EADS is involved in a number of claims and arbitrations that have arisen in the ordinary course of business. EADS believes that it has made adequate provisions to cover current or contemplated general and specific litigation risks.

At the end of 2002, a request for arbitration was filed against a subsidiary of EADS involved in the supply of equipment under a commercial contract that was completed several years ago. EADS believes it has strong defences, both procedural and of substance, to oppose the claim. At this stage of the procedure the financial risk cannot be assessed since, in June 2003, EADS was notified that the arbitration procedure was suspended at the request of the claimant. At the date of this document, such arbitration procedure is still suspended.

Following its unilateral withdrawal from the 1992 E.U.-U.S. Agreement on Trade in Large Civil Aircraft, the U.S. lodged a request on 6th October 2004 to initiate settlement proceedings before the World Trade Organisation (“WTO”). In response, the E.U. launched a parallel WTO case against the U.S. in relation to its subsidization of Boeing. On 11th January 2005, the E.U. and the U.S. agreed to suspend their respective WTO cases for three months, with a view towards reaching a new agreement relating to public funding of large civil aircraft. However as of 11th April 2005, the parties had not been able to reach a satisfactory agreement. On 31st May 2005, the U.S. requested the establishment of a panel. At its meeting on 20th July 2005, the Dispute Settlement Body established the panels. On 17th October 2005, the panels were finally composed. On 22nd December 2005, the parties completed the formal fact finding process for the two proceedings (so-called ASCM Annex V). The E.U. filed a new panel request in its case on 20th January 2006. Then on 31st January 2006, the U.S. filed a new consultation request on its case. Theses latest developments mean that the formal litigation process which was originally set to begin in March 2006 will now be set back to two to four months. Exact timing of the WTO litigation process is still to be agreed through negotiations between the U.S. and the E.U.

EADS is not aware of any other exceptional items or pending or threatened governmental, legal or arbitration proceedings during the last twelve months, that may have, or may have had in a recent period, a significant effect on the financial position, the activities or the results of EADS or the Group taken as a whole, except as stated above.

EADS recognises provisions for litigation and claims when (i) it has a present obligation from legal actions, governmental investigations, proceedings and other claims resulting from past events that are pending or may be instituted or asserted in the future against the Group, (ii) it is probable that an outflow of resources embodying economic benefits will be required to settle such obligation and (iii) a reliable estimate of the amount of such obligation can be made. For the amount provided for risk due to litigations and claims, see Part 1 “Notes to the Consolidated Financial Statements (IFRS)— Note 21(d): Other provisions”.