The Group’s objective is to maintain sufficient cash and cash equivalents at all times to meet its present and future cash requirements and maintain a favourable credit rating. It attempts to achieve this policy objective by:

• implementing measures designed to generate cash;
• developing and maintaining access to the capital markets; and
• containing its exposure to customer financing.

EADS benefits from a strong positive cash position, with €10.0 billion of consolidated gross cash (including securities of €1.8 billion) at 31^st December 2006. This cash position is further supported by a €3.0 billion syndicated back-up facility. Overall, financial liabilities (short and long-term) amounted to €5.8 billion at 31^st December 2006.

EADS defines its consolidated net cash position as the difference between (i) cash, cash equivalents and securities and (ii) financial liabilities (as recorded in the consolidated balance sheet). The net cash position at 31^st December 2006 was €4.2 billion. The factors affecting EADS’ cash position, and consequently its liquidity risk, are discussed below.

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, figures for 2005 below have been restated accordingly. €4,160 million of cash and cash equivalents for the year 2005 have been reclassified as “Current securities”.