these countries. New aircraft demand from airlines in the Middle
East has also become increasingly important, as they have rapidly
executed strategies to establish a global presence and to leverage
the beneﬁts the region can deliver.
The no-frills/low-cost carriers also constitute a signiﬁcant sector,
and are expected to continue growing around the world, particularly
in Asia, where emerging markets and continued deregulation
should provide increased opportunities. While Airbus single-aisle
aircraft continue to be a popular choice for these carriers, demandfor Airbus’ range of twin-aisle aircraft may also increase as someof these carriers begin testing the market with new long-range
operations.
Overall g rowth. The long-term market for passenger aircraft
depends primarily on passenger demand for air travel, which isitself primarily driven by economic or GDP growth, fare levels anddemographic growth. Measured in revenue passenger kilometres,
air travel increased every year from 1967 to 2000, except for1991 due to the Gulf War, resulting in an average annual growthrate of 7.9% for the period. Demand for air transportation 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 thethird period of negative trafﬁc growth during the jet age, and acyclical downturn for airlines in terms of trafﬁc (both passenger
and cargo), yields and proﬁtability. By the end of 2010 however,trafﬁc had recovered strongly from 2009 levels, with trafﬁc growthin 2012 expected to be close to the long-term trend upon therelease of ofﬁcial ﬁgures in 2013.
Beyond the near-term market uncertainties driven by sovereign
debt and economic concerns in Europe and elsewhere, Airbus
believes that air travel remains a growth business. Based on internal
estimates, Airbus anticipates a growth rate of 4.7% annually during
the period 2012-2031. If the actual growth rate equals or exceeds
this level, Airbus expects that passenger trafﬁc, as measured inrevenue passenger kilometres, would more than double in thenext twenty years.
Cyclicality. Despite an overall growth trend in air travel, aircraft
order intake can vary signiﬁcantly from year to year, due to thevolatility of airline proﬁtability, cyclicality of the world economy andoccasional unforeseen events which can depress demand for air
travel, such as the spread of H1N1 ﬂu. Thus, following a peak in
new orders reached in 2007, Airbus recorded signiﬁcantly fewer
new orders in 2008 and 2009 as a result of the global economiccrisis and a related drop in air trafﬁc. In 2010 and 2011, the reboundin passenger trafﬁ c, improved yields and higher load factors
supported a recovery among airlines globally, which in turn was
reﬂected in increased aircraft orders. In 2012, with passenger trafﬁc

Information on EADS’ Activities
1.1 Presentation of the EADS Group

continuing to grow despite some uncertainty and a slowdown
in economic activity, particularly in Europe, Airbus’ order intake
remained above the level of deliveries, although orders in 2012were below the very high level achieved in 2011.
Despite periodic volatility in air trafﬁc, Airbus aims to secure stabledelivery rates from year to year, supported by a strong backlog oforders and a regionally diverse customer base. At the end of 2012,
Airbus’ commercial backlog stood at 4,682 aircraft, representing
almost eight years of production at current rates. Through carefulbacklog management, close monitoring of the customer baseand a prudent approach to production increases, Airbus has
successfully increased annual deliveries for 11 years running, eventhrough the economic crisis of 2008-2009.
Regulation/Deregulation. National and international regulation(and deregulation) of international air services and major domestic
air travel markets affect demand for passenger aircraft as well. In
1978, the US deregulated its domestic air transportation system,
followed by Europe in 1985. The more recently negotiated “Open
Skies Agreement” between the US and Europe, which became
effective in 2008, allows any European or US airline to ﬂy any route
between any city in the EU and any city in the US. Other regions andcountries are also 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
the creation 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 intraregional markets since deregulation (e.g., in the US and Europe).
Airline n etwork d evelopment: “h ub” and “p oint-to-p oint”
n etworks. Following deregulation, major airlines have sought
to tailor their route networks and ﬂeets to continuing changes
in customer 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 have developed highly
efﬁcient “hub and spoke” systems, which provide passengers withaccess to a far greater number of air travel destinations throughone 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 (hubto-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 to implement such strategies (although
the trend has been towards larger-sized aircraft within each market
segment as discussed below).
Airbus, like others in the industry, believes that route networks willcontinue 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 be well served by Airbus’
latest product offering, the A350 XWB. In addition, the A380 has
been designed primarily to meet the signiﬁcant demand between
the major hub cities, which are often among the world’s largest
urban centres (such as London, Paris, New York and Beijing).
Airbus has identiﬁ ed 42 major hub cities in its current market
analysis, with this number expected to grow to more than 90 by
2031. Airbus believes that it is well positioned to meet current andfuture market requirements given its complete family of products.
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, approximately one-third of the world’s
jetliner seats being ﬂown today are operated by just 15 airlines
as of January 2013. 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.

Market Structure and Competition
Market segments. According to a study conducted by Airbus, a
total of 15,500 passenger aircraft with more than 100 seats were inservice with airlines worldwide at the beginning of 2013. Currently,
Airbus competes in each of the three principal market segments
for aircraft with more 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 and medium-range
routes.
“Twin-aisle” or “wide-body” aircraft, such as the A330/A350 XWB
families, have a wider fuselage with more than 210 seats, typicallyconﬁgured with eight seats per row and with two aisles. The A330/
A350 XWB families are capable of serving all short- to long-range
markets.
“Very large aircraft”, such as the A380 family, are designed to carry
more than 400 passengers, non-stop, over very long-range routes
with superior comfort standards and with signiﬁcant cost-perseat beneﬁts to airlines, although such aircraft can also be usedover shorter ranges in high-density (including domestic) markets.
Freight aircraft, which form a fourth, related segment, are often
converted ex-passenger aircraft. See “— 1.1.7 Investments —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 and A380 to serve the business jetmarket in private, corporate shuttle and in government/VIP roles.
Geographic differences. The high proportion of single-aisle
aircraft in use in both North America and Europe reﬂ ects the
predominance of domestic short-range and medium-range
ﬂights, particularly in North America due to the development ofhubs following deregulation. In comparison with North America
and Europe, the Asia-Paciﬁc region uses a greater proportion of

EADS REGISTRATION DOCUMENT 2012 — 27

1

Information on EADS’ Activities
1.1 Presentation of the EADS Grouptwin-aisle aircraft, as populations tend to be more concentrated
in fewer large urban centres. The tendency towards use oftwin-aisle aircraft is also reinforced by the fact that many of theregion’s major airports limit the number of ﬂ ights, due either
to environmental concerns or to infrastructure constraints that
limit the ability to increase ﬂ ight 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 and low-cost carriers continue todevelop in the region. Aircraft economics will also help to drive
aircraft size, with airlines looking to reduce the cost per seatthrough higher density aircraft cabins and the use of larger aircraft
types and variants where possible.
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 for 2012, Airbus and Boeing,respectively, accounted for 49.5% and 50.5% of total commercial
aircraft deliveries, 41% and 59% of total net orders (in units), and
52% and 48% of the total year-end backlog (in units). Airbus
commercial aircraft deliveries (588 in 2012) were 10% higher thanin 2011 (534 deliveries), and 2012 was the 11th year in a row ofincreased production at Airbus.
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 market
share. Regional jet makers Embraer and Bombardier, comingfrom the less than 100-seat commercial aircraft market, continue
to develop larger airplanes (such as the new 100- to 149-seat
C-Series launched by Bombardier). Additionally, other competitorsfrom Russia, China and Japan will enter the 70- to 150-seat aircraft
market over the next few years.

Customers
As of 31 December 2012, Airbus had 348 customers and a totalof 12,312 Airbus aircraft had been ordered, of which 7,630 aircraft
had been delivered to operators worldwide. The table below shows
Airbus’ largest commitments in terms of total gross ﬁrm orders bycustomer for the year 2012.
Customer

Firm orders(1)Norwegian100

Air Asia

100

Pegasus Airlines

75

PAL

64

Avianca-Taca Holding

51

ICBC

50

Boc Aviation

50(1) Options are not included in orders booked or year-end backlog.

28 — EADS REGISTRATION DOCUMENT 2012

Products and Services
The Family Concept — Commonality across the Fleet
Airbus’ aircraft families promote ﬂeet commonality. This philosophy
takes a central aircraft and tailors it to create derivatives tomeet the needs of speciﬁc market segments, meaning that all
new-generation Airbus aircraft share the same cockpit design,
fly-by-wire controls and handling characteristics. Pilots cantransfer among any aircraft within the Airbus family with minimal
additional training. Cross-crew qualiﬁ cation across families ofaircraft provides airlines with signiﬁ cant operational ﬂ exibility.
In addition, the emphasis on ﬂeet commonality permits aircraft
operators to realise signiﬁcant cost savings in crew training, spareparts, 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 core of
Airbus’ strategy since its creation. Each product in the Airbus
family is intended to set new standards in areas crucial toairlines’ 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
in the aircraft industry.
A320 family. With more than 9,031 aircraft sold and 5,402
delivered and currently in service, Airbus’ family of single-aisle
aircraft, based on the A320, includes the A318, A319 and A321
derivatives, as well as the A319-based Airbus Corporate Jetlinerand A318 Elite business jet. 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 3,700 nm/6,800 km.
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 a spacious under ﬂ oor cargo volume. The A320 family
incorporates digital ﬂ y-by-wire controls, an ergonomic cockpit
and a lightweight carbon ﬁ bre composite horizontal stabiliser.
The use of composite material has also been extended to thevertical stabiliser. The A320 family’s competitor is the Boeing 737
series.
Airbus continues to invest in improvements for the A320 family,
including development of the A320neo (new engine option).
Compared to the existing A320, the A320neo is designed todeliver fuel savings of 15% (including sharklets) and an additional
flight distance of 500nm (950 km), or the ability to carry two
tonnes more payload at a given range. This new engine option
will be available for the A321, A320 and A319 aircraft models,with an entry into service targeted for October 2015.
Sharklets (wing-tip devices designed to cut down on aerodynamicdrag) are also available as a forward-fit option from the end of2012 and are designed to result in 4% reduced fuel burn over

Information on EADS’ Activities
1.1 Presentation of the EADS Grouplong sectors as well as increased payload range and improved
take-off performance. The first A320 equipped with sharklets
was delivered to Air Asia in December 2012.

In 2012, Airbus received 783 gross orders for the A320 family of
aircraft (739 net), and delivered 455 to 70 customers.

A320 Family Technical Features (standard version)
Model(1)

A318
A319

Entry into service

Passenger capacity(1)Maximum range (km)Length (metres)

Wingspan (metres)

2003

107

6,000

31.4

34.1

124

6,850

(2)

33.8

34.1

(2)

37.6

34.1

44.5

34.1

1996

A320

1988

150

6,100

A321

1994

185

5,950

(1) Two-class layout.
(2) Maximum range with sharklets.

A330 family. With 1,244 aircraft sold and 931 delivered andcurrently in service, the A330 family covers all market segmentswith one twin-engine aircraft type and is designed to carry between
250 and 300 passengers. The combination of low operating costs,
high efﬁciency, ﬂexibility and optimised performance makes thetwin-engine A330 popular with an ever-increasing operator base.
The A330 family offers high levels of passenger comfort as well aslarge under-ﬂoor cargo areas. The competitors of the A330 family
are the Boeing 767, 777 and 787 aircraft series.
In 2012, Airbus announced a maximum take-off weight (MTOW)
increase for the A330-200 and A330-300 to 240 metric tonnes,
followed by an additional augmentation to 242 metric tonnes. The
second MTOW step-up also provides an increased fuel capacity
option for the larger A330-300 version.

Airbus has also developed a new dedicated cargo variant of theA330 family, the A330-200F, a mid-size long-range cargo aircraftthat is designed to respond to the current market dynamics
of rising fuel prices and increased pressure on yields. Since
entering into service in 2010, the A330-200F has demonstrated
its attractiveness as an efﬁcient, reliable and proﬁtable freighter.
Complementing the A330-200F, the A330P2F programme offersa passenger-to-freighter conversion opportunity for A330s whichhave completed their useful operational service as passenger
jetliners. Development of the A330P2F will be performed withthe resources of ST Aerospace, based in Singapore, EADS EFW
and Airbus.
In 2012, Airbus received 80 gross orders for the A330 family of
aircraft (58 net), and delivered 103 (including two A340-500 aircraft)to 30 customers.

A330 Family Technical Features
Model(1)Entry into service

Passenger capacity(1)Maximum range (km)Length (metres)

Wingspan (metres)

A330-200

1998

253

13,40059.0

60.3

A330-300

1994

295

10,80063.7

60.3(1) Three-class layout.

A380. The double-deck A380 is the world’s largest commercial
aircraft. 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 of eachairline. Carrying 525 passengers in a comfortable three- classconﬁguration and with a range of 8,300 nm/15,400 km, the A380
offers superior economic performance, lower fuel consumption,less noise and reduced emissions. The A380’s competitor is the
400-seat Boeing 747-8.

In 2012, Airbus received nine gross orders for the A380 (nine net), and delivered 30 to nine customers with two new operators: Malaysia
Airlines and Thai Airways.
A380 Technical Features
Model(1)

A380-800

Entry into service

Typical capacity(1)Maximum range (km)Length (metres)

Wingspan (metres)

2007

525

15,40073.0

79.8(1) Three-class layout.

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Information on EADS’ Activities
1.1 Presentation of the EADS GroupNew Product Development
A350 XWB family. The A350 XWB family is an all new family of
mid-sized wide-body aircraft, designed to accommodate between
270 and 350 passengers. 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 maincompetitors are the Boeing 787 and 777 aircraft series.
2012 marked the start of the A350 XWB ﬁnal assembly line activities
in Toulouse. Airbus completed assembly of the A350 XWB static

test specimen aircraft (to be used for ground tests), as well as themain structural assembly of the ﬁrst A350 XWB that will ﬂy.
In July 2012, Airbus announced a new programme schedule for
the A350 XWB-900 programme due to the challenges faced when
the automated wing drill process was launched. Entry into service
is currently targeted for the second half of 2014.
In 2012, Airbus received 40 gross orders for the A350 XWB (27 net),
for a total of 582 ﬁrm orders from 34 customers at the end of theyear.

A350 XWB Family Technical Features
Model(1)Entry into service

Passenger capacity(1)A350 XWB-800

2016

A350 XWB-900

2014

A350 XWB-1000

2017

Maximum range (km)Length (metres)

Wingspan (metres)

270

15,700

61.0

64.0

314

15,000

67.3

64.0

350

15,60074.0

64.0(1) Three-class layout.

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

worldwide, mostly through exclusive distribution deals with
manufacturers of the original equipment.

Customer Services

Customer Finance

Airbus Customer Services’ prime role is to help its customers
operate their Airbus ﬂeet safely and proﬁtably and to the satisfactionof passengers. As a result of its continued growth, Airbus’ customer
base has increased consistently over the past years.

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, and incertain cases to participate in ﬁnancing those aircraft for the airline.

A worldwide network of more than 4,000 people covers all areasof support from technical engineering/operational assistance andspare parts supply, to crew and personnel training. Hundredsof technical specialists provide advice and assistance to Airbus
customers 24 hours a day, 7 days a week. There are over
238 customer support representatives positioned around theworld in more than 157 stations close to the airlines they serve,
and an international network of support centres, training centres
and spares’ stores.
Beyond the core customer support activities, Airbus Customer
Services department has developed a wide range of modular
and customised services driven by the unique added value thatan aircraft manufacturer can bring. These services are clusteredaround ﬁ ve main domains of activity: ﬂ y-by-the-hour services,material management, systems and cabin upgrade, information
management and e-solution and training services (ﬂight operations
and maintenance). Innovative and integrated solutions have beendeveloped in these domains, such as the Flight Hour Services
Component programme (FHS Component) and Tailored Support
Package (FHS TSP), which provide integrated engineering/
maintenance and component packages to enable customers
to reduce their investments and support costs while increasing
operational reliability. Similar integrated solutions have also beendeveloped in system and cabin upgrade.
Part of Airbus’ growth strategy in the area of customer services
consists of targeted acquisitions, such as that of Satair. This
Copenhagen-based company distributes aircraft spare parts

30 — EADS REGISTRATION DOCUMENT 2012

Extension of credit or assumption of exposure is subject tocorporate oversight and monitoring, and follows strict standardsof discipline and caution. Airbus’ dedicated customer ﬁnance teamhas accumulated decades of expertise in aircraft ﬁnance. When
Airbus ﬁnances a customer, the ﬁnanced aircraft generally serveas collateral, with the engine manufacturer participating in theﬁnancing. These elements assist in reducing the risk borne by
Airbus. Airbus’ customer ﬁnancing transactions are designed tofacilitate subsequent sell-down of the exposure to the ﬁnancial
markets, third-party lenders or lessors.
In 2012, Airbus continued to beneﬁt from market appetite for both
aircraft ﬁnancing and sale and leaseback lessor opportunities. The
markets, however, remain unpredictable and Airbus continues toallow for potential additional ﬁnancing exposure. Management
believes, in light of its experience, that the level of provisioning
protecting Airbus from default costs is adequate and consistent
with standards and practice in the aircraft ﬁnancing industry. See“— Management’s Discussion and Analysis of Financial Condition
and Results of Operations”.

Asset Management
The Airbus Asset Management Division was established in 1994 to
manage and re-market used aircraft acquired by Airbus, originallyas a result of customer bankruptcies, and subsequently in thecontext of certain buy-back commitments. The Division operates
with a dedicated staff and manages a ﬂeet comprised of Airbus
aircraft across the range of models. Through its activities, theInformation on EADS’ Activities
1.1 Presentation of the EADS Group

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 suchaircraft. At the end of 2012, the Airbus Asset Management portfolio
contained 23 aircraft, a net increase of six aircraft from 2011.
The Asset Management Division also provides a full range ofremarketing services, including assistance with entry into service,interior reconﬁguration and maintenance checks.

Production
Industrial Organisation
Each task in the building of Airbus aircraft (from design toproduction) is allocated to a designated plant. The Airbus plants
are typically organised around different aircraft components andsections, in component delivery teams. Each component delivery
team is either in charge of one aircraft programme, or organisedby manufacturing technology clusters depending on the optimum
solution for each plant. Every plant is organised with production,engineering, quality, supply chain, manufacturing, engineeringand logistics capabilities to ensure a seamless production ﬂow
of operations.
A transversal “Operations Excellence” Centre of Competences is incharge of ensuring that harmonised and standardised processes,
methods and tools are developed and implemented across theplants, in order to increase efﬁciency, based on best practices.
Following production by the respective plants, the various aircraft
sections are transferred between the network of sites and the ﬁnal
assembly lines using dedicated transport means, such as the“Beluga” Super Transporters. To support the A380 production
ﬂow, Airbus has also integrated road, river and sea transport.
Programme management is then responsible for the ﬁnal assemblyline activities. The programme management works closely with theplants to secure delivery of aircraft sections to the ﬁnal assemblylines on time, cost and quality.
Airbus announced in July 2012 that it would build a new A320
family ﬁnal assembly line in Mobile, Alabama (US). Constructionof the facility will begin in 2013. Aircraft assembly is planned to
begin in 2015, with ﬁrst delivery of a Mobile-assembled aircraft
expected in 2016.

Engineering
Airbus Engineering is a global organisation that develops complete
aircraft and aircraft components and conducts research thatcan be applied to the next generation of aircraft. The “Centresof Competence” that make up Airbus Engineering operatetransnationally, with most engineers employed at four Airbus sites
in France, Germany, the UK and Spain. A growing population ofexperienced aerospace engineers worldwide are employed at
ﬁve further engineering centres in Wichita (Kansas, US), Mobile(Alabama, US), Moscow (Russia), Bangalore (India) and Beijing(China).

A key part of the Airbus engineering organisation is the architect
and integration centre, which ensures, together with a team ofsenior aircraft architects and the programme chief engineers, thata consistent and multi-disciplinary approach is applied during
aircraft development.
In 2012, Airbus Engineering certiﬁed the use of sharklets for theA320 aircraft and completed the concept phase for the A320neo.
The A350 XWB iron bird integration test rig and further integration
test benches were operational and designed to increase maturityof the aircraft before its ﬁrst ﬂight. Airbus Engineering has also
been a major contributor to a number of international initiatives
dedicated to making aviation greener. The main target of these
initiatives is to reduce both noise and CO 2 emissions of Airbus
aircraft. The Airbus Engineering change project has improved theway-of-working in several domains and increased efﬁciency also
through organisational changes.

Airbus Military
Introduction and Overview
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 light and medium
military transport aircraft and is responsible for the European heavy
military transport A400M project.
In 2012, Airbus Military recorded total revenues of € 2.1 billion.

Strategy
Airbus Military’s strategy is to further develop its core businesses
and increase market share by leveraging its technology know-how,while at the same time enhancing proﬁtability. To achieve thesegoals, 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 (aerial refuelling boom system (“ARBS”),
fully integrated tactical system (“FITS”), maritime patrol andantisubmarine warfare solutions (MPA, ASW, ASuW), signal
intelligence (SIGINT) and airborne early warning and command(AEW&C), as well as those of EADS’ wide range of platforms
and systems. Airbus Military will seek further consolidation of its
position in this market through its offering of tanker (A330 MRTT)
and maritime patrol aircraft (derived from CN235 and C295 aircraft
platforms). Airbus Military made progress on this goal during
2012, for example, when the Indian government selected it as
the preferred bidder in connection with an on-going aerial tanker
procurement campaign. Moreover, the Royal Air Force of Oman
became a signiﬁcant new operator of the C295 maritime patrolaircraft during 2012.

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Information on EADS’ Activities
1.1 Presentation of the EADS Group

Maintaining its Leadership for Military Transport Aircraft
Airbus Military is a global leader in the light and medium militarytransport aircraft markets. Through the addition of the A400M
heavy military transport aircraft to its portfolio – with the ﬁ rst
customer delivery targeted for the second quarter of 2013 – Airbus
Military offers a full range of tactical military transport aircraft
capable of covering all mission needs. Airbus Military will seek
to maintain its leadership in part by launching improvements to
its existing product line. For example, Airbus Military signed anagreement with PT Dirgantara Indonesia at the end of 2012 for thejoint launch of an upgraded version of the C212-400 aircraft. The
aircraft, renamed as NC212, will be offered to both civil and militarycustomers within the light military transport segment.

Increasing Services Revenue by Expanding its Offeringof Mission-Critical Services
Airbus Military intends to further develop and deliver “value
for money” solutions for its clients based on a comprehensive
understanding of their needs and through the formation of longterm partnerships worldwide. Airbus Military offers a competitive
services portfolio ranging from traditional support to full availabilitybased and ”mission success” contracting, leveraging its capabilities
as a design authority to provide fully integrated support service toclients throughout the product lifecycle.

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 speciﬁ c operational
requirements. This development as well as rapidly evolving defence
and security needs is expected to boost demand for special
mission aircraft in the medium-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 payloadof one to three tonnes, (ii) medium transport aircraft, with a payloadof four to 14 tonnes, and (iii) heavy transport aircraft, with a payloadof 15 tonnes or more. According to an analysis by DMS Forecast
International — an independent aerospace and defence industry
consulting ﬁrm — the global market for military transport aircraftis expected to amount to approximately US$ 66.9 billion from 2012
through 2021 (value of production).

32 — EADS REGISTRATION DOCUMENT 2012

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 and its C-130 Hercules. The A400M represents Airbus
Military’s entry into this market, at a time when the US and Europe
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 this market
will continue to grow at a moderate rate. Airbus Military aircraft areleaders in this segment, speciﬁcally the CN235 and C295 aircraft,which have a combined average market share (in units) of 54%
over the last ten years according to internal estimates. Both theCN235 and the C295 have been designed as complements or
replacements for the ageing C-130 Hercules, accomplishing mostof their missions at a reduced operating cost. Their competitors
are the C-27J Spartan, manufactured by Alenia Aeronautica, and
the An-32, manufactured by Antonov.
Light military transport. This is a mature market that is diminishingin size as countries develop economically and are able to afford
medium military transport aircraft. The C212 has historically led
this market segment, with an average market share (in units) of
10% over the last ten years according to internal estimates. The
C212’s main competitors are the M-28, manufactured by Polskie
Zaklady Lotnice Mielec, and the DHC-6 Series 400, manufactured
by Viking, Canada.

Products and Services
Special Mission Aircraft
Multi-role tanker transport — A330 MRTT. The A330 MRTT,a derivative of the Airbus A330 family, offers military strategic airtransport as well as air-to-air refuelling capabilities. Its large tankcapacity is sufﬁcient to supply the required fuel quantities without
the need for any auxiliary tanks. This allows the entire cargo bay to
be available for freight, with the possibility of incorporating standard
LD3 or LD6 containers, military pallets and/or any other type ofload device in use today. Airbus Military achieved civil and militarycertiﬁcation for the A330 MRTT in 2010, with 11 aircraft in service
at the end of 2012.
Airbus Military has won contracts for the A330 MRTT from thegovernments of Australia, Saudi Arabia (including one repeat
order), the United Arab Emirates and the UK, with a total backlogof 17 aircraft at the end of 2012. Airbus Military delivered ﬁve A330
MRTT aircraft in 2012.
The backlog includes aircraft to be provided under a 27-year
contract with the UK Ministry of Defence (“MoD”) in connection withthe latter’s Future Strategic Tanker Aircraft (“FSTA”) programmethrough the AirTanker consortium. The FSTA programme calls
for the provision of a ﬂeet of 14 new tanker aircraft, with the ﬁrst
aircraft entering into service in 2012. The contract also includes
provision for all necessary infrastructure, training, maintenance,
ﬂight management, ﬂeet management and ground services toenable the Royal Air Force to ﬂy air-to-air refuelling and transport
missions worldwide.

Information on EADS’ Activities
1.1 Presentation of the EADS Group

Airbus Military is also working on a technological programme aimed
at developing a new ARBS. The new ARBS is designed to providea refuelling performance that is substantially faster than that of thecompetition – a considerable advantage given the vulnerability of
the aircraft during the refuelling procedure. The ARBS has beentested with over 1,300 dry and wet contacts on a wide range ofaircraft, including F-16 and F/A-18 ﬁghters and E-3A Awacs.
Maritime p atrol a ircraft. Airbus Military provides different
solutions ranging from maritime surveillance to anti-submarine
warfare missions through aircraft based on the C212, CN235,
C295 or P-3 Orion platforms. Airbus Military aircraft, speciﬁcally theCN235 and C295, have a combined average market share (in units)of 47% over the last ten years according to internal estimates. Theirmain 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 core of the mission
system installed on these maritime patrol platforms. FITS is a newgeneration system that enhances tactical awareness and facilitatesdecision-making processes and operations within a networkcentric environment.
In 2012, the US Coast Guard ordered two additional CN235
maritime patrol aircraft for use within the Deepwater programme.
The Royal Air Force of Oman ordered three C295 maritime patrolaircraft. In terms of deliveries, Airbus Military delivered three CN235
maritime patrol aircraft to Mexico and one CN235 maritime patrolaircraft (14th in total) to the US Coast Guard. One upgrade of a
CN235 aircraft for Ireland was ordered in 2012 and delivered within
the year.
Based on the maritime patrol conﬁguration, the C295 ASW is theﬁrst ASW type designed and certiﬁed in Europe and intended toreplace ageing P-3 Orion or Bréguet Atlantic ﬂeets. Airbus Militaryis also involved in the modernisation and operational upgrade of
P-3 Orion maritime patrol aircraft for the Spanish and Brazilian
air forces. The programme includes the FITS installation together
with new mission sensors and avionics equipment. In 2012, four
upgraded P-3’s were delivered, three to the Brazilian Air Forceand one to the Spanish Air Force.

Military Transport Aircraft
CN235 — Medium military transport. The ﬁrst version in theCN235 family, the S-10, entered into service in 1987. The latest one,
the Series 300, is a new-generation, twin turboprop, pressurised
aircraft. The CN235-300 is capable of transporting a payload of up
to 6,000 kg, accommodating (i) 36 paratroopers, (ii) 18 stretchersplus three medical attendants, (iii) four of the most widely used
types of freight pallets, or (iv) oversized loads such as aircraft
engines or helicopter blades. Paratrooper operations can be
performed through the two lateral doors in the rear part of theaircraft or over the rear ramp. Variants of the CN235-300 are used
for other missions such as maritime patrol or pollution control,
among others. Considering all variants, over 270 CN235 aircraft
have been delivered since the beginning of the programme.
In 2012, Cameroon ordered one CN235 aircraft, becoming a newcustomer. In terms of deliveries, Airbus Military delivered three
CN235 aircraft to France.

C295 — Medium military transport. Certiﬁed in 1999, the C295
has a basic conﬁguration similar to the CN235, with a stretchedcabin to airlift a 50% heavier payload at greater speed overlonger distances. The C295 is equipped with integrated avionics
incorporating digital cockpit displays and a ﬂight management
system, enabling tactical navigation, planning and the integrationof signals from several sensors. The C295 has accumulated
110,000 ﬂight hours in all kind of environments: from the polar
arctic areas to deserts. Over 95 C295 aircraft have been delivered
to 16 operators from 15 countries.
In 2012, Airbus Military received total orders for 25 C295 aircraftfrom Colombia, Egypt, Indonesia, Kazakhstan, Oman and Poland,with Oman and Kazakhstan becoming new customers. In termsof deliveries, Airbus Military delivered a total of 10 C295 aircraft to
Egypt, Ghana, Indonesia, Kazakhstan and Poland.
C212 — Light military transport. The C212 was designed asa simple 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 take-off
and landing performance. In addition, the C212’s rear cargo door
provides multi-mission capability with a conﬁguration that can bechanged quickly and easily, thereby reducing turnaround times.
Since the beginning of the programme, a total of 477 C212 aircraft
have been delivered.
In 2012, Airbus Military delivered one C212 aircraft to Vietnam andone C212 aircraft to Thailand.

New Product Development
A400M. The A400M is an all-new military airlifter designed fortactical, strategic and logistic applications, intended to respond to
the needs of the world’s armed forces for military, humanitarian andpeacekeeping missions. Airbus Military’s objective is to develop aleadership position in the market for heavy military transport aircraft,which together with its medium and light military transport aircraft
will allow it to offer a full range of tactical military transport aircraft
to customers. The current order book comprises 174 aircraft, with
170 allocated to the seven launch customer nations and four to
one export customer, Malaysia. In addition, there are ten options(seven for Germany and three for the UK). Airbus Military will seek
additional export opportunities for the A400M while providing inservice support for customers following entry into service.
The ﬂight test campaign is progressing and had logged morethan 4,500 ﬂight test hours and around 1,500 ﬂights by the end of
2012. The programme target for 2013 is to achieve Initial Operating
Clearance (IOC) during the ﬁrst quarter and deliver a total of four
aircraft during the remainder of the year, with the ﬁrst customer
delivery (to the French Air Force) targeted for the second quarter.
At the end of 2012, four aircraft were in the ﬁnal assembly line
and 13 additional aircraft were in various stages of production. A
full production rate of 2.5 aircraft per month is targeted for 2015.

EADS REGISTRATION DOCUMENT 2012 — 33

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Information on EADS’ Activities
1.1 Presentation of the EADS Group

Customer Services
Approximately 850 delivered aircraft are supported by Airbus
Militar y’s Customer Ser vices organisation, which offers
personalised assistance to meet the needs of each operator. Airbus
Military applies the integrated logistic support (“ILS”) concept
throughout the life cycle of its products, from the ﬁrst design phaseright through to the end of their useful lifetimes. Airbus Military’s
main objective is to ensure that clients obtain the best operational
performance and beneﬁt from an integrated support service inaccordance with their needs, thus guaranteeing the success of
their missions.
Airbus Military support centres are strategically located throughout
the world to provide maintenance, repair and overhaul services on
equipment. This includes service centres in Europe (Seville andPoland) as well as a new centre in Mobile, Alabama (US) to cover
ﬂeet needs in North America. Airbus Military has also expanded its
service capabilities in the Middle East through the recent creationof a new subsidiary in Saudi Arabia (ECAS).

satisfaction and develop additional business opportunities
related to mission-critical services throughout the productlifecycle. As part of that strategy, Airbus Military Customer Services
created a dedicated organisation in 2012 in order to reinforce its
bidding capabilities, and to identify and capture aviation services
opportunities in the target segment.
Finally, Airbus Military has the capability to design, develop,
produce and give assistance with training at different levels ofcomplexity. An Airbus Military training centre is located in Seville,
which has space for six full-ﬂight simulators and a range of othercomputer-based training devices.

Production
A ﬁnal assembly line for light and medium aircraft is located at the
San Pablo factory in Seville (southern Spain). The facilities – which
are shared with the A400M – have a surface area of 600,000 m2.
A site nearby which is dedicated to customer services includes a
training centre with a surface area of 383,644 m2.

As new products are introduced, Airbus Military service centre
capabilities are continually updated to support them. For example,
Airbus Military is currently working on development of ILS tasks,
products and associated services to support the A400M’s entry
into service. Negotiations on in-service support for France (the ﬁrst
A400M customer), the United Kingdom and Turkey are on-going.

The aerostructures business and speciﬁc assemblies and subassemblies (such as the A400M horizontal stabiliser, MRTT boom,
C295 and C235 assemblies) are performed at the Tablada factoryin Seville with a surface area of 98,537 m2. Other assemblies,
composite and metallic parts are manufactured in Puerto de Santa
Maria (Cadiz), with a surface area of 78,840 m2.

Airbus Military Customer Services has steadily reinforced the role ofthe customer programme managers, in order to increase customer

Finally, at its Getafe factory, Airbus Military has specialisedengineering, design and manufacturing facilities, where it conducts,
among other things, work on the A330 MRTT.

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. This product range currently
includes light single-engine, light twin-engine, medium andmedium-heavy helicopters which are adaptable to all kinds of
mission types based on customer needs.

Eurocopter aims at further strengthening its position and increasing
its services revenues in order to achieve sustained proﬁ table
growth. To achieve these goals, Eurocopter is actively:

Eurocopter delivered 475 helicopters in 2012 (503 in 2011) andreceived 492 gross orders in 2012 (compared to 472 gross orders
in 2011). After accounting for cancellations, net order intake for2012 was 469 helicopters (compared to 457 helicopters in 2011).
Civil contracts accounted for 69% of this order volume, with military
sales representing the remaining 31%. As of 31 December 2012,
Eurocopter’s backlog of helicopter orders was 1,070 aircraft(compared to 1,076 aircraft in 2011).

With the aim of maintaining market leadership and technologicalsuperiority, Eurocopter will continue to strongly invest in the
renewal of its comprehensive products and services lines of civil
and military helicopters. Accordingly, Eurocopter is currently
focused on launching a number of platform upgrades and othernew developments, in particular in the medium and medium-heavy
segments of the market (e.g., EC175 and X4), so as to incorporate
the latest innovations. Through a combination of core technologicalsolutions with high-value customisation capabilities, Eurocopter
seeks to offer a cost-effective solution to both civil and militarycustomers with multi-mission needs. The latest products launchedon the market (like the EC145 T2 and the EC130 T2) have received
a very positive customer response.

In 2012, Eurocopter recorded total revenues of € 6.3 billion,
representing 11.1% of EADS’ revenues.

34 — EADS REGISTRATION DOCUMENT 2012

Implementing an Ambitious Productand Services Policy

Information on EADS’ Activities
1.1 Presentation of the EADS GroupIn 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. Supportand service efﬁciency is therefore a major focus in Eurocopter’slatest products developments, aimed equally at generating future
revenues and increasing customer satisfaction. Eurocopter may
also pursue external growth opportunities to increase its service
offering in the future, as it did through the acquisition of Vector
Aerospace in 2011.

Globalising to Capture Growth Worldwide
Eurocopter’s business model is heavily focused on exports, andgrowth of its global footprint will remain a priority for the future.
Building on its already strong implementation in countries like theUS, Australia and Brazil and its presence in 30 nations, Eurocopter
will seek to further develop its industrial footprint in potential
growth markets such as Russia, China and India. Through suchinternational expansion, Eurocopter intends to increase platform
sales and capture service opportunities in the after-sales market,
in line with customer proximity efforts.

Building a Leaner, More Streamlined Company
Following implementation of the “SHAPE” transformation
programme in 2010, Eurocopter is pursuing further improvement
initiatives to build an ever leaner and efﬁ cient company andthereby bolster its competitiveness. In this regard, Eurocopter
has launched the “LEAN” initiative across the whole value chain
in order to increase efﬁciency. This is intended to result in shorterproduct development time, faster production cycles and enhanced
customer service.

MarketMarket Drivers
The value of turbine helicopters delivered worldwide grew from anestimated € 18 billion in 2011 to an estimated € 20 billion in 2012,according to Eurocopter market data based on industry informationand internal evaluations. According to market forecasts publishedby The Teal Group, Honeywell and Rolls Royce, between 9,000
to 11,000 civil helicopters and 6,000 to 6,800 military helicopters
are expected to be built globally between 2012 and 2020. This
forecast, particularly with respect to the military sector, relies to alarge extent on large US development programmes.
Helicopters sold in the civil and parapublic sector, where Eurocopter
is a leader in each market segment, provide transport for corporate
executives, offshore oil operations, diverse commercial applications
and state agencies, including coast guard, police, medical andﬁre-ﬁghting services. Eurocopter market data indicates that in2012, worldwide deliveries of civil turbine helicopters stood at
approximately 880 units.
Demand for military helicopters is mainly driven by budgetary andstrategic considerations, and the need to replace ageing ﬂeets.
Eurocopter believes that the advanced age of current ﬂeets, theemergence of a new generation of helicopters equipped withintegrated systems and the on-going introduction of combat

helicopters into many national armed forces will contribute toincreased military helicopter procurement over the next few years.
Recent large-scale military programmes, such as those conductedby the US, Russia, China, India, South Korea, Saudi Arabia, Brazil
and most western European countries have conﬁrmed this trend.
Nevertheless, demand from the military sector has historically been
subject to large year-to-year variations due to evolving strategic
considerations, and short-term growth potential may be limited
due to increasing budgetary constraints on public spending insome regions like Europe, while other regions like Asia or Latin
America are expected to continue growing. Eurocopter market data
indicates that in 2012, worldwide deliveries of military helicoptersstood at 698 units.

Competition
Eurocopter’s main competitors in the civil and parapublic sector
are Agusta-Westland, Sikorsky and Bell Helicopter. The civil sector
has grown more competitive in recent years, with Sikorsky andAgusta-Westland having increased their market share in the heavy
and medium helicopter classes, while Bell has increased its market
share in the light helicopter classes.
The military sector 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
to international industrial cooperation, Eurocopter’s share of the
global market for military helicopters has increased. In 2012,
Eurocopter ranked third in the military sector by deliveries in amarket still dominated by US manufacturers and, more recently,
Russian manufacturers. Eurocopter’s main competitors in the
military sector are Agusta-Westland in Europe, and Sikorsky,
Boeing and Bell Helicopter (a division of Textron Inc.) in the US.
Russian manufacturers have been aggressive particularly in the
Asian and Latin American markets. Military sales accounted for
46% of Eurocopter’s revenues in 2012.

Customers
Almost 3,000 operators currently ﬂ y Eurocopter helicopters in
148 countries, forming a broad base for Eurocopter’s customer
support activities. 85% of Eurocopter’s customers have ﬂeets of
between one and four helicopters. Eurocopter’s principal militaryclients are European MoDs, as well as MoDs in Asia, the US and
Latin America. In the civil and parapublic sector, Eurocopter hasa 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 (such as Bristow, CHC, Era
and PHI) use Eurocopter helicopters for passenger transport andoffshore oil industry support. In the emergency medical services
market segment, Eurocopter helicopters dominate the ﬂ eetsof 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.

EADS REGISTRATION DOCUMENT 2012 — 35

1

Information on EADS’ Activities
1.1 Presentation of the EADS GroupEurocopter’s marketing strategy is strongly leveraging on thescale of its global network. Eurocopter’s network currently
encompasses 30 foreign subsidiaries, complemented by a rich
network of authorised distributors and service centres aimed ata large number of existing and potential clients. Eurocopter has
developed expertise in production licensing, joint production andsubcontracting agreements, and has been developing links withindustrial partners and suppliers in more than 35 countries.

Products and Services
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 mediumheavy helicopters, and is based on a series of new-generation platforms designed to be adaptable to both military and civil applications.
In addition, products share multiple 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(1), Civil & Military Utility(2), Corporate/Private
Emergency Medical, Tourism, Oil & Gas, Corporate/Private

Light Twin Engine
AS355NP/AS555

Parapublic(1), Utility, Corporate/Private

EC135/EC635

Emergency Medical, Parapublic(1), Oil & Gas, Corporate/Private

EC145/LUH (UH-72)/EC645

Civil & Military Utility(2), Emergency Medical, Parapublic(1), Shuttle

Medium (“Dauphin” family)
AS365 “Dauphin”/AS565 “Panther”

Parapublic(1) (in particular Coast Guard & SAR), Oil & Gas

EC155

Corporate/Private, VIP, Oil & Gas, Parapublic(1), Shuttle

EC175

SAR, Emergency Medical, Oil & Gas

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

AttackTiger

Combat, Armed reconnaissance/Escort(1) Parapublic includes homeland security, law enforcement, fire fighting, border patrol, coast guard and public agency emergency medical services.
(2) Civil Utility includes different kinds of commercial activities such as aerial works, electrical new gathering (ENG), passenger and cargo transport.

Civil Range
Eurocopter’s civil range includes light single-engine, light twinengine, medium and medium-heavy helicopters, which areadaptable to all mission types based on customer needs. To
maintain and strengthen its competitive edge in the civil sector,
Eurocopter is pursuing a fast-paced product range renewal. Thisentails upgrades of existing platforms as well as development for
the next generation of helicopters.
The newest products with short-term service entry targets are
the twin-engine EC145 T2, the lightweight single-engine EC130
T2, and the medium-class EC175. The EC145 T2 incorporates
Eurocopter’s latest innovations in terms of power, avionics, ﬂight

36 — EADS REGISTRATION DOCUMENT 2012

safety, noise reduction and mission equipment, with one of themost visible changes being a new tail-boom assembly with theFenestron shrouded tail rotor. For the EC130 T2 version – delivered
to customers starting in late 2012 – Eurocopter has incorporated a
new turboshaft engine and gearbox, providing a higher maximum
take-off weight and increased ﬂight speeds.
In addition, Eurocopter and Chinese AVIC II Corporation havelaunched the joint development and production (on a 50/50 basis)of the EC175, a civil helicopter in the 7-tonne category, which
will broaden both partners’ product ranges. The development
phase began in 2006; aircraft certiﬁcation and ﬁrst deliveries aretargeted for 2013.

Information on EADS’ Activities
1.1 Presentation of the EADS GroupFor its next-generation helicopter family, Eurocopter is actively
working on development of the X4 – the successor to the current
Dauphin family. Beneﬁtting from innovative features and technology,
the X4 will offer signiﬁcantly improved performance, lower fuelconsumption and noise emissions, while providing pilots with a
new way of ﬂying a helicopter.

Military Range
Eurocopter’s military range comprises platforms derived from its
commercial range (such as the EC725 derived from the EC225)
as well as purely military platforms for governmental development
programmes (the NH90 and the Tiger).
NH90. Designed for modern multi-mission capabilities and costeffectiveness throughout its lifecycle, the NH90 has been developed
as a multi-role helicopter for both tactical transport (TTH) andnaval (NFH) applications. The programme, mainly ﬁnanced by thegovernments of France, Germany, Italy and the Netherlands, hasbeen jointly developed by Eurocopter, Agusta-Westland of Italy
and Fokker Services of the Netherlands as joint partners in NatoHelicopter Industries (“NHI”) in direct proportion to their countries’
expressed procurement commitments. Eurocopter’s share of NHI
is 62.5%. There were 35 NH90 deliveries in 2012, for a cumulative
total of 135 deliveries as of the end of 2012.
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 and 6 by Spain; the UHT (antitank missile, air-to-air missile,
axial gun and rockets), 80 of which have been ordered by Germany;
the ARH (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. The Tiger has been recently deployedin Afghanistan by the German forces and by the French Armed
Forces since 2009 with three helicopters permanently on site, andin Libya for a few months in 2011. There were 10 Tiger deliveries in
2012, for a cumulative total of 96 deliveries as of the end of 2012.

1.1.4

Customer Services
With nearly 3,000 operators in 148 countries, Eurocopter has alarge ﬂeet of more than 11,827 in-service helicopters to support.
As a result, customer service activities to support this large ﬂeet
generated 42% of Eurocopter’s revenues for 2012. Eurocopter’scustomer service activities consist primarily of maintenance,
repairs, spare parts supply, training and technical support. In orderto provide efﬁcient worldwide service, Eurocopter has established
an international network of subsidiaries, authorised distributors
and service centres. Further, in order to meet globalising customer
demand, Eurocopter has been extending its range of customer
services. Eurocopter plans to pursue this expansion in order tooffer its customers advanced services that are tailor-made to theiroperations. Eurocopter’s service offering is not only limited to its
own helicopter ﬂeet but also comprises other original equipment
manufacturer (OEM) platforms as well as ﬁ xed-wing mission
aircraft.

Production
Eurocopter’s industrial activities are conducted in four primarylocations, two in France, one in Germany and one in Spain. The
French sites are Marignane, in southern France, and La Courneuve,near Paris. The German site is located in Donauwörth, and the
Spanish site is located in Albacete.
In the US, American Eurocopter has an industrial site in Columbus,
Mississippi, which is dedicated to the assembly and delivery of lightutility helicopters for the US government. In Australia, Australian
Aerospace assembles NH90 and Tiger for the country’s armed
forces. A new rotary-wing centre of excellence in Itajuba, Brazil, hasbeen inaugurated where Helibras (Eurocopter’s Brazilian subsidiary)
is now producing, assembling and maintaining EC725 helicopters
acquired by the Brazilian armed forces in addition to the Ecureuils.
Eurocopter will continue to pursue international expansion of its
global supply chain with an emphasis on US dollar-based andlow-cost sourcing in particular, while also seeking to rationalise its
supply network and streamline its internal industrial organisationin parallel.

Astrium

Introduction and Overview

Strategy

Astrium designs, develops and manufactures satellite systems,
orbital infrastructures and launchers, and provides satellite
telecommunication and geo-information services on behalf ofcommercial and government customers. Astrium conducts its
activities through three main Business Units: Astrium Satellites,
Astrium Space Transportation and Astrium Services. These
Business Units also provide launch services through Astrium’s
shareholdings in Arianespace (Ariane 5 launcher), Starsem (Soyuz
launcher) and Eurockot (Rockot launcher).

Through its established presence in Europe, Astrium offers
comprehensive expertise in all areas of the space industry(satellite systems, orbital infrastructures, launchers, services andequipment). Astrium’s strategy is to strengthen its market position
by being able to offer its customers a total solution to their needs,
ranging from a single piece of equipment to a more tailored, turnkey
solution involving launchers, satellite systems and terminals.

In 2012, Astrium recorded total revenues of € 5.8 billion, representing
10.3% of EADS’ revenues.

EADS REGISTRATION DOCUMENT 2012 — 37

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Information on EADS’ Activities
1.1 Presentation of the EADS Group

With the satellite and launcher markets still ﬂat in Europe, Astrium
will seek to enhance its proﬁtability by strengthening its services
and equipment activities in particular. To achieve its goals, Astrium
is actively seeking to:

Maintain its Strong Position in European Space
Markets
Public spending on space activities is relatively ﬂat in Europe due
to existing budget constraints, with further cuts expected to lead toincreasing competition in the future. Within this context, Astrium willseek to maintain its market share by providing the most innovative,
cost-effective solutions possible to customers.
In the launcher market, for example, Astrium Space Transportation
has continued to streamline its activities as prime contractor on
certain programmes (such as the Ariane 5 launcher and M51 missile
system), which has contributed to an increase in the reliability
and cost-effectiveness of Astrium’s activities in this area. Thiswas reﬂected most recently in the decision by the 2012 European
Space Agency Ministerial Conference to select Astrium as theprime contractor for developing the successor to the Ariane 5
launcher – the Ariane 5 ME (Mid-life Evolution) – to be launchedin 2017/2018.

Remain the Key Partner of Ministries of Defence
Astrium is committed to maintaining its role as a key partner
for ministries of defence in Europe and within NATO. As prime
contractor for a range of applications such as welfare and military
secured communications, Earth observation systems and early
warning systems, Astrium is already an important industrial partner
for the armed forces of France, Germany and the UK amongst
others. In addition, Astrium is prime contractor for the ballistic
missile systems for France’s deterrence forces and is undercontract with NATO to deﬁne various defence systems. As partof its strategy, Astrium will seek to leverage existing partnerships
and technologies to develop further business opportunities in the
defence ﬁeld.

Grow its Offering in Space Services and in
Equipment
Astrium will pursue its strategy of moving from being solely asystems supplier to a leading service provider in the areas ofsatellite telecommunication and geo-information services.
In 2012, the acquisition and integration of Vizada, a leading
telecommunication services company providing both mobile andﬁxed satellite communication services to business-to-business(B2B) customers, helped to further enhance Astrium’s position inthis growing sector.
Astrium will also continue to develop its equipment portfolio(electronic equipment, solar generators, attitude and orbit control
subsystem (AOCS) sensors, propulsion equipment, antenna
reﬂectors, etc.) to provide customers with reliable, standardisedand competitive products.

38 — EADS REGISTRATION DOCUMENT 2012

Extend its Global Presence
Astrium will continue to focus investment on innovation andon extension of its global presence to gain a foothold in export
markets. In 2012, for example, Astrium Americas was created inorder to further develop Astrium’s activities in the US and Canada.
Astrium Brazil and Astrium Singapore were also created, while inRussia, Energia (51%) and Astrium (49%) formed a joint venture“Energia Satellite Technologies” to build telecommunication andEarth observation satellites for the Russian market.

Continue to Transform and Innovate to Gain
Competitive Advantage
Launched in 2010 to better adapt to the challenging market
environment and to increase profitability, the transformation
programme AGILE (Ambitious, Globally growing, Innovative,
Lean and Entrepreneurial) strives to improve Astrium’s agility andcompetitiveness, while freeing up additional resources to invest
in innovation. At the same time, AGILE emphasises customer
orientation as well as employee empowerment.

Astrium Satellites
Astrium Satellites is a leader in satellite solutions, designing andmanufacturing all types of satellite systems, platforms, payloads,
ground infrastructures and space equipment for a wide range ofcivil and military applications. Its business covers four categories ofsatellite applications – telecommunication, observation, scientiﬁc/
exploration and navigation.
Astrium Satellites also includes an array of wholly owned
subsidiaries such as EADS CASA Espacio (Spain), which supplies
platforms, space-borne antennas, deployment mechanisms andharness subsystems for telecommunication satellites; CRISA(Spain), which designs and manufactures electronic equipment
and software for space applications; Tesat (Germany), a supplier oftelecommunication electronic equipment and subsystems; Dutch
Space (Netherlands), which provides solar arrays and otherspecialised items; SSTL (UK), which provides small satellites andpayloads; and Jena-Optronik, which provides space sensors andoptical systems.

Market
The commercial telecommunication satellite market is very
competitive, with customer decisions primarily based on price,technical expertise and track record. Astrium Satellites expects
this market to remain stable over the next ﬁ ve years at a levelof approximately 20-22 orders per year on average. Its maincompetitors are Loral, Boeing, Orbital and Lockheed Martin in
the US, Thales Alenia Space in France and Italy, and Information
Satellite Systems Reshetnev in Russia. Astrium Satellites will seek
to reinforce its position in this market through emphasis on its
technical expertise, track record and cost effectiveness.
In the public market for Earth observation, scientiﬁc/explorationand navigation satellites, competition in Europe is organised ona national and multinational level, primarily through the European
Space Agency (“ESA”) and the European Commission. New

Information on EADS’ Activities
1.1 Presentation of the EADS Groupbudgets were approved at the 2012 ESA Ministerial Conference
and will pave the way for future European programmes in which
Astrium Satellites may seek to participate, such as METOP secondgeneration weather satellites, next-generation telecommunication
satellites as part of the ARTES programmes, next-generation
European navigation systems, new environmental Earth observation
satellites (Earth Explorers, GMES) and scientiﬁc missions. There isalso considerable export demand for Earth observation systems,
for which EADS is a leading provider. Astrium expects the export
market to continue growing over the medium-term.
For military customers, demand for telecommunication andobservation satellites has increased in recent years. The Skynet 5/
Paradigm contract in the UK, the SATCOM Bw contract in Germany,
the Yahsat contract in the United Arab Emirates, the contracts for
optical reconnaissance satellites in France and the Paz SAR Earthobservation contract in Spain demonstrate the positive trend in
this market.
The equipment segment can rely on a stable European market,
with potential growth to come from developing space countries
as well as the US.

