The tables below set forth the notional amount of foreign exchange hedges in place and the US dollar rates applicable to corresponding EBIT * .
- EADS hedge portfolio*, 30 June 2012
status as of 30.06.2012
|Average hedge rates||2012||2013||2014||2015||2016+|
|£ vs $||1.60||1.57||1.57||1.59||1.57|
More than half of EADS' revenues are denominated in US dollars with approximately half of such currency exposure 'naturally hedged' by US 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 US dollar.
EADS manages a long-term hedge portfolio with a maturity of several years covering its net exposure to US dollar sales, mainly from the activities of Airbus (and to a lesser extent, of the Eurocopter Division, ATR and the Cassidian Division). The net exposure is defined as the total currency exposure (US dollar-denominated revenues), net of the part that is 'naturally hedged' by US dollar-denominated costs. The hedge portfolio covers the vast majority of the Group's hedging transactions.
In parallel, EADS is trying to developp contracting in Euro with european partners and customers.
This subject is progressing, and as of 31.12.2011, more than five billions of future sales in dollars have benn converted in Euro, reducing our Dollar foreign exchange exposure by the same amount.
EADS uses EBIT pre goodwill impairment and exceptionals as a key indicator of its economic performance. The term “exceptionals” refers to such items as depreciation expenses of fair value adjustments relating to the EADS merger, the Airbus Combination and the formation of MBDA, as well as impairment charges thereon.