EADS N.V. (Airbus Group)
Unaudited Condensed IFRS Consolidated Financial Information for the three-month period
ended 31 March 2014

Unaudited Condensed IFRS Consolidated
Financial Information of EADS N.V.
for the three-month period ended 31 March 2014
Unaudited Condensed IFRS Consolidated Income Statements ………………………………......…2
Unaudited Condensed IFRS Consolidated Statements of Comprehensive Income……….……...3
Unaudited Condensed IFRS Consolidated Statements of Financial Position…………...……...…4
Unaudited Condensed IFRS Consolidated Statements of Cash Flows…………....………………..5
Unaudited Condensed IFRS Consolidated Statements of Changes in Equity..……………...........6
Explanatory notes to the Unaudited Condensed IFRS Consolidated Financial Statements
as at 31 March 2014……….………….…………….…………..……....…………..…......…....................7
1. The Company…………………………………………………………………………………..…….7
2. Accounting policies……………….………………………………………………..…..……..........7
3. Acquisitions and other M&A transactions………...….……………………………………..…11
4. Segment information………………………………..………………………………..…….....…..11
5. EBIT pre-goodwill impairment and exceptionals…..……..…………………………….…….13
6. Significant income statement items………….…………………..………….……………........13
7. Significant items of the statement of financial position…….……………………...…........14
8. Significant cash flow items……………………………………………………..…...…..……….16
9. Financial instruments…………………………………….……………......................................17
10. Number of shares…...…………………………………….……………......................................20
11. Earnings per share……………………………………..……………….………...……...………..20
12. Related party transactions.………………..…………………...…….……………………..……21
13. Number of employees ……………………………….……………….……………..........………21
14. Litigation and claims …..…………………………….……………….……………..........………21
15. Subsequent events …..…………………………….……………….……………..........………...23

1

13.05.2014

EADS N.V. (Airbus Group)
Unaudited Condensed IFRS Consolidated Financial Information for the three-month period
ended 31 March 2014

Unaudited Condensed IFRS Consolidated Income Statements

1 January 31 March 2014
Revenues
Cost of sales
Gross margin
Selling, administrative & otherexpenses
Research and development
expenses

1 January 31 March 2013 *)Deviation

M€
12,648-10,669
1,979

%
100
-84
16

M€
12,094-10,421
1,673

%
100
-86
14

M€
554
-248
306

-666

-5

-664

-5

-2

-727

-6

-617

-5

-110

52

0

61

0

-9

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

71

0

126

1

-55

709
36
-130
-13
-107
-166
436

5
0
-1
0
-1
-1
3

579
40
-126
-187
-273
-77
229

5
0
-1
-1
-2
-1
2

130
-4
-4
174
166
-89
207

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

439
-3

3
0

227
2

2
0

212
-5

Earnings per share
Basic
Diluted
*)

€

€

€

0.56
0.56

0.28
0.28

0.28
0.28

Previous year’s figures are adjusted due to the application of IFRS 11.

2

13.05.2014

EADS N.V. (Airbus Group)
Unaudited Condensed IFRS Consolidated Financial Information for the three-month period
ended 31 March 2014

Unaudited Condensed IFRS Consolidated Statements of Comprehensive
Income1 January 1 January 31 March 2014 31 March 2013

in M €
Profit for the period *)

436

229

7

0

using the equity method

5-8

Tax on items that will not be reclassified to profit or loss

-20

Items that will not be reclassified to profit or loss:
Actuarial losses on defined benefit plans
Actuarial losses on defined benefit plans from investments

Items that will be reclassified to profit or loss:
Foreign currency translation differences for foreign operations *)

-36

114

Net change in fair value of cash flow hedges *)38-1,846

Net change in fair value of available-for-sale financial assets

-64

-11

-13

27

-8

555

Other comprehensive income, net of tax-73-1,169Total comprehensive income of the period

363

-940

366
-3
363

-939
-1
-940

Changes in other comprehensive income from investments accounted forusing the equity method *)Tax on items that will be reclassified to profit or loss*)

Attributable to:Equity owners of the parent
Non-controlling interests
Total comprehensive income of the period*)

Previous year’s figures are adjusted due to the application of IFRS 11.

3

13.05.2014

EADS N.V. (Airbus Group)
Unaudited Condensed IFRS Consolidated Financial Information for the three-month period
ended 31 March 2014

Unaudited Condensed IFRS Consolidated Statements of Financial Position
31 March 201431 December 2013 *)
M€
%
M€
%
Non-current assets
Intangible assets
Property, plant and equipment
Investments in associates under theequity method
Other investments and long-term
financial assets
Other non-current assets
Deferred tax assets
Non-current securities
Current assets
Inventories
Trade receivables
Other current assets
Current securities
Cash and cash equivalents
Total assets
Total equity
Equity attributable to equity owners of
the parent
Capital stockReserves
Accumulated other comprehensive
incomeTreasury shares
Non-controlling interests
Non-current liabilities
Non-current provisions
Long-term financing liabilities
Deferred tax liabilities
Other non-current liabilities
Current liabilities
Current provisions
Short-term financing liabilities
Trade liabilities
Current tax liabilities
Other current liabilities
Total liabilities
Total equity and liabilities*)

Deviation
M€%

12,50815,750141712,50015,654

14
17

8
96

0
1

3,844

4

3,858

4

-14

0

1,727

2

1,756

2

-29

-2

3,699
3,643
4,877
46,048

4
4
6
51

3,727
3,733
4,298
45,526

4
4
5
50

-28
-90
579
522

-1
-2
13
1

25,640
6,101
4,827
2,413
5,864
44,84590,893

28
7
5
3
6
49
100

24,023
6,628
4,311
2,585
7,201
44,74890,274

27
7
5
3
8
50
100

1,617
-527
516
-172
-1,337
97
619

7
-8
12
-7
-19
0
1

784
7,737

1
8

783
7,202

1
8

1
535

0
7

2,846

3

2,929

3

-83

-3

-10
11,35739
11,396

0
12
0
12

-50
10,86442
10,906

0
12
0
12

40
493
-3
490

-80
5
-7
4

9,506
3,813
1,473
18,71333,505

10
4
2
21
37

9,604
3,804
1,454
18,15533,017

11
4
2
20
37

-98
9
19
558
488

-1
0
1
3
1

4,911
2,794
9,059
620
28,60845,992
79,49790,893

5
3
10
1
32
51
88
100

5,222
1,826
9,668
616
29,01946,351
79,36890,274

6
2
11
0
32
51
88
100

-311
968
-609
4
-411
-359
129
619

-6
53
-6
1
-1
-1
0
1

Previous year’s figures are adjusted due to the application of IFRS 10 and 11.

