Airbus SE — Audit Report / Information 2005

Mar 8, 2006

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 to equity 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……………………………………………9
6.	Significant profit and loss statement items……………………………….…………………9
7.	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

Unaudited Condensed IFRS Consolidated Income Statements

	January 1 - December 31, 2005		January 1 - December 31, 2004		Deviation
	M €	%	M €	%	M €	%
Revenues	34,206	100	31,761	100	2,445	8
Cost of sales *)	-27,530	-80	-25,522	-80	-2,008	8
Gross margin	6,676	20	6,239	20	437	7
Selling, administrative & other
expenses	-2,336	-7	-2,296	-7	-40	2
Research and development
expenses	-2,075	-6	-2,126	-7	51	-2
Other income	222	0	314	1	-92	-29
Share of profit from associates and
other income from investments	225	1	84	0	141	168
Profit before finance costs and
income taxes	2,712	8	2,215	7	497	22
Finance costs	-177	-1	-330	-1	153	-46
Income taxes	-825	-2	-664	-2	-161	24
Profit for the period	1,710	5	1,221	4	489	40
Attributable to:
Equity holders of the parent (Net
income) *)	1,676	5	1,203	4	473	39
Minority interests	34	0	18	0	16	89
	€		€		€
Earnings per share
Basic *)	2.11		1.50		0.61
Diluted *)	2.09		1.50		0.59

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

Unaudited Condensed IFRS Consolidated Balance Sheets

	December 31, 2005		December 31, 2004		Deviation
	M €	%	M €	%	M €	%
Non-current assets
Intangible assets *)	11,052	16	10,549	15	503	5
Property, Plant and Equipment *)	13,951	19	12,956	19	995	8
Investment in associates	1,908	3	1,738	3	170	10
Other investments and long-term
financial assets	1,938	3	2,110	3	-172	-8
Deferred tax assets *)	2,557	4	2,548	4	9	0
Non-current securities	1,011	1	466	1	545	117
Non-current other assets *)	3,610	5	7,096	10	-3,486	-49
	36,027	51	37,463	55	-1,436	-4
Current assets
Inventories	15,425	22	12,334	18	3,091	25
Trade receivables	4,802	7	4,406	6	396	9
Other current assets *)	3,675	5	5,242	8	-1,567	-30
Current securities	29	0	0	0	29
Cash and cash equivalents	9,546	14	8,718	13	828	9
	33,477	48	30,700	45	2,777	9
Non-current assets classified as	881	1	0	0	881
held for sale
Total assets	70,385	100	68,163	100	2,222	3
Total equity
Capital Stock	818	1	810	1	8	1
Reserves *)	9,371	13	7,899	12	1,472	19
Accumulated other comprehensive	3,982	6	7,678	11	-3,696	-48
income
Treasury shares	-445 13,726	0 20	-177 16,210	0 24	-268 -2,484	151 -15
Minority interests *)	176	0	144	0	32	22
	13,902	20	16,354	24	-2,452	-15
Non-current liabilities
Non-current provisions *)	6,879	10	6,074	9	805	13
Long-term financial liabilities *)	4,189	6	4,405	6	-216	-5
Deferred tax liabilities	2,376	3	4,134	6	-1,758	-43
Other non-current liabilities	11,295	16	10,267	15	1,028	10
	24,739	35	24,880	36	-141	-1
Current liabilities
Current provisions	2,727	4	2,350	3	377	16
Short-term financial liabilities *)	908	1	818	1	90	11
Liability for puttable instruments *)	3,500	5	3,500	5	0	0
Trade liabilities	6,634	10	5,860	9	774	13
Current tax liabilities	174	0	178	0	-4	-2
Other current liabilities	17,739	25	14,223	22	3,516	25
	31,682	45	26,929	40	4,753	18
Liabilities directly associated with	62	0	0	0	62
non-current assets held for sale
Total equity and liabilities	70,385	100	68,163	100	2,222	3

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

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) *)	1,676	1,203
Profit attributable to minority interests *)	34	18
Adjustments to reconcile profit for the period (net income) to cash
provided by operating activities
Depreciation and amortization	1,653	1,621
Valuation adjustments and CTA release *)	261	-188
Deferred tax expense	386	537
Results of disposal of non-current assets	-170	-8
Results of companies accounted for by the equity method	-210	-88
Change in current and non-current provisions and
current tax assets / liabilities	238	-237
Change in other operating assets and liabilities	1,239	2,155
Cash provided by operating activities	5,107	5,013
- Purchase of intangible assets, PPE	-2,818	-3,017
- Proceeds from disposals of intangible assets, PPE	101	36
- Acquisitions of subsidiaries (net of cash)	-131	-100
- Proceeds from disposals of subsidiaries (net of cash)	89	0
- Payments for investments in associates and other
investments and long-term financial assets	-659	-482
- Proceeds from disposals of associates and other
investments and long-term financial assets	485	492
- Dividends paid by companies valued at equity	36	36
- Increase in equipment of leased assets	-40	-656
- Proceeds from disposals of leased assets	256	74
- Increase in finance lease receivables	-219	-261
- Decrease in finance lease receivables	85	110
Change of securities	-559	10
Change in cash from changes in consolidation	12	9
Cash (used for) investing activities	-3,362	-3,749
Change in long-term and short-term financial liabilities	-344	474
Cash distribution to EADS N.V. shareholders	-396	-320
Payments related to liability for puttable instruments	-93	-64
Capital increase	187	43
Purchase of treasury shares	-288	-81
Cash (used for) provided by financing activities	-934	52
Effect of foreign exchange rate changes and other valuation
adjustments on cash and cash equivalents	17	-2
Net increase in cash and cash equivalents	828	1,314
Cash and cash equivalents at beginning of period	8,718	7,404
Cash and cash equivalents at end of period	9,546	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 the unaudited 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.

