Our ratings on Netherlands-based European Aeronautic Defence and Space Co. N.V. (BBB+/Stable/A-2; EADS) are supported by the company's position as one of the two global producers of large commercial aircraft, its competitive business product portfolio, and its conservative financial policy. The ratings also take into account the cyclicality of the commercial airplane business and execution risk related to the group's restructuring program. EADS' greatest challenge is its exposure to significant currency risks, because about two-thirds of its revenues are in U.S. dollars, whereas most of its costs or liabilities are euro-denominated. However, EADS uses a substantial hedging portfolio to manage its exposure to currency risk. EADS is the world's second-largest aerospace firm, with 2008 revenues of over €43 billion. About