413.05.2014

EADS N.V. (Airbus Group)
Unaudited Condensed IFRS Consolidated Financial Information for the three-month period
ended 31 March 2014

Unaudited Condensed IFRS Consolidated Statements of Cash Flows
1 January 31 March 2014M€

1 January 31 March 2013
M€

Profit for the period attributable to equity owners of the parent (Net income)*)

439

227

Profit for the period attributable to non-controlling interests

-3

2

471

434

42

17

Deferred tax expense

77

27

Change in income tax assets, income tax liabilities and provisions for income tax *)

-9

-22

Results on disposals of non-current assets

-5

0

-46

-109

Adjustments to reconcile profit for the period to cash provided by operating activities
Depreciation and amortization*)
Valuation adjustments*)

Results of companies accounted for by the equity method*)

Change in current and non-current provisions *)42

80

Reimbursement from / contribution to plan assets

-13

-12

Change in other operating assets and liabilities *)-2,545-3,117

Cash (used for) operating activities-1,550-2,473

Investments:- Purchases of intangible assets, PPE *)

-553

-664

*)

23

15

- Proceeds from disposals of subsidiaries (net of cash)- Payments for investments in associates and otherinvestments and long-term financial assets *)

-24

0

-27

-88

- Proceeds from disposals of intangible assets, PPE- Proceeds from disposals of associates and otherinvestments and long-term financial assets

84

36

Change of securities *)

-402

-243

Cash (used for) investing activities

-899

-944

Change in long-term and short-term financing liabilities *)

962

407

Changes in capital and non-controlling interests

16

101

Change in treasury shares

1110Cash provided by financing activities
Effect of foreign exchange rate changes and other valuation adjustments on cash
and cash equivalents

1,089

508

23

49

Net decrease of cash and cash equivalents-1,337-2,860Cash and cash equivalents at beginning of period

7,201

8,188

Cash and cash equivalents at end of period

5,864

5,328

*)

Previous year’s figures are adjusted due to the appliocation of IFRS 10 and 11.

513.05.2014

EADS N.V. (Airbus Group)
Unaudited Condensed IFRS Consolidated Financial Information for the three-month period
ended 31 March 2014

Unaudited Condensed IFRS Consolidated Statements of Changes in Equity
Equityattributable to Non-controlling
equity owners ofinterests
the parent
10,40325

in M €
Balance at 1 January 2013
Retrospective adjustment*)

Balance at 1 January 2013, adjusted
*)

total
10,428

-143

-1

-144

10,26024

10,284

227

2

229

-1,166-3-1,169

-939

-1

-940

99

2

101

Equity transactions (IAS 27)

-119

21

-98

Balance at 31 March 2013

9,301

46

9,347

Balance at 1 January 2014

11,011

43

11,054

*)

-147

-1

-148

Balance at 1 January 2014

10,86442

10,906

Profit for the period

439

-3

436

Other comprehensive income

-73

0

-73

Total comprehensive income

366

-3

363

Capital increase

16

0

16

Change in treasury shares

111

0

111

Balance at 31 March 2014

11,35739

11,396

Profit for the period

Other comprehensive income*)

Total comprehensive income
Capital increase

Retrospective adjustment*)

Previous year’s figures are adjusted due to the application of IFRS 11.

613.05.2014

EADS N.V. (Airbus Group)
Unaudited Condensed IFRS Consolidated Financial Information for the three-month period
ended 31 March 2014

Explanatory notes to the Unaudited Condensed IFRS Consolidated Financial
Statements as at 31 March 2014
1. The Company
The accompanying Unaudited Condensed IFRS Consolidated Financial Statements present theoperations of European Aeronautic Defence and Space Company EADS N.V. and its
subsidiaries (the “Group”), a Dutch public limited liability company (Naamloze Vennootschap)
legally seated in Amsterdam (current registered office at Mendelweg 30, 2333 CS Leiden, The
Netherlands), and are prepared and reported in Euros (“€”). On 2 January 2014, the Group has
been rebranded to Airbus Group as part of a wider reorganization including integration of theGroup’s space and defence activities with associated restructuring measures. The Group’s corebusiness is the manufacturing of commercial aircraft, civil and military helicopters, commercial
space launch vehicles, missiles, military aircraft, satellites, defence systems and defence
electronics and rendering of services related to these activities. The Unaudited Condensed IFRS
Consolidated Financial Statements for the three-month period ended 31 March 2014 wereauthorized for issue by the Airbus Group Board of Directors on 12 May 2014.

