Airbus SE
Unaudited Condensed Interim
IFRS Consolidated Financial Information
for the three-month period ended 31 March 2018

Contents
1 Airbus SE Unaudited Condensed Interim IFRS Consolidated Financial Statements ....................................................................... 2
Unaudited Condensed Interim IFRS Consolidated Income Statement ................................................................................................. 2
Unaudited Condensed Interim IFRS Consolidated Statement of Comprehensive Income ................................................................... 3
Unaudited Condensed Interim IFRS Consolidated Statement of Financial Position............................................................................. 4
Unaudited Condensed Interim IFRS Consolidated Statement of Cash Flows ...................................................................................... 6
Unaudited Condensed Interim IFRS Consolidated Statement of Changes in Equity............................................................................ 7
2 Notes to the Airbus SE Unaudited Condensed Interim IFRS Consolidated Financial Statements.................................................. 8
1.

The Company............................................................................................................................................................................ 82.

Accounting Policies ................................................................................................................................................................... 8

3.

Acquisitions and Disposals ..................................................................................................................................................... 12

4.

Related Party Transactions ..................................................................................................................................................... 12

5.

Segment Information ............................................................................................................................................................... 12

6.

Revenue, Gross Margin and Profit before Financial Result and Income Taxes ..................................................................... 13

7.

Total Financial Result.............................................................................................................................................................. 14

8.

Income Taxes.......................................................................................................................................................................... 14

9.

Earnings per Share ................................................................................................................................................................. 15

10.

Intangible Assets and Property, Plant and Equipment ............................................................................................................ 15

11.

Investments Accounted for under the Equity Method ............................................................................................................. 15

12.

Other Investments and Other Long-Term Financial Assets .................................................................................................... 15

13.

Inventories............................................................................................................................................................................... 15

14.

Trade Receivables, Contract Assets and Contract Liabilities ................................................................................................. 16

15.

Provisions................................................................................................................................................................................ 16

16.

Other Financial Assets and Other Financial Liabilities ............................................................................................................ 16

17.

Other Assets and Other Liabilities .......................................................................................................................................... 17

18.

Total Equity ............................................................................................................................................................................. 1819.

Net Cash ................................................................................................................................................................................. 18

20.

Information about Financial Instruments ................................................................................................................................. 19

21.

Litigation and Claims ............................................................................................................................................................... 20

22.

Number of Employees............................................................................................................................................................. 22

23.

Events after the Reporting Date .............................................................................................................................................. 22

Airbus SE
Unaudited Condensed Interim IFRS Consolidated Financial Information
for the three-month period ended 31 March 2018

1
Airbus SE
Unaudited Condensed Interim
IFRS Consolidated Financial Statements
Unaudited Condensed Interim
IFRS Consolidated Income Statement(In € million)(1)

Revenue(1)
Cost of sales(1)
Gross margin
Selling expenses
Administrative expenses
Research and development expenses
Other income
Other expenses(1)
Share of profit from investments accounted for under the equity method
Other income from investments(1)
Profit before financial result and income taxes
Interest income
Interest expense
Other financial result
Total financial result(1)
Income taxes(1)
Profit for the period

Note
6
6

6

7
8

Attributable to:(1)
Equity owners of the parent (Net income)Non-controlling interests
Earnings per share
(1)
Basic
(1)
Diluted(1)

9
9

1 January 31 March 201810,119(9,045)
1,074
(185)
(357)
(616)
256
(9)
31
5
199
41
(104)
102
39
46
284

1 January 31 March 2017
11,442(10,437)
1,005
(211)
(412)
(548)
703
(21)
42
17
575
39
(127)
(118)
(206)
41
410

283
1

409
1

€
0.37
0.37

€
0.53
0.53

Previous year figures are restated due to the application of IFRS 15.

The accompanying notes are an integral part of these Unaudited Condensed Interim IFRS Consolidated Financial Statements.

2

Airbus SE
Unaudited Condensed Interim IFRS Consolidated Financial Information
for the three-month period ended 31 March 2018

Unaudited Condensed Interim
IFRS Consolidated Statement of Comprehensive Income
1 January 31 March 2018
284

1 January 31 March 2017
410

Items that will not be reclassified to profit or loss:
Remeasurement of the defined benefit pension plans(2)
Change in fair value of financial assets
Share of change from investments accounted for under the equity method
Income tax relating to items that will not be reclassified

(261)
(50)
6
66

65
0
6
(39)

Items that may be reclassified to profit or loss:
Foreign currency translation differences for foreign operations
Change in fair value of cash flow hedges(2)
Change in fair value of financial assets
Share of change from investments accounted for under the equity method
Income tax relating to items that may be reclassified
Other comprehensive income, net of tax(1)
Total comprehensive income for the period

(108)
1,994
(44)
(6)
(547)
1,050
1,334

(37)
1,818
53
(9)
(513)
1,344
1,754

Attributable to:(1)
Equity owners of the parent
Non-controlling interests

1,328
6

1,744
10

(In € million)(1)

Profit for the period
Other comprehensive income

(1)
(2)

Previous year figures are restated due to the application of IFRS 15.
IFRS 9 new classification category (prior year-end: change in fair value of available-for-sale financial assets).

The accompanying notes are an integral part of these Unaudited Condensed Interim IFRS Consolidated Financial Statements.

3

Airbus SE
Unaudited Condensed Interim IFRS Consolidated Financial Information
for the three-month period ended 31 March 2018

Unaudited Condensed Interim
IFRS Consolidated Statement of Financial Position(In € million)

AssetsNon-current assets
Intangible assets
Property, plant and equipment
Investment property
Investments accounted for under the equity method
Other investments and other long-term financial assets
Non-current contract assets
Non-current other financial assets
Non-current other assets
Deferred tax assets
Non-current securities(1)
Total non-current assets

Note

31 March 201831 December 201710
10

11,573
16,502
2
1,476
4,322
3
3,876
983
4,395
10,75553,887

11,62916,610
3
1,617
4,204
1
2,980
975
4,563
10,94453,52632,814
5,350
557
2,282
2,301
4,026
1,064
1,814
8,354
58,562
28
112,477

29,737
5,487
529
2,120
1,979
2,937
914
1,627
12,01657,346
202
111,074

11
12
14
16
17

Current assets
Inventories
Trade receivables
Current portion of other long-term financial assets
Current contract assets
Current other financial assets
Current other assets
Current tax assets
Current securities
Cash and cash equivalents(1)
Total current assets
Assets and disposal group of assets classified as held for sale(1)
Total assets

13
14
14
16
17

19
3

4

Airbus SE
Unaudited Condensed Interim IFRS Consolidated Financial Information
for the three-month period ended 31 March 2018

(In € million)

Equity and liabilities
Equity attributable to equity owners of the parent
Capital stock(1)
Reserves(1)
Accumulated other comprehensive income
Treasury shares(1)
Total equity attributable to equity owners of the parent
Non-controlling interests(2)
Total equity
Liabilities
Non-current liabilities(1)
Non-current provisions
Long-term financing liabilities(1)
Non-current contract liabilities(1)
Non-current other financial liabilities(1)
Non-current other liabilities(1)
Deferred tax liabilities(1)
Non-current deferred income(1)
Total non-current liabilities
Current liabilities(1)
Current provisions(1)
Short-term financing liabilities(1)
Trade liabilities(1)
Current contract liabilities(1)
Current other financial liabilities(1)
Current other liabilities
Current tax liabilities
Current deferred income(1)
Total current liabilities
Disposal group of liabilities classified as held for sale(1)
Total liabilities(1)
Total equity and liabilities
(1)
(2)

Note

31 March 201831 December 2017

18

775
7,338
3,982
(39)
12,056
10
12,066

775
7,225
2,742
(2)
10,7402
10,742

15
20
14
16
17

10,147
8,828
13,975
6,414
411
1,507
48
41,3309,779
8,984
15,353
6,704
298
1,002
42
42,162

15
20

5,891
2,326
12,20029,767
1,792
5,226
1,315
542
59,05922
100,411
112,477

6,272
2,213
13,40628,227
2,050
3,909
1,481
506
58,064
106
100,332
111,074

14
16
17

3

Previous year figures are restated due to the application of IFRS 15.
As of 31 March 2018, the accumulated other comprehensive income, previously classified within equity relating to assets and disposal groups
classified as held for sale, amounts to € -65 million.