Products and Services
Telecommunication s atellites. Astrium Satellites produces
telecommunication satellites that may be used for civil or military
applications, such as television and radio broadcasting, ﬁxed andmobile communication services and Internet broadband access.
Current Astrium geostationary telecommunication satellites are
based on the Eurostar family of platforms (69 ordered to date),the latest version of which is the Eurostar E3000.
In 2012, Astrium Satellites signed contracts for two commercial
telecommunication satellites for Russian operator RSCC
(Express AM4R and AM7) and for the Arabsat 6B augmented
mission. It launched four telecommunication satellites in 2012:
Yahsat 1B (April 2012), Astra 2F (September 2012), Eutelsat 70B(December 2012) and Skynet 5D (December 2012).
Observation and s cientiﬁ c/e xploration s atellites. Astrium
Satellites supplies Earth observation satellite systems including
ground infrastructures for both civil and military applications.
Customers can derive signiﬁ cant beneﬁ ts from the common
elements of Astrium’s civil and military observation solutions, whichallow the collection of information for various applications, such as
cartography, weather forecasting, climate monitoring, agriculturaland forestry management, mineral, energy and water resource
management, as well as military reconnaissance and surveillance.
Astrium Satellites also produces scientiﬁc satellites, which are
tailor-made products adapted to the speciﬁc requirements of themostly high-end mission assigned to them. Applications include
astronomical observation of radiation sources within the universe,
planetary exploration and Earth sciences.
Astrium Satellites designs and manufactures a wide range of highly
versatile platforms, optical and radar instruments and equipment.
Astrium Satellites is the prime contractor for complex missions
such as: Pléiades, three small and highly agile Earth observation
satellites for French and Spanish civil and military applications,able to take daily pictures of every given point on Earth; Swarm, aclimatology satellite monitoring the evolution of the Earth’s magneticﬁ elds; Gaia, a global space astrometry science mission; Bepi
Colombo, an exploration mission to Mercury; EarthCARE, a joint
European-Japanese cloud and aerosol mission; SeoSAR/Paz, aradar Earth observation system for the Spanish government; andthe Spot 6 and Spot 7 high resolution Earth observation satellites
for Astrium Services (Spot Image).
In 2012, Astrium was selected by ESA as prime contractor for the
Solar Orbiter mission that will perform close-up observation of
the sun. Solar Orbiter is the ﬁrst mission in ESA’s Cosmic Vision
programme to start its implementation phase and is scheduled forlaunch in 2017. In addition, Astrium Satellites was recently selectedby ESA to provide the EUCLID payload, and NASA selected Astrium
in 2012 to build the two Grace follow-on satellites, a mission to
study the Earth’s gravity ﬁeld. The German Space Agency DLR
also selected Astrium to lead the ﬁrst phase of DEOS, a German
robotic mission to demonstrate the technology to repair, refuel or
de-orbit satellites.
Astrium Satellites launched three Earth observation satellites
in 2012: Spot 6 (September 2012), Metop B for EUMETSAT(September 2012) and Pleiades 2B (December 2012).
Navigation satellites. Astrium Satellites plays a major industrial
role in the new “Galileo” European navigation satellite system,
which delivers signals enabling users to determine their geographic
position with high accuracy and is expected to become increasingly
signiﬁ cant in many sectors of commercial activity. Astrium is
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 the ﬁrst four satellites of
the constellation and part of the ground infrastructure for Galileo,
followed by the testing of this partial system. After the successful
launch of the ﬁrst two Astrium Galileo IOV satellites in 2011, thesecond pair of Astrium IOV satellites were launched in late 2012.
Astrium will play an active role in the Galileo full operation capability
phase (“FOC”) with a nearly 50% work share, including providing
the payloads for the ﬁrst 22 FOC satellites.
Satellite p roducts. Astrium offers an extensive portfolio ofembedded subsystems and equipment for all types of space
applications: telecommunications, Earth observation, navigation,scientiﬁc missions, manned spaceﬂight and launchers. In 2012,
Astrium Satellites’ Products unit delivered major equipment forthe programmes Meteosat Third Generation, BepiClombo, SolO,EDRS, Sentinel 4 and 5. In addition to stable business with existingcustomers in the US and Asia, new customers were acquired in
Russia and Singapore. The signature of export contracts on thedelivery of equipment for the next generation GLONASS navigation
system was a decisive achievement towards a long-term supplier
status for this Russian programme.

Astrium Space Transportation
Astrium Space Transportation is the European space infrastructureand space transportation specialist. It designs, develops andproduces Ariane 5 launchers, the Columbus laboratory and

EADS REGISTRATION DOCUMENT 2012 — 39

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Information on EADS’ Activities
1.1 Presentation of the EADS Groupthe Automated Transfer Vehicle (“ATV”) cargo carrier for theInternational Space Station (“ISS”), ballistic missile systems
for France’s deterrence forces, propulsion systems and spaceequipment.

Orbital Infrastructure and Space Exploration
The orbital infrastructure segment comprises manned andunmanned space systems. The ISS, together with related
vehicle and equipment development programmes and services,
constitutes the predominant ﬁ eld of activity in this segment.
Astrium Space Transportation is the prime contractor under an
ESA contract relating to two key elements of the ISS: the spacelaboratory (“Columbus”) and the ATV cargo carrier. Moreover,
Astrium is responsible for managing the operation and use of theEuropean elements on the ISS under an ESA contract.

MarketDemand for orbital infrastructure systems originates solely frompublicly funded space agencies, in particular from ESA, NASA,
Roscosmos (Russia) and NASDA (Japan). Such systems are usuallybuilt in cooperation with international partners. In addition to the
Columbus and ATV projects, ESA is responsible for additional ISS
components for the station’s construction and operational phases.
National space agencies, such as DLR and CNES, are also involvedin the development of experimental facilities to be used on the ISS.

Products and Services
Astrium Space Transportation has been the prime contractor forthe development and integration of Columbus. Columbus is apressurised module with an independent life-support system.
It provides a full-scale research environment under microgravity
conditions (material science, medicine, human physiology, biology,
Earth observation, ﬂuid physics and astronomy) and serves asa test-bed for new technologies. In 2011, ESA awarded Astrium
Space Transportation a contract to manage the continued
operation of the European components of the ISS as the leadpartner in an industrial consortium. The contract represents theﬁrst phase of a long-term service agreement for the entire planned
service life of the ISS until 2020.
Astrium Space Transportation is also the prime contractor forthe development and construction of the ATV cargo carrier,designed to carry fuel and supplies to the ISS and to provide reboost capability and a waste disposal solution. Following the ﬁrst
two successful launches, the third ATV, “Edoardo Amaldi”, wassuccessfully launched in 2012. The fourth ATV “Albert Einstein” wasshipped to Kourou in August 2012 for ﬁnal assembly and testingand is expected to be launched in April 2013.
The 2012 ESA Ministerial Conference has also decided to develop
a module service for the US Orion programme for human space
exploration. Astrium Space Transportation will be the prime
contractor for this programme referred to as MPCV-SM (Multiple
Purpose Crew Vehicle – Service Module), which will be based on
ATV technology.

Launchers & Launch Services
Space systems (including satellites, orbital infrastructure elements
and interplanetary probes) depend on expendable rocket powered
multi-stage launch vehicles to place them into orbit. Astrium SpaceTransportation is active in two distinct businesses: (i) designing andmanufacturing launchers for both civil and military purposes, and(ii) providing launch services through its interests in Arianespace,
Starsem and Eurockot.
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 SpaceTransportation also supplies all Ariane 5 stages, the equipment
bay, the ﬂ ight software as well as numerous sub-assemblies.
Additionally, Astrium Space Transportation is the prime contractor
for ballistic missile systems to the French State. It is responsible forthe development, manufacturing and maintenance of submarinelaunched missiles and related operating systems.

Market
The market for commercial launch services continues to evolve.
Competitive pressure is increasing in light of other competitors
entering or coming back into the market. The accessible market
to Arianespace for commercial launch services for geostationary
satellites is expected to remain stable at around 20 payloads
per year. However, due to various factors (such as technology
advances and consolidation of customers), this ﬁgure remains
volatile. This market does not include institutional launch services
for the US, Russian or Chinese military and governmental 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 andstate-ﬁnanced development work, Astrium Space Transportation
performs substantial maintenance work on the ballistic missile
arsenal to ensure system readiness over the life span of theequipment, 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 theﬁ eld of launch services through shareholdings in Arianespace(for heavy-lift launchers), Starsem (for medium-lift launchers) andEurockot (for small-lift launchers):— Arianespace. Astrium is Arianespace’s second largest
shareholder (after CNES) with a 32.5% stake (direct andindirect), and its largest industrial shareholder. Arianespace isthe world’s largest commercial launch service provider in termsof total order book. Arianespace markets and sells the Ariane
launcher worldwide and carries out launches from the Guiana
Space Centre in Kourou, French Guiana.
In 2012, Arianespace signed a total of ten launch contracts forgeostationary satellites. It conducted seven Ariane launches,
which placed 12 telecommunication satellites and one ATV

40 — EADS REGISTRATION DOCUMENT 2012

Information on EADS’ Activities
1.1 Presentation of the EADS Group

into orbit. Since the first Ariane 5 launch in 1996, 67 Ariane 5
rockets have been launched with 53 successful launches ina row since Astrium Space Transportation became the prime
contractor in 2003. In 2012, Arianespace performed the firstlaunch of Vega from Kourou. Arianespace is now able to provide
a full range of launch services with a 3 launchers, Vega from
1 to 20 payload class.

— 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
Samara Space Centre (25%). Through Arianespace, Starsem
markets launch services by Soyuz launchers for medium-weightspacecraft into low or sun-synchronous orbits as well as forinterplanetary missions. In 2012, Starsem performed 10 Soyuz
launches from Baikonour and Plesetsk, including to launch the
Astrium built Metop B.

— Eurockot. Astrium Space Transportation (51%) and Khrunichev

In 2010, the French Defence Procurement Agency and Astrium
Space Transportation signed a contract covering the development
and production of the second version of the M51 strategic missile(M51.2), which helps to secure Astrium Space Transportation’s
capabilities in this ﬁeld. In addition, Astrium Space Transportation
manages the operational maintenance of the M51 missile systemon behalf of the French armed forces. At the end of 2011, Astrium
Space Transportation received a ﬁrst design study contract in orderto prepare the intended M51.3 new upper stage development.

Astrium Services
Astrium Services offers innovative, highly competitive end-toend tailored satellite telecommunication and geo-information
services on behalf of commercial and government customers.
As the European “one-stop-shop” provider for satellite services,
Astrium Services supports its customers’ business and criticalmissions even in the most remote areas.

(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. In 2012, the
ESA and Eurockot signed two new satellite launch service
contracts in support of the European GMES (Global Monitoring
for Environment and Security) programme. These contracts
cover the launch of the Sentinel-2A and Sentinel-3A satellites.
In 2013, Eurockot will launch the SWARM satellites of ESA,
designed and built by Astrium.

In 2012, Astrium Services integrated Vizada, a leading independent
provider of global satellite communications services acrosssectors such as maritime, aero, land, media, non-governmentalorganisations and government/defence. It offers mobile and ﬁxed
connectivity services from multiple satellite network operators, both
directly and through a network of 400 service provider partners.
The integration of Vizada has enhanced Astrium Services’ rangeof solutions and strengthened its presence globally.

Commercial l aunchers. Astrium Space Transpor tation
manufactures launchers and performs research and development
for the Ariane programmes. Member states, through ESA, fund thedevelopment cost for Ariane launchers and associated technology.

In April 2012, Astrium Services also completed its majority
stake acquisition in Space Engineering, the Italian specialist in
telecommunications and radar technology. This investment
demonstrates Astrium’s commitment to developing its activities
in Italy.

Astrium Space Transportation has been the sole prime contractor
for the Ariane 5 system since 2004. Given the commercial successof 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.
In 2012, Astrium Space Transportation delivered six Ariane 5
launchers to Arianespace.
In 2012, the European Union awarded a contract to Astrium SpaceTransportation to adapt Ariane 5 to make it capable of launchingfour Galileo satellites at the same time. In addition, the 2012 ESA
Ministerial Conference selected Astrium as the prime contractor for
developing the successor to the Ariane 5 launcher – the Ariane 5
ME (Mid-life Evolution) – to be launched in 2017/2018. Astrium
was also selected to perform an 18-month-study to deﬁne theconﬁguration of the Ariane 6 launcher to be launched in 2025.
Ballistic m issiles. Astrium Space Transportation is the only
company in Europe which designs, manufactures, tests andmaintains ballistic missiles. Following its contracts with the French
State for the submarine-launched ballistic missiles family of M1,
M2, M20, M4 and M45, Astrium Space Transportation is now
under contract to develop and produce the M51 with increased
technical and operational capabilities. With the successful 4th ﬂight
test and acceptance launch in 2010, the M51.1 is set to soon enter
service on France’s nuclear-powered ballistic missile submarines.

Products and Services
Military and g overnment c ommunications. In 2003, the
UK MoD selected Astrium Services to deliver a global military
satellite communication service for its next-generation Skynet 5
programme. This contract, pursuant to which Astrium Services
owns and operates the UK military satellite communication
infrastructure, allows the UK MoD to place orders and to pay forservices as required. Offering a catalogue of services, Astrium
Services delivers tailored end-to-end in-theatre and back-tobase communication solutions for voice, data and video services,
ranging from a single voice channel to a complete turnkey system
incorporating terminals and network management. The ﬁrst three
Skynet 5 satellites were launched in 2007 and 2008, enabling the
UK MoD to pronounce full operational service in 2009. In 2010, thecontract was extended by 30 months, including the manufacturing,launch, testing and operation of a fourth satellite Skynet 5D, which
was launched at the end of 2012.
In Germany, a team led by Astrium Services is providing Germany’s
ﬁrst dedicated satellites for a secure communication network. Twomilitary-frequency satellites and a comprehensive user groundterminal segment give the German Armed Forces (Bundeswehr) a
secure information resource for use by units on deployed missions,with voice, fax, data, video and multimedia applications. With the

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Information on EADS’ Activities
1.1 Presentation of the EADS Groupﬁrst satellite (ComSat Bw1) launched in 2009, the second (ComSat
Bw2) in 2010, and user terminals deployed in theatre, the systemcommenced operations in 2010. Astrium Services, through a joint
venture with ND Satcom operates the system on a long-term basis
and provides additional capacity from commercial operators.
In the US, following the integration of Vizada, Astrium Services
was awarded a Custom SATCOM Solutions (CS2) contractby the US General Services Administration as part of the US
government’s Future COMSATCOM Services Acquisition (FCSA).
This contract vehicle aims to provide customised, end-to-end,
satellite communication solutions to US government agencies
anywhere in the world.
In Abu Dhabi, Astrium Services (together with Thales Alenia
Space) won a contract with Yahsat, a wholly owned subsidiary of
Mubadala Development Company, for the construction of a securesatellite communication system. Astrium Services is managing
the programme and will supply the space segment (except forthe payload) and 50% of the ground segment. In 2011, after the
successful completion of in-orbit testing, the ﬁrst satellite Yahsat
1A was ofﬁcially handed over to Yahsat and the initial system
acceptance milestone was achieved. This milestone enables
Yahsat to provide the United Arab Emirates Armed Forces withmilitary satellite communications capabilities. The second satellite,
Yahsat 1B, was launched and delivered in 2012.
Commercial communications. With the integration of Vizada,
Astrium Services has expanded its satellite telecommunication in
the commercial market. Astrium Services’ more than 200,000 endusers beneﬁt from access to these satellite telecommunications
services wherever they are in the world. These include merchantshipping vessels, emergency response organisations, global media
companies, telecommunication and internet service providers,and business and civil aviation. Astrium Services works with thebroadest range of network providers in the industry, including
Inmarsat, Iridium, Thuraya, Eutelsat, Intelsat, Loral, New Skies and
SES. In November 2012, Astrium Services and SES extended VSAT
coverage and service to deliver connectivity to vessels around
Latin America as well as in the North Sea, Mediterranean Sea,
Red Sea and Gulf of Aden. With this contract, Astrium Services
will renew capacity on the SES-4 satellite to provide its customers
with managed services for maritime business communications,
tracking equipment and engine performance as well as ensuringthat crew at sea may stay connected.

1.1.5

Geo-information services. Astrium Services is a provider of both
optical and radar-based geo-information services to customers
including international corporations, governments and authorities
around the world. In 2012, Spot 6 and Pleiades 1B, two new opticalsatellites, were launched to complete the constellation providing
images distributed by Astrium Services. With Pleiades 1B joining
its twin, Pléiades 1A, in orbit, two very-high-resolution satellites
will operate for the ﬁrst time as a constellation, offering daily revisit
capability to all users. Daily revisit capability permits the imagingof any place on Earth daily, enabling conﬂict zones and crisis/
disaster areas to be visible in a matter of hours, for example,
wherever their location.
Spot 6 is the ﬁrst satellite of the “Astroterra programme”, which isdesigned to replace Spot 5 (owned by the French State with an
exclusive operating licence granted to Astrium Services) before
the end of its lifetime with a constellation of two Earth observation
satellites (Spot 6 and Spot 7) in order to maintain high resolution
capability through to 2023.
While Spot 6 & 7 will provide a wide picture over an area with its
60-km swath, Pléiades 1A and 1B will be able to offer, for the samezone, products with a narrower ﬁeld of view but with an increased
level of detail (50 cm). For instance, in case of ﬂooding or conﬂict,
Spot 6 can provide the big picture and Pléiades will bring the focus
over the most populated or damaged areas.
The successful launch of TerraSAR-X in 2007 – a radar-based
Earth observation satellite that provides high-quality topographic
information – enabled Astrium Services to signiﬁcantly expand its
capabilities by proposing new kinds of images based on radar.
TanDEM-X, its almost identical twin, was successfully launched in2010 and will further expand Astrium Services product portfolio
by allowing 3D imagery.

Production
Astrium’s main production facilities are located in France (Élancourt,
Les Mureaux, Bordeaux, Toulouse, Limeil-Brévannes), Germany(Backnang, Bremen, Friedrichshafen, Jena, Lampoldshausen,
Ottobrunn), Spain (Madrid), the UK (Portsmouth, Stevenage,
Guildford) and the Netherlands (Leiden). With the integration ofVizada, Astrium has enlarged its footprint in Norway (Oslo, Eik) andalso in the US (Santa Paula, Fort Collins, Southbury, Washington,
Glen Burnie, Rockville, Houston, Dallas, League City, Herndon).

CassidianIntroduction and Overview
Cassidian is a worldwide leader in global security solutions andsystems, providing lead systems integration and value-added
products and services to civil and military customers around theglobe: air systems (combat aircraft, military transport, mission
aircraft and unmanned aerial systems), land, naval and joint
systems, intelligence and surveillance, cyber security, secure

42 — EADS REGISTRATION DOCUMENT 2012

communications, test systems, missiles, services and support
solutions. As a lead systems integrator, Cassidian combines
the know-how to design, develop and implement overall systemsolutions by integrating across platforms, equipment and services.
In 2012, Cassidian recorded total revenues of € 5.7 billion,
representing 10.2% of EADS’ revenues.

Information on EADS’ Activities
1.1 Presentation of the EADS Group

Strategy
Cassidian is seeking to grow its defence and security revenues,
expand its services business and continue its global growth. To
achieve these goals, Cassidian is actively:

Focusing on Core Business Sectors
Within the context of increasing budgetary constraints on public
spending in its European home markets, Cassidian will seek tomaintain its leadership in core areas (such as combat aircraft,
missiles, electronics and systems) while simultaneously streamlining
its portfolio through selected investments and focusing its effort on
the most promising proﬁtable growth sectors such as:— the unmanned aerial systems market, which is a dynamic andgrowing sector within the aerospace industry. Cassidian’s
acquisitions of Surveycopter and Rheinmetall’s unmanned
aerial vehicle business over the past two years have enabled
Cassidian to offer a larger and more competitive portfolio in
this sector, thereby reinforcing its market position;— the security market, which is growing significantly across theworld with less constraints on establishing a global presence
than in the traditional defence sector. In order to securesustainable profitable growth in this segment, Cassidian willseek to concentrate on areas where it is best positioned (suchas border security and emergency response), while increasing
overall returns through development of more standardisedcustomer solutions and additional internal sourcing. Moreover,Cassidian will continue its move into the cyber security market
through organic development and selected acquisitions; and— the services market, where Cassidian will seek to enhance
its offering of comprehensive packages of mission criticalservices to its customers at home and abroad. This service
portfolio ranges from consultancy, concept development andsimulation, to through-life support of aerial platforms, fleet andflight service, training, operation and outsourcing.

Consolidating in Home Markets while Becoming
a Global Player
In order to prepare the way for long-term growth, Cassidian’s
home markets (France, Germany, Spain and the UK) continue
to play a crucial role despite the challenging budget situation.
Besides the consolidation of its business in these traditional homemarkets, Cassidian will seek to expand its industrial footprint inother markets with signiﬁcant growth potential, such as the Middle
East, South America and India. It intends to do so not only bytargeting key contract tenders, but also through development ofa long-term industrial presence in order to be considered as atrusted local player by potential customers.

MarketMarket Drivers
The defence and security market continues to be driven by rapidly
evolving security challenges and the need to respond to new
global threats. At the same time, economic conditions in the mainindustrialised countries—in particular Cassidian’s European homemarkets—are creating downward pressure on budget resources for
defence and security spending. Countries must therefore balance
funding priorities in order to plan for the broadest possible range
of operations, including homeland defence, stabilisation efforts,counterinsurgency and counterterrorism operations, or nation
state aggressors with growing sophistication and military means.
This has only served to reinforce the convergence of the traditionalroles of defence and security into a single set of customer needs,
a trend that Cassidian expects will continue.
Within the current economic climate, Cassidian believes that thestrongest opportunities for growth are in the Middle East, SouthAmerica and India, among others, where defence and security
budgets are growing quickly. With increasing needs and aging
equipment, these regions have the ﬁnancial strength necessary
to make future defence and security acquisitions.

Improving Competitiveness

Competition

Considering the ever stronger competition Cassidian faces acrossits entire portfolio in both its traditional and its new markets,
Cassidian is seeking to increase its competitiveness. In orderto do so, Cassidian has decided to launch a comprehensive
improvement programme called “Simplify”, with a focus on threelevers:The defence and security market is highly competitive, with
Cassidian facing competition from large- and medium-sized US
and European companies that also specialise in its key markets.
Its main competitors include Lockheed Martin, Dassault, Boeing,
Northrop Grumman, Thales, Motorola, General Dynamics,
Raytheon, other lead systems integrators and combat aircraft
manufacturers worldwide. Competitive factors include affordability,
technical and management capability, the ability to develop andimplement complex, integrated system architectures and the ability
to provide timely solutions to customers.

— improving cost structures through more efficient processes
and headcount reductions;— improving programme delivery through the application of LEAN
methodology as well as the development of standardisedcustomer solutions for global re-use and an enhanced internal
value chain; and— reducing complexity through a more streamlined organisation
with reduced bureaucracy, clear accountabilities and decision
making processes.

Cassidian’s major challenge is to develop business in newgeographic markets and high growth market segments globally so
as to compensate for stagnating or declining defence budgets in its
European home markets. In 2012 therefore, Cassidian continued toaccelerate its drive to globalise its business outside of Europe while
simultaneously seeking to consolidate its position in its European

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Information on EADS’ Activities
1.1 Presentation of the EADS Grouphome markets. It also pursued the renewal of its product portfolio
through the development of next-generation defence and security
products.

Customers
The nature of Cassidian’s business demands that it establish longterm relationships with its customers and, where possible, enter
into strategic partnerships with large international players in orderto sustainably expand the Division’s industrial footprint outside its
home markets. Key customers primarily include government andsecurity agencies, such as ministries of defence and the interiorand security forces, located not only in Cassidian’s European homemarkets but increasingly worldwide.

development of next generation systems for a common European
UAS (future European MALE). Finally, Cassidian contributes to the
Research and Technology programme “Agile UAV in net-centric
environment” for the German armed forces, using its companyﬁnanced BARRACUDA technology demonstrator.
A major partner with respect to military mission avionics for the
A400M, Cassidian assumes sub-systems responsibility for mission
management and defensive aids. Its offer comprises avionics
equipment, such as digital map units, ﬂight data recorders andobstacle warning systems for helicopters. In addition, Cassidian isdeveloping multi-sensor integration and data-fusion technology –a key future technology for network-enabled capabilities.

Security Systems and Solutions

Products and Services
Air Systems and Services
Air services. Cassidian offers its customers a full range of services
associated with operating their military air systems, including
maintenance, repair and overhaul (MRO), upgrades, logistics
optimisation, product-speciﬁ c training and integrated systemsupport centres. Cassidian has developed expertise in this area byconducting upgrade programmes for aircraft such as the Tornado
and C-160 Transall, among others.
Combat a ir systems. The Euroﬁghter multi-role combat aircraft(referred to as Typhoon for export outside of Europe) is Cassidian’s
ﬂagship product. The aircraft has been designed to enhance ﬂeet
efﬁciency through a single ﬂying weapon system capable of fulﬁllingboth air-to-air and air-to-ground missions.
The Euroﬁ ghter GmbH shareholders and subcontractors are
Cassidian (46% share), BAE Systems (33% share) and Alenia
Aermacchi (21% share). With regard to series production, therespective production work shares of the participating partners
within the Euroﬁghter consortium stand at 43% for Cassidian,
37.5% for BAE Systems and 19.5% for Alenia. Cassidian develops
and manufactures the centre fuselage, ﬂ ight control systems,
identiﬁcation and communication sub-systems, and the right wing
and leading edge slats for all aircraft, and is in charge of ﬁnal
assembly of aircraft ordered by the German and Spanish air forces.
As of 31 December 2012, in the Euroﬁghter programme, a total of
571 aircraft had been ordered by seven customers (UK, Germany,
Italy, Spain, Austria, Saudi Arabia and Oman), with a total of
355 aircraft delivered. Within the core programme, 472 aircraft
were ﬁrmly on order (with an additional 99 aircraft for export). A
total of 46 aircraft were delivered in 2012. Production of aircraftwithin the core programme is scheduled to last until 2017, whilefurther export opportunities are believed to exist worldwide.
Mission systems. Cassidian offers a full range of unmanned
mission air systems and mission avionics systems. In the ﬁeld of
unmanned aerial systems (“UAS”), Cassidian provides tactical UAS
like Tracker, Tanan and ATLANTE; medium-altitude long-endurance(MALE) systems like Harfang; and high-altitude long-endurance(HALE) systems like EuroHawk. Cassidian is also working on

44 — EADS REGISTRATION DOCUMENT 2012

Integrated s ystems. Cassidian is a provider of full systems
architecture and integration for military and security land-, sea-,
air- and space-based systems. Cassidian designs, integrates andimplements secure ﬁxed, tactical, theatre and mobile information
infrastructure solutions, including all of the services needed tosupport integrated mission systems and solutions. Cassidian is
also a designer and supplier of C4I systems (Command, Control,
Communications, Computers and Intelligence).
Cassidian’s lead systems integration offering includes the ability
to design, develop and integrate the widest possible range ofindividual platforms and subsystems into a single effective network.
Large systems integration has become increasingly important forcustomers engaged in border control and coastal surveillance,
as well as for non-military customers in areas such as homeland
security. Cassidian signed the world’s ﬁrst fully integrated borderand maritime security system in 2007 (the Qatar National Security
Shield), and is also the prime contractor in Saudi Arabia for thedevelopment of a national security programme as well as in
Romania for an integrated solution for border surveillance andsecurity.
Secure communication systems. Cassidian is a provider of digital
Professional Mobile Radio (“PMR”) and secure networks with morethan 200 networks delivered in 67 countries. Its solutions for PMR
enable professional organisations in various areas – such as public
safety, civil defence, transport and industry – to communicate
effectively, reliably and securely. Cassidian offers its customers
specialised PMR solutions based on TetraPOL, Tetra and P25
technologies. Cassidian’s PMR solutions were in use during events
like the Beijing Olympic Games and the Tour de France.
Cyber s ecurity. Cassidian has established a cyber security
branch to meet the growing cyber security needs of usersof critical IT infrastructure, including governments and global
companies,. Cassidian provides expertise and solutions to help
such organisations protect against, detect, prevent and respondto cyber threats. Cassidian has a long track record in providing themost sensitive secure IT and data handling and training solutions
to defence and security customers throughout France, Germany,
the UK and other NATO countries.

Information on EADS’ Activities
1.1 Presentation of the EADS Group

Sensors
Cassidian is a partner in the development of airborne multi-mode
radars and provides integrated logistics support, maintenance andupgrades. It is also involved in the development and applicationof next-generation active electronically scanned (AESA) radars
for air, naval and ground applications. In the area of air defence,
Cassidian produces mid-range radars for ship (TRS-3D/4D) andland (TRML-3D) applications. Synthetic aperture radars (SAR)
for reconnaissance and surveillance operations and airport
surveillance radars (ASR-S) are also part of the portfolio, alongwith the Spexer security radar family. A range of optronics solutions
completes Cassidian’s offering in this ﬁeld.
In the ﬁeld of electronic warfare, Cassidian supplies electronic
protection systems for military vehicles, aircraft and civil
installations, such as laser warning, missile warning and electronic
countermeasure units.

MBDA
Cassidian’s missile business derives from its 37.5% stake in MBDA
(a joint venture between EADS, BAE Systems and Finmeccanica).
MBDA offers missile systems capabilities that cover the whole
range of solutions for air dominance, ground-based air defence andmaritime superiority, as well as advanced technological solutions
for battleﬁeld engagement. Beyond its role in European markets,
MBDA has an established presence in export markets like Asia,
the Gulf region and Latin America.
The broad product portfolio covers all six principal missile system
categories: air-to-air, air-to-surface, surface-to-air, anti-ship, antisubmarine and surface-to-surface. MBDA’s product range also
includes a portfolio of airborne countermeasures such as missile
warning and decoy systems, airborne combat training and minecountermeasures. 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 System (MEADS) and the Scalp NAVAL ship andsubmarine-launched deep strike weapon.

application software. The versatility of test and services systems
means that a multitude of equipment and systems can be tested.
Signalis. Signalis is a provider of maritime safety and security
solutions and ofﬁcially started operating as of 1 January 2011.
Signalis regroups all activities of Sofrelog (acquired by Cassidianin 2006) and Atlas Maritime Security, a subsidiary of Atlas
Elektronik. Signalis is co-owned by Cassidian (60%) and Atlas
Elektronik (40%). Signalis provides integrated mission critical realtime systems using radar and other wide-area sensors, mostly formaritime applications, typically vessel trafﬁc services and coastal
surveillance.
Atlas Elektronik. Atlas Elektronik GmbH, headquartered in
Bremen (Germany), is a joint venture of ThyssenKrupp (51%) and
EADS (49%). Atlas Elektronik provides maritime and naval solutions
above and below the ocean surface. The company holds a leading
position in all ﬁelds of maritime high technology from commandand control systems to coastal surveillance systems and in-housesupport.
Larsen & Toubro. In February 2011, Indian authorities approveda joint venture between the Indian engineering company
Larsen & Toubro and Cassidian in the ﬁeld of defence electronics(with stakes of 74% and 26%, respectively). The joint venture
cooperates closely with Cassidian’s new engineering centre in
Bengaluru (India), where systems design and engineering activities
are carried out in the ﬁ elds of electronic warfare, radars andavionics for military application.
Emiraje Systems. Emiraje Systems LLC is a joint venture
established in 2009 between C4 Advanced Solutions LLC (C4AS)(51%), a wholly owned subsidiary of the Emirates Advanced
Investments group, and Cassidian (49%) for the purpose of building
a strong lead systems integration capability within the United ArabEmirates and bringing the most advanced C4ISR solutions toUnited Arab Emirates customers and to the wider circle of Middle
East customers.

Production
Other Activities and Joint Ventures
Test and services. The test and services product range covers
the entire life cycle of electronic equipment and systems. It includes
comprehensive solutions and associated services that rely on test
services and systems. The solutions are either integrated or soldas stand-alone elements: instrumentation, system software and

1.1.6

In addition to facilities in its European home markets of Germany,
France, Spain and the UK, Cassidian operates in more than
80 countries and has a worldwide network of ofﬁces. Important
production sites are located in Germany (Manching, Ulm) and Spain(Getafe). Cassidian operates an engineering centre in Bengaluru,
India.

Other Businesses

Regional Aircraft — ATR
ATR (Avions de Transport Régional) is a world leader in the
50- to 74-seat regional turboprop aircraft market. ATR is an equal
partnership between EADS and Alenia Aermacchi (Finmeccanica
Group), with EADS’ 50% share managed by Airbus. Headquarteredin Toulouse in the south of France, ATR employs more than
930 people, with major operations in the Midi-Pyrénées andAquitaine regions of France. ATR was launched in 1981.

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Information on EADS’ Activities
1.1 Presentation of the EADS Group

MarketProduction

The regional turboprop aircraft industry has experienced growing
concentration over the years. During the 1990s, a numberof regional aircraft manufacturers merged, closed or ceased
production, leading to the withdrawal from the market of BAe,
Beechcraft, Fokker, Saab and Shorts, among others. Currently, theworldwide market for turboprop aircraft of 50-70 seats in production
is dominated by two manufacturers: ATR and Bombardier.

The ATR fuselage is produced in Naples, Italy, and ATR wings are
manufactured in Merignac near Bordeaux, France. Final assembly
occurs in Saint Martin near Toulouse on the Airbus production site.
Flight-testing, certiﬁcation and deliveries also occur in Toulouse.
ATR outsources certain areas of responsibility to Airbus, suchas wing design and manufacturing, ﬂight-testing and information
technology.

After a number of years of declining activity, the regional turboprop
aircraft market has experienced sustained growth since 2005 dueto the advantages of turboprop aircraft over jet aircraft in terms offuel efﬁciency and CO2 emissions. In 2012, ATR delivered 64 newaircraft (compared to 54 in 2011) and recorded orders for 74 newaircraft (compared to 157 in 2011).
As of 31 December 2012, ATR had a backlog of 221 aircraft(compared to 224 in 2011). The current backlog represents close
to three years of deliveries, with at least 80 targeted for 2013.
The relative lower operating cost and reduced CO 2 emissionsof turboprop aircraft, in an ever passenger-yield constrained
environment, are expected to lead to sustained market activity
over the coming years.

Products and Services
ATR 42 and ATR 72. Commencing with the ATR 42 (50-seat),which entered service in 1985, ATR has developed a family of highwing, twin turboprop aircraft in the 50- to 74-seat market that aredesigned for optimal efﬁciency, operational ﬂexibility and comfort.
In 1995, in order to respond to operators’ increasing demands
for comfort and performance, ATR launched the ATR 42-500 and
two years later, the ATR 72-500 (70-seat) series. In 2007, ATR
launched the new -600 series with improved engines, new avionics
and a new cabin. Like Airbus, the ATR range is based on thefamily concept, which provides for savings in training, maintenance
operations, spare parts supply and cross-crew qualiﬁcation. By
the end of 2012, ATR had delivered 1,033 aircraft (422 ATR 42
and 611 ATR 72).
Customer service. ATR has established a worldwide customer
support organisation committed to supporting aircraft over theirservice life. Service centres and spare parts stocks are locatedin Toulouse, Paris, the greater Washington D.C. area, Miami,
Singapore, Bangalore, Auckland, Kuala Lumpur, Toronto andJohannesburg.
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 thepast, clients for such used aircraft have subsequently purchased
new aircraft as they have gained experience in the operation of
ATR turboprops.

46 — EADS REGISTRATION DOCUMENT 2012

EADS Sogerma
EADS Sogerma is a wholly owned subsidiary of EADS which
specialises in aerostructures and cabin interior activities. The
company designs and manufactures major aerostructure elements
in metal and composite for commercial and military aircraft and isalso 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 market, EADS Sogerma engages in thedesign, manufacturing and assembly of Airbus aircraft sections(A318/A320/A330), 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 market, EADS Sogerma designs and manufactures ﬁrst
and business class seats for large commercial aircraft.
EADS Sogerma employs approximately 2,000 people and has threesites in France (Rochefort, Mérignac and Toulouse). The Mérignac
site is entirely dedicated to the ATR business. The Toulouse site(design ofﬁ ce branch) is located near Airbus. Rochefort, thelargest site in terms of staff, covers a wide spectrum of activities:
aerostructure, seats and cockpit seats. EADS Sogerma also has a
subsidiary in Morocco (Maroc Aviation) as well as two subsidiaries
specialised in composites: CAQ (Composite Aquitaine) in France
and CAL (Composite Atlantic) in Canada.

EADS North America
EADS North America is the US-based subsidiary of EADS.
Headquartered in Herndon, Virginia, the company offers a broadarray of advanced solutions for ﬁxed- and rotary-wing aircraft,homeland and cyber security, telecommunications, defence
electronics and avionics, and services. EADS North America
business operations include the activities of: American Eurocopter
Corporation; Airbus Military North America; EADS Supply &Services; EADS North America Test and Services; FairchildControls Corporation and Cassidian Communications.
EADS North America’s presence in the US defence and homeland
security sectors continues to grow. As prime contractor for the
US Army’s UH-72A Light Utility Helicopter, EADS North America
has delivered more than 200 helicopters to date. EADS has also
supplied more than 100 Eurocopter HH-65 helicopters to the Coast
Guard for its homeland security missions.

Information on EADS’ Activities
1.1 Presentation of the EADS Group

Daher-Socata
In 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 ofexpertise (manufacturing, services and transport) built into a global
offer.

1.1.7

In aerospace and defence, Daher-Socata is both a manufacturer
and a tier-1 supplier of equipment and services with approximately
7,500 employees and a presence in 14 countries. Daher-Socata
produces aerostructures and systems, fitted sections andairframes. In the under 8.6-tonne category, it produces aircraftwith options dedicated to the civil (business aircraft) and military(multi-role aircraft) markets.

Investments

Dassault Aviation
EADS holds a 46.3% stake in Dassault Aviation (listed on Euronext
Paris), with Groupe Industriel Marcel Dassault holding a 50.6%
stake and a free ﬂoat of 3.1%. Dassault Aviation itself holds a 26%
stake in Thales, which makes it the second largest shareholder ofThales behind the French state.
Dassault Aviation is active in the market for military jet aircraft andbusiness jets. Founded in 1936, Dassault Aviation has delivered
more than 8,000 military and civil aircraft to purchasers in morethan 80 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 to avoid any potential conﬂict between
the military products of Dassault Aviation and EADS (Rafale andEuroﬁghter) and to facilitate a “Chinese wall” approach, EADS’
Dassault Aviation shareholding is managed by EADS Corporate,
whereas the Euroﬁghter programme is managed by Cassidian.
In 2012, Dassault Aviation recorded orders totalling € 3.3 billion(compared to € 2.9 billion in 2011), including 58 net orders for
Falcon business jets (compared to 36 net orders in 2011).
Consolidated revenues amounted to € 3.9 billion in 2012 (comparedto € 3.3 billion in 2011), with consolidated net income of € 510 million(compared to € 323 million in 2011). Dassault has approximately
11,500 employees, of which more than 60% are based in France.

Military Jet Aircraft
Dassault Aviation offers wide expertise in the design andmanufacturing of the latest generation military jet aircraft.
Rafale. The Rafale is a twin-engine, omni-role combat aircraft
developed for both airforce and navy applications. To date,
286 Rafale aircraft have been ordered by the French MoD. In
2012, Rafale was selected by the Indian MoD to enter into exclusive
negotiations for the sale of 126 aircraft. Negotiations are still inprogress. From 2013 and onwards, the new Rafale “Omnirole” will
be delivered, with improvements such as the RBE2-AESA radar,
missile launch detector and optronics.
Mirage 2000. The Mirage 2000 family reached the end of its
production phase in 2006. Approximately 470 Mirage 2000 aircraft
are in service with nine air forces worldwide.
nEUROn. Dassault Aviation is the prime contractor for thedevelopment of the unmanned combat air vehicle demonstrator,nEUROn. The programme was open to European cooperation andﬁve countries have decided to participate and share the skills of
their aerospace industries: EADS CASA (Spain), SAAB (Sweden),HAI (Greece), RUAG (Switzerland) and Alenia Aeronautica (Italy).
The nEUROn demonstrator made its ﬁrst ﬂight in 2012 and will be
performing test ﬂights in France until 2014.
MALE UAV system. Following the French-UK joint Declaration
on Defence and Security Co-operation signed in November 2010,
Dassault and BAE Systems have agreed to work together on
the next generation of medium-altitude long endurance (MALE)
unmanned air surveillance system. The common product would becalled Telemos. Telemos is planned to have a maximum take-off
weight of about 8 metric tonnes, and a wing-span of 24 metres.
A jointly funded, competitive assessment phase was conducted
in 2011, with a view to new equipment delivery between 2015
and 2020.
F-Heron TP. In 2011, the French MoD decided to enter into
negotiations with Dassault Aviation with a view to supplying the
French armed forces with a MALE UAV in 2014. This system isbased on the Heron TP, originally commissioned by the Israeli
government from Israel Aerospace Industries for its own purposes.
It builds on the preliminary studies carried out with Israel Aerospace
Industries for EUROMALE and for SDM.

Business Jets
Dassault Aviation offers a wide range of products at the top end of
the business jet sector. The family of Falcon business jets currently
includes the Falcon 7X, the 900 LX and the 2000 LX & S. In-service
Falcons currently operate in over 65 countries worldwide, ﬁlling
corporate, VIP and government transportation roles.

Aerostructures, Aircraft Conversion and Floor
PanelsEADS Elbe Flugzeugwerke GmbH — EFW
EADS EFW (consolidated within Airbus) combines various aviationand technology activities under a single roof: development andmanufacturing of ﬂat ﬁbre-reinforced composite components forstructures and interiors, the conversion of passenger aircraft into
freighter conﬁguration, maintenance and repair of Airbus aircraft
as well as engineering services in the context of certiﬁcation andapproval.

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Information on EADS’ Activities
1.1 Presentation of the EADS GroupIn the area of composite structures and interiors, EADS EFWdevelops, designs and manufactures ﬂat sandwich components
for structures and cabin interiors for the entire Airbus family. The
product range includes ﬂoor and ceiling panels, cargo linings andbullet-proof cockpit doors. The passenger-to-freighter conversion
business comprises a standard extensive modiﬁcation, carriedout by order of the civil aircraft owner. The freighter conversion
market comprises cargo airlines, aerospace companies with small
aircraft ﬂeets as well as ﬁnance groups. To date, more than 170
freighter aircraft have been converted for 39 customers throughout
the world.

Aerolia
Aerolia is a wholly owned subsidiary of EADS (consolidated
within Airbus) which was formed from the spin-off of the former
French Airbus sites in Méaulte and St-Nazaire Ville pursuant tothe aerostructures reorganisation strategy initiated under Power8.
Aerolia has approximately 2,900 employees who work on thedesign and manufacturing of around 6 million detail parts andpanels and more than 500 sections of 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 three sites: Méaulte (1,350 employees),
St-Nazaire (650 employees) and Toulouse (400 employees). In
2009, a fourth site was launched in Tunisia (target is to have
750 employees by 2014). The design ofﬁce, based in Toulouse,combines the skills of approximately 250 engineers and employees,
coming for the most part from the Airbus design ofﬁces.

1.1.8

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 the spin-offof the former German Airbus sites in Nordenham and Varel andthe former EADS site in Augsburg pursuant to the aerostructures
reorganisation strategy initiated under Power8. Premium AEROTEC
has its own development unit with its main facilities at its Augsburg
site and ofﬁ ces in Bremen, Hamburg, Munich/Ottobrunn andManching. The management headquarters for the operational units
are in Varel, while the company itself is headquartered in Augsburg.
Premium AEROTEC GmbH also has a plant for processing aircraftcomponents in Ghimbav/Brasov County in Romania.
The core business of Premium AEROTEC is focused on structuresand manufacturing 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 design of
new concepts in such ﬁelds as carbon composite technologies.

Insurance

EADS Corporate Insurance Risk Management (“IRM”) is an
integrated corporate ﬁnance function established to proactively
and efﬁciently respond to risks that can be treated by insurance
techniques. IRM, centralised at EADS headquarters, is accordingly
responsible for all corporate insurance activities and related
protection for the Group and is empowered to deal directly with
the insurance and re-insurance markets. A continuous task of IRM
in 2012 was the development, design and structuring of efﬁcientand appropriate corporate and project-related insurance solutions
based on the individual needs of the Divisions.
IRM’s mission includes the definition and implementation of
EADS’ strategy for insurance risk management to help ensurethat harmonised insurance policies and standards are in place
for all insurable risks underwritten by the Group. A systematic
review, monitoring and reporting procedure is in place, in close
relationship with insurance managers in charge of the Divisions,to assess the exposure and protection systems applicable to all
EADS sites, aiming at the:— continuous and consistent identification, evaluation andassessment of insurable risks;

48 — EADS REGISTRATION DOCUMENT 2012

— initiation and monitoring of appropriate mitigation and risk
avoidance measures for identified and evaluated insurable
risks; and— efficient, professional management and transfer of theseinsurable risks to protect the Group adequately against thefinancial consequences of unexpected events.
EADS’ insurance programmes cover high risk exposures related to
the Group’s assets and potential liabilities, as well as risk exposuresrelated to employees.
Asset and liability insurance policies underwritten by IRM for theGroup 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;

Information on EADS’ Activities
1.1 Presentation of the EADS Group— commercial general liabilities including non-aviation and nonspace product liabilities and risks related to environmental
accidents; and— Director and officer liability.
Claims related to property damage and business interruption arecovered 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 the insurance policies
as outlined above.
Group employee-related insurance policies cover risks such as:— personal accidents;— medical and assistance support during business trips andassignments;— company automobiles; and— personal and property exposure during business trips.
Amounts insured for such Group employee-related policies
adequately cover the respective exposure.
EADS follows a policy of seeking to transfer the insurable risk
of EADS to external insurance markets at reasonable rates, on

1.1.9

customised and sufﬁcient terms and limits as provided by theinternational insurance markets. All insurance policies are required
to satisfy EADS’ mandatory standards of insurance protection.
However, to be more independent from the volatilities of theinsurance markets, EADS uses the capabilities of a corporateowned re-insurance captive as a strategic tool with respect tothe property damage, business interruption programme and theaviation insurance programme. The captive is capitalised andprotected according to European legal requirements so as to help
ensure its ability to reimburse claims, without limiting the scope ofcoverage of the original insurance policies or additionally exposing
the ﬁnancial assets of EADS.
The insurance industry remains unpredictable in terms of its
commitment to provide protection for large industrial entities. Theremay be future demands to increase insurance premiums, raise
deductible amounts and limit the scope of coverage.
In addition, the number of insurers that have the capabilities andﬁnancial strength to underwrite large industrial risks is currently
limited, and may contract further in light of new solvency
requirements. No assurance can be given that EADS will be able
to maintain its current levels of coverage on similar ﬁnancial terms
in the future.

Legal and Arbitration Proceedings

EADS is involved from time to time in various legal and arbitration
proceedings in the ordinary course of its business, the mostsigniﬁcant of which are described below. Other than as described
below, EADS is not aware of any signiﬁcant governmental, legal
or arbitration proceedings (including any such proceedings which
are pending or threatened), during a period covering at least theprevious twelve months which may have, or have had in the recent
past signiﬁcant effects on EADS N.V.’s or the Group’s ﬁnancial
position or proﬁtability.
Regarding EADS’ provisions policy, EADS recognises provisions
for litigation and claims when (i) it has a present obligation fromlegal actions, governmental investigations, proceedings andother 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. Although
EADS believes that adequate provisions have been made tocover current or contemplated general and speciﬁc litigation andregulatory risks, no assurance can be provided that such provisions
will be sufﬁcient. For the amount of provisions for litigation andclaims, see “— Notes to the Consolidated Financial Statements(IFRS) — Note 25C: Other provisions”.

WTO
Although EADS is not a party, EADS is supporting the European
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 launcheda parallel WTO case against the US in relation to its subsidies to
Boeing.
On 1 June 2011, the WTO adopted the Appellate Body’s ﬁnal reportin the case brought by the US assessing funding to Airbus from
European governments. On 1 December 2011, the EU informed
the WTO that it had taken appropriate steps to bring its measures
fully into conformity with its WTO obligations, and to comply with
the WTO’s recommendations and rulings. Because the US did
not agree, the matter is now under WTO panel review pursuant
to WTO rules.
On 23 March 2012, the WTO adopted the Appellate Body’s ﬁnal
report in the case brought by the EU assessing funding to Boeing
from the US. The EU has cited the failure by the US to implement theﬁndings prior to the due date of 23 September 2012 in commencing
a new proceeding on the adequacy of US compliance.
Exact timing of further steps in the WTO litigation process is subject
to further rulings and to negotiations between the US and the EU.
Unless a settlement, which is currently not under discussion, isreached between the parties, the litigation is expected to continue
for several years.

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Information on EADS’ Activities
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Securities Litigation
Following the dismissal of charges brought by the French Autoritédes marchés financiers for alleged breaches of market regulations
and insider trading rules with respect primarily to the A380 delays
announced in 2006, proceedings initiated in other jurisdictions
have also been terminated. Nevertheless, following criminal
complaints ﬁled by several shareholders in 2006 (including civil
claims for damages), a French investigating judge is still carryingout an investigation based on the same facts. It is expected thatthe investigating judge will decide later in 2013 on whether to closethe ﬁle (ordonnance de non-lieu) or to bring the case to trial (renvoi
devant le tribunal correctionnel).

CNIM
On 30 July 2010, Constructions Industrielles de la Méditerrannée(“CNIM”) brought an action against EADS and certain of its
subsidiaries before the commercial court of Paris, alleging anticompetitive practices, breach of long-term contractual relationships
and improper termination of pre-contractual discussions. CNIM
is seeking approximately € 115 million in damages on a joint andseveral basis. On 12 January 2012, the court rejected all of CNIM’sclaims, following which CNIM ﬁled for appeal.

GPT
Prompted by a whistleblower’s allegations, EADS has conductedinternal audits and commissioned an external investigation
relating to GPT Special Project Management Ltd. (“GPT”), a
subsidiary that EADS acquired in 2007. The allegations called
into question a service contract entered into by GPT prior to its

acquisition by EADS, relating to activities conducted by GPTin Saudi Arabia. Following the allegations, EADS conductedcomprehensive internal audits in 2010 that did not detect any
violations of law. The UK Serious Fraud Ofﬁ ce (the “SFO”)
subsequently commenced a review of the matter. In 2011,
EADS retained PricewaterhouseCoopers (“PwC”) to conduct
an independent review, the scope of which was agreed with
the SFO. In the period under review and based on the work it
undertook, nothing came to PwC’s attention to suggest that
improper payments were made by GPT. Further, the review did
not ﬁ nd evidence to suggest that GPT or through GPT, anyother EADS Group company, asked speciﬁ c third parties tomake improper payments on their behalves. The PwC review
was conducted between November 2011 and March 2012,
and a copy of its report was provided by EADS to the SFO in
March 2012. Separately, in August 2012, the SFO announced
that it had opened a formal criminal investigation into the matter.
EADS is cooperating fully with this investigation.

Euroﬁghter Austria
In March 2012, the German public prosecutor, following a request
for assistance by the Austrian public prosecutor, launched acriminal investigation into alleged bribery, tax evasion and breachof trust by current and former employees of EADS DeutschlandGmbH and Euroﬁghter Jagdﬂugzeug GmbH as well as by third
parties relating to the sale of Euroﬁghter aircraft to Austria in 2003.
EADS is cooperating fully with this investigation, and has also
engaged external legal counsel to conduct an independent reviewof the matter.

1.1.10 Research and Technology, Intellectual Property
Research and Technology
EADS has a Research and Technology leadership team acrossthe Divisions, implementing a streamlined approach to capturesynergies. Management focuses Research and Technology
spending on a number of larger projects, thereby ensuring moreconcentrated investment of funds in strategic directions. In addition,
global Research and Technology collaboration continued to growoutside Europe in order to access a diverse pool of scientiﬁc andengineering expertise. Partnerships with leading research institutes
expanded in Canada, India, Russia, Singapore, China and the US.