2. Accounting policies
These Unaudited Condensed Consolidated Financial Statements have been prepared inaccordance with International Financial Reporting Standards (“IFRS”) issued by the International
Accounting Standards Board (“IASB”) as endorsed by the European Union (EU) as at 31 March2014 and Part 9 of Book 2 of the Netherlands Civil Code. They comprise (i) IFRS, (ii) International
Accounting Standards (“IAS”) and (iii) Interpretations originated by the IFRS Interpretations
Committee (“IFRIC”) or former Standards Interpretation Committee (“SIC”).
These Unaudited Condensed IFRS Interim Consolidated Financial Statements should be read in
conjunction with Airbus Group’s (previously EADS NV) Consolidated Financial Statements as of
31 December 2013. Except for the amended Standards to be applied for the first time in the first
three months 2014 (mentioned below in the next section), Airbus Group’s accounting policies andtechniques are unchanged compared to 31 December 2013.
Financial reporting rules applied for the first time as of 1 January 2014:
The following new or amended Standards were applied for the first time in the first three months
2014 and are effective for Airbus Group as of 1 January 2014. If not otherwise stated, their first
application has not had a material impact on Airbus Group’s Consolidated Financial Statements aswell as its basic and diluted earnings per share.
The IASB issued IFRS 10 “Consolidated Financial Statements”, IFRS 11 “Joint Arrangements”,
IFRS 12 “Disclosure of Interests in Other Entities” and consequential amendments to IAS 27“Separate Financial Statements” and amendments to IAS 28 “Investments in Associates and Joint
Ventures” as well as the Transition Guidance (Amendments for IFRS 10, IFRS 11 and IFRS 12).
IFRS 10 supersedes the requirements related to Consolidated Financial Statements in IAS 27“Consolidated and Separate Financial Statements” (amended 2008) as well as SIC 12“Consolidation – Special Purpose Entities”. IFRS 11 supersedes IAS 31 “Interests in Joint
Ventures” (amended 2008) and SIC 13 “Jointly Controlled Entities – Non-Monetary Contributions
by Venturers”. IFRS 12 replaces disclosure requirements in IAS 27, IAS 28 and IAS 31.

7

13.05.2014

EADS N.V. (Airbus Group)
Unaudited Condensed IFRS Consolidated Financial Information for the three-month period
ended 31 March 2014

IFRS 10 defines the principle of control and establishes control as the sole basis for determining
which entity should be consolidated in the Consolidated Financial Statements: An investor controls
an investee when it is exposed, or has rights, to variable returns from its involvement with theinvestee and has the ability to affect those returns through its power over the investee. The
standard provides additional guidance to determine control in cases difficult to assess such as insituations where an investor holds less than a majority of voting rights, but has the practical ability
to direct the relevant activities of the investee unilaterally by other means as well as in cases ofagency relationships which were neither addressed by IAS 27 nor by SIC 12.
IFRS 11 provides guidance for the accounting of joint arrangements by focusing on the rights andobligations arising from the arrangement. The standard distinguishes between two types of joint
arrangements: joint operations and joint ventures. A joint operation is a joint arrangement whereby
the parties that have joint control of the arrangement (i.e. joint operators) have rights to the assets,
and obligations for the liabilities, relating to the arrangement. A joint venture is a joint arrangement
whereby the parties that have joint control of the arrangement (i.e. joint venturers) have rights tothe net assets of the arrangement. IFRS 11 requires a joint operator to recognize and measure theassets and liabilities (and recognize the related revenues and expenses) in relation to its interest in
the arrangement applicable to the particular assets, liabilities, revenues and expenses. A joint
venturer is required to recognize an investment and to account for this investment using the equity
method. The proportionate consolidation method may no longer be used for joint ventures.
IFRS 12 provides disclosure requirements for all forms of interests in other entities, including
subsidiaries, joint arrangements, associates, structured entities (formerly referred to as “special
purpose entities”) and off-balance sheet vehicles in one single standard. The standard requires anentity to disclose information that enables users of financial statements to evaluate the nature of,and risks associated with, its interests in other entities and the effects of those interests on its
financial position, financial performance and cash flows.
The first time application of IFRS 10 and IFRS 11 has an impact on Airbus Group’s consolidation
scope: The application of the new control concept as defined by IFRS 10 resulted in the exclusionof three special purpose entities which were previously fully consolidated under IAS 27 and SIC 12
from the consolidation scope and the consolidation of two special purposes entities formerly notconsolidated. Additionally, twelve entities which were previously classified as joint ventures under
IAS 31 and consolidated by using the proportional consolidation method in accordance with theAirbus Group accounting policy choice under IAS 28 are now accounted for using the equity
method as described above under IFRS 11. This had a material impact on the Group’s financial
statement. The first time application of IFRS 11 did not result in any reassessment regarding theclassification of Airbus Group entities as joint ventures under IAS 31.
The following tables summarise the impacts on the comparative information on the Group’s
financial position, income statement and statement of cash flows resulting from the change inconsolidation scope:813.05.2014

EADS N.V. (Airbus Group)
Unaudited Condensed IFRS Consolidated Financial Information for the three-month period
ended 31 March 2014

Condensed consolidated statement of financial position as at 31 December 2013
As previously
reported

IFRS 10 and 11

Intangible assets

13,653-1,153

12,500Property, plant & equipment

15,925-271

15,654

Investment in associates

2,902

956

3,858

Other non-current assets

13,733-219

13,514

46,213-687

45,526Inventories

25,060-1,03724,023

Trade receivables

7,239

-611

6,628

Other current assets

7,034

-138

6,896

Cash and cash equivalents

7,765

-564

7,201

47,098-2,35044,748

Total assets

93,311-3,037

90,274

Total equity

11,054-148

10,906

Non-current provisions

10,046

-442

9,604

Other non-current liabilities

23,630-217

23,41333,676-659

33,017

Current provisions

5,323

-101

5,222

Trade liabilities

10,372

-704

9,668

Other current liabilities

32,886-1,42531,461

48,581-2,23046,351

93,311-3,037

90,274in M €As restatedNon-current assets

Current assets

Non-current liabilities

Current liabilities

Total equity and liabilities

913.05.2014

EADS N.V. (Airbus Group)
Unaudited Condensed IFRS Consolidated Financial Information for the three-month period
ended 31 March 2014

Condensed consolidated income statement for the first three months ended 31 March 2013
In M €As previously
reported

IFRS 10 and 11

Revenues

12,387-293

12,094

Cost of sales-10,640

219-10,421

Gross Margin

1,747

-74

1,673

Selling, administrative & other expenses

-702

38

-664

Research and development expenses

-624

7

-617

Other income

58

3

61

Share of profit from associates and otherincome from investments

107

19

126

Profit before finance result and income
taxes

586

-7

579

As restatedInterest result-86

Other financial result

-165

-22

-187

-86

Finance result

-251

-22

-273

Income taxes

-92

15

-77

Profit for the period

243

-14

229

Condensed consolidated statement of cash flow as of 31 March 2013
in M €As previously
reported