Unaudited Condensed IFRS Consolidated Statements of Changes in equity attributable to equity holders of the parent and minority interests

in M €	Equity attributable to equity holders of the parent	Minority interests
Balance at January 1, 2004	16,149	2,179
Retrospective adjustments *)	-1,000	-2,053
Balance at January 1, 2004, adjusted	15,149	126
Capital Increase	43
Profit for the period *)	1,203	18
Cash distribution to shareholders	-320
OCI	204
Purchases of treasury shares	-81
Others	12
Balance at December 31, 2004	16,210	144
Capital Increase	187
Profit for the period	1,676	34
Cash distribution to shareholders	-396
OCI	-3,696	-2
Purchases of treasury shares	-288
Others	33
Balance at December 31, 2005	13,726	176

*) 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 – an unqualified audit report on the 2005 IFRS Consolidated Financial Statements is expected from Group 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' core business is the manufacturing of commercial aircraft, civil helicopters, commercial space launch vehicles, 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 Accounting Standards 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").

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 existing Standards 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 and Discontinued 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 payment transactions 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 with the transition rules EADS applied the Standard retrospectively to two equity settled plans, which were granted after November 7th, 2002 and not vested as of January 1st, 2005. (For the effect on previous 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 future servicing 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 cost of an item of property, plant and equipment, the initial estimate of costs of dismantling and removing 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

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 fair value. 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 adoption of 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 prior periods presented. The historical minority interests for BAE Systems' 20% stake in Airbus at the time of the business combination in 2001 have been replaced by the posting of a liability for puttable 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 to the fair value have been treated as contingent consideration in a business combination in accordance with IFRS 3 "Business Combinations" and led to adjustments of goodwill. (For the effect 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 in connection 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 in accordance 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 used in 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 the annual IFRS Consolidated Financial Statements 2004.

3. Changes in the consolidation perimeter of EADS

On 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 is determined 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.

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 and management 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 in accordance with this new structure.

• Airbus Development, manufacturing, marketing and sale of commercial jet aircraft of more than 100 seats and the development and manufacturing of aircraft for military use.
• Military Transport Aircraft Development, manufacturing, marketing and sale of military transport aircraft and special mission aircraft.
• Eurocopter Development, manufacturing, marketing and sale of civil and military helicopters and 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 infrastructures and 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 allocable to the divisions are disclosed in the column "HQ/ Conso.". "Other Businesses" comprises the development, manufacturing, marketing and sale of regional turboprop aircraft and light commercial aircraft as well as civil and military aircraft conversion and maintenance services.

in M €	Airbus	Military Transport Aircraft	Eurocopter	Defence & Security Systems	Space	Other	Businesses HQ/ Conso.	Consoli dated
Year ended December 31, 2005
Revenues	22,179	763	3,211	5,636	2,698	1,155	-1,436	34,206
Research and development 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	-1,653	31,761
Research and development 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

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 by management 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 €	January 1- Dec. 31, 2005	January 1- Dec. 31, 2004
Profit before finance costs and income taxes	2,712	2,215
Fair value adjustments	140	217
EBIT pre goodwill impairment and exceptionals	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 because of 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 increase is 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 and customer 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 to Finmeccanicca 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 an amount of +185 M €.

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 performed at the end of the year, did not lead to any impairment. The increase is mainly caused by the revaluation 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 increase by +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 the change 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 €) are allocated 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 the reclassification to "other current assets" of those contracts becoming current.

The fair values of financial instruments are included in non-current other assets with an amount of 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 €, prior year: 44 M €). While the volume of hedged US dollar-contracts has risen from 40.2 bn US dollar to 47.1 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 / € rate of 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 foreign exchange 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 €), the start of several serial production programs in Eurocopter (+416 M €)) and higher advance payments made (+647 M €). Inventories are shown with their gross amount. Those advance payments 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 an amount of 9,259 M €.

The increase in trade receivables by +396 M € to 4,802 M € (prior year: 4,406 M €) comes to a large extent from Space (+408 M €).