Performance and Best Practices
The Research and Technology 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.

50 — EADS REGISTRATION DOCUMENT 2012

Building on the identiﬁcation, evaluation and prioritisation of criticaltechnologies for the Group, EADS is shaping a technologicalpolicy that seeks to strengthen Group synergies and is aimed atmaintaining – and when needed, increasing – EADS’ Research andTechnology efforts. Each Division is responsible for proposing its
own targets, as well as for securing public and private Research
and Technology funding.
The EADS Research and Technology strategy is driven by:— shareholder value: a stringent, leading-edge Research andTechnology portfolio that seeks to enable seamless introductionof new technology on future products and a strong return on
investment;— customer satisfaction: high-value solutions that meet thetechnological, performance, safety and cost-competitive
pressures that challenge the future;— upstream contribution to successful on-time, on-quality andon-price introduction of new products and processes;

Information on EADS’ Activities
1.1 Presentation of the EADS Group— technology leadership to fuel business growth; and— societal responsibility: Research and Technology solutions that
contribute to mobility, environmental protection, safety andsecurity requirements.

Corporate Technical Office Organisation
The Chief Technical Ofﬁcer’s (“CTO”) mission is to be the Research
and Technology focal point for the entire Group. The CTO ensuresthat business strategy and technology strategy are closely linked.
He is responsible for innovation best practices across EADS, andalso manages information technology, Group quality operations
and Intellectual property. The CTO is a Member of the Executive
Committee and has responsibility for the entire Research andTechnology budget and Research and Technology production
within EADS. The CTO seeks to deliver shareholder value througha disciplined, leading-edge Research and Technology portfolio thatenables the introduction of new technologies on future productswith strong returns on investment. The CTO’s mandate is also
to pursue innovation that addresses broader public concerns
concerning safety, security, environmental compatibility andenergy efﬁciency.
The EADS Executive Technical Council, chaired by the CTO, ismade up of the technical Directors of each Division. The Executive
Technical Council is responsible for ensuring alignment with
the Group’s technology strategy and implementation throughthe Group Research and Technology roadmap. The Executive
Technical Council 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 that
Research and Technology synergies are exploited throughout
the Divisions and at EADS Innovation Works – the Company’s
aerospace research arm. The Chief Operating Ofﬁcer-Innovationis chairperson of the Research and Technology Council, which ismade up of the Research and Technology Directors of the Divisions
and Business Units, and the head of EADS Innovation Works.
The CTO steers the EADS-wide harmonisation of transversal
technical processes, methods, tools and skills development
programmes, such as systems engineering, common tools
for Product Lifecycle Management (PLM/Phenix) training andqualiﬁcation. The CTO team also carries out technical assessmentson behalf of the CEO and the Executive Committee.
The head of EADS Innovation Works reports to the CTO. EADS
Innovation Works manages the corporate Research and Technology
production that develops the Group’s technical innovation potentialfrom low Technology Readiness Level (TRL) one to three. Driven
by the EADS Research and Technology strategy, EADS Innovation
Works seeks to identify new technologies and prepare themfor eventual transfer to the Divisions so as to create long-term
innovation value for the Group.
EADS Innovation Works operates two principal sites near Munichand Paris and employs over 1,000 people – including doctorates
and university interns. Research centres are maintained in Toulouse
and Nantes (France) as well as Hamburg and Stade (Germany)to support knowledge transfer to the Business Units. A liaisonofﬁ ce operates in Moscow, which coordinates relations withleading Russian scientiﬁc institutes. EADS operates Research
and Technology centres in the UK, Spain, Singapore and India. It
also operates two ofﬁces in the US and China.
EADS Innovation Works and the EADS Research and Technology
community in the Divisions maintain and continually growpartnerships with leading universities and high-tech engineeringschools through employment of thesis students, post-graduate
interns and doctorates, and through research contracts.

Protecting Innovation: Intellectual Property
Intellectual property – including patents, trademarks, copyrights
and know-how – plays an important role in the production andprotection of EADS’ technologies and products. The use ofIntellectual property rights enables EADS to remain competitivein the market and to manufacture and sell its products freely, andto prevent competitors from exploiting protected technologies.
It is EADS’ policy to establish, protect, maintain and defend its
rights in all commercially signiﬁcant Intellectual property and to use
those rights in responsible ways. The value proposition of EADS’Intellectual property is also leveraged through EADS’ technology
licensing initiative, as discussed below.

Organisation
The general management of Intellectual property in EADS is
conducted through an Intellectual property Council led by the
EADS Chief Intellectual property Counsel. Executives responsible
for Intellectual property at the Divisions sit on this council.
Each of the Divisions and EADS Innovation Works own theIntellectual property that is speciﬁc to their particular business.
Where Intellectual property is of common interest throughout
the Group, the Division that generated the Intellectual property
may issue a licence allowing its use elsewhere (respecting theinterests of the other shareholders when appropriate). EADS also
owns Intellectual property directly or under licence agreementswith its Divisions. EADS centralises and coordinates the Group’sIntellectual property portfolio, participates with the Divisions in
its management and promotes licensing of common Intellectual
property between the Divisions. EADS seeks to control theprotection of its Intellectual property developed in 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 the contracts
between Business Units of the Group concerning shared Research
and Technology must have provisions allowing for the ﬂ ow ofknowledge (EADS Research and Technology network rules).
In 2011, the EADS Intellectual property portfolio comprised
approximately 9,500 inventions (approximately 9,000 in 2010),

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Information on EADS’ Activities
1.1 Presentation of the EADS Group

which are covered by more than 33,000 patents throughout theworld. 1,018 priority patents were ﬁled in 2011, which gives anindication of the greater momentum in Research and Technology
and product development. For international patent protection,
EADS uses the Patent Cooperation Treaty, which provides asimpliﬁed system for international patent ﬁling.

In 2009, EADS launched its technology licensing initiative, which
provides access to a wide range of technologies to help companies
outside the Group to develop new products, improve production
methods and expand their market opportunities. EADS’ technology
licensing initiative 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 implies
commitment and responsibility from citizens, governments andindustry. EADS continuously pursues sustainability by setting
the standards for an eco-efﬁ cient company, considering it to
be a major strategic goal. Eco-efﬁ ciency aims at maximising
the beneﬁts of EADS’ products and services for customers andother stakeholders while minimising the environmental impact
of manufacturing and operating these products throughout
their lifecycle. The implementation of further innovative andeco-efﬁ cient technologies and processes is a key factor inensuring EADS’ sustainability, increasing the attractiveness of
its products and its overall competitiveness, creating growth,safeguarding employment and adding value for all stakeholders.

Organisation
While each Division, Business Unit and corporate function remains
responsible for the implementation of EADS’ environmental policy
in pursuit of eco-efﬁciency, EADS Corporate Environmental Affairs
ensures the consistency of the various initiatives group-wide. This
team is intended to leverage capabilities, avoid duplications ofresponsibilities, mitigate environmental risks, limit the capacity
needed to provide an expanded service and strengthen EADS’
responsiveness by:— anticipating environmental issues, monitoring and sharing
information on emerging trends globally and on legislative
activity concerning environmental matters;— supporting the lobbying and communication activities of theDivisions on environmental issues in their respective sectors andhelping to coordinate a group-wide position when necessary;— encouraging the sharing of best practices and fosteringcommunications through the EADS Environmental Network;and— complying with the Group’s reporting obligations and ensuring
a consistent standard of reporting by the Group’s entities.
EADS strives to develop joint initiatives within the aerospace anddefence industry in order to improve the overall environmental
performance of the sector in the most effective, consistent andcost-efﬁ cient manner possible. EADS supported the creationof the International Aerospace Environmental Group (IAEG) in
order to harmonise industry responses to existing and emerging
environmental regulations, align aerospace environmental
standards and work on common approaches and expectations
for the supply chain.

52 — EADS REGISTRATION DOCUMENT 2012

EADS leads or participates in various European and international
environmental working groups such as ICAO, ATAG, ICCAIA, ASD,CAEP and WEF, and in environmental working groups of national
industry organisations such as GIFAS in France, TEDAE in Spain,
BDLI in Germany and ADS in the UK.

EADS Eco-Efﬁciency Approach
The eco-efﬁciency concept is about maximising economic value
creation while minimising environmental impact. It was ﬁrst deﬁned
by the World Business Council for Sustainable Development(WBCSD) as a “concept of creating more goods and services while
using fewer resources and creating less waste and pollution”.
The Group has committed to moving towards an eco-efﬁciententerprise and has established internal roadmaps to support
this effort through a series of concrete projects and actions.
This entails regulatory compliance and continuous improvement
in environmental management, and defines specific goals of
eco-efﬁcient operations, products and services to be achievedby 2020.
For EADS, achieving its targets involves two key elements:— Integration of environmental considerations into decisionmaking. An eco-efficient approach is the reconciliationof environmental protection with business opportunities.
It is therefore essential to fully integrate environmental
considerations into decision-making, in particular with respect
to future investments; and— Performance operational goals (against 2006 baseline).
Such goals include: 80% reduction of water discharge; 50%
reduction of waste, water consumption, CO 2 and volatileorganic compound (VOC) emissions; 30% reduction of energy
consumption; 20% sourcing of energy from renewable sources;
pursuit of Advisory Council for Aeronautics Research in Europe(ACARE) research goals for aviation and the various definedgoals for other products.
By adopting an eco-efﬁcient approach, EADS intends to reduce
recurring costs by improving resource efﬁciency, secure growth by
driving innovation, expand its environmental products and services
portfolio and strengthen its identity as an eco-efﬁcient enterpriseamong its stakeholders. EADS also seeks to implement a common
culture on environmental topics across divisions and countries
through the development of employee awareness, encouraging
employees to take action, and making them proud to work for a
responsible company.

Information on EADS’ Activities
1.1 Presentation of the EADS Group

Products and Services
A lifecycle-oriented approach takes into account all stages of thelife of a product or service, from the design of the product to theend of its lifetime. EADS’ main target is to design or identify “true”
environmentally-friendly solutions, which avoid pollution transfersfrom one stage of the lifecycle to the other.

Designing for the Environment
Taking into account environmental considerations is an essential
requirement for the design of any new product. One major
element of EADS’ Research and Technology efforts is therefore
to investigate, test, validate and optimise the most advanced
technologies, design features, conﬁgurations and architectures.
This is intended to lead to aircraft that generate fewer emissions
and less noise, while carrying a maximum payload over the mission
range.
In addition to optimising propulsion systems and overall aerodynamic
efﬁciency, the continuous and progressive introduction of advanced
materials and new manufacturing processes also reduces theweight of an aircraft, and therefore its fuel consumption andcorresponding engine emissions.
For example, the A350 XWB has been designed to be eco-efﬁcientfrom gate to gate, which means lower levels of noise andemissions and greater fuel efﬁciency at every stage of the journey.
Environmentally-friendly materials have been favoured throughout
the design of the A350 XWB. Some typical examples are hydraulicﬂuid, and batteries. Each part of the aircraft has been optimised
for increased eco-efﬁciency.

Operating in the Most Efficient Way
The most obvious way to cut CO 2 emissions is to reduce fuelconsumption. This can be done through improvements in aircraft
technologies as well as streamlining air trafﬁc management. Further
steps towards reducing CO 2 emissions can be achieved throughthe use of alternative fuels. EADS is pioneering the development ofsustainable biofuels, made from biomass feedstock that throughtheir total lifecycle produce lower CO2 emissions than conventional
fossil fuels. EADS has been working with a broad range of partners– universities, farmers, airlines and reﬁneries as well as standardsetting organisations – to develop “drop-in” biofuels that can beused in current aircraft without modiﬁcation. Airbus currently has
six value chain projects in place in Romania, Spain, Qatar, Brazil,
Australia and China, and is pursuing projects in South Africa andCanada. It also supports airlines with their commercial operations
using biofuels and is co-leading a key project with the EU to preparea feasibility study and roadmap to ensure two million tonnes of
biofuel availability for aviation in the EU by 2020.
Through Airbus’ involvement in ﬂights and its technical support,
50/50 blend alternative fuels are now certiﬁed for commercial ﬂights(Fischer-Tropsch and HEFA processes). Over 1,500 commercial
ﬂights have now been ﬂown with alternative fuels worldwide. Airbus’
alternative fuels strategy is based around being the catalyst in the
search for sustainable solutions for the production of affordable
alternative fuels in sufﬁcient commercial quantities to face theenvironmental challenges for aviation.

EADS is also dedicated to the development and support of modern
air trafﬁc management systems, with the overall objective being toallow sustainable growth of air transport. EADS is interacting withand helping to develop air trafﬁc management programmes suchas “Single European Sky ATM Research” (SESAR) in Europe, as
well as NextGen in the US. The Group subsidiary “Airbus ProSky”
is dedicated to the development and support of modern air trafﬁcmanagement systems.
The use of innovative technologies, biofuels and optimised air
trafﬁc and ﬂight procedures for modern aircraft can all lead toa signiﬁcant drop in CO 2 emissions. This was demonstrated inJune 2012 when Airbus and Air Canada performed a ﬂight using an
Airbus A319 that reduced CO2 emissions by over 40% compared
to a similar regular ﬂight.

Anticipating the End of an Aircraft Lifecycle
As part of its lifecycle approach, Airbus is addressing ways to recycle
commercial aircraft through its Tarmac Aerosave joint venture,
which is the ﬁrst company dedicated to dismantling end-of-lifeaircraft in an environmentally-friendly fashion. The joint venture wasestablished by a consortium of Airbus and its partners and became
operational in 2009. Located at Tarbes airport in southwesternFrance, Tarmac Aerosave applies experience from the Airbus-led
LIFE-PAMELA (Process for Advanced Management of End-ofLife Aircraft) experimental project, which deﬁned methods for theenvironmentally responsible disposal of retired jetliners – including
recovery and potential reuse of equipment and material. According
to the project, up to 90% of an aircraft’s weight could be recycled,
and more than 70% of its components and materials could bereused or recovered through regulated recovery channels.

Environmental Management (ISO 14001/EMAS)
ISO 14001 is an internationally recognised standard of environmental
management system efﬁciency for businesses and organisations.
EADS encourages not only the environmental certiﬁcation of its
operations but also the development of a full lifecycle orientation
for its products and services, as this remains the most costefﬁcient and practical way to effectively reduce environmental
impacts. Certiﬁ ed environmental management systems havebeen progressively implemented across EADS’ manufacturing
sites, and approximately 90% of EADS’ employees operate underan ISO 14001. The site and product lifecycle orientation of theenvironmental management system attempts to create economic
value by reducing environmental costs and exposure at each stageof the product life, from design to operations up to end of life.
In 2012, Astrium France successfully completed the ISO 14001
re-certiﬁcation process. Numerous Eurocopter sites were also
ISO 14001 certiﬁed in 2012, in particular Eurocopter UK, Helibras
Brazil and American Eurocopter (third party audit planned forsecond quarter 2013). In 2013, Cassidian is expected to obtainits ﬁrst ISO 14001 certiﬁcation for its Finnish sites, Airbus will go
through the global re-certiﬁcation process and Eurocopter will
pursue the certiﬁ cation process for Eurocopter South Africa,
Australian Aerospace and Motorﬂug.

EADS REGISTRATION DOCUMENT 2012 — 53

1

Information on EADS’ Activities
1.1 Presentation of the EADS Group

Monitoring of the various achievements against objectives isbeing performed through the collection of a set of indicators.
The consistency and reliability of the reporting exercise is being
ensured through corporate procedures and guidelines derived
from Global Reporting Initiative (“GRI”) requirements, combinedwith an advanced environmental management information systemthat is operational within EADS worldwide.

Reducing EADS’ Industrial Environmental
ImpactIn order to meet stakeholders’ increasing demands for environmental
impact related information and further movement towards ecoefﬁcient industrial activities, and in anticipation of more stringent
reporting regulations, it is essential for EADS to communicate on its
environmental impact, and on the reduction projects implemented
through the Divisions to achieve the 2020 targets. The EADS-wide
environmental reporting system was implemented ﬁve years ago,
organised around clear guidelines derived from GRI as well as
greenhouse gas protocol requirements. It provides a status of theGroup’s environmental performance and enables the monitoring of
progress achieved. The reporting process and the environmental
data of EADS are externally audited every year.
In 2012, numerous initiatives were launched at the Division andsite level to reduce the Group’s environmental footprint by 2020:— Airbus built new facilities that are state-of-the-art in terms ofsustainable buildings, designed to improve the energy efficiency
of industrial activities based on lean manufacturing principles,while also reducing the environmental impact. For example,
the A350 XWB North Factory, in Broughton, UK, was assessed“excellent” in the BREEAM methods, thanks to biomass boilers
as a primary source of heating, photovoltaic solar tracking
arrays, a new drainage system to collect rainwater and manyother building management system improvements.

— Eurocopter built new buildings in Donauwörth using low energy

also strengthened partnerships to move towards green logistics(with SDV and DHL mainly) to develop carbon off-settings anddirect carbon reductions.

— Cassidian and Astrium launched some renovation campaigns(roofing, insulation, etc.), changed some compressed air
systems, implemented presence sensors for lighting control andencouraged local initiatives to reach ambitious 2020 objectives.
In addition to numerous facility management improvements, EADS
has sought to integrate eco-efﬁciency ﬁrmly within its industrial
strategy. Workshops have been conducted to identify Group bestpractices and to benchmark other enterprises and sectors. Best inclass eco-efﬁcient industrial practices and processes will be listed
to become standards and applicable references for the Group.

Hazardous Substances Management
The European REACH (Registration, Evaluation and Authorisationof Chemicals) regulation (EU No. 2007/1906) came into force on
1 June 2007. REACH aims at improving the protection of humanhealth and the environment through more stringent regulationof chemical use by industries. It replaces the pre-existing EU
regulatory framework on chemicals and introduces a range of new
obligations over an 11-year period, which is intended to reduce therisks that the 30,000 most frequently used chemicals may cause.
The regulation will also bring about the phased withdrawal fromuse of some of the substances that are considered to be of very
high concern for human health and the environment.
An internal EADS REACH audit has been conducted to assess
progress of the Divisions in meeting their obligations under
the REACH regulation, and intensive efforts were devoted to
exchange best practices and to allow the qualiﬁcation of the moststandardised possible solutions. While proactively moving towards
the elimination of these substances, EADS and its Divisions arecommitted to the highest achievable control of emissions, in fullcompliance with the applicable regulatory framework.

consumption technologies and geothermal energy, and createda car park covered by 16,000 m2 of solar panels. Eurocopter

1.1.12 Employees
As of 31 December 2012, the EADS workforce amounted to140,405 employees (compared to 133,115 employees in 2011 and
121,691 employees in 2010), 96.6% of which consisted of full time
employees. Depending on country and hierarchy level, the average
working time is between 35 and 40 hours per week.
In 2012, 11,080 employees worldwide joined EADS (compared to8,238 in 2011 and 5,047 in 2010). At the same time, 4,042 employees
left EADS (compared to 3,666 in 2011 and 3,213 in 2010).
In total, 92.6% of EADS’ active workforce is located in Europe on
more than 100 sites.

54 — EADS REGISTRATION DOCUMENT 2012

Workforce by Division and Geographic Area
The tables below provide a breakdown of EADS employees by
Division 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.

Information on EADS’ Activities
1.1 Presentation of the EADS Group

Employees by Division

31 December 201231 December 201131 December 2010

Airbus73,50069,30062,751

Eurocopter

22,43520,75916,760Astrium

17,038

16,623

15,340Cassidian21,57320,923

21,181

Headquarters

2,904

2,665

2,430

Other Businesses

2,955

2,845

3,229

140,405

133,115

121,691

31 December 201231 December 201131 December 2010

France52,147

48,39445,580Germany

49,442

47,051

43,966

Spain

11,021

10,701

10,498

UK

14,894

13,467

12,813

Italy

464

480

487

US

3,245

2,829

2,692

Other Countries

9,193

10,193

5,655

140,405

133,115

121,691

31 December 201231 December 201131 December 2010

Total EADS

Employees by geographic area

Total EADS% Part time employees

France

4.1%

4.1%

4.1%

Germany

4.0%

3.9%

3.7%

Spain

0.8%

0.9%

0.7%

UK

2.1%

2.2%

2.1%

US

0.5%

1.4%

0.7%

Other Countries

2.4%

2.8%

2.8%

Total EADS

3.4%

3.5%

3.4%

1.1.13 Incorporation by Reference
The English versions of the following documents shall be deemed
to be incorporated in and form part of this Registration Document:— the Consolidated Financial Statements (IFRS) and the Company
Financial Statements of EADS for the year ended 31 December
2010, together with the related notes, appendices and Auditors’
reports, as incorporated by reference in the Registration
Document filed in English with, and approved by, the AFM
on 19 April 2011 and filed in English with the Chamber ofCommerce of The Hague;— the Consolidated Financial Statements (IFRS) and the Company
Financial Statements of EADS for the year ended 31 December
2011, together with the related notes, appendices and Auditors’
reports, as incorporated by reference in the Registration
Document filed in English with, and approved by, the AFM
on 12 April 2012 and filed in English with the Chamber ofCommerce of The Hague;— the Consolidated Financial Statements (IFRS) and the Company
Financial Statements of EADS for the year ended 31 December
2012, together with the related notes, appendices and Auditors’
reports.
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(Investor Relations > Events and Reports > Annual Report andRegistration Document).
Copies of the above-mentioned Registration Documents are alsoavailable in English on the website of the AFM on www.afm.nl(Professionals > Registers > Approved prospectuses). The abovementioned ﬁnancial statements are also available in English forinspection at the Chamber of Commerce of The Hague.

EADS REGISTRATION DOCUMENT 2012 — 55

1

Information on EADS’ Activities
1.2 Recent Developments

1.2 Recent Developments
New Board Approves Launch of Share Buyback Programme
On 2 April 2013, the new Board of Directors approved an 18-monthshare buyback programme (the “Buyback”) of up to € 3.75 billion.
The Buyback is to be carried out in accordance with the authority
conferred by the Company’s shareholders at the Extraordinary
General Meeting of Shareholders held on 27 March 2013 for a
repurchase of up to 15% of EADS’ issued and outstanding sharecapital and at a maximum price of € 50 per share.
The programme reﬂ ects current market conditions as well as
EADS’ balanced approach to organic and external growth while
preserving a conservative ﬁnancial policy and sustainable returns
to shareholders.

The Buyback is planned to be ﬁnanced by cash available on thebalance sheet. It is also expected to be earnings accretive.
The Buyback may be carried out by any means, including on stock
exchange, in private purchase or via derivative products, subject
to market conditions, applicable legal requirements, and otherapplicable laws. EADS will disclose the results of the Buyback inaccordance with its disclosure obligations.
The Buyback will enable EADS to repurchase shares from allits shareholders. Shares acquired through the Buyback will becancelled.

EADS’ New Board of Directors
Following their appointment by the Extraordinary General Meeting of Shareholders held on 27 March 2013 and the effectiveness of suchappointment on 2 April 2013, the following individuals now compose the Board of Directors of EADS:
Name

Age

Term
started

2000, re-elected
in 2005

Term
expires

Manfred Bischoff

70

Ralph D. Crosby

65

Thomas Enders

54

Hans-Peter Keitel

65

Hermann-Josef
Lamberti

57

Anne Lauvergeon

53

Lakshmi N. Mittal

62

Sir John Parker

70

Michel Pébereau
Josep Piqué i
Camps

71

2007, re-elected
in 20122007, re-elected
in 2012

58

2012

2016

61

First proposed
to EGM in 2013

2016

70

2012

2016

Denis RanqueJean-Claude
TrichetFirst proposed
to EGM in 20132005, re-elected
in 2012First proposed
to EGM in 20132007 re-elected
in 2012First proposed
to EGM in 20132007 re-elected
in 201256 — EADS REGISTRATION DOCUMENT 2012

2016

2016
2016
2016

2016
2016
2016

2016
2016

Principal function

StatusDirector of Royal KPN N.V.
and UniCredit S.p.a.
and Chairman of the Supervisory Boards of Voith AG
Non-independent,
and Daimler AG Non-Executive Director
Member of the Board of Directors of Serco Group PLC.
and former Member of the Management Boards of Northrop
Non-independent,
Grumman Corporation and EADS N.V. Non-Executive Director
Chief Executive Officer of EADS N.V
Executive Director
Vice President of the Federation of German Industries (BDI)
Independentand former Chief Executive Officer of Hochtief AG Non-Executive Director
Member of the Supervisory Board of Carl Zeiss AG,
Member of the Advisory Board of Barmenia Versicherungen,and former Member of the Management Board
Independentof Deutsche Bank AG Non-Executive Director
Independent
Partner of Efficiency Capital and CEO of A.L.P.S.A. Non-Executive Director
Chairman and Chief Executive Officer of ArcelorMittal
Independent
and Member of the Board of Directors of Goldman Sachs Non-Executive Director
Chairman of Anglo American PLC, Deputy Chairmanof DP World and former Chairman of the Board
Independentof Directors of National Grid PLC Non-Executive Director
Honorary President of BNP Paribas and Member
Independentof the Board of Directors of Saint-Gobain S.A. and Total S.A. Non-Executive Director
Chairman of Pangea21 Consultora Internacional
Independentand Chairman of Vueling Non-Executive Director
Member of the Board of Directors of Saint-Gobain S.A.,
former Chairman of the Board of Directors of Technicolor S.A.,
and former Chairman
Independentand Chief Executive Officer of Thales S.A. Non-Executive Director
Honorary Governor of Banque de France
Independentand former President of the European Central Bank Non-Executive DirectorAt its inaugural meeting, the new Board of Directors elected
Denis Ranque as its Chairman and re-appointed Tom Enders as
CEO. In addition, the new Board of Directors elected the membersof the Audit Committee and the Remuneration & Nomination
Committees.
Based on their strong experience in recent years, Sir John Parker
and Hermann-Josef Lamberti were elected to continue serving
as Chairmen of the Remuneration & Nomination Committee andAudit Committee, respectively.
Joining Sir John Parker in the Remuneration & Nomination
Committee as members are Jean-Claude Trichet, Lakshmi N.
Mittal and Hans-Peter Keitel.

Jean-Claude Trichet and Anne Lauvergeon also sit on the
Supervisory Board of the French national defence c ompany,
while Manfred Bischoff and Hans-Peter Keitel are Members of
the German national defence c ompany’s Board of Directors.
Their appointments in these national defence companies havereceived the consent of the respective governments of Franceand Germany.
At the Extraordinary General Meeting, shareholders also
approved changes to the Company’s Articles of Association
and a possible share buy back (subject to market conditions).

Besides Hermann-Josef Lamberti, the Audit Committee iscomposed of Anne Lauvergeon, Michel Pébereau and Josep
Piqué i Camps.

Airbus Activates “Plan B” for the A350 XWB Batteries
On 15 February 2013, Airbus announced that it was conﬁdent
that the lithium ion (Li-ion) main battery architecture it had beendeveloping with Saft and qualifying for the A350 XWB aircraft was
robust and safe, and that the A350 XWB ﬂight test programme
would continue as planned using the qualiﬁed Li-ion main batteries.
However, given that the root causes of two prior industry Li-ion
main batteries incidents remained unexplained to the best of
Airbus’ knowledge, and with a view to ensuring the highest levelof programme certainty, Airbus decided to activate its “Plan B”
and therefore to revert back to the proven and mastered nickel
cadmium main batteries for its A350 XWB programme at entry
into service. Airbus considers this to be the most appropriate way
forward in the interest of programme execution and A350 XWB
reliability.

In parallel, Airbus has also launched additional maturity studies
on Li-ion main batteries behaviour in aerospace operations andwill naturally take on board the ﬁndings of the ongoing ofﬁcial
investigation. As a result of making this decision now, Airbus does
not expect it to impact the A350 XWB entry into service schedule.

EADS REGISTRATION DOCUMENT 2012 — 57

2
58 — EADS REGISTRATION DOCUMENT 2012

Management’s Discussion
and Analysis of Financial Condition
and Results of Operations
2.1 Operating and Financial Review

60

2.1.1 Overview

61

2.1.2 Critical Accounting Considerations, Policies and Estimates

62

2.1.3 Performance Measures66

2.1.4 Results of Operations

71

2.1.5 Changes in Consolidated Total Equity(Including Non-Controlling Interests)

76

2.1.6 Liquidity and Capital Resources77

2.1.7 Hedging Activities

84

2.2 Financial Statements

86

2.3 Statutory Auditors’ Fees87

2.4 Information Regarding the Statutory Auditors

87

EADS REGISTRATION DOCUMENT 2012 — 59

Management’s Discussion and Analysis of Financial Condition and Results of Operations
2.1 Operating and Financial Review

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 2012, 2011 and 2010 incorporated
by reference herein. These ﬁnancial statements have been prepared inaccordance 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 Dutch Civil Code.
The following discussion and analysis also contains certain “non-GAAP ﬁnancial
measures”, i.e., ﬁnancial measures that either exclude or include amounts
that are not excluded or included in the most directly comparable measurecalculated and presented in accordance with IFRS. Speciﬁcally, EADS makes
use of the non-GAAP measures “EBIT*”, “net cash” and “free cash ﬂow”.
EADS uses these non-GAAP ﬁnancial measures to assess its consolidated
ﬁnancial and operating performance and believes they are helpful in identifying
trends in its performance. These measures enhance management’s ability
to make decisions with respect to resource allocation and whether EADS is
meeting established ﬁnancial goals.
Non-GAAP ﬁnancial measures have certain limitations as analytical tools, andshould not be considered in isolation or as substitutes for analysis of EADS’
results as reported under IFRS. Because of these limitations, they should not
be considered substitutes for the relevant IFRS measures.

60 — EADS REGISTRATION DOCUMENT 2012

Management’s Discussion and Analysis of Financial Condition and Results of Operations
2.1 Operating and Financial Review

2.1.1

Overview

With consolidated revenues of € 56.5 billion in 2012, EADS isEurope’s premier aerospace and defence company and one of
the largest aerospace and defence companies in the world. In
terms of market share, EADS is among the top two manufacturersof commercial aircraft, civil helicopters, commercial spacelaunch vehicles and missiles, and a leading supplier of military

2.1.1.1

aircraft, satellites and defence electronics. In 2012, it generated
approximately 79% of its total revenues in the civil sector (comparedto 76% in 2011) and 21% in the defence sector (compared to 24%
in 2011). As of 31 December 2012, EADS’ active headcount was
140,405 employees.

Exchange Rate Information

The ﬁnancial information presented in this document is expressed in euros, US dollars or pounds sterling. The following table sets out,
for the periods indicated, certain information concerning the exchange rate between the euro and the US dollar and pound sterling,
calculated using the ofﬁcial European Central Bank ﬁxing rate:
AverageYear EndYear ended

€-US$

€-£

€-US$

€-£

31 December 2010

1.32570.85781.33620.860831 December 2011

1.39200.86791.29390.835331 December 2012

1.28480.81091.31940.81612.1.1.2

Reportable Business Segments

EADS organises its businesses into the following ﬁve reportablesegments:— Airbus Commercial: development, manufacturing, marketingand sale of commercial jet aircraft of more than 100 seats;
aircraft conversion and related services;— Airbus Military: development, manufacturing, marketing andsale of military transport aircraft and special mission aircraft
and related services;
The reportable segments, Airbus Commercial and Airbus Military,
form the Airbus Division. The effect of internal subcontracting
between Airbus Commercial and Airbus Military is eliminated in
the consolidated ﬁgures of the Airbus Division.

— Eurocopter: development, manufacturing, marketing and saleof civil and military helicopters and provision of helicopterrelated services;— Astrium: development, manufacturing, marketing and sale ofsatellites, orbital infrastructures and launchers and provisionof space-related services; and— Cassidian: development, manufacturing, marketing and saleof missile systems, military combat aircraft and training aircraft;provision of defence electronics and of global security market
solutions such as integrated systems for global border security
and secure communications solutions and logistics; training,
testing, engineering and other related services.
“Other Businesses” mainly consist of the development,
manufacturing, marketing and sale of regional turboprop aircraft,aircraft components as well as the Group’s activities managed
in the US.

2.1.1.3

Signiﬁcant Programme Developments
and Related Financial Consequencesin 2010, 2011 and 2012

A380 programme. In 2010, EADS made signiﬁ cant progresson the learning curve, leading to an improvement of the grossmargin per aircraft. However, the A380 programme continued toweigh signiﬁcantly on underlying performance. In 2011, continued
progress on the learning curve led to further improvement of
the gross margin per aircraft, though still signiﬁcantly negative.
Moreover, following the discovery of hairline cracks in the wing rib
feet of certain in-service A380 aircraft, a provision of € 105 million
for estimated warranty and repair costs for delivered aircraft wasrecorded in 2011.
In 2012, a solution to the wing rib issue was developed, with retroﬁt
repairs on-going on delivered aircraft and design modiﬁcations
incorporated into a new production standard. An additional chargeof € -251 million was recorded in 2012 for estimated warranty andrepair costs for delivered aircraft.
A350 XWB programme. In 2011, the A350 XWB programme
entered into the manufacturing phase. Manufacturing and preassembly of the A350 XWB-900 progressed across all pre-ﬁnal
assembly sites, with the ﬁrst major airframe sections delivered to
the A350 XWB ﬁnal assembly line in Toulouse at the end of 2011.
Following a programme review in the second half of 2011, EADS
recorded an adjustment on the loss-making contract provision of€ 0.2 billion to reﬂect the entry into service which was then targeted
for the ﬁrst half of 2014.
In 2012, a subsequent programme review indicated a three-monthslippage for entry into service – to the second half of 2014 – inrespect of which EADS recorded a charge of € -124 million.
The A350 XWB programme remains on track based on therevised schedule, with the ﬁnal assembly line fully operational.

EADS REGISTRATION DOCUMENT 2012 — 612

Management’s Discussion and Analysis of Financial Condition and Results of Operations
2.1 Operating and Financial Review

The structural assembly of the ﬁrst ﬂyable plane, “MSN1”, wascompleted and “electrical power on” accomplished. Anothermilestone was achieved in February 2013 with the award of theEuropean Aviation Safety Agency’s Engine Type Certiﬁcation for
the Trent XWB turbofan.

Civil and military certiﬁcation for the A400M is expected in the ﬁrst
quarter of 2013, with the ﬁrst delivery due in the second quarterand a total of four deliveries expected during 2013. Full militarycapabilities will be achieved over time and challenges remain until
then.

However, the A350 XWB programme remains challenging, andthere is no room left in the schedule. Any schedule change could
lead to an increasingly higher impact on provisions.

2.1.1.4

A400M programme. On 5 November 2010, EADS/Airbus/AMSL,OCCAR and the launch nations concluded their negotiations
on various aspects of a new programme approach for the
A400M, with an amendment to the A400M programme contract
subsequently ﬁnalised on 7 April 2011. The on-going technicalprogress on the A400M programme resulted in the recognitionof A400M-related revenues of € 1.0 billion in 2010, including apartial utilisation of the A400M loss provision of € -157 million.
Further technical progress on the A400M programme resulted
in the recognition of A400M-related revenues of € 0.8 billion in2011 and € 0.5 billion in 2012.

2.1.2

Current Trends

Airbus is targeting approximately 600 to 610 commercial aircraft
deliveries in 2013, as well as a level of gross commercial aircraft
orders that is above deliveries, in the range of approximately 700
commercial aircraft orders. 25 A380 deliveries are targeted for 2013,
as Airbus works to resolve the wing rib issue through on-going
retroﬁt repairs on already delivered aircraft and implementation ofa new production standard for future aircraft. A further expenseof approximately € 85 million is expected to be recorded in 2013
to cover the estimated wing rib feet repair costs on the 25 A380
aircraft targeted for delivery.
Any major production or market disruption or economic downturn
could lead to revision of these ﬁgures.

Critical Accounting Considerations, Policies and Estimates

2.1.2.1 Scope of and Changes
in Consolidation

Rheinmetall within a new entity. Rheinmetall Airborne Systems
GmbH reported revenues of € 63 million for the full year 2012.

Acquisitions and disposals of interests in various businesses canaccount, in part, for differences in EADS’ results of operations
for one year as compared to another year. See “— Notes to theConsolidated Financial Statements (IFRS) — Note 4: Acquisitions
and disposals”.

On 3 April 2012, Astrium acquired 66.8% of Space Engineering
SpA, Rome (Italy), a specialist in digital telecommunications, RF
and antenna equipment engineering for both space and groundbased applications for a total consideration of € 10 million. SpaceEngineering SpA reported revenues of € 17 million for the full year
2012.

Acquisitions
On 20 November 2012, EADS acquired Eltra Holdings Pte Ltd.,Singapore (Singapore), an aerospace group involved in various
aerospace supply chain and MRO activities for a total considerationof € 28 million. Eltra Holdings Pte Ltd. reported revenues of€ 31 million for the full year 2012.
On 16 November 2012, Cassidian acquired 99.8% of Netasq,
Villeneuve d’Ascq (France), a leading expert and pioneer in the
IT security market for a total consideration of € 27 million. Netasq
reported revenues of € 17 million for the full year 2012.
On 1 October 2012, Cassidian acquired 75.1% of the shares of Carl
Zeiss Optronics GmbH, Oberkochen (Germany), with the intention
to run the optics and optronics activities of Carl Zeiss Optronics
GmbH together with Carl Zeiss AG for a total consideration of€ 121 million. Carl Zeiss Optronics GmbH is a manufacturer of
optronic, optic and precision-engineered products for military andcivil applications. Carl Zeiss Optronics GmbH reported revenuesof € 110 million for the full year 2012.
On 1 July 2012, Cassidian acquired 51% of Rheinmetall Airborne
Systems GmbH, Bremen (Germany), for a total consideration of€ 85 million, to pursue Rheinmetall’s activities related to unmanned
aerial systems as well as cargo loading systems together with
62 — EADS REGISTRATION DOCUMENT 2012

In the ﬁrst half year 2012, Eurocopter expanded the MRO engine
business of its subsidiary Vector Aerospace Corp., Toronto(Canada), via several asset deals, primarily in the Asia-Paciﬁ cregion, for a total consideration of € 43 million. The acquired
businesses reported revenues of € 17 million for the full year 2012.
On 19 December 2011, Astrium Holding S.A.S. acquired 100%of MobSat Group Holding S.a.r.l., Munsbach, Luxemburg, being
the ultimate parent company of Vizada group (“Vizada”), froma consortium of investors led by Apax France, a French private
equity fund and the former majority shareholder. Vizada is acommercial satellite service provider offering mobile and ﬁ xed
connectivity services from multiple satellite network operators. The
total consideration paid by Astrium included € 413 million for theacquisition of Vizada’s equity instruments as well as € 325 million
due to a mandatory extinguishment of the former Vizada debt
structure.
On 20 October 2011, Airbus Operations GmbH acquired 74.9%of the shares and voting rights of PFW Aerospace AG, Speyer,
Germany, the ultimate parent company of PFW Aerospace Group,
for a total consideration of € 4 million primarily arising from impacts
due to the separate recognition of settlements of pre-existing
relationships.

Management’s Discussion and Analysis of Financial Condition and Results of Operations
2.1 Operating and Financial Review

On 19 October 2011, Airbus Americas, Inc. acquired 100% of theshares and voting rights of Metron Holdings, Inc., Dulles, Virginia(USA), the ultimate parent company of Metron Aviation, a providerof air trafﬁc ﬂow management solutions, from its management
team and two institutional investors for a total consideration of€ 55 million.
On 5 October 2011, Airbus S.A.S. obtained control of Satair A/S,
Copenhagen, Denmark (“Satair”), an independent distributor of
aircraft part and services, following a public voluntary conditionaltender offer of DKr 580/share for all of the outstanding shares of
Satair, including an offer of DKr 378.66/warrant for each warrant
holder. As a result of the public voluntary offer EADS acquired
98.5% of Satair’s shares during October and November 2011,
while the remaining 1.5% of Satair’s shares were acquired via
linked squeeze out procedures ﬁnalised on 6 February 2012. The
total consideration of € 351 million for this acquisition includes€ 346 million paid in cash for 98.5% of Satair’s shares and 100%of warrants during October and November 2011 as well as an
amount of € 5 million paid to the remaining shareholders (1.5% of
Satair’s shares) within linked squeeze-out procedures.
On 30 June 2011, Eurocopter Holding S.A.S. acquired 98.3%
of Vector Aerospace Corporation, Toronto (Canada) (“Vector”),
following a CAD 13.00/share cash offer for all of the outstanding
common shares of Vector, including all shares that could be issued
on the exercise of options granted under Vector’s share option
plan. The remaining 1.7% shares of Vector were acquired via
linked squeeze out procedures ﬁnalised on 4 August 2011. The
total consideration for this independent global provider of original
equipment manufacturer (OEM) approved maintenance, repair
and overhaul (MRO) aviation services includes the amount paid in
cash for the acquisition of 98.3% of Vector’s shares (€ 452 million)at the end of June 2011 as well as the amount of € 8 million paid
to the remaining shareholders as part of the related squeeze out
procedures.
On 9 June 2011, Cassidian increased via EADS DeutschlandGmbH, Ottobrunn, Germany, its 45.0% shareholding in Grintek
Ewation (Pty) Ltd., Pretoria, South Africa, a system engineering
company, by acquiring a 42.4% stake formerly held by Saab South
Africa Ltd., Centurion, South Africa, for € 21 million within a stepacquisition.
On 7 June 2011, EADS N.V. purchased the remaining 25% of
DADC Luft- und Raumfahrt Beteiligungs AG, Munich (Germany),
from Daimler Luft- and Raumfahrt Holding AG, Ottobrunn, for a
total consideration of € 110 million.
On 10 May 2011, the GEO Information Division of Astrium Services(formerly Spot Image and Infoterra) expanded its investment ini-cubed LLC, Fort Collins, Colorado (USA), a provider of imagery
and geospatial data management technologies and services, from
25.6% to 77.7% by a step-acquisition of the additional 52.1% for€ 6 million via its US subsidiary SPOT Image Corporation, Chantilly,
Virginia (USA).
On 28 February 2011, Astrium Services GmbH obtained control
of ND SatCom GmbH, Immenstaad (Germany), a supplier ofsatellite and ground systems equipment and solutions, by acquiring

75.1% of the shares and voting interests in the company for a total
consideration of € 5 million from SES ASTRA.
On 11 January 2011, Cassidian and Atlas Elektronik GmbH,
Bremen, Germany (“Atlas Elektronik”), a joint venture ofThyssenKrupp AG and Cassidian, completed the merger of theirmaritime safety and security activities formerly carried out via theirseparate subsidiaries Sofrelog and Atlas Maritime Security. The
new company named SIGNALIS was set up as a medium-sizedcorporation which will be co-owned by Cassidian (60%) and Atlas
Elektronik (40%).
On 3 December 2010, Astrium GmbH acquired Jena-Optronik
GmbH, Jena (Germany), one of the international leading providersof space sensors and opto-electronic instruments.

Disposals
On 13 May 2011, EADS North America, Inc. sold its subsidiary
EADS North America Defense Security and Systems Solutions,Inc., San Antonio, Texas (USA), to Camber Corporation, Huntsville,
Alabama (USA), for a total consideration of € 18 million.
On 31 December 2010, Cassidian Air Systems sold its shares in
ASL Aircraft Services Lemwerder GmbH to SGL Rotec GmbH &Co. KG, which intends to establish a production line for rotor blades
at the Lemwerder site. The programme related assets and liabilitiesof the Euroﬁghter, Tornado, A400M and C160 programmes weretransferred to Premium Aerotec GmbH.

Transactions with Non-Controlling Shareholders
On 28 May 2012, Cassidian reduced its shareholding of 87.4% in
Grintek Ewation (Pty) Ltd., Pretoria, South Africa, to 75% to comply
with local black economic empowerment (BEE) requirements for€ 7 million.

2.1.2.2 UK Pension Commitments
In the UK, the different pension plans in which EADS participates
are currently underfunded. Accordingly, EADS has recorded a
provision of € 1.0 billion as of 31 December 2012 (compared to€ 0.9 billion as of 31 December 2011) for its current share of the net
pension underfunding in these plans. A related amount of actuarial
gains and losses (cumulative) of € -1.1 billion has been recorded
in total equity (net of deferred taxes) as of 31 December 2012
(compared to € -1.0 billion as of 31 December 2011) in accordancewith IAS 19.
For further information related to EADS’ participation in pension
plans in the UK, see “— Notes to the Consolidated Financial
Statements (IFRS) — Note 25B: Provisions for retirement plans”.

2.1.2.3 Fair Value Adjustments
The merger of the operations of Aerospatiale Matra, Daimler
Aerospace AG and Construcciones Aeronáuticas S.A., leading
to the creation of EADS in 2000, was recorded using the purchasemethod of accounting with Aerospatiale Matra as the acquirer.
Accordingly, the book value of certain assets and liabilities, mainly
property, plant and equipment and inventories, was adjusted by

EADS REGISTRATION DOCUMENT 2012 — 632

Management’s Discussion and Analysis of Financial Condition and Results of Operations
2.1 Operating and Financial Review

an aggregate amount of € 1.8 billion, net of income taxes, toallocate a portion of the respective fair market values of Daimler
Aerospace AG and Construcciones Aeronáuticas S.A. at the timeof the merger (the “fair value adjustments”). These aggregate
additions in value are generally being depreciated over four to
25 years for ﬁxed assets and were amortised over approximately
24 months for inventories. In addition, in 2001 in connection withthe 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 of income taxes, to reﬂect their fair market values.
The fair value adjustments lead to a depreciation expense that isrecorded in 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 “— 2.1.3.2 Use of EBIT*”.

2.1.2.4 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 of assets,
subsidiaries, joint ventures or associates likely to be affected. In
addition, EADS tests goodwill for impairment in the fourth quarterof each ﬁnancial year, whether or not there is any indication of
impairment. An impairment loss is recognised in the amount bywhich 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 isparticularly sensitive to the selected discount rates and estimatesof future cash ﬂows by EADS’ management. Consequently, slightchanges to these elements can materially affect 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 — SigniﬁcantAccounting Policies — Impairment of non-ﬁnancial assets” and“— Note 14: Intangible assets”.
An impairment of goodwill has an effect on proﬁtability, as it isrecorded in the line item “Other expenses” on EADS’ consolidated
income statement. No goodwill was impaired in 2010. In 2011
and 2012, the annual goodwill impairment tests within Other
Businesses resulted in impairment charges of € 20 million and€ 17 million, respectively.

2.1.2.5 Capitalised Development Costs
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
costs not meeting the IAS 38 criteria are expensed as incurred in
the consolidated income statement. € 145 million of product-related
development costs were capitalised in accordance with IAS 38 in

64 — EADS REGISTRATION DOCUMENT 20122010, € 97 million in 2011 and € 488 million in 2012, the latter relating
mostly (€ 366 million) to A350 XWB programme development costs.
Capitalised development costs are generally amortised overthe estimated 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 (and impairments, if any) is mainly recognised
within “Cost of sales”. Amortisation of capitalised development
costs amounted to € 34 million in 2010, € 116 million in 2011 and€ 171 million in 2012, the latter relating among others to the A380
programme and FSTA programme. T he 2012 ﬁgure also includes
an impairment of capitalised development costs at Cassidian(€ 74 million).
Internally generated intangible assets are reviewed for impairment
annually when the asset is not yet in use and subsequently
whenever events or changes in circumstances indicate that thecarrying amount may not be recoverable. See “— Notes to theConsolidated Financial Statements (IFRS) — Note 2: Summary ofsigniﬁcant accounting policies — Signiﬁcant accounting policies— Research and development expenses”.

2.1.2.6 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 incurred in 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 “— 2.1.7.1 Foreign Exchange Rates” and “Risk
Factors — 1. Financial Market Risks — Foreign Currency Exposure”.
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 in fairvalue of the hedging instruments related to the effective part of
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 result of
the underlying hedged transaction, when realised. See “— 2.1.5
Changes in Consolidated Total Equity (including Non-controlling
Interests)”. The ineffective portion is immediately recorded in “Proﬁt
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 recognisedin the income statement. If hedged transactions are cancelled,
gains and losses on the hedging instrument that were previously
recorded in equity are generally recognised in “Proﬁ t for theperiod”. If the hedging instrument expires or is sold, terminatedor exercised, or if its designation as hedging instrument is revoked,
amounts previously recognised in equity remain in equity until theManagement’s Discussion and Analysis of Financial Condition and Results of Operations
2.1 Operating and Financial Review

forecasted transaction or ﬁrm commitment occurs. Apart fromderivative ﬁ nancial instruments, the Group also uses ﬁ nancial
liabilities denominated in a foreign currency to hedge foreign
currency risk inherent in forecast transactions. See “— 2.1.7.1
Foreign Exchange Rates”.
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.
“Natural” hedges. EADS uses certain foreign currency
derivatives to mitigate its foreign currency exposure arising fromchanges in the fair value of recognised assets and liabilities.
To reﬂect the largely natural offset those derivatives provide to
the remeasurement gains or losses of speciﬁc foreign currency
balance sheet items, EADS presents the gains or losses of thoseforeign exchange rate derivatives as well as the fair value changesof the relating recognised assets and liabilities in EBIT* (rather
than presenting the gains or losses of those foreign exchange rate
derivatives in “other ﬁnancial result” but the fair value changesof the relating recognised assets and liabilities in EBIT*) insofar
as certain formal requirements are met, with no impact on net
income. See “— Notes to the Consolidated Financial Statements(IFRS) — Note 2: Summary of signiﬁcant accounting policies —Signiﬁcant Accounting Policies — Derivative ﬁnancial instruments”
and “— Note 12: Total ﬁnance costs — Other ﬁnancial result”.

2.1.2.7 Foreign Currency Translation
EADS’ 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 translationdifferences are included as a component of AOCI.
Transactions in foreign currencies are translated into euro at theexchange rate prevailing on the transaction date. Monetary assets
and liabilities 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 in cash
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 ﬁ nancial assets andliabilities that are measured at fair value are reported as part of
the fair value gain or loss. In addition, translation differences of
non-monetary ﬁnancial assets measured at fair value and classiﬁed
as available for sale are included in AOCI.
Goodwill and fair value adjustments arising on the acquisition of
a foreign entity that was acquired after 31 December 2004 aretreated as assets and liabilities of the acquired company and aretranslated into euro at the period-end exchange rate. Regardingtransactions prior to that date, goodwill, assets and liabilities
acquired are treated as those of the acquirer.

See “— Notes to the Consolidated Financial Statements (IFRS) —Note 2: Summary of signiﬁcant accounting policies — Signiﬁcantaccounting policies — Foreign currency translation”.

Currency Translation Mismatch
Customer advances (and the corresponding revenues recorded
when sales recognition occurs) are translated at the exchange
rate prevailing on the date they are received. US dollardenominated costs are converted at the exchange rate prevailingon the date they are incurred. To the extent that US dollardenominated customer advances differ, in terms of timing ofreceipt 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.

2.1.2.8 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 financingof customers, on a case-by-case basis, directly or throughguarantees provided to third parties. Certain sales contracts
may include the provision of an asset value guarantee, whereby
EADS guarantees a portion of the market value of an aircraft
or helicopter during a limited period, starting at a speciﬁc dateafter its delivery (in most cases, 12 years post-delivery). See “—
2.1.6.4 Sales Financing” and “Notes to the Consolidated Financial
Statements (IFRS) — Note 33: Commitments and contingencies”.
The accounting treatment of sales ﬁnancing transactions varies
based on the nature of the ﬁnancing transaction and the resulting
exposure.
On balance s heet. 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 aloan or a ﬁ nance lease. In such instances, revenues from thesale of the aircraft are recorded upon delivery, while ﬁ nancial
interest is recorded over time as ﬁnancial income. The outstandingbalance of principal is recorded on the statement of ﬁ nancial
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.
Rather than recording 100% of the revenues from the “sale” of theaircraft at the time of delivery, rental income from such operatingleases is recorded in revenues over the term of the respective
leases. The leased aircraft are recorded at production cost on
the statement of ﬁnancial position (on balance sheet) as property,
plant and equipment, and the corresponding depreciation and

EADS REGISTRATION DOCUMENT 2012 — 652

Management’s Discussion and Analysis of Financial Condition and Results of Operations
2.1 Operating and Financial Review

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 asset value guarantee exceeds 10% of
the sales price of the aircraft, the sale of the underlying aircraft isaccounted for as an operating lease in the Consolidated Financial
Statements. In this case, upon aircraft delivery, the cash payment
received from the customer is recognised on the consolidated
statement of ﬁnancial position as deferred income and amortised
straight-line up to the amount, and up to the last exercise date, of
the asset value guarantee. The production cost of the aircraft isrecorded on the statement of ﬁnancial position as property, plantand equipment. Depreciation expenses are recorded in cost of
sales in the consolidated income statement. See “— Notes to theConsolidated Financial Statements (IFRS) — Note 15: Property,
plant and equipment” and “— Note 30: Deferred income”.
Off balance sheet — contingent commitments. Certain sales
ﬁnancing commitments, such as lease in/lease out structures
and asset value guarantees 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 asset value guarantees areaccounted for as sales, with the related exposure deemed to bea contingent commitment. To reduce exposure under asset value
guarantees and to minimise the likelihood of their occurrence, theGroup extends them with prudent guaranteed asset values andrestrictive exercise conditions, including limited exercise window
periods.
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(directly or indirectly) the aircraft to Airbus or ATR, which in turnsub-leases it to the customer. To the extent possible, the termsof the head lease and sub-lease match payment streams andother 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 33:
Commitments and contingencies”.