IFRS 10 and 11

As restatedCash (used for) operating activities-2,464-9-2,473

Cash (used for) investing activities

-987

43

-944

Cash (used for) financing activities

517

-9

508

Others41

849-2,89333-2,860Cash and cash equivalents

As of 1 January 2013, the impacts resulting from the change in consolidation scope on the Group’s
financial position are in the same order of magnitude and restated on a consistent basis aspresented above for December 31, 2013.
Amendments to IAS 32 “Financial Instruments: Presentation” clarify the IASB’s requirements foroffsetting financial instruments.
Amendments to IAS 39 “Novation of Derivatives and Continuation of Hedge Accounting” provide
an exception to the requirement for the discontinuation of hedge accounting in IAS 39 and IFRS 9
in circumstances when a hedging instrument is required to be novated to a central counterparty asa result of laws or regulations.

10

13.05.2014

EADS N.V. (Airbus Group)
Unaudited Condensed IFRS Consolidated Financial Information for the three-month period
ended 31 March 2014

3. Acquisitions and other M&A transactions
On 28 February 2014, EADS North America, Inc., Herndon (VA, USA) sold 100% of the assets of
its Test and Services division to Astronics Corp., East Aurora (NY, USA), for a total considerationof 51 M €.
On 1 March 2014, Astrium Services GmbH, Ottobrunn (Germany) disposed of 100% of the shares
of ND Satcom GmbH, Immenstaad (Germany) to Quantum Industries S.à.r.l., Luxembourg(Luxembourg), leading to a negative consideration of -9 M €.
Apart from the transactions mentioned above, other acquisitions and disposals are considered tohave no material impact on the Group’s consolidated financial statements.

4. Segment information
In order to improve competitiveness and better adapt to shrinking traditional markets, the Group’s
defence and space businesses are combined within one Division from 1 January 2014 onwards.
Improving access to international customers, creating synergies in the Group’s operations andproduct portfolio and better focus the Group’s research and development activities are among thegoals of this reorganization. Having conducted a strategy review, the Group decided pooling theirdefence and space busineses into one Division. This structural change shall provide optimized
market access, cost and market synergies and improved competitiveness overall. The Group
operates in three reportable segments which reflect the internal organizational and management
structure according to the nature of the products and services provided.
 Airbus — Development, manufacturing, marketing and sale of commercial jet aircraft of morethan 100 seats; aircraft conversion and related services; development, manufacturing,marketing and sale of regional turboprop aircraft and aircraft components.
 Airbus Helicopters (before 1 January 2014: Eurocopter) — Development, manufacturing,marketing and sale of civil and military helicopters; provision of helicopter related services.
 Airbus Defence & Space —Military combat aircraft and training aircraft; provision of defence
electronics and of global security market solutions such as integrated systems for global bordersecurity and secure communications solutions and logistics; training, testing, engineering andother related services; development, manufacturing, marketing and sale of missiles systems;
development, manufacturing, marketing and sale of satellites, orbital infrastructures andlaunchers; provision of space related services; development, manufacturing, marketing and saleof military transport aircraft and special mission aircraft and related services.
The former reportable segments Cassidian, Astrium and Airbus Military form the new segment
Airbus Defence & Space.
The following table presents information with respect to the Group’s business segments. As a rule,inter-segment transfers are carried out on an arm’s length basis. The Group’s activities managed in
the US,, the holding function of the Group’s Headquarters and other activities not allocable to thereportable segments, combined together with consolidation effects, are disclosed in the column“Others/ HQ / Conso.”.

11

13.05.2014

EADS N.V. (Airbus Group)
Unaudited Condensed IFRS Consolidated Financial Information for the three-month period
ended 31 March 2014

in M €

AirbusAirbusHelicopters

AirbusDefence &
Space

Total
segments

Others/ HQ/
Conso.

Consolidated

Three-month period ended 31 March 2014
Total revenues

8,937

1,182

2,743

12,862

149

13,011

Internal revenues

-184

-114

-60

-358

-5

-363

Revenues

8,753

1,068

2,683

12,504

144

12,648

-576

-73

-76

-725

-2

-727

539

58

82

679

30

709

546

58

85

689

30

719

Research anddevelopment
expensesProfit before financeresult and income
taxes
EBIT pre-goodwill
imp. and exceptionals(see definition below)
Finance result-107

Income taxes-166

Profit for the period

436

Three-month ended 31 March 2013
Total revenues *)

8,759

1,038

2,664

12,461

88

12,549Internal revenues

-264

-116

-70

-450

-5

-455

Revenues *)

8,495

922

2,594

12,011

83

12,094

Research anddevelopment
expenses *)

-482

-66

-65

-613

-4

-617

Profit before financeresult and income
taxes *)

457

20

81

558

21

579

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

463

20

84

567

22

589

Finance result *)-273

Income taxes *)-77

Profit for the period *)

229

*)

Previous year’s figures are adjusted due to the application of IFRS 11.

1213.05.2014

EADS N.V. (Airbus Group)
Unaudited Condensed IFRS Consolidated Financial Information for the three-month period
ended 31 March 2014

5. EBIT pre-goodwill impairment and exceptionals
Airbus Group uses EBIT pre-goodwill impairment and exceptionals as a key indicator of its
economic performance. The term “exceptionals” refers to such items as depreciation expenses offair value adjustments relating to the former EADS merger, the Airbus combination and theformation of MBDA, as well as impairment charges thereon. It also comprises disposal impacts
related to goodwill and fair value adjustments from these transactions. EBIT pre-goodwill
impairment and exceptionals is treated by management as a key indicator to measure thesegments’ economic performances.
The reconciliation from profit before finance result and income taxes to EBIT pre-goodwill
impairment and exceptionals is set forth in the following table (in M €):in M €
Profit before finance result and income taxes *)1 January 31 March 2014

1 January 31 March 2013

709

579

10

10

719

589

Goodwill and exceptionals:
Exceptional depreciation/ disposal (fixed assets in cost of sales)
EBIT pre-goodwill impairment and exceptionals*)*)

Previous year’s figures are adjusted due to the application of IFRS 11.

