EADS N.V.
Unaudited Condensed Consolidated Financial Information for the year ended December 31, 2005

Year 2005 Report

Unaudited Condensed Consolidated
Financial Information of EADS N.V.
for the year 2005

Unaudited Condensed IFRS Consolidated Income Statements ...………………………….….......…2
Unaudited Condensed IFRS Consolidated Balance Sheets….…..………….……………...……....…3
Unaudited Condensed IFRS Consolidated Cash Flow Statements……………....…...…………...…4
Unaudited Condensed IFRS Consolidated Statements of Changes in equity attributable toequity holders of the parent and minority interests…….………………………..………………………5
Explanations to the Unaudited Condensed IFRS Consolidated Financial Statements
as at December 31st, 2005...….…………………………………………….…………...………………...…..5
1. The Company…………………………………………………………………………………………..5
2. Accounting policies……………….………………………………………………..………………...5
3. Changes in the consolidation perimeter of EADS…………………………....…….….…….…7
4. Segment information………………………………..…………..……………………………………8
5. EBIT pre goodwill impairment and exceptionals…..……..…………………………..…………96. Significant profit and loss statement items……………………..………….………..……..……97. Significant balance sheet items…………………...…………………………………...…..….....10
8. Significant cash flow items…………………………………………………………...…..……….12
9. Contingencies………………………………………………………………………………………..12
10. Number of shares…………………………………………………………...……………….…...…13
11. Earnings per share……………………………………..………………………...….…..………….13
12. Related party transactions ………………..…………………...……………...……………..……14
13. Number of employees ……………………………….……………………………..……....………14

1

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EADS N.V.
Unaudited Condensed Consolidated Financial Information for the year ended December 31, 2005

Unaudited Condensed IFRS Consolidated Income Statements

January 1 December 31, 2005
Revenues
Cost of sales *)Gross margin
Selling, administrative & otherexpenses
Research and development
expensesM€
34,206-27,530
6,676

January 1 December 31, 2004

%
100
-80
20

M€
31,761-25,5226,239-2,336-7-2,075

Deviation

%
100
-80
20

M€
2,445
-2,008437%-2,296

-7

-40

2

-6

-2,126

-7

51

-2

222

0

314

1

-92

-29

8
8
7

Other income
Share of profit from associates andother income from investments
Profit before finance costs andincome taxes
Finance costs
Income taxes
Profit for the period

225

1

84

0

141

168

2,712
-177
-825
1,710

8
-1
-2
5

2,215
-330
-664
1,221

7
-1
-2
4

497
153
-161
489

22
-46
24
40

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

1,676
34

5
0

1,203
18

4
0

473
16

39
89

Earnings per share
Basic *)
Diluted *)

€

€

€

2.11
2.09

1.50
1.50

0.61
0.59

*) For retrospective adjustments concerning 2004 please refer to Note 2 “Accounting policies”.

2

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EADS N.V.
Unaudited Condensed Consolidated Financial Information for the year ended December 31, 2005

Unaudited Condensed IFRS Consolidated Balance Sheets
December 31, 2005
M€
Non-current assets
Intangible assets *)Property, Plant and Equipment *)Investment in associates
Other investments and long-term
financial assets
Deferred tax assets *)Non-current securities
Non-current other assets *)Current assets
Inventories
Trade receivables
Other current assets *)Current securities
Cash and cash equivalents
Non-current assets classified asheld for sale
Total assets
Total equity
Capital StockReserves *)Accumulated other comprehensive
incomeTreasury shares
Minority interests *)Non-current liabilities
Non-current provisions *)Long-term financial liabilities *)Deferred tax liabilities
Other non-current liabilities
Current liabilities
Current provisions
Short-term financial liabilities *)Liability for puttable instruments *)Trade liabilities
Current tax liabilities
Other current liabilities
Liabilities directly associated with
non-current assets held for sale
Total equity and liabilities