2.1.3

Provisions and a llowances. Under its provisioning policy forsales ﬁnancing risk, EADS records provisions to fully cover its
estimated ﬁ nancing 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
the Consolidated Financial Statements (IFRS) — Note 25C: Other
provisions”. Provisions are recorded as impairments of the related
assets when they can be directly related to the corresponding
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.

2.1.2.9 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 natureof many of EADS’ contracts, the estimation of total revenues
and costs at completion is complicated and subject to many
assumptions, judgements and estimates. The introduction of
new aircraft programmes (such as the A350 XWB) or major
derivative aircraft programmes adds an additional element ofcomplexity to the assumptions, judgements and estimates related
to expected development, production and certiﬁcation schedules
and anticipated cost components, including possible customer
penalties and supplier claims. EADS’ contracts may also include
customer options to cancel or extend the contract under certain
circumstances, requiring a judgment as to the probability thatthese options will be exercised.
Loss-making contract provisions are therefore reviewed andreassessed regularly. However, future changes in the assumptions
used by EADS or a change in the underlying circumstances, suchas the ﬂuctuation of certain foreign exchange rates, may lead toa revaluation of past loss-making contract provisions and have acorresponding positive or negative effect on EADS’ future ﬁnancial
performance.

Performance Measures

2.1.3.1 Order Backlog
Year-end order backlog 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.

66 — EADS REGISTRATION DOCUMENT 2012

Defence-related orders are included in the backlog upon signatureof the related procurement contract (and the receipt, in most cases,of an advance payment). Commitments under defence “umbrella”
or “framework” agreements by governmental customers are notincluded in backlog until they are ofﬁcially notiﬁed to EADS.

Management’s Discussion and Analysis of Financial Condition and Results of Operations
2.1 Operating and Financial Review

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

CONSOLIDATED BACKLOG FOR THE YEARS ENDED 31 DECEMBER 2012, 2011 AND 2010 (1)Year ended 31 December 2012

Year ended 31 December 2011

Year ended 31 December 2010

Amount in €bn

In percentage(2)Amount in €bn

In percentage(2)Amount in €bn

In percentage(2)

523.4

93%

495.5

92%

400.4

89%

503.2

89%

475.5

88%

378.9

85%

21.1

4%

21.3

4%

22.8

5%

Eurocopter

13.0

2%

13.8

2%

14.5

3%

Astrium

12.7

2%

14.7

3%

15.8

4%

Airbus(3) (4)

Airbus Commercial
Airbus Military

Cassidian

15.6

3%

15.5

3%

16.9

4%

Total Divisional backlog

564.7

100%

539.5

100%

447.6

100%

Other Businesses
HQ/Consolidation
Total
(1)
(2)
(3)
(4)

2.9

3.0

2.5

(1.1)

(1.5)

(1.6)

566.5

541.0

448.5

Without options.
Before “Other Businesses” and “HQ/Consolidation”.
Based on catalogue prices for commercial aircraft activities.
Airbus reports in two segments: Airbus Commercial and Airbus Military. Eliminations between Airbus Commercial and Airbus Military are treated at the Airbus Division level.
See “— 2.1.1 Overview”.

2012 compared to 2011. The € 25.5 billion increase in the orderbacklog from 2011, to € 566.5 billion, primarily reﬂects the strong
order intake at EADS in 2012 (€ 102.5 billion), in particular at Airbus,
which largely exceeded the revenues accounted for in the same
year (€ 56.5 billion). This increase was partially offset by the weaker
US dollar spot rate used for conversion of the non-hedged portionof the backlog into euro at year end (€-US$ 1.32 as compared to€-US$ 1.29 at the end of 2011), which had a negative impact onorder backlog of approximately € -9 billion.
Airbus’ backlog increased by € 27.9 billion from 2011, to€ 523.4 billion, reﬂecting the backlog increase at Airbus Commercial.
Airbus Commercial’s backlog increased by € 27.7 billion from 2011,
to € 503.2 billion, reﬂecting a book-to-bill ratio of more than two
with new orders of € 86.5 billion, partially offset by the negative
net foreign currency adjustment to the non-hedged portion of theorder backlog. Order intake consisted of 833 net orders in 2012(as compared to 1,419 in 2011), broken down as follows: 739 A320
family aircraft, 85 A330/A350 XWBs and nine A380s. Total orderbacklog at Airbus Commercial amounted to 4,682 aircraft at theend of 2012 (as compared to 4,437 aircraft at the end of 2011).
Airbus Military’s backlog decreased by € 0.2 billion from 2011, to€ 21.1 billion, reﬂecting a book-to-bill ratio of slightly less than one
with new orders of € 1.9 billion. Order intake at Airbus Militaryconsisted of 32 net orders in 2012 (as compared to ﬁve in 2011).
Total order backlog at Airbus Military amounted to 220 aircraft at
the end of 2012 (as compared to 217 aircraft at the end of 2011).
Eurocopter’s backlog decreased by € -0.8 billion from 2011, to€ 13.0 billion, reﬂecting a book-to-bill ratio of less than one withnew orders of € 5.4 billion. Order intake consisted of 469 net
orders in 2012 (as compared to 457 in 2011), reﬂecting orders forcivil helicopters, in particular for the Ecureuil, EC135 and EC145
families. Total order backlog amounted to 1,070 helicopters at theend of 2012 (as compared to 1,076 helicopters at the end of 2011).
Astrium’s backlog decreased by € -2.0 billion from 2011, to€ 12.7 billion, reﬂecting a book-to-bill ratio of less than one withnew orders of € 3.8 billion. Order intake was driven mainly byservices activity including Vizada.
Cassidian’s backlog increased slightly by € 0.1 billion from 2011,
to € 15.6 billion, with new orders of € 5.0 billion despite thechallenging market environment. Order intake was driven mainlyby the Euroﬁghter and missile export business.
2011 compared to 2010. The € 92.5 billion increase in the orderbacklog from 2010, to € 541.0 billion, primarily reﬂects the strong
order intake at EADS in 2011 (€ 131.0 billion), which largely exceeded
the revenues accounted for in the same year (€ 49.1 billion). In
addition, the stronger US dollar spot rate used for conversionof the non-hedged portion of the backlog into euro at year end(€-US$ 1.29 as compared to €-US$ 1.34 at the end of 2010) had
a positive impact on order backlog of approximately € 15 billion.
Airbus’ backlog increased by € 95.1 billion from 2010, to€ 495.5 billion, reﬂecting a strong increase at Airbus Commercial.
Airbus Commercial’s backlog increased by € 96.6 billion from 2010,
to € 475.5 billion, primarily reﬂecting a book-to-bill ratio of more than
three with new orders of € 117.3 billion and, to a lesser extent, thepositive net foreign currency adjustment to the non-hedged portionof the order backlog. Order intake consisted of 1,419 net orders in2011 (as compared to 574 in 2010), driven mainly by the A320neo(new engine option), which received 1,226 ﬁrm orders. Total orderbacklog at Airbus Commercial amounted to 4,437 aircraft at the

EADS REGISTRATION DOCUMENT 2012 — 672

Management’s Discussion and Analysis of Financial Condition and Results of Operations
2.1 Operating and Financial Review

end of 2011 (as compared to 3,552 aircraft at the end of 2010).
Airbus Military’s backlog decreased by € 1.5 billion from 2010, to€ 21.3 billion, reﬂecting a book-to-bill ratio of less than one withnew orders of € 0.9 billion. Order intake at Airbus Military consisted
of ﬁve net orders in 2011 (as compared to 11 in 2010). Total orderbacklog at Airbus Military amounted to 217 aircraft at the end of
2011 (as compared to 241 aircraft at the end of 2010).
Eurocopter’s backlog decreased by € 0.7 billion from 2010, to€ 13.8 billion, reﬂecting a book-to-bill ratio of less than one withnew orders of € 4.7 billion. Order intake consisted of 457 net orders
in 2011 (as compared to 346 in 2010), driven mainly by orders forcivil helicopters, in particular Ecureuil and the EC145. Total orderbacklog amounted to 1,076 helicopters at the end of 2011 (ascompared to 1,122 helicopters at the end of 2010).
Year ended 31 December 2012

Astrium’s backlog decreased by € 1.1 billion from 2010, to€ 14.7 billion, reﬂecting a book-to-bill ratio of less than one with neworders of € 3.5 billion, driven mainly by commercial and institutional
satellite orders.
Cassidian’s backlog decreased by € 1.4 billion from 2010, to€ 15.5 billion, reﬂecting a book-to-bill ratio of less than one withnew orders of € 4.2 billion. Order intake included a contract award
for the ﬁrst phase of the United Arab Emirates command andcontrol system.
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 2011

Year ended 31 December 2010

Amount in €bn(1)In percentage

Amount in €bn(1)In percentage

Amount in €bn(1)In percentage

Backlog:
Civil Sector

516.9

91%

488.2

90%

390.2

87%

Defence Sector

49.6

9%

52.8

10%

58.3

13%

Total

566.5

100%

541.0

100%

448.5

100%

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

2.1.3.2 Use of EBIT*EADS uses EBIT pre-goodwill impairment and exceptionals(EBIT*) as a key indicator of its ﬁnancial performance. The term
“exceptionals” refers to such items as depreciation expenses offair value adjustments relating to the EADS merger, the Airbus
combination and the formation of MBDA, as well as impairment(in €m)Profit before finance costs and income taxes
Disposal and impairment of goodwill
Exceptional depreciation/disposal
EBIT*

68 — EADS REGISTRATION DOCUMENT 2012charges thereon. It also comprises disposal and impairment
impacts related to goodwill in EADS.
Set forth below is a table reconciling EADS’ proﬁt before ﬁnancecosts and income taxes (as reﬂected in EADS’ consolidated income
statement) with EADS’ EBIT*.
Year ended
31 December 2012

Year ended
31 December 2011

Year ended
31 December 2010

2,131

1,613

1,187

17

42

-

38

41

44

2,186

1,696

1,231

Management’s Discussion and Analysis of Financial Condition and Results of Operations
2.1 Operating and Financial Review

2.1.3.3 EBIT* Performance by Division
Set forth below is a breakdown of EADS’ consolidated EBIT* by Division for the past three years.
Year ended
31 December 2012

Year ended
31 December 2011

Year ended
31 December 2010

1,230

584

305

1,125

543

291

93

49

21

Eurocopter

311

259

183

Astrium

312

267

283

(in €m)Airbus(1)Airbus Commercial
Airbus Military

CassidianTotal Divisional EBIT*

142

331

457

1,995

1,441

1,228

Other Businesses

49

59

25

HQ/Consolidation(2)

142

196

(22)

2,186

1,696

1,231

Total

(1) Airbus reports in two segments: Airbus Commercial and Airbus Military. Eliminations between Airbus Commercial and Airbus Military are treated at the Airbus Division level. See“— 2.1.1 Overview”.
(2) 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.

2012 compared to 2011. EADS’ consolidated EBIT* increased by
28.9%, from € 1.7 billion for 2011 to € 2.2 billion for 2012, reﬂecting
the increased EBIT* at Airbus, Eurocopter and Astrium. Partially
offsetting this increase was a deterioration in EBIT* at Cassidian,Headquarters/Consolidation and Other Businesses in 2012.
Airbus’ EBIT* increased by 110.6%, from € 0.6 billion for 2011
to € 1.2 billion for 2012, due primarily to an increase at Airbus
Commercial. Airbus Commercial’s EBIT* increased by 107.2%,
from € 0.5 billion for 2011 to € 1.1 billion for 2012, mainly due tooperational improvements, including higher aircraft deliveries (588deliveries in 2012 with margin recognition for 585, as compared
to 534 deliveries in 2011 with margin recognition for 536) and an
improvement in the price of delivered aircraft net of escalation. Also
contributing to the EBIT* increase was an improvement in hedge
rates. See “— 2.1.4.1 Consolidated Revenues”. Partially offsetting
the EBIT* increase at Airbus Commercial was (i) a charge of€ -251 million for estimated warranty costs in repairing the wing rib
feet of delivered A380 aircraft, (ii) a charge of € -124 million related
to the three-month shift of entry into service for the A350 XWB
programme (to the second half of 2014), (iii) a charge of € -76 million
related to the closure of the Hawker Beechcraft programme, and(iv) € -71 million in currency translation adjustments, including thoserelated to the mismatch between US dollar-denominated customer
advances and corresponding US dollar-denominated costs as wellas the revaluation of loss-making contract provisions.
Airbus Military’s EBIT* increased by 89.8%, from € 49 million
for 2011 to € 93 million for 2012, primarily due to a favourable
delivery mix with margin improvements from technically maturing
programmes.
Eurocopter’s EBIT* increased by 20.1%, from € 259 million for2011 to € 311 million for 2012, primarily due to a favourable mix
effect. Partially offsetting the EBIT* increase was an increase inresearch and development expenses as well as a € 100 million

charge to reﬂect the status of on-going renegotiations of certain
governmental helicopter programmes.
Astrium’s EBIT* increased by 16.9%, from € 267 million for 2011 to€ 312 million for 2012, primarily due to efﬁciency and productivity
gains coming through the operational performance as a result of
the “AGILE” transformation programme. Partially offsetting the
EBIT* increase was an increase in research and development
expenses, globalisation efforts as well as some Vizada integration
costs.
Cassidian’s EBIT* decreased by 57.1%, from € 331 million
for 2011 to € 142 million for 2012, primarily due to a provisionof € 98 million recorded for restructuring costs in line with thebusiness transformation, and an additional expense of € -100
million for impairment charges, in particular for the secure systems
and solutions business. Partially offsetting the EBIT* decrease wasa reduction in research and development expenses.
The EBIT* of Other Businesses decreased by 16.9%, from€ 59 million for 2011 to € 49 million for 2012, primarily due to aless favourable revenue mix. The 2011 EBIT* included a gain froma divestiture at EADS North America.
2011 compared to 2010. EADS’ consolidated EBIT* increased
by 37.8%, from € 1.2 billion for 2010 to € 1.7 billion for 2011,
primarily reﬂecting the increased EBIT* at Airbus, Eurocopter andHeadquarters/Consolidation. Partially offsetting this increase wasa deterioration in EBIT* at Cassidian and Astrium in 2011.
Airbus’ EBIT* increased by 91.5%, from € 0.3 billion for 2010
to € 0.6 billion for 2011, due primarily to an increase at Airbus
Commercial. Airbus Commercial’s EBIT* increased by 86.6%,
from € 0.3 billion for 2010 to € 0.5 billion for 2011, mainly due tooperational improvements, including higher aircraft deliveries (534deliveries in 2011 with margin recognition for 536, as compared
to 510 deliveries in 2010 with margin recognition for 508), positive

EADS REGISTRATION DOCUMENT 2012 — 69

2

Management’s Discussion and Analysis of Financial Condition and Results of Operations
2.1 Operating and Financial Review

mix effects and an improvement in the price of delivered aircraftnet of escalation. See “— 2.1.4.1 Consolidated Revenues”. Partially
offsetting this EBIT* increase was an increase in research anddevelopment expenses, particularly for the A350 XWB programme,
and a deterioration of hedge rates.
Airbus Military’s EBIT* increased from € 21 million for 2010 to€ 49 million for 2011, primarily due to a favourable delivery mix,
operational improvements and overhead cost reductions.
Eurocopter’s EBIT* increased by 41.5%, from € 183 million for2010 to € 259 million for 2011, primarily due to a favourable mix
effect in commercial deliveries and support activities as well as
better operational performance. An increase in research anddevelopment expenses was roughly offset by cost savings. 2011
EBIT* includes a net charge of € -115 million mainly relating togovernmental programmes and the “SHAPE” transformation
programme.
Astrium’s EBIT* decreased by 5.7%, from € 283 million for 2010
to € 267 million for 2011. The strong performance in the satellites
and space transportation businesses was weighed down by lower
activity in services, expenses related to the Vizada acquisition anda charge of € 23 million booked for the “AGILE” transformation
programme in 2011.
Cassidian’s EBIT* decreased by 27.6%, from € 457 million for 2010
to € 331 million for 2011, primarily due to a signiﬁcant increase inresearch and development expenses, a restructuring provision of€ 38 million in relation to its transformation programme and a net
negative charge of € 34 million on programmes in 2011.
The EBIT* of Other Businesses increased from € 25 million for2010 to € 59 million for 2011, primarily due to increases at ATR
and Sogerma as well as a gain from the divestiture of Defense
Security and Systems Solutions (DS3) in EADS North America
that was completed in May 2011.
Headquarters/Consolidation EBIT* improved from € -22 million for2010 to € 196 million for 2011, mainly due to an increased allocationof management fees to Divisions and positive impacts from Groupeliminations in the fourth quarter of 2011.

70 — EADS REGISTRATION DOCUMENT 2012

Foreign currency impact on EBIT*. More than 60% of EADS’revenues are denominated in US dollars, whereas a substantial
portion of its costs is incurred in euros and, to a lesser extent,
pounds sterling. Given the long-term nature of its business cycles(evidenced by its multi-year backlog), EADS hedges a signiﬁcantportion of its net foreign exchange exposure to mitigate the impact
of exchange rate ﬂuctuations on its EBIT*. See “— 2.1.7.1 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 affectedby the impact of revaluation of certain assets and liabilities at theclosing rate and the impact of natural hedging.
During 2012, cash flow hedges covering approximately
US$ 22.2 billion of EADS’ US dollar-denominated revenues
matured. In 2012, the compounded exchange rate at which
hedged US dollar-denominated revenues were accounted for was€-US$ 1.36, as compared to €-US$ 1.37 in 2011. This difference
resulted in an approximate € 0.2 billion increase in EBIT* from 2011
to 2012, of which the majority was at Airbus. In addition, othercurrency translation adjustments, including those related to themismatch between US dollar-denominated customer advancesand corresponding US dollar-denominated costs as well as therevaluation of loss-making contract provisions, had an approximate
negative effect of € -0.1 billion on EBIT* compared to 2011. See“— 2.1.2.7 Foreign Currency Translation”.
During 2011, cash flow hedges covering approximately
US$ 19.1 billion of EADS’ US dollar-denominated revenues
matured. In 2011, the compounded exchange rate at which hedged
US dollar-denominated revenues were accounted for was€-US$ 1.37, as compared to €-US$ 1.35 in 2010. This difference
resulted in an approximate € -0.2 billion decrease in EBIT* from2010 to 2011, of which approximately € -0.2 billion was at Airbus.
In addition, other currency translation adjustments, including thoserelated to the mismatch between US dollar-denominated customer
advances and corresponding US dollar-denominated costs aswell as the revaluation of loss-making contract provisions, had apositive effect of € 0.2 billion on EBIT* compared to 2010.

Management’s Discussion and Analysis of Financial Condition and Results of Operations
2.1 Operating and Financial Review

2.1.4

Results of Operations

Set forth below is a summary of EADS’ consolidated income statements (IFRS) for the past three years.

(in €m, except for earnings per share)

Year ended
31 December 2012

Year ended
31 December 2011

Year ended
31 December 2010

Revenues

56,48049,12845,752

Cost of sales(48,545)(42,285)(39,528)

Gross margin

7,935

6,843

6,224

Selling and administrative expenses(2,864)(2,408)(2,312)

Research and development expenses(2,939)(3,142)(3,152)Other income

184

359

171

Other expenses

(229)

(221)

(102)

Share of profit from associates accounted for under the equity
method and other income from investments

247

192

145

Profit before finance costs and income taxes

2,131

1,613

1,187

Interest result

(285)

13

(99)

Other financial result

(168)

(233)

(272)

Income taxes

(449)

(356)

(244)

Profit for the period

1,229

1,037

572

1,228

1,033

553

1

4

19

Earnings per share (basic) (in €)

1.50

1.27

0.68

Earnings per share (diluted) (in €)

1.50

1.27

0.68

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

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

2.1.4.1 Consolidated Revenues
Set forth below is a breakdown of EADS’ consolidated revenues by Division for the past three years.

(in €m)Airbus(1)Airbus Commercial
Airbus MilitaryYear ended
31 December 2012

Year ended
31 December 2011

Year ended
31 December 2010

38,592

33,10329,97836,94331,15927,673

2,131

2,504

2,684

Eurocopter

6,264

5,415

4,830

Astrium

5,817

4,964

5,003

Cassidian

5,740

5,803

5,933

Total Divisional revenues

56,41349,28545,744

Other Businesses

1,524

1,252

1,182

HQ/Consolidation(2)(1,457)(1,409)(1,174)

Total

56,48049,12845,752(1) Airbus reports in two segments: Airbus Commercial and Airbus Military. Eliminations between Airbus Commercial and Airbus Military are treated at the Airbus Division level.
See “— 2.1.1 Overview”.
(2) HQ/Consolidation includes, in particular, adjustments and eliminations for intercompany transactions.

For 2012, consolidated revenues increased by 15.0%, from € 49.1 billion for 2011 to € 56.5 billion for 2012. The increase was primarily
due to higher revenues at Airbus, Eurocopter and Astrium.
For 2011, consolidated revenues increased by 7.4%, from € 45.8 billion for 2010 to € 49.1 billion for 2011. The increase was primarily
due to higher revenues at Airbus and Eurocopter, partially offset by slight revenue decreases at Astrium and Cassidian.

EADS REGISTRATION DOCUMENT 2012 — 712

Management’s Discussion and Analysis of Financial Condition and Results of Operations
2.1 Operating and Financial Review

AirbusFor 2012, Airbus’ consolidated revenues increased by 16.6%, from € 33.1 billion for 2011 to € 38.6 billion for 2012. The increase wasdue to higher revenues at Airbus Commercial, partially offset by a decrease in revenues at Airbus Military.
For 2011, Airbus’ consolidated revenues increased by 10.4%, from € 30.0 billion for 2010 to € 33.1 billion for 2011. The increase wasdue to higher revenues at Airbus Commercial, partially offset by a decrease in revenues at Airbus Military.

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 2012

Year ended
31 December 2011

Year ended
31 December 2010

Single-aisle

455

421

401

Long-range

103

87

91

Number of aircraft

Very large
Total

30

26

18

588(1)

534(2)

510 (3)(1) 585 aircraft with revenue recognition (three A330-200 delivered under operating lease).
(2) 536 aircraft with revenue recognition (two A330-200 delivered under operating lease in 2010 were sold down in 2011).
(3) 508 aircraft with revenue recognition (two A330-200 delivered under operating lease).

For 2012, Airbus Commercial’s consolidated revenues increased
by 18.6%, from € 31.2 billion for 2011 to € 36.9 billion for 2012.
The increase was primarily due to (i) higher aircraft deliveries (588deliveries in 2012 with margin recognition for 585, as compared
to 534 deliveries in 2011 with margin recognition for 536), (ii) an
approximate € 1.4 billion positive impact of improved hedge andaverage exchange rates, and (iii) an improvement in the price ofdelivered aircraft net of escalation. For a discussion of the impact
of exchange rate variations on EADS’ results of operations,see “— 2.1.2.6 Accounting for Hedged Foreign Exchange
Transactions in the Financial Statements”,“— 2.1.2.7 Foreign
Currency Translation”,“— 2.1.7.1 — Foreign Exchange Rates” and“Risk Factors — 1. Financial Market Risks — Exposure to Foreign
Currencies”.
For 2011, Airbus Commercial’s consolidated revenues increasedby 12.6%, from € 27.7 billion for 2010 to € 31.2 billion for 2011.
The increase was primarily due to higher aircraft deliveries (534deliveries in 2011 with revenue recognition for 536, as compared to
510 deliveries in 2010 with revenue recognition for 508), a favourable
mix effect (in particular the increased number of A380s deliveredin 2011) as well as an improvement in the price of delivered aircraftnet of escalation. Partially offsetting this revenue increase was an
approximate € -0.4 billion negative impact of exchange rate effects.

Airbus Military
Set forth below is a breakdown of deliveries of military transport aircraft by product type for the past three years.
Year ended
31 December 2012

Year ended
31 December 2011

Year ended
31 December 2010

CN235

8

7

6

C212

2

3

-

C295

10

10

13

P-3

4

3

1

Number of aircraft

A330 MRTT (Tanker)

5

6

-

Total

29

29

20

For 2012, Airbus Military’s consolidated revenues decreasedby 14.9%, from € 2.5 billion for 2011 to € 2.1 billion for 2012.
The decrease was primarily due to lower A400M and tanker
revenues.

72 — EADS REGISTRATION DOCUMENT 2012

For 2011, Airbus Military’s consolidated revenues decreased
by 6.7%, from € 2.7 billion for 2010 to € 2.5 billion for 2011. The
decrease was primarily due to € 0.3 billion lower revenue recognitionon the A400M programme in 2011, partially offset by an increase
in revenues from tanker activities.

Management’s Discussion and Analysis of Financial Condition and Results of Operations
2.1 Operating and Financial Review

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 2012

Year ended
31 December 2011

Year ended
31 December 2010

Tiger

10

16

15

Light

227

237

260

Medium

168

189

197

Heavy

70

61

55

of which NH90

35

32

28

Total

475

503

527

For 2012, consolidated revenues of Eurocopter increased by
15.7%, from € 5.4 billion for 2011 to € 6.3 billion for 2012, despite
an overall decrease in helicopter deliveries from 503 in 2011 to 475
in 2012. The revenue increase was primarily due to higher repair
and overhaul support activities, as well as additional revenuesof € 0.2 billion in 2012 related to the ﬁrst full-year consolidationof Vector Aerospace. See “— 2.1.2.1 Scope of and Changes inConsolidation Perimeter”. Higher NH90 and Super Puma revenues
also contributed to the increase.
For 2011, consolidated revenues of Eurocopter increased by 12.1%,
from € 4.8 billion for 2010 to € 5.4 billion for 2011, despite an overall
decrease in helicopter deliveries from 527 in 2010 to 503 in 2011.
The revenue increase was primarily due to a favourable mix effectin commercial deliveries and from support activities, as well as
additional revenues of € 0.2 billion in 2011 related to the ﬁrst-time
consolidation of Vector Aerospace.

Astrium
For 2012, consolidated revenues of Astrium increased by 17.2%,
from € 5.0 billion for 2011 to € 5.8 billion for 2012. The revenue
increase was primarily due to strong programme execution andgrowth in services activities, including additional revenues of€ 0.5 billion in 2012 related to the ﬁrst-time consolidation of Vizada.
See “— 2.1.2.1 Scope of and Changes in Consolidation Perimeter”.
For 2011, consolidated revenues of Astrium amounted to€ 5.0 billion, almost stable compared to 2010. A decrease inrevenues at Astrium Services was nearly offset by an increase inrevenues at Astrium Space Transportation and Astrium Satellites.

Cassidian
For 2012, consolidated revenues of Cassidian decreased by 1.1%,
from € 5.8 billion for 2011 to € 5.7 billion for 2012. Revenues wereroughly stable across Cassidian’s business segments year-overyear.
For 2011, consolidated revenues of Cassidian decreased by 2.2%,
from € 5.9 billion for 2010 to € 5.8 billion for 2011. Strong revenues
related to backlog deliveries from core and export Euroﬁghter
programme, missiles and radar business were more than offset by,among other things, the milestone shift in the security business.

Other Businesses
For 2012, consolidated revenues of Other Businesses increased
by 21.7%, from € 1.3 billion for 2011 to € 1.5 billion for 2012. The
increase mainly reﬂects higher revenues at EADS North America
as well as higher aircraft deliveries at ATR (10 additional aircraftcompared to 2011).
For 2011, consolidated revenues of Other Businesses increased
by 5.9%, from € 1.2 billion for 2010 to € 1.3 billion for 2011. The
increase mainly reﬂects a ramp-up in medium and light transport
aircraft deliveries and higher revenues from light utility helicopter
deliveries at EADS North America in 2011, as well as production
rate increases and higher cabin seat activity at EADS Sogerma.

2.1.4.2 Consolidated Cost of Sales
For 2012, consolidated cost of sales increased by 14.8%, from€ 42.3 billion for 2011 to € 48.5 billion for 2012. The increase wasprimarily due to strong delivery patterns and costs related tobusiness growth at Airbus, as well as charges incurred on the A380
and A350 XWB programmes in 2012. See “— 2.1.1.3 SigniﬁcantProgramme Developments and Related Financial Consequencesin 2010, 2011 and 2012”. Consolidated cost of sales also includes
the amortisation/impairment of capitalised development costs
pursuant to IAS 38, which amounted to € -171 million in 2012
compared to € -116 million in 2011. Notwithstanding the above
stated items, the gross margin increased from 13.9% in 2011 to
14.0% in 2012.
For 2011, consolidated cost of sales increased by 7.0% despite
certain cost savings, from € 39.5 billion for 2010 to € 42.3 billion
for 2011. The increase was primarily due to strong delivery
patterns and costs related to business growth at Airbus, as well
as a loss-making contract charge of € 200 million incurred on
the A350 XWB programme in 2011. See “— 2.1.1.3 SigniﬁcantProgramme Developments and Related Financial Consequencesin 2010, 2011 and 2012”. Consolidated cost of sales also includes
the amortisation of capitalised development costs pursuant to
IAS 38, which amounted to € -116 million in 2011 compared to€ -34 million in 2010. Mainly as a result of the above stated items
and despite a negative US dollar effect at Airbus in respect ofrevenues compared to 2010, the gross margin increased from
13.6% in 2010 to 13.9% in 2011.

EADS REGISTRATION DOCUMENT 2012 — 732

Management’s Discussion and Analysis of Financial Condition and Results of Operations
2.1 Operating and Financial Review

2.1.4.3 Consolidated Sellingand Administrative Expenses
For 2012, consolidated selling and administrative expenses
increased by 18.9%, from € 2.4 billion for 2011 to € 2.9 billion
for 2012. A large portion of the increase was due to changes
in consolidation scope linked to the full year inclusion of 2011acquisitions (mainly Vizada, Vector Aerospace and Satair), as well
as restructuring costs at Cassidian. See “— 2.1.2.1 Scope of andChanges in Consolidation Perimeter”.
For 2011, consolidated selling and administrative expenses
increased by 4.2%, from € 2.3 billion for 2010 to € 2.4 billion for 2011.
The increase was primarily due to higher expenses at Eurocopter,
which was in turn primarily related to the ﬁrst consolidation of
Vector Aerospace. See “— 2.1.2.1 Scope of and Changes inConsolidation Perimeter”.

2.1.4.4 Consolidated Researchand Development Expenses
For 2012, consolidated research and development expenses
decreased slightly by 0.3%, from € 3.2 billion for 2011 to € 3.1 billion
for 2012, in particular due to the capitalisation of € 0.5 billion indevelopment costs under IAS 38. See “— 2.1.2.5 Capitalised
development costs”. The focus continues on major development
programmes across the portfolio, in particular at Airbus (e.g., A350
XWB).
For 2011, consolidated research and development expenses
increased by 7.2%, from € 2.9 billion for 2010 to € 3.2 billion for2011. The increase was primarily due to higher expenses at Airbus
for A350 XWB development, at Cassidian for unmanned aerial
systems and Euroﬁghter radar activities and at Eurocopter acrossthe product range.

2.1.4.5 Consolidated Other Income
and Other Expenses
Consolidated other income and other expenses include gains andlosses on disposals of investments in ﬁxed assets and income
from rental properties.
For 2012, other income and other expenses was € -45 million net
as compared to € 138 million for 2011. The net decrease wasmainly due to the settlement of European government refundable
advances following Airbus’ termination of the A340 programme in2011, which had a positive effect of € 192 million on other income
in 2011. Also included was a goodwill impairment charge in 2012amounting to € -17 million.
For 2011, other income and other expenses was € 138 million
net as compared to € 69 million for 2010. The net increase wasmainly due to the settlement of European government refundable
advances following Airbus’ termination of the A340 programme in2011, which had a positive effect of € 192 million on other income.
See “— Notes to the Consolidated Financial Statements (IFRS) —74 — EADS REGISTRATION DOCUMENT 2012

Note 27: Other ﬁnancial liabilities”. This positive effect was partially
offset by a goodwill impairment charge of € -20 million in 2011.

2.1.4.6 Consolidated Share of Proﬁt
from Associates Accounted for under
the Equity Method and 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 for underthe equity method and the results attributable to non-consolidated
investments.
For 2012, EADS recorded € 247 million in consolidated share of
proﬁt from associates accounted for under the equity method andother income from investments as compared to € 192 million for2011. The € 55 million increase reﬂects among others the increased
contribution from EADS’ equity investment in Dassault Aviation.
See “— Notes to the Consolidated Financial Statements (IFRS) —Note 11: Share of proﬁt from associates accounted for under theequity method and other income from investments”.
For 2011, EADS recorded € 192 million in consolidated share of
proﬁt from associates accounted for under the equity method andother income from investments as compared to € 145 million for2010. The € 47 million increase reﬂects among others the increased
contribution from EADS’ equity investment in Dassault Aviation.

2.1.4.7 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 2012, EADS recorded a consolidated net interest expenseof € -285 million, as compared to a consolidated net interest
income of € 13 million for 2011. The deterioration in interest
result is primarily due to lower interest income recorded on
the Group’s cash balances. In addition, the 2011 interest result
included a positive effect of € 120 million following Airbus’
termination of the A340 programme in 2011. See “— Notes to
the Consolidated Financial Statements (IFRS) — Note 27: Other
financial liabilities”.
For 2011, EADS recorded a consolidated net interest income of€ 13 million, as compared to a consolidated net interest expenseof € -99 million for 2010. The improvement in interest result is
primarily due to lower interest expenses on refundable advances
and a higher interest income recorded on the Group’s higher cash
balances. The 2011 interest result includes a positive effect of€ 120 million following Airbus’ termination of the A340 programmein 2011.

Management’s Discussion and Analysis of Financial Condition and Results of Operations
2.1 Operating and Financial Review

2.1.4.8 Consolidated Other Financial Result
This line item includes, among others, the impact from therevaluation of ﬁnancial instruments, the effect of foreign exchange
valuation of monetary items and the unwinding of discounted
provisions. See “— Notes to the Consolidated Financial
Statements (IFRS) — Note 2: Summary of signiﬁcant accounting
policies — Signiﬁcant Accounting Policies — Derivative ﬁnancial
instruments — Embedded derivatives”. This line item also includes
the valuation of the premium paid for US dollar options used forforeign exchange hedging.
For 2012, consolidated other financial result improved to€ -168 million from € -233 million for 2011, reﬂecting among others
an improved impact from the revaluation of ﬁnancial instruments
compared to 2011. See “— Notes to the Consolidated Financial
Statements (IFRS) — Note 12: Total ﬁ nance costs” for further
discussion.
For 2011, consolidated other financial result improved to€ -233 million from € -272 million for 2010. This positive € 39 million
change results among others from the improvement in the impact ofrevaluation changes of US dollar- and pound sterling-denominatedcash balances on the euro-denominated balance sheets of Group
companies.

2.1.4.9 Consolidated Income Taxes
For 2012, income tax expense was € -449 million as compared to€ -356 million for 2011. The increase was primarily due to the higher
taxable income recorded in 2012 (€ 1,678 million) as compared
to 2011 (€ 1,393 million). The effective tax rate was 27% in 2012.
See “— Notes to the Consolidated Financial Statements (IFRS)— Note 13: Income taxes”.

2.1.4.10 Consolidated Non-Controlling
Interests
For 2012, consolidated proﬁt for the period attributable to noncontrolling interests was € 1 million, as compared to € 4 million for2011 and € 19 million for 2010.

2.1.4.11 Consolidated Proﬁt for the Period
Attributable to Equity Ownersof the Parent (Net Income)As a result of the factors discussed above, EADS recorded
consolidated net income of € 1,228 million for 2012, as compared
to consolidated net income of € 1,033 million for 2011 and€ 553 million for 2010.

2.1.4.12 Earnings per Share
Basic earnings were € 1.50 per share in 2012, as compared to€ 1.27 per share in 2011. The number of outstanding shares as of
31 December 2012 was 827,367,945. The denominator used to
calculate earnings per share was 819,378,264 shares, reﬂecting
the weighted average number of shares outstanding during theyear. In 2010, EADS reported basic earnings of € 0.68 per share.
Diluted earnings were € 1.50 per share in 2012, as comparedto € 1.27 per share in 2011. The denominator used to calculate
diluted earnings per share was 820,551,931, reﬂecting the weighted
average number of shares outstanding during the year, adjusted
to assume the conversion of all potential ordinary shares. In 2010,
EADS reported diluted earnings of € 0.68 per share.
See “— Notes to the Consolidated Financial Statements (IFRS)— Note 23: Total equity” and “— Note 38: Earnings per share”.

For 2011, income tax expense was € -356 million as comparedto € -244 million for 2010. The increase was primarily due tothe higher taxable income recorded in 2011 (€ 1,393 million) as
compared to 2010 (€ 816 million). The effective tax rate was 26%
in 2011.

EADS REGISTRATION DOCUMENT 2012 — 75

2

Management’s Discussion and Analysis of Financial Condition and Results of Operations
2.1 Operating and Financial Review

2.1.5

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 2012 through31 December 2012.
(in €m)Balance as at 31 December 2011, (adjusted)(1)8,865

Profit for the period

1,229

Actuarial gains or losses(770)

Accumulated other comprehensive income

1,357

Thereof foreign currency translation adjustments

4

Capital increase

144

Share-based payment (IFRS 2)

18

Cash distribution to EADS N.V. shareholders/dividends paid to non-controlling interests(379)

Equity transaction (IAS 27)(32)

Change in non-controlling interests

7

Change in treasury shares(5)

Balance as at 31 December 2012

10,434(1) Comparative information is adjusted retrospectively in accordance with IFRS 3.45. See “— Notes to the Consolidated Financial Statements (IFRS)— Note 4: Acquisitions and disposals”.

The increase in consolidated total equity in 2012 primarily reﬂects
the increase in accumulated other comprehensive income (“AOCI”)(€ 1.4 billion), with the latter mainly due to the positive variation(net of tax) of the year-end mark-to-market valuation of that
portion of EADS’ hedge portfolio qualifying for cash ﬂow hedge
accounting under IAS 39 (“cash flow hedges”), as well as proﬁt
for the period recorded for 2012. The increase in consolidated
total equity was partially offset by, among others, changes in
actuarial gains or losses (€ -0.8 billion) and the cash distribution
to EADS N.V. shareholders/dividends paid to non-controllinginterests (€ -0.4 billion).
Set forth below is a discussion on the calculation of AOCI andthe related impact on consolidated total equity. For a discussionof 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 2012, 2011 and 2010”.

76 — EADS REGISTRATION DOCUMENT 2012

2.1.5.1 Cash Flow Hedge Related Impact
on AOCI
As of 31 December 2012, the notional amount of EADS’ portfolioof outstanding cash ﬂow hedges amounted to US$ 83.6 billion,
hedged against the euro and the pound sterling. The year-end
mark-to-market valuation of this portfolio required under IAS 39
resulted in a positive pre-tax AOCI valuation change of € 1.9 billion
from 31 December 2011, based on a closing rate of €-US$ 1.32,
as compared to a negative pre-tax AOCI valuation change of€ -0.5 billion as of 31 December 2011 from 31 December 2010,
based on a closing rate of €-US$ 1.29. For further informationon the measurement of the fair values of ﬁnancial instruments
see “— Notes to the Consolidated Financial Statements (IFRS) —Note 34: Information about ﬁnancial instruments”.
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 value ofcash ﬂow hedges are recognised as adjustments to AOCI. These
adjustments to AOCI are net of corresponding changes to deferred
tax assets (for cash ﬂow hedges with negative mark-to-market
valuations) and deferred tax liabilities (for cash ﬂow hedges withpositive mark-to-market valuations). Set out below is a graphic
presentation of cash ﬂow hedge related movements in AOCI overthe past three years (in €m).

Management’s Discussion and Analysis of Financial Condition and Results of Operations
2.1 Operating and Financial Review

CASH FLOW HEDGE RELATED MOVEMENTS IN AOCI IN €M (BASED ON YEAR-END EXCHANGE RATES)-2,001

OCI Net Liability-2,547
-600
629
776

Net Deferred Taxes
184

31 December 2011: US$-1.29-1,372Net Equity OCI

31 December 2010: US$-1.34-1,77131 December 2012: US$-1.32-416

As a result of the positive change in the fair market valuation of the cash ﬂow hedge portfolio in 2012, AOCI amounted to a net liabilityof € -0.6 billion for 2012, as compared to a net liability of € -2.5 billion for 2011. The corresponding € -0.6 billion tax effect led to a net
deferred tax asset of € 0.2 billion as of 31 December 2012 as compared to a net deferred tax asset of € 0.8 billion as of 31 December 2011.
See “— Notes to the Consolidated Financial Statements (IFRS) — Note 34B: Carrying amounts and fair values of ﬁnancial instruments”
for further information.

2.1.5.2 Currency Translation Adjustment Impact on AOCIThe € 4 million currency translation adjustment (“CTA”) related impact on AOCI in 2012 mainly reﬂects the effect of the variation of the
US dollar.

2.1.6

Liquidity and Capital Resources

The Group’s objective is to maintain sufﬁcient liquidity at all times
to meet its present and future cash requirements and maintain afavourable credit rating. It attempts to achieve this objective by:— implementing measures designed to generate cash;— developing and maintaining access to the capital markets; and— containing its exposure to customer financing.
EADS deﬁnes its consolidated net cash position as the sum of(i) cash and cash equivalents and (ii) securities, minus (iii) ﬁnancing
liabilities (all as recorded in the consolidated statement of ﬁnancial
position). The net cash position as of 31 December 2012 was€ 12.3 billion (€ 11.7 billion as of 31 December 2011).
This net cash position is further supported by a € 3.0 billion
syndicated back-up facility, undrawn as of 31 December 2012
with no ﬁnancial covenants, as well as a Euro medium term note
programme and commercial paper programme. See “— 2.1.6.3
Consolidated Financing Liabilities”. The factors affecting EADS’cash position, and consequently its liquidity risk, are discussed
below.

EADS N.V. has two ofﬁ cial long-term credit ratings, the ﬁ rst
being A2 with a stable outlook by Moody’s Investors Service Inc.
(“Moody’s”), and the second A- with a positive outlook by Standard
and Poor’s Credit Market Services Europe Limited (“Standard& Poor’s”). EADS N.V. also has an unsolicited long-term credit
rating of BBB+ with a positive outlook by Fitch Polska S.A. (“Fitch
Ratings”). Standard and Poor’s and Fitch Ratings are establishedin the European Union and, as of the date of this Registration
Document, are registered as credit rating agencies in accordancewith EC Regulation 1060/2009 of the European Parliament and of
the Council of 16 September 2009 on credit rating agencies (the“CRA Regulation”). Moody’s is not established in the European
Union and not registered under the CRA Regulation but Moody’s
Investors Service Ltd., its European Union credit rating agency
afﬁliate, is registered under the CRA Regulation and has endorsed
Moody’s rating.

EADS REGISTRATION DOCUMENT 2012 — 772

Management’s Discussion and Analysis of Financial Condition and Results of Operations
2.1 Operating and Financial Review

2.1.6.1 Cash FlowsEADS generally ﬁnances its manufacturing activities and product development programmes, and in particular the development of newcommercial 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 governmentﬁnanced research and development 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.

(in €m)Consolidated net cash position at 1 January(1)Year ended
31 December 2012

Year ended
31 December 2011

Year ended
31 December 2010

11,681

11,918

9,797

4,772

3,392

2,177

Changes in other operating assets and liabilities

(76)

1,386

2,819

Thereof customer financing

(146)

135

63

(3,448)(3,820)(2,289)(3,270)(2,197)(2,250)

Thereof acquisitions(201)(1,535)(38)

Free cash flow(3)

1,248

958

2,707

Free cash flow before customer financing

1,394

823

2,644

Cash distribution to shareholders/non-controlling interests

(379)

(183)

(7)

Changes in capital and non-controlling interests

144

(65)

(48)

Change in treasury shares

(5)

(1)

(3)

Contribution to plan assets of pension schemes

(856)

(489)

(553)

Other changes in financial position

459

(457)

25

12,292

11,681

11,918Gross cash flow from operations

Cash used for investing activities(2)

Thereof industrial capital expenditures

Consolidated net cash position as of 31 December(1) Represents cash provided by operating activities, excluding (i) changes in other operating assets and liabilities (working capital) and (ii) contribution to plan assets of pension
schemes (€ -553 million for 2010; € -489 million for 2011; € -856 million for 2012).
(2) Does not reflect change of securities (net investment of € -3,147 million for 2010; net investment of € -378 million for 2011; net disposal of € 3,422 million for 2012), which areclassified as cash and not as investments solely for the purposes of this net cash presentation.
(3) Does not reflect change of securities and contribution to plan assets of pension schemes.

The net cash position as of 31 December 2012 was € 12.3 billion,
a 5.2% increase from 31 December 2011. The increase primarily
reﬂects the gross cash ﬂow from operations (€ 4.8 billion), partially
offset by the cash used for investing activities (€ -3.4 billion) as
well as other items.

ramp-up on single-aisle and long-range aircraft production. The
negative variations within the year were partially offset by (i) predelivery payments from customers (€ 1.2 billion), which neverthelessdecreased compared to 2011 due to lower order intake mainly at
Airbus, and (ii) the change in trade liabilities (€ 0.8 billion).

Gross Cash Flow from Operations

In 2011, the main net contributors to the positive working
capital variation were: (i) pre-delivery payments from customers(€ 2.0 billion), which increased compared to 2010 due to higher
business activity mainly at Airbus, (ii) the change in trade liabilities(€ 0.8 billion), mainly at Airbus and (iii) the change in tradereceivables (€ 0.4 billion). The positive variations within the year
were partially offset by (i) the change in inventory (€ -1.6 billion)
reﬂecting inventory growth across most Divisions, in particular at
Airbus due to the progressive ramp-up on single-aisle and longrange aircraft production and (ii) the change in other assets andliabilities (€ -0.3 billion).

Gross cash ﬂow from operations increased by 40.7% to € 4.8 billion
for 2012, primarily due to the improvement of operating proﬁtability
before depreciation and provisioning.

Changes in Other Operating Assets
and Liabilities
Changes in other operating assets and liabilities is comprised ofinventories, trade receivables, other assets and prepaid expenses
netted against trade liabilities, other liabilities (including customer
advances), deferred income and customer ﬁnancing. They resulted
in a € -76 million negative impact on the net cash position for 2012,
as compared to a positive impact of € 1.4 billion for 2011.
In 2012, the main net contributor to the negative working capitalvariation was the change in inventory (€ -1.5 billion) reﬂ ecting
inventory growth in particular at Airbus due to the progressive

78 — EADS REGISTRATION DOCUMENT 2012

European g overnment r efundable a dvances. As of
31 December 2012, 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” due to their speciﬁc nature, amounted to€ 6.1 billion, including accrued interest.

Management’s Discussion and Analysis of Financial Condition and Results of Operations
2.1 Operating and Financial Review

European government refundable advances (net of reimbursements)
as recorded on the statement of ﬁnancial position decreased in2011, due primarily to the settlement of € 0.4 billion in obligations
following Airbus’ termination of the A340 programme (cash effect of€ -0.1 billion). This also had a positive effect on other income and on(in €bn)

Long-range

interest result (€ 192 million and € 120 million, respectively) during
2011 as discussed above. See “— Notes to the Consolidated
Financial Statements (IFRS) — Note 27: Other ﬁnancial liabilities”.
Set out below is a breakdown of the total amount of European
government refundable advances outstanding, by product/project.

2012

2011

2010

1.9

1.5

1.8

A380

3.7

3.8

3.7

Eurocopter

0.2

0.2

0.2

Others

0.3

0.2

0.3

Total

6.1

5.7

6.0

Cash Used for Investing Activities
Management categorises cash used for investing activities into
three components: (i) industrial capital expenditures, (ii) acquisitionsand (iii) others.
Industrial capital expenditures. Industrial capital expenditures(investments in property, plant and equipment and intangible assets)
amounted to € -3.3 billion for 2012, as compared to € -2.2 billion
for 2011 and € -2.3 billion for 2010. Capital expenditures in 2012
related to programmes at Airbus of € -2.4 billion (a large portionof which related to the A350 XWB) and additional projects in theother Divisions of € -0.9 billion, mainly driven by investment at
Astrium and Eurocopter. Capital expenditures include productrelated development costs that are capitalised in accordance with
IAS 38. See “—2.1.2.5 Capitalised Development Costs”.
For the period 2013 to 2014, 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 bebroadly distributed across EADS’ home markets of France,
Germany, Spain and the UK.
Acquisitions. In 2012, the € -0.2 billion ﬁgure reﬂects the net cashused for the Group’s acquisitions during the year, in particularacquisitions at Cassidian (€ -123 million for Carl Zeiss Optronics
GmbH, Rheinmetall Airborne Systems GmbH and Netasq) andasset deals at Eurocopter (€ -43 million). See “— Notes to theConsolidated Financial Statements (IFRS) — Note 31: Consolidated
statements of cash ﬂows”.
In 2011, the € -1.5 billion ﬁ gure reﬂ ects the net cash used for
the Group’s acquisitions during the year, in particular Vizada(€ -709 million), Vector (€ -432 million) and Satair (€ -342 million).
In 2010, the € -38 million ﬁgure reﬂects the acquisition of JenaOptronik GmbH.

Free Cash FlowEADS deﬁnes free cash ﬂow as the sum of (i) cash provided byoperating activities and (ii) cash used for investing activities, minus(iii) change of securities and (iv) contribution to plan assets ofpension schemes. As a result of the factors discussed above,
free cash ﬂow amounted to € 1.2 billion for 2012, as comparedto € 1.0 billion for 2011 and € 2.7 billion for 2010. Free cash ﬂow
before customer ﬁnancing was € 1.4 billion for 2012, as comparedto € 0.8 billion for 2011 and € 2.6 billion for 2010.

Contribution to Plan Assets of Pension
Schemes
The cash outﬂows of € -0.9 billion, € -0.5 billion and € -0.6 billion in2012, 2011 and 2010, respectively, primarily relate to a contribution
to the Contractual Trust Arrangement (CTA) for allocating andgenerating pension plan assets in accordance with IAS 19, as
well as to plan assets in the UK and to German beneﬁt funds.
See “— Notes to the Consolidated Financial Statements (IFRS)— Note 25B: Provisions for retirement plans”. In 2013, EADS
intends to make additional contributions to plan assets in orderto reduce the provision for retirement plans on its statement ofﬁnancial position.

Other Changes in Financial Position
In 2012, the positive change of € 459 million mainly results fromrevaluation of securities and ﬁ nancing liabilities. In 2011, thenegative change of € -457 million results from increases in ﬁnancing
liabilities due to the newly consolidated companies. In 2010 there
was a small positive change of € 25 million, which reﬂects among
others currency effects on ﬁnancing liabilities.

2.1.6.2 Consolidated Cash and Cash
Equivalents and Securities
The cash and cash equivalents and securities portfolio of theGroup is invested mainly in non-speculative ﬁnancial instruments,
mostly highly liquid, such as certiﬁ cates of deposit, overnight
deposits, commercial paper, other money market instruments
and bonds. See “— 2.1.7.2 Interest Rates” and “— Notes to theConsolidated Financial Statements (IFRS) — Note 34A: Financial
risk management”.