6. Significant income statement items
Revenues of 12,648 M € (first quarter 2013 adjusted: 12,094 M €) increase by +554 M €, mainly
at Airbus Commercial (+178 M €) and at Airbus Helicopter (+144 M €). All segments contributed
positively to the increase of revenues.
The Gross margin increases by +306 M € to 1,979 M € compared to 1,673 M € (adjusted) in thefirst quarter of 2013. This improvement is mainly related a) to Airbus reflecting operational
improvement and a positive balance sheet revaluation and mismatch and b) to a lesser extent at
Airbus Helicopters and Airbus Defence & Space. The improvement is partly compensated byhigher A350 support costs at Airbus.The A350 XWB Entry into service is scheduled for the end of
2014. Airbus continues to make significant progress on A350 XWB program. Since the first flight inJune 2013 significant flight and static tests have been performed. Airbus is in the most criticalphase of the A350 program. The industrial ramp up preparation is underway and associated risks
will continue to be closely monitored in line with the schedule, aircraft performance and overall
cost envelope, as per customers commitment.
Research and development expenses increase by -110 M € to -727 M € (first quarter 2013adjusted: -617 M €) mainly reflecting phasing.
Share of profit from associates under the equity method and other income frominvestments of 71 M € (first quarter 2013 adjusted: 126 M €) mainly consists of the share of theresult of Dassault Aviation of 36 M € (first quarter 2013: 83 M €). The Dassault Aviation equity
accounted-for income in the first quarter 2014 includes a positive catch-up on 2013 results.

13

13.05.2014

EADS N.V. (Airbus Group)
Unaudited Condensed IFRS Consolidated Financial Information for the three-month period
ended 31 March 2014

Finance result amounts to -107 M € (first quarter 2013 adjusted: -273 M €) comprising interest
result of -94 M € (first quarter 2013 adjusted: -86 M €). Other financial result amounts to -13 M €(first quarter 2013 adjusted: -187 M €) and mainly includes the negative impact from unwinding of
discounted provisions (-41 M €, first quarter 2013: -37 M €) nearly compensated by the positive
impact from foreign exchange valuation of monetary items (+36 M €, first quarter 2013: -89 M €).
The income tax expense of -166 M € (first quarter 2013 adjusted: -77 M €) corresponds to aneffective income tax rate of 28% (first quarter 2013 adjusted: 25%).

7. Significant items of the statement of financial positionNon-current assets
Intangible assets of 12,508 M € (prior year-end adjusted: 12,500 M €) include 9,866 M € (prioryear-end adjusted: 9,872 M €) of goodwill. This mainly relates to Airbus Commercial (6,680 M €),Airbus Defence & Space (2,877 M €) and Airbus Helicopters (296 M €). The last annual
impairment tests, which were performed in the fourth quarter, led to an impairment charge of 15 M
€ in ‘Others/ HQ/ Conso.’. Capitalization for development costs of the A350 XWB programme
started in the second quarter 2012. In the first quarter 2014, an amount of 49 M € has been
capitalized resulting in a total amount of 770 M €.
Property, plant and equipment increase by +96 M € to 15,750 M € (prior year-end adjusted:
15,654 M €), including leased assets of 343 M € (prior year-end adjusted: 421 M €). The increaseis mainly driven by the A350 programme. Property, plant and equipment also comprise“Investment property” amounting to 68 M € (prior year-end: 69 M €).
Investments in associates under the equity method of 3,844 M € (prior year-end adjusted:
3,858 M €) mainly include the equity investment in Dassault Aviation. The equity investment in
Dassault Aviation includes an IFRS catch-up adjustment for income and other comprehensive
income relating to prior period.
Other investments and other long-term financial assets of 1,727 M € (prior year-end adjusted:
1,756 M €) are related to Airbus for an amount of 777 M € (prior year-end adjusted: 702 M €),mainly concerning the non-current portion of aircraft financing activities.
Other non-current assets mainly comprise non-current derivative financial instruments and noncurrent prepaid expenses. The decrease by -28 M € to 3,699 M € (prior year-end adjusted: 3,727
M €) is mainly caused by the negative variation of the non-current portion of fair values ofderivative financial instruments (-44 M €).
Deferred tax assets decrease by -90 M € to 3,643 M € (prior year-end adjusted: 3,733 M €)..
The fair values of derivative financial instruments are included in other non-current assets(1,949 M €, prior year-end: 1,993 M €), in other current assets (753 M €, prior year-end adjusted:
716 M €), in other non-current liabilities (559 M €, prior year-end: 671 M €) and in other current
liabilities (339 M €, prior year-end adjusted: 302 M €) which corresponds to a total net fair value of+1,804 M € (prior year-end: +1,736 M €). The volume of hedged US dollar-contracts decreases
from 75.9 billion US dollar as at 31 December 2013 to 72.1 billion US dollar as at 31 March 2014.
The US dollar spot rate is 1.38 USD/ € at 31 March 2014 and at 31 December 2013. The average
US dollar hedge rate for the hedge portfolio of the Group remains stable at 1.34 USD/ € as at 31
December 2013 and at 31 March 2014.

14

13.05.2014

EADS N.V. (Airbus Group)
Unaudited Condensed IFRS Consolidated Financial Information for the three-month period
ended 31 March 2014

Non-current securities with a remaining maturity of more than one year increase by +579 M € to
4,877 M € (prior end adjusted: 4,298 M €). The movement is related to the cash management
policy of the Group.

