Results in brief

Results from continuing operations	Six months to 30 June 2006	Six months to 30 June 2005
Sales1	£8,214m	£6,773m
EBITA2	£788m	£566m
Operating profit	£653m	£488m
Underlying earnings per share3	15.4p	10.7p
Basic earnings per share4	12.6p	10.9p
Other results including discontinued operations
Interim dividend per share	4.4p	4.0p
Cash (outflow)/inflow from operating activities	£(293)m	£586m
Net debt as defined by the Group	£1,582m	£2,239m
Order book5	£56.9bn	£52.5bn

Highlights

• Sales¹ up 21% at £8,214m


• EBITA² up 39% at £788m, including £63m one-off accounting gain in the US


• Underlying earnings per share³ up 44% at 15.4p


• US businesses delivering good organic growth


• United Defense integration complete


• Good programme execution


• Airbus share sale recommended


• UK pension funding deficit addressed


• Interim dividend increased 10% to 4.4p

Outlook

The good first half results underpin the outlook for the full year; that is for modest organic growth from our defence businesses together with a full year contribution from the former United Defense activities. Some weakening of the Airbus contribution is anticipated in the second half following a good first half performance and before taking account of the timing of the recommended disposal of the Group's 20% shareholding in that business. We expect to turn operating profits into cash in the second half with this year’s additional contributions to the UK pension schemes mostly concluded in the first half.

1 including share of equity accounted investments’ sales 2 earnings before amortisation and impairment of intangible assets, finance costs and taxation expense 3 earnings per share excluding amortisation and impairment of intangible assets, non-cash finance movements on pensions and financial derivatives, and uplift on acquired inventories (see note 5) 4 basic earnings per share in accordance with International Accounting Standard 33 5 including share of equity accounted investments’ order books and after the elimination of intra-group orders of £0.9bn (2005 £1.0bn)

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