Unaudited Condensed Interim IFRS Consolidated
Financial Information of Airbus SE
for the three-month period ended 31 March 2017
Unaudited Condensed Interim IFRS Consolidated Income Statements .................................................................. 2
Unaudited Condensed Interim IFRS Consolidated Statements of Comprehensive Income .................................... 3
Unaudited Condensed Interim IFRS Consolidated Statements of Financial Position .............................................. 4
Unaudited Condensed Interim IFRS Consolidated Statements of Cash Flows ....................................................... 5
Unaudited Condensed Interim IFRS Consolidated Statements of Changes in Equity ............................................. 6
Notes to the Unaudited Condensed Interim IFRS Consolidated Financial Statements as at 31 March 2017 .......... 7
1.

The Company ............................................................................................................................................ 72.

Accounting policies .................................................................................................................................... 7

3.

Acquisitions and disposals ........................................................................................................................ 8

4.

Related party transactions ......................................................................................................................... 8

5.

Segment information ................................................................................................................................. 9

6.

Revenues, gross margin and profit before finance result and income taxes ........................................... 11

7.

Finance result .......................................................................................................................................... 12

8.

Income tax ............................................................................................................................................... 12

9.

Earnings per share .................................................................................................................................. 12

10.

Intangible assets and property, plant and equipment .............................................................................. 13

11.

Investments accounted for under the equity method ............................................................................... 13

12.

Other investments and other long-term financial assets .......................................................................... 13

13.

Inventories ............................................................................................................................................... 13

14.

Other financial assets and other financial liabilities ................................................................................. 14

15.

Other assets and other liabilities ............................................................................................................. 14

16.

Total equity .............................................................................................................................................. 15

17.

Provisions ................................................................................................................................................ 15

18.

Cash flows, securities and financing liabilities ......................................................................................... 16

19.

Financial instruments............................................................................................................................... 17

20.

Litigation and claims ................................................................................................................................ 19

21.

Number of employees ............................................................................................................................. 22

22.

Subsequent events .................................................................................................................................. 22

Airbus SE
Unaudited Condensed Interim IFRS Consolidated Financial Information
for the three-month period ended 31 March 2017

Unaudited Condensed Interim IFRS Consolidated Income Statements

Note
Revenues

1 January 31 March 2017
In € million
In %6

1 January 31 March 2016
In € million
In %ChangeIn € million

12,988100

12,183100

805-11,703-90-10,740

-88

-963

1,285

10

1,443

12

-158

Selling, administrative and other expenses

-644

-5

-651

-5

7

Research and development
expenses

-548

-4

-547

-5

-1

703

5

85

1

618

56

0

32

0

24

852

6

362

3

490

Interest income

39

0

75

0

-36

Interest expense

-127

-1

-143

-1

16

Cost of sales
Gross margin

Other income

6

6

Share of profit from investments
under the equity method and otherincome from investments
Profit before finance result
and income taxes

6

Other financial result

-118

-1

261

2

-379

Finance result

7

-206

-2

193

1

-399

Income taxes

8

-37

0

-157

-1

120

609

4

398

3

211

Equity owners of the parent(Net income)

608

5

399

3

209

Non-controlling interests

1

0

-1

0

2

Profit for the period
Attributable to:

€

€

€

Basic

0.79

0.51

0.28

Diluted

0.78

0.51

0.27

Earnings per share

9

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 2017

Unaudited Condensed Interim IFRS Consolidated Statements of Comprehensive
Income(In € million)
Profit for the period

1 January 31 March 2017

1 January 31 March 2016

609

398

65

-710

Items that will not be reclassified to profit or loss:
Remeasurement of the defined benefit pension plans
Share of remeasurement of the defined benefit pension plansfrom investments accounted for under the equity method
Income tax relating to items that will not be reclassified

6

-3

-39

219

Items that may be reclassified to profit or loss:
Foreign currency translation differences for foreign operations

-37

-247

1,818

3,543

Change in fair value of available-for-sale financial assets

53

98

Share of changes in other comprehensive income
from investments accounted for under the equity method

-9

-20

Income tax relating to items that may be reclassified-513-1,075

Other comprehensive income, net of tax

1,344

1,805

Total comprehensive income of the period

1,953

2,203

Equity owners of the parent

1,943

2,207

Non-controlling interests

10-4Change in fair value of cash flow hedges

Attributable to:

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 2017

Unaudited Condensed Interim IFRS Consolidated Statements of Financial Position
Note
AssetsNon-current assets
Intangible assets
Property, plant and equipment
Investments accounted for under the equity method
Other investments and other long-term
financial assets
Non-current other financial assets
Non-current other assets
Deferred tax assets
Non-current securities

31 March 2017
In € million In %In %12,047
16,789
1,468

11
15
1

12,06816,918
1,608

11
15
2

-21
-129
-140

0
-1
-9

12
14
15

4,088
936
2,346
7,150
9,804
54,628

4
1
2
6
9
49

3,655
976
2,358
7,557
9,897
55,037

3
1
2
7
9
50

433
-40
-12
-407
-93
-409

12
-4
-1
-5
-1
-1

33,484
9,074
397
1,166
3,141
1,216
1,334
9,186
58,998

29
8
0
1
3
1
1
8
51

29,688
8,101
522
1,257
2,576
1,110
1,551
10,14354,948

27
7
1
1
2
1
1
9
49

3,796
973
-125
-91
565
106
-217
-957
4,050

13
12
-24
-7
22
10
-14
-9
7

136
113,762

0
100

1,148
111,133

1100-1,012
2,629

-88
2

773
8,395
-3,542
-3
5,623
-18
5,605

1
7
-3
0
5
0
5

773
7,732
-4,845
-3
3,657
-5
3,652

0
7
-4
0
3
0
3

0
663
1,303
0
1,966
-13
1,953

0
9
-27
0
54
260
53

17
18
14
15

10,651
8,735
11,912
16,8791,604
49,781

9
8
10
15
1
43

10,826
8,791
13,313
16,567
1,292
50,789

10
8
12
15
1
46

-175
-56
-1,401
312
312-1,008

-2
-1
-11
2
24
-2

17
18

5,848
1,839
13,510916
5,211
31,03558,359

5
2
12
1
5
27
52

6,143
1,687
12,532
1,126
5,761
28,45255,701

5
2
11
1
5
26
50

-295
152
978
-210
-550
2,583
2,658

-5
9
8
-19
-10
9
5

18

12
14
15

Assets and disposal group of assets
classified as held for sale
Total assets

3

13

18
18

Total equity(1)Equity attributable to equity owners of the parent
Capital stockReserves
Accumulated other comprehensive income
Treasury shares
Non-controlling interests
16

Current liabilities
Current provisions
Short-term financing liabilities
Trade liabilities
Current tax liabilities
Current other financial liabilities
Current other liabilities

ChangeIn € million

10
10
11

Current assets
Inventories
Trade receivables
Current portion of other long-term financial assets
Current other financial assets
Current other assets
Current tax assets
Current securities
Cash and cash equivalents

Liabilities
Non-current liabilities
Non-current provisions
Long-term financing liabilities
Non-current other financial liabilities
Non-current other liabilities
Deferred tax liabilities

31 December 2016
In € million In %14
15

Disposal group of liabilities
classified as held for sale
3
17
0
991
1
-974
-98
Total liabilities
108,157
95
107,48197
676
1
Total equity and liabilities
113,762100
111,133100
2,6292(1) As of 31 March 2017, the accumulated other comprehensive income, previously classified within equity relating to assets
and disposal groups classified as held for sale, amounts to €-16 million.
The accompanying notes are an integral part of these Unaudited Condensed Interim IFRS Consolidated Financial Statements.

4

Airbus SE
Unaudited Condensed Interim IFRS Consolidated Financial Information
for the three-month period ended 31 March 2017

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

Note

Profit for the period attributable to equity owners of the parent (Net income)
Profit (loss) for the period attributable to non-controlling interests

1 January 31 March 2017

1 January 31 March 2016

608

399

1

-1

Adjustments to reconcile profit for the period to cash provided by operating activities
Depreciation and amortization

551

512

Valuation adjustments

76

-406

Deferred tax expense

168

76

Change in income tax assets, income tax liabilities and provisions for income tax

-306

32

Results on disposals of non-current assets

-696

-13

Results of companies accounted for under the equity method

-39

-20

Change in current and non-current provisions

-276

-88

-106
-1,337-57-2,721-1,356-2,287-482-563

Reimbursement from / contribution to plan assets(1)

Change in other operating assets and liabilities
Cash (used for) operating activities(1)18Investment activities- Purchases of intangible assets, PPE- Proceeds from disposals of intangible assets, PPE