The accompanying notes are an integral part of these Unaudited Condensed Interim IFRS Consolidated Financial Statements.

5

Airbus SE
Unaudited Condensed Interim IFRS Consolidated Financial Information
for the three-month period ended 31 March 2018

Unaudited Condensed Interim
IFRS Consolidated Statement of Cash Flows
Note(In € million)

Operating activities:(1)
Profit for the period attributable to equity owners of the parent (Net income)
Profit for the period attributable to non-controlling interests
Adjustments to reconcile profit for the period to cash provided by operating
activities:
Depreciation and amortization(1)
Valuation adjustments(1)
Deferred tax expense (income)Change in income tax assets, income tax liabilities and provisions for income
tax
Results on disposals of non-current assets(1)
Results of investments accounted for under the equity method(1)
Change in current and non-current provisions
Contribution to plan assets(1)
Change in other operating assets and liabilities(1) (2)
Cash provided by operating activities
Investing activities:
Purchases of intangible assets, property, plant and equipment, investment
property
Proceeds from disposals of intangible assets, property, plant and equipment
and investment property
Proceeds from disposals of subsidiaries (net of cash)
Payments for investments accounted for under the equity method, otherinvestments
Proceeds from disposals of investments accounted for under the equity method,other investments and other long-term financial assets
Disposals of non-current assets and disposal groups classified as assets held
for sale
Change in securities
Cash (used for) investing activities
Financing activities:
Change in financing liabilities
Change in treasury shares
Cash provided by (used for) financing activities
Effect of foreign exchange rate changes on cash and cash equivalents
Net increase in cash and cash equivalents(3)
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
(1)
(2)
(3)

3

1 January 31 March 2018

1 January 31 March 2017

283
1

409
1

564
(94)
192

551
85
256

(320)
(207)
(31)
(128)
(53)
(3,797)(3,590)

(306)
(696)
(42)
(15)
(106)
(1,493)(1,356)

(393)

(482)

156
0

2
738

(188)

(450)

103

168

193
5
(124)

0
285
261

156
(37)
119
(72)
(3,667)
12,021
8,354

159
0
159
(38)
(974)
10,1609,186Previous year figures are restated due to the application of IFRS 15.
Cash provided by operating activities has been positively impacted by certain agreements reached with the Company’s suppliers and customers
relating to the settlement of claims and negotiation on payment terms.
The cash and cash equivalents at the beginning of the period 2018 include € 5 million, which is presented as part of assets of disposal groups
classified as held for sale.

The accompanying notes are an integral part of these Unaudited Condensed Interim IFRS Consolidated Financial Statements.

6

Airbus SE
Unaudited Condensed Interim IFRS Consolidated Financial Information
for the three-month period ended 31 March 2018

Unaudited Condensed Interim
IFRS Consolidated Statement of Changes in Equity

Balance at 1 January 2017, as reported(1)
Restatements(1)
Balance at 1 January 2017, restated(1)
Profit for the period
Other comprehensive income
Total comprehensive income for the period
Share-based payment (IFRS 2)
Equity transaction (IAS 27)
Balance at 31 March 2017, restatedEquity attributable
to equity owners of
the parent
3,657(2,088)
1,569
409
1,335
1,744
23
0
3,336

Non-controllinginterests
(5)
0
(5)
1
9
10
0
(23)
(18)

Total Equity
3,652(2,088)
1,564
410
1,344
1,754
23
(23)
3,318

Balance at 1 January 2018, as reported(1) (2)
Restatements(1) (2)
Balance at 1 January 2018, restated(1)
Profit for the period
Other comprehensive income
Total comprehensive income for the period
Share-based payment (IFRS 2)
Equity transaction (IAS 27)
Change in treasury shares
Balance at 31 March 2018

13,348(2,616)
10,732
283
1,045
1,328
33
0
(37)
12,056

3
(1)
2
1
5
6
0
2
0
10

13,351(2,617)
10,734
284
1,050
1,334
33
2
(37)
12,066(In € million)

(1)
(2)

Previous year figures are restated due to the application of IFRS 15.
Opening balance figures are restated due to the application of IFRS 9.

The accompanying notes are an integral part of these Unaudited Condensed Interim IFRS Consolidated Financial Statements.

7

Airbus SE
Unaudited Condensed Interim IFRS Consolidated Financial Information
for the three-month period ended 31 March 20182
Notes to the Airbus SE
Unaudited Condensed Interim
IFRS Consolidated Financial Statements
1.

The Company

The accompanying Unaudited Condensed Interim IFRS Consolidated Financial Statements present the financial position and the resultsof operations of Airbus SE and its subsidiaries, a European public limited-liability company (Societas Europaea) with its seat (statutairezetel) in Amsterdam, The Netherlands, its registered address at Mendelweg 30, 2333 CS Leiden, The Netherlands, and registered with
the Dutch Commercial Register (Handelsregister) under number 24288945. The Company reportable segments are Airbus, Airbus
Helicopters and Airbus Defence and Space (see “– Note 5: Segment Information”). The Company is listed on the European stock
exchanges in Paris, Frankfurt am Main, Madrid, Barcelona, Valencia and Bilbao. The Unaudited Condensed Interim IFRS Consolidated
Financial Statements were authorised for issue by the Company’s Board of Directors on 26 April 2018.

2.

Accounting Policies

The Unaudited Condensed Interim Consolidated Financial Statements are prepared in accordance with International Financial
Reporting Standards (“IFRS”), issued by the International Accounting Standards Board (“IASB”) as endorsed by the European Union(“EU”) as at 31 March 2018. They are prepared and reported in euro (“€”) and all values are rounded to the nearest million
appropriately. Due to rounding, numbers presented may not add up precisely to the totals provided and percentages may not preciselyreflect the absolute figures.
These Unaudited Condensed Interim IFRS Consolidated Financial Statements are prepared in compliance with IAS 34 and should beread in conjunction with the IFRS Consolidated Financial Statements as of 31 December 2017. With the exception of the changes
highlighted below and applied for the first time in the first three months 2018, the Company’s accounting policies and methods areunchanged compared to 31 December 2017.
The Company has implemented the new standards IFRS 9 “Financial Instruments” and IFRS 15 “Revenue from contracts withcustomers” on 1 January 2018. As a result, the Company has changed its accounting policy for revenue recognition and for theaccounting of financial instruments as detailed below.
The implementation of other amended standards and new interpretation has no material impact on the Unaudited Condensed Interim
IFRS Consolidated Financial Statements as of 31 March 2018.