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

Other current assets include "Current portion of long-term financial assets", "Current other assets", "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 portion of 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 are shown 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 of pension 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 an increase of +110 M € to 1,153 M € (excluding foreign exchange rate effects of +178 M €) and provisions for derivative financial instruments according to IAS 39 with an increase of +335 M € to 472 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 the decrease 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 deferred income". 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 €) and comprise the current portions of pensions (220 M €) and other provisions (2,507 M €). The

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 a liability 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 advance payments of 14,078 M € (prior year: 10,884 M €) . The current portion of advance payments, which has previously been deducted from inventories is reclassified to other current liabilities. The figure of 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 as well as the purchases of treasury shares.

9. Contingencies

Pension commitments - EADS has several common investments with BAES, of which the most significant in terms of employees are Airbus and MBDA. In respect of each investment, for so long as BAES remains a shareholder, UK employees may stay in the BAES pensions schemes, which currently 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 of time (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 of 2005, 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 in any potential future deficit once the period of contribution caps will have expired. Consequently,

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) in conjunction 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	January 1 to December 31, 2004
Net income attributable to shareholders	1,676 M €	1,203 M €
Weighted average number of ordinary shares outstanding	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 "Share based Payment"	-0.04 €	-0.02 €

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, the inclusion of the related potential ordinary shares increases the weighted average number of shares. 5,482,133 shares (2004: 3,047,837 shares) are considered dilutive according to IAS 33.

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

	January 1 to December 31, 2005	January 1 to December 31, 2004
Net income attributable to shareholders	1,676 M €	1,203 M €
Weighted average number of ordinary shares outstanding
(diluted)	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 "Share
based Payment"	-0.04 €	-0.01 €

12. Related party transactions

The Group has entered into various transactions with related companies in 2005 and 2004 that have 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 the transactions with the French State, such transactions are not considered material to the Group either 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.

News Release

•	Revenues	€ 34.2 billion	–	up 8 percent
•	EBIT*	€ 2.85 billion	–	up 17 percent
•	Net Income	€ 1.7 billion	–	up 39 percent

• Net cash € 5.5 billion up 39 percent
• Dividend proposal € 0.65 up 30 percent
• 2006 revenues expected to exceed € 37 billion
• 2006 EBIT* expected to grow to between € 3.2 billion and € 3.4 billion
• 2006 EPS expected to increase to between € 2.35 and € 2.55

Amsterdam, 8 March 2006 – EADS (stock exchange symbol: EAD), a global leader in aerospace, defence and related services, exceeded its financial targets for the sixth consecutive year in 2005. EBIT* (pre-goodwill and exceptionals) stood at € 2.85 billion for the year, up 17 percent over 2004 with the EBIT* margin also increasing from 7.7 percent to 8.3 percent.

"EADS achieved its best results ever and will push for further growth as a global leader in the industry. Looking forward, we intend to further strengthen EADS' profitability and expand in tomorrow's growth markets," said EADS CEOs Thomas Enders and Noël Forgeard. EADS published its 2005 results on Wednesday.

The CEOs continued: "The cyclical upturn is lifting our earnings, and we believe the record order book and vibrant customer demand point to sustained high deliveries at Airbus. Profitability at Eurocopter, and at our combined defence and space businesses is also on a clear upward trend. We must, however, remain mindful of the challenges ahead: the weak dollar, the revived competition in the commercial aircraft arena, the ramp-up of new programmes, and stretched resources. Hence we will keep a strong focus on operations to ensure that our businesses deliver the ambitious results shareholders and markets expect."

Strong EBIT* improvement

In 2005, EADS clearly outperformed its previous record year. The outstanding result is mainly due to the continued strong revenues and earnings of Airbus as well as of the Group's space and defence businesses. The EBIT* grew in spite of a less favourable FY 2005 average hedge rate of € 1 = US\$ 1.06 (FY 2004: € 1 = US\$ 0.99).

In 2005, EADS expensed € 2.1 billion on Research and Development (R&D), representing a decline of two percent compared to 2004. In the same period, € 293 million were capitalized, of which € 259 million related to the A380 programme (FY 2004: € 169 million, of which € 152 million was for the A380). EADS' R&D expenditure, remaining high in 2005, reflecting the Group's continued emphasis on technological investment.

Revenues grew by eight percent to € 34.2 billion (FY 2004: € 31.8 billion). Increases were achieved at Airbus, Eurocopter, Space and Defence & Security Systems Divisions. Combined revenues from EADS defence businesses remained at € 7.7 billion (2004: € 7.7 billion), due to a shift of internal revenue recognition on the A400M programme to the first quarter of 2006.

Net Income soars

EADS' Net Income rose sharply by 39 percent to € 1.68 billion (FY 2004: € 1.20 billion), or € 2.11 per share (FY 2004: € 1.50) reflecting the strong operational performance and an increased financial result. It also benefits from a different accounting treatment of BAE Systems' minority stake in Airbus. Revised application of IAS 32 standards required changes regarding the accounting for the put option granted to BAE Systems as a minority shareholder of Airbus (20 percent). These changes contributed € 289 million to Net Income (FY 2004: € 185 million) or € 0.36 to earnings per share (FY 2004: € 0.23). These changes also resulted in the recognition of the put option in the balance sheet as a liability for puttable instruments (€ 3.5 billion). The liability replaces the minority interest for BAE Systems' 20 percent Airbus stake in EADS' balance sheet.