2

8- Acquisitions of subsidiaries and joint ventures (net of cash)

0

-118

- Proceeds from disposals of subsidiaries (net of cash)

738

-9

- Payments for investments in associates and otherinvestments and long-term financial assets

-450

-115

- Proceeds from disposals of associates and otherinvestments and long-term financial assets

168

24

Disposal of assets, liabilities and disposal group classified as held for sale
Change in securities
Cash provided by (used for) investing activities

18

Financing activities
Change in long-term and short-term financing liabilities
Changes in capital and non-controlling interests
Share buyback
Cash provided by financing activities

18

Effect of foreign exchange rate changes on cash and cash equivalents(1)

Net (decrease) of cash and cash equivalents

Cash and cash equivalents at beginning of period(1)(1)

Cash and cash equivalents at end of period(1)

Thereof presented as cash and cash equivalents

Thereof presented as part of disposal groups classified as held for sale

0

-6

285

384

261

-395

159

2,479

0

2

0

-378

159

2,103

-38
-974

-110
-689

10,160

6,677

9,186

5,988

9,186

5,905

0

83

(1) Investments made by Airbus SE in certain securities and trade liabilities have been reassessed and reclassified. Previous
year figures are adjusted accordingly (cash and cash equivalents at 31 December 2015: €-899 million; change in otheroperating assets and liabilities for the first quarter 2016: €93 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 2017

Unaudited Condensed Interim IFRS Consolidated Statements of Changes in Equity(In € million)
Balance at 1 January 2016
Profit for the period

Equityattributable
to equity ownersof the parent

Non-controllinginterests

5,966

7

Total
5,973

399

-1

398

Other comprehensive income

1,808

-3

1,805

Total comprehensive income

2,207

-4

2,203

2

0

2

Capital increase
Equity transactions

38

-19

19

-358

0

-358

24

0

24

Balance at 31 March 2016

7,879

-16

7,863

Balance at 1 January 2017

3,657

-5

3,652

Change in treasury shares
Share-based payment (IFRS 2)

Profit for the period

608

1

609

Other comprehensive income

1,335

9

1,344

Total comprehensive income

1,943

10

1,953

Capital increase

0

0

0

Equity transactions

0

-23

-23

Change in treasury shares

0

0

0

Share-based payment (IFRS 2)

23

0

23

5,623

-18

5,605

Balance at 31 March 2017

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 2017

Notes to the Unaudited Condensed Interim IFRS Consolidated Financial Statements as
at 31 March 2017
1. The Company
The accompanying Unaudited Condensed IFRS Consolidated Financial Statements present the financial position
and the results of operations of Airbus SE (the “Company”) and its subsidiaries, a European public limited-liability
company (Societas Europaea) with its registered office (statutaire zetel) in Amsterdam, The Netherlands, its
official address at Mendelweg 30, 2333 CS Leiden, The Netherlands, and registered with the Dutch Commercial
Register (Handelsregister) under number 24288945, and are prepared and reported in euro (“€”). On 1 January
2017, the Company has been further integrated by merging its Group structure with the commercial aircraft
activities of Airbus, with associated restructuring measures. On 12 April 2017, the Company changed its namefrom Airbus Group SE to Airbus SE, following approval at the Annual General Meeting. Therefore, the Company
together with its subsidiaries will be referred to as “Airbus” and no longer the “Group”, and the segment
formerly known as Airbus will be referred to as “Airbus Commercial Aircraft”. In this new set-up, Airbus willretain Airbus Helicopters and Airbus Defence and Space as Divisions. During 2017, while the transition to the neworganisation is completed, Airbus will continue to report under the existing reportable segments. Airbus’ corebusiness is the manufacturing of commercial aircraft, civil and military helicopters, commercial space launchvehicles, missiles, military aircraft, satellites, defence systems and defence electronics and rendering of services
related to these activities. The Unaudited Condensed IFRS Consolidated Financial Statements for the year ended
31 March 2017 were authorised for issue by the Company Board of Directors on 26 April 2017.

