Hedging
The tables below set forth the notional amount of foreign exchange hedges in place and the U.S. dollar rates applicable to corresponding EBIT * .
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More than half of EADS' revenues are denominated in U.S. dollars (approximately U.S. $29 billion at Airbus in 2007), with approximately half of such currency exposure "naturally hedged" by U.S. dollar-denominated costs. The reminder of costs is incurred primarily in Euro, and to a lesser extent, in Pounds Sterling.
As EADS intends to generate profits only from its operations and not through speculation on foreign currency exchange rate movements, EADS uses hedging strategies solely to manage and minimise the impact on its EBIT* from the volatility of the U.S. dollar.
EADS manages a long-term hedge portfolio with a maturity of several years covering its net exposure to U.S. dollar sales, mainly from the activities of Airbus (and to a lesser extent, of the Eurocopter Division, ATR, the DS Division and the MTA Division). The net exposure is defined as the total currency exposure (U.S. dollar-denominated revenues), net of the part that is "naturally hedged" by U.S. dollar-denominated costs. The hedge portfolio covers the vast majority of the Group's hedging transactions.
How Is Airbus Hedging Volume Determined?
Further Information