Strong increase in cash after continuing investment

EADS' net cash position was boosted 39 percent to € 5.5 billion (2004: € 4.0 billion). EADS' active cash management policies are prudent and provide flexibility for further business development.

Free Cash Flow (FCF) before Customer Financing was again strongly positive, reaching € 2.2 billion (2004: € 1.8 billion). This performance reflects the positive cash contribution from operations, driven by contributions from working capital, higher Net Income and lower capital expenditures on the A380 development. FCF including customer financing grew even stronger and reached € 2.4 billion (FY 2004: € 1.6 billion) due to the sell-down of customer financing exposure to the financial markets.

Dividend proposal up 30 percent to € 0.65 per share

EADS' 2005 results have confirmed the Group's financial strength. The growth in the dividend reflects EADS' continued success. The Board of Directors is recommending to the Annual General Meeting of shareholders an increased dividend of € 0.65 per share (dividend per share 2004: € 0.50).

"EADS has delivered its strongest financial year ever and our shareholders shall substantially benefit. The outstanding 2005 performance enables us to move our dividend to a higher level. Looking forward, we expect to offer dividend continuity based on the long-term development of the Group," EADS CFO Hans Peter Ring commented.

Order intake up 110 percent

Mirroring the strong business momentum of EADS' operational units order intake more than doubled to € 92.6 billion over the previous year (FY 2004: € 44.1 billion).

At € 253.2 billion, the EADS order book (contributions from commercial aircraft activities based on list prices) grew to a record amount at year-end 2005 (2004: € 184.3 billion). On top, this outstanding EADS order book benefited from a more favourable US Dollar closing spot rate of € 1 = US\$ 1.18 (2004: € 1 = US\$ 1.36) displaying a positive dollar impact on the non-hedged part of the Airbus order book (around € 10 billion). To date, EADS' order book is the strongest in the global aerospace and defence industry.

At the end of 2005, the Group's defence order book stood at € 52.4 billion (2004: € 49.1 billion) which is seven percent up compared to the previous year.

At the end of December 2005, EADS had 113,210 employees (year-end 2004: 110,662).

Divisions

Airbus continued to lead the commercial aircraft market in 2005, delivering its best year ever in terms of deliveries, order intake and profitability. The EBIT* surged to € 2,307 million (2004: € 1,919 million). The increase was mainly driven by higher aircraft deliveries (378 versus 320 in 2004) and benefited from the Route06 cost savings programme mitigating the less favourable US Dollar. Revenues increased by ten percent to € 22,179 million (FY 2004: € 20,224 million). Airbus' EBIT* margin improved from 9.5 percent to 10.4 percent.

With 1,111 gross orders in 2005, Airbus achieved an all-time record order intake in the commercial aviation industry and as a result outsold its competitor for the fifth year in a row. New aircraft orders were in large part motivated by the rapid growth of commercial aviation in Asia which represents 47 percent of Airbus' order intake. Underlining the strong demand from low cost carriers Airbus sold more than one out of three aircraft in this segment (36 percent) in 2005. The order intake for both the Single Aisle Family (918 units) and the long range aircraft A330/A340/A350 (166 units) were the highest ever for each of those segments. Orders for 20 A380s and seven A300 freighters completed Airbus' order intake. At the end of 2005, the Airbus order book amounted to € 202.0 billion based on list prices. This is an increase of 48 percent over year-end 2004. The order book represents a total of 2,177 commercial aircraft (2004: 1,500).

The A380 is on track for certification, with the first delivery scheduled for the end of 2006. Airbus has already successfully completed close to 1.000 hours of flight testing with its four flying A380s and has received 159 firm orders from 16 customers to date, including three new customers in 2005. Launched in October, the A350 has received 172 firm orders and commitments from 13 customers by the end of 2005.

The Military Transport Aircraft Division's EBIT* grew to € 48 million (FY 2004: € 26 million). This surge reflects the successful operations and the completed restructuring in the previous year. Revenues decreased to € 763 million (FY 2004: 1,304 million) due to a shift of an internal revenue recognition on the A400M programme worth € 539 million to the first quarter of 2006. Since then, the next contractual milestone was successfully passed in February 2006 on schedule. South Africa's and Malaysia's orders for the A400M raised the aircraft's firm orders to 192. Additionally, Chile indicated its intention to purchase up to three A400Ms. The production phase is already underway and the construction of the final assembly line in Seville, Spain is well advanced. In the medium-light aircraft segment, the Division achieved 16 new orders for its CN-235 and C-295. This includes twelve units for Brazil, which also contracted for the modernization of eight mission aircraft.

The Division's order book increased by five percent to € 21.0 billion (2004: € 19.9 billion). EADS MTA led AirTanker was designated preferred bidder for the UK tanker programme in 2005. In preparation for a US tanker competition, EADS has teamed with Northrop Grumman to supply the most advanced tanker aircraft to the US Air Force. Moreover, EADS has partnered with Raytheon for the tender on the US Future Cargo Aircraft (FCA) programme.