2. Accounting policies
The Unaudited Condensed Interim Consolidated Financial Statements have been 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 2017.
These Unaudited Condensed Interim Consolidated Financial Statements are prepared in compliance with IAS 34
and should be read in conjunction with Airbus’ Consolidated Financial Statements as of 31 December 2016.
Airbus’ accounting policies and methods are unchanged compared to 31 December 2016.
Use of estimates and judgment
In preparing Airbus’ Unaudited Condensed Interim Consolidated Financial Statements, Airbus’ management
makes assumptions and estimates. The underlying assumptions used for the main estimates are similar to thosedescribed in Airbus’ Consolidated Financial Statements as of 31 December 2016. 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 estimated average annual effective income tax rate applied to the pre-tax income of the interim period.

7

Airbus SE
Unaudited Condensed Interim IFRS Consolidated Financial Information
for the three-month period ended 31 March 2017

3. Acquisitions and disposals
On 28 February 2017, Airbus sold its defence electronics business, a leading global provider of mission-criticalsensors, integrated systems and services for premium defence and security applications mainly based in Ulm, toaffiliates of KKR & Co. L.P. (the acquirer), a leading global investment firm. This divestment is part of the strategic
review of the Airbus Defence and Space business portfolio. Airbus has recognised a net gain of €560 million in
Airbus Defence and Space Division. The assets and liabilities of this company were classified as disposal groupheld for sale as of 31 December 2016.
The purchase price allocation of the Navtech Inc. Group (“Navtech”) ended on 9 March 2017. No adjustment
was made on the goodwill which amounts to €104 million.
The allocation of the purchase price on Airbus Safran Launchers (“ASL”) is still ongoing at ASL level and is
expected to be finalised during the one year window period ending on 30 June 2017.
Assets and disposal groups classified as held for sale
As of 31 March 2017, Airbus accounted for assets and disposal groups of assets classified as held for salein the amount of €136 million (prior year-end: €1,148 million). Disposal group of liabilities classified as held
for sale as of 31 March 2017 amount to €17 million (prior year-end: €991 million).

4. Related party transactions
Airbus has entered into various transactions with related entities that have all been carried out in the normal
course of business.
Airbus participates in the UK in several funded trustee-administered pension plans. In some of these, BAE
Systems is the principal employer.

8Airbus SE
Unaudited Condensed Interim IFRS Consolidated Financial Information
for the three-month period ended 31 March 2017

5. Segment information
Airbus operates in three reportable segments which reflect the internal organizational and management structure
according to the nature of the products and services provided.


Airbus Commercial Aircraft (formerly Airbus) — Development, manufacturing, marketing and sale ofcommercial jet aircraft of more than 100 seats; aircraft conversion and related services; development,
manufacturing, marketing and sale of regional turboprop aircraft and aircraft components.

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



Airbus Defence and Space — Military combat aircraft and training aircraft; provision of defence electronics
and of global security market solutions such as integrated systems for global border security and securecommunication solutions and logistics; training, testing, engineering and other related services;development, manufacturing, marketing and sale of missile systems; development, manufacturing,marketing and sale of satellites, orbital infrastructures and launchers; provision of space related services;development, manufacturing, marketing and sale of military transport aircraft and special mission aircraft andrelated services.

The following table presents information with respect to the Airbus’ business segments. As a rule, inter-segment
transfers are carried out on an arm’s length basis. Inter-segment sales predominantly take place between Airbus
Commercial Aircraft and Airbus Defence and Space and between Airbus Helicopters and Airbus Commercial
Aircraft. The holding function of Airbus’ Headquarters, the Airbus Group Bank and other activities not allocable to
the reportable segments, combined together with consolidation effects, are disclosed in the column“Other/HQ/Conso.”.

9

Airbus SE
Unaudited Condensed Interim IFRS Consolidated Financial Information
for the three-month period ended 31 March 2017

Business segment information for the year ended 31 March 2017:(In € million)
Total revenues
Internal revenues

AirbusCommercial
Aircraft

AirbusHelicopters

AirbusDefenceand SpaceTotal
segments

Other/
HQ/Conso.

Consolidated

9,825

1,291

2,114

13,23012

13,242

-82

-142

-29

-253

-1

-254

Revenues

9,743

1,149

2,085

12,977

11

12,988

Research anddevelopment expenses

-403

-65

-60

-528

-20

-548

Profit before financeresult and income taxes

336

-2

620

954

-102

852

Finance result-206

Income taxes-37

Profit for the period

609

Business segment information for the year ended 31 March 2016:
AirbusCommercial
Aircraft

AirbusHelicopters

AirbusDefenceand SpaceTotal
segments

Other/
HQ/Conso.