December 31, 2004%

M€

Deviation

%

M€

%

11,052
13,951
1,908

16
19
3

10,54912,956
1,738

15
19
3

503
995
170

5
8
10

1,938

3

2,110

3

-172

-8

2,557
1,011
3,610
36,027

4
1
5
51

2,548
466
7,096
37,463

4
1
10
55

9
545
-3,486-1,436

0
117
-49
-4

15,425
4,802
3,675
29
9,546
33,477

22
7
5
0
14
48

12,334
4,406
5,242
0
8,718
30,700

18
6
8
0
13
45

3,091
396
-1,567
29
828
2,777

25
9
-30

881

1

0

0

881

70,385100

68,163

100

2,222

3

818
9,371

1
13

810
7,899

1
12

8
1,472

1
19

3,982

6

7,678

11

-3,696-48-445
13,726
176
13,902

0
20
0
20

-177
16,210144
16,354

0
24
0
24

-268
-2,48432-2,452

151
-15
22
-15

6,879
4,189
2,376
11,29524,739

10
6
3
16
35

6,074
4,405
4,134
10,267
24,880

9
6
6
15
36

805
-216
-1,758
1,028
-141

13
-5
-43
10
-1

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

4
1
5
10
0
25
45

2,350
818
3,500
5,860
178
14,22326,929

3
1
5
9
0
22
40

377
90
0
774
-4
3,516
4,753

16
11
0
13
-2
25
18

62

0

0

0

62

70,385100

68,163

100

2,222

9
9

3

*) For retrospective adjustments as of December 31st, 2004 please refer to Note 2 “Accounting
policies”.

3

07.03.2006

EADS N.V.
Unaudited Condensed Consolidated Financial Information for the year ended December 31, 2005

Unaudited Condensed IFRS Consolidated Cash Flow Statements
January 1 - December January 1 - December
31, 2005
31, 2004
M€
M€
Profit for the period attributable to equity holders of the parent(Net income) *)Profit attributable to minority interests *)Adjustments to reconcile profit for the period (net income) to cash
provided by operating activities
Depreciation and amortization
Valuation adjustments and CTA release *)Deferred tax expense
Results of disposal of non-current assets
Results of companies accounted for by the equity method
Change in current and non-current provisions andcurrent tax assets / liabilities
Change in other operating assets and liabilities
Cash provided by operating activities- Purchase of intangible assets, PPE- Proceeds from disposals of intangible assets, PPE- Acquisitions of subsidiaries (net of cash)- Proceeds from disposals of subsidiaries (net of cash)- Payments for investments in associates and otherinvestments and long-term financial assets- Proceeds from disposals of associates and otherinvestments and long-term financial assets- Dividends paid by companies valued at equity- Increase in equipment of leased assets- Proceeds from disposals of leased assets- Increase in finance lease receivables- Decrease in finance lease receivables
Change of securities
Change in cash from changes in consolidation
Cash (used for) investing activities
Change in long-term and short-term financial liabilities
Cash distribution to EADS N.V. shareholders
Payments related to liability for puttable instruments
Capital increase
Purchase of treasury shares
Cash (used for) provided by financing activities
Effect of foreign exchange rate changes and other valuation
adjustments on cash and cash equivalents
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

1,676
34

1,203
18

1,653
261
386
-170
-210

1,621
-188
537
-8
-88

238
1,239
5,107
-2,818
101
-131
89

-237
2,155
5,013
-3,017
36
-100
0

-659

-482

485
36
-40
256
-219
85
-559
12
-3,362
-344
-396
-93
187
-288
-934

492
36
-656
74
-261
110
10
9
-3,749
474
-320
-64
43
-81
52

17
828

-2
1,314

8,718
9,546

7,404
8,718

*) For retrospective adjustments concerning 2004 please refer to Note 2 “Accounting policies”.
As of December 31st, 2005, EADS’ cash position (stated as cash and cash equivalents in theunaudited consolidated cash flow statements) includes 1,202 M € (687 M € as of December 31st,
2004) representing the amount Airbus has deposited at BAE Systems. Additionally included are 579 M€ (602 M € as of December 31st, 2004), which represent EADS’ share in MBDA’s cash and cash
equivalents, deposited at BAe Systems and Finmeccanica. These funds are available for EADS upon
demand.

4

07.03.2006

EADS N.V.
Unaudited Condensed Consolidated Financial Information for the year ended December 31, 2005

Unaudited Condensed IFRS Consolidated Statements of Changes in equity
attributable to equity holders of the parent and minority interests
Equity attributable toequity holders of theparentin M €

Minority interests

Balance at January 1, 2004

16,1492,179

Retrospective adjustments *)-1,000-2,053

Balance at January 1, 2004, adjusted

15,149126

Capital Increase

43

Profit for the period *)1,203

Cash distribution to shareholders

-320

OCI

204

Purchases of treasury shares-81

Others12

Balance at December 31, 2004

16,210Capital Increase

187

Profit for the period

1,676

Cash distribution to shareholders

18

144
34

-396

OCI

-3,696

Purchases of treasury shares

-2

-288

Others33

Balance at December 31, 2005

13,726176*) For retrospective adjustments as of January 1st, 2004 please refer to Note 2 “Accounting policy”.