IFRS 15 “Revenue from Contracts with Customers”
In May 2014, the IASB issued IFRS 15 which establishes a single comprehensive framework for determining when to recognise revenue
and how much revenue to recognise. IFRS 15 replaced the former revenue recognition standards IAS 18 “Revenue” and IAS 11“Construction contracts” and related interpretations. The core principle of IFRS 15 is that an entity recognizes revenue to depict thetransfer of control of the promised goods or/and services in an amount that reflects the consideration to which that entity is entitled.
The Company adopted the new standard on 1 January 2018, using the full retrospective transition method. Accordingly, the Company
restated the comparative 2017 results included in the first three months 2018 Unaudited Condensed Interim IFRS Consolidated
Financial Statements. The opening equity was restated as of 1 January 2017.
The Company has elected practical expedients for completed contracts and contract modifications.
As a result, the implementation of IFRS 15 “Revenue from contracts with customers”, the Company revised its accounting policies.
Revenue recognition
The Company recognises revenue when it transfers the control of the promised goods and services to the customer. The Company
measures revenue, for the consideration to which the Company is expected to be entitled in exchange for transferring promised goods
or services. Variable considerations are included in the transaction price when it is highly probable that there will be no significant
reversal of the revenue in the future.
Revenue from the sale of commercial aircraft
Revenue will continue to be recognised at a point in time (i.e. at the delivery of the aircraft). The Company will estimate the amount ofprice concession for delivered aircraft and will treat the price concession as a reduction of both revenue and cost of sales.
8Airbus SE
Unaudited Condensed Interim IFRS Consolidated Financial Information
for the three-month period ended 31 March 2018

Revenue from the sale of military aircraft, space systems and services
When the control of the produced good and rendered services is transferred over time to the customer, revenue is recognised over time(i.e. under the percentage of completion method).
The Company transfers control over time when:-

it produces a good with no alternative use and the Company has an irrevocable right to payment (including a reasonable margin) for
the work completed to date, in the event of termination of the contract for the convenience of the customer (e.g. Tiger contract).

-

it creates a good which is controlled by the customer as the good is created or enhanced (e.g. Eurofighter contracts, some bordersecurity contracts).

-

the customer simultaneously receives and consumes the benefits provided by the Company (e.g. maintenance contracts).

When none of the criteria stated above have been met, revenue is recognised at a point in time. Revenue has been recognised at thedelivery of the aircraft under IFRS 15 from the sale of military transport aircraft, from the A400M launch contract and most of NH90
serial helicopters contracts.
The most significant changes result from the following:-

Several performance obligations are identified instead of recognising a single contract margin under IAS 11 (e.g. A400M, NH90
contracts). In some cases, the over time (e.g. percentage of completion (“PoC”) method) revenue recognition criteria are not fulfilled
under IFRS 15. In particular, on A350 launch contracts, on A400M series production and certain NH90 contracts, revenue andproduction costs relative to the manufacture of aircraft are recognised at a point in time (e.g. upon delivery of the aircraft to thecustomer).

-

Under IFRS 15, measurement of the revenue takes into account variable consideration constraints in order to achieve highlikelihood that a significant reversal of the recognised revenue will not occur in the future. The constraint in assessing revenue atcompletion for some contracts (A400M) generates a decrease in recognised revenue.

-

Under IFRS 15, for the application of the overtime method (PoC method), the measure of the progress towards complete
satisfaction of performance obligations is based on inputs (i.e. cost incurred) rather than on outputs (i.e. milestones achieved). On
Airbus current long-term construction contracts progress were usually measured based on milestones achieved (e.g. Tiger
programme, satellites, orbital infrastructures). Under IFRS 15, Airbus measures progress of work performed using a cost-to-cost
approach, whenever control of the work performed transfers to the customer over time.

IFRS 15 also impact the presentation of the revenue. Under IAS 18, Airbus recognised revenue based on the amount of its contracts
with its customer, unless it has confirmation of the amount of the price concession. In contrast, IFRS 15 requires Airbus to estimate theamount of price concession in all cases and to treat the price concession as a reduction of revenue and cost of sales. Under IFRS 15,
revenue and cost of sales decrease by the amount of the estimated concession granted by Airbus engine supplier to their customers.
In addition to these changes, IFRS 15 introduced a new class of assets and liabilities “contract assets” and “contract liabilities”.
-

A contract asset represents the company’s right to consideration in exchange for goods or services that the Company has
transferred to a customer when that right is conditioned on something other than the passage of time (e.g. receivables recognisedfrom the application of the PoC method before the Company has a right to invoice. These receivables were prior to theimplementation of IFRS 15 reported within “trade receivables”).

-

A contract liability represents the Company’s obligation to transfer goods or services to a customer for which the customer has paid
a consideration (e.g. contract liabilities mainly include the customer advance payments received which were reported prior to theimplementation of IFRS 15 within the “other liabilities”).

For any individual contract, either a contract asset or a contract liability is presented on a net basis.
The distinction between non-current and current presentation remains unchanged.

9

Airbus SE
Unaudited Condensed Interim IFRS Consolidated Financial Information
for the three-month period ended 31 March 2018

The following tables summarise the impacts on the comparative information resulting from the change in revenue recognition principles:
Condensed IFRS Consolidated Statements of Financial Position as at 31 December 2017
As previously
reported(In € million)

Non-current assets
Intangible assets
Property, plant and equipment
Investments accounted for under the equity method
Non-current contract assets
Non-current other assets
Total non-current assets
Current assets
Inventories
Trade receivables
Current contract assets
Current other assets
Cash and cash equivalents
Total current assets
Total assets

IFRS 15

As restated
11,62916,6101,617
123,66953,526

31,464
8,358
0
8,158
12,01659,996113,937

0
0
(61)
1
(355)
(415)
0
(1,727)(2,871)2,120
30
0(2,448)(2,863)29,737
5,487
2,120
8,188
12,01657,548111,074

13,351(2,609)10,742

10,153034,30244,455(374)
15,353(17,272)(2,293)

9,779
15,353
17,03042,162

6,575
13,444036,11256,131
100,586
113,937(303)(38)
28,227(25,847)
2,039
(254)
(2,863)

6,272
13,40628,227
10,26558,170100,332
111,074

11,62916,6101,678
024,02453,941Equity and liabilities
Total equity
Liabilities
Non-current liabilities
Non-current provisions
Non-current contract liabilities
Non-current other liabilities
Total non-current liabilities
Current liabilities
Current provisions
Trade liabilities
Current contract liabilities
Current other liabilities
Total current liabilities
Total liabilities
Total equity and liabilities

Condensed IFRS Consolidated Income Statements for the three-month period ended 31 March 2017
(In € million)

Revenue
Cost of sales
Gross margin
Selling, administrative and other expenses
Research and development expenses
Other income
Share of profit from investments accounted for under the equity method
and other income from investment
Profit before financial result and income taxes (EBIT)
Total financial result
Income taxes
Profit for the period10

As previously
reported
12,988(11,703)
1,285
(644)
(548)
703

IFRS 15(1,546)
1,266
(280)
0
0
0

As restated
11,442(10,437)
1,005
(644)
(548)
703

56
852
(206)
(37)
609

3
(277)
0
78
(199)

59
575
(206)
41
410

Airbus SE
Unaudited Condensed Interim IFRS Consolidated Financial Information
for the three-month period ended 31 March 2018