Eurocopter maintained its global leadership in the civil and parapublic sector, while achieving progress in military business and expanding its international presence. EBIT* grew to € 212 million (FY 2004: € 201 million) while revenues increased by 15 percent to € 3,211 million (FY 2004: € 2,786 million). The higher revenues were mainly due to a strong increase in helicopter deliveries (334 versus 279 in 2004) and the first time consolidation of Australian Aerospace. The lower EBIT* margin resulted from a less favourable business mix and hedging impact as well as higher R&D expenditure.

In 2005, the Division received new orders for 401 helicopters (FY 2004: 332), 71 percent from outside the European home markets. The NH90 multi-role transport helicopter attracted three new customers: Belgium, New Zealand and Spain. At the end of 2005, the Eurocopter order book amounted to € 10 billion (2004: € 9.1 billion).

The creation of the Eurocopter Spain entity, the building of the new industrial site in Albacete, Spain and the NH90 selection confirmed Spain as Eurocopter's third home market. Significant progress was also made in high-growth Asia. Eurocopter and China agreed on the joint development of a new six-to-seven-ton transport helicopter. In South Korea, traditionally a US dominated market, the government entrusted Eurocopter and KAI with the development of the country's first military utility helicopter. In the US civil market, Eurocopter continued to lead. To develop its North American defence business, Eurocopter teamed up with Sikorsky Aircraft for the US Army's Light Utility Helicopter (LUH) programme.

The Space Division made further strides improving profitability and reached a substantially higher EBIT* of € 58 million (FY 2004: € 9 million). The improvement reflects growth despite a continued difficult business environment, combined with the positive impact of the lower cost base following the already completed restructuring. Revenues expanded to € 2,698 million (FY 2004: € 2,592 million) with all business units contributing to this growth. Revenues were driven by the delivery of telecommunication satellites and the Ariane 5 production ramp-up as well as the step up in Paradigm service revenues. Five Ariane 5 launchers successfully took off to space, among them two of the new ten-ton version. In 2005, EADS SPACE Transportation fulfilled for the first time its new role as main contractor for the Ariane 5.

Major orders for EADS Astrium include contracts from South Korea covering a multi-mission geo-stationary satellite and from the European Space Agency for an earth observation programme. Germany selected EADS as preferred bidder for its defence satellite communications system. The development of Europe's Galileo satellite navigation system was confirmed with the agreement on the first four satellites. The Galileo contract was signed in January 2006 and will strengthen EADS' space activities. At year-end 2005, the Division's order book stood at € 10.9 billion (2004: € 11.3 billion). The acquisition of Dutch Space, the Netherlands' largest space company, also further enhanced the scale of the Group's space business and made EADS the only space company covering five nations.

The Defence & Security Systems Division had a strong year for deliveries and new orders and strengthened its capabilities in growth areas. Driven largely by Eurofighter and missile programmes revenues grew organically by five percent to € 5,636 million (FY 2004: € 5,385 million). EBIT* decreased to € 201 million (FY 2004: € 226 million). This decrease results from the one-off release of a litigation provision in 2004 and charges for Unmanned Aerial Vehicle (UAV) activities in 2005 and was nearly compensated by a better operational performance.

Substantial contracts included India's order for Exocet missiles, Spain's order for the Taurus air-to-ground missile and an order for Eurofighter selfprotection electronics as well as confirmation of the Romanian border surveillance contract. EADS/LFK and MBDA were awarded a part in designing and developing the tri-national Medium Extended Air Defense System (MEADS). The order book rose by seven percent to € 18.5 billion at year-end 2005 (2004: € 17.3 billion) and provides considerable prospects for revenue growth in the years to come.

Adding capabilities in growth sectors, the Division acquired Nokia's Professional Mobile Radio (PMR) business, making EADS a competitive global secure telecommunications player. In addition, EADS and ThyssenKrupp Technologies jointly acquired naval electronics provider Atlas Elektronik. This significantly strengthens the Group's position in maritime electronics and systems in the future, with no impact in 2005 financial statements. Enhanced integration of the Division's central functions will increase efficiency by creating synergies and cost savings for Defence & Security Systems.

Headquarters and Other Businesses (not belonging to any Division):

At EADS Headquarters, EBIT* improved thanks to a higher contribution from the 46.30 percent stake in Dassault Aviation.

The EBIT* of Other Businesses (ATR, EADS EFW, EADS Socata and EADS Sogerma Services) accounted for € -171 million (FY 2004: € 2 million) with positive contributions from ATR, EADS EFW and EADS Socata. EADS Sogerma Services' loss widened by € 198 million compared to 2004. This result is due to operational losses, impairment of assets and restructuring. The target is to achieve a turnaround as soon as possible subject to a restructuring plan to be decided in the next month.

Economic growth and the demand for highly efficient regional aircraft led to a recovery in the turbo-prop market. With 80 orders ATR was the global market leader in this segment in 2005. At year-end, the order book amounted to € 707 million.