EADS REGISTRATION DOCUMENT 2012 — 792

Management’s Discussion and Analysis of Financial Condition and Results of Operations
2.1 Operating and Financial Review

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 positionof each subsidiary within the Group and enables management toallocate cash optimally within the Group depending upon shifting
short-term needs.

Total cash and cash equivalents in 2012 included € 0.4 billion fromthe 37.5% consolidation of MBDA, compared to € 0.7 billion in 2011and € 0.7 billion in 2010.

2.1.6.3 Consolidated Financing Liabilities
The following table sets forth the composition of EADS’ consolidated ﬁnancing liabilities, including both short- and long-term debt, asof 31 December 2012:31 December 2012(in €m)Not exceeding 1 year

Over 1 year up to 5 years

More than 5 years

Total

Bonds

165

1,090

579

1,834

Liabilities to financial institutions

53

821

561

1,435

Loans

189

231

56

476

Finance leases

13

99

69

181

Others

853

-

-

853

Total

1,273

2,241

1,265

4,779 (1)(1) Financing liabilities include non-recourse Airbus debt for € 345 million.

The outstanding balance of financing liabilities decreased
from € 5.1 billion as of 31 December 2011 to € 4.8 billion as of
31 December 2012. This decrease is mainly related to a dividend
from MBDA.
Financing liabilities include liabilities connected with sales ﬁnancing
transactions amounting to € 345 million as of 31 December 2012,
most of which bore interest at variable rates. See “— 2.1.6.4 Sales
Financing”.
EMTN programme. EADS has a € 3 billion Euro Medium Term
Note (“EMTN”) Programme in place, with two tranches outstanding
as of 31 December 2012:— € 0.5 billion of notes issued in 2003 and maturing in 2018,
bearing interest at 5.5% (effective interest rate: 5.6%) andsubsequently swapped into a variable rate of three -month
EURIBOR plus 1.72%; and— € 1.0 billion of notes issued in 2009 and maturing in 2016,
bearing interest at 4.625% (effective interest rate: 4.7%) andsubsequently swapped into a variable rate of three -month
EURIBOR plus 1.57%.
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 since2003 and has a maximum authorised volume limit of € 2 billion.
As of 31 December 2012, an issued volume of € 165 million was
outstanding under the programme.
European i nvestment b ank l oans. In 2004, the European
Investment Bank granted a long-term loan to EADS in theamount of US$ 421 million maturing in 2014 and bearing interest

80 — EADS REGISTRATION DOCUMENT 2012

at 5.1% (effective interest rate: 5.1%). In 2011, EADS entered intoa US$ 721 million long-term credit agreement maturing in 2021
(with straight line amortisation from August 2015 onwards) with
the European Investment Bank, bearing interest at a variable rateof three -month USD LIBOR plus 0.849%. EADS concurrently
swapped the variable interest rate into a ﬁxed rate of 3.2%.
Development Bank of Japan l oan. In 2011, EADS enteredinto a US$ 300 million loan maturing in 2021 (bullet loan) with
the Development Bank of Japan, fully drawn down and bearing
interest at a variable rate of three-month USD LIBOR plus 1.15%.
EADS concurrently swapped the variable interest rate into a ﬁxed
rate of 4.8%.
For further information, see “— Notes to the Consolidated Financial
Statements (IFRS) — Note 26: Financing liabilities”.

2.1.6.4 Sales Financing
EADS 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 productsales, primarily at Airbus, Eurocopter and ATR, EADS may agree
to participate in the ﬁnancing of customers, on a case-by-casebasis, directly or through guarantees provided to third parties.
The ﬁnancial markets remain unpredictable, which may cause
EADS to increase its future outlays in connection with customer
ﬁnancing of commercial aircraft, mostly through ﬁnance leases
and secured loans. Nevertheless, it intends to keep the amountas 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Management’s Discussion and Analysis of Financial Condition and Results of Operations
2.1 Operating and Financial Review

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 wellas 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 the ﬁnancing terms
offered to customers.
7.2% of the € 4.8 billion of total consolidated ﬁnancing liabilities as of
31 December 2012 related to the funding of EADS’ sales ﬁnancing
assets, which are of a long-term nature and have predictablepayment schedules.

Set out below is a breakdown of the total amount of sales ﬁnancing liabilities outstanding.
(in €m)

2012

2011

2010

Liabilities to financial institutions

313

421

491

Loans

32

111

140

Total sales financing liabilities

345

532

631

All of the € 345 million total sales financing liabilities as of
31 December 2012 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 26: Financing liabilities”. See also “— 2.1.2.8 Accounting
for Sales Financing Transactions in the Financial Statements”.
Furthermore, in 1999, Airbus received a reinvestment note from
Deutsche Bank AG in the amount of US$ 800 million, bearing aﬁxed interest rate of 9.88% with an outstanding debt of € 195 million
as of 31 December 2012 (2011: € 224 million, 2010: € 275 million).
Sales ﬁnancing transactions are generally collateralised by theunderlying aircraft. Additionally, Airbus, Eurocopter and ATR beneﬁt
from protective covenants and from security packages tailoredaccording to the perceived risk and the legal environment of eachtransaction.
EADS classiﬁ es the exposure arising from its sales ﬁ nancing
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 Risk”.

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 orloans; and (iii) the net present value of the maximum commitment
amounts under ﬁnancial guarantees.
Gross c ustomer f inancing e xposure from operating leases,
ﬁnance leases and loans differs from the value of related assets
on EADS’ statement of ﬁnancial position and related off-balance
sheet contingent commitments for the following reasons:(i) assets are recorded in compliance with IFRS, but may relate totransactions where there is limited recourse to Airbus, Eurocopteror ATR; (ii) the value of the assets is impaired or depreciated on
the consolidated statement of ﬁnancial position; (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 asset value guarantees recorded as operating leases inthe ﬁnancial statements is categorised under asset value exposure,
not customer ﬁnancing exposure.
Airbus’ g ross c ustomer f inancing e xposure amounted to
US$ 1.5 billion (€ 1.1 billion) as of 31 December 2012. The chart
below illustrates the evolution of this exposure during 2012 (in US$
million).

EADS REGISTRATION DOCUMENT 2012 — 812

Management’s Discussion and Analysis of Financial Condition and Results of Operations
2.1 Operating and Financial Review

EVOLUTION OF AIRBUS GROSS EXPOSURE DURING 2012

1,430

31 December 2011
Additions

Disposals

Amortisation

560

-345

-142

31 December 2012

1,503

Airbus gross customer ﬁnancing exposure as of 31 December
2012 is distributed over 87 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 10
airlines in nine countries (this excludes backstop commitments).

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 aircraftin 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 “— 2.1.2.8 Accounting for Sales Financing Transactions in the
Financial Statements”.

ATR’s g ross c ustomer f inancing e xposure amounted to
US$ 0.1 billion (€ 0.1 billion) as of 31 December 2012. This exposure
is distributed over 124 aircraft. EADS proportionally consolidates
only 50% of ATR and shares the risk with its partner, Alenia.
Eurocopter’s gross customer ﬁnancing exposure amounted to€ 84 million as of 31 December 2012. This exposure is distributed
over 50 helicopters.

82 — EADS REGISTRATION DOCUMENT 2012

Management’s Discussion and Analysis of Financial Condition and Results of Operations
2.1 Operating and Financial Review

The table below shows the transition from gross to net ﬁnancing exposure (which does not include asset value guarantees) as of
31 December 2012, 2011 and 2010. It includes 100% of Airbus’ and Eurocopter’s customer ﬁnancing exposure and 50% of ATR’s
exposure, reﬂecting EADS’ stake in ATR.
Airbus(in €m)ATR 50%Eurocopter

Total EADS

Note(1) 31/12/2012 31/12/2011 31/12/2010 31/12/2012 31/12/2011 31/12/2010 31/12/2012 31/12/2011 31/12/2010 31/12/2012 31/12/2011 31/12/2010

Operating leases

15

693

497

579

-

-

-

-

-

-

693

497

579

Finance leases& loans

17

783

1,062

1,234

19

13

14

70

46

41

872

1,121

1,289

Others

-

-

-

10

29

55

2

-

-

12

29

55

On balance
sheet customer
financing

1,476

1,559

1,813

29

42

69

72

46

41

1,577

1,647

1,923

Off balance
sheet customer
financing

318

357

448

45

56

46

12

40

48

375

453

542

Non-recourse
transactions onbalance sheet

(461)

(721)

(880)

-

-

-

-

-

-

(461)

(721)

(880)

Off balance sheet
adjustments

(194)

(90)

(115)

-

-

-

-

-

-

(194)

(90)

(115)

Gross Customer
Financing
Exposure

33

1,139

1,105

1,266

74

98

115

84

86

89

1,297

1,289

1,470

Collateral values

33

(741)

(627)

(759)

(61)

(86)

(105)

(48)

(53)

(62)

(850)

(766)

(926)

398

478

507

13

12

10

36

33

27

447

523

544

Net exposure
Assetimpairments
and provisions
on:
Operating leases

33

(223)

(127)

(75)

-

-

-

-

-

-

(223)

(127)

(75)

Finance leases& loans

33

(132)

(172)

(176)

-

-

-

-

-

-

(132)

(172)

(176)

On balance sheet
commitments

33

-

-

-

(13)

(12)

(10)

(36)

(33)

(27)

(49)

(45)

(37)

Off balance sheet
commitments

33

(43)

(179)

(256)

-

-

-

-

-

-

(43)

(179)

(256)

(398)

(478)

(507)

(13)

(12)

(10)

(36)

(33)

(27)

(447)

(523)

(544)

-

-

-

-

-

-

-

-

-

-

-

-

Asset
impairments
and provisions
Residual exposure(1) The indicated numbers refer to the number of the Notes to Consolidated Financial Statements (IFRS).

The gross value of consolidated operating leases shown in the table
above (€ 693 million in 2012, € 497 million in 2011 and € 579 million
in 2010) is accounted for in “Property, plant and equipment” at net
book value of operating leases before impairment. Corresponding
accumulated asset impairments (€ -223 million in 2012, € -127 million
in 2011 and € -75 million in 2010) are charged against this net bookvalue. See “— Notes to the Consolidated Financial Statements(IFRS) — Note 15: Property, plant and equipment” and “— Note 33:
Commitments and contingencies”.
Also shown in the table above is the gross value for consolidated
ﬁnance leases and loans (€ 872 million in 2012, € 1,121 million in2011 and € 1,289 million in 2010). Consolidated ﬁnance leases(€ 448 million in 2012, € 618 million in 2011 and € 731 million in2010) are accounted for as long-term ﬁnancial assets, recorded attheir book value before impairment. Loans (€ 424 million in 2012,€ 503 million in 2011 and € 558 million in 2010) are also accounted

for as long-term ﬁnancial assets, recorded at their outstanding
gross amount. Corresponding overall accumulated impairments(€ -132 million in 2012, € -172 million in 2011 and € -176 million in2010) are charged against the book values. See “— Notes to theConsolidated Financial Statements (IFRS) — Note 17: Investments
in associates accounted for under the equity method, otherinvestments and other long-term ﬁnancial assets”.
Off-balance sheet customer ﬁnancing exposure at Airbus, ATR(accounted for at 50% by EADS) and Eurocopter was € 375 million
in 2012, € 453 million in 2011 and € 542 million in 2010. Theseamounts reﬂect the total nominal value of future payments underlease in/lease out structures. The corresponding net present
value of future payments (discounted and net of mitigating factors)
is included in total g ross ﬁnancing exposure for an amount of€ 181 million in 2012, € 363 million in 2011 and € 427 million in 2010.
A provision of € 43 million has been accrued for in EADS’ balance

EADS REGISTRATION DOCUMENT 2012 — 832

Management’s Discussion and Analysis of Financial Condition and Results of Operations
2.1 Operating and Financial Review

sheet as of 31 December 2012 to cover the full amount of thecorresponding net exposure. See “— Notes to the Consolidated
Financial Statements (IFRS) — Note 33: Commitments andcontingencies”.

guaranteed on a transaction basis taking counter guarantees into
account. See “— Notes to the Consolidated Financial Statements(IFRS) — Note 25C: Other provisions”.

Backstop Commitments
Asset Value Exposure
A significant portion of EADS’ asset value exposure arises
from outstanding asset value guarantees, primarily at Airbus.
Management considers the ﬁnancial risks associated with suchguarantees to be manageable. Three factors contribute to thisassessment: (i) the guarantee only covers a tranche of the estimatedfuture value of the aircraft, and its level is considered prudent incomparison to the estimated future value of each aircraft; (ii) the
asset value guarantee-related exposure is diversiﬁed over a large
number of aircraft and customers; and (iii) the exercise dates ofoutstanding asset value guarantees are distributed through 2022,
resulting in low levels of exposure maturing in any year. In addition,these asset value guarantees must generally be exercised duringa pre-deﬁned window and contain speciﬁc conditions that must
be met in order for them to be exercisable. Airbus is currently
engaged in taking mitigation action to reduce the impact of asset
value guarantees falling due in the coming years relating to A340s
in particular.
Gross exposure. Gross asset value exposure is deﬁned as thesum of the maximum guaranteed tranche amounts (as opposedto the sum of the maximum guaranteed asset value amounts)
under outstanding asset value guarantees. As of 31 December
2012, gross asset value exposure was US$ 1.9 billion (€ 1.4 billion).
The off-balance sheet portion of g ross a sset value exposure,
representing asset value guarantees with net present values ofless than 10% of the sales price of the corresponding aircraft, was€ 1,046 million, excluding € 333 million where the risk is considered
to be remote. In many cases, the risk is limited to a speciﬁc portionof 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
be probable, is fully provided for and included in the amountof the provision for asset value risks of € 712 million as of
31 December 2012. This provision covers a potential expectedshortfall between the estimated value of the aircraft of the dateupon which the guarantee can be exercised and the value

2.1.7

Hedging Activities

2.1.7.1

Foreign Exchange Rates

More 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 ofcosts is incurred primarily in euros, and to a lesser extent, inpounds sterling. Consequently, to the extent that EADS does
not use ﬁnancial instruments to hedge its net current and futureexchange rate exposure from the time of a customer order to the

84 — EADS REGISTRATION DOCUMENT 2012

While backstop commitments to provide ﬁnancing related to orders
on Airbus’, Eurocopter’s and ATR’s backlog are also given, suchcommitments are not considered to be part of gross exposure until
the ﬁnancing is in place, which occurs when the aircraft is delivered.
This is due to the fact that (i) past experience suggests it is unlikelythat all such proposed ﬁnancings actually will be implemented(although it is possible that customers not beneﬁting from suchcommitments may nevertheless request ﬁ nancing assistanceahead 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.
Airbus orders and backstop commitments. Over the last three
years (2010, 2011 and 2012), the average number of newly orderedaircraft in respect of which a backstop commitment has beenoffered amounted to 8% of the average orders recorded over thesame period, i.e. 73 supported aircraft per year out of 942 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 andconditions offered to customers will vary.
Airbus deliveries and ﬁ nancing support implemented atdelivery. Over the last three years (2010, 2011 and 2012), theaverage number of aircraft delivered in respect of which ﬁnancing
support has been provided by Airbus amounted to 2% of theaverage number of deliveries over the same period, i.e. nine aircraft
ﬁnanced per year out of 544 deliveries per year on average. Thisﬁ nancing support may take the form of senior or junior loans
or guarantees. Such support may have originated from EADS’contractual backstop commitments provided at signing of thepurchase agreement (see above) or may be the result of a request
for ﬁnancing assistance made by the customer ahead of aircraft
delivery.
See “— Notes to the Consolidated Financial Statements (IFRS) —Note 33: Commitments and contingencies” for further discussionof EADS’ sales ﬁnancing policies and accounting procedures.

time of delivery, 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. 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 the impact of exchange rate ﬂuctuations on its EBIT*.
See “— 2.1.3.3 EBIT* Performance by Division — Foreign Currency

Management’s Discussion and Analysis of Financial Condition and Results of Operations
2.1 Operating and Financial Review

Impact on EBIT*”. See also “— Risk Factors — 1. Financial Market
Risks — Foreign Currency Exposure”.
As EADS uses ﬁnancial instruments to hedge its net foreign currency
exposure, the portion of its US dollar-denominated revenues nothedged by ﬁnancial instruments is exposed to changes in exchange
rates. Of this non-hedged portion of revenues, a certain percentage(relating to customer pre-delivery payments) is converted into euroat the spot rate effective at the time the payment was received
by EADS. The remainder of non-hedged US dollar-denominatedrevenues (corresponding to payments upon delivery) are subject
to changes in the spot rate at the time of delivery. See “— 2.1.2.7
Foreign Currency Translation”.
Exposure on aircraft sales. For products such as aircraft,
EADS typically hedges ﬁrmly committed sales in US dollars. The
hedged items are deﬁned as ﬁrmly committed future cash inﬂows
for a given month based upon ﬁnal payments at delivery. Usually,
EADS designates a portion of the total monthly cash inﬂ ows
as the hedged position to cover its expected foreign currency
exposure. Therefore, as long as the actual gross foreign currency
cash inﬂows (per month) exceed the portion designated as being
hedged, a postponement or cancellation of sales transactions
and corresponding cash inﬂows have no impact on the hedging
relationship. The amount of the expected ﬂows to be hedged cancover up to 100% of the equivalent of the net US dollar exposure
at inception. The coverage ratio is adjusted to take into accountmacroeconomic movements affecting the spot rates and interest
rates as well as the robustness of the commercial cycle.
Exposure on non-aircraft business. For the non-aircraftbusiness EADS hedges in- and outﬂows in foreign currencies
from ﬁrmly committed or forecast sales and purchase contracts.
In the non-aircraft business, hedges are typically contracted inlower volumes but follow similar ﬁrst ﬂow logic or are designatedbased on agreed milestone payments.

Exposure on treasury operations. In connection with its treasury
operations, EADS enters into foreign exchange swap contracts(notional amount of € 2.1 billion as of 31 December 2012) toadjust for short-term ﬂuctuations of non-euro cash balances at
the Business Unit level. Year-to-year changes in the fair market
value of these swaps are recorded in the consolidated income
statement in the line item “other ﬁnancial result” if not designated as
hedging instruments. These changes may have a material impact
on EADS’ net income.
Embedded derivatives. EADS also has foreign currency derivative
instruments which are embedded in certain purchase and lease
contracts denominated in a currency other than the functional
currency of the signiﬁ cant 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” if not designated as hedging instruments.
These changes may have a material impact on EADS’ net
income. See “— Notes to the Consolidated Financial Statements(IFRS) — Note 2: Summary of signiﬁcant accounting policies —Signiﬁcant accounting policies — Derivative ﬁnancial instruments— Embedded derivatives”. In addition, EADS hedges currency risk
arising from ﬁnancial transactions in other currencies than euro,
such as funding transactions or securities.
Hedge portfolio. EADS manages a long-term hedge portfolio witha maturity of several years hedging its net exposure to US dollar
sales, mainly relating to the activities of Airbus Commercial (and toa lesser extent, of ATR, Eurocopter, Astrium and Cassidian). The
net exposure is deﬁned as the total currency exposure (US dollardenominated revenues), net of the part that is “naturally hedged”
by US dollar-denominated costs. This hedge portfolio covers to alarge extent the Group’s highly probable transactions. For ﬁnancial
reporting purposes, foreign currency transactions qualify as ahedged item if they are included in the internally audited orderbook or are otherwise considered highly probable, e.g. becauseof contractual or planning evidence.

The table below sets forth the notional amount of foreign exchange hedges in place as of 31 December 2012, and the average US
dollar rates applicable to corresponding EBIT*.
2013

2014

2015

2016+

Total

23.1

21.6

18.5

20.4

83.6

€-US$(1)

1.37

1.36

1.35

1.32

£-US$

1.57

1.57

1.58

1.57

Total Hedges (in US$bn)
Forward Rates (in US$)(1) Including collars at their least favourable rates.

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 34C: Notional amounts of derivative ﬁnancial instruments”.

EADS REGISTRATION DOCUMENT 2012 — 852

Management’s Discussion and Analysis of Financial Condition and Results of Operations
2.2 Financial Statements

2.1.7.2

Interest Rates

EADS uses an asset-liability management approach with theobjective of limiting its interest rate risk. EADS undertakes to matchthe risk proﬁle of its assets with a corresponding liability structure.
The remaining net interest rate exposure is managed throughseveral types of interest rate derivatives in order to minimise risks
and ﬁnancial impacts.
Hedging instruments that are speciﬁ cally designated to debt
instruments (such as the notes issued under the EMTN programme)
have at the maximum the same nominal amounts, as well as thesame maturity dates, as the corresponding hedged item.
The cash and cash equivalents and securities portfolio of the Groupis invested in ﬁnancial instruments such as overnight deposits,

certiﬁcates of deposits, commercial papers, other money market
instruments and short-term as well as medium-term bonds. Any
related interest rate hedges qualify for hedge accounting as either
fair value hedges or cash ﬂow hedges. For this portfolio, EADS
holds on a regular basis an asset management committee whichaims at limiting the interest rate risk on a fair value basis througha value-at-risk approach.
For information regarding the notional amounts of the Group’s
interest rate derivative ﬁnancial instruments, see “— Notes to theConsolidated Financial Statements (IFRS) — Note 34C: Notionalamounts of derivative ﬁnancial instruments”. For further information
relating to market risk and the ways in which EADS attempts tomanage this risk, see “— Notes to the Consolidated Financial
Statements (IFRS) — Note 34A: 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
2012, together with the related notes, appendices and Auditors’
reports, shall be deemed to be incorporated in and form part ofthis Registration Document.
In addition, the English versions of the following documents shallbe deemed to be incorporated in and form part of this Registration
Document:— the Consolidated Financial Statements (IFRS) and the Company
Financial Statements of EADS for the year ended 31 December
2010, together with the related notes, appendices and Auditors’
reports, as incorporated by reference in the Registration
Document filed in English with, and approved by, the AFM
on 19 April 2011 and filed in English with the Chamber ofCommerce of The Hague; and— the Consolidated Financial Statements (IFRS) and the Company
Financial Statements of EADS for the year ended 31 December
2011, together with the related notes, appendices and Auditors’
reports, as incorporated by reference in the Registration

86 — EADS REGISTRATION DOCUMENT 2012

Document filed in English with, and approved by, the AFM
on 12 April 2012 and filed in English with the Chamber ofCommerce of The Hague.
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(Investor Relations > Events and Reports > Annual Report andRegistration Document).
Copies of the above-mentioned Registration Documents are alsoavailable in English on the website of the AFM on www.afm.nl(Professionals > Registers > Approved prospectuses). The abovementioned ﬁnancial statements are also available in English forinspection at the Chamber of Commerce of The Hague.
EADS conﬁrms that the reports of the auditors incorporated byreference herein have been accurately reproduced and that as far
as EADS is aware and is able to ascertain from the information
provided by the auditors, no facts have been omitted which would
render such reports inaccurate or misleading.

Management’s Discussion and Analysis of Financial Condition and Results of Operations
2.4 Information Regarding the Statutory Auditors

2.3 Statutory Auditors’ Fees
Services provided to the Group by Statutory Auditors and Members of their network for the ﬁnancial years 2012, 2011 and 2010:
KPMG Accountants N.V.
2012
Amountin €K

Audit process,certification, examinationof individual andconsolidated accounts

Ernst & Young Accountants LLP

2011%Amount
in €K

5,780

55.0%

Additional tasks

3,725

35.5%

Sub-total

9,505 90.5%

2010%

Amount
in €K

5,675

70.0%

1,678

20.7%

2012
%

Amount
in €K

5,710

81.1%

516

7.4%

2011
%

Amount
in €K

5,836

61.3%

3,158

33.2%

2010
%

Amount
in €K

%

5,851

69.2%

4,493

70.8%

2,338

27.6%

1,607

25.4%

Audit

7,353 90.7%

6,226 88.5%

8,994 94.5%

8,189 96.8%

6,100 96.2%

Other services
as relevant
Legal, tax, employment

961

9.2%

715

8.8%

628

8.9%

519

5.5%

201

2.4%

123

1.9%

Information technology

20

0.1%

37

0.5%

12

0.2%

-

-

70

0.8%

121

1.9%

Other

22

0.2%

6

0.1%

172

2.4%

-

-

-

-

-

-

Sub-total

1,003

9.5%

758

9.3%

812

11.5%

519

5.5%

271

3.2%

244

3.8%

Total

10,508

100%

8,111

100%

7,038

100%

9,513

100%

8,460

100%

6,344

100%

2.4 Information Regarding the Statutory Auditors
Date of first
appointment

Expiration of current
term of office(1)KPMG Accountants N.V.
Rijnzathe 14, 3454 PV De Meern — The Netherlands
Represented by Jack Van Rooijen

10 May 2000

29 May 2013

Ernst & Young Accountants LLP
Boompjes 258, 3011 XZ Rotterdam — The Netherlands
Represented by C. T. Reckers

24 July 2002

29 May 2013

(1) A resolution will be submitted to the Annual General Meeting of Shareholders to be held on 29 May 2013, in order to appoint Ernst & Young Accountants LLP and KPMG
Accountants N.V. as the Company’s auditors for the 2013 financial year.

KPMG Accountants N.V., Ernst & Young Accountants LLP and their respective representatives are registered with the NBA (Nederlandse
Beroepsorganisatie van Accountants; formerly Royal NIVRA).

EADS REGISTRATION DOCUMENT 2012 — 872

3
88 — EADS REGISTRATION DOCUMENT 2012

General Description of the Company
and its Share Capital
3.1 General Description of the Company

90

3.1.1 Commercial and Corporate Names, Seat and Registered Ofﬁce

90

3.1.2 Legal Form

90

3.1.3 Governing Laws and Disclosures90

3.1.4 Date of Incorporation and Duration of the Company

92

3.1.5 Objects of the Company

92

3.1.6 Commercial and Companies Registry92

3.1.7 Inspection of Corporate Documents

92

3.1.8 Financial Year93

3.1.9 Allocation and Distribution of Income

93

3.1.10 General Meetings

93

3.1.11 Disclosure of Holdings

95

3.1.12 Mandatory Disposal

96

3.1.13 Mandatory Offers

97

3.2 General Description of the Share Capital

98

3.2.1 Issued Share Capital98

3.2.2 Authorised Share Capital

98

3.2.3 Modiﬁcation of Share Capital or Rights Attached to the Shares

98

3.2.4 Securities Granting Access to the Company’s Share Capital

99

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

100

3.3 Shareholdings and Voting Rights

101

3.3.1 Shareholding Structure101

3.3.2 Relationships with Principal Shareholders

102

3.3.3 Form of Shares

106

3.3.4 Changes in the Shareholding of the Company Since its Incorporation

106

3.3.5 Persons Exercising Control over the Company

108

3.3.6 Simpliﬁed Group Structure Chart

108

3.3.7 Purchase by the Company of its Own Shares110

3.4 Dividends

113

3.4.1 Dividends and Cash Distributions Paid Since the Incorporation of the Company

113

3.4.2 Dividend Policy of EADS

114

3.4.3 Unclaimed Dividends

114

3.4.4 Taxation

114

3.5 Annual Securities Disclosure Report

115

EADS REGISTRATION DOCUMENT 2012 — 89

General Description of the Company and its Share Capital
3.1 General Description of the Company

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, theNetherlands

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, and operates 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 and Spain, theCompany is subject to certain laws and regulations in these three
jurisdictions. A summary of the main regulations applicable to theCompany in relation to information to be made public in thesethree jurisdictions, as well as the Netherlands, is set out below.

3.1.3.1 Periodic Disclosure Obligations

Finally, Regulated Information must be made available for central
storage by a mechanism that is ofﬁcially designated by EADS’
home Member state.

Dutch Regulations
For the purpose of the Transparency Directive, supervision of EADSis effected by the Member state in which it maintains its corporate
seat, which is the Netherlands. The competent market authoritythat assumes ﬁnal responsibility for supervising compliance by
EADS in this respect is the AFM.
Under the Transparency Directive as implemented under Dutch law,
EADS is subject to a number of periodic disclosure requirements,
such as:Pursuant to Directive 2004/109/EC on the harmonisation oftransparency 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 on-going information (the “Regulated Information”).

— publishing an Annual Financial Report, together with an audit

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 nondiscriminatory basis. For this purpose, EADS may use a professional
service provider (wire). In addition, Regulated Information 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.

— publishing quarterly financial reports, within a period between

90 — EADS REGISTRATION DOCUMENT 2012

report drawn up by the Statutory Auditors, within four months
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; andten weeks after the beginning and six weeks before the endof the first or second six-month period of the financial year.
In addition, the Company must ﬁle with the AFM, within ﬁve days
following their adoption by the Company’s shareholders, its audited
annual ﬁ nancial statements (including the consolidated ones),
the management report, the Auditors’ report and other information
related to the ﬁnancial statements.

General Description of the Company and its Share Capital
3.1 General Description of the Company

The Company has also provided in this Registration Document a listof certain corporate and ﬁnancial documents and other informationthat 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 theEuropean 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 with certain
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 Prime Standard
sub-segment of the Regulated Market (regulierter Markt) of theFrankfurt Stock Exchange, the Company is subject to certain
post-listing obligations as described below. The Company isincluded inter alia in the selection index MDAX, the MidCap indexof Deutsche Börse AG.
Pursuant to sections 50 and 51 of the Exchange Rules(Börsenordnung) of the Frankfurt Stock Exchange, the Company isrequired to publish consolidated annual and semi-annual ﬁnancial
statements as well as quarterly ﬁnancial reports, which may be
prepared in English only. In addition, pursuant to section 52 of the
Exchange Rules, the Company is required to publish a ﬁnancial
calendar at the beginning of each ﬁnancial year in German andEnglish. The Company is also required to hold an analysts’ meetingat least once per year in addition to the press conference regarding
the annual ﬁnancial statements.
Save for certain exceptions, pursuant to section 69 of the German
Stock Exchange Admissions Regulation, the Company has to apply
for admission of shares issued at a later date to the RegulatedMarket (regulierter Markt) of the Frankfurt Stock Exchange.

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 and market
manipulation (the “Market Abuse Directive”). Such informationmust be disseminated throughout the European Community (seeintroduction to section “— 3.1.3.1 Periodic Disclosure Obligations”).
Inside information consists of information of a precise nature which
has not been made public that relates, directly or indirectly, to one
or more issuers of ﬁnancial instruments or to one or more ﬁnancial
instruments and which, if it were made public, would be likely tohave 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 to prejudice
its legitimate interests provided that such omission would not belikely to mislead the public and provided that the issuer is able toensure the conﬁdentiality of that information.

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 will keep
all relevant Regulated Information in a publicly available register.
EADS will, whenever it discloses inside information pursuant toapplicable mandatory law as part of the Regulated Information,
disclose and disseminate throughout the European Community
any such information.
Under Dutch law, the Company must also publish any change inthe 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 is organised under Dutch law implementing the Transparency
Directive so as to provide simultaneously in France equivalent
information to that provided abroad.

German Regulations
Any inside information as deﬁ ned above will be disclosed inGermany by means of dissemination throughout the European
Community, as it is organised under Dutch law implementing theTransparency Directive so as to provide simultaneously in Germany
equivalent information to that provided abroad.

Spanish Regulations
Pursuant to Article 82 of the Spanish Securities Act, the Company
is required to make public, as soon as possible, any fact ordecision that may substantially affect the quotation of its shares(“a relevant event”). Any relevant event must be notiﬁed to the
CNMV simultaneously with its diffusion by any other means, as

EADS REGISTRATION DOCUMENT 2012 — 91

3

General Description of the Company and its Share Capital
3.1 General Description of the Company

soon as the relevant fact is known, the relevant 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 suchlack of publication does not mislead the public and that EADS
is in a position to guarantee the conﬁ dentiality 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 relevant event on its website.
EADS must try to ensure that the relevant information is disclosed
simultaneously to all types of investors 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 on behalf of
EADS and must have access to senior management in order toverify any information requested by the CNMV.

3.1.4

A circular dated 4 November 2009 further provides that the
publication of any relevant event must be made via the CIFRADOC
system (the CNMV’s electronic system for notifications andcommunications) and that publication by a different 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 implementing rules
and regulations, EADS is also required:(i) to have a website which must contain as a minimum theinformation specified by Spanish regulations;(ii) to make available to shareholders and file a Corporate
Governance Report with the CNMV in the Spanish language
on an annual basis; and(iii) to make available to shareholders a directors’ remuneration
report in the Spanish language on an annual basis.

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 its Articles of Association, the objects of the Company
are to hold, co-ordinate and manage participations or otherinterests and to ﬁnance and assume liabilities, provide for security
and/or guarantee debts of legal entities, partnerships, businessassociations and undertakings that are involved in:

3.1.6— the aeronautic, defence, space and/or communication industry;or— activities that are complementary, supportive or ancillary
thereto.

Commercial and Companies Registry

The Company is registered with the Registry of the Chamber of Commerce of The Hague (Handelsregister van de Kamer van Koophandelen Fabrieken voor Den Haag) under number 24288945.

3.1.7

Inspection of Corporate Documents

The Articles of Association are available for inspection in Dutch at
the Chamber of Commerce of The Hague.
In France, the Articles of Association are available at the headofﬁce of EADS in France (37, boulevard de Montmorency, 75016
Paris, France, Tel.: +33 1 42 24 24 24).

92 — EADS REGISTRATION DOCUMENT 2012

In Germany, the Articles of Association are available at the headofﬁce 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 andat the head ofﬁce of EADS in Spain (Avda. Aragón 404, 28022
Madrid, Spain, Tel.: +34 91 585 70 00).

General Description of the Company and its Share Capital
3.1 General Description of the Company

3.1.8

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

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 distribution on shares shallbe paid in shares of the Company or in the form of assets 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,
interim dividends or other distributions shall be payable on suchdate(s) as determined by the Board of Directors.

Dividends, interim dividends and other distributions on shares shallbe paid by bank transfer to the bank or giro accounts designatedin writing to the Company by, or on behalf of, shareholders at thelatest 14 days after their announcement.
The persons entitled to a dividend, interim dividend or other
distribution shall be the shareholders as at a record date to be
determined by the Board of Directors for that purpose, which date
may not be a date prior to the date on which such dividend, interim
dividend or other distribution is declared.

3.1.9.2 Liquidation
In 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

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, when required under Section 2:108a of the
Dutch Civil Code (as a result of a decrease of the Company’s equity
to or below half of the Company’s paid up and called up capital) or
upon the request of shareholders holding, individually or together,at least 10% of the total issued share capital of the Company. The
Annual General Meeting of Shareholders of the Company is held
within six months of the end of the ﬁnancial year.
The Board of Directors must give notice of shareholders’ meetings
through publication of a notice on the Company’s website(www.eads.com), which will be directly and permanently accessible
until the shareholders’ meeting. The Company must comply withthe statutory rules providing for a minimum convening period,
which currently require at least 42 days of notice. The convening
notice must state the items required under Dutch law.

with meeting rights collectively representing at least the statutory
threshold (which is currently 1% of the issued share capital or
shares having an aggregate market value of € 50 million) haverequested in writing to be put on the agenda for a general meetingof shareholders shall be included in the convening notice or shallbe announced in the same fashion, if the substantiated request
or a proposal for a resolution is received by the Company no later
than the 60 th day before the general meeting.
A request as referred to in the preceding paragraph may only bemade 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 Shareholders’Meetings

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

Each holder of one or more shares may attend shareholders’meetings, either in person or by written or electronically recorded
proxy, speak and vote according to the Articles of Association. See“— 3.1.10.4 Conditions of Exercise of Right to Vote”. A shareholder
or person who has the right to attend a meeting can see to it that
he is represented by more than one proxy holder, provided that
only one proxy holder can be appointed for each share.

The Board of Directors must announce the date of the Annual
General Meeting of Shareholders at least ten weeks before themeeting. A matter which one or more shareholders or other parties

The persons who have the right to attend and vote at shareholders’meetings are those who are so on record in a register designatedfor that purpose by the Board of Directors on the registration

EADS REGISTRATION DOCUMENT 2012 — 93

General Description of the Company and its Share Capital
3.1 General Description of the Company

date referred to in Section 2:119 of the Dutch Civil Code which
is currently the 28 th day prior to the day of the shareholders’meeting (the “Registration Date”), irrespective of who may beentitled to the shares at the time of that meeting.
If the Board of Directors so decides, any person who is entitled toexercise the rights set out in the above paragraph (either in personor by means of a written or electronically recorded proxy) and is
attending the shareholders’ meeting by means of electronic andvideo communication from another designated location in such amanner that the person acting as Chairman of the shareholders’meeting is convinced that such a person is properly participatingin the shareholders’ meeting, shall be deemed to be present or
represented at the shareholders’ meeting, shall be entitled to voteand shall be counted towards a quorum accordingly.
In advance of a shareholders’ meeting, as a prerequisite toattending and voting at such shareholders’ meeting, the Company,or alternatively an entity or person so designated by the Company,
must be notiﬁed in writing by each person entitled and intending toattend the shareholders’ meeting, not earlier than the Registration
Date, of the intention to attend the meeting, including such person’s
identity and the composition, nature and size of such person’s“Interest” (as such term is deﬁned under the Articles of Association).
Ultimately this notice must be received by the Company, or
alternatively an entity or person so designated by the Company,on the day mentioned in the convening notice.
The Company has the right to request additional information anddocumentation with respect to the Interest of a person who has
indicated his or her intention to attend a shareholders’ meeting.
For as long as a shareholder has not complied with this request,
his or her meeting and voting rights would be suspended.
The Company may direct any person who wishes to enter ashareholders’ meeting to identify himself or herself by means ofa valid passport or a valid driver’s license and to be submitted tosecurity restrictions. If a person were to fail to comply, such person
could be refused entry to, or be ejected from, the shareholders’meeting.
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
the name of Euroclear France S.A.
Shareholders holding their EADS shares through Euroclear
France S.A. who wish to attend shareholders’ meetings will haveto request 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 theCompany in the convening notice. For this purpose, a shareholder
will also be able to request that it be registered directly (and not
through Euroclear France S.A.) in the register of the Company.
However, only shares registered in the name of Euroclear
France S.A. may be traded on stock exchanges.

94 — EADS REGISTRATION DOCUMENT 2012

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 speciﬁ ed by theCompany in the convening notice.
Pursuant to its Articles of Association, the Board of Directors may
provide for electronic means of attendance, speaking and voting
at the shareholders’ meetings. The use of such electronic means
will depend on the availability of the necessary technical means
and market practice.

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 except as required
under applicable law for a very limited number of resolutions ofan extraordinary nature. Dutch law requires a special majority forthe passing of certain resolutions: inter alia, capital reduction,
exclusion of pre-emption rights in connection with share issues,
statutory mergers or statutory de-mergers; the passing of such
resolutions requires a majority of two-thirds of the votes cast if
50% of the share capital with voting rights is not present at theshareholders’ meeting (or otherwise a simple majority). In addition,
resolutions to amend the Articles of Association or to dissolve
the Company may only be adopted with a majority of at least
two-thirds of the valid votes cast at a shareholders’ meeting,whatever the quorum present at such meeting, and resolutions
to amend certain provisions of the Articles of Association may
only be adopted with a majority of at least 75% 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 toa pledge or a usufruct, which do not have voting rights, are entitled
to attend and to speak at shareholders’ meetings.

3.1.10.4 Conditions of Exercise of Right
to VoteIn all shareholders’ meetings, each shareholder has one vote inrespect 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 those of the othershareholders.
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 andsubject to the prior consent of the Board of Directors, a pledgee ofshares in the Company may be granted the right to vote in respectof such pledged shares.

General Description of the Company and its Share Capital
3.1 General Description of the Company

The Articles of Association provide: “The right to vote can be
granted to a usufructuary. The right to vote can be granted to apledgee, but only with the prior consent of the Board of Directors.
No vote may be cast at the General Meeting on a share that is heldby the Company or a subsidiary; nor for a share in respect of which

one of them holds the depository receipts. Usufructuaries andpledgees of shares that are held by the Company or its subsidiaries
are, however, not excluded from their voting rights, in case theright of usufruct or pledge was vested before the share was heldby 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 meansof 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 several of the above-mentioned
thresholds due to a change in EADS’ outstanding capital, or invoting 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 the notiﬁcation 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 a shareholder’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 shareholder must then provide
an update of its previous disclosure within four weeks of the end ofeach 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 notify
the Company when meeting or crossing the thresholds above.
The Articles of Association also contain disclosure obligations
for shareholders that apply when their interests in EADS reach or
cross certain thresholds.
Under the Articles of Association, the disclosure obligationsof shareholders are enhanced in several ways beyond what isrequired under the WFT, including by requiring the disclosure ofadditional information, tying the disclosure obligations to a broader
range of interests in the capital or voting rights of EADS and byrequiring a shareholder to notify the Company if his or her interest
reaches, exceeds or falls below the Mandatory Disposal Threshold(as deﬁned below ) or if the interest of a shareholder (alone or amember of a concert) which is above such Mandatory Disposal
Threshold charges in its composition, nature and/or size.
Failure to comply with the legal obligation to notify a change inshareholding under the WFT is a criminal offence punishable bycriminal and administrative penalties as well as civil law penalties,

including the suspension of voting rights. Failure to comply witha notiﬁ cation under the Articles of Association can lead to asuspension of meeting and voting rights.

Disclosure Requirements for Membersof the Board of Directors and the Executive
Committee
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 number ofshares in EADS and attached voting rights(1) held by him or an entity
controlled by him, within two weeks following his appointment as
Director, whether or not such shareholdings meet or exceed any of
the speciﬁed thresholds. Subsequently, any Member of the Boardof Directors is required to notify the AFM of any changes in such
number of shares in EADS and attached voting 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 or supervisory responsibilities within the Company and,
where applicable, persons closely associated with them (together“Insiders”, as deﬁned below), are required to notify the AFM within
ﬁve trading days of all transactions conducted for their own accountinvolving shares of the Company, or derivatives or other ﬁnancial
instruments related to such shares, unless the aggregate amountof such transactions does not exceed € 5,000 in respect of alltransactions 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 under category (i) (including
their spouses, dependent children and other relatives who haveshared the same household), and (iii) legal entities, trusts orpartnerships 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 of such a person, or whose economic interests aresubstantially equivalent to those of such a person.

(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).

EADS REGISTRATION DOCUMENT 2012 — 95

3

General Description of the Company and its Share Capital
3.1 General Description of the Company

EADS has adopted speciﬁ c 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. The
Insider Trading Rules are available on the Company’s website,and provide in particular that: (i) all employees and Directors areprohibited 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 shares or stock options within very
limited periods and have speciﬁc information obligations to the ITR
Compliance Ofﬁcer of the Company and the competent ﬁnancial
market authorities with respect to certain transactions. The ITR
Compliance Ofﬁcer is responsible for the implementation of the
Insider Trading Rules and for reporting 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 of alabour 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 associatedwith them, must disclose transactions conducted for their own
account involving shares of the Company or ﬁnancial instrumentsthat relate to those shares, especially derivatives. These persons
have to notify the Company and the German Federal Financial
Supervisory Authority of the transactions within ﬁve trading days
unless the aggregate amount of such transactions does notexceed € 5,000 in respect of all transactions in a calendar year.
Since 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 Disposal
3.1.12.1 Mandatory Disposal Threshold
Restricting Ownership to 15%
The Articles of Association prohibit any shareholder from holding
an interest of more than 15% of the share capital or voting rights
of EADS, acting alone or in concert with others (the “Mandatory
Disposal Threshold”). An interest (“Interest”) includes not
only shares and voting rights, but also other instruments thatcause shares or voting rights to be deemed to be at someone’s
disposal pursuant to the Dutch Financial Supervision Act, andmust be notified to the Dutch regulator, the AFM, if certain
thresholds are reached or crossed. Any shareholder having aninterest of more than the Mandatory Disposal Threshold must
reduce its interest below the Mandatory Disposal Threshold,for instance by disposing of its Excess Shares, within two
weeks. The same applies to concerts of shareholders andother persons who together hold an interest exceeding the
Mandatory Disposal Threshold. Should such shareholder orconcert not comply with not exceeding the 15% Mandatory
Disposal Threshold by the end of such two-week period, theirExcess Shares would be transferred to a Dutch law foundation(“Stichting”), which can, and eventually must, dispose of them.
The Dutch law foundation would issue depositary receipts to therelevant shareholder in return for the Excess Shares transferredto the foundation, which would entitle the relevant shareholder
to the economic rights, but not the voting rights, attached tosuch EADS shares. The foundation’s Articles of Association andthe terms of administration governing the relationship between
the foundation and the depositary receipt holders provide, interalia, that:— the Board Members of the foundation must be independent
from EADS, any grandfathered persons and their affiliates(see “— 3.1.12.2 Exemptions from Mandatory Disposal
Threshold”) and any holder of depositary receipts and their

96 — EADS REGISTRATION DOCUMENT 2012

affiliates (there is an agreement under which EADS will,inter alia, cover the foundation’s expenses and indemnify
the Board Members against liability);— the Board Members are appointed (except for the initial Board
Members who were appointed at incorporation) and dismissedby the Management Board of the foundation (EADS may
however appoint one Board Member in a situation where there
are no foundation Board Members);— the foundation has no discretion as to the exercise of voting
rights attached to any EADS shares held by it and will in amechanical manner vote to reflect the outcome of the votes cast(or not cast) by the other shareholders, and the foundation will
distribute any dividends or other distributions it receives fromEADS to the holders of depositary receipts; and— no transfer of a depositary receipt can be made without theprior written approval of the foundation’s board.
For any shareholder or concert, the term “Excess Shares”, asused above, refers to such number of shares comprised in theinterest of such shareholder or concert exceeding the Mandatory
Disposal Threshold which is the lesser of: (a) the shares held bysuch shareholder or concert which represent a percentage of theCompany’s issued share capital that is equal to the percentage
with which the foregoing interest exceeds the Mandatory Disposal
Threshold; and (b) all shares held by such person or concert.
This restriction is included in the Articles of Association to reﬂect
the Company’s further normalised governance going forward
aiming at a substantial increase of the free ﬂoat and to safeguard
the interests of the Company and its stakeholders (including all
its shareholders), by limiting the possibilities of inﬂuence above
the level of the Mandatory Disposal Threshold or takeovers otherthan a public takeover offer resulting in a minimum acceptanceof 80% of the share capital referred to below.

General Description of the Company and its Share Capital
3.1 General Description of the Company

3.1.12.2 Exemptions from Mandatory Disposal
Threshold
The restrictions pursuant to the Mandatory Disposal Thresholdunder the Articles of Association do not apply to a person
who has made a public offer with at least an 80% acceptance(including any EADS shares already held by such person). These
restrictions also have certain grandfathering exemptions for the
beneﬁt of shareholders and concerts holding interests exceeding
the Mandatory Disposal Threshold on the date that the current
Articles of Association entered into force (the “Exemption Date”).

The Company has conﬁrmed that (i) the speciﬁc exemption inarticle 16.1.b of the Articles of Association applies to Sogepa,
as it held more than 15% of the outstanding EADS voting rights
and shares including the legal and economic ownership thereofon the Exemption Date and (ii) the speciﬁc exemption in article
16.1.c applies to the concert among Sogepa, GZBV and SEPI, as
they held more than 15% of the outstanding EADS voting rights
and shares including the legal and economic ownership thereofon the Exemption Date.

Different grandfathering regimes apply to such shareholders andconcerts depending on the interests and the nature thereof heldby each such shareholder or concert on the Exemption Date.

3.1.13 Mandatory Offers
3.1.13.1 Takeover Directive
The Directive 2004/25/EC on takeover bids (the “Takeover
Directive”) sets forth the principles governing the allocation oflaws applicable to EADS in the context of a takeover bid for theshares of the Company. The Takeover Directive refers to the rulesof 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.
For EADS, matters relating to, inter alia, the consideration offeredin the case of a bid, in particular the price, and matters relating
to the bid procedure, in particular the information on the offeror’s
decision to make a bid, the contents of the offer document andthe disclosure of the bid, shall be determined by the laws of theEuropean Union Member State having the competent authority,
which will be selected by EADS at a future date.
Matters relating to the information to be provided to the employees
of EADS and matters relating to company law, in particular
the percentage of voting rights which confers control and any
derogation from the obligation to launch a bid, the conditions underwhich the Board of Directors of EADS may 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”).

3.1.13.2 Dutch Law
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 in concert – 30% or more of
the voting rights in the Company. In the case of such a concert, a
new Member of the concert can be exempted if it satisﬁes certain
conditions.
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 cooperate withthe target company with the objective to prevent the success ofan announced public offer for the shares in such target company.
The following categories of natural persons, legal entities orcompanies are in any event deemed to be “acting in concert”
under the Takeover Act: (i) legal entities or companies that form agroup 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, provided that the bidder as aconsequence can exercise more than 50% of the votes at thetarget company’s shareholders’ meeting;— 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 theinterests 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 with the cooperation of such target company;

EADS REGISTRATION DOCUMENT 2012 — 97

3

General Description of the Company and its Share Capital
3.2 General Description of the Share Capital— acquires significant control as a result of: (i) an intra-grouptransfer of the shares representing significant control; or (ii) atransfer between a parent company and its subsidiary;— acquires significant control acting in concert with one or moreother natural persons, legal entities or companies, in which casethe obligation to make a public offer lies with the natural person,
legal entity or company that can exercise most of the voting
rights in the shareholders’ meeting of the target company; or— 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,amongst others:— the natural person, legal entity or company, after acquiring
significant control, loses such control within a thirty day grace
period (which may be extended by the Enterprise Chamber of

the Court of Appeals in Amsterdam court to ninety days in total),
unless (i) loss of control is due to a transfer to a natural person,
legal entity or company to which one of the exemptions set out
above applies, or (ii) the acquirer of the significant control has
exercised its voting rights during the grace period; or— the target company’s shareholders’ meeting agrees upfront
with the acquisition of significant control – and any subsequentacquisition of shares – by a third party with 90% of votes castin 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
at least 95% of the issued share capital and the voting rights. This
claim must be brought before the Enterprise Chamber of the Courtof Appeals in Amsterdam within the three-month period after theclosing of the acceptance period of the public offer.

3.2 General Description of the Share Capital
3.2.1

Issued Share Capital

As of 31 December 2012, the Company’s issued share capital amounted to € 827,367,945, consisting of 827,367,945 fully paid-up
shares of a nominal value of € 1.0 each.

3.2.2 Authorised Share Capital
As of 31 December 2012, the Company’s authorised share capital amounted to € 3 billion, consisting of 3,000,000,000 sharesof € 1.0 each.

3.2.3 Modiﬁcation of Share Capital or Rights Attached to the Shares
Unless such right is limited or excluded by the shareholders’meeting (or the Board of Directors, if authorised by the shareholders’meeting to do so) 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 and sharesissued 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”.
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 shares and to
determine the terms and conditions of share issuances.
98 — EADS REGISTRATION DOCUMENT 2012

The shareholders’ meeting also has the power to limit or to exclude
pre-emption rights in connection with new issues of shares, andmay authorise the Board of Directors for a period of no more thanﬁve years, to limit or to exclude pre-emption rights. All resolutionsin this context must be approved by a two-thirds majority of thevotes cast during the shareholders’ meeting in the case where lessthan half of the capital issued is present or represented at said
meeting, except that resolutions to issue shares or to grant rights
to subscribe for shares for an aggregate issue price in excessof € 500,000,000 per issuance, without preferential subscription
rights, as well as delegation of those powers to the Board of
Directors, have to be approved by 75% of the votes cast during
the shareholders’ meeting.

General Description of the Company and its Share Capital
3.2 General Description of the Share Capital

Pursuant to the shareholders’ resolution adopted at the Annual
General Meeting of Shareholders held on 31 May 2012, the Boardof Directors was granted powers (i) to issue shares and to grantrights to subscribe for shares which are part of EADS’ authorised
share capital, provided that such powers shall be limited to 0.15% of
the Company’s authorised share capital from time to time and (ii) tolimit or exclude preferential subscription rights, in both cases for aperiod expiring at the Annual General Meeting of Shareholders tobe held in 2013. Shareholders will be asked to renew this authority
at the Company’s Annual General Meeting of Shareholders to beheld on 29 May 2013, provided that such renewed authorisation will
not involve an issuance of shares, or granting of rights to subscribe
for shares, which requires a 75% voting majority.