IFRS 9 “Financial Instruments”
IFRS 9, published in July 2014, replaces the existing guidance in IAS 39 “Financial instruments: recognition and measurement”. IFRS 9
includes revised guidance on the classification and measurement of financial instruments, including a new expected credit loss model
for calculating impairment on financial assets, and the new general hedge accounting requirements. It also carries forward the guidanceon recognition and de-recognition of financial instruments from IAS 39.
The Company has elected to apply the limited exemption in IFRS 9 relating to transition for classification and measurement andimpairment, and accordingly has not restated comparative periods in the year of initial application. As a consequence, any adjustments
to carrying amounts of financial assets or liabilities are recognised at the beginning of the reporting period, with the difference
recognized in opening equity.
Hedging instruments in place as at 31 December 2017 qualify as hedges under IFRS 9. The Company’s risk management strategies
and hedge documentation are aligned with the requirement of the new standard and hedge accounting continues to apply.
Changes in the time value of foreign currency options used as hedging instruments were previously recognised in the income
statement. Upon adoption of IFRS 9, the Company will retrospectively account for changes in the time value of its foreign currency
options as a cost of hedging through other comprehensive income and recognize them as a separate component of equity. The
cumulative cost-of-hedging will be reclassified to profit or loss when the hedged transaction affects profit or loss. At that point, thecumulative cost-of-hedging will equal the net option premium initially paid, which had no value under the option strategy applied by theCompany up to the first-time adoption of IFRS 9. As a result, there will be no EBIT impact arising from retrospectively applying the costof-hedging guidance.
Applying the cost-of-hedging guidance retrospectively results in an increase of the 2018 opening balance of accumulated othercomprehensive income by € +172 million on a net of tax basis and a corresponding decrease of the opening balance of retained
earnings. As a result, the total equity as of 1 January 2018 would not have changed.
From 1 January 2018, the Company classifies its financial assets according to IFRS 9 using the following measurement categories:-

those to be measured subsequently at fair value (either through other comprehensive income or through profit and loss), and-those to be measured at amortised cost.

The classification depends on the Company’s business model for managing the financial assets and the contractual terms of the cash
flows.
Financial assets at fair value through other comprehensive income – This category comprises (i) equity investments that are notheld for trading nor represent contingent consideration. With the exception of dividends received, the associated gains and losses(including any related foreign exchange component) are recognised in OCI. Unlike the treatment of “available-for-sale” equity
investments under IAS 39, amounts presented in OCI are not subsequently transferred to profit and loss on de-recognition of the equity
investment nor in the event of an impairment. (ii) Debt instruments where contractual cash flows are solely payments of principal andinterest, and that are held both for sales and collecting contractual cash flows. These instruments are measured in a manner similar to
the “available-for- sale” debts instruments under IAS39, as described in detail in Note 35.2 to the 2017 Consolidated Financial
Statements.
Financial assets at fair value through profit and loss –This category comprises all other financial assets that are to be measured atfair value (including equity investments for which the Company did not elect to present changes in fair value in other comprehensive
income).
There was no significant impact in the opening financial position, on the amounts recognised in relation to these assets from theadoption of IFRS 9.
The total impact on the group’s retained earnings due to classification and measurement of financial instruments as at 1 January 2018 is
as follows:(In € million)

Opening equity - IAS 39(1)
Increase in expected loss allowance for trade receivables and contract assets(1)
Increase in expected loss allowance for other financial assets
Deferred tax effects
Adjustment to equity from adoption of IFRS 9Opening equity – IFRS 9

1 January 2018
10,742
(7)
(4)
3
(8)
10,734(1) The Company applies the low credit risk exemption allowing the Company to assume that there is no significant increase in credit risk since initialrecognition of a financial instrument if the instrument is determined to have low credit risk at the reporting date. Similarly, the Company has determinedthat its trade receivables and contract assets generally have low credit risk. The Company has applied the practical approach of measuring expectedcredit losses of trade receivables and contract assets on a lifetime basis.

11

Airbus SE
Unaudited Condensed Interim IFRS Consolidated Financial Information
for the three-month period ended 31 March 2018

Use of Estimates and Judgements
In preparing the Unaudited Condensed Interim IFRS Consolidated Financial Statements, management makes assumptions andestimates. The underlying assumptions used for the main estimates are similar to those described in the Company’s IFRS Consolidated
Financial Statements as of 31 December 2017. These estimates are revised if the underlying circumstances have evolved or in light of
new information.
The only exception is the estimate of income tax liabilities which is determined in the interim financial statements using the estimatedaverage annual effective income tax rate applied to the pre-tax income of the interim period.

3.

Acquisitions and Disposals

Acquisitions
On 16 October 2017, Airbus and Bombardier Inc. (“Bombardier”) signed an agreement that brings together Airbus’ global reach andscale with Bombardier’s newest, state-of-the-art jet aircraft family. Under the agreement, Airbus will provide procurement, sales andmarketing, and customer support expertise to the C Series Aircraft Limited Partnership (“CSALP”), the entity that manufactures and sells
the C Series. At closing, Airbus will acquire a 50.01% interest in CSALP. Bombardier and Investissement Québec will own
approximately 31% and 19%, respectively. The transaction has been approved by the Boards of Directors of both Airbus andBombardier, as well as the Cabinet of the Government of Québec. The transaction remains subject to regulatory approvals, as well asother conditions usual in this type of transaction.
Disposals
On 7 March 2018, the Company finalised the sale of Plant Holdings, Inc., held by the Airbus DS Communications Inc. business, toMotorola Solutions after receiving the required regulatory approvals. Airbus Defence and Space recognised a gain of € 159 million,
reported in other income.
Assets and Disposal Groups Classified as Held for Sale
As of 31 March 2018, the Company accounted for assets and disposal groups of assets classified as held for sale in the amount of€ 28 million (prior year-end: € 202 million). Disposal group of liabilities classified as held for sale as of 31 March 2018 amount to€ 22 million (prior year-end: € 106 million).

4.

Related Party Transactions

The Company has entered into various transactions with related entities that have all been carried out in the normal course of business.
The Company participates in the UK in several funded trustee-administered pension plans, some of which have BAE Systems as
principal employer.

5.

Segment Information

The Company operates in three reportable segments which reflect the internal organisational and management structure according to
the nature of the products and services provided.


Airbus (formerly Airbus Commercial Aircraft and Headquarters) — Development, manufacturing, marketing and sale ofcommercial jet aircraft of more than 100 seats; aircraft conversion and related services; development, manufacturing, marketingand sale of regional turboprop aircraft and aircraft components. It also includes the holding function of the Company and its bankactivities.



Airbus Helicopters — Development, manufacturing, marketing and sale of civil and military helicopters; provision of helicopter
related services.



Airbus Defence and Space — Military Aircraft design, development, delivery, and support of military aircraft such as combat,
mission, transport and tanker aircraft as well as Unmanned Aerial systems and their associated services. Space Systems design,development, delivery, and support of full range of civil and defence space systems for telecommunications, earth observations,navigation, science and orbital systems. Communication, Intelligence & Security provision of services around data processing fromplatforms, secure communication and cyber security. In addition, the main joint ventures design, develop, deliver, and support
missile systems as well as space launcher systems.

The following tables present information with respect to the Company’s business segments. As a rule, inter-segment transfers arecarried out on an arm’s length basis. Inter-segment sales predominantly take place between Airbus and Airbus Defence and Space andbetween Airbus Helicopters and Airbus. Other activities not allocable to the reportable segments, together with consolidation effects, aredisclosed in the column “Transversal/Eliminations”.
The Company uses EBIT as a key indicator of its economic performance.

