Pursuant to IAS 7, the definition of “cash and cash equivalents” now includes only cash items with an original maturity of 3 months. The previous cash definition was based on short-term maturity of 1 year having insignificant risk of changes in value. Due to this new interpretation, €4,160 million of cash and cash equivalents at year-end 2005 have now been reclassified as “Current securities”.

The cash and cash equivalents and securities portfolio of the Group is invested mainly in non-speculative financial instruments, mostly highly liquid, such as certificates of deposits, overnight deposits, commercial paper and other money market instruments which, for cash and cash equivalents, have an original maturity of less than three months. Therefore, EADS assesses its exposure towards price risk due to changes in interest rates and spreads as minimal. See “Hedging Activities — Interest Rates” and “Notes to Consolidated Financial Statements (IFRS) — Note 30a: Information about Financial Instruments — Financial risk management”.

In 2003, the fully automated cross-border cash pooling system (covering France, Germany, Spain, the Netherlands and the U.K.) became operational. The cash pooling system enhances Management’s ability to assess reliably and instantaneously the cash position of each subsidiary within the Group and enables Management to allocate cash optimally within the Group depending upon shifting short-term needs.

Total cash and cash equivalents (including available-for-sale securities) includes €0.6 billion from the 50% consolidation of MBDA. However, EADS’ economic stake in MBDA is only 37.5%, representing only 75% of this consolidated amount.