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 cancellation of shares requires the approval of a two-thirds
majority of the votes cast during the shareholders’ meeting in
the case where less than half of the capital issued is present or
represented at said meeting; the reduction of nominal value bymeans of an amendment to the Articles of Association requires
the approval of a two-thirds majority of the votes cast during
the shareholders’ meeting, except that under the Articles of
Association, the required majority is 75% for certain amendments
to the Articles of Association.

3.2.4 Securities Granting Access to the Company’s Share 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 or over time, to the share capital of EADS.
The table below shows the total potential dilution that would occur if all the stock options issued as of 31 December 2012 were exercised:

Total number of EADS shares issued
as of 31 December 2012
Total number of EADS shares which may be issued
following exercise of stock options
Total potential EADS share capital

Numberof shares

Percentage ofdiluted capital

Number of
voting rights

Percentage ofdilutedvoting rights(1)827,367,945

98.6%

822,141,410

98.6%

11,356,143

1.4%

11,356,143

1.4%

838,724,088

100%

833,497,553

100%(1) 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 thecase of subsequent cancellation of repurchased shares. See “— 3.3.7.1 Dutch law and information on share repurchase programmes”.

EADS REGISTRATION DOCUMENT 2012 — 99

3

General Description of the Company and its Share Capital
3.2 General Description of the Share Capital

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

Nominal
Number ofvalue per shares issued/
share
cancelled

Premium(1)Total number
of issued
shares after
transaction

Total issued
capital after
transaction

Date

29 December 1998 Incorporation

NLG 1,000

100

-

100

NLG 100,000

Conversion into €Issue of shares in exchange for contributions
8 July 2000
by Aerospatiale Matra, DASA AG and SEPI
Issue of shares for the purpose of the initial public
13 July 2000
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
21 September 2000 listing of the Company
Issue of shares for the purpose of an employee offering(note d’opération approved by the COB(2) on 13 October
5 December 2001 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
4 December 2002 2002 under number 02-1081)
Issue of shares for the purpose of an employee
offering (note d’opération approved by the COB
5 December 2003 on 25 September 2003 under number 03-836)
Cancellation of shares upon authorisation granted by
20 July 2004
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
3 December 2004 on 10 September 2004 under number 04-755)
Issue of shares following exercise of options granted
In 2004
to employees(3)Cancellation of shares upon authorisation granted by
25 July 2005
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
29 July 2005
under number 05-353)
Issue of shares following exercise of options granted
In 2005
to employees(3)Cancellation of shares upon authorisation granted by
20 July 2006
the Annual Shareholders’ Meeting held on 4 May 2006
Issue of shares following exercise of options granted
In 2006
to employees(3)Cancellation of shares upon authorisation granted by
In 2007
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

9 May 2007

Issue of shares for the purpose of an employee offering
Issue of shares following exercise of options granted
to employees(3)Cancellation of shares upon authorisation granted by
the Annual Shareholders’ Meeting held on 26 May 2008

€1

2,037,835€1

613,519€ 9,438,683

814,014,473€ 814,014,473€1

1,291,381-

812,723,092€ 812,723,092

Issue of shares for the purpose of an employee offering
Issue of shares following exercise of options granted
to employees(3)Cancellation of shares upon authorisation granted by
the Annual Shareholders’ Meeting held on 27 May 2009€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

18 December 2009 Issue of shares for the purpose of an employee offering
Issue of shares following exercise of options granted
In 2010to employees(3)€11,358,936€ 13,263,215

816,105,061€ 816,105,061€1

297,661€ 4,477,168

816,402,722€ 816,402,722

29 July 2011

Issue of shares for the purpose of an employee offering
Cancellation of shares upon authorisation granted by
the Annual Shareholders’ Meeting held on 26 May 2011
Issue of shares following exercise of options granted
to employees(3)€12,445,527€ 34,602,580€178,850-€1

1,712,892€ 25,995,005 820,482,291 € 820,482,291

Issue of shares for the purpose of an employee offering
Cancellation of shares upon authorisation granted by
the Annual Shareholders’ Meeting held on 31 May 2012
Issue of shares following exercise of options granted
to employees(3)€12,177,103€ 38,084,482 822,659,394 € 822,659,394€1

553,233-

822,106,161€ 822,106,161€1

5,261,784€ 98,893,293

827,367,945€ 827,367,945

3 April 2000

In 2007
In 2008
25 July 2008
In 2008
31 July 20099 August 2011
In 201130 July 2012
8 August 2012
In 2012€ 33,482,173 813,400,954 € 813,400,954

818,848,249 € 818,848,249
818,769,399(1) 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.
(2) Predecessor of the AMF.
(3) 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”.

100 — EADS REGISTRATION DOCUMENT 2012

€ 818,769,399

General Description of the Company and its Share Capital
3.3 Shareholdings and Voting Rights

3.3 Shareholdings and Voting Rights
3.3.1

Shareholding Structure

As of 31 December 2012, 14.78% of EADS’ share capital washeld by Daimler Aerospace AG (“DASA”), whose share capital,
as of 31 December 2012, was held 50% by Daimler Luft- undRaumfahrt Holding AG (“DLRH”), a wholly owned subsidiary ofDaimler AG (“Daimler”) and 50% by a consortium of private andpublic-sector investors (“Dedalus”), with Daimler controlling thevoting rights of all of the EADS shares held by DASA. Sociétéde Gestion de l’Aéronautique, de la Défense et de l’Espace(“Sogeade”), a French partnership limited by shares (société encommandite par actions) whose share capital, as of 31 December
2012, was held 66.67% by Société de Gestion de Participations
Aéronautiques (“Sogepa”), a French state holding company,
and 33.33% by Désirade (a French société par actions simplifiée
wholly owned by Lagardère SCA (“Lagardère”)), held 22.16%
of EADS’ share capital. Thus, 36.94% of EADS’ share capital
was held by DASA and Sogeade who jointly controlled EADS
through a Dutch law contractual partnership managed by EADSParticipations B.V. (the “Contractual Partnership”). Sociedad
Estatal de Participaciones Industriales (“SEPI”), a Spanish stateholding company and a party to the Contractual Partnership, held
5.40% of EADS’ share capital. Kreditanstalt für Wiederaufbau(“KfW”), a public law institution serving domestic and international
policy objectives of the Federal Government of the Federal
Republic of Germany, held 2.76% of EADS’ share capital. Asof 31 December 2012, KfW had also agreed to acquire 65% ofDedalus. This acquisition was completed on 2 January 2013, as
described under “ – 3.3.2.1 Changes to Shareholding Structure”.
The public (including EADS employees) and the Company held,
respectively, 54.23% and 0.63% of EADS’ share capital. The
République Française (the “French State”) directly held 0.06%
of the share capital, such shareholding being subject to certain
speciﬁc provisions.
The diagram below shows the ownership structure of EADS
as of 31 December 2012 (% of capital and of voting rights (inparentheses) before exercise of outstanding stock options
granted for the subscription of EADS shares). See “— Corporate
Governance — 4.3.3 Long-Term Incentive Plans”.

3

EADS REGISTRATION DOCUMENT 2012 — 101

General Description of the Company and its Share Capital
3.3 Shareholdings and Voting Rights

OWNERSHIP STRUCTURE OF EADS AS OF 31 DECEMBER 2012

FRENCH STATE(1)LAGARDÈRESPANISHSTATEDÉSIRADE

SOGEPA

66.67%

33.33%DAIMLERGERMAN
STATE

DLRH

KfW

50%

SOGEADE

SEPI

DASA

22.16%(22.30%)5.40%(5.44%)

14.78%(14.88%)50%

CONSORTIUM(Dedalus)

Contractual partnership(2)(Managed by EADSParticipations B.V.)

2.75%(2.76%)EADS N.V.

54.23%(54.57%)

PUBLIC(1) The French State owned an additional 0.06% of the share capital directly.
(2) EADS Participations B.V. exercised the voting rights attached to these EADS shares pledged by Sogeade, DASA and SEPI who retain title to their respective shares.
(3) As of 31 December 2012, EADS held, directly or indirectly through another company in which EADS holds directly or indirectly more than 50% of the share capital, 5,226,535
of its own shares, equal to 0.63% of issued share capital. The treasury shares owned by EADS do not carry voting rights.

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

Approximately 1.7% of the share capital (and voting rights) was
held by EADS employees as of 31 December 2012.

3.3.2 Relationships with Principal Shareholders
On 5 December 2012, the Board of Directors, EADS’ then-coreshareholders – Daimler, DASA, Sogeade, Lagardère, Sogepa
and SEPI – and KfW reached an agreement (the “Multiparty
Agreement”) on far-reaching changes to EADS’ shareholding
structure and governance. The Multiparty Agreement aimed atfurther normalising and simplifying the governance of EADS while
securing a shareholding structure that allowed France, Germany andSpain to protect their legitimate strategic interests. This represented
a major step forward in the evolution of the governance of EADS.

102 — EADS REGISTRATION DOCUMENT 2012

The Multiparty Agreement provided for signiﬁ cant changes to
EADS’ shareholding structure. In addition, a series of relatedtransactions (collectively referred to as the “Consummation”)
occurred shortly after the Extraordinary General Meeting of
Shareholders held on 27 March 2013. This resulted in several
changes in the governance of EADS, including changes in thecomposition of the Board of Directors and its internal rules, aswell as amendments to the Articles of Association of EADS. The
Participation Agreement (the “Participation Agreement”) among

General Description of the Company and its Share Capital
3.3 Shareholdings and Voting Rights

EADS’ former core shareholders and, as at 31 December 2012
including KfW (together, the “Former Consortium Members”),
the Contractual Partnership and the related arrangements(collectively, the “Former Consortium”) were terminated andreplaced in part by a more limited shareholders’ agreement(the “Shareholders’ Agreement”) among only Gesellschaft zur
Beteiligungsverwaltung GZBV mbH & Co. KG, a subsidiary of KfW(“GZBV”), Sogepa and SEPI (who have agreed to hold, collectively,
less than 30% of the voting interests in EADS). The Shareholders’
Agreement does not give the parties to it any rights to designate
members of the Board of Directors or management team or toparticipate in the governance of EADS.

3.3.2.1 Changes to Shareholding Structure
In a transaction contemplated by the Multiparty Agreement,on 6 December 2012, Daimler sold 61.1 million EADS shares(approximately 7.44% of the outstanding EADS shares) throughan accelerated book building transaction (the “ABB”). This
reduced Daimler’s economic interest in EADS to approximately
7.44% and its voting interest to 14.88%. KfW acquired 2.76% of
the outstanding EADS shares as part of the ABB. In a second
transaction, KfW acquired (through a wholly owned subsidiary)
65% of the shares in Dedalus on 2 January 2013, which brought
its stake in Dedalus to 78%. The remaining 22% is held by certain
other German public entities. Dedalus held an economic interestof 7.44% in EADS as of the time of this acquisition. As a resultof these two transactions, KfW held a voting interest of 2.76%
in EADS and an economic interest of 8.56% in EADS – 2.76%
directly and 5.80% via Dedalus. The other German public entities
participating in Dedalus held a 1.64% economic interest in EADS
via Dedalus. The joint economic interest of KfW and such German
public entities in EADS was thus 10.2% immediately following
these acquisitions.

3.3.2.2 New Corporate Governance
Arrangements
After the Consummation, the corporate governance arrangements
of EADS were substantially changed. These changes are intended
to further normalise and simplify EADS’ corporate governance,
reﬂ ecting an emphasis on best corporate governance practices
and the absence of a controlling shareholder group. Certainchanges to EADS’ corporate governance arrangements were
provided for in the Articles of Association, including (i) disclosure
obligations for shareholders that apply when their i nterests in
EADS reach or cross certain thresholds and (ii) ownership
restrictions prohibiting any shareholder from holding an i nterestof more than 15% of the share capital or voting rights of EADS,
acting alone or in concert with others. See sections 3.1.11 and3.1.12 above. In addition, there were changes in the compositionof the Board of Directors and its internal rules. See section 4
below.

3.3.2.3 New Shareholder Arrangements
Grandfathering Agreement
At the Consummation, the French State, Sogepa, the German
State, KfW and GZBV (all parties together the “Parties” and each,individually, as a “Party”) entered into an agreement with respect
to certain grandfathering rights under the Articles of Association.
Below is a summary of such agreement.

Individual Grandfathering Rights
A Party that is individually grandfathered pursuant to Article 16.1. bof the Articles of Association (such Party holding “Individual
Grandfathering Rights”) shall remain individually grandfatheredin accordance with the Articles of Association if the new concert
with respect to EADS (the “New Concert”) is subsequently
terminated (for instance by terminating the S hareholders’
Agreement) or if it exits the New Concert.

Loss of Individual Grandfathering Rights
A Party holding Individual Grandfathering Rights as well as any of
its afﬁliates who are grandfathered pursuant to Article 16.1. b inconjunction with Article 16.3 of the Articles of Association (suchafﬁ liates holding “Derived Grandfathering Rights”, and theIndividual Grandfathering Rights and the Derived Grandfathering
Rights, together, the “Grandfathering Rights”) shall all no longer
be entitled to exercise their Grandfathering Rights in the event:— the New Concert is terminated as a result of it or any of its
affiliates having actually or constructively terminated such
Concert; or— it or its relevant affiliate(s) exit(s) the New Concert,and such termination or exit is not for good cause and is notbased on material and on-going violations of the New Concert
arrangements, including, without limitation, of the Shareholders’
Agreement, by the other principal Member of the New Concert.
In the event that in the future the voting rights in EADS of theother principal Member of the New Concert together with thoseof its afﬁliates would for an uninterrupted period of three months
represent less than 3% of the outstanding aggregate voting rights
of EADS, the Grandfathering Rights of the Party including its
afﬁliates which were no longer entitled to use their Grandfathering
Rights shall from then on revive and Sogepa and GZBV shall jointly
notify the Company to that effect.

Notification to the Company
EADS will not be required to take any of the actions provided
for in Article 15 of the Articles of Association pursuant to thepost-concert Grandfathering Agreement unless and until it
receives (i) a joint written instruction from Sogepa and GZBVwith respect to the taking of any of the actions provided for in
Article 15 of the Articles of Association pursuant to the postconcert Grandfathering Agreement, or (ii) a copy of a binding
advice rendered by three independent, impartial and neutral

EADS REGISTRATION DOCUMENT 2012 — 103

3

General Description of the Company and its Share Capital
3.3 Shareholdings and Voting Rights

Expert Adjudicators in order to settle any dispute between theParties arising out of or in connection with the post-concert
Grandfathering Agreement.
EADS will not incur any liability to any of the Parties by taking suchactions following receipt of any such joint instruction or binding
advice, and EADS will not be required to interpret the post-concert
Grandfathering Agreement or any such joint instruction or binding
advice.
Notwithstanding the description under “Various provisions –Jurisdiction” below, the courts of the Netherlands will haveexclusive jurisdiction to resolve any dispute, controversy or claim
affecting the rights or obligations of EADS under the post-concert
Grandfathering Agreement.

Various provisions
Termination. The post-concert Grandfathering Agreement
terminates only if either the French State and its afﬁliates or theGerman State and its afﬁliates no longer hold shares in EADS.

as an independent Director pursuant to the conditions set
forth in the Board Rules, and shall vote as Shareholders in any
shareholders’ meeting in favour of such appointment and against
the appointment of any other person for such position.
If, for whatever reason, the French State Security Agreement and/or
the German State Security Agreement has/have been terminated,
KfW or Sogepa, as the case might be, shall propose two persons,and the Shareholders shall exercise their best endeavours so thatthese persons are appointed as Directors.
Modification of the Articles of Association. Sogepa and
GZBV shall consult each other on any draft resolution intending
to modify the Board Rules and/or the Articles of Association.
Unless Sogepa and GZBV agree to vote in favour together onsuch draft resolution, the Shareholders shall vote against suchdraft resolution. If Sogepa and GZBV reach a mutual agreementon such draft resolution, the Shareholders shall vote in favour ofsuch draft resolution.

Jurisdiction. Binding advice for any dispute, controversy or claim
arising out of or in connection with the post-concert Grandfathering
Agreement in accordance with the procedure set forth in the postconcert Grandfathering Agreement; provided, however, that to theextent application to the courts is permitted to resolve any suchdispute controversy or claim, the courts of the Netherlands shallhave exclusive jurisdiction.

Reserved Matters. With respect to the matters requiring theapproval of a Qualiﬁed Majority at the Board level (“Reserved
Matters”), all the Directors shall be free to express their own views.
If the implementation of a Reserved Matter would require a decisionof the shareholders’ meeting of the Company, Sogepa and GZBV
shall consult each other with a view to reaching a common position.
Should Sogepa and GZBV fail to reach a common position, Sogepa
and GZBV shall remain free to exercise on a discretionary basis
their votes.

End of Former Consortium and New
Shareholders’ Agreement

Prior consultation. Sogepa and GZBV shall consult each otheron any draft resolution submitted to the shareholders’ m eetingother than related to Reserved Matters and the Board Rules.

Governing law. Laws of The Netherlands.

At the Consummation, the Former Consortium was terminated,
and Sogepa, GZBV and SEPI entered into the Shareholders’
Agreement, which has a much more limited scope than the Former
Consortium.
Below is a further description of the Shareholders’ Agreement,
based solely on a written summary of the main provisions of the
Shareholders’ Agreement that has been provided to EADS by
Sogepa, GZBV and SEPI (all parties together the “Shareholders”)
pursuant to the Multiparty Agreement.

Governance of the Company
Appointment of the Directors. The Shareholders shall votein favour of any draft resolution relating to the appointment of
Directors submitted to the shareholders’ meeting of the Company
in accordance with the terms and conditions of the German State
Security Agreement and the French State Security Agreement(as described below). If, for whatever reason, any person to
be appointed as a Director pursuant to the German State
Security Agreement or the French State Security Agreement
is not nominated, the Shareholders shall exercise their best
endeavours so that such person is appointed as a Director.
Sogepa and GZBV shall support the appointment of one Spanish
national that SEPI may present to them as Member of the Boardof Directors of the Company, provided such person qualiﬁ es

104 — EADS REGISTRATION DOCUMENT 2012

Balance of interests
The Shareholders agree their common objective to seek a balance
between themselves of their respective interest in the Company
as follows:— as closely as reasonably possible to 12% of the voting rights for
Sogepa, together with any voting rights attributable to Sogepa
and/or to the French State, pursuant to Dutch takeover rules
except for voting rights attributable due to acting in concert
with the other Parties;— as closely as reasonably possible to 12% of the voting rights
for GZBV, together with any voting rights attributable to GZBV
and/or to the German State, pursuant to Dutch takeover rules
except for voting rights attributable due to acting in concert
with the other Parties;— as closely as reasonably possible to 4% of the voting rights
for SEPI, together with any voting rights attributable to SEPI
and/or to the Spanish State, pursuant to Dutch takeover rules
except for voting rights attributable due to acting in concert
with the other Parties.

General Description of the Company and its Share Capital
3.3 Shareholdings and Voting Rights

Mandatory Takeover Threshold
The total aggregate voting rights of the Shareholders shall always
represent less than 30% of the voting rights of the Company,or less than any other threshold the crossing of which would
trigger for any Shareholder a mandatory takeover obligation(the “MTO Threshold”). In the event that the total aggregate
voting rights of the Shareholders exceed the MTO Threshold,the Shareholders shall take all appropriate actions as soon asreasonably practicable, but in any event within 30 days, to fall
below the MTO Threshold.

Transfer of Securities
Permitted transfer. Transfer of securities by any Shareholder toone of its afﬁliates.
Pre-emption right. Pro rata pre-emption rights of the Shareholders
in the event any Shareholder intends to transfer any of its securities
to a third party directly or on the market.
Call o ption r ight. Call-option right for the benefit of the
Shareholders in the event that the share capital or the voting
rights of any Shareholders cease to be majority owned directly or
indirectly by the French State, the German State or the Spanish
State as applicable.
Tag a long r ight. Tag-along right for the beneﬁt of SEPI in theevent that Sogepa, the French State or any of their afﬁliates andany French public entity and GZBV, the German State or any of
their afﬁliates and any public entity propose together to transfer
all of their entire voting rights interests.

Various provisions
Termination. The Shareholders’ Agreement may cease to apply inrespect of one or more Shareholders and/or their afﬁliates, subject
to the occurrence of certain changes in its or their shareholding
interest in EADS or in its or their shareholders.
Governing law. Laws of the Netherlands.
Jurisdiction. Arbitration in accordance with the Rules of Arbitrationof the International Chamber of Commerce, with the seat ofarbitration in The Hague (The Netherlands).

3.3.2.4 Limitations on EADS Share
Transactions
Following the Consummation, Lagardère and Daimler are free
to sell their EADS shares with no contractual restrictions (otherthan undertakings between Lagardère and Daimler with respect
to such sales).
SEPI may sell up to 1.15% of EADS’ share capital between
Consummation and close of business on 9 April 2013. Other thanthis, Sogepa and SEPI have agreed not to sell any EADS shareson the market until the earlier of 1 January 2014 and the date on
which Daimler has sold a further 5% economic interest in EADS.

3.3.2.5 Undertakings with Respect to Certain
Interests of Certain Stakeholders
EADS has made certain undertakings and entered into certain
agreements in connection with certain interests of its former coreshareholders and the German State.

State Security Agreements and Related
Undertakings and Negotiations
EADS and the French State have entered into an amendment
to the current convention between the French State and EADS
relating to the ballistic missiles business of EADS (as so amended,
the “French State Security Agreement”). Under the French
State Security Agreement, certain sensitive French military
assets will be held by an EADS subsidiary (the “French Defence
Holding Company”). At the Consummation, EADS contributed
certain sensitive French military assets to the French Defence
Holding Company. The French State has the right to approve ordisapprove of – but not to propose or appoint – three outside
Directors to the Board of Directors of the French Defence Holding
Company (the “French Defence Outside Directors”), at least
two of whom must qualify as Independent Directors under the
Board Rules if they were Members of the Board. Two of the French
Defence Outside Directors are required to also be Membersof the Board. French Defence Outside Directors may neither(i) be employees, managers or corporate ofﬁcers of a company
belonging to the Group (although they may be Members of theBoard) nor (ii) have material on-going professional relationships
with the Group.
EADS and the German State have entered into an agreement
relating to the protection of essential interests to the German
State’s security (the “German State Security Agreement”).
Under the German State Security Agreement, certain sensitive
German military assets are held by an EADS subsidiary (the“German Defence Holding Company”). The German State has
the right to approve or disapprove of – but not to propose or
appoint – three outside Directors to the supervisory board of
the German Defence Holding Company (the “German Defence
Outside Directors”), at least two of whom must qualify as
Independent Directors under the Board Rules if they were
Members of the Board. Two of the German Defence Outside
Directors are required to also be Members of the Board. The
qualiﬁcations to serve as a German Defence Outside Director
are comparable to those to serve as a French Defence Outside
Director, with the additional requirement that a German Defence
Outside Director may not be a civil servant.
EADS has agreed to negotiate with the Spanish State in order toreach a special security agreement relating to the protection of
the essential security interests of the Spanish State.

EADS REGISTRATION DOCUMENT 2012 — 105

3

General Description of the Company and its Share Capital
3.3 Shareholdings and Voting Rights

Dassault Aviation

Specific Rights of the French StateEADS plans to enter into an agreement with the French State
pursuant to which EADS would:

Pursuant to an agreement entered into between EADS and theFrench State (the “Ballistic Missiles Agreement”), EADS hasgranted to the French State (a) a veto right and subsequently a call
option on the ballistic missiles activity exercisable under certain
circumstances, including if (i) a third party acquires, directly or
indirectly, either alone or in concert, more than 15% or any multiple
thereof of the share capital or voting rights of EADS or (ii) the saleof the ballistic missiles assets or of the shares of such companies
carrying out such activity is considered and (b) a right to oppose
the transfer of any such assets or shares.

— grant the French State a right of first offer in case of the sale of
all or part of its shareholding in Dassault Aviation; and— commit to consult with the French State prior to making any
decision at any shareholders’ meeting of Dassault Aviation.
Entry into this agreement is conditional upon receiving anappropriate waiver to a mandatory bid from the French stock
exchange authorities.

Stock Exchange Listings
EADS has undertaken to the parties to the Shareholders’
Agreement that for the duration of the Shareholders’ Agreement
EADS shares will remain listed exclusively in France, Germany
and Spain.

EADS, the French State and MBDA are parties to a similar
convention regarding the assets comprising the French nuclear
airborne systems under which the French State has similar rights.

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, on shares inbearer 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. Theseshares were 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 description of
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”).
Starting in July 2000, 4,293,746 EADS shares were 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

106 — EADS REGISTRATION DOCUMENT 2012

— 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 the capitaland 2.78% of the EADS voting rights at that date, except for its
Indirect EADS Shares.
On 11 November 2005, DASA 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.
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 shares

General Description of the Company and its Share Capital
3.3 Shareholdings and Voting Rights

with a group of investment banks. Daimler indicated that it had
lent these shares to the banks in anticipation of the settlementof 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 delivered inthree 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 notiﬁ ed 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 the
Dedalus consortium by which it effectively reduced its shareholding
in EADS from 22.5% to 15%, while maintaining the balance of voting
rights between German and French shareholders. The Dedalus
consortium thereby acquired a 7.5% equity interest in EADS, with
Daimler continuing to control the voting rights of the entire 22.5%
package of EADS shares.
On 26 December 2007, JSC Vneshtorgbank sold and transferred
41,055,530 EADS shares to the Bank for Development and Foreign
Economic Affairs (Vnesheconombank). EADS was notiﬁed of suchtransaction 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 tothe subscription contract whereby they agreed, on the initiativeof 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 Dedalus consortium ofprivate and public-sector investors conﬁ rmed the continuationof the agreement reached on 9 February 2007 concerning
the equity interests and voting rights in EADS (as discussed
above). At Germany’s Federal Chancellery on 16 March 2010,

Daimler and the investors stated their willingness to maintain theexisting agreement without any changes. As a result, Daimler
continued to hold 22.5% of the voting rights in EADS while its
economic interest remained at 15%. Thus, the existing balanceof voting rights between German and French shareholders was
unchanged.
On 10 November 2011, Daimler announced that it had reached
an agreement in principle with the German federal governmentthat KfW would take over an equity interest in EADS from Daimler.
On 6 December 2012 pursuant to a transaction contemplatedby the Multiparty Agreement, Daimler sold 61.1 million EADS
shares (approximately 7.44% of the outstanding EADS shares)
through an ABB. This reduced Daimler’s economic interest in
EADS to approximately 7.44% and its voting interest to 14.88%.
KfW acquired 2.76% of the outstanding EADS shares as part of
the ABB. In a second transaction, KfW acquired (through a wholly
owned subsidiary) 65% of the shares in Dedalus on 2 January
2013, which brought its stake in Dedalus to 78%. The remaining
22% was held by certain other German public entities. Dedalus
held an economic interest of 7.44% in EADS as of the time ofthis acquisition. As a result of these two transactions, KfW helda voting interest of 2.76% in EADS and an economic interest of
8.56% in EADS – 2.76% directly and 5.80% via Dedalus. The
other German public entities participating in Dedalus held a
1.64% economic interest in EADS via Dedalus. The joint economic
interest of KfW and such German public entities in EADS wasthus 10.2% following these acquisitions.
On 19 March 2013, KfW transferred the 2.76% of the EADS shares
which it held directly to GZBV. As part of the Consummation, 7.44%of the outstanding EADS shares held by Dasa were transferred
to GZBV, and Dasa, which now holds a 7.44% economic andvoting interest in EADS, became a wholly owned subsidiary ofDaimler. GZBV, which now holds a 10.2% economic and votinginterest in EADS, is now owned 83.96% by KfW and 16.04% by
the other German public entities which were investors in Dedalus
immediately prior to such transfer.
As part of the Consummation, 7.44% of the outstanding EADS
shares held by Sogeade were transferred to Sogepa, and Sogeade,which now holds a 7.44% economic and voting interest in EADS,
became a wholly owned subsidiary of Lagardère.

EADS REGISTRATION DOCUMENT 2012 — 107

3

General Description of the Company and its Share Capital
3.3 Shareholdings and Voting Rights

The evolution in ownership of the share capital and voting rights of the Company over the past three years is set forth in the table below:
Position as of 31 December 2012

Position as of 31 December 2011

Position as of 31 December 2010

Shareholders% ofcapital% ofvoting rights

Number ofshares% ofcapital% ofvoting rights

Number ofshares% ofcapital% ofvoting rights

Number ofshares

DASA

14.77%

14.87%

122,225,136

22.35%

22.45%

183,337,704

22.46%

22.55%

183,337,704

Sogeade22.16%

22.30%

183,337,704

22.35%

22.45%

183,337,704

22.46%

22.55%

183,337,704

SEPI

5.40%

5.44%

44,690,871

5.45%

5.47%

44,690,871

5.47%

5.49%

44,690,871

KfW

2.75%

2.76%

22,725,182

-

-

-

-

-

-

Sub-total
ContractualPartnership45.08%

45.37%

372,978,893

50.14%

50.36%

411,366,279

50.39%

50.59%

411,366,279

French State

0.06%

0.06%

502,746

0.06%

0.06%

502,746

0.06%

0.06%

502,746

Public(1)54.23%

54.57%

448,659,771

49.35%

49.58%

404,943,474

49.16%

49.35%

401,338,521

Own sharebuy-back(2)

0.63%

-

5,226,535

0.45%

-

3,669,792

0.39%

-

3,195,176

Total

100%

100%

827,367,945

100%

100% 820,482,291

100%

100%

816,402,722(1) Including EADS employees. As of 31 December 2012, EADS employees held approximately 1.7% of the share capital (and voting rights).
(2) The shares owned by the Company do not carry voting rights.

To the knowledge of the Company, there are no pledges over theshares of the Company.
The Company requested disclosure of the identity of the 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 2012, resulted
in the identification of 1,512 shareholders holding a total of435,424,496 EADS shares (including 4,355,531 shares held by
Iberclear on behalf of the Spanish markets and 30,203,957 shares
held by Clearstream on behalf of the German market).
The shareholding structure of the Company as of 31 December
2012 is as shown in 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 structureof EADS as of 31 December 2012, comprising four Divisions andthe main Business Units. See “— Information on EADS’ Activities

108 — EADS REGISTRATION DOCUMENT 2012

— 1.1.1 Overview — Organisation of EADS Businesses”. For easeof presentation, certain intermediate holding companies have been
omitted.

General Description of the Company and its Share Capital
3.3 Shareholdings and Voting Rights

CASSIDIAN Ltd(UK)

EADS France
S.A.S. (France)

3.69%

96.31%

78.48%EADS
DeutschlandGmbH (Germany)

EADS GROUP STRUCTURE CHART(The Netherlands)

5.58%

EADS CASAFrance S.A.
(France)

EADS N.V.

EADS
North America(USA)

Airbus S.A.S.
(France)94.42%

EFW(Germany)

AirbusOperations S.A.S.
(France)CASSIDIAN S.A.S.
(France)

Aerolia(France)37.50%MBDA S.A.S.
(France)

Premium
Aerotech GmbH
(Germany)

EADS CASA(Spain)2.54%

97.46%EADS CASA
Holding (France)

Astrium S.A.S.
(France)

5.09%

Astrium Holding
S.A.S. (France)

Astrium Services
Holding S.A.S.

Astrium B.V.

Astrium GmbH
(Germany)

AirbusOperations
Ltd (UK)

Astrium Ltd(UK)

Astrium Services
GmbH (Germany)

Astrium Services
UK Ltd (UK)EADS Casa
Espacio (Spain)

Paradigm
Services Ltd(UK)

Paradigm Secure
Communications
Ltd (UK)

Infoterra Ltd(UK)

Mobstat Group
Holding Sarl
(Lux)

AirbusOperations SL(Spain)Astrium España
SL (Spain)

AirbusOperations
GmbH (Germany)

EADS
Sogerma(France)

Airbus (including EADS CASA)
Astrium
Cassidian
Eurocopter
North America
Sogerma
Indirect
DirectSubsidiaries held with no indication of ownership percentage are 100% owned.

CRISA(Spain)Eurocopter
Holding S.A.S.
(France)95%

Eurocopter
S.A.S. (France)

Eurocopter
DeutschlandGmbH (Germany)

Eurocopter UK
Ltd (UK)

Eurocopter
España S.A.
(Spain)VectorAerospace
Holding S.A.S.

EADS REGISTRATION DOCUMENT 2012 — 109

3

General Description of the Company and its Share Capital
3.3 Shareholdings and Voting Rights

3.3.7

Purchase by the Company of its Own Shares

3.3.7.1 Dutch Law and Information on Share
Repurchase Programmes
Pursuant to EC Regulation No. 2273/2003, the Company is subject
to conditions for share repurchase programmes and disclosure
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 less thepayment 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’ meeting has authorised the Board of 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 insuch cases where the right of usufruct or pledge was vested before
the share was held by the Company.
The Annual General Meeting of Shareholders held on 31 May 2012
authorised the Board of Directors, in a resolution that renewed theprevious authorisation given by the Annual General Meeting of
Shareholders held on 26 May 2011, for a period of 18 months fromthe date of such meeting, to repurchase shares of the Company, by
any means, including derivative products, on any stock exchange
or otherwise, as long as, upon such repurchase, the Company will
not hold more than 10% of the Company’s issued share capital andat a price not less than the nominal value and not more than thehigher of the price of the last independent trade and the highest
current independent bid on the trading venues of the regulated
market of the country in which the purchase is carried out.
Moreover, the Extraordinary General Meeting of Shareholders held
on 27 March 2013 authorised the Board of Directors, for a periodof 18 months from the date of such meeting, to repurchase up
to 15% of the Company’s issued and outstanding share capital(i.e. issued share capital excluding shares held by the Company
or its subsidiaries) as of the date of such meeting, by any means,including derivative products, on any stock exchange, in a private
purchase, by way of a public purchase offer or otherwise, ata price not less than the nominal value and at most € 50 per
share. This authorisation is in addition, and without prejudice,to the authorisation granted by the Annual General Meeting of
Shareholders held on 31 May 2012.
A resolution will be submitted to the Annual General Meetingof Shareholders called for 29 May 2013 in order to renew theauthorisation given by the Annual General Meeting of Shareholders

110 — EADS REGISTRATION DOCUMENT 2012

held on 31 May 2012 and authorise the Board of Directors, fora new period of 18 months as from the date of such meeting,to repurchase 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 more than
10% of the Company’s issued share capital and at a price not lessthan the nominal value and not more than the higher of the priceof the last independent trade and the highest current independent
bid on the trading venues of the regulated market of the country inwhich the purchase is carried out. This authorisation will replace theauthorisation given by the Annual General Meeting of Shareholders
held on 31 May 2012, but will be in addition, and without prejudice,to the authorisation granted by the Extraordinary General Meeting
held on 27 March 2013.
As of the date of this document, the Company held 5,226,535 of
its own shares, representing 0.63% 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 shares requires the
publication of the description of the share repurchase programme.
Such description must be published prior to the implementationof 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 todisclose on its website speciﬁ ed information regarding such
purchases within at least seven trading days.
In addition, the Company must report to the AMF, on at least
a monthly basis, all the speciﬁ ed 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 subject to German rules on
repurchasing its own shares only to a limited extent, since German
rules refer to the law of the Member State in which the Company
is domiciled.
In addition, general principles of German law of insider trading,market manipulation and equal treatment of shareholders areapplicable.

General Description of the Company and its Share Capital
3.3 Shareholdings and Voting Rights

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, insider trading is
prohibited and the Company may not trade in its own shares forthe purpose of manipulating the market.

3.3.7.5 Description of the Share Repurchase
Programme Authorised by the
Extraordinary General Meeting of
Shareholders held on 27 March 2013
Pursuant to Articles 241-2-I and 241-3 of the AMF General
Regulations, below is a description of the share repurchaseprogramme authorised by the extraordinary general meeting ofshareholders held on 27 March 2013, and which the Board of
Directors decided to implement on 2 April 2013, for an amount
up to € 3.75 billion, for 18 months and to repurchase up to 15% of
EADS’ issued and outstanding share capital.
For details on the decision of the Board of Directors to launchsuch share repurchase programme, please refer to “1. Information
on EADS’ Activities —1.2 Recent Developments”.

— date of the shareholders’ meeting authorising the share
repurchase programme: 27 March 2013;— date of the Board of Directors’ decision to implement theshare repurchase programme: 2 April 2013;— intended use of the EADS shares held by the Company
as of the date of this document: For details on use of the
EADS shares already held by the Company, please refer to“3.3.7.6 – Description of the Share Repurchase Programme to
be authorised by the Annual General Meeting of Shareholders
to be held on 29 May 2013”.

— sole purpose of the share repurchase programme to be
implemented by the Company: the reduction of sharecapital by cancellation of all of the repurchased shares;— procedure:— maximum portion of the issued share capital that may be
repurchased by the Company: 15%,
— maximum number of shares that may be repurchasedby the Company: 123,884,942 shares, based on anissued share capital of 831,126,149 shares and 5,226,535
repurchased shares in treasury and consequently based on
an outstanding issued share capital of 825,899,614 shares
as of 27 March 2013,means the contribution premiums (in relation to contributions
in kind), the issue premiums (in relation to cash contributions)and the other reserves as set out in the ﬁnancial statements
of EADS, from which the repurchase price for the treasury
shares must be deducted.
As of 31 December 2012, the respective values of each ofthese EADS equity components which are by nature repayable
or distributable to the shareholders were: € 7,253,000,000(contribution premiums), € -2,294,000,000 (other reserves
and retained earnings, including net proﬁt for the year) and€ -84,000,000 (treasury shares), i.e. an aggregate amountof € 4,875,000,000.
EADS reserves the right to implement the share purchaseprogramme to its full extent and undertakes not to exceed,
directly or indirectly, the threshold of 15% of the issued sharecapital as well as the amount of € 4,875,000,000 throughout
the term of the programme.
Finally, EADS undertakes to maintain at any time a sufﬁcientnumber of shares in public hands to meet the thresholds of
NYSE Euronext,— shares may be bought or sold at any time (including during
a public offering) to the extent authorised by the stock
exchange regulations and by any means, including, without
limitation, by means of block trades and including the useof options, combinations of derivative ﬁnancial instrumentsor the issue of securities giving rights in any way to EADS
shares within the limits set out in this document.
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 not use mechanisms
which would signiﬁcantly increase the volatility of the sharesin 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 and Valencia
Stock Exchanges,— the share repurchase programme will enable EADS to
repurchase shares from all its shareholders,— maximum purchase price per share: € 50,— term of the share repurchase programme and othercharacteristics: this share repurchase programme shall bevalid until 27 September 2014 inclusive, i.e. the date of expiryof the authorisation granted by the extraordinary general
meeting of shareholders held on 27 March 2013.

— 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”

EADS REGISTRATION DOCUMENT 2012 — 111

3

General Description of the Company and its Share Capital
3.3 Shareholdings and Voting Rights

3.3.7.6 Description of the Share Repurchase
Programme to be Authorisedby the Annual General Meetingof Shareholders to be held on
29 May 2013
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: 29 May 2013;— intended use of the EADS shares held by the Company asof the date of this document: the reduction of share capitalby cancellation of all or part of the repurchased shares, inparticular to avoid the dilution effect related to certain sharecapital increases for cash (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:
5,226,535 shares.
For information on shares held by EADS at the date of the entry
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 order of use of
the repurchase authorisation, which will be determinedon a case-by-case basis by the Board of Directors basedon need):— the reduction of share capital by cancellation of all or partof the repurchased shares, in particular to avoid the dilution
effect related to certain share capital increases for cash(i) reserved or to be reserved for employees of the EADSGroup and/or (ii) carried out or to be carried out in the context
of the exercise of stock options granted or to be granted tocertain EADS Group employees, it being understood that the
repurchased shares shall not carry any 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 otherallocations of shares to EADS Group employees,— the purchase of shares for retention and subsequent use forexchange 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;

112 — EADS REGISTRATION DOCUMENT 2012

— 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: 83,112,614 shares, based on an issued
share capital of 831,126,149 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 83,869,438 shares based on the838,694,388 shares which would make up the entire fullydiluted 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 to contributions
in kind), the issue premiums (in relation to cash contributions)and the other reserves as set out in the ﬁnancial statements
of EADS, from which the repurchase price for the treasury
shares must be deducted.
As of 31 December 2012, the respective values of each ofthese EADS equity components which are by nature repayable
or distributable to the shareholders were: € 7,253,000,000(contribution premiums), € -2,294,000,000 (other reserves
and retained earnings, including net proﬁt for the year) and€ -84,000,000 (treasury shares), i.e. an aggregate amountof € 4,875,000,000.
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 sharecapital as well as the amount of € 4,875,000,000 throughout
the term of the programme.
Finally, EADS undertakes to maintain at any time a sufﬁcientnumber of shares in public hands to meet the thresholds of
NYSE Euronext,— shares may be bought or sold at any time (including during apublic offering) to the extent authorised by the stock 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 issueof securities giving rights in any way to EADS shares within
the limits set out in this document. Moreover, EADS will use
call options and swaps that have been acquired pursuant tothe agreements it had entered into during the previous share
repurchase programme (see below) and does not exclude
the possibility of using a structure of transaction similar tothe one that had been used in the previous share repurchaseprogramme in order to repurchase its own shares.
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 not use mechanisms
which would signiﬁcantly increase the volatility of the sharesin particular in the context of call options,General Description of the Company and its Share Capital
3.4 Dividends— 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 and Valencia
Stock Exchanges,— Daimler, DASA, the French State, Lagardère, SEPI, Sogeadeand Sogepa will retain all of their rights, depending on thecircumstances, to sell their available EADS shares to EADS
as part of this share repurchase programme,— maximum purchase price per share: € 50;— term of the share repurchase programme and othercharacteristics: this share repurchase programme shall bevalid until 29 November 2014 inclusive, i.e. the date of expiry of
the authorisation requested from the Annual General Meetingof Shareholders to be held on 29 May 2013. As one of the main
aims of this EADS share repurchase programme is related to thepossible exercise by EADS Group employees of stock options
granted to them from 2003 to 2006, it is currently intended(i) that such a programme be continued and renewed until atleast 17 December 2016 (16 December 2016 being the latest
date upon which an employee of the EADS Group may exercise
all or part of his/her stock options granted in 2006) and (ii) that
the Annual General Meeting of Shareholders be asked to renew
the authorisations until such date.

The 1,843,814 EADS shares held by EADS at the date of theentry into force of EC Regulation No. 2273/2003 of 22 December
2003 on 13 October 2004 and still held by EADS at the dateof this document shall be, in order of decreasing priority, either(i) cancelled pursuant to a decision to be made, according toDutch law, by an Annual General Meeting of Shareholders, to avoid
the dilution effect related to certain share capital increases forcash carried out, during the ﬁnancial year preceding such Annual
General Meeting of Shareholders, in the context of an EADS
employee share ownership programme and/or upon the exerciseof stock options granted to certain EADS Group employees, or(ii) retained in order to allow the performance of certain obligations
described within 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 repurchase programme.

3

3.4 Dividends
3.4.1

Dividends and Cash Distributions Paid Since the Incorporation of the Company

Cash distributions paid to the shareholders since the incorporation of the Company are set forth in the table below:
Date of the cash distribution payment

Gross amount per share(1)2000

27 June 2001

€ 0.502001

28 June 2002

€ 0.502002

12 June 2003

€ 0.30Financial Year2003

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

2009

-

-

2010

6 June 2011

€ 0.222011

7 June 2012

€ 0.45(1) Note: figures have not been adjusted to take into account changes in the number of shares outstanding.

EADS REGISTRATION DOCUMENT 2012 — 113

General Description of the Company and its Share Capital
3.4 Dividends

3.4.2 Dividend Policy of EADS
Based on earnings per share of € 1.50 in 2012, the Board of
Directors has proposed payment of a dividend of € 0.60 per shareto the next Annual General Meeting of Shareholders. Subject toapproval by the Annual General Meeting, the dividend is expected
to be paid on 5 June 2013 (expected record date of 4 June 2013).

3.4.3

Unclaimed Dividends

Pursuant to the Articles of Association, the claim for payment of
a dividend or other distribution approved by the shareholders’meeting shall lapse ﬁve years after the day on which such claim
becomes due and payable. The claim for payment of interim

3.4.4

This is converging towards a pay-out ratio in line with sector andindustry peers. From the Board of Directors’ perspective, as theCompany matures, this dividend pay-out will be the orientation
for the future.

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.

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 the Netherlands
for any Netherlands tax purposes (a “Non-Resident Holder”).
Certain categories of holders of the Company’s shares may besubject 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. Where the summary refers to “theNetherlands” or “Netherlands”, it refers only to the European partof the Kingdom of the Netherlands.

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, repaymentof 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 as capital 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 orcomplete exemption or refund of all or a portion of the above
withholding tax pursuant to domestic rules or under a tax convention
that is in effect between the Netherlands and the Non-Resident
Holder’s country of residence. The Netherlands has concluded
such conventions with the US, Canada, Switzerland, Japan, almost
all European Union Member states and other countries.

114 — EADS REGISTRATION DOCUMENT 2012

Withholding 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 or otherdisposition is, or is deemed to be, made to the Company or a direct
or indirect subsidiary of the Company. In principle, a redemption
or sale to the Company or a direct or indirect subsidiary of theCompany will be treated as a dividend and will be subject to therules set forth in “Withholding Tax on Dividends” above.

Taxes on Income and Capital Gains
A Non-Resident Holder who receives dividends distributed by
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:— such income or gain is attributable to an enterprise or part thereof
which is either effectively managed in the Netherlands or carriedon 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 or is deemed to have, directly or indirectly,
a substantial interest (“aanmerkelijk belang”) or a deemed
substantial interest in the Company and such interest (i) does
not form part of the assets of an enterprise and (ii) is held by
the Non-Resident Holder with the main objective, or one of
the main objectives, to avoid Netherlands withholding tax on
dividends or Netherlands individual income tax at the level ofanother person or entity; or— the Non-Resident Holder is an individual and (i) the
Non-Resident Holder has, directly or indirectly, a substantial
interest (“aanmerkelijk belang”) or a deemed substantial

General Description of the Company and its Share Capital
3.5 Annual Securities Disclosure Reportinterest in the Company and such interest does not form
part of the assets of an enterprise, or (ii) such income orgain qualifies as income from miscellaneous activities(“belastbaar resultaat uit overige werkzaamheden”) in the
Netherlands as defined in the Dutch Income Tax Act 2001(“Wet inkomstenbelasting 2001”).
Generally, a Non-Resident Holder of Shares will not have asubstantial interest in the Company’s share capital, unless the NonResident 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 sharecapital or any class thereof. Generally, a deemed substantial
interest exists if all or part of a substantial interest has been or isdeemed to have been disposed of with application of a roll-overrelief.

Gift or Inheritance Taxes

Value-Added Tax
No Netherlands value-added tax is imposed on dividends on the
Shares or on the transfer of the Shares.

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

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

Netherlands gift or inheritance taxes will not be levied on thetransfer of Shares by way of gift, or upon the death of a NonResident Holder, unless the transfer is construed as an inheritanceor gift made by or on behalf of a person who, at the time of thegift or death, is or is deemed to be resident in the Netherlands.

3

3.5 Annual Securities Disclosure Report
The announcements listed below 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 2012 Results

16 May 2012

Press release – EADS Confirms Top Management Changes

31 May 2012

Press release – First Half 2012 Results

27 July 2012

Press release – New EADS Group Executive Committee Appointed

6 September 2012

Press release – BAE Systems plc and EADS N.V.

10 October 2012

Press release – Third Quarter 2012 Results

8 November 2012

Press release – Response to Recent Shareholding Structure Reshuffling Press Reports

3 December 2012

Press release – EADS Governance and Shareholding Structure Receives Far-Reaching Overhaul

5 December 2012

Press release – EADS Proposes Candidates for Future Board of Directors

5 February 2013

Press release – 2012 Annual Results

27 February 2013

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

EADS REGISTRATION DOCUMENT 2012 — 115

4
116 — EADS REGISTRATION DOCUMENT 2012

Corporate GovernanceCorporate Governance
4.1 Management and Control

118

4.1.1 New Corporate Governance Arrangements

118

4.1.2 Corporate Governance Arrangements in 2012

121

4.1.3 Dutch Corporate Governance Code, “Comply or Explain”

131

4.1.4 Enterprise Risk Management System

132

4.1.5 Compliance Organisation

137

4.2 Interests of Directors and Principal Executive Ofﬁcers

138

4.2.1 Remuneration Granted to Directors and Principal Executive Ofﬁcers

138

4.2.2 Long-Term Incentives Granted to the Chief Executive Ofﬁcer

142

4.2.3 Related Party Transactions

142

4.2.4 Loans and Guarantees Granted to Directors

142

4.3 Employee Proﬁt Sharing and Incentive Plans

143

4.3.1 Employee Proﬁt Sharing and Incentive Agreements

143

4.3.2 Employee Share Ownership Plans

143

4.3.3 Long-Term Incentive Plans

144

EADS REGISTRATION DOCUMENT 2012 — 117

Corporate Governance
4.1 Management and Control

4.1 Management and Control
T he corporate governance arrangements of EADS were
substantially changed pursuant to the Multiparty Agreement,
including changes in the composition of the Board of Directors
and the rules governing its internal affairs (the “Board Rules”).
These changes are intended to further normalise and simplify

4.1.1

EADS’ corporate governance, reﬂ ecting an emphasis on best
corporate governance practices and the absence of a controllingshareholder group. Below is a summary description of suchchanges.

New Corporate Governance Arrangements

Board of Directors Composition
and Board Rules
Under the Board Rules, the Board of Directors has a total of twelve(12) Directors, who each serve for a three-year term. At least amajority of the Members of the Board of Directors (i.e., 7/12) must
be European Union nationals (including the Chairman of the Boardof Directors) and a majority of such majority (i.e., 4/7) must be both
European Union nationals and residents. No Director may be an
active civil servant. The Board of Directors has one (1) Executive
Director and eleven (11) non-Executive Directors. While the Boardof Directors appoints the Chief Executive Ofﬁcer of EADS (the“CEO”), the CEO is required to be an Executive Director and must
be a EU national and resident; therefore it is anticipated that theBoard of Directors will appoint as CEO the person appointed by
the shareholders as an Executive Director. At least nine (9) of
the non-Executive Directors must be “Independent Directors”(including the Chairman of the Board of Directors).
Under the Board Rules, an “Independent Director” is a nonExecutive Director who is independent within the meaning of
the Dutch Corporate Governance Code and meets additional
independence standards. Speciﬁcally, where the Dutch Corporate
Governance Code would determine independence, in part, byreference to a Director’s relationships with shareholders who own
at least 10% of EADS, the Board Rules determine such Director’s
independence, in relevant part, by reference to such Director’s
relationships with shareholders who own at least 5% of EADS.
T he Remuneration and Nomination Committee of the Board of
Directors is charged with recommending to the Board of Directors
the names of candidates to succeed active Board Members after
consultation with the Chairman of the Board of Directors and theCEO.
The Board of Directors, voting by simple majority vote, proposes
individuals to the shareholders’ meeting of EADS for appointment
as Directors. No shareholder or group of shareholders, or any otherentity, has the right to propose, nominate or appoint any Directors
other than the rights available to all shareholders under general
Dutch corporate law.

118 — EADS REGISTRATION DOCUMENT 2012

In addition to the membership and composition rules describedabove, the Remuneration and Nomination Committee, inrecommending candidates for the Board of Directors, and theBoard of Directors, in its resolutions proposed to the shareholders’meeting relative to the naming of Directors or decisions to propose
replacements of any resigning or incapacitated Director, are eachrequired to apply the following principles:— the preference for the best candidate for the position, and— the maintenance, in respect of the number of Members of
the Board of Directors, of the observed balance among thenationalities of the candidates in respect of the location of
the main industrial centres of EADS (in particular among thenationals of the four (4) Member States of the European Union
where these main industrial centres are located).
The Board of Directors is required to take into account, in the
resolutions proposed in respect of the nomination of Directors
presented to the shareholders’ meeting, the undertakings of EADS
to the French State pursuant to the amendment to the French
State Security Agreement and to the German State pursuant to
the German State Security Agreement, in each case as described
more fully above. In practice, this means that (A) two (2) of the
Directors submitted to the shareholders for appointment should
also be French Defence Outside Directors (as deﬁned above) of theFrench Defence Holding Company (as deﬁned above) who havebeen proposed by EADS and consented to by the French Stateand (B) two (2) of the Directors submitted to the shareholders forappointment should also be German Defence Outside Directors(as deﬁned above) of the German Defence Holding Company (asdeﬁned above) who have been proposed by EADS and consented
to by the German State.
The Remuneration and Nomination Committee endeavours to
avoid a complete replacement of outgoing Directors by new
candidates, but rather to ensure continuity of company-speciﬁcknowledge and experience within the Board of Directors, whilefavouring the introduction of new candidates for at least 1/3 ofDirector positions.
For details on the new composition of the Board of Directors
please refer to “— 1. Information on EADS’ Activities — 1.2 Recent
Developments”.