EADS EFW increased the number of freighter conversions carried out to 14 up from eight in the previous year. In its aerostructures business, EADS EFW also benefited from the ramp-up of Airbus production rates. EADS EFW's order book stood at € 384 million at year-end 2005, mainly related to 43 freighter conversions.

Other Businesses achieved revenues of € 1,155 million (FY 2004: € 1,123 million). At the end of 2005, the order book of Other Businesses strongly increased to € 2.1 billion (2004: € 1.1 billion).

Outlook 2006

EADS expects its 2006 revenues to grow to more than € 37 billion (FY 2005: € 34.2 billion), powered by the progression of Airbus deliveries and higher volume from its combined defence businesses. Airbus deliveries are expected to grow by at least ten percent in 2006. EADS uses a planning rate of € 1 = US\$ 1.30.

EBIT* is expected to grow to between € 3.2 billion and € 3.4 billion (FY 2005: € 2.85 billion), mainly under the influence of the higher Airbus volume, but also due to better operational efficiencies across all divisions, despite higher R&D costs and the continuing US Dollar headwind arising from the maturity of less attractive hedges.

Consistent with the strong cash flow generation in 2005, Free Cash Flow before Customer Financing is expected to remain robust in 2006, despite the build up of inventories related to the delivery ramp-up, particularly for the A380.

2006 EPS are expected to grow to between € 2.35 and € 2.55 (FY 2005: € 2.11), based on an expected average of around 795 million shares and on a US Dollar year-end closing rate similar to 2005.

* EADS uses EBIT pre-goodwill impairment and exceptionals as a key indicator of its economic performance. The term "exceptionals" refers to income or expenses of a non-recurring nature, such as amortization expenses of fair value adjustments relating to the EADS merger, the formation of Airbus S.A.S. and the formation of MBDA, and impairment charges.

Live-Transmission EADS Annual Press Conference on the Internet

You can view the EADS Annual Press Conference on the EADS website www.eads.com using Windows media format.

Please click onto the banner located on the front page. Following the live transmission, an on-demand version will be available from 1 p.m. CET onwards.

EADS – Figures FY 2005

(Amounts in Euro)

EADS Group	FY 2005	FY 2004	Change
Revenues, in millions thereof defence, in millions	34,206 7,700	31,761 7,694	+8% +/-0%
EBITDA(1), in millions	4,365	3,841(3)	+14%
EBIT(2), in millions	2,852	2,432(3)	+17%
Research and Development costs, in millions	2,075	2,126	-2%
Net Income, in millions	1,676	1,203(3) (4)	+39%
Earnings Per Share (EPS)	2.11	1.50(3) (4)	+0.61 €
Free Cash Flow (FCF), in millions	2,413	1,614	+50%
FCF, before Customer Financing, in millions	2,239	1,802	+24%
Dividend per share	0.65(5)	0.50	+30%
Order Intake(6), in millions	92,551	44,117	+110%

EADS Group	31 Dec 2005	31 Dec 2004	Change
Order Book(6), in millions thereof defence, in millions	253,235 52,363	184,288 49,075	+37% +7%
Net Cash position, in millions	5,489	3,961	+39%
Employees	113,210	110,662	+2%

• 1) Earnings before interest, taxes, depreciation, amortization and exceptionals
• 2) Earnings before interest and taxes, pre-goodwill impairment and exceptionals
• 3) Previous year restated by stock options expense (€ -12 million for EADS Group) according to first time application of IFRS 2
• 4) EADS continues to use the term Net Income. It is identical with Profit for the period attributable to equity holders of the parent as defined by IFRS Rules; Revised application of IAS 32 standards required changes regarding the accounting for the put option granted to BAE Systems as a minority shareholder of Airbus. These changes contributed € 289 million to Net Income (FY 2004: € 185 million) or € 0.36 to earnings per share (FY 2004: € 0.23).
• 5) to be proposed to AGM on 4 May 2006
• 6) Contributions from commercial aircraft activities to EADS Order Intake and Order Book based on list prices

by Division		EBIT(1)			Revenues
(Amounts in millions of Euro)	FY 2005	FY 2004	Change	FY 2005	FY 2004	Change
Airbus	2,307	1,919	+20%	22,179	20,224	+10%
Military Transport Aircraft	48	26	+85%	763	1,304	-41%
Eurocopter	212	201	+5%	3,211	2,786	+15%
Space	58	9	+544%	2,698	2,592	+4%
Defence & Security Systems	201	226	-11%	5,636	5,385	+5%
Headquarters / Consolidation	197	49	–	-1,436	-1,653	–
Other Businesses(2)	-171	2	–	1,155	1,123	+3%
Total	2,852	2,432(3)	+17%	34,206	31,761	+8%

by Division	Order Intake(4)			Order Book(4)
(Amounts in millions of Euro)	FY 2005	FY 2004	Change	31 Dec 2005	31 Dec 2004	Change
Airbus	78,254	25,816	+203%	201,963	136,022	+48%
Military Transport Aircraft	1,840	1,176	+56%	20,961	19,897	+5%
Eurocopter	3,522	3,245	+9%	9,960	9,117	+9%
Space	2,322	5,658	-59%	10,931	11,311	-3%
Defence & Security Systems	6,673	8,457	-21%	18,509	17,276	+7%
Headquarters / Consolidation	-1,931	-1,355	–	-11,217	-10,414	–
Other Businesses(2)	1,871	1,120	+67%	2,128	1,079	+97%
Total	92,551	44,117	+110%	253,235	184,288	+37%

