EADS Global Website - EADS Guidance for 2006

The revised A380 delivery schedule results in cumulative EBIT* shortfalls of EUR 4.8 billion compared to the margin contribution of its original baseline plan for the years 2006 to 2010 (at $1.30 per EUR 1.00).

From an Income Statement perspective, the management estimates that the A380 series production will generate a cumulative programme EBIT* loss of around EUR 2.8 billion for the years 2006 to 2010, of which approximately EUR 1.1 billion is anticipated in 2006 and approximately EUR 0.7 billion in 2007. The A380 programme shall deliver a first positive EBIT* contribution in 2010. The management estimates that the A380 programme contributions will be substantial beyond 2010.

The above 2006 programme EBIT* loss reflects an estimated EUR 0.6 billion of provisions for A380 loss making contracts. The A380 charges, and charges potentially arising from the outstanding decision on the A350 programme, as well as the amount and phasing of non recurring charges of the "Power8" programme, invalidate the previously provided 2006 EBIT* guidance. Until further notice, EADS will not issue an updated 2006 outlook. Possible contract terminations under the new A380 timetable have not been taken into account in the financial estimates.

* 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.

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