Corporate Governance
4.1 Management and Control

Remuneration and Nomination Committee
The Remuneration and Nomination Committee has four (4)Members, with geographic diversity. Each Member of theRemuneration and Nomination Committee is an Independent
Director. One Member of the Remuneration and Nomination
Committee is a Director who is appointed to the Board of Directors
on the basis of the French State Security Agreement. One Memberof the Remuneration and Nomination Committee is a Director who
is appointed to the Board of Directors on the basis of the German
State Security Agreement. The Board of Directors, by a Simple
Majority (deﬁned below), appoints the chair of the Remuneration
and Nomination Committee, who may not be any of the following:— the Chairman of the Board of Directors;— a current or former Executive Director of EADS;— a non-Executive Director who is an Executive Director withanother listed company; or— a Director appointed to the Board of Directors on the basisof the French State Security Agreement or the German State
Security Agreement.

Other Board Committees
The Board of Directors continues to have an Audit Committee, theresponsibilities of which have not changed. The Audit Committee
has four (4) Members and is chaired by an Independent Director
who is not the Chairman of the Board of Directors or a current orformer Executive Director of EADS. At least one (1) Member of the
Audit Committee must be a ﬁnancial expert with relevant knowledge
and experience of ﬁnancial administration and accounting for listedcompanies or other large legal entities.
The Board of Directors no longer has a Strategic Committee.

Role of the Board of Directors
The Board Rules specify that in addition to the Board of Directors’
responsibilities under applicable law and the Articles of Association,
the Board of Directors is responsible for certain enumerated
categories of decisions. Under the Articles of Association, theBoard of Directors is responsible for the management of EADS.
Under the Board Rules, the Board of Directors delegates dayto-day management of EADS to the CEO, who, supported by
the Executive Committee, makes decisions with respect to the
management of EADS. However, the CEO may not enter intotransactions that form part of the key responsibilities of the Boardof Directors unless these transactions have been approved by
the Board of Directors. Most Board of Directors’ decisions
are made by a simple majority of the votes of the Directors (a“Simple Majority”), but certain decisions must be made by a 2/3
majority (i.e., eight (8) favourable votes) of the Directors regardlessof whether present or represented in respect of the decision(a “Qualified Majority”). In addition, amendments to certain
provisions of the Board Rules require the unanimous approval of
the Board of Directors, with no more than one Director not present
or represented (including provisions relating to nationality andresidence requirements with respect to Members of the Board of
Directors and the Executive Committee). However, no individual
Director or class of Directors has a veto right with respect to any
Board of Directors’ decisions.
Matters that require Board of Directors’ approval include among
others, the following items (by Simple Majority unless otherwise
noted):— approving any change in the nature and scope of the businessof EADS and the Group;— approving any proposed resolution to be presented to theshareholders’ m eeting relating to a change of any of thearticles of the Articles of Association of EADS which requires
the approval of a majority of at least seventy-five percent (75%)
of the valid votes cast at such shareholders’ meeting (Qualified
Majority);— approving the overall strategy and the strategic plan of theGroup;— approving the operational business plan of the Group(the “Business Plan”) and the yearly budget (the “Yearly
Budget”) of the Group, including the plans for Investment,
R&D, Employment, Finance and, as far as applicable, major
programmes;— setting the major performance targets of the Group;— monitoring on a quarterly basis, the operating performanceof the Group;— nominating, suspending or revoking the Chairman of the Boardof Directors and the CEO (Qualified Majority);— approving of all of the Members of the Executive Committee
taken as a whole as proposed by the CEO and to approvetheir proposed appointment as Chief Executive Officers ofimportant Group companies and their service contracts andother contractual matters in relation to the Executive Committee
and their function as Chief Executive Officers;— establishing, and approving amendments to the Board Rules
and the rules for the Executive Committee (Simple Majority
with certain exceptions);— deciding upon the appointments of the Airbus Shareholder
Committee, the appointments of the EADS Corporate Secretary
and the chairmen of the supervisory board (or similar organ)of other important Group companies and Business Units,on the basis of the recommendations of the Remuneration
and Nomination Committee, as well as the institution andamendment of the rules governing the organs of such entities;— approving the relocation of the headquarters of the principal
companies of the Group and of the operational headquarters
of EADS (Qualified Majority);— approving decisions in connection with the location of new
industrial sites material to the Group as a whole or the changeof the location of existing activities that are material to the Group;

EADS REGISTRATION DOCUMENT 2012 — 119

4

Corporate Governance
4.1 Management and Control— approving decisions to invest and initiate programmes financedby the Group, acquisition, divestment or sale decisions, in eachcase for an amount in excess of € 300 million;— approving decisions to invest and initiate programmes financedby the Group, acquisition, divestment or sale decisions, in eachcase for an amount in excess of € 800 million (Qualified Majority);— approving decisions to enter into and terminate strategic
alliances at the level of EADS or at the level of one of its principal
subsidiaries (Qualified Majority);— approving principles and guidelines governing the conductof the Group in matters involving non-contractual liabilities(like environmental matters, quality assurance, financial
announcements, integrity) as well as the corporate identityof the Group;— approving any share buyback, cancellation (redemption) of
shares or the issuing of new shares or any similar measureleading to a change in the total number of voting rights in EADS,
except in the case of any buyback or cancellation (redemption)of shares if in the ordinary course of business (in which casethe management of EADS will only inform the Directors before
its implementation with a reasonable prior notice) (Qualified
Majority);— approving matters of shareholder policy, major actions or major

the Board of Directors cannot act on a Qualiﬁed Majority Matterbecause this quorum is not satisﬁed, the quorum would decrease
to eight (8) of the Directors at a new duly called meeting.
In addition to the Board Rules, the work of the Board of Directors
is governed by a Directors’ charter detailing the rights and dutiesof the Members of the Board of Directors, which was adopted inlight of corporate governance best practices.
The Directors’ Charter sets out core principles that bind each andevery Director, such as acting in the best interest of the Company
and its stakeholders, devoting necessary time and attention to
the carrying out of their duties and avoiding any and all conﬂicts
of interest.

Executive Committee Nomination
and Composition
The CEO proposes all of the Members of the Executive Committee
taken as a whole for approval by the Board of Directors, after
consultation with (a) the Chairman of the Remuneration and
Nomination Committee and (b) the Chairman of the Board of
Directors, applying the following principles:— the preference for the best candidate for the position;— the maintenance, in respect of the number of Members ofof fundamental significance for the Group or which involves anabnormal level of risk;

the Executive Committee, of the observed balance among
the nationalities of the candidates in respect of the location of
the main industrial centres of EADS (in particular among thenationals of the four (4) Member States of the European Union
where these main industrial centres are located); and— approving any proposal of names of candidates to succeed— at least 2/3 of the Members of the Executive Committee,announcements to the capital markets;— approving decisions in respect of other measures and businessactive Directors made by the Remuneration and Nomination
Committee, after consultation with the Chairman of the Boardof Directors and the CEO, for submission to the shareholders’meeting; and— approving entering into and terminating cooperation agreements
at the level of EADS or at the level of one of its principal
subsidiaries having an impact on the share capital of EADS orof the relevant subsidiary (Qualified Majority).
The Board of Directors must have a certain number of Directors
present or represented at a meeting to take action. This quorum
requirement depends on the action to be taken. For the Board of
Directors to make a decision on a Simple Majority matter, a majorityof the Directors must be present or represented. For the Boardof Directors to make a decision on a Qualiﬁed Majority matter, atleast ten (10) of the Directors must be present or represented. If

120 — EADS REGISTRATION DOCUMENT 2012

including the CEO and the CFO, being EU nationals andresidents.
The Board of Directors determines, by simple majority vote,whether to approve all of the Members of the Executive Committee
taken as a whole as proposed by the CEO.

Role of CEO and Executive Committee
The CEO, supported by an Executive Committee (the “Executive
Committee”), is responsible for managing the day-to-day
operations of EADS. The Executive Committee, chaired by theCEO, also comprises the Heads of the major Functions andDivisions of the Group. The CEO endeavours to reach consensus
among the Members of the Executive Committee. In the event a
consensus is not reached, the CEO is entitled to decide the matter.

Corporate Governance
4.1 Management and Control

4.1.2

Corporate Governance Arrangements in 2012COMPOSITION OF THE BOARD OF DIRECTORS IN 2012

Name

Age

Term started (as Memberof the Board of Directors)

Termexpires

Principal function

StatusArnaud Lagardère

51

2003, re-elected in
2005, 2007 and 20122017

Chairman of the Boardof Directors of EADS N.V.

Non-Executive

Thomas Enders

54 2005, re-elected in 20122017

Chief Executive Officer of EADS N.V.

Executive

Co-Managing Partnerof Lagardère SCA Nominated by Sogeade

Dominique D’Hinnin

53

2007, re-elected in 20122017

Hermann-Josef Lamberti

57

2007, re-elected in 20122017

Former Member of the Management
Board of Deutsche Bank AG

Independent
Independent

Lakshmi N. Mittal

62

2007, re-elected in 20122017

Chairman and Chief Executive Officer
of ArcelorMittal S.A.

Sir John Parker

70

2007, re-elected in 20122017

Chairman of Anglo American PLC

Independent

Michel Pébereau

71

2007, re-elected in 20122017 Honorary President of BNP Paribas S.A.

Independent

2012

2017

Chairman of Pangea XXI,
Consultora Internacional

Nominated by SEPI

2017

Member of the Management
Board of Daimler AG

Nominated by Daimler

Josep Piqué i Camps
Wilfried Porth

58

54 2009, re-elected in 2012

Jean-Claude Trichet

70

2012

2017

Bodo Uebber

53

2007, re-elected in 20122017

President of SOGEPA, Honorary
Governor of Banque de France Nominated by Sogeade
Member of the Management
Board of Daimler AG

Nominated by Daimler

Note: Status as of 1 March 2013. 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.

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 number ofshares that must be held by a Director.

— Chairman of the Supervisory Board of Lagardère Services S.A.S.
— Chairman of the Supervisory Board of Lagardère Active S.A.S.
— Chairman of the Executive Committee of Lagardère
Unlimited S.A.S.

Curriculum Vitae and other Mandates
and Duties Performed in any Company
by the Members of the Board of Directors
in 2012— Director of Lagardère Ressources S.A.S.
— President, Lagardère Unlimited Inc.
— Permanent Representative of Lagardère Unlimited INC,
Managing Member of Lagardère Unlimited LLC

Arnaud Lagardère
Mr Arnaud Lagardère was appointed Managing Partner of
Lagardère SCA in March 2003 and his appointment was renewedby the Supervisory Board on proposal of the General Partners
on 11 March 2009, for a period of six years to run until 11 March2015. In addition, Mr Lagardère is the Chairman of Lagardère
S.A.S. and Lagardère Capital & Management S.A.S. He and thesetwo companies held 9.30% of Lagardère SCA’s share capital on
31 December 2012. Mr Lagardère holds a DEA higher degreein economics from the University of Paris Dauphine. He wasappointed Director and Chief Executive Ofﬁcer of the company
MMB, which became Lagardère SCA, in 1987. He was Chairmanof the US Company Grolier Inc. from 1994 to 1998.
Current mandates in addition to the one listed in the chart above
are set forth below:— Chairman and Chief Executive Officer of Lagardère Media ex— Director of World Sport Group Investments Ltd— Director of World Sport Group Holdings Ltd— Chairman and Chief E xecutive Of ficer 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)— Chairman and Chief Executive Officer of Lagardère S.A.S.
— Chairman and Chief Executive Officer of Lagardère Capital &Management S.A.S.

Hachette S.A.)— Director of Hachette Livre S.A.
EADS REGISTRATION DOCUMENT 2012 — 121

4

Corporate Governance
4.1 Management and Control— Chairman and Chief Executive Officer of Arjil Commanditée ARCO S.A.

— Chairman of Sports Investment Company LLC
Former mandates for the last ﬁve years:— Director of France Télécom S.A. (resigned January 2008)— 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)— Permanent Representative of Lagardère Active Publicité to theBoard of Directors of Lagardère Active Radio International S.A.
(resigned May 2009)— Member of the Supervisory Board of Daimler AG (resigned
April 2010)— President of the “Association des Amis de Paris Jean-Bouin
C.A.S.G.”(Association loi 1901) (resigned September 2010)— Chairman of the Supervisory Board of Lagardère Sports S.A.S.
(resigned May 2011)

Thomas Enders
Thomas Enders was appointed Chief Executive Ofﬁcer of EADSin May 2012 after being CEO of Airbus since 2007. He studied
Economics, Political Science and History at the University of Bonnand at the University of California in Los Angeles. Prior to joining
the aerospace industry in 1991 (Messerschmitt-Bölkow-Blohm), he
worked, inter alia, as a Member of the Planning Staff of the German
Minister of Defence. At MBB and subsequently DASA he held
various positions, including Chief of Staff, Director of Corporate
Development & Technology, and Head of Defence Systems.
Following the creation of EADS in 2000, he was appointed CEOof the EADS Defence and Security Systems Division, holding thisposition until 2005 when he was appointed co-CEO of EADS.
Furthermore, Mr Enders served as President of the BDLI (German
Aerospace Industry Association) from 2005 to 2012.
Current mandates in addition to the one listed in the chart above
are set forth below:— Chief Executive Officer of EADS N.V.
— Member of the Executive Committee of EADS N.V.
— Chairman of the Shareholder Committee of Airbus— Chairman of the Supervisory Board Eurocopter— Chairman of the Supervisory Board Astrium— Chairman of the Supervisory Board EADS Deutschland GmbH

— Member of the Board of Directors of the BDI (Federation ofGerman Industry)— Chairman of the Advisory Council for Aeronautics Researchand Innovation in Europe (ACARE)— Member of the Governing Board of HSBC Trinkhaus— Member of the International Advisory Board of Atlantic Councilof the US
Former mandates for the last ﬁve years:— Chairman of the Atlantik Brücke from 2005-2009— President and Chief Executive Officer of Airbus S.A.S. from2007-2012— President of the BDLI (Bundesverband der deutschen Luft- undRaumfahrtindustrie e.V.) from 2005-2012

Dominique D’Hinnin
Mr Dominique D’Hinnin was appointed Co-Managing Partner of
Lagardère SCA in March 2010. He joined Lagardère in 1990 as
Advisor to the Chairman of the Finance Committee of the Group.
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 Presidentof Grolier Inc. in the US and Chief Financial Ofﬁcer of Lagardère
SCA in 1998. Mr D’Hinnin is an alumnus of 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:— Director, Chief Operating Officer of Arjil Commanditée Arco S.A.
— Chairman and Managing Director of Ecrinvest 4 S.A.
— Administrator of Lagardère Media (ex Hachette S.A.)— Member of the Supervisory Board of Lagardère Active S.A.S.
— Permanent representative of Lagardère Media (ex Hachette S.A.)
at the Supervisory Board of Lagardère Active Broadcast— Member of the Supervisory Board of Lagardère Services S.A.S.
— Administrator of Hachette Livre S.A.
— Administrator of Lagardère Ressources S.A.S.
— Administrator of Sogeade Gérance S.A.S.
— Member of the Supervisory Board of Financière de Pichat&CIE SCA— Member of the Supervisory Board of Matra Manufacturing &Services S.A.S.

— Chairman of the “Club des Normaliens dans l’Entreprise”— Treasurer of “Fondation de l’École normale supérieure”— Chairman of the “Institut de l’École Nationale Supérieure”— Permanent representative of Hachette Filipacchi Presse at theSupervisory Board of Les Editions P. Amaury S.A.

122 — EADS REGISTRATION DOCUMENT 2012

Corporate Governance
4.1 Management and Control— Deputy Chairman and Member of the Supervisory Board andof the Audit Committee of CANAL+ France S.A.

— Member of the Board of Trustees of Institute for Law and
Finance Frankfurt— Director of Lagardère North America, Inc.
— Member of the Board of Directors of EADS Participations B.V.
— Member of the Strategic Committee of PWC France— Member of the Board of Trustees of the Frankfurt International

Former mandates for the last ﬁve years:— Member of the Steering Committee and of the Federal— Member of the Supervisory Board of Financière de Pichat S.A.S.
(resigned April 2008)— Chairman of the Supervisory Board of Newsweb S.A. (resigned
June 2008)— Chairman of Eole S.A.S. (resigned February 2009)— Member of the Supervisory Board and Chairman of the Audit
Committee of Le Monde S.A. (resigned November 2010)— Chairman of Club des Trente (resigned January 2011)— V ic e - C h a ir m a n of Ata r i S. A . (fo r m e r Info g ra m e sEntertainment S.A.) and Chairman of the Audit Committeeof Atari S.A. (resigned March 2011)— Member of the Supervisory Board of Lagardère Sports S.A.S.
(resigned May 2011)— Administrator of Le Monde Interactif S.A. (resigned
December 2011)— Administrator of Lagardère Entertainment S.A.S. (resigned
June 2012)

Hermann-Josef Lamberti
Hermann-Josef Lamberti was Member of the Management
Board of Deutsche Bank AG from 1999 until 2012 and operated
as the bank’s Chief Operating Ofﬁ cer. As COO he had global
responsibility for Human Resources, Information Technology,
Operations and Process Management, Building and Facilities
Management as well as Purchasing. He joined Deutsche Bankin Frankfurt in 1998 as Executive Vice President. From 1985,
he held various management positions within IBM, working inEurope and the United States, in the ﬁelds of controlling, internal
application development, sales, personal software, marketingand brand management. In 1997, he was appointed Chairmanof the Management of IBM Germany. Mr Lamberti started his
career in 1982 with Touche Ross in Toronto, before joining theChemical Bank in Frankfurt. He studied Business Administration
at the Universities of Cologne and Dublin, and graduated witha 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 Carl Zeiss AG— Member of the Advisory Board of Barmenia VersicherungenWuppertal— Chairman of the Society of Freunde der Bachwoche Ansbache.V.

School e.V.

— Member of the Managing Committee of the Institut fürWirtschaftsinformatik der HSG of the Universität St. Gallen

Committee of Wirtschaftsrat der CDU e.V.

— 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.

— Member of the Board of Trustees of Johann Wolfgang
Goethe-Universität Fachbereich Wirtschaftswissenschaftenand Member of the Board of Trustees of Frankfurt Institute forAdvanced Studies (FIAS) of Goethe-Universität
Former mandates for the last ﬁve years:— Member of the Foundation Board of Otto A. Wipprecht-Stiftung(resigned 31 May 2008)— Member of the Advisory Board of Universität Augsburg (resigned
30 September 2008)— Executive Customer of the Advisory Council of Symantec
Corporation (resigned 12 May 2010)— Member of the Board of Trustees of Baden-Badener
Unternehmergespräche - Gesellschaft zur Förderung desUnternehmensnachwuchses e.V. (resigned 13 May 2010)— Member of the Board of Trustees of Wallraf-Richartz-Museum
und Museum Ludwig e.V. (resigned 31 January 2011)— Member of the Founder Council of Wallraf-Richartz-Museum(resigned 31 January 2011)— Member of the Senate of Fraunhofer Gesellschaft. (resigned
31 December 2011)— Member of the Management Board of Deutsche Bank AG(resigned 31 May 2012)— Member of the Supervisory Board of BVV Versicherungsverein
des Bankgewerbes A.G. und BVV Versorgungskasse desBankgewerbes e.V. (resigned 21 June 2012)— Member of the Supervisory Board of Deutsche Börse AG(resigned 16 May 2012)— Member of the Supervisory Board of Deutsche Bank Privat-undGeschäftskunden A.G. (resigned 24 May 2012)— Member of the Board of Management of Arbeitgeberverband
des privaten Bankgewerbes e.V. (resigned 21 June 2012)— Deputy Member of the Deposit Insurance Committee of
Bundesverband deutscher Banken e.V. (resigned 21 June 2012)

EADS REGISTRATION DOCUMENT 2012 — 123

4

Corporate Governance
4.1 Management and Control— Delegate of the Delegates’ Assembly of the Deposit InsuranceCommittee of Bundesverband deutscher Banken e.V. (resigned
21 June 2012)— Member of the Financial Community Germany Committee of
Bundesverband deutscher Banken e.V. (resigned 21 June 2012)— Member of the Board of Management of Deutsches Aktieninstitut
e.V. (resigned 21 June 2012)— Member of the Board of Trustees of e-Finance Lab Frankfurt— Member of the Board of Trustees of Hanns Martin SchleyerStiftung (resigned 21 June 2012)— Member of the Editorial Board of scientific journal“Wirtschaftsinformatik” (resigned 31 May 2012)— Member of the International Advisory Board of IESE Business
School, University of Navarra (resigned 28 March 2012)— Member of the Board of Trustees of Stiftung Lebendige Stadt(resigned 31 May 2012)

am Main (resigned 31 May 2012)— Member of the Stock Exchange Council of Eurex Deutschland(resigned 31 May 2012)— Member of the Stock Exchange Council of Frankfurter
Wertpapierbörse AG (resigned 31 May 2012)— Member of the Advisory Board of Institut für Unternehmensplanung- IUP (resigned 31 May 2012)— Member of the Board of Trustees of Junge Deutsche
Philharmonie (resigned 8 October 2012)— Deputy Chairman of the Board of Trustees of the Society ofPromotion of Kölner Kammerorchester e.V. (resigned 31 May
2012)— Member of the Programme Advisory Board of LOEWE LandesOffensive zur Entwicklung Wissenschaftlich-ökonomischer
Exzellenz des Hessischen Ministeriums für Wissenschaft und
Kunst (resigned 14 June 2012)— Member of the Advisory Circle of Münchner Kreis (resigned
31 May 2012)— Deputy Member of the Advisory Board of Prüfungsverband
deutscher Banken e.V. (resigned 31 May 2012)— Member of the Administrative Council of Universitätsgesellschaft
Bonn-Freunde, Förderer, Alumni (resigned 31 May 2012)— Member of the Advisory Board in the centre for marketorientated corporate management of WHU (resigned 31 May
2012)— Member of the Commission of Börsensachverständigenkommission (Bundesfinanzministerium) (resigned 31 May 2012)— Member of the Management Board and Member of the
Executive Committee of Frankfurt Main Finance e.V. (resigned
31 May 2012)— Member of the Advisory Board of Fraunhofer-IUK-Verbund(resigned 31 May 2012)— Member of the Executive Committee and of the Steering
Committee of Frankfurt RheinMain e.V. (resigned 31 May 2012)— Member of the Senate of acatech – Deutsche Akademie derTechnikwissenschaften e.V. (resigned 31 May 2012)— Member of the Board of Directors of American Chamber ofCommerce in Germany (resigned 11 May 2012)

124 — EADS REGISTRATION DOCUMENT 2012

Lakshmi N. Mittal
Lakshmi N. Mittal is the Chairman and CEO of Arcelor Mittal. He
founded Mittal Steel Company in 1976 and led its 2006 merger
with Arcelor to form ArcelorMittal, the world’s largest steelmaker.
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. Among his manifold mandates,
Mr Mittal is Member of the Board of Directors of Goldman Sachs,of the World Economic Forum’s International Business Council,
and of the Advisory Board of the Kellogg School of Management.
Furthermore, he has been awarded numerous recognitions frominternational institutions and magazines and is closely associatedwith a number of non-proﬁt organisations.
Current mandates in addition to the one listed in the chart above
are set forth below:— Chairman of the Board of Directors and CEO of
ArcelorMittal S.A.

— Chairman of the Board of Directors of Aperam S.A.
— Member of the Board of Directors of Goldman Sachs— Member of the Executive Committee of World Steel Association(earlier named International Iron and Steel Institute)— Member of the World Economic Forum’s International BusinessCouncil— Member of the Foreign Investment Council in Kazakhstan— Member of the Prime Minister of India’s Global Advisory Council— Member of the Presidential International Advisory Board ofMozambique— Member of President’s Domestic and Foreign Investors Advisory
Council, Ukraine— Member of the Advisory Board of the Kellogg School ofManagement— Member of Board of Trustees of Cleveland Clinic— Member of Executive Board of Indian School of Business— Gold Patron of Prince’s Trust— Member of the Board of ArcelorMittal USA Inc.
— President of Ispat Inland ULC— Governor of ArcelorMittal Foundation

Corporate Governance
4.1 Management and Control— Member of the Board of ONGC Mittal Energy Ltd.
— Member of the Board of ONGC Mittal Energy Services Ltd.
— Trustee of Gita Mittal Foundation— Trustee of Gita Mohan Mittal Foundation— Trustee of Lakshmi and Usha Mittal Foundation— Chairman of Governing Council of LNM Institute of Information
Technology— Trustee of Mittal Champion Trust— Trustee of Mittal Children’s Foundation
Former mandates for the last ﬁve years:— Member of the International Advisory Board of Citigroup(resigned June 2008)— Member of the Board of Directors of ICICI Bank Limited(resigned May 2010)— Member of the Board of Commonwealth Business Council
Limited (resigned February 2011)— Member of the Business Council (resigned December 2011)— Member of the Managing Committee of Lakshmi Niwas andUsha Mittal Foundation (resigned December 2011)— Member of the Board of ArcelorMittal USA Inc.
Sir John Parker
Sir John Parker is Chairman of Anglo American PLC, Deputy
Chairman of DP World (Dubai), Non-Executive Director of Carnival
PLC and Carnival Corporation. He stepped down as Chairmanof National Grid PLC in December 2011. His career has spanned
the engineering, shipbuilding and defence industries, with some
25 years’ experience as CEO including Harland & Wolff and theBabcock International Group. He also chaired the Court of the
Bank of England between 2004 and 2009. Sir John Parker studied
Naval Architecture and Mechanical Engineering at the College ofTechnology, Queens University, Belfast. He is currently Presidentof the Royal Academy of Engineers.
Current mandates in addition to the one listed in the chart above
are set forth below:— Director of Carnival PLC and Carnival Corporation— Deputy Chairman of D.P. World (Dubai)— Director of White Ensign Association Limited— Member of the Board of Directors of Stichting Administratiekantoor
EADS— President of the Royal Academy of Engineering— Visiting fellow of the University of Oxford
Former mandates for the last ﬁve years:— Senior non-executive Director of Bank of England (resigned
June 2009)— Joint Chairman Mondi Group (resigned August 2009)— Chancellor of the University of Southampton (resigned July
2011)

— Member of the International Advisory Board of Citigroup(dissolved December 2011)— Chairman of National Grid PLC (resigned January 2012)
Michel Pébereau
Michel Pébereau was Chairman of the Board of BNP Paribas
between 2003 and 2011. 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 CEO of
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 des Finances.
In 1970 he joined the French Treasury, where he held various highranking posts. Mr Pébereau is an alumnus of the École Nationaled’Administration and of the École Polytechnique.
Current mandates in addition to the one listed in the chart above
are set forth below:— Member of the Board of Directors of BNP Paribas— Member of the Board of Directors of Compagnie de SaintGobain— Member of the Board of Directors of Total— Member of the Board of Directors of EADS N.V.
— Member of the Board of Directors of Pargesa Holding S.A.,
Switzerland— Member of the Board of Directors of BNP Paribas S.A.,
Switerland— Member of the Board of Directors of Axa— Member of the Supervisory Board of Banque Marocaine pourle Commerce et l’Industrie, Morocco— Censor of Galeries Lafayette S.A.
— Chairman of the Management Board of Institut d’études
Politiques de Paris— Member of the Supervisory Board of Institut Aspen France— Member of the Executive Committee of the Institut de l’Entreprise— Member of the Executive Committee of Mouvement desEntreprises en France— Member of the “Académie des sciences morales et politiques”— Member of the Board of “Fondation ARC pour la Recherche
sur le cancer”— Member of “Fondation Nationale des Sciences Politiques”
Former mandates for the last ﬁve years:— Member of the Board of Directors of Lafarge (resigned 12 May
2011)— Chairman of the Board of Directors of BNP Paribas (resigned
1 December 2011)
EADS REGISTRATION DOCUMENT 2012 — 125

4

Corporate Governance
4.1 Management and Control

Josep Piqué i Camps
Josep Piqué i Camps has been the Non-Executive Chairman of
Vueling since 2007. He started his career as an economist of thestudies service “la Caixa” and became General Director of theCatalan Industry in 1986. Two years later, he joined the company
Ercros, where he eventually became CEO and Chairman. After
serving several years within the Circle of Economics of Barcelona,
he led it as Chairman (1995-96). In the following, Mr Piqué was
successively appointed Minister for Industry and Energy (1996-00),
Government Spokesperson (1998-00), Minister of Foreign Affairs(2000-02) and Minister of Science and Technology (2002-03).
Furthermore to his engagements, he served as Deputy, Senatorand President of the Popular Party of Catalonia (2003-07). Mr Piquéholds a PhD in Economic and Business Studies and is a Law
graduate from the University of Barcelona, where he also serves
as lecturer of Economic Theory.
Current mandates in addition to the one listed in the chart above
are set forth below:— Chairman of Vueling— Advisory Board of Seat, Volkswagen Group— Chairman of Circulo de Economia— Chairman of Spain–Japan Council Foundation— Chairman of Vertice 360 Servicios Audiovisuales, S.A.
— Member of the Board of Directors of Ezentis, S.A.
— Member of the Board of Directors of Grupo San Jose, S.A.
— Member of the Board of Directors of Plasmia Biotech, S.L.
Former mandates for the last ﬁve years:— Chairman of Mixta Africa until 2010
— Member of the Board of Directors of Applus Technologies
Holding, S.L. until 2012

Wilfried Porth
Mr Wilfried Porth is a Member of the Board of Management ofDaimler AG and the Director of Labor Relations, responsible for
Human Resources, IT-management and Procurement of NonProduction 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 experience abroad. Mr Porthgraduated in engineering at the University of Stuttgart.
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— Member of the Supervisory Board of Daimler Financial Services
AG

126 — EADS REGISTRATION DOCUMENT 2012

— Member of the Board of Directors of EADS Participations B.V.
— Chairman of the Board of Directors Hanns Martin SchleyerStiftung— Member of the Advisory Board of Daimler UnterstützungskasseGmbH
Former mandates for the last ﬁve years:— 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)— Officer of Daimler Vans Manufacturing, LLC (resigned August
2009)Jean-Claude Trichet
Jean-Claude Trichet was President of the European Central Bank,of the European Systemic Risk Board and of the Global Economy
meeting of Central Bank Governors in Basel until the end of 2011.
Previously, he was in charge of the French Treasury for six years
and was Governor of Banque de France for ten years. Earlier in his
career, he held positions within the French Inspection Générale desFinances, as well as the Treasury department, and was Advisor
to the French President for microeconomics, energy, industry
and research (1978-81). Mr Trichet graduated from the École desMines de Nancy, the Institut d’Études Politiques de Paris andthe University of Paris in Economics, is a Doctor Honoris Causa
of several universities and an alumnus of the École Nationaled’Administration.
Current mandates in addition to the one listed in the chart above
are set forth below:— Chairperson of the G30 (non-prof it organisation),
Washington D.C.

— Chairman of the Board of Directors of the BRUEGEL Institute,
Washington D.C. (non-profit organisation)
Former mandates for the last ﬁve years:— President of the European Central Bank (end of mandate
1 November 2011)— President of the Global Economy meeting of Central Bank
Governors in Basel (end of mandate 1 November 2011)— President of the European Systemic Risk Board (end of mandate
1 November 2011)— President of the Group of Governors and Heads of Supervision(GHOS) (end of mandate 1 November 2011)

Corporate Governance
4.1 Management and Control

Bodo Uebber

Independent Directors

Mr Bodo Uebber was appointed Chairman of EADS in April 2009.
He is a Member of the Board of Management of Daimler AG,
responsible for Finance and Controlling (since 16 December2004) as well as for the Daimler Financial Services Division(since 16 December 2003). He previously held various leadership
positions in ﬁnance within Dornier Luftfahrt GmbH, DASA AG and
MTU Aero Engines GmbH. Mr Uebber was born on 18 August 1959
in Solingen. He graduated in 1985 with a degree in engineeringand economics at the Technical University of Karlsruhe. In thesame year, he joined Messerschmitt-Bölkow-Blohm GmbH (MBB).

The four independent Directors appointed pursuant to the criteria
of independence set out above are Hermann-Josef Lamberti,
Lakshmi N. Mittal, Sir John Parker and Michel Pébereau.

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— Member of the Supervisory Board of Mercedes-Benz Bank AG— Chairman of the Supervisory Board of Daimler Luft- undRaumfahrt Holding AG— Member of the Supervisory Board of Dedalus GmbH & Co.
KGaA— Member of the Supervisory Board of Bertelsmann AG SE& Co. KGaA

— Member of the Supervisory Board of Stiftung Deutsche
Sporthilfe— Member of the Investment Council of “Stifterverband derDeutschen Wissenschaft”— Member of the Advisory Board of Daimler UnterstützungskasseGmbH— Member of the Advisory Board of Deutsche Bank AG in Munich— Member of the Advisory Board of Landesbank BadenWürttemberg
Former mandates for the last ﬁve years:— 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)— Member of the Supervisory Board of McLaren (resigned
10 November 2009)— Member of the Supervisory Board of Talanx AG (resigned
31 August 2011)

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 a Memberof the administrative, management or supervisory bodies of any
issuer or conduct of affairs of any company, during at least thelast ﬁve years. As of the date of this document, there are no familyties among any of the Directors.

Operation of the Board of Directors in 2012
Board Meetings
The Board of Directors met 11 times during 2012 and was regularly
informed of developments through business reports from the Chief
Executive Ofﬁcer, including strategic and operational plans. The
average attendance rate at such meetings remained stable at 86%.
Throughout 2012, the Board of Directors monitored the progressof signiﬁcant programmes, such as A350 XWB, A400M, A380,
NH90, and Saudi Border Security. It was kept regularly informed
about the A350 XWB programme development progress as wellas the A380 wing rib feet challenges.
The Board of Directors also addressed EADS’ strategy (including thecompetitive environment) and undertook post-merger integration
reviews on recent acquisitions such as Vector Aerospace andVizada. Furthermore, the Board approved the Single Aisle Final
Assembly Line investment in Mobile, Alabama, which is bringing
the production of the industry-leading A320 Family to the world’s
largest market for single-aisle jetliners.
In line with the ambitious objectives of Vision 2020, the Board
supported the management in its evaluation and negotiation of amerger between EADS and BAE Systems. The initiative was basedon sound industrial logic and represented an opportunity to create
a combination of two complementary companies greater than thesum of the parts. The effort was discontinued when it appearedthat the interest of the parties’ home country governments could
not be reconciled adequately, and that the length of the process
would be disruptive to the Company.
Finally, following a review of lessons learned from the abandoned
merger project, the Board supported management to negotiate
the renouncement by the principal shareholders of their control
rights and the establishment of the new governance agreed in theMultiparty Agreement of 5 December 2012. During the merger
evaluation and the governance discussions, the Board protected
the integrity of its work by setting up appropriate working groups,
subcommittees and information sharing procedures to avoid risks

EADS REGISTRATION DOCUMENT 2012 — 127

4

Corporate Governance
4.1 Management and Control

of conﬂict of interest, and to shelter certain Directors from the riskof insider knowledge. Throughout this period, the independent
Directors played a major role.

were prepared diligently by the Board, applying the succession
process under the governance of EADS, which was updated in
October 2007. The process identiﬁed the best possible candidates
for the composition of the Board of Directors as well as the top
Executive management positions.

Moreover, the Board focused on the Group’s ﬁ nancial results
and forecasts, asset management, supply chain challenges, theservices business, compliance in key business processes and inmajor programs, as well as efﬁciency and innovation initiatives.
It reviewed Enterprise Risk Management (“ERM”) results, export
control regulations, investor relations and ﬁnancial communication
policy, and legal risks. The Board also discussed further actions
resulting from the third EADS engagement survey.

Board Assessment
The Board of Directors carries out an assessment of its performance
annually and a more thorough assessment is conducted every
three years by independent consultants. Due to the transition ofBoard and management in mid-year, and in view of the signiﬁcantchanges in Governance, and Board composition, following the EGM
in March 2013, the Board decided to forego a Board assessment
in 2012. The next Board assessment will be conducted in 2013.

Finally, the Board of Directors focused on governance issues andsuccession planning, ensuring a smooth Board and managementtransition. The recommendations for the respective appointments

Board Committees in 2012
In 2012, membership on Board Committees was as follows:
Directors

Audit Committee

Remuneration & Nomination Committee

Arnaud Lagardère (Chairman)

Strategic Committee

ChairmanThomas Enders (CEO)X

Dominique D’Hinnin
Hermann-Josef Lamberti

X

X

ChairmanX

X

Chairman

Lakshmi N. Mittal
Sir John Parker
Michel Pébereau

X

Josep Piqué i Camps
Wilfried Porth

X

Jean-Claude Trichet

X

Bodo Uebber

X

Number of meetings in 2012

5

6

1

85%

96%

100%

Average attendance rate in 2012

X

Note: Status as of 1 March 2013.

Audit Committee
Pursuant to the Board Rules, the Audit Committee makes
recommendations to the Board of Directors on the approvalof the annual ﬁnancial statements and the interim (Q1, H1, Q3)
accounts, as well as the appointment of external auditors andthe determination of their remuneration. Moreover, the Audit
Committee has the responsibility for ensuring that the internal andexternal audit activities are correctly directed and that audit matters
are given due importance at meetings of the Board of Directors.
Thus, it discusses with the auditors their audit programme and theresults of the audit of the accounts and it monitors the adequacyof the Group’s internal controls, accounting policies and ﬁnancial
reporting. It also oversees the operation of the Group’s ERM systemand the Compliance Organisation.
Under the governance rules in place in 2012, the Chairman of
the Board of Directors and the Chief Executive Ofﬁ cer werepermanent guests of the Committee. The Chief Financial

128 — EADS REGISTRATION DOCUMENT 2012

Ofﬁcer and the Head of Accounting were requested to attend
meetings to present management proposals and to answer
questions. Furthermore, the Head of Corporate Audit and theChief Compliance Ofﬁcer were requested to report to the Audit
Committee on a regular basis. The new Board of Directors has
not yet adopted comparable rules.
The Audit Committee is required to meet at least four times a year.
In 2012 it fully performed all of its duties, and met ﬁve times, withan 85% average attendance rate.

Remuneration and Nomination Committee
Pursuant to the Board Rules as in effect in 2012, the Remuneration
and Nomination Committee made recommendations to theBoard of Directors regarding the appointment of Members of the
Executive Committee (upon proposal by the CEO and approvalby the Chairman); the EADS Corporate Secretary; the Membersof the Airbus Shareholder Committee; and the chairmen of theCorporate Governance
4.1 Management and Control

Supervisory Board (or similar organ) of other important Group
Member companies and Business Units. The Remuneration and
Nomination Committee makes recommendations to the Boardof Directors regarding remuneration strategies and long-term
remuneration plans and decides on the service contracts andother contractual matters in relation to the Board of Directors andExecutive Committee Members.
The guiding principle governing management appointments in
the Group was that the best candidate should be appointed tothe position (“best person for the job”), while at the same timeseeking to achieve a balanced composition with respect togender, experience, national origin, etc. The implementation ofthese principles should, however not create any restrictions on thediversity within the EADS executive management team.
Under the governance rules in place in 2012, the Chairman of theBoard of Directors and the Chief Executive Ofﬁcer were permanent
guests of the Committee. The Head of EADS Human Resources
was requested to attend meetings of the Remuneration and
Nomination Committee to present management proposals andto answer questions. The new Board of Directors has not yet
adopted comparable rules.
The Remuneration and Nomination Committee is required to meetat least twice a year. It met six times during 2012, with a 96%
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 top
talents and succession planning, discussed measures to improveengagement and to promote diversity, reviewed the remunerationof the Executive Committee Members for 2012, the Long-Term
Incentive Plan, and the variable pay for 2011. Based on the outcomeof the Free Share plan, it also proposed the terms of the 2013
ESOP plan.

Strategic Committee
The Strategic Committee was not a decision making body but aresource available to the Board of Directors for the preparationof decisions on strategic matters prior to the Consummation.
Pursuant to the Board Rules as in effect in 2012, the Strategic
Committee made recommendations to the Board of Directors
regarding strategic developments, corporate strategies, major
merger and acquisition projects, major investments or divestments,
projects or product decisions, as well as major research anddevelopment projects.
In addition to monitoring major strategic and divisional initiatives,
acquisition targets and divestment candidates, and progress on the
top priorities of the Group for the year, it made recommendations
to the Board of Directors linked to the competitive landscapeand home countries industrial policy, company perception in key
markets, the continuous constraints on defence budgets, andconducted a review of several country strategies.
The Strategic Committee was required to meet at least twice ayear. The Chief Executive Ofﬁcer was a Member and the Chief ofthe EADS Marketing and Sales Organisation was a permanent

guest, in order to present management proposals and to answer
questions. During the merger initiative with BAE, the Board of
Directors absorbed the functions of the Strategic Committee, thus
the Committee only met once during 2012, in the ﬁrst half of theyear.

Executive Committee in 2012
The Chief Executive Ofﬁcer, supported by an Executive Committee(the “Executive Committee”), is responsible for managing the
day-to-day operations of the Company. The Executive Committee,
chaired by the Chief Executive Ofﬁcer, also comprises the Headsof the major Functions and Divisions of the Group. The Executive
Committee met 8 times during 2012.
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);— investment approvals up to € 300,000,000;— setting up and control of the implementation of the strategy
for EADS businesses;— management, organisational and legal structure of the Group;— performance level of the Group’s businesses and support
functions; and— all business issues, including the operational plan of the Groupand its Divisions and Business Units.
The internal organisation of the Executive Committee is deﬁned
by the business allocation among the Members under thesupervision of the Chief Executive Ofﬁcer. Notwithstanding the joint
responsibilities as deﬁned above, each Member of the Executive
Committee is individually responsible for the management of his
portfolio and must abide by decisions taken by the Chief Executive
Ofﬁcer and the Executive Committee, as the case may be.
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 entitled to decide
the matter. If there is a fundamental or signiﬁcant disagreementwith respect to any undecided matter, the dissenting Executive
Committee Member may request that the Chief Executive Ofﬁcer
submit such matter to the Chairman for his opinion.
Under the Board Rules in effect in 2012, the Executive Committee
Members were appointed by the Board of Directors on the proposalof the Chief Executive Ofﬁ cer ﬁ rst approved by the Chairman
after review by the Remuneration and Nomination Committee.
The appointment of the Executive Committee were approved asa whole team, not on an individual basis, with the exception of
the Chief Executive Ofﬁcer of Airbus, who was appointed by the
Board of Directors individually. The term of ofﬁce for the Executive
Committee Members was ﬁve years.

EADS REGISTRATION DOCUMENT 2012 — 129

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Corporate Governance
4.1 Management and Control

Composition of the Executive Committee in 2012
Name

Age

Current Term started

Term expires

Principal Occupation

Thomas Enders

53

2012

2017

Chief Executive Officer EADS

François Auque

56

2010

2015

Astrium CEO

Thierry Baril

47

2012

2017

Chief Human Resources Officer EADS & Airbus

Lutz Bertling

50

2011

2016

Eurocopter CEO

Jean J. Botti

55

2011

2016

Chief Technical Officer EADS

Fabrice Brégier

51

2012

2017

Airbus CEO

Günter Butschek

51

2012

2017

Airbus COO

Bernhard Gerwert

59

2012

2017

Cassidian CEO

Marwan Lahoud

46

2012

2017

Chief Strategy and Marketing Officer EADSJohn Leahy

62

2012

2017

Airbus COO - Customers

Sean O’Keefe

56

2010

2014

EADS North America CEO

Domingo Ureña-Raso

54

2009

2014

Head of Airbus Military

Harald Wilhelm

46

2012

2017

Chief Financial Officer EADS & Airbus

Note: Status as of 1 March 2013. The professional address of all Members of the Executive Committee for any matter relating to EADS is Mendelweg 30, 2333 CS Leiden, The Netherlands.

Thomas Enders – EADS CEO
Thomas Enders was appointed Chief Executive Ofﬁcer of EADSin May 2012 after being CEO of Airbus since 2007. He studied
Economics, Political Science and History at the University of Bonnand at the University of California in Los Angeles. Prior to joining
the aerospace industry in 1991 (Messerschmitt-Bölkow-Blohm), he
worked, inter alia, as a Member of the Planning Staff of the German
Minister of Defence. At MBB and subsequently DASA he held
various positions, including Chief of Staff, Director of Corporate
Development & Technology, and Head of Defence Systems.
Following the creation of EADS in 2000, he was appointed CEOof the EADS Defence and Security Systems Division, holding thisposition until 2005 when he was appointed co-CEO of EADS.
Furthermore, Mr Enders served as President of the BDLI (German
Aerospace Industry Association) from 2005 to 2012.

François Auque – Astrium CEO
Mr Auque was appointed Chief Executive Ofﬁcer of Astrium in
2000. Previously, he was Chief Financial Ofﬁcer together withManaging Director for satellites of Aerospatiale Matra after having
been Chief Financial Ofﬁcer of Aerospatiale since 1991. He spent
his earlier career with the Suez Group and the French Cour descomptes. Mr Auque graduated from École des Hautes Études
Commerciales, Institut d’Études Politiques and is an alumnus of
École Nationale d’Administration.

within Alcatel, General Electric and Alstom. Mr Baril holds auniversity degree in HR Management, having graduated in 1988
from the “Institut de Gestion Sociale.

Lutz Bertling, Eurocopter CEO
Mr Bertling was appointed Chief Executive Ofﬁcer of Eurocopter
in 2006. Coming from the Defence & Security Division, he joined
Eurocopter in 2003 as Executive Vice President Governmental
Programmes and became CEO of Eurocopter Deutschland inearly 2006. Previously, Mr Bertling held various positions at
DaimlerChrysler Rail Systems and at Braunschweig University. He
received a PhD in Engineering from the University of Braunschweig.

Jean Botti – EADS CTOMr Botti was appointed Chief Technical Ofﬁcer of EADS in 2006. He
joined from General Motors, where he was Chief Technologist andthen Business Line 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 Arts etMétiers and completed the course of Research and Development
Management at the Massachusetts Institute of Technology (MIT).
Mr Botti is an SAE fellow as well as a Member of the French
Academy of Technology and a Member of the European Key
enabling technology Board. He holds 2 PHD honorary degrees
from University of Cardiff and University of Bath.

Thierry Baril, EADS and Airbus CHRO
Mr Baril was appointed Chief Human Resources Ofﬁcer of EADS
and Airbus in May 2012. After leading the Human Resources
department at Eurocopter, he joined Airbus in 2007 as Executive
Vice President Human Resources and Member of the Airbus
Executive Committee. Prior in his career, he gained experience in
Human Resources matters having served in various HR positions

130 — EADS REGISTRATION DOCUMENT 2012

Fabrice Brégier, Airbus CEO
Mr Brégier was appointed CEO of Airbus in May 2012 after being
its COO for six years as well as Head of Operational performanceacross the EADS Group. Previously, he was appointed President
and CEO of Eurocopter in 2003, CEO of MBDA in 2001 and CEOof BAe Dynamics in 1998. Mr Brégier joined Matra Défense in
1993. He is alumnus of École Polytechnique and École des Mines.

Corporate Governance
4.1 Management and Control

Günter Butschek – Airbus COO
After joining Airbus in 2011 as Head of Operations, Mr Butschek
was appointed Chief Operating Ofﬁcer of Airbus and Member ofthe EADS Executive Committee in 2012. Mr Butschek spent mostof his career within Daimler AG having served several positions
in logistics, Human Resources, procurement and manufacturingin the Mercedes-Benz passenger Cars division. From 2002, healso led the Dutch entity Netherlands Car B.V., a subsidiary of
Mitsubishi and cooperation with DaimlerChrysler, and furthermore
ran Beijing Benz Automotive in China from 2005. Mr Butschek
graduated in Economics.

Bernhard Gerwert – Cassidian CEO
Mr Gerwert was appointed Chief Executive Ofﬁcer of Cassidianin 2012. Previously, he served the Division as Member of theManagement Board, being successively appointed CEO of
Cassidian Air Systems from 2007 to 2011 and then Chief Operation
Ofﬁcer from 2011. Starting his career in 1979, Mr Gerwert held
various leadership positions in Engineering, Product Support,
Finance and project management at MBB, DASA, Dornier,DaimlerChrysler Aerospace and EADS. Mr Gerwert graduatedin Electrical Engineering from the University of Paderborn and in
Industrial Engineering from the University of Bielefeld.

Marwan Lahoud, EADS CSMOMr Lahoud was appointed Chief Strategy and Marketing Ofﬁcer
of EADS in June 2007. Previously, he was CEO of MBDA. He
worked for Aerospatiale during the merger with Matra and as wellat the foundation of EADS. Within EADS, he served as Senior Vice
President Merger & Acquisition. Mr Lahoud is an alumnus of École
Polytechnique and graduated from the École Nationale Supérieurede l’Aéronautique et de l’Espace.

John Leahy, Airbus COO-Customers
Mr Leahy was appointed Chief Operation Ofﬁcer – Customers of
Airbus and Member of the Airbus Executive Committee in 2005,
in addition to his responsibilities as Chief Commercial Ofﬁcer of
Airbus (since 1994). In 2012 he has been appointed Member ofthe EADS Executive Committee. Mr Leahy joined Airbus North

4.1.3

America in 1985 after working seven years at Piper Aircraft. He
became Head of Sales in 1988 and ﬁnally President of Airbus
North America. One of Mr Leahy’s greatest achievements was toraise Airbus’ global market share from 18% in 1995 to over 50%
today. Mr Leahy holds an MBA from Syracuse University and a
BA from Fordham University.

Sean O’Keefe, EADS North America CEO
Mr O’Keefe was appointed CEO of EADS North America in
November 2009 and Chairman of the Board of EADS North America
in January 2012. Previously, he was a Corporate Ofﬁcer of theGeneral Electric Company. Before joining GE, he held several public
service positions as Chancellor of the Louisiana State University,
NASA Administrator, Deputy Director of the federal budget atthe White House, Secretary of the US Navy and CFO of the US
Department of Defense. Between public service appointments, heheld professorships at various US universities. Mr O’Keefe earned
academic degrees from Syracuse University and Loyola University,and has been awarded ﬁve honorary doctoral degrees.

Domingo Ureña Raso, Head of Airbus Military
Mr Ureña-Raso was appointed Head of Airbus Military in
February 2009. Previously, he was in charge of the Power8 and“Future EADS” programmes. Since 1989, he has held various
positions, amongst others at CASA, EADS PZL, the Defence &Security Division and Airbus. Mr Ureña-Raso holds degrees fromthe Polytechnic University of Madrid, from ESSEC in Paris andhas an MBA.

Harald Wilhelm, EADS and Airbus CFO
Mr Wilhelm was appointed Chief Financial Officer of EADS
and a Member of the EADS Executive Committee in 2012.
Simultaneously, he pursues his mission as Chief Financial Ofﬁcerof Airbus and Member of the Airbus Executive Committee (since2008). Mr Wilhelm joined Airbus in 2000, serving in various ﬁnancial
positions and being ﬁnally appointed Chief Controlling Ofﬁcer of
Airbus in 2007. Earlier in his career, he developed strong M&A
experience at DASA. Mr Wilhelm holds a degree in BusinessStudies from the University of Munich.

Dutch Corporate Governance Code, “Comply or Explain”

In accordance with Dutch law and with the provisions of the Dutch
Corporate Governance Code as amended at the end of 2008
(the “Dutch Code”), which includes a number of non-mandatory
recommendations, the Company either applies the provisions of
the Dutch Code or, if applicable, explains and gives sound reasonsfor 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 accordancewith the “apply or explain” principle, provide the explanations
below. For the full text of the Dutch Code, please refer towww.commissiecorporategovernance.nl.