Current assets
Inventories of 25,640 M € (prior year-end adjusted: 24,023 M €) increase by +1,617 M €. This ismainly driven by Airbus (+1,363 M) and Airbus Helicopters (+275 M €).
Trade receivables decrease by -527 M € to 6,101 M € (prior year-end adjusted: 6,628 M €),mainly caused by Airbus Defence & Space (-422 M €) and by Airbus Helicopters (-196 M €).
Other current assets include “Current portion of other long-term financial assets”, “Current otherfinancial assets”, “Current other assets” and “Current tax assets”. The increase of +516 M € to
4,827 M € (prior year-end adjusted: 4,311 M €) comprises among others an increase of VAT
receivables (+396 M €) and of prepaid expenses (+65 M €).
Current securities with a remaining maturity of one year or less correspond to 2,413 M € (prioryear-end adjusted: 2,585 M €) and decrease by -172 M €. (Please refer to “non-current
securities”).
Cash and cash equivalents decrease from 7,201 M € (adjusted) to 5,864 M € (see also note 8“Significant cash flow items”).

Total equity
Equity attributable to equity owners of the parent (including purchased treasury shares) amounts
to 11,357 M € (prior year-end adjusted: 10,864 M €). The increase is mainly due to a net income of+439 M € and by the sale of treasury shares of +111 for LTIP hedging purposes, partly
compensated by changes in accumulated other comprehensive income of -83 M €..
Non-controlling interests decrease to 39 M € (prior year-end adjusted: 42 M €).

Non-current liabilities
Non-current provisions of 9,506 M € (prior year-end adjusted: 9,604 M €) include the non-current
portion of pension provisions which increases by +55 M € to 5,921 M € (prior year-end adjusted:
5,866 M €).
Moreover, other provisions are included in non-current provisions, which decrease by -153 M € to
3,585 M € (prior year-end adjusted: 3,738 M €).
The provision for contract losses as part of other provisions mainly relates to Airbus Defence &Space in conjunction with the A400M and to the A350 XWB programme in Airbus. After 2deliveries in 2013, the A400M programme enters in progressive enhancement of military capability
in a sequence to be negotiated and concluded with the customers. Risks related to cost envelopeand military functionalities are closely monitored.
Included in non-current (and current) provision are costs for the A380 program related to in service
technical issues identified and with solutions defined, which reflects the latest facts andcircumstances. Contractually, Airbus is not liable towardsairliners for losses of use, revenue or
profit or for any other direct, incidentally or consequential damages. However, in view of overall

15

13.05.2014

EADS N.V. (Airbus Group)
Unaudited Condensed IFRS Consolidated Financial Information for the three-month period
ended 31 March 2014

commercial relationships, contracts adjustments may occur, and be considered on a case by casebasis.
Long-term financing liabilities, mainly comprising bonds and liabilities to financial institutions
increase by +9 M € to 3,813 M € (prior year-end adjusted: 3,804 M €).
Other non-current liabilities, comprising “Non-current other financial liabilities”, “Non-current
other liabilities” and “Non-current deferred income”, increase in total by +558 M € to 18,713 M €(prior year-end adjusted: 18,155 M €). Advance payments received increase by +627 M € whereas
the negative fair values of financial instruments decrease by -112 M €.

Current liabilities
Current provisions decrease by -311 M € to 4,911 M € (prior year-end adjusted: 5,222 M €) andcomprise the current portions of pensions (373 M €) and of other provisions (4,538 M €). The
decrease is mainly linked to the A400M Program on which inventories are presented net of therespective portion of the contract loss provision.
Short-term financing liabilities increase by +968 M € to 2,794 M € (prior year-end adjusted:
1,826 M €), mainly due to higher liabilities in the commercial paper programme and to transactions
related to repo agreements (short-term cash collection).
Trade liabilities decrease by -609 M € to 9,059 M € (prior year-end adjusted: 9,668 M €), mainly
at Airbus Defence and Space (-369 M €) and at Airbus (-277 M €).
Other current liabilities include “Current other financial liabilities”, “Current other liabilities” and“Current deferred income”. They decrease by -411 M € to 28,608 M € (prior year-end adjusted:
29,019 M €), mainly due to a decrease of advance payments received (-825 M €) partly
compensated by higher outstanding wages, salaries and holiday payments (+296 M €).

8. Significant cash flow items
Cash (used for) operating activities increases by +923 M € to -1,550 M € (first quarter 2013adjusted: -2,473 M €). Cash (used for) operating activities before changes in other operating
assets and liabilities of +995 M € increases compared to the prior period’s level (first quarter 2013adjusted: +644 M €). Changes in other operating assets and liabilities amount to -2,545 M € (firstquarter 2013 adjusted: -3,117 M €) mainly reflecting an increase in inventories due to a ramp-up
for programmes at Airbus and Airbus Helicopters and due to lower trade liabilities, mainly at Airbus
Defence & Space.
Cash (used for) investing activities amounts to -899 M € (first quarter 2013 adjusted: -944 M €).
This mainly comprises purchases of intangible assets and property, plant and equipment of -553
M € (first quarter 2013 adjusted: -664 M €) (mainly in Airbus) and changes in securities of -402 M €(first quarter 2013 adjusted: -243 M €).
Cash provided by financing activities increases by +581 M € to +1,089 M € (first quarter 2013adjusted: +508 M €). This mainly comprises changes in long-term and short-term financing
liabilities of +962 M € (first quarter 2013 adjusted: +407 M €) (please refer to Note 7 “Significant
items of the statement of financial positions”) and changes in treasury shares of +111 M € (2012:
0 M €).

16

13.05.2014

EADS N.V. (Airbus Group)
Unaudited Condensed IFRS Consolidated Financial Information for the three-month period
ended 31 March 2014

9. Financial instruments
Fair values of financial instruments have been determined with reference to available market
information at the end of the reporting period and the valuation methodologies as described indetail in note 34 b) to the 2013 Consolidated Financial Statements. For the first three months
2014, Airbus Group has aplied the same methodologies for the fair value measurement of financial
instruments. . Considering the variability of their value-determining factors, the use of carrying
amounts for fair values as a proxy and the volume of financial instruments, the fair values
presented herein may not be indicative of the amounts that the Group could realise in a current
market environment. The following items are the main exceptions to this general rule:

31 March 2014
in M €

Financial Instruments
Total
Book Value

359

359

Long-term and short-term financing liabilities

6,607

6,737

31 December 2013
in M €**)*)

Financial Instruments
Total
Book Value*)

Fair Value

Other investments and long-term financial
assets- Equity instruments

Fair Value

Other investments and long-term financial
assets- Equity instruments

359

359

Long-term and short-term financing liabilities

5,630

5,760

*)

For certain unlisted equity investments price quotes are not available and fair values may not be reliably measurable

using valuation techniques because the range of reasonable fair value estimates is significant and the probabilities of thevarious estimates within the range cannot be reasonably assessed. These equity investments are accounted for at cost,
and their fair values as reported in the table above equal their carrying amounts .
**)Previous year’s figures are adjusted due to the application of IFRS 10 and 11.