12

Airbus SE
Unaudited Condensed Interim IFRS Consolidated Financial Information
for the three-month period ended 31 March 2018

Business segment information for the three-month period ended 31 March 2018 is as follows:(In € million)
Total revenue
Internal revenue
Revenue
thereof:sales of goods at a point in timesales of goods over time
services, including sale of spare parts
Profit (loss) before financial result and income taxes(EBIT)
thereof research and development expenses
Interest result
Other financial result
Income taxes
Profit for the period

Airbus
7,222
(166)
7,056

AirbusHelicopters
961
(100)
861

AirbusDefenceand Space
2,217
(15)
2,202

Transversal /Eliminations
0
0
0

Consolidated
Airbus
10,400(281)
10,119

6,395
0
661

58
341
462

709
648
845

0
0
0

7,162
989
1,968

(2)
(430)

(10)
(70)

265
(58)

(54)
(58)

199
(616)
(63)
102
46
284

Airbus
8,166
(69)
8,097

AirbusHelicopters
1,176
(142)
1,034

AirbusDefenceand Space
2,340
(29)
2,311

Transversal /Eliminations
0
0
0

Consolidated
Airbus
11,682(240)
11,442

7,409
0
688

43
405
586

532
1,028
751

0
0
0

7,984
1,433
2,025

(48)
(374)

(6)
(65)

657
(60)

(28)
(49)

575
(548)
(88)
(118)
41
410

Business segment information for the three-month period ended 31 March 2017 is as follows:(In € million)
Total revenue
Internal revenue
Revenue
thereof:sales of goods at a point in timesales of goods over time
services, including sale of spare parts
Profit (loss) before financial result and income taxes(EBIT)
thereof research and development expenses
Interest result
Other financial result
Income taxes
Profit for the period
(1)

(1)

Previous year figures are restated due to the application of IFRS 15.

6.

Revenue, Gross Margin and Profit before Financial Result and Income
Taxes

Revenue decreased by € -1,323 million to € 10,119 million (first three months 2017 (restated): € 11,442 million), mainly due to adecrease at Airbus (€ -944 million) and Airbus Helicopters (€ -215 million). At Airbus, the decrease was mostly driven by an adverse
foreign exchange rate impact and a negative volume effect.
Revenue by geographical areas based on the location of the customer is as follows:
1 January 31 March 2018
3,388
2,636
1,975
1,298
144
678
10,119(In € million)

EuropeAsia-PacificNorth America
Middle East
Latin America
Other Countries
Total
(1)

Previous year figures are restated due to the application of IFRS 15.

13

1 January (1)31 March 2017
3,618
3,409
2,081
1,119
428
787
11,442

Airbus SE
Unaudited Condensed Interim IFRS Consolidated Financial Information
for the three-month period ended 31 March 2018

The gross margin increased by € +69 million to € 1,074 million compared to € 1,005 million in the first three months 2017 (restated).
The gross margin rate increased from 8.8% (restated) to 10.6%.
In the first three months 2018, Airbus has delivered 17 A350 XWB aircraft. New order intakes, cancellations, delivery postponements
and other contractual agreements to the end of March 2018 have been reflected in the financial statements.
The industrial ramp-up is progressing and associated risks continue to be closely monitored in line with the schedule, aircraft
performance and overall cost envelope, as per customer commitments. Despite the progress made, challenges remain with recurring
cost convergence as the ramp-up continues.
4 A400M aircraft were delivered in 2018. In total, 61 aircraft have been delivered as of 31 March 2018.Tthe Company continued with
development activities toward achieving the revised capability roadmap. Retrofit activities are progressing.
In 2017, the Company entered into discussions with OCCAR and the customer Nations that resulted in the signature of a Declaration ofIntent (“DOI”) on 7 February 2018 agreeing on a global re-baselining of the contract, including a revised aircraft delivery schedule, an
updated technical capability roadmap and a revised retrofit schedule. The DOI represents an important step towards reaching acontractually binding agreement also mitigating the commercial exposure while satisfying customer needs with regard to capabilities andavailability of the aircraft. The Company is working together with OCCAR and the customer Nations on turning the DOI into a contract
amendment within 2018.
A detailed review of the programme concluded in the fourth quarter of 2017 including an estimate of the financial impacts of the above
mentioned adaptations on schedule, capabilities and retrofit resulted in an update of the loss making contract provision of € 1,299 million
for the year 2017 (thereof € 1,149 million in the fourth quarter 2017). The Company’s remaining exposure going forward is expected tobe more limited. Risks remain on development of technical capabilities and the associated costs, on securing sufficient export orders intime, and on cost reductions as per the revised baseline. The year end 2017 assessment remains unchanged as of 31 March 2018.
The A400M contractual SOC 1, SOC 1.5, SOC 2, SOC 2.5 and SOC 3 development milestones remain to be achieved. SOC 1 fell due
end October 2013, SOC 1.5 fell due end December 2014, SOC 2 end of December 2015 and SOC 2.5 end of October 2017. The
associated termination rights became exercisable by OCCAR on 1 November 2014, 1 January 2016, and 1 January 2017, respectively.
Management judges that it is highly unlikely that any of these termination rights will be exercised.
The profit before finance result and income taxes decreased by € -376 million to € 199 million compared to € 575 million in the first
three months 2017 (restated), mainly driven by a decrease in other income.
Research and development expenses increased by 12% primarily reflecting R&D activities on the A350 XWB programme at Airbus.
Other income decreased by € -447 million to € 256 million compared to € 703 million in the first three months 2017, mostly driven by thecapital gain from disposals of Airbus Defence and Space entities (see “– Note 3: Acquisitions and Disposals”).

7.

Total Financial Result

Total financial result improved by € +245 million to € 39 million compared to € -206 million in the first three months 2017. This is mainly
due to the revaluation of certain equity investments under IFRS 9, partly offset by a negative impact from the revaluation of financial
instruments of € -149 million.

8.

Income Taxes

The income tax benefit of € 46 million (first three months 2017 (restated): € 41 million) corresponds to an effective tax rate of -19.3%(first three months 2017 (restated): -11.1%). This is due to the sale of Plant Holdings, Inc. (see “– Note 3: Acquisitions and Disposals”)
and the impact of IFRS 9 (see “–Note 2: Accounting Policies”), both tax-free.

14

Airbus SE
Unaudited Condensed Interim IFRS Consolidated Financial Information
for the three-month period ended 31 March 20189.

Earnings per Share(1)

Profit for the period attributable to equity owners of the parent (Net income)Weighted average number of ordinary shares(1)
Basic earnings per share(1)

1 January 31 March 2018
€ 283 million
774,364,786€ 0.37

1 January 31 March 2017
€ 409 million
772,728,699€ 0.53

Previous year figures are restated due to the application of IFRS 15.

Diluted earnings per share – The Company’s categories of dilutive potential ordinary shares are share-settled Performance Units
relating to Long-Term Incentive Plans (“LTIP”) and the convertible bond issued on 1 July 2015. During the first three months 2018,the average price of the Company’s shares exceeded the exercise price of the share-settled Performance Units and therefore 671,747
shares (first three months 2017: 417,618 shares) were considered in the calculation of diluted earnings per share. The dilutive effect of
the convertible bond was also considered in the calculation of diluted earnings per share in the first three months 2018, by adding back€ 2 million of interest expense to the profit for the period attributable to equity owners of the parent (first three months 2017: € 2 million)
and by including 5,022,990 of dilutive potential ordinary shares.