Explanations to the Unaudited Condensed IFRS Consolidated Financial
Statements as at December 31st, 2005
1. The Company
The accompanying Condensed Interim Consolidated Financial Statements (unaudited – anunqualified audit report on the 2005 IFRS Consolidated Financial Statements is expected fromGroup auditors) present the operations of European Aeronautic Defence and Space Company
EADS N.V. and its subsidiaries (“EADS” or the “Group”), a Dutch public limited liability company(naamloze vennootschap) legally seated in Amsterdam (Le Carré, Beechavenue 130-132, 1119
PR, Schiphol-Rijk, The Netherlands), and are prepared and reported in Euros (“€”). EADS’ corebusiness is the manufacturing of commercial aircraft, civil helicopters, commercial space launchvehicles, missiles, military aircraft, satellites, defence electronics and rendering of services related
to these activities.
2. Accounting policies
EADS’ Condensed Consolidated Financial Statements are prepared in accordance with
International Financial Reporting Standards (“IFRS”), adopted by the International AccountingStandards Board (“IASB”) as endorsed by the European Union (EU). They comprise (i) IFRS, (ii)International Accounting Standards (“IAS”) and (iii) Interpretations originated by the International
Financial Reporting Interpretations Committee (IFRIC) or former Standing Interpretations
Committee (“SIC”).

5

07.03.2006

EADS N.V.
Unaudited Condensed Consolidated Financial Information for the year ended December 31, 2005

As of January 1st, 2005, EADS adopted the following revisions and amendments to existingStandards and new Standards and Interpretations as required by the following announcements
released by the IASB:EADS has applied thirteen revised International Accounting Standards (IASs) in conjunction with
the Improvements Project (IASs 1, 2, 8, 10, 16, 17, 21, 24, 27, 28, 31, 33, 40), new IFRS 2 “Share
Based Payment”, IFRS 4 “Insurance Contracts” and IFRS 5 “Non-current Assets Held for Sale andDiscontinued Operations”, new IFRIC 1 “Changes in Existing Decommissioning, Restoration and
Similar Liabilities”, IFRIC 2 “Members’ Shares in Co-operative Entities and Similar Instruments”
and IFRIC 4 “Determining whether an Arrangement contains a Lease” as well as amendments to
IAS 1 (August 2005), IAS 19 (December 2004), IAS 32 (March 2004), IAS 39 (March 2004) and to
SIC 12 “Consolidation – Special Purpose Entities”.

IFRS 2 Share-based Payment —The revised accounting policy for share-based paymenttransactions is described below. The main impact of IFRS 2 on the Group’s Consolidated Financial
Statements is the recognition of an expense and a corresponding entry within equity for senior
executive and employees’ stock options and employee stock ownership plans. In accordance withthe transition rules EADS applied the Standard retrospectively to two equity settled plans, whichwere granted after November 7th, 2002 and not vested as of January 1st, 2005. (For the effect onprevious year figure, please refer to Note 6.)
IAS 1 Presentation of Financial Statements — The effect of the application of the amended
standard is a revised presentation of the Consolidated Balance Sheet. All assets and liabilities are
now classified on the face of EADS Consolidated Balance Sheet as either current or non-current
depending on their nature. An asset is qualified as current when it is expected to be realised in
EADS’ normal operating cycle or when it is held primarily for the purpose of being traded. A liability
is qualified as current when it is expected to be settled in EADS’ normal operating cycle. Financial
liabilities are classified as current if they are due within twelve months after the balance sheet
date. All other assets and liabilities are classified as non-current.
In addition, minority interests are presented within total equity. Prior period’s Consolidated Balance
Sheet has been adjusted consistently.
IAS 16 Property, Plant and Equipment — As of January 1st, 2005 EADS applied the component
approach as set out in the revised standard. Under this approach foreseeable costs of major futureservicing and major parts (components) to be replaced during the life-time of an item of property,
plant and equipment are depreciated separately over their respective useful lives.
The revised guidance in IAS 16 “Property, plant and equipment“ requires to include within the costof an item of property, plant and equipment, the initial estimate of costs of dismantling andremoving the item and restoring the site on which it is located. A provision presenting the asset
retirement obligation is recognised in the same amount at the same date in accordance with IAS
37 “Provisions, Contingent Liabilities and Contingent Assets“.
IAS 32 Financial Instruments: Disclosure and Presentation (revised 2004) — Since January
1st, 2005, EADS applies revised IAS 32 “Financial Instruments: Disclosure and Presentation”(revised 2004). Amongst others, revised IAS 32 provides modified guidance whether a share in an
entity should be classified as equity or as financial liability. Accordingly, under certain
circumstances, an entity shall record a financial liability rather than an equity instrument for the
exercise price of a written put on the entity’s equity.
As part of the Airbus business combination in 2001, the option granted to BAE Systems to put its
20% stake in Airbus is such a written put option. As such EADS has the obligation to purchase