1713.05.2014

EADS N.V. (Airbus Group)
Unaudited Condensed IFRS Consolidated Financial Information for the three-month period
ended 31 March 2014

The following table allocates the financial assets and liabilities measured at fair value to the threelevels of the fair value hierarchy as of 31 March 2014:

31 March 2014
in M €
Financial assets measured at fair value

Level 1

Level 2

Level 3

Total

203

-

-

203

-

2,671

32

2,703

Securities

7,284

6

-

7,290

Cash equivalents

2,224

1,990

-

4,214

Total

9,711

4,667

32

14,410Derivative instruments

-

(898)

-

(898)

Other liabilities

-

-

(180)

(180)

-

(898)

(180)

(1,077)

Level 1

Level 2

Level 3

Total

252

-

-

252

-

2,677

34

2,711

Securities

6,876

7

-

6,883

Cash equivalents

3,777

1,286

-

5,063

Total

10,9053,970

34

14,909Derivative instruments

-

(974)

-

(974)

Other liabilities

-

-

(180)

(180)

-

(974)

(180)

(1,154)

Other investments and long-term financial
assetsEquity Instruments
Other non-current and current assets
Derivative Instruments

Financial liabilities measured at fair value

Total
31 December 2013**)in M €
Financial assets measured at fair value
Other investments and long-term financial
assetsEquity Instruments
Other non-current and current assets
Derivative Instruments

Financial liabilities measured at fair value

Total
**)

Previous year’s figures are adjusted due to the application of IFRS 10 and 11

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

18

13.05.2014

EADS N.V. (Airbus Group)
Unaudited Condensed IFRS Consolidated Financial Information for the three-month period
ended 31 March 2014

The development of financial instruments of Level 3 is as follows:
Total gains orlosses in

Financial assets andliabilities on Level 3

Balance at
1 January profit
2014 or lossother
Balancecompreathensive
Settlem Reclassi- 31 March
income Issues
ents fication
2014

Financial assets – Derivative instruments
Commodity swap
agreements

26

Other derivative
instruments
Total

8
34

7

(129)

-

(51)
(180)

-

7

-

-

(9)

-

24

-

(9)

-

8
32

-

Financial liabilities – Other liabilities
Written put options on
non-controlling interests
Earn-out agreements
Total

(129)
-

-

-

-

(51)
(180)

Total gains orlosses in

Financial assets andliabilities on Level 3

Balance at
1 January profit
2013 or lossother
Balancecompreathensive
Settlem Reclassi- 31 Decem
income Issues
ents fication ber 2013

Financial assets - Derivative instruments
Commodity swap
agreements

41

35

-

-

(50)

-

26

Other derivative
instruments
Total

8
49

(1)
34

1
1

-

(50)

-

8
34

Written put options on
non-controlling interests

-

-

1

(101)

3

(32)1)(129)

Earn-out agreements

-

1

-

-

-

(52)2)

(51)

(5)
(5)

1

1

(101)

5
8

(84)

(0)
(180)

Financial liabilities – Other liabilities

Other
Total
1)

Reclassification of 32 M € for written put options on non-controlling interest issued in 2012 from financial liabilities
recognised at amortised cost during 2013.

2)

52 M € of earn-outs for entities acquired in 2012 have been recorded within Other Provisions of 2012 Consolidated
Financial Statements and have been reclassified to Level 3 financial liabilities at fair value through profit or loss.

The Financial assets measured at fair value that are classified as Level 3 mainly consist of shortterm commodity contracts whose notional amounts vary with the actual volumes of certain
commodity purchases made by the Group in specific months.
A deviation of 10% of actual monthly volumes purchased from expected monthly volumes
purchased would increase or decrease (depending on whether actual volumes are 10% more or
10% less than expected volumes) the total Level 3 fair value of these short term commodity
contracts by 2 M € (prior year-end: 3 M €).
The Financial liabilities measured at fair value that are classified as Level 3 consist of several
written put options on non-controlling interest (“NCI puts”) of Airbus Group subsidiaries. The fair19

13.05.2014

EADS N.V. (Airbus Group)
Unaudited Condensed IFRS Consolidated Financial Information for the three-month period
ended 31 March 2014

values of these NCI puts vary, among otherswith the weighted average cost of capital (”WACC”)
and the growth rate used to determine the terminal value. An increase (decrease) of the discountrates by 50 basis points results in a decrease (increase) of the NCI put values by 5 M € (6 M €).
An increase (decrease) in the growth rates by 50 basis point increases (decreases) the NCI put
values by 5 M € (4 M €) respectively. (Changes correspond to those disclosed for prior year-end).

10. Number of shares
The total number of shares issued is 783,639,993 and 783,157,635 as of 31 March 2014 and as of
31 December 2013. The inrease is mainly caused by the issuance of new shares. The Group’s
shares are exclusively ordinary shares with a par value of 1.00 €.
During the first quarter 2014, the number of treasury stock held by Airbus Group decreased from2,835,121 as of 31 December 2013 to 572,118 as of 31 March 2014. While most of these shareswere sold back to the market, 56,993 shares (in the first three months 2013: 0 shares) werecancelled.
In 2014, the Group issued 539,351 new shares due to the exercise of stock options (in the first
three months 2013: 3,758,204 new shares).