(1)

Profit for the period attributable to equity owners of the parent (Net income)(2)
Weighted average number of ordinary shares (diluted)(1)
Diluted earnings per share(1)(2)

1 January 31 March 2018
€ 285 million
780,059,523€ 0.37

1 January 31 March 2017
€ 411 million
778,169,307€0.53

Previous year figures are restated due to the application of IFRS 15.
Dilution assumes conversion of all potential ordinary shares.

10.

Intangible Assets and Property, Plant and Equipment

Intangible assets decreased by € -56 million to € 11,573 million (prior year-end: € 11,629 million). Intangible assets mainly relate to
goodwill of € 9,130 million (prior year-end: € 9,141 million).
Property, plant and equipment decreased by € -108 million to € 16,502 million (prior year-end (restated): € 16,610 million) mainly at
Airbus (€ -95 million). Property, plant and equipment includes leased assets of € 58 million (prior year-end: € 52 million).

11.

Investments Accounted for under the Equity Method

Investments accounted for under the equity method decreased by € -141 million to € 1,476 million (prior year-end (restated): €1,617 million) and mainly include the equity investments in ArianeGroup, MBDA and ATR.

12.

Other Investments and Other Long-Term Financial Assets(In € million)

Other investments
Other long-term financial assets
Total non-current other investments and other long-term financial assets
Current portion of other long-term financial assets
Total

31 March 2018
2,605
1,717
4,322
557
4,879

31 December 2017
2,441
1,763
4,204
529
4,733

Other investments mainly comprise the Company’s participations. The significant participations at 31 March 2018 include theremaining investment in Dassault Aviation amounting to € 1,280 million (prior year-end: € 1,071 million).
Other long-term financial assets and the current portion of other long-term financial assets include other loans in the amount of€ 1,587 million as of 31 March 2018 (prior year-end: € 1,521 million), and the sales finance activities in the form of finance leasereceivables and loans from aircraft financing.

13.

Inventories

Inventories of € 32,814 million (prior year-end (restated): € 29,737 million) increased by € +3,077 million. This is mainly driven by Airbus(€ +2,490 million), and reflects an increase in work in progress associated with A350 XWB ramp-up, and Airbus Defence and Space(€ +434 million).

15

Airbus SE
Unaudited Condensed Interim IFRS Consolidated Financial Information
for the three-month period ended 31 March 201814.

Trade Receivables, Contract Assets and Contract Liabilities

As of 31 March 2018, contract assets include receivables from revenue recognised on overtime contract in the amount of € 9,635
million (prior year-end: € 11,349 million) and contract liabilities include customer advance payment received in the amount of € 49,004
million (prior year-end: € 47,580 million).

15.

Provisions
31 March 2018
8,669
7,369
16,038
10,147
5,891(In € million)

Provisions for pensions
Other provisions
Total
thereof non-current portion
thereof current portion

31 December 2017
8,361
7,690
16,051
9,779
6,272

Provisions for pensions increased by € +308 million due to the negative development of funds in Germany and the UK.
Other provisions are presented net of programme losses against inventories (see “– Note 13: Inventories”).
A restructuring provision associated with the re-organisation of the Company of € 160 million was recorded at year-end 2016, following
the communication of the plan to the employees and the European Works Council in November 2016. The French social plan wasagreed between the Company and the works council in June 2017. The German social plan was agreed between the Company and theworks councils in September 2017, and the reconciliation of interests were finalized on 21 February 2018
In Airbus Helicopters, the restructuring plan launched in 2016 was signed by the three representative trade unions and validated by theWork Administration Agency (DIRECCTE) in March 2017.
An H225 Super Puma helicopter was involved in an accident on 29 April 2016. Management is cooperating fully with the authorities todetermine the precise cause of the accident. An estimate of the related net future costs has been prepared and is included in otherprovisions.

16.

Other Financial Assets and Other Financial Liabilities

Other Financial Assets
31 March 2018
3,790
86
3,876
922
997
382
2,301
6,177

(In € million)

Positive fair values of derivative financial instruments
OthersTotal non-current other financial assets
Receivables from related companies
Positive fair values of derivative financial instruments
OthersTotal current other financial assets
Total

16

31 December 2017
2,901
79
2,980
992
663
324
1,979
4,959

Airbus SE
Unaudited Condensed Interim IFRS Consolidated Financial Information
for the three-month period ended 31 March 2018

Other Financial Liabilities
31 March 2018
848
5,527
39
6,414
837
369
139
447
1,792
8,206

(In € million)

Liabilities for derivative financial instruments
European Governments refundable advances(1)
Others(1)
Total non-current other financial liabilities
Liabilities for derivative financial instruments
European Governments refundable advances(1)
Liabilities to related companies
Others(1)
Total current other financial liabilities
(1)
Total
(1)

31 December 2017
1,127
5,537
40
6,704
1,144
364
199
343
2,050
8,754

Previous year figures are restated due to the application of IFRS 15.

The total net fair value of derivative financial instruments improved by € +1,809 million to € 3,102 million (prior year-end: € 1,293 million)
as a result of the devaluation of the US dollar versus the euro associated with the mark to market valuation of the hedge portfolio.

17.

Other Assets and Other Liabilities

Other Assets
31 March 2018
873
18
92
983
2,701
522
308
495
4,026
5,009

(In € million)(1)

Cost to fulfil a contract(1)
Prepaid expenses(1)
Others(1)
Total non-current other assets
Value added tax claims(1)
Cost to fulfil a contract(1)
Prepaid expenses
Others(1)
Total current other assets
(1)
Total
(1)

31 December 2017
868
15
92
975
1,892
522
146
377
2,937
3,912

Previous year figures are restated due to the application of IFRS 15.

Other Liabilities
31 March 2018
411
411
2,261
2,965
5,226
5,637

(In € million)(1)

Others(1)
Total non-current other liabilities
Tax liabilities (excluding income tax)
Others(1)
Total current other liabilities
(1)
Total
(1)

Previous year figures are restated due to the application of IFRS 15.

17

31 December 2017
298
298
1,397
2,512
3,909
4,207

Airbus SE
Unaudited Condensed Interim IFRS Consolidated Financial Information
for the three-month period ended 31 March 201818.

Total Equity

The Company’s shares are exclusively ordinary shares with a par value of € 1.00. The following table shows the development of thenumber of shares issued and fully paid:
31 March 2018774,556,062
000774,556,062(518,198)
774,037,864(In number of shares)

Issued as at 1 January
Issued for ESOP
Issued for exercised options
Cancelled
Issued at end of period
Treasury shares
Outstanding at end of period

31 December 2017
772,912,869
1,643,193
00774,556,062(129,525)
774,426,537

Holders of ordinary shares are entitled to dividends and to one vote per share at general meetings of the Company.
Equity attributable to equity owners of the parent (including purchased treasury shares) amounts to € 12,056 million (prior year-end(restated): € 10,740 million) representing an increase of € +1,316 million. This is due to an increase in other comprehensive income of€ +1,045 million, principally related to the mark to market revaluation of the hedge portfolio of € +1,428 million, and a net income for theperiod of € 283 million.
The non-controlling interests (“NCI”) from non-wholly owned subsidiaries increased to € 10 million as of 31 March 2018 (prior year-end:€ 2 million).