1) Earnings before interest and taxes, pre-goodwill impairment and exceptionals

2) ATR, EADS EFW, EADS Socata and EADS Sogerma Services are allocated to Other Businesses which is not a stand-alone EADS Division

3) Previous year restated by stock options expense (€ -12 million for EADS group) according to first time application of IFRS 2

4) Contributions from commercial aircraft activities to EADS Order Intake and Order Book based on list prices

EADS – Fourth Quarter Results (Q4) 2005

(Amounts in Euro)

EADS Group	Q4 2005	Q4 2004	Change
Revenues, in millions	10,760	10,302	+4%
EBIT(1), in millions	753	941(2)	-20%
Net Income, in millions	405	466(2) (3)	-13%
Earnings Per Share (EPS)	0.51	0.58(2) (3)	-0.07 €

by Division		EBIT(1)			Revenues
(Amounts in millions of Euro)	Q4 2005	Q4 2004	Change	Q4 2005	Q4 2004	Change
Airbus	453	540	-16%	6,146	5,809	+6%
Military Transport Aircraft	47	21	+124%	259	765	-66%
Eurocopter	107	100	+7%	1,190	1,054	+13%
Space	48	15	+220%	1,028	946	+9%
Defence & Security Systems	191	303	-37%	2,217	2,181	+2%
Headquarters / Consolidation	22	-28	–	-452	-767	–
Other Businesses(4)	-115	-10	–	372	314	+18%
Total	753	941(2)	-20%	10,760	10,302	+4%

The lower EBIT* in Q4 2005 compared to Q4 2004 is not related to a weaker operational performance; unfavourable effects from weaker US Dollar hedges and Sogerma losses were mitigated by efficiency improvements and volume effects. The lower EBIT* is related to higher R&D expenditures and one-time effects (mainly the release of a ligitation provision in 2004).

• 1) Earnings before interest and taxes, pre-goodwill impairment and exceptionals
• 2) Previous year restated by stock options expense (€ -3 million for EADS Group) according to first time application of IFRS 2
• 3) EADS continues to use the term Net Income. It is identical with Profit for the period attributable to equity holders of the parent as defined by IFRS Rules; revised application of IAS 32 standards required changes regarding the accounting for the put option granted to BAE Systems as a minority shareholder of Airbus. These changes contributed € 43 million to Net Income (Q4 2004: € 36 million) or € 0.04 to earnings per share (Q4 2004: € 0.04).
• 4) ATR, EADS EFW, EADS Socata and EADS Sogerma Services are allocated to Other Businesses which is not a stand-alone EADS Division.

EADS highlights in 2005 and on

Record Airbus sales and progress across commercial aircraft activities:

• The A380 first flight on 27 April launched a new era in commercial aviation. To date, Airbus has received 159 firm orders from 16 customers for the A380. The A380 attracted three new customers in 2005: UPS, China Southern Airlines and Kingfisher Airlines.
• On 6 October, the EADS Board of Directors gave its go ahead for Airbus to launch the A350 airliner family. To date, Airbus has received 172 firm orders and commitments from 13 customers.
• With an order for 150 A320 family aircraft, Airbus received its largest single order since entering the Chinese market. Earlier in 2005, three Chinese airlines signed contracts for the purchase of 30 Airbus aircraft, among them five A380s.
• Southeast Asia's leading low cost carrier AirAsia signed a contract for 60 A320s, plus a further 40 options, making this airline the largest Asia-Pacific customer for the A320 family. In February 2006, India's leading airline, Indian Airlines, ordered 43 Airbus A320 family aircraft.
• In Mobile, Alabama, the groundbreaking for an Airbus Engineering Centre took place in early 2006. In case of a success in the U.S. tanker competition, the KC-30 production site will be co-located there.
• EADS Socata announced a new six-seat TBM 850 which combines light jet cruising speeds with the efficiency of a turboprop.
• ATR's outstanding 2005 order intake of 80 aircraft proves the strong revival of turboprop aircraft in the regional aviation market.