11. Earnings per share
Basic earnings per share are calculated by dividing profit for the period attributable to equity
owners of the parent (Net income) by the weighted average number of issued ordinary shares
during the period, excluding ordinary shares purchased by the Group and held as treasury shares:
1 January to
31 March 2014
Net income attributable to equity owners of the parent*)

Weighted average number of ordinary shares outstanding
Basic earnings per share*)*)

1 January to
31 March 2013

439 M €

227 M €

780,878,364

823,522,587

0.56 €

0.28 €

Previous year’s figures are adjusted due to the application of IFRS 11.

For calculation of the diluted earnings per share, the weighted average number of ordinary
shares is adjusted to assume conversion of all potential ordinary shares. The Group’s categories
of dilutive potential ordinary shares are stock options and share-settled performance units for
Executive Committee members relating to long-term incentive plans for 2009 to 2013. Since in thefirst three months 2014 the average price of Airbus Group shares exceeded the exercise price ofththth
the 6 , 7 and 8 stock option plan as well as the share-settled performance units (in the first
th
th
th
th
three months 2013: the 5 , 6 , 7 and 8 stock option plan), 2,483,434 potential shares (in thefirst three months 2013: 1,602,232 shares) were considered in the calculation of diluted earnings
per share.

20

13.05.2014

EADS N.V. (Airbus Group)
Unaudited Condensed IFRS Consolidated Financial Information for the three-month period
ended 31 March 2014

1 January to
31 March2014
Net income attributable to equity owners of the parent*)

Weighted average number of ordinary shares outstanding(diluted)
Diluted earnings per share*)

1 January to
31 March 2013

439 M €

227 M €

783,361,798

825,124,819

0.56 €

0.28 €*) Previous year’s figures are adjusted due to the application of IFRS 11.

12. Related party transactions
In the first three months 2014 the Group considers that neither governmental nor othershareholders are meeting the definition of a related party under IAS 24.
In the first months 2013, transactions with related parties included the French government,
Daimler AG, Lagardère group and the Spanish government (SEPI) and its related entities. The
Group has entered into various transactions with related entities that have all been carried out inthe normal course of business.

13. Number of employees
The number of employees as at 31 March 2014 is 138,924 as compared to 138,830 (adjusted) as
at 31 December 2013.

14. Litigation and claims
Airbus Group is involved from time to time in various legal and arbitration proceedings in theordinary course of its business, the most significant of which are described below. Other thanas described below, Airbus Group is not aware of any material governmental, legal or arbitration
proceedings (including any such proceedings which are pending or threatened), during a period
covering at least the previous twelve months which may have, or have had in the recent pastsignificant effects on EADS N.V.’s or the Group’s financial position or profitability.

WTO
Although Airbus Group is not a party, Airbus Group is supporting the European Commission inlitigation before the WTO. Following its unilateral withdrawal from the 1992 EU-US Agreement on
Trade in Large Civil Aircraft, the US lodged a request on 6 October 2004 to initiate proceedings
before the WTO. On the same day, the EU launched a parallel WTO case against the US in
relation to its subsidies to Boeing.
On 1 June 2011, the WTO adopted the Appellate Body’s final report in 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

21

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EADS N.V. (Airbus Group)
Unaudited Condensed IFRS Consolidated Financial Information for the three-month period
ended 31 March 2014

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. On 23 September 2012, the US 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 EU did notagree, the matter is now under WTO panel review pursuant to WTO rules.
Exact timing of further steps in the WTO litigation process is subject to further rulings and tonegotiations between the US and the EU. Unless a settlement, which is currently not underdiscussion, is reached between the parties, the litigation is expected to continue for several years.

Securities Litigation
Following the dismissal of charges brought by the French Autorité des marchés financiers foralleged 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 carried out an investigation based on the samefacts. In November 2013 the investigating judge decided to send the case to trial (renvoi devant letribunal correctionnel) against 7 current and former executives that exercised their stock options inMarch 2006 as well as two former shareholders. All other parties will not stand trial.

GPT
Prompted by a whistleblower’s allegations, the Company has conducted internal audits andcommissioned an external investigation relating to GPT Special Project Management Ltd. (“GPT”),
a subsidiary that Airbus Group acquired in 2007. The allegations called into question a service
contract entered into by GPT prior to its acquisition by Airbus Group, relating to activities
conducted by GPT in Saudi Arabia. Following the allegations, Airbus Group conductedcomprehensive internal audits in 2010 that did not detect any violations of law. The UK Serious
Fraud Office (the “SFO”) subsequently commenced a review of the matter. In 2011, Airbus Groupretained 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, nothingcame to PwC’s attention to suggest that improper payments were made by GPT. Further, thereview did not find evidence to suggest that GPT or through GPT, any other Group company,
asked specific third parties to make 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
Airbus Group to the SFO in March 2012. Separately, in August 2012, the SFO announced that it
had opened a formal criminal investigation into the matter. Airbus Group is cooperating fully withthis investigation.

Eurofighter Austria
In March 2012, the German public prosecutor, following a request for assistance by the Austrian
public prosecutor, launched a criminal investigation into alleged bribery, tax evasion and breach oftrust by current and former employees of EADS Deutschland GmbH and Eurofighter Jagdflugzeug

2213.05.2014

EADS N.V. (Airbus Group)
Unaudited Condensed IFRS Consolidated Financial Information for the three-month period
ended 31 March 2014

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 toconduct an independent review of the matter.

Commercial disputes
In May 2013, the Group has been notified of a commercial dispute following the decision taken by
the Group to cease a partnership for sales support activities in some local markets abroad. The
Group believes it has solid grounds to legally object to the alleged breach of a commercial
agreement. However, the consequences of this dispute and the potential outcome of any future
procedures to be initiated by the parties cannot be assessed at this stage.
In the course of another commercial dispute, the Group has received in the third quarter 2013 astatement of claim alleging liability for refunding part of the purchase price of a large contract
which the customer claims it was not obliged to pay. The Group believes that this claim whichgoes back many years ago should be dismissed in principle. As always, the outcome of a legal
proceeding is uncertain.

15. Subsequent events
On 2 April 2014, Airbus Group successfully issued a 1 billion € bond with a 10 year-maturity. The
bond will pay a 2.375% coupon, which is the lowest ever for the Group.

23

13.05.2014