6

07.03.2006

EADS N.V.
Unaudited Condensed Consolidated Financial Information for the year ended December 31, 2005

these minority shares whenever the minority shareholder requests it, limited to a revolving yearly
window period for an amount equal to the fair value of the shares at the time the option is
exercised, to be paid in cash or an equivalent amount of EADS shares. Following revised IAS 32
and despite BAE Systems (legal) minority rights in Airbus, the related interest is now to be
regarded as financial liability in the EADS Consolidated Financial Statements, to be stated at fairvalue. The liability for the put option has been measured by applying a choice of different valuation
techniques, based on best estimates currently available, and is presented in a separate line of the
EADS Consolidated Balance Sheet “Liability for puttable instruments”.
Following IAS 8 “Accounting Policies, Changes in Accounting Estimates and Errors”, the adoptionof revised IAS 32 is treated as a change in accounting policy firstly effecting EADS’ Consolidated
Financial Statements as of December 31st, 2005 with corresponding adjustments to the priorperiods presented. The historical minority interests for BAE Systems’ 20% stake in Airbus at thetime of the business combination in 2001 have been replaced by the posting of a liability forputtable instruments, the difference between those two amounts being accounted for against
consolidated total equity. Prior years dividend payments to BAE Systems have been treated as
partial repayments, thus consequently reducing the liability for puttable instruments. All changes tothe fair value have been treated as contingent consideration in a business combination inaccordance with IFRS 3 “Business Combinations” and led to adjustments of goodwill. (For theeffect on previous year figures and the impact on earnings per share, please refer to Note 6, 7 and
11).
IFRIC 4 Determining whether an Arrangement contains a Lease — Certain contracts that do
not take the legal form of a lease convey the right to use an asset. This is often the case inconnection with service contracts. In accordance with the transitional provisions of the Standard,
EADS identified such contracts as of January 1st, 2005 and accounted for the lease element inaccordance with IAS 17 “Leases”.

Besides consequential changes as mentioned above the accounting policies used in the
preparation of the Condensed Consolidated Financial Statements are consistent with those usedin the annual Consolidated Financial Statements for the year ended December 31, 2004, which
are disclosed as an integral part of the Group’s Annual Report 2004. The annual Consolidated
Financial Statements 2005 were authorised for issue by EADS’ Board of Directors on March 7,
2006.
These Condensed Consolidated Financial Statements should be read in conjunction with theannual IFRS Consolidated Financial Statements 2004.
3. Changes in the consolidation perimeter of EADSOn February 28, 2005, EADS sold its Enterprise Telephony Business, which comprises its civil
telecommunication activities, to Aastra Technologies Limited, Concord / Canada .
Furthermore, the Group acquired in 2005 Nokia’s Professional Mobile Radio – PMR activities(EADS Secure Networks Oy) from Nokia. The initial accounting for this business combination isdetermined on a provisional basis.
On November 30th, 2005 EADS sold its 50% participation in TDA – Armements S.A.S. to Thales.
Apart from these transactions, other acquisitions or disposals by the Group are not material.

7

07.03.2006

EADS N.V.
Unaudited Condensed Consolidated Financial Information for the year ended December 31, 2005

4. Segment information
The Group operates in five divisions (segments) which reflect the internal organizational andmanagement structure according to the nature of the products and services provided. Following
recent changes in the EADS structure, the Aeronautics Division was dissolved end of June 2005
and split into Eurocopter Division and Other Businesses. Segment figures have been restated inaccordance with this new structure.
• Airbus — Development, manufacturing, marketing and sale of commercial jet aircraft of morethan 100 seats and the development and manufacturing of aircraft for military use.
• Military Transport Aircraft — Development, manufacturing, marketing and sale of militarytransport aircraft and special mission aircraft.
• Eurocopter — Development, manufacturing, marketing and sale of civil and military helicoptersand maintenance services.
• Defence & Security Systems — Development, manufacturing, marketing and sale of missiles
systems; military combat and training aircraft; provision of defence electronics, defence-related
telecommunications solutions; and logistics, training, testing, engineering and other related
services.
•

Space — Development, manufacturing, marketing and sale of satellites, orbital infrastructuresand launchers; and provision of space services.