19.

Net Cash

The net cash position provides financial flexibility to fund the Company’s operations, to react to business needs and risk profile and toreturn capital to the shareholders.

(In € million)

Cash and cash equivalents
Current securities
Non-current securities
Gross cash position
Short-term financing liabilities
Long-term financing liabilities
Total

31 March 2018
8,354
1,814
10,75520,923(2,326)(8,828)9,769

31 December 201712,016
1,627
10,944
24,587(2,213)(8,984)
13,39031 March 2018
3,057
4,366
980
(49)
8,354
0
8,354

31 December 2017
3,672
6,256
2,085
8
12,021
5
12,016

Cash and Cash Equivalents
Cash and cash equivalents are composed of the following elements:(In € million)

Bank account and petty cash
Short-term securities (at fair value through profit and loss)(1)
Short-term securities (at fair value through other comprehensive income)
OthersTotal cash and cash equivalents
Recognised in disposal groups classified as held for sale
Recognised in cash and cash equivalents(1)

IFRS 9 new classification category (prior year-end: available-for-sale).

Only securities with a maturity of three months or less from the date of the acquisition, that are readily convertible to known amounts ofcash and which are subject to an insignificant risk of changes in value, are recognised in cash equivalents.

18

Airbus SE
Unaudited Condensed Interim IFRS Consolidated Financial Information
for the three-month period ended 31 March 2018

Financing Liabilities
31 March 2018
6,434
1,687
393
313
1
8,828
507
283
118
17
1,401
2,326
11,154(In € million)

Bonds
Liabilities to financial institutions
Loans
Liabilities from finance leases(1)
OthersTotal non-current other financing liabilities
Bonds
Liabilities to financial institutions
Loans
Liabilities from finance leases(1)
OthersTotal current other financing liabilities
Total
(1)

31 December 2017
6,551
1,722
385
325
1
8,984
512
290
144
17
1,250
2,213
11,197

Included in “others” are financing liabilities to joint ventures.

Long-term financing liabilities, mainly comprising bonds and liabilities to financial institutions, decreased by € -156 million to € 8,828
million (prior year-end: € 8,984 million).
Short-term financing liabilities increased by € +113 million to € 2,326 million (prior year-end: € 2,213 million).

20.

Information about Financial Instruments

The following table presents the composition of derivative financial instruments:
31 December 2017
2,901
663
3,564
(1,127)(1,144)(2,271)1,293

31 March 2018
3,790
997
4,787
(848)
(837)
(1,685)3,102(in € million)

Non-current positive fair values
Current positive fair values
Total positive fair values of derivative financial instruments
Non-current negative fair values
Current negative fair values
Total negative fair values of derivative financial instruments
Total net fair values of derivative financial instruments

The volume of hedged US dollar-contracts was US$ 82.6 billion as at 31 March 2018 (prior year-end: US$ 88.7 billion). The US dollar
spot rate was 1.23 US$/€ and 1.20 US$/€ at 31 March 2018 and at 31 December 2017, respectively. The average US dollar hedge rate
for the hedge portfolio of the Company decreased to 1.23 US$/€ as at 31 March 2018 compared to 1.23 US$/€ as at 31 December
2017.

Carrying Amounts and Fair Values of Financial Instruments
Fair values of financial instruments have been determined with reference to available market information at the end of the reporting
period and the valuation methodologies as described in detail in Note 35.2 to the 2017 IFRS Consolidated Financial Statements. For the
first three months 2018, the Company has applied the same methodologies for the fair value measurement of financial instruments. In
addition, the Company has remeasured non-listed equity investments for which no quoted market prices are available at fair value anddetermined the fair values of these equity investments using common valuation methods such as net asset values or a comparable
company valuation multiples technique.
Carrying amount is a reasonable approximation of fair value for all classes of financial instruments listed in the first table of Note 35.2 tothe 2017 IFRS Consolidated Financial Statements, with the exception of:(In € million)

Financing liabilities
Issued bonds andLiabilities to banks and otherfinancing liabilities

31 March 2018
Book Value
Fair Value

31 December 2017
Book Value
Fair Value(6,941)(6,936)(7,063)(7,363)(3,883)(3,889)(3,791)(3,838)19

Airbus SE
Unaudited Condensed Interim IFRS Consolidated Financial Information
for the three-month period ended 31 March 2018

Fair Value Hierarchy
Depending on the extent the inputs used to measure fair values rely on observable market data, fair value measurements may behierarchised according to the following levels of input:Level 1: quoted prices (unadjusted) in active markets for identical assets and liabilities;

Level 2: inputs other than quoted prices that are observable for the asset or liability – fair values measured based on Level 2
input typically rely on observable market data such as interest rates, foreign exchange rates, credit spreads or volatilities;

Level 3: inputs for the asset or liability that are not based on observable market data – fair values measured based on Level 3
input rely to a significant extent on estimates derived from the Company’s’ own data and may require the use of assumptions
that are inherently judgemental and involve various limitations.

The fair values disclosed for financial instruments accounted for at amortised cost reflect Level 2 input. Otherwise, fair values are
determined mostly based on Level 1 and Level 2 input and to a minor extent on Level 3 input.
The following table presents the carrying amounts of the financial instruments held at fair value across the three levels of the fair value
hierarchy:

Level 1(In € million)

Financial assets measured at fair value
Equity instruments
Derivative instruments
Securities
Cash equivalents
Total
Financial liabilities measured at fair value
Derivative instruments
Total

21.

31 March 2018
Level 2
Level 3

Total

Level 131 December 2017
Level 2
Level 3

Total

2,137
0
10,803
4,366
17,306

0
4,787
1,766
980
7,533

0
0
0
0
0

2,137
4,787
12,5695,346
24,8391,963
010,995
6,256
19,214

0
3,564
1,576
2,085
7,225

0
0
0
0
0

1,963
3,564
12,571
8,341
26,43900(1,602)(1,602)(29)(29)(1,631)(1,631)00(2,268)(2,268)(3)(3)(2,271)(2,271)

Litigation and Claims

The Company is involved from time to time in various legal and arbitration proceedings in the ordinary course of its business, the mostsignificant of which are described below. Other than as described below, the Company is not aware of any material governmental, legal
or arbitration proceedings (including any such proceedings which are pending or threatened), during a period covering at least theprevious twelve months which may have, or have had in the recent past significant effects on Airbus SE’s or the Company’s financial
position or profitability.
If the Company concludes that the disclosures relative to contingent liabilities can be expected to prejudice seriously its position in a
dispute with other parties, the Company limits its disclosures to the nature of the dispute.

WTO
Although the Company is not a party, the Company is supporting the European Commission in litigation before the WTO. Following its
unilateral withdrawal from the 1992 EU-US Agreement on Trade in Large Civil Aircraft, the US lodged a request on 6 October 2004 to
initiate proceedings before the WTO. On the same day, the EU launched a parallel WTO case against the US in relation to its subsidies
to Boeing. On 19 December 2014, the European Union requested WTO consultations on the extension until the end of 2040 of
subsidies originally granted by the State of Washington to Boeing and other US aerospace firms until 2024.
On 1 June 2011, the WTO adopted the Appellate Body’s final report in the case brought by the US assessing funding to Airbus from
European governments. On 1 December 2011, the EU informed the WTO that it had taken appropriate steps to bring its measures fully
into conformity with its WTO obligations, and to comply with the WTO’s recommendations and rulings. Because the US did not agree,
the matter was referred to the WTO for further review pursuant to WTO rules.
On 23 March 2012, the WTO adopted the Appellate Body’s final report in the case brought by the EU assessing funding to Boeing fromthe US. On 23 September 2012, the US informed the WTO that it had taken appropriate steps to bring its measures fully into conformity
with its WTO obligations, and to comply with the WTO’s recommendations and rulings. Because the EU did not agree, the matter is now
under WTO review pursuant to WTO rules.
Exact timing of further steps in the WTO litigation process is subject to further rulings and to negotiations between the US and the EU.
Unless a settlement, which is currently not under discussion, is reached between the parties, the litigation is expected to continue forseveral years.