Consolidated

Total revenues

8,668

1,158

2,534

12,36066

12,426

Internal revenues

-67

-149

-26

-242

-1

-243

Revenues

8,601

1,009

2,508

12,11865

12,183

Research anddevelopment expenses

-380

-63

-66

-509

-38

-547

Profit before financeresult and income taxes

289

33

88

410

-48

362

(In € million)

Finance result

193

Income taxes-157

Profit for the period

398

10

Airbus SE
Unaudited Condensed Interim IFRS Consolidated Financial Information
for the three-month period ended 31 March 2017

6. Revenues, gross margin and profit before finance result and income taxes
Revenues of €12,988 million (first quarter 2016: €12,183 million) increased by €+805 million, mainly at Airbus
Commercial Aircraft (€+1,157 million), mostly driven by a positive volume effect, particularly in the A350 XWB,
and a favourable foreign exchange impact. This increase is partially offset by a decrease at Airbus Defence andSpace (€-420 million) mainly due to perimeter changes.
The gross margin decreased by €-158 million to €1,285 million compared to €1,443 million in the first quarter
2016, mainly at Airbus Defence and Space, largely due to perimeter changes. The gross margin rate decreased
from 11.8% to 9.9%.
In the first three months 2017, Airbus Commercial Aircraft has delivered 13 A350 XWB aircraft.
The industrial ramp-up is progressing and associated risks continue to be closely monitored in line with theschedule, aircraft performance and overall cost envelope, as per customer’s commitment. Despite the progress
made, challenges remain with recurring cost convergence as the ramp-up accelerates.
4 A400M aircraft were delivered during the first quarter 2017. In total, 42 aircraft have now been delivered to thecustomer as of 31 March 2017.
Industrial efficiency and military capabilities remain a challenge for the A400M programme and furthermore, the
EASA Airworthiness Directive, linked to the Propeller Gear Box (“PGB”) on the engine, and various PGB quality
issues. In the first quarter 2017, Airbus continues with development activities toward achieving the capability
roadmap shared with the customer, however achievement of contractual technical capabilities remains
challenging.
In the first half-year 2016, management reviewed the programme evolution and estimated contract result
incorporating the implications at this time of the revised engine programme and its associated recovery plan,
technical issues related to the aluminium alloy used for some parts within the aircraft, recurring cost convergenceissues, an updated assumption of export orders during the launch contract phase and finally some delays,
escalation and cost overruns in the development programme. During the second half-year 2016, the programme
encountered further challenges to meet military capabilities and management reassessed the industrial cost of the
programme, now including an estimation of the commercial exposure. As a result of these reviews, Airbus
Defence and Space has recorded a charge of € 2,210 million in 2016 (thereof € 1,026 million in the first half-year2016). This remains to be the current best management assessment as of 31 March 2017. Challenges remain on
meeting contractual capabilities, securing sufficient export orders in time, cost reduction and commercial
exposure, which could be significant. Given the order of magnitude on the cumulative programme loss, the Boardof Directors mandated the management in February 2017 to re-engage with customers to cap the remaining
exposure. Discussions with the customer started in March 2017.
The A400M contractual SOC 1, SOC 1.5 and SOC 2 milestones remain to be achieved. SOC 1 fell due end
October 2013, SOC 1.5 fell due end December 2014, and SOC 2 end of December 2015. The associatedtermination 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.

11

Airbus SE
Unaudited Condensed Interim IFRS Consolidated Financial Information
for the three-month period ended 31 March 2017

The profit before finance result and income taxes increased by €+490 million to €852 million compared to€362 million in the first three months 2016, mainly driven by an increase in other income, partly compensated by
the decrease in gross margin.
Other income increased by €+618 million to €703 million compared to €85 million in the first three months 2016
mainly due to the capital gain from the sale of the defence electronics business (see Note 3 “Acquisitions anddisposals”).

7. Finance result
Finance result deteriorated by €-399 million to €-206 million compared to €+193 million in the first three months
2016. This is mainly related to both a negative impact from revaluation of financial instruments of €-281 million
and from foreign exchange valuation of monetary items of €-121 million.

8. Income tax
The income tax expense of €-37 million (first quarter 2016: €-157 million) corresponds to an effective tax rate of
5.7% (first quarter 2016: 28.3%). The effective tax rate was impacted by the disposal of the defence electronics
business taxed at a reduced rate.