The following table presents information with respect to the Group’s business segments.
Consolidation effects, the holding function of EADS headquarters and other activities not allocableto the divisions are disclosed in the column “HQ/ Conso.”. “Other Businesses” comprises thedevelopment, manufacturing, marketing and sale of regional turboprop aircraft and lightcommercial aircraft as well as civil and military aircraft conversion and maintenance services.

in M €

AirbusMilitary
Transport
AircraftEurocopter

Defence &Security
SystemsOther
HQ/ Conso.
Businesses

Space

Consolidated

Year ended December 31, 2005
Revenues

22,179

763

3,211

5,636

2,698

1,155

-1,43634,206

Research anddevelopment
expenses-1,659

-18

-70

-207

-58

-6

-57

-2,075

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

2,307

48

212

201

58

-171

197

2,852

Year ended December 31, 2004
Revenues

20,224

1,304

2,786

5,385

2,592

1,123

-1,65331,761

Research anddevelopment
expenses-1,734

-26

-61

-185

-61

-7

-52

-2,126

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

1,919

26

201

226

9

2

49

2,432

8

07.03.2006

EADS N.V.
Unaudited Condensed Consolidated Financial Information for the year ended December 31, 2005

5. EBIT pre goodwill impairment and exceptionals
EADS uses EBIT pre goodwill impairment and exceptionals as a key indicator of its economic
performance. The term “exceptionals” refers to such items as amortization expenses of fair value
adjustments relating to the EADS merger, the Airbus combination and the formation of MBDA, as
well as impairment charges thereon. EBIT pre goodwill impairment and exceptionals is treated bymanagement as a key indicator to measure the segments’ economic performances.
A reconciliation from Profit before finance costs and income taxes to EBIT pre goodwill impairment
and exceptionals is set forth in the following table (in M €):in M €
Profit before finance costs and income taxes
Fair value adjustments
EBIT pre goodwill impairment and exceptionals

January 1Dec. 31, 2005

January 1Dec. 31, 2004

2,712

2,215

140

217

2,852

2,432

6. Significant profit and loss statement items
The Gross Margin increases by M€ +437 to M€ 6,676 compared to M€ 6,239 in 2004. The
increase mainly results from Airbus (M€ +335).
Other income decreases by M€ -92 to M€ 222. In 2004, it included the release of the provision for
VT 1 claim (M€ -106).
Research and development expenses of 2,075 M € (2004: 2,126 M €) mainly decrease becauseof the entry of the A 380 passenger version into the series production phase and increased
capitalized development costs for A 380. In 2005, EADS capitalized 259 M € of development costs
for A 380 (in 2004: 152 M €).
Share of profit from associates and other income from investments of 225 M € (2004: 84 M€) is mainly influenced by the result of Dassault Aviation of 205 M € (2004: 78 M €). The increaseis mainly due to positive 2004 IFRS-catch up adjustments accounted for of +64 M € in 2005
compared to negative IFRS-catch up adjustments of -33 M € accounted for in 2004.
The improvement in finance costs to -177 M € (2004: -330 M €) mainly results from a lower net
interest charge of -155 M € (2004: -275 M €), mainly due to a higher net cash position andcustomer financing at Airbus.
Income taxes of -825 M € (2004: -664 M €) result in an income tax rate of 33 % (2004: 35 %).
Profit for the period attributable to minority interest of 34 M € (2004: 18 M €) mainly relates toFinmeccanicca for its share in result of MBDA.
Profit for the period attributable to equity holders of the parent (Net income) amounts to
1,676 M € (prior year :1,203 M €). The profit for 2004 was adjusted due to the retrospective
application of IFRS 2 “Share-based Payment” amounting to -12 M € and revised IAS 32 with anamount of +185 M €.