A growing defence business strongly contributes to EADS portfolio balance and revenue growth:

• MEADS, the transatlantic cooperation project for ground-based tactical air defence, entered its Design and Development phase which is scheduled to run until 2013.
• New Zealand selected the NH90 helicopter as a replacement for its Air Force's aging transport helicopters fleet. Spain and Belgium also opted for the NH90 which, to date, has orders from 14 customers.
• Korea designated Eurocopter as its primary partner for the development of Korea's first military transport helicopter. With China, Eurocopter agreed to develop the new EC 175.
• EADS North America expanded the industrial team for its UH-145 advanced Light Utility Helicopter with the addition of Sikorsky Aircraft. The U.S. Army is planning to acquire more than 300 platforms.
• To pool their naval systems activities, EADS and ThyssenKrupp Technologies jointly acquired Atlas Elektronik.
• The selection of EADS-led AirTanker as preferred bidder by the Royal Air Force marked the Group's breakthrough in the tanker business.
• In the expectation of a tanker competition in the US, EADS joined Northrop Grumman as team mate and principal subcontractor on the KC-30 advanced tanker bid.
• A400M production was launched in January with the first metal cut on a major airframe component.
• South Africa and Malaysia became A400M programme partners. Chile indicated its intention to purchase up to three A400M.
• EADS will supply Brazil with C-295 military transport aircraft and install the Fully Integrated Tactical System (FITS) into the country's fleet of P-3 maritime patrol aircraft.
• The Group will additionally deliver a digital radio network based on the Tetrapol standard to Brazil's Departamento de Polícia Federal.
• Spain placed a contract for 43 Taurus missiles destined for the F-18 and Eurofighter aircraft of the Spanish Air Force.
• The German Armed Forces procured mobile radio systems, covering 10,000 terminal devices, accessories and a training facility.
• EADS teamed up with Siemens for the German BOSNET bid, expanded its professional mobile radio (PMR) business through the acquisition of Nokia's PMR activities and founded a new business line Secure Networks.
• The UK Ministry of Defence signed a contract with the ATLAS Consortium for the Defence Information Infrastructure (Future) project to replace numerous individual information systems with a single, more efficient information infrastructure.

• EADS Corporate Research Centre Germany was awarded an innovation prize for its "hyper-sensitive artificial nose" technology sniffing out explosives, drugs or poisonous gases.

EADS' space business on track for improved profitability:

• The new, more powerful Ariane 5 ECA was successfully launched twice from the European spaceport in Kourou.
• EADS Astrium successfully launched the first two Inmarsat-4 spacecrafts, the world's most sophisticated commercial communication satellites.
• EADS Astrium won the order for South Korea's first geo-stationary multifunctional satellite and for a communication satellite from Luxemburg's SES Astra.
• EADS SPACE has a key role in the test phase for the new European satellite navigation system Galileo.
• EADS Astrium was selected to build three satellites for ESA's Swarm mission, enabling analysis of the Earth's magnetic field.

EADS strengthened global citizenship:

• In the field of humanitarian aid, EADS supported the relief efforts for victims of the tsunami disaster in south-east Asia, hurricane Katrina in the United States and the Pakistan earthquake. When employee's contributions are added, EADS' total donation exceeded € 4 million.
• EADS acquired a 10 percent stake in Russian aircraft manufacturer Irkut to reinforce this strategic partnership

EADS is a global leader in aerospace, defence and related services. The EADS Group includes the aircraft manufacturer Airbus, the world's largest helicopter supplier Eurocopter and the joint venture MBDA, the international leader in missile systems. EADS is the major partner in the Eurofighter consortium, is the prime contractor for the Ariane launcher, develops the A400M military transport aircraft and is the largest industrial partner for the European satellite navigation system Galileo.

EADS Investor Relations contacts :

Pierre de BAUSSET	tel. + 49 89 607 34 113 pierre.debausset@eads.com
Nathalie ERRARD	tel. + 33 1 42 24 24 26 nathalie.errard@eads.com
Lars KÄSTLE	tel. + 49 89 607 34 114 lars.kaestle@eads.com
Christopher EMERSON	tel. +1 703 236 3320 christopher.emerson@eads-na.com

Safe Harbour Statement:

Certain statements contained in this press release are not historical facts but rather are statements of future expectations and other forward-looking statements that are based on management's beliefs. These statements reflect the EADS' views and assumptions as of the date of the statements and involve known and unknown risk and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements.

When used in this press release, words such as "anticipate", "believe", "estimate", "expect", "may", "intend", "plan to" and "project" are intended to identify forward-looking statements.

This forward looking information is based upon a number of assumptions including without limitation: assumption regarding demand, current and future markets for EADS' products and services, internal performance, customer financing, customer, supplier and subcontractor performance or contracts negotiations, favourable outcomes of certain pending sales campaigns.

Forward looking statements are subject to uncertainty and actual future results and trends may differ materially depending on variety of factors including without limitation: general economic and labour conditions, including in particular economic conditions in Europe, North America and Asia, legal, financial and governmental risk related to international transactions, the cyclical nature of some of EADS' businesses, volatility of the market for certain products and services, product performance risks, collective bargaining labour disputes, factors that result in significant and prolonged disruption to air travel world wide, the outcome of political and legal processes, including uncertainty regarding government funding of certain programs, consolidation among competitors in the aerospace industry, the cost of developing, and the commercial success of new products, exchange rate and interest rate spread fluctuations between the Euro and the U.S. dollar and other currencies, legal proceeding and other economic, political and technological risk and uncertainties.

Additional information regarding these factors is contained in the Company's "document de référence" dated April 19, 2005.