1. The corporate governance arrangements of EADS
were substantially changed pursuant to the Multiparty
Agreement. These changes are intended to further
normalise and simplify EADS’ corporate governance,
reflecting an emphasis on best corporate governancepractices and the absence of a controlling shareholder
group, while securing a shareholding structure thatallows France, Germany and Spain to protect theirlegitimate strategic interests.
— The Board of Directors shall endeavour to avoid a complete
replacement of outgoing Directors by new candidates, whilefavouring the introduction of new candidates for at least one
EADS REGISTRATION DOCUMENT 2012 — 131

4

Corporate Governance
4.1 Management and Control

third of Director positions (whereas provision III.3.6 of the
Dutch Code recommends that there be a retirement schedule
to avoid, as far as possible, a situation in which many NonExecutive members of the Board of Directors retire at thesame time).
— The term of the ofﬁce of Members of the Board of Directors isthree years without limitation on renewal (whereas provision
III.3.5 of the Dutch Code recommends that there be no morethan three four-year terms for non-Executive Members of theBoard of Directors).
— The Board of Directors is headed by the Chairman of theBoard of Directors. In case of dismissal or resignation of the
Chairman, the Board of Directors shall immediately designatea new Chairman. There is therefore no need for a viceChairman to deal with the situation when vacancies occur(whereas provision III.4.1(f) of the Dutch Code recommends
that there is a vice-Chairman).
— Pursuant to the Bill on Management and Supervision (Wetbestuur en toezicht) that was enacted on 1 January 2013,a Board of Directors is composed in a balanced way if it
contains at least 30% women and at least 30% men. The
contemplated balance of the composition of the Board of
Directors shall as much as possible be taken into account at,among others, new appointments and recommendations.
The Board of Directors does not yet comply with thesecomposition guidelines. A woman was appointed to its
Board of Directors at the Extraordinary General Meeting of
Shareholders held on 27 March 2013. EADS will continue
to promote gender diversity within its Board of Directors in
the future by striving to increase the proportion of female
Directors.

2. As for remuneration of 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 times
the annual total target salary would be paid subject to thefollowing conditions (whereas provision II.2.8 of the Dutch Coderecommends that the maximum remuneration in the event of
dismissal be one year’s salary, 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 Executive Officer can no longer fulfil his position
as a result of change of EADS’ strategy or policies or as a resultof a change in control of EADS. The termination indemnity
would be paid only provided that the performance conditions
assessed by the Board of Directors would have been fulfilledby the Chief Executive Officer.

3. EADS is listed on the Frankfurt, Paris and Spanish
stock exchanges and endeavours to strictly comply
with the relevant regulations and takes into account thegeneral principles on these markets protecting all its
stakeholders.
Therefore, in line with these regulations and general principles
in the jurisdictions in which the Company is listed;— 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);— 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.

EADS applies different rules for the remuneration of
Executive (the Chief Executive Officer) and non-Executive
Members of the Board of Directors, as set forth below under“4.2.1 — Remuneration Granted to Directors and Principal
Executive Officers”.

4.1.4

Enterprise Risk Management System

Risk and opportunity management is of paramount importance
to EADS, given the complex and volatile business environment inwhich EADS operates. A comprehensive set of risk and opportunity
management procedures and activities across EADS makes up
the EADS Enterprise Risk Management (“ERM”) system.
The objective of the ERM system is to create and preserve value
for EADS’ stakeholders. It is designed and operated to effectively
identify potential events that may affect EADS, manage risk to be

132 — EADS REGISTRATION DOCUMENT 2012

within the deﬁned risk tolerance, identify and manage opportunities,
and provide reasonable assurance regarding the achievementof targets. To achieve this, EADS seeks to have one integrated,consistent, comprehensive, efﬁcient and transparent ERM system,
using the same understanding, practice and language. It seeks
to embed the risk management philosophy into EADS culture, inorder to make risk and opportunity management a regular andeveryday process for employees.

Corporate Governance
4.1 Management and Control

The Board of Directors and EADS top management regard ERM
as a key management process to steer the Company and enable
management to effectively deal with risks and opportunities. The
advanced ERM capabilities and organisation that EADS is seeking
to progressively implement can provide a competitive advantage
to the extent they successfully achieve the following:— strategy: the selection of high level strategic objectives,supporting the EADS vision and consistent with risk appetite;— operations: the effectiveness and efficiency of operations andresource allocation; the delivery of products on time and inaccordance with cost and quality objectives; the capability toachieve performance and financial targets; the implementationof risk-enabled decisions and managerial processes;— reporting: reliability of reporting, in particular financial reporting;

The ERM process applies to all possible sources of risks andopportunities, with both internal and external sources, quantiﬁable
and unquantifiable, potentially affecting EADS in the short-,
middle- and long-term. It also applies to all of EADS’ businesses,
activities and departments. Management at each level discusses
ERM when they run the business, as part of their decision-making
and related activities. Accordingly, the ERM process is part ofthe management process and interrelated with other processes.
The details of application of the ERM process vary with the risk
appetite of management and the size, structure and nature of theorganisational unit, programme/project, department or process.
Nonetheless, the fundamental principles of the EADS ERM Policy
generally apply.
For a discussion of the main risks to which the Group is exposed,
see “— Risk Factors”.

and— compliance: compliance with applicable laws and regulations.

4.1.4.2 ERM Governance and Responsibility

4.1.4.1 ERM Process

The governance structure and related responsibilities for the ERM
system are as follows:

The objectives, principles and process for the ERM system as
endorsed by the Board of Directors are set forth in the EADSERM Policy and communicated throughout the Group. The EADSERM Policy is supplemented by various manuals, guidelines,
handbooks, etc. The ERM system is based on the Internal Control
and Enterprise Risk Management Framework of the Committee ofSponsoring Organisations of the Treadway Commission (COSO II).
External standards that contribute to the EADS ERM system
include the Internal Control and ERM frameworks of COSO, aswell as industry-speciﬁc standards as deﬁned by the International
Standards Organisation (ISO).

— the Board of Directors supervises the design and effectiveness

The ERM system comprises an integrated hierarchical bottom-up
and top-down process to enable better management andtransparency of risks and opportunities. At the top, the Boardof Directors and the Audit Committee discuss major risks andopportunities, related risk responses and opportunity capture
as well as the status of the ERM system, including signiﬁ cantchanges and planned improvements. This is based on systematicbottom-up information including management judgement. The
results are then fed back into the organisation. The design of the
ERM system seeks to ensure compliance with applicable laws
and regulations with respect to internal control (“IC”) and risk
management (“RM”), addressing both subjects in parallel.

Committee, is responsible for an effective ERM system, therelated internal environment (i.e. values, culture) and risk
philosophy. He is supported by the EADS Chief Financial Officer
who supervises the EADS Chief Risk Officer and the ERM
system design and process implementation;

The ERM process consists of four elements: the operational
process, which consists of a sequence of eight consistent,
standardised components to enhance operational risk andopportunity management; the reporting process, which contains
procedures for the status reporting of the ERM system and therisk/opportunity situation; the compliance process, which
comprises procedures to substantiate the assessment of theeffectiveness of the ERM system; and the support process, which
includes procedures to increase the quality and provide further
substantiation of the quality of the ERM system.

of the ERM system including management actions to mitigate
the risks inherent in EADS’ business activities. It discusses
the major risks at least quarterly based on ERM reporting or
as required depending on development of business risks. It is
supported by the Audit Committee, which discusses at least
yearly the activities with respect to the operation, design andeffectiveness of the ERM system, as well as any significant
changes and planned improvements prior to presentation to
the full Board of Directors;— the EADS Chief Executive Officer, backed by the Executive— the EADS Chief Risk Officer has primary responsibility for the
ERM strategy, priorities, system design, culture development
and reporting tool. He supervises the operation of the ERM
system and is backed by a dedicated risk management
organisation on Group and Division level, which actively
seeks to reduce overall risk criticality. This risk management
organisation is networked with the risk owners on the
different organisational levels and pushes for a proactive risk
management culture; and— the executive management of the Divisions, Business Units
and Headquarters’ departments assume responsibility for theoperation and monitoring of the ERM system in their respective
area of responsibility. They seek to ensure transparency
and effectiveness of the ERM system and adherence to its
objectives. They take responsibility for the implementation of
appropriate response activities to reduce probability and impactof risk exposures, and conversely for the implementation of
appropriate responses to increase probability and impact ofopportunities.

EADS REGISTRATION DOCUMENT 2012 — 133

4

Corporate Governance
4.1 Management and Control— ERM IC system: needs to have an effective IC system for the

4.1.4.3 ERM Effectiveness
The EADS ERM system needs to be effective. EADS has
established recurring ERM self-assessment mechanisms, to be
applied across EADS. This seeks to allow EADS to reasonably
assure the effectiveness of its ERM system. The ERM effectivenessassurance comprises:— ERM process: needs to be present and functioning throughout
EADS without any material weaknesses and needs to fulfil the
EADS ERM Policy requirements;— Risk appetite: needs to be in accordance with the EADS risk
environment;

ERM process in place.
For the coverage of all of its activities, EADS has deﬁned 20 highlevel business processes. In order to achieve ERM effectiveness,
the ERM process as an overlaying process must be an integral
part of these business processes. ERM effectiveness is assured
if the achievement of the ERM process objectives is secured byadequate ERM controls which are operating effectively throughout
the organisation and are within the respective risk appetite level.
Operating effectiveness is measured inter alia by assessing any
potential major failings in the ERM system which have been
discovered in the business year or any signiﬁcant changes madeto the ERM system.

The combination of the following controls is designed to achieve reasonable assurance about ERM effectiveness:
Organisation

ERM control with explanations

Board of Directors/Audit Committee

Regular monitoring
The Board of Directors and the Audit Committee review, monitor and supervise the ERM system.

Top Management

ERM top management discussions
This control is an important step of the ERM compliance process. All results of the risk
management, self-assessment and confirmation procedures are presented by the Divisions or
Business Units to top management and discussed and challenged at EADS CEO/CFO level.

Management

ERM confirmation letter procedure
Entities and processes/department heads that participate in the annual ERM compliance
procedures need to sign ERM confirmation letters, especially on internal control effectiveness anddeficiencies or weaknesses. The scope of participants is determined by aligning coverage of EADS
business with management’s risk appetite.

ERM department

ERM effectiveness measurement
Assess ERM effectiveness by performing operational risk management for the ERM process,benchmarks, etc.

Corporate Audit

Audits on ERM
Provide independent assurance to the Audit Committee on the effectiveness of the ERM system.

Compliance

Alert System
Provide evidence for deficiencies of the ERM system.

4.1.4.4 Developments in 2012 and Outlook
Today, companies are operating in a more volatile risk environment
than ever before. Mature risk management capabilities are therefore
more critical, more strategic and overall more valuable. EADS
seeks to deploy its ERM system effectively across the Group inorder to mitigate risk and drive competitive advantage, and invests
accordingly. The design of its ERM system has evolved towards
a more homogeneous and performance-oriented management
tool that is integrated into the business, with the following majorachievements in 2012:— regular monitoring took place by the Board of Directors/Audit
Committee: quarterly monitoring by the Board of Directorsof the top risks and opportunities; yearly monitoring by the
Audit Committee each January of the operation, design andeffectiveness of the ERM system;— strengthening of ERM foundations, with a progressive
appreciation of ERM processes and development of a truerisk culture;— further roll-out of a dedicated group-wide ERM IT tool;

134 — EADS REGISTRATION DOCUMENT 2012

— strong ERM contribution to improvement initiatives launchedacross the Group; and— successful finalisation of year-end ERM compliance process,i.e. ERM confirmation letters were received from all relevant riskowners in Divisions, Business Units and Business Functions,and all ERM top management discussions took place.
Generally, EADS seeks to continuously evaluate and improve theoperating effectiveness of the ERM system. EADS will continue
to use the recommendations from the internal audit department,
which regularly reviews risk management of selected departments
and business processes, to further strengthen its ERM system.

4.1.4.5 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 2012 and provides reasonableassurance that the ﬁnancial reporting does not contain any errorsof material importance.

Corporate Governance
4.1 Management and Control

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 canbe given that EADS’ ERM system and procedures are or will be,
despite all care and effort, entirely effective.

4.1.4.6 Business Processes Coveredby the ERM System
Based on EADS’ activities, 20 high-level business processes
have been identiﬁ ed 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 and insurance) and management processes (strategy,
corporate audit, controlling, compliance, risk management andmanagement controls). These business processes, together
with the corresponding ERM processes, are designed to control
process risks that have signiﬁcant potential to affect the Group’s
ﬁnancial condition and results of operations. Below is a descriptionof the main business processes at the respective headquarters’level which were in place during 2012.

Accounting
At the core of EADS’ ERM system are accounting processes andcontrols designed to provide reasonable assurance regarding
the reliability 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
and organisational units within EADS.
The EADS ﬁnancial control model deﬁnes the planning and reporting
procedures that apply to all operational units of the Group, as wellas the responsibilities of the Chief Financial Ofﬁcer, who is charged
with developing, implementing and monitoring these procedures.
Among the Chief Financial Ofﬁcer’s primary tasks is oversightof the preparation of the Consolidated Financial Statements of
EADS, which are prepared under the direct supervision of the
Chief Accounting Ofﬁcer (“CAO”). The CAO is responsible for theoperation of the Group’s consolidation systems and rules and forthe deﬁnition of group-wide accounting policies which comply
with IFRS, reporting rules and ﬁnancial guidelines in order to ensure
the consistency and quality of ﬁnancial information reported by
the Divisions 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 signiﬁ cantchanges are involved, the Chief Financial Ofﬁcer or the Board of
Directors (based upon the advice of the Audit Committee).
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 atimely 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 ﬁ nancial
information used for future strategic and operative planning andcontrol and supervision of economic risks arising from the Group’s
operations. The Divisional Chief Financial Ofﬁcers frequently meetwith the CAO and his responsible staff to discuss the ﬁnancial
information generated by the Divisions.
Prior to being disclosed to the public and subsequently submitted
for approval to the shareholders, the consolidated year-end
ﬁ nancial statements are audited by EADS’ external auditors,
reviewed by the Audit Committee and submitted for approval by
the Board of Directors. A similar procedure is used for the semiannual and quarterly closing. Group auditors are involved before
EADS ﬁnancial statements are submitted to the Board of Directors.

Treasury
Treasury management procedures, deﬁ ned by EADS’ c entral
t reasur y depar tment at Group headquar ters, 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.
Cash m anagement. The 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 managementwith the information required to oversee the Group’s cash proﬁleand to initiate necessary corrective action in order to ensure overallliquidity. To maintain targeted liquidity levels and to safeguardcash, EADS has implemented a cash pooling system with daily
cash sweeps from the controlled subsidiaries to centrally managed
accounts. Payment fraud prevention procedures have been deﬁned
and communicated throughout the Group. For management ofcredit risks related to ﬁnancial instruments, see “— Notes to theConsolidated Financial Statements (IFRS) — Note 34A: Financial
risk management”.
Hedge management. Commercial operations generate material
foreign exchange and interest rate exposures. A Group hedging
policy is deﬁned and updated regularly by the Board of Directors.
In order to ensure that all hedging activity is undertaken in linewith the Group hedging policy, the central treasury department
executes all hedging transactions. The central treasur ydepartment conducts on-going risk analysis and proposesappropriate measures to the Divisions and Business Units withrespect to foreign exchange and interest rate risk. Subsidiaries
are required to calculate, update and monitor their foreignexchange and interest rate exposure with the EADS Central
Treasury department on a monthly basis, in accordance withdeﬁned treasury procedures. See “— Management’s Discussion
and Analysis of Financial Condition and Results of Operations— 2.1.7 Hedging Activities”.

EADS REGISTRATION DOCUMENT 2012 — 135

4

Corporate Governance
4.1 Management and Control

Sales ﬁnancing. In connection with certain commercial contracts,
EADS may agree to enter into sales ﬁnancing arrangements. In
respect of sales ﬁnancing at Airbus, an annual sales ﬁnancing
budget is deﬁned as part of the EADS operative planning process.
Sales ﬁnancing transactions are approved on a case-by-case basiswith 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 into material commercial
contracts that expose it to unacceptable risk or are not in line with
the Group’s overall objectives. These procedures include (i) Boardof Directors-approved thresholds and criteria for determining therisk and proﬁ tability proﬁ les and (ii) a mandated pre-approval
process for contracts deﬁ ned as “high-risk”. Contracts fallingwithin the deﬁned threshold categories require approval by therespective Divisional Chief Financial Ofﬁcer. Contracts that are
deemed “high-risk” and exceed certain thresholds must be
submitted to a standing Commercial Committee (with the Chief
Financial Ofﬁcer and the Chief Strategy and Marketing Ofﬁcer
serving as Chairmen, and a possible escalation to the Chief
Executive Ofﬁcer when needed). This committee is responsible
for reviewing the proposal and giving recommendations whennecessary, based on which the concerned Business Unit isallowed to remit its offer. In the case of Airbus, due to the natureand size of its business, contracts are approved in accordancewith Airbus’ own corporate governance policy based on EADS
guidelines which follow the same principle, with participation of
EADS. In general, where EADS shares control of a subsidiarywith a third party, the Commercial Committee is responsiblefor developing the EADS position on proposed commercial
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 ensurethat 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 and administrationof (i) the EADS corporate governance procedures and (ii) the
legal documentation underlying the delegation of powers and

136 — EADS REGISTRATION DOCUMENT 2012

responsibilities which deﬁne the EADS management and its internal
control environment.

Corporate Audit
The EADS Corporate Audit department, under the direction of
the Corporate Secretary, provides assurance to the Executive
Committee and Audit Committee Members based upon a riskoriented approved annual audit plan. The Corporate Audit
department (i) reviews the achievement of the Group’s strategic,
ﬁnancial or operational objectives, (ii) reviews the reliability andintegrity of Group reporting, (iii) reviews the effectiveness of
the ERM system, (iv) reviews the efﬁ ciency and effectivenessof selected processes, entities or functions and (v) reviews
compliance with laws, regulations, Group guidelines andprocedures. Corporate audit also conducts ad hoc reviews,
performed at the request of management, focusing on current(e.g., suspected fraudulent activities) and future (e.g., contract
management and programme management) risks. In 2011, theInstitut français de l’audit et du contrôle internes (IFACI) reviewed
the Corporate Audit department and certiﬁ ed that it fulﬁ lled
the requirements of the International Professional Practices
Framework. Corporate audit also established a forensic function
in 2011, with specialist expertise to support the Group in its
treatment of compliance allegations.

Corporate Sourcing
The performance of EADS is to a large extent determined throughits supply chain. Therefore, sourcing is a key lever for EADS in its
marketplace.
EADS’ size and complexity requires a common approachto maximise market levers and to avoid inefficiencies in the
procurement process. To help ensure that sourcing is carried out
in the most effective, efﬁcient and ethical manner, a set of 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
and optimised across all Divisions through the sourcing networks.
These sourcing networks comprise representatives from all
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, Compliance,
Corporate Social Responsibility, and Procurement Performance
Management. The procurement processes are regularly reviewed
by means of performance indicators, audits and self-assessments
and thus consistently challenged and optimised.

Ethics and Compliance
See “— 4.1.5 Compliance Organisation” below.

Corporate Governance
4.1 Management and Control

4.1.5

Compliance Organisation

The Board of Directors appointed the EADS Group Chief
Compliance Ofﬁcer (“CCO”) to design and implement the EADS
Ethics and Compliance Programme, which supports the Group’scommitment to adhering to the highest ethical and compliancestandards in order to sustain the Group’s global competitiveness.
The CCO heads the group-wide compliance organisation, theoperations of which are overseen by the Audit Committee.

— the monitoring of Ethics and Compliance policies;— empowerment of compliance organisation and transparent

The EADS Ethics and Compliance Programme seeks to ensurethat Group business practices conform to applicable laws andregulations as well as to ethical business principles endorsedby the Group. It also seeks to promote a culture of integrity
and transparency. A key programme element consists of theGroup Ethics Code, “Integrity & Transparency” (available on the
Company’s website), which provides the daily behaviour of all
EADS employees.

of the alert system OpenLine, through which employees may
raise ethical and compliance concerns in strict confidentiality
and without fear of retaliation.

A compliance organisation and a resource network have been
implemented throughout the Group, in a structure that balances
proximity to day-to-day business activities with the necessary
independence. Accordingly, Compliance Ofﬁcers throughout theGroup report both to management as well as to the complianceorganisation. This is reﬂected at the very top of the hierarchy, with
the EADS Group CCO reporting both to the Chief Executive Ofﬁcer
and the Audit Committee.
Compliance ofﬁcers appointed in each of EADS’ four Divisions
as well as various Business Units are in charge of supporting
employees to conduct business ethically and in accordance with
the EADS Ethics and Compliance Programme. Chief ComplianceOfﬁcers at the Divisions and Business Units must ensure that they
have sufﬁcient local resources to carry out their roles effectively,
and report both to the EADS Group CCO and to the head of therelevant Division or Business Unit.
At Group level, permanent Compliance Ofﬁcers are appointed
where the main compliance risks exist, and are empowered toissue compliance directives applicable throughout the Group. The
Group International Compliance Ofﬁcer is in charge of developing
and implementing EADS’ Business Ethics Policy and associatedprocesses and guidelines to prevent corruption. The Group
Export Compliance Ofﬁcer seeks to ensure that the activities of
the Group comply with all relevant export control rules and with theinternal “sensitive countries” policy, while the Group Procurement
Compliance Ofﬁcer supervises compliance in the supply chain. The
Group Data Protection Compliance Ofﬁcer is in charge of more
effectively addressing the compliance risks associated with theprotection of data privacy in the Group.

reporting to the Audit Committee and discussions with the
Executive Committee;— communication and training activities across the Group; and— the investigation of compliance allegations and the functioning

Due to regulatory requirements, alerts posted on the OpenLine may
only be treated if they deal with accounting, ﬁnancial, corruption
or anti-competitive practices issues. The use of the OpenLine islimited to employees of all companies controlled by the Groupand located in France, Germany, Spain and the UK. In 2012,
relevant regulatory clearance was obtained for the reporting ofissues related to conﬂict of interest, harassment, disclosure of
conﬁdential information and product safety as well as to expand
the system to new countries. Implementation is subject to internal
clearance. Taking into account EADS’ overall compliance strategy,
EADS monitors the OpenLine system, organises its deployment
in additional countries and assesses the possibility of further
broadening its scope to issues of a general and operational nature.
Programme progress reports are presented are quarterly to theBoard of Directors Audit Committee. Additionally, the EADS GroupCCO provides a semi-annual Compliance Report to the Audit
Committee on compliance allegations. The report contains details
on potentially signiﬁcant compliance violations affecting the Groupof which the CCO is currently aware, including the complianceallegations described above under “— 1. Information on EADS’
Activities — 1.1.9 Legal and Arbitration Proceedings”. Reﬂecting
transparency across the Group, this report is shared with the top
management.
In the future, EADS will continue to lead efforts to establish
consistent global standards for compliance in the aerospaceand defence industry, in particular business ethics including thezero tolerance to corruption commitment. Today, the European
Common Industry Standards and the International Forum on
Business Ethical Conduct are both among the most innovative
sector-wide business ethics initiatives. As such industry 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 order to achieve the objectives set by the Chief Executive Ofﬁcer
and discussed with the Audit Committee, the EADS Group CCO
has established a compliance “roadmap” based on international
standards. The roadmap provides an overview of complianceactivities such as:— a periodic assessment and reporting of the main compliancerisks as part of the EADS ERM system;

EADS REGISTRATION DOCUMENT 2012 — 137

4

Corporate Governance
4.2 Interests of Directors and Principal Executive Ofﬁ cers

4.2 Interests of Directors and Principal
Executive Ofﬁcers
4.2.1

Remuneration Granted to Directors and Principal Executive Ofﬁcers

4.2.1.1 General Principles

4.2.1.2 Detailed Remuneration Policy

Strategy

Non-Executive Members of the Boardof Directors

EADS’ remuneration strategy is to provide remuneration that:— attracts, retains and motivates qualified executives;— is aligned with shareholders’ interest;— is performance-related to a significant extent;— is fair and transparent;— is competitive against the comparable market;— can be applied consistently throughout the Group.
BenchmarkThe remuneration policy is benchmarked regularly against thepractice of other global companies, using peer group data andgeneral industry data of consulting ﬁrms. The benchmark data isa weighted average of French, German and UK information, in thehome countries of EADS. In countries outside EADS’ home region(such as the US), EADS benchmarks against national peer groupdata of the industry. The total target remuneration for executives
is targeted at the median level compared to the benchmark data.

138 — EADS REGISTRATION DOCUMENT 2012

Each non-Executive Member of the Board of Directors receives
an annual ﬁxed fee of € 80,000, as well as a fee for participation in
Board meetings of € 5,000 per meeting attended. The Chairmanof the Board receives an annual ﬁxed fee of € 180,000 for carryingout this role, as well as a fee for participation in Board meetingsof € 10,000 per meeting attended.
The Chairmen of each of the Board Committees receive anadditional annual ﬁ xed fee of € 30,000. The Members of eachof the Board Committees receive an additional annual fixed
fee of € 20,000 for each Committee membership. Committee
chairmanship and Committee membership annual fees are
cumulative if the concerned non-Executive Members of the Boardof Directors belong to two different Committees.
Non-Executive Members of the Board of Directors are not entitledto variable remuneration or grants under EADS’ Long-Term
Incentive Plans.

Corporate Governance
4.2 Interests of Directors and Principal Executive Ofﬁ cers

Chief Executive Officer
The Chief Executive Ofﬁcer (the sole Executive Member of the Board of Directors) does not receive fees for participation in Board
meetings or any dedicated compensation as a Member of the Board of Directors. Rather, the remuneration policy for the Chief Executive
Ofﬁcer (as well as the other Members of the Executive Committee) is designed to balance short-term operational performance with themid- and long-term objectives of the Company and consists of the following main elements:
Remuneration Element

Main drivers

Performance measures% of total target
remuneration/ % of vesting• Former EADS CEOLouis Gallois: 45% of total
target remuneration
Base salary

Rewards market value of job/position• EADS CEO
Thomas Enders: 50% of total
target remuneration(2)Not applicable• Other Members of
the Executive Committee: 50%of total target remuneration

Annual variable remuneration

Long-Term Incentive Plans

Rewards annual performance basedon achievement of company
performance measures andindividual/team objectives,
including financial and non-financial
targets and behaviours

Rewards long-term company
performance and engagement
on financial targets

Collective part (50% of target
variable remuneration): EBIT*(50%), Free Cash Flow (50%)

Individual part (50% of target
variable remuneration):achievement of annual individual
objectives
The number of performance
units which will vest isbased on 3 year absolute
average earnings per share
at EADS level• Former EADS CEOLouis Gallois: 55% of total
target remuneration(range from 0% to 200%)• EADS CEO
Thomas Enders: 50% of total
target remuneration(range from 0% to 200%)(2)• Other Members of
the Executive Committee: 50%of total target remuneration(range from 0% to 200%)
Vested performance units
will range from 50% to 150%
of initial grant(1)(1) In case of absolute negative results 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).
(2) For Louis Gallois, former CEO of EADS, until 31 May 2012. For Thomas Enders, CEO of EADS, since 1 June 2012.

In addition, the Chief Executive Ofﬁcer (as well as the other Members of the Executive Committee) is entitled to pension and otherbeneﬁts as described below.

4.2.1.3 Remuneration of the Members of the Board of Directors
The amounts of the various components constituting the compensation granted to the Chief Executive Ofﬁcer and to Non-Executive
Directors during 2012, 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 related to 2012 and 2011 can besummarised as follows:

Non-Executive Members of the Board of Directors

Fixed fees(1)Fees for participation in meetings

2012

2011

in €

in €

1,158,335

1,170,000

510,000

425,000(1) The fixed fees related to 2011 were paid in 2012; the fixed fees related to 2012 will be paid in 2013.

EADS REGISTRATION DOCUMENT 2012 — 139

4

Corporate Governance
4.2 Interests of Directors and Principal Executive Ofﬁ cers

Executive Member of the Board of Directors

2012

2011

in €

in €

Former CEO, Louis Gallois, until 31 May 2012
Base salary

412,500

990,000

Annual variable remuneration (related to reporting period including part paid by EADS N.V.)

830,615

1,993,475

816,669

N/A

1,278,083

N/A

Current CEO, Thomas Enders, from 1 June 2012
Base salary
Annual variable remuneration (related to reporting period including part paid by EADS N.V.)

The cash remuneration of the non-Executive Members of the Board of Directors related to 2012 was as follows:
2012

Fixed fees(1) in €Fees for participation in meetings in €Total in €157,500

55,000212,500

Director
Bodo Uebber
Rolf Bartke(2)

Dominique D’Hinnin

41,667

15,00056,667

120,000

55,000175,000

Juan Manuel Eguiagaray Ucelay(2)33,33315,00048,333

Arnaud Lagardère

164,167

80,000244,167

Hermann-Josef Lamberti

130,000

50,000180,000

Lakshmi N. Mittal(3)80,00040,000120,000

Sir John Parker

130,000

50,000180,000

Michel Pébereau

100,000

40,000140,000

Josep Piqué I Camps(4)

Wilfried Porth
Jean-Claude Trichet(4)
Total
(1)
(2)
(3)
(4)

46,66735,00081,667

108,334

35,000143,334

46,66740,00086,667

1,158,335

510,000

1,668,335

The fixed fees will be paid in 2013.
Retired from Board of Directors as of 31 May 2012.
Excluding the fees related to 2011 paid in 2012.
Appointed to Board of Directors as of 31 May 2012.

The cash remuneration of the Executive Member of the Board of Directors related to 2012 was as follows:2012

Base salary in €Annual variable remuneration in € related to 2012

Former CEO, Louis Gallois (until 31 May 2012)

412,500

830,615

Current CEO, Thomas Enders (from 1 June 2012)

816,669

1,278,083

Director

Long-Term Incentives
The table below gives an overview of the performance units granted to the Chief Executive Ofﬁcer in 2012 pursuant to the LTIP:
Unit plan: number of performance units(1)Thomas Enders

Granted in 2012

Vesting dates

50,300

Vesting schedule is made up of 4 payments over 2 years:(i) 25% expected in May 2016;(ii) 25% expected in November 2016;(iii) 25% expected in May 2017;(iv) 25% expected in November 2017.

(1) Vesting of all performance units granted to the Chief Executive Officer is subject to performance conditions (see “— 4.3.3 Long-Term Incentive Plans”) and following specific rules
for EADS Executive Committee Members

140 — EADS REGISTRATION DOCUMENT 2012

Corporate Governance
4.2 Interests of Directors and Principal Executive Ofﬁ cers

Pension Benefits

Non-Competition Clause

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 ﬁve years of service in the Executive Committee of
EADS, payable once they reach retirement age.

A non-competition clause is included in the terms of the Chief
Executive Ofﬁcer’s mandate, applicable for one-year starting at theend of the mandate contract, and renewable for another year at theCompany’s initiative. The clause envisages a compensation equal
to 50% of the last target annual salary, deﬁned as the base salaryplus the last paid annual variable remuneration. The application of
the clause is subject to a Board of Directors’ decision.

These rights can gradually increase to 60% after a second term,
usually after ten years of service in the Executive Committee.
However, in order to reach this 60% replacement ratio therespective Member of the Executive Committee must also have
12 years of seniority within the Group.
These pension schemes have been implemented through collective
executive pension plans in France and Germany. These pension
promises also have separate rules, e.g. for minimum length ofservice and other conditions to comply with national regulations.
The former Chief Executive Ofﬁcer, Louis Gallois, retired from EADS
as of 1 June 2012, with a pension promise worth € 3,869,637(deﬁned beneﬁt obligation (i.e., the book cash value)).
For the current Chief Executive Ofﬁ cer, Thomas Enders, theamount of the pension deﬁned beneﬁt obligation (i.e., the book
cash value) amounted to € 11,800,233 as of 31 December 2012,
while the amount of current service and interest cost related to his
pension promise accounted for the ﬁscal year 2012 represented an
expense of € 1,000,769. This obligation has been accrued in theConsolidated Financial Statements. Such higher deﬁned beneﬁt
obligation for the Company pension of Thomas Enders resultsfrom EADS Executive Committee pension policy as describedabove and takes into account (1) the seniority of Thomas Enders
at EADS and its Executive Committee and (2) the signiﬁcant lower
public pension promise deriving from the German social security
pension system, compared to public pensions resulting from themembership in the French public pension system. These abovementioned public pension promises are off-set positions, which
reduce the ultimate pensions paid by the Company.
Non-Executive Members of the Board of Directors do not receive
pension beneﬁts.

Termination Indemnity
As part of his mandate contract, the Chief Executive Ofﬁcer isentitled to a termination indemnity when the departure results froma decision by the Company in case of change in control or change
in the Company’s strategy. Payment of the termination indemnity
is also subject to performance conditions as ﬁxed and assessedby the Board of Directors. The termination indemnity, if applicable,
would amount to a maximum of 18 months of annual total target
remuneration. The former Chief Executive Ofﬁcer, Louis Gallois,
reached the age of 65 in 2009 and retired in 2012, without any
payment of a termination indemnity.
Non-Executive Members of the Board of Directors do not have atermination indemnity.

The former Chief Executive Ofﬁcer, Louis Gallois, has acknowledged
EADS’ expectations with regard to his non-competition clause
when retiring. However, because both EADS and Louis Gallois
agreed not to formally enforce this non-competition clause, norelated payment has been made.

Other Benefits
The Chief Executive Ofﬁ cer, Thomas Enders, is entitled to acompany car. The residual value of his company car was worth€ 57,134 (excluding VAT) as of 31 December 2012.

4.2.1.4 Remuneration of the Membersof the Executive Committee
The Members of the Executive Committee, including the Chief
Executive Ofﬁcer, are entitled to receive for the year 2012 total
remuneration (pro-rata for the period of membership in the
Executive Committee, including base salaries, variable pay for2012 and payments from EADS Long-Term Incentive Plans) of€ 26,712,896. The increase in total remuneration compared to 2011is largely due to the enlargement of the Executive Committee andto the payout on past Long-Term Incentive Plans.
The remuneration for the former EADS Chief Executive Ofﬁcer
Louis Gallois was divided into 45% ﬁxed part (base salary) anda 55% variable part (annual variable remuneration) on target andfor the other Members of the Executive Committee into a 50%
ﬁxed part (base salary) and a 50% variable part (annual variable
remuneration) on target. Thomas Enders, EADS Chief Executive
Ofﬁcer, has a 50% ﬁxed part (base salary) and a 50% variable part(annual variable remuneration) on target.
The total remuneration paid by EADS and all its Group companies
to Louis Gallois, former Chief Executive Ofﬁcer, during the year
2012, was € 1,243,115 (this sum includes the payments of his
January to 31 May 2012 base salary of € 412,500 and the variable
pay for 2012 of € 830,615). The total remuneration paid by EADS
and all its Group companies to Thomas Enders, Chief Executive
Ofﬁcer, from 1 June 2012 to 31 December 2012, was € 2,696,264(for that period, this sum includes the payments of his base salaryof € 816,669, the variable pay for 2012 of € 1,278,083 and paymentsfrom EADS Long-Term Incentive Plans of € 601,512).
Addition ally, performance units granted in 2012 pursuant to the
LTIP to the Chief Executive Officer and to the other Executive
Comittee Members represented 275,900 units (356,350 units
in 2011). The related compensation expense recorded in 2012amounted to € 0.1 million.

EADS REGISTRATION DOCUMENT 2012 — 141

4

Corporate Governance
4.2 Interests of Directors and Principal Executive Ofﬁ cers

The Members of the Executive Committee including the Chief
Executive Officer receive the majority of their remunerationfrom their relevant national Group entity (under the terms of
their employment or mandate contract) and the remaining partfrom EADS N.V. (“N.V. compensation”, under the terms of the
N.V. letter of agreement).

Besides Louis Gallois, former CEO of EADS, three Executive
Committee Members left the EADS Executive Committee in 2012:
Hans Peter Ring, former CFO of EADS, Jussi Itavuori, former EADSHead of Human Resources and Stefan Zoller, former Head of
the Cassidian Division. The total cumulated amount of severance
payments made in the frame of EADS Group departures was€ 3,132,162.

4.2.2 Long-Term Incentives Granted to the Chief Executive Ofﬁcer
See “— 4.3.3 Long-Term Incentive Plans”.

4.2.3 Related Party Transactions
Reﬂecting Article 2:129(6) of the Dutch Civil Code, Article 18.5 of
the Articles of Association provides that “A Director shall not takepart in the deliberations or decision-making if he has a direct orindirect personal interest which conflicts with the interests of theCompany and of the enterprise connected with it. If as a result
thereof no resolution of the Board of Directors can be adopted,
the resolution is adopted by the General Meeting.”
During the years 2010, 2011 and 2012, no agreement was enteredinto by the Company with one of its Directors or principal ofﬁcers
or a shareholder holding more than 5% of the voting rights of
the Company outside the ordinary course of business and in
conditions other than arm’s length conditions. See “— Notes
to the Consolidated Financial Statements (IFRS) — Note 36:

Related party transactions” for the year ended 31 December
2012 and “— Notes to the Consolidated Financial Statements(IFRS) — Note 36: Related party transactions” for the year ended
31 December 2011, as incorporated by reference herein.
For a description of the relationships between the Company
and its principal shareholders, see “— General Description of
the Company 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 private interests
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.

142 — EADS REGISTRATION DOCUMENT 2012

Corporate Governance
4.3 Employee Proﬁ t Sharing and Incentive Plans

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 2012, 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 of a new
employee share ownership plan (see “— 4.3.2 Employee ShareOwnership Plans”).

The success sharing schemes which are implemented at EADSin France, Germany, Spain and the UK follow one set of common
rules of the Group, ensuring a consistent application in these four
countries.

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 2000-2012(3):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

2002

€ 8.86(1)/€ 7.93(2)€12,022,939

4 December 2002

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(1)/€ 17.16(2)€12,037,835

9 May 2007

€1

2,031,820

25 July 2008

2008

(1)

€ 12.79 /€ 11.70

(2)

2009

€ 10.76€1

1,358,936

18 December 20092011

€ 22.15(1)/€ 21.49(2)€12,445,527

29 July 2011

2012

(1)

€1

2,177,103

30 July 2012(2)

€ 28.55 /€ 27.07(1) Shares purchased within context of Group employee savings plan.
(2) Shares purchased directly.
(3) In 2010, the normal ESOP plan was replaced through a worldwide 10 years EADS – Special Anniversary Free Share Plan for about 118,000 employees in 29 countries. Eacheligible employee was granted 10 free shares in EADS, resulting in the distribution of 1,184,220 shares in total. Such shares were distributed out of treasury and therefore had no
impact on the issued share capital.

ESOP 2012— were employed by (i) EADS or (ii) one of its subsidiaries or(iii) companies in which EADS holds at least 50% of the sharecapital and over whose management it has a determining
influence.

In June 2012, EADS offered to qualifying employees a maximumof 0.39% of its total issued share capital before the offering. This
employee offering was for up to 3,200,000 shares of a nominal
value of € 1 each.

The employee offering was divided into two tranches:

The employee offering was open only to employees who:

— shares subscribed for by qualifying employees as part of— had at least three months’ seniority;a Group employee savings plan were offered for a price of€ 28.55 per share;

EADS REGISTRATION DOCUMENT 2012 — 143

4

Corporate Governance
4.3 Employee Proﬁ t Sharing and Incentive Plans— shares subscribed for by qualifying employees directly were
offered for a price of € 27.07 per share.
The 2012 ESOP was structured as a share matching plan, whereby
EADS matched a certain number of shares purchased at fairmarket value with a grant of free shares based on a deﬁned ratio.
This ratio varied depending on the number of shares purchased,
representing a maximum discount of 50% for 10 purchased shares
and a minimum discount of 21% for 400 purchased shares (themaximum number of shares available for purchase by a single
employee).
The employees are generally restricted from selling the shares
offered in this employee offering for one year and sometimes longer
in certain countries. A total number of 2,177,103 shares were issued
in the employee offering. Shares were delivered on 30 July 2012.

Future ESOPs
EADS intends to implement an ESOP in 2013, subject to approvalby the Board of Directors. The 2013 ESOP is expected to bea share matching plan, whereby the Company would match acertain number of shares purchased at fair market value with agrant of free shares based on a deﬁned ratio. The total offering
would be up to approximately 3,200,000 shares of the Company,
i.e. up to 0.39% of its issued share capital, open to all qualifying
employees (including the Chief Executive Ofﬁcer). As part of ESOP2013, a dedicated UK share incentive plan (SIP) was launched
in December 2012 subject to a ﬁ nal decision by the Board of
Directors.

4.3.3 Long-Term Incentive Plans
Based on the authorisation granted to it by the shareholders’meetings (see dates below), the Board of Directors approved stock
option plans in 2003, 2004, 2005 and 2006. In 2007, 2008, 2009,2010, 2011 and 2012, the Board of Directors approved the grantingof performance units and restricted units in the Company. The
grant of so-called “units” will not physically be settled in shares
but represents a cash settled plan in accordance with IFRS 2.

The principal characteristics of these options as well as performanceand restricted units as of 31 December 2012 are set out in the“Notes to the Consolidated Financial Statements (IFRS) — Note 35:
Share-based payment”. They are also summarised in the tables
below:

Fourth tranche

Date of shareholders’ meeting
Date of Board of Directors meeting (grant date)
Number of options granted
Number of options outstanding

10 May 2001
9 August 2002
7,276,700-

Options granted to:• Mr Philippe Camus• Mr Rainer Hertrich• the 10 employees having being granted the highest
number of options during the year 2001
(third tranche) and 2002 (fourth tranche)

Total number of eligible employees

Exercise date

Expiry dateConversion right
VestedExercise price
Exercise price conditions
Number of exercised options

144 — EADS REGISTRATION DOCUMENT 2012

135,000
135,000

808,000
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 asof the third anniversary of the date of grant of the options (subject to specificprovisions contained in the Insider Trading Rules – see “— General Descriptionof the Company and its Share Capital — 3.1.11 Disclosure of Holdings”).
8 August 2012
One option for one share100%€ 16.96
110% of fair market value of the shares at the date of grant
6,434,110

Corporate Governance
4.3 Employee Proﬁ t Sharing and Incentive Plans

Fifth tranche

Date of shareholders’ meeting
Date of Board of Directors meeting (grant date)

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

1,502,835

3,316,613

135,000

135,000

135,000

135,000

808,000

808,000

1,491

1,495

Options granted to:• Mr Philippe Camus• Mr Rainer Hertrich• the 10 employees having being granted the highest

number of options during the year 2003 (fifth tranche)and 2004 (sixth tranche)

Total number of eligible employees

Exercise date

Expiry date

50% of options may be exercised after a period of two years and four weeks
from 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 specificprovisions contained in the Insider Trading Rules – see “— General Descriptionof 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

Conversion right

Exercise price conditions
Number of exercised options

110% of fair market value of the shares at the date of grant
5,403,571

1,909,745(1) As regards to the sixth tranche, vesting of part of the options granted to the top EADS 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.

Seventh tranche

Date of shareholders’ meeting
Date of Board of Directors meeting (grant date)

11 May 2005
9 December 2005

Number of options granted

7,981,760

Number of options outstanding

5,333,695

Options granted to:• Mr Thomas Enders• Mr Noël Forgeard• the 10 employees having being granted the highest

number of options during the year 2005 (seventh tranche)

Total number of eligible beneficiaries

Exercise date

Expiry dateConversion right
VestedExercise price
Exercise price conditions

135,000
135,000
940,000
1,608
50% of options may be exercised after a period of two years from the dateof 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 Descriptionof the Company and its Share Capital — 3.1.11 Disclosure of Holdings”).
As regards to the seventh tranche, part of the options granted tothe top EADS executives was performance related.
8 December 2015
One option for one share100%(1)€ 33.91
110% of fair market value of the shares at the date of grant

Number of exercised options-(1) As regards to the seventh tranche, vesting of part of the options granted to the top EADS 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.

EADS REGISTRATION DOCUMENT 2012 — 145

4

Corporate Governance
4.3 Employee Proﬁ t Sharing and Incentive Plans

Eighth tranche

Date of shareholders’ meeting

4 May 2006

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

Number of options granted

1,747,500

Number of options outstanding

1,202,000

Options granted to:• Mr Thomas Enders• Mr Louis Gallois• the 10 employees having being granted the highest

67,50067,500

number of options during the year 2006 (eighthtranche)425,000

Total number of eligible beneficiaries

Date from which the options may be exercised

221
50% of options may be exercised after a period of two years from the dateof 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 Descriptionof 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

Vested100%

Exercise price
Exercise price conditions€ 25.65
110% of fair market value of the shares at the date of grant

Number of exercised options

350,000

Ninth tranche

Date of Board of Directors meeting (grant date)

7 December 2007
Performance and restricted unit plan

Number of units granted
Number of units outstanding

Performance units

Restricted units

1,693,940

506,060--

33,700-239,900

43,500

Units granted to:• Mr Louis Gallois• the 10 employees having being granted the highest

number of units during the year 2007 (ninth tranche)

Total number of eligible beneficiaries

Vesting dates

Number of vested units

146 — EADS REGISTRATION DOCUMENT 2012

1,617
The restricted units will vest if the participant is still employed by an EADS
company at the respective vesting dates.
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.
4,240

475,860

Corporate Governance
4.3 Employee Proﬁ t Sharing and Incentive Plans

Tenth tranche

Date of Board of Directors meeting (grant date)

13 November 2008
Performance and restricted unit plan

• Number of units granted(1)• Number of units outstanding(2)

Performance units

Restricted units

2,192,740

801,860

1,409,592

377,575

40,000-304,000

68,200

Units granted to:• Mr Louis Gallois• the 10 employees having being granted the highest

number of units during the year 2008 (tenth tranche)

Total number of eligible beneficiaries

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.

Vesting dates

Number of vested units(2)1,422,956

382,535(1) Based on 100% target performance achievement. A minimum of 50% of performance units will vest; 100% in case of on-target performance achievement; up to a maximum of
150% in case of overachievement of performance criteria. In case of absolute negative results (cumulative EBIT* of EADS) 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).
(2) Re-evaluation based on 136% performance achievement for the remaining outstanding performance units.

Eleventh tranche

Date of Board of Directors meeting (grant date)

13 November 2009
Performance and restricted unit plan
Performance units

Number of units granted(1)

Number of units outstanding

Restricted units

2,697,740

928,660

2,579,920

903,82046,000-356,000

96,000

Units granted to:• Mr Louis Gallois*• the 10 employees having being granted the highest

number of units during the year 2009 (eleventh tranche)

Total number of eligible beneficiaries

Vesting dates

Number of vested units

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.
9,150

4,160

(1) Based on 100% target performance achievement. A minimum of 50% of performance units will vest; 100% in case of on-target performance achievement; up to a maximum of
150% in case of overachievement of performance criteria. In case of absolute negative results (cumulative EBIT* of EADS) 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).
* For more information in respect of units granted to the Chief Executive Officer, see “— Notes to the Company Financial Statements — Note 11: Remuneration”.

EADS REGISTRATION DOCUMENT 2012 — 147

4

Corporate Governance
4.3 Employee Proﬁ t Sharing and Incentive Plans

Twelfth tranche

Date of Board of Directors meeting (grant date)

10 November 2010
Performance and restricted unit plan
Performance units

Restricted units

Number of units granted(1)2,891,540

977,780

Number of units outstanding

2,835,240

947,160

54,400-341,600

79,000

Units granted to:• Mr Louis Gallois*• the 10 employees having being granted the highest

number of units during the year 2010 (twelfth tranche)

Total number of eligible beneficiaries

Vesting dates

Number of vested units

1,711
The performance and restricted units will vest if the participant is still employedby an EADS company at the respective vesting dates and, in the 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 2014;• 25% expected in November 2014;• 25% expected in May 2015;• 25% expected in November 2015.
-

700(1) Based on 100% target performance achievement. A minimum of 50% of performance units will vest; 100% in case of on-target performance achievement; up to a maximum of
150% in case of overachievement of performance criteria. In case of absolute negative results (cumulative EBIT* of EADS) 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).
* For more information in respect of units granted to the Chief Executive Officer, see “— Notes to the Company Financial Statements — Note 11: Remuneration”.

Thirteenth tranche

Date of Board of Directors meeting (grant date)

9 November 2011
Performance and restricted unit plan
Performance units

Restricted units

Number of units granted(1)2,588,950

877,750

Number of units outstanding

2,559,950

877,125

51,400-320,050-

Units granted to:• Mr Louis Gallois*• the 10 employees having being granted the highest

number of units during the year 2011 (thirteenth tranche)

Total number of eligible beneficiaries

Vesting dates

Number of vested units

1,771
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 2015;• 25% expected in November 2015;• 25% expected in May 2016;• 25% expected in November 2016.
-625(1) Based on 100% target performance achievement. A minimum of 50% of performance units will vest; 100% in case of on-target performance achievement; up to a maximum of
150% in case of overachievement of performance criteria. In case of absolute negative results (cumulative EBIT* of EADS) 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).
* For more information in respect of units granted to the Chief Executive Officer, see “— Notes to the Company Financial Statements — Note 11: Remuneration”.

148 — EADS REGISTRATION DOCUMENT 2012

Corporate Governance
4.3 Employee Proﬁ t Sharing and Incentive Plans

Fourteenth tranche

Date of Board of Directors meeting (grant date)

13 December 2012
Performance and restricted unit plan
Performance units

Restricted units

Number of units granted(1)2,121,800

623,080

Number of units outstanding

2,121,800

623,080

50,300-251,800-

Units granted to:• Mr Thomas Enders*• the 10 employees having being granted the highest

number of units during the year 2012 (fourtheenth tranche)

Total number of eligible beneficiaries

Vesting dates

1,797
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 2016;• 25% expected in November 2016;• 25% expected in May 2017;• 25% expected in November 2017.

Number of vested units--(1) Based on 100% target performance achievement. A minimum of 50% of performance units will vest; 100% in case of on-target performance achievement; up to a maximum of
150% in case of overachievement of performance criteria. In case of absolute negative results (cumulative EBIT* of EADS) 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).
* 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 35: Share-based payment”.

For information on the transactions carried out by the Members of
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
Shareholding

Member of the Board of Directors

5,440 ordinary shares
197,500 stock options(1)• Mr Thomas Enders(1) 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.

4

EADS REGISTRATION DOCUMENT 2012 — 149

5
150 — EADS REGISTRATION DOCUMENT 2012

Entity Responsible
for the Registration Document
5.1 Entity Responsible for the Registration Document152

5.2 Statement of the Entity Responsible
for the Registration Document152

5.3 Information Policy

153

5.4 Undertakings of the Company regarding Information

153

5.5 Signiﬁcant Changes

153

EADS REGISTRATION DOCUMENT 2012 — 151

Entity Responsible for the Registration Document

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 the Registration
Document is, to the best of the Company’s knowledge, in accordance with the facts and contains no omission likely to affect its import.
EADS represented by:Thomas Enders
Chief Executive Officer

152 — EADS REGISTRATION DOCUMENT 2012

Entity Responsible for the Registration Document

5.3 Information Policy
Contact details for information:
Mr Philippe Balducchi
Head of Investor Relations and Financial Communication, EADS
37, boulevard de Montmorency

A website, www.eads.com, provides a wide range of informationon 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

75781 Paris Cedex 16 France
Telephone: +33 1 42 24 28 00

by, the AFM on 19 April 2011;— the Registration Document filed in English with, and approved
by, the AFM on 12 April 2012; andFax: +33 1 42 24 28 40
E-mail: ir@eads.com— the Consolidated Financial Statements (IFRS) and theCompany Financial Statements of EADS for the years ended
31 December 2010, 2011 and 2012, together with the related
Auditors’ reports, may be inspected at EADS’ registeredoffice at: European Aeronautic Defence and Space 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 dedicated to 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, the Company

is subject to certain laws and regulations applicable in France,
Germany and Spain in relation to information, the main ones ofwhich are summarised in “General Description of the Company
and its Share Capital — 3.1.3 Governing Laws and Disclosures”.

5.5 Signiﬁcant Changes
As of the date of this Registration Document, there has been no signiﬁcant change in the Group’s ﬁnancial or trading position since
31 December 2012.

EADS REGISTRATION DOCUMENT 2012 — 153

5

154 — EADS REGISTRATION DOCUMENT 2012

EADS REGISTRATION DOCUMENT 2012 — 155

156 — EADS REGISTRATION DOCUMENT 2012