907.03.2006

EADS N.V.
Unaudited Condensed Consolidated Financial Information for the year ended December 31, 2005

7. Significant balance sheet items
Non-current assets
Intangible assets of 11,052 M € (prior year: 10,549 M €) include 10,167 M € (prior year: 10,001 M€) of Goodwill. It mainly stems from Airbus (6,987 M €), Defence & Security Systems (2,469 M €),Space (559 M €) and Eurocopter (111 M €). The annual impairment tests, which were performedat the end of the year, did not lead to any impairment. The increase is mainly caused by therevaluation of the contingent consideration with regard to the BAE Systems put option of +93 M €and the acquisition of Nokia (+44 M €, see Note 3).
Eliminating foreign exchange-rate effects of +369 M €, property, plant and equipment increaseby +626 M € to 13,951 M € (prior year: 12,956 M €), including leased assets of 2,385 M €. Most of
the increase is attributable to Airbus, due to significant capital expenditures related to the A380
program and to the Space Division. Property, plant and equipment comprises “Investment
property” amounting to 134 M € (prior year: 159 M €).
Investment in associates of 1,908 M € (prior year: 1,738 M €) mainly increases due to thechange in the equity investment of Dassault Aviation, amounting to 1,867 M € (prior year: 1,705 M€).
Other investments and long-term financial assets of 1,938 M € (prior year: 2,110 M €) areallocated to Airbus in the amount of 1,242 M € (prior year: 1,553 M €), mainly concerning the noncurrent portion of aircraft financing activities with a foreign exchange-rate effect of +215 M €.
Deferred tax assets of 2,557 M € (prior year: 2,548 M €) are presented as non-current assets as
required by IAS 1.
Non-current other assets mainly comprise non-current financial instruments and “non-current
prepaid expenses”. The decrease by -3,486 M € to 3,610 M € (prior year: 7,096 M €) is mainly
caused by the variation of the non-current portion of fair values of financial instruments and thereclassification to “other current assets” of those contracts becoming current.
The fair values of financial instruments are included in non-current other assets with an amountof 2,762 M € (prior year: 6,243 M €), in current other assets (1,191 M €, prior year: 2,705 M €), in
non-current provisions (472 M €, prior year: 137 M €) and in current provisions (449 M €, prioryear: 44 M €). While the volume of hedged US dollar-contracts has risen from 40.2 bn US dollar to47.1 bn US dollar, the US dollar exchange rate decreased (USD / € spot rate of 1.18 at December
31st, 2005 vs. 1.36 at December 31st, 2004). The average US dollar hedged rate for the hedge
portfolio of the Group as at December 31st, 2005 increased for the same period (US dollar / € rateof 1.12 as at December 31st, 2005 vs. 1.03 as at December 31st, 2004).

Current assets
Inventories of 15,425 M € (prior year: 12,334 M €) increase by 3,041 M € (without foreignexchange revaluation of +50 M €) in all divisions. This is mainly driven by a higher level of
unfinished goods and services (mainly Airbus for A380 (+1,054 M €) and A400M (+488 M €), thestart of several serial production programs in Eurocopter (+416 M €)) and higher advancepayments made (+647 M €). Inventories are shown with their gross amount. Those advancepayments received, which so far were deducted from inventories are now reclassified to current
and non-current other liabilities. Previous year figure has been adjusted accordingly with anamount of 9,259 M €.
The increase in trade receivables by +396 M € to 4,802 M € (prior year: 4,406 M €) comes to alarge extent from Space (+408 M €).

1007.03.2006

EADS N.V.
Unaudited Condensed Consolidated Financial Information for the year ended December 31, 2005

Other current assets include “Current portion of long-term financial assets”, “Current otherassets”, “Current tax assets” and “Current prepaid expenses”. The decrease of -1,567 M € to
3,675 M € (prior year: 5,242 M €) is caused with -1,514 M € by the variation of the current portionof fair values of financial instruments (see “Financial instruments” under “Non-current assets”).
Cash and cash equivalents increase from 8,718 M € to 9,546 M €.

Total equity
Equity attributable to equity holders of the parent (including treasury shares) amounts to
13,726 M € (prior year: 16,210 M €), mainly resulting from a profit for the period (Net income) of+1,676 M €, offset by a cash distribution to shareholders of -396 M €, a decrease of OCI of -3,696
M €, primarily resulting from changes in fair values as well as consumption of derivative financial
instruments and the purchases of treasury shares of -288 M €.
Minority interests of 176 M € (prior year: 144 M €) mainly represent shares of Finmeccanica in
MBDA. According to revised IAS 32, minority interests for BAE Systems’ share in Airbus areshown as “liability for puttable instruments”.

