EADS seeks to maintain a strong financial profile to safeguard its going concern, financial flexibility as well as shareholders’ and other stakeholders’ confidence in the Group.

As part of its capital management, it is one of EADS’ objectives to maintain a strong credit rating by institutional rating agencies. This enables EADS to contain the Group’s cost of capital which positively impacts its stakeholder value (entity value). Next to other also non-financial parameters, the credit rating is based on factors such as capital ratios, profitability and liquidity ratios. EADS focuses on keeping them in a preferable range.

Currently, EADS’ long-term rating from Standard & Poor’s is BBB+ (Outlook: stable) and A1 (Outlook: stable) from Moody’s Investors Service respectively. In accordance with its conservative financial policy it is essential for EADS to maintain an investment grade rating.

EADS’ management currently implements a monitoring system which allows benchmarking the return on capital by comparing it with the cost of capital. EADS basically defines return on capital as operating income before interest expense after tax (NOPAT) divided by the sum of total shareholders’ equity and interest bearing liabilities, excluding components arising from cash flow hedges.

The Group also monitors the level of dividends paid to its shareholders.

As mentioned above, the Group reassessed its approach to capital management in 2007. The focus is now on total interest bearing liabilities as one of the capital components rather than on “net liabilities” (interest bearing liabilities net of cash and cash equivalents) as in previous years. Capital management is part of EADS’ management by objectives which is planned to be re-aligned with EADS’ change in capital definition.

EADS satisfies its obligations arising from share-based payment plans by issuing new shares. In order to avoid any dilution of its current shareholders out of these share-based payment plans, EADS has accordingly decided to buy back and cancel its own shares following the decisions of the Board of Directors and approval of the Annual General Meeting (AGM). Apart from this purpose, EADS generally does not trade with treasury shares.

EADS complies with the capital requirements under applicable law and its articles of association.