20

Airbus SE
Unaudited Condensed Interim IFRS Consolidated Financial Information
for the three-month period ended 31 March 2018

GPT
Prompted by a whistleblower’s allegations, the Company conducted internal audits and retained PricewaterhouseCoopers (“PwC”) to
conduct an independent review relating to GPT Special Project Management Ltd. (“GPT”), a subsidiary that the Company acquired in2007. The allegations called into question a service contract entered into by GPT prior to its acquisition by the Company, relating toactivities conducted by GPT in Saudi Arabia. PwC’s report was provided by the Company to the UK Serious Fraud Office (the “SFO”) in
March 2012. In the period under review and based on the work it undertook, nothing came to PwC’s attention to suggest that improper
payments were made by GPT. In August 2012, the SFO announced that it had opened a formal criminal investigation into the matter.
The Company is in continuing engagement with the authorities.

Eurofighter Austria
In February 2017, the Austrian Federal Ministry of Defence raised criminal allegations against Airbus Defence and Space GmbH andEurofighter Jagdflugzeug GmbH for wilful deception and fraud in the context of the sale of the Eurofighter aircraft to Austria andrespective damage claims. After the Austrian Federal Ministry of Defence raised its criminal allegations, the Austrian public prosecutor
opened an investigation against Airbus Defence and Space GmbH, Eurofighter Jagdflugzeug GmbH and former and current employeesof the two entities. On 18 September 2017, the Company filed a first submission to the Vienna Public Prosecutor in response to theallegations of deception in the procurement of Eurofighter combat aircraft made by the Austrian Defence Minister. The Company iscooperating fully with the authorities.

Investigation by the UK SFO and France’s PNF
In the context of review and enhancement of its internal compliance improvement programme, the Company discovered misstatements
and omissions relating to information provided in respect of third party consultants in certain applications for export credit financing for
the Company customers. In early 2016, the Company informed the UK, German and French Export Credit Agencies (“ECAs”) of theirregularities it had discovered. The Company made a similar disclosure to the UK Serious Fraud Office (“SFO”). In August 2016, theSFO informed the Company that it had opened an investigation into allegations of fraud, bribery and corruption in the civil aviation
business of the Company relating to irregularities concerning third party consultants (business partners). In March 2017, France’s
Parquet National Financier (“PNF”) informed the Company that it had also opened a preliminary investigation into the same subject andthat the two authorities would act in coordination going forward. The Company is cooperating fully with both authorities including inrespect of potential issues across the Company’s business. As part of the Company’s engagement with the US authorities, the latter
have requested information relating to conduct forming part of the SFO/PNF investigation that could fall within US jurisdiction. The
Company is cooperating with the US authorities in close coordination with the SFO and PNF. The SFO and PNF investigations and any
penalties potentially levied as a result could have negative consequences for the Company. The potential imposition of any monetary
penalty (and the amount thereof) or other sanction including tax liability arising from the SFO and PNF investigations will depend on theultimate factual and legal findings of the investigation, and could have a material impact on the financial statements, business andoperations of the Company. However, at this stage it is too early to determine the likelihood or extent of any such possible
consequence. Investigations of this nature could also result in (i) civil claims or claims by shareholders against the Company (ii) adverse
consequences on the Company’s ability to obtain or continue financing for current or future projects (iii) limitations on the eligibility ofgroup companies for certain public sector contracts and/or (iv) damage to the Company’s business or reputation via negative publicity
adversely affecting the Company’s prospects in the commercial market place.

ECA Financing
A first ECA application since 2016 for financing submitted by the Company under the process previously agreed with the ECAs was
accepted by the ECAs and ECA cover was granted in Q1 2018. We anticipate a return to ECA cover in 2018 for a limited number oftransactions while the level of appetite for commercial financing remains high.

Other Investigations
The Company is cooperating with a judicial investigation in France related to Kazakhstan. The Company is not a party to theseproceedings. The Company is cooperating with French judicial authorities pursuant to a request for mutual legal assistance made by thegovernment of Tunisia in connection with historical aircraft sales.
Following a review of its US regulatory compliance procedures, the Company has discovered and subsequently informed relevant US
authorities of its findings concerning certain inaccuracies in filings made with the US Department of State pursuant to Part 130 of the US
International Traffic in Arms Regulations (“ITAR") (a US export control regulation). The Company is cooperating with the US authorities.
The Company is unable to reasonably estimate the time it may take to resolve the matter or the amount or range of potential loss,
penalty or other government action, if any, that may be incurred in connection with this matter.

21

Airbus SE
Unaudited Condensed Interim IFRS Consolidated Financial Information
for the three-month period ended 31 March 2018

Review of Business Partner Relationships
In light of regulatory investigations and commercial disputes, including those discussed above, the Company has determined toenhance certain of its policies, procedures and practices, including ethics and compliance and export control. The Company isaccordingly in the process of revising and implementing improved procedures, including those with respect to its engagement ofconsultants and other third parties, in particular in respect of sales support activities and is conducting enhanced due diligence as a precondition for future or continued engagement and to inform decisions on corresponding payments. The Company engaged legal,
investigative, and forensic accounting expertise of the highest calibre to undertake a comprehensive review of all relevant third party
business consultant relationships and related subject matters. The Company believes that these enhancements to its controls andpractices will best position it for the future, particularly in light of advancements in regulatory standards. Several consultants and otherthird parties have initiated commercial litigation and arbitration against the Company seeking relief. The comprehensive review andthese enhancements of its controls and practices has led to additional commercial litigation and arbitration against the Company andmay lead to other civil law or criminal law consequences in the future, which could have a material impact on the financial statements,
however at this stage it is too early to determine the likelihood or extent of any liability.

Commercial Disputes
In May 2013, the Company was notified of a commercial dispute following the decision taken by the Company to cease a partnership forsales support activities in some local markets abroad. The Company believes it has solid grounds to legally object to the alleged breachof a commercial agreement. However, the consequences of this dispute and the outcome of the proceedings cannot be fully assessedat this stage. The arbitration will not be completed until 2019 at the earliest.
In the course of another commercial dispute, the Company received a statement of claim by the Republic of China (Taiwan) alleging
liability for refunding part of the purchase price of a large contract for the supply of missiles by subsidiary Matra Défense S.A.S., which
the customer claims it was not obliged to pay. An arbitral award was rendered on 12 January 2018 with a principal amount of € 104
million plus interest and costs against Matra Défense S.A.S. Post-award proceedings are currently underway.

22.

Number of Employees

Airbus77,246
77,16331 March 201831 December 201723.

Events after the Reporting Date

There are no significant events after the reporting date.

22

AirbusHelicopters
19,988
20,108

AirbusDefence and Consolidated
Space
Airbus31,974
129,208
32,171
129,442