Non-current liabilities
Non-current provisions of 6,879 M € (prior year: 6,074 M €) comprise the non-current portions ofpension provisions with an increase of +151 M € to 3,900 M € and other provisions, increasing by+654 M € to 2,979 M €. Other provisions include among others aircraft financing activities with anincrease of +110 M € to 1,153 M € (excluding foreign exchange rate effects of +178 M €) andprovisions for derivative financial instruments according to IAS 39 with an increase of +335 M € to472 M €.
Long-term financial liabilities of 4,189 M € (prior year: 4,405 M €), excluding foreign exchangerate effects of +271 M €, decrease by -487 M € in particular due to the refinancing of the Skynet V
program.
Deferred tax liabilities of 2,376 M € (prior year: 4,134 M €) are significantly influenced by thedecrease in the fair value of financial instruments accounted for as “Non-current other assets” and“Other current assets”. They are defined as non-current liabilities.
Other non-current liabilities comprise “Non-current other liabilities” and “Non-current deferredincome”. Without considering foreign exchange-rate effects of +81 M €, other non-current liabilities
increase by +947 M € to 11,295 M € (prior year: 10,267 M €). Other non-current liabilities mainly
include the non-current portion of European Government refundable advances amounting to 4,950
M € (prior year: 4,781 M €) and non-current customer advance payments received of 4,911 M €(prior year: 3,985 M €). Advance payments received are also included for their non-current portion,
which have previously been recorded as a deduction from inventories. Previous year figure has
been adjusted accordingly with an amount of +632 M €. Non current deferred income of 1,324 M €(prior year: 1,490 M €) mainly decreases due to amortization of amounts relating to the RVG
restated portfolio.

Current liabilities
Current provisions slightly increase by +377 M € to 2,727 M € (prior year: 2,350 M €) andcomprise the current portions of pensions (220 M €) and other provisions (2,507 M €). The

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Unaudited Condensed Consolidated Financial Information for the year ended December 31, 2005

increase mainly reflects the revaluation of derivative financial instruments according to IAS 39(+405 M €).
Short-term financial liabilities of 908 M € (prior year: 818 M €), excluding foreign exchange-rate
effects of +18 M €, slightly increase by +72 M €.
As of January 1st, 2005, EADS adopted retrospectively revised IAS 32 and accounted for aliability for puttable instruments of 3,500 M € (prior year: 3,500 M €) for the 20 % interest of
BAE Systems in Airbus.
Without considering foreign exchange rate effects of +66 M €, trade liabilities increase by +708 M€ to 6,634 M € (prior year: 5,860 M €), mainly coming from Airbus (+505 M €) and Space (+136 M€).
Other current liabilities include “Current other liabilities” and “Current deferred income”. Without
considering foreign exchange rate revaluations of +36 M €, they increase by 3,480 M € to 17,739
M € (prior year: 14,223 M €). Other current liabilities mainly comprise current customer advancepayments of 14,078 M € (prior year: 10,884 M €) . The current portion of advance payments, whichhas previously been deducted from inventories is reclassified to other current liabilities. The figureof previous year has been adjusted accordingly with an amount of +8,627 M €.
8. Significant cash flow items
Cash provided by operating activities increases by +94 M € to 5,107 M € (2004: 5,013 M €).
This increase mainly reflects improvements in EADS operations. The positive variation in working
capital (change in other operating assets and liabilities) of 1,239 M € (2004: 2,155 M €) primarily
results from an increase in inventories, more than offset by ongoing customer advance payments.
Cash used for investing activities decreases by +387 M € to -3,362 M € (2004: -3,749 M €). The
outflow is mainly caused by Airbus and Skynet V activities and the net acquisition of securities.
Cash used for financing activities increases by -986 M € to -934 M € (2004: +52 M €). The
outflow mainly contains cash distribution paid to shareholders, repayments of financial liabilities aswell as the purchases of treasury shares.
9. Contingencies
Pension commitments - EADS has several common investments with BAES, of which the mostsignificant in terms of employees are Airbus and MBDA. In respect of each investment, for so longas BAES remains a shareholder, UK employees may stay in the BAES pensions schemes, whichcurrently qualify as multi-employer defined benefit plans. BAES is applying IFRS as of January 1st,
2005. In accordance with IAS 19, BAES has disclosed for its UK defined pension schemes a net(pre tax) pension liability as of December 31st, 2005 in a total amount of 4,659 M GBP. As
participants in the BAES schemes, EADS investments are potentially affected by any shortfall of
BAES schemes. However, the agreements between EADS and BAES have the effect of capping
the contributions that the investment has to make to the pension scheme for a certain period oftime (until July 2011 for Airbus and until December 2007 for MBDA). Any additional contribution
would be paid by BAES. EADS is therefore not exposed to increased contribution payments
resulting from the pension underfunding during the period of the contribution caps. In the course of2005, EADS has requested detailed information about these pension schemes. Based on limited
information made available, EADS has judged this information not to be sufficient to properly
allocate the pension plans’ deficit and is therefore not able to reliably determine its participation inany potential future deficit once the period of contribution caps will have expired. Consequently,

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EADS N.V.
Unaudited Condensed Consolidated Financial Information for the year ended December 31, 2005

EADS continues to expense the contributions made to the pension schemes as if the plans were
defined contribution plans.
10. Number of shares
The total number of shares outstanding is 797,140,426 and 799,550,294 as of December 31st,
2005 and 2004, respectively. EADS’ shares are exclusively ordinary shares with a par value of
1.00 €.
During 2005, EADS repurchased 11,910,287 of its ordinary shares (in 2004: 3,787,523) inconjunction with the share-buyback program. The General shareholders’ meeting on May 11th,
2005 had renewed the authorization given to the Board of Directors to repurchase shares of
EADS. 1,336,358 of these treasury shares (in 2004: 5,686,682 shares), repurchased and held by
the Group, were cancelled.
7,562,110 new shares (in 2004: 362,747 shares) were issued as a result of the exercise of stock
options in compliance with the implemented stock option plans. Under the 2005 Employee Stock
Ownership Plan, 1,938,309 shares were issued in July 2005 (in 2004: 2,017,822 shares).
11. Earnings per share
The net income for 2004 was adjusted due to retrospective application of IFRS 2 and revised IAS
32 in 2004 with an amount of +173 M €.
Basic earnings per share are calculated by dividing profit for the period attributable to equity
holders of the parent (Net income) by the weighted average number of issued ordinary shares
during the period, excluding ordinary shares purchased by the Group and held as treasury shares:
January 1 to
December 31,
2005
Net income attributable to shareholders

January 1 to
December 31,
2004

1,676 M €1,203 M €794,734,220

801,035,035

Basic earnings per share

2.11 €

1.50 €

thereof effect from the initial application of IAS 32 (revised)“Liability for puttable instruments”

0.36 €

0.23 €

thereof effect from the initial application of IFRS 2 “Sharebased Payment”-0.04 €

-0.02 €

Weighted average number of ordinary shares outstanding

For calculation of the diluted earnings per share, the weighted average number of ordinary
shares is adjusted to assume conversion of all potential ordinary shares. The Group’s only
category of dilutive potential ordinary shares is stock options. Since the average price of EADS
shares during 2005 exceeded the exercise price of the stock options under the 1st, 2nd, 3rd, 4th, 5th
and 6th stock option plans (in 2004: 4th and 5th stock option plan) initiated by the Group, theinclusion of the related potential ordinary shares increases the weighted average number ofshares. 5,482,133 shares (2004: 3,047,837 shares) are considered dilutive according to IAS 33.

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EADS N.V.
Unaudited Condensed Consolidated Financial Information for the year ended December 31, 2005

January 1 to
December 31,
2005
Net income attributable to shareholders

January 1 to
December 31,
2004

1,676 M €1,203 M €800,216,353

804,082,872

Diluted earnings per share

2.09 €

1.50 €

thereof effect from the initial application of IAS 32 (revised)“Liability for puttable instruments”

0.36 €

0.23 €

thereof effect from the initial application of IFRS 2 “Sharebased Payment”-0.04 €

-0.01 €

Weighted average number of ordinary shares outstanding(diluted)

12. Related party transactions
The Group has entered into various transactions with related companies in 2005 and 2004 thathave all been carried out in the normal course of business. As is the Group’s policy, all related
party transactions have to be carried out at arm’s length. Transactions with related parties include
the French State, DaimlerChrysler, Lagardère, and SEPI (Spanish State). Except for thetransactions with the French State, such transactions are not considered material to the Groupeither individually or in the aggregate. The transactions with the French State include mainly sales
from the Eurocopter, Defence & Security Systems and Space divisions.
13. Number of employees
The number of employees at December 31st, 2005 is 113,210 as compared to 110,662 at
December 31st, 2004.

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