9. Earnings per share

1 January 31 March 2017

1 January 31 March 2016

Profit for the period attributable to equity owners of the parent(Net income)€608 million€399 million

Weighted average number of ordinary shares outstanding

772,728,699

776,552,505

€0.79

€0.51

Basic earnings per share

Basic earnings per share

Diluted earnings per share – Airbus’ categories of dilutive potential ordinary shares are share-settled
Performance Units relating to Long-Term Incentive Plans and the convertible bond issued on 1 July 2015. In
2016, it also included the last Stock Option Plan (“SOP”) which expired in December 2016. During the firstquarter 2017, the average price of the Company’s shares exceeded the exercise price of the share-settled
Performance Units and therefore 417,618 shares (first three months 2016: 291,330 shares) were considered in
the calculation of diluted earnings per share. The dilutive effect of the convertible bond was also considered in thecalculation of diluted earnings per share in the first quarter 2017, by adding back €2 million of interest expense to
the profit for the period attributable to equity owners of the parent (first three months 2016: €2 million) and byincluding 5,022,990 of dilutive potential ordinary shares.

1 January 31 March 2017

1 January 31 March 2016

Profit for the period attributable to equity owners of the parent(Net income)€610 million€401 million

Weighted average number of ordinary shares outstanding(1)(diluted)

778,169,307

781,866,825

€0.78

€0.51

Diluted earnings per share

Diluted earnings per share(1) Dilution assumes conversion of all potential ordinary shares

12

Airbus SE
Unaudited Condensed Interim IFRS Consolidated Financial Information
for the three-month period ended 31 March 2017

10. Intangible assets and property, plant and equipment
Intangible assets decreased by €-21 million to €12,047 million (prior year-end: €12,068 million) and includes
goodwill of €9,414 million (prior year-end: €9,425 million).
The annual impairment tests were performed in the fourth quarter 2016 and led to no impairment charge.
Property, plant and equipment decreased by €-129 million to €16,789 million (prior year-end: €16,918 million)
mainly at Airbus Commercial Aircraft (€-102 million). Property, plant and equipment includes leased assets of€166 million (prior year-end: €116 million).

11. Investments accounted for under the equity method
Investments accounted for under the equity method decreased by €-140 million to €1,468 million (prioryear-end: €1,608 million) and include mainly the equity investments on ASL, MBDA and ATR.

12. Other investments and other long-term financial assets
Composition of other investments and other long-term financial assets:(In € million)

31 March 201731 December 2016

Other investments

2,177

2,091

Other long-term financial assets

1,911

1,564

Total non-current other investments and other long-term financial
assets

4,088

3,655

397

522

4,485

4,177

Current portion of other long-term financial assets
Total

Other investments and other long-term financial assets increased by €+308 million to €4,485 million(prior year-end: €4,177 million). Included in other investments is the remaining participation in Dassault Aviation of€984 million.
Other long-term financial assets mainly comprise the aircraft financing activities.

13. Inventories
Inventories of €33,484 million (prior year-end: €29,688 million) increased by €+3,796 million. This is driven by
Airbus Commercial Aircraft (€+3,422 million) and Airbus Defence and Space (€+205 million). The former mainlyreflects an increase in work in progress associated with A350 XWB and A320 ramp-up.

13

Airbus SE
Unaudited Condensed Interim IFRS Consolidated Financial Information
for the three-month period ended 31 March 2017

14. Other financial assets and other financial liabilities
Composition of other financial assets:(In € million)

31 March 201731 December 2016

853

893

Positive fair values of derivative financial instruments
Others83

83

Total non-current other financial assets

936

976

Receivables from related companies

384

517

Positive fair values of derivative financial instruments

296

258

Others486

482

Total current other financial assets

1,166

1,257

Total

2,102

2,233

31 March 201731 December 2016

Composition of other financial liabilities:(In € million)
European Governments refundable advances

6,610

6,340

Negative fair values of derivative financial instruments

4,886

6,544

416

429

11,912

13,313

OthersTotal non-current other financial liabilities
European Governments refundable advances

447

730

4,245

4,476

519

555

Total current other financial liabilities

5,211

5,761

Total

17,123

19,074

Negative fair values of derivative financial instruments
OthersThe liabilities for derivative financial instruments have decreased as a result of the devaluation of the US dollar
versus the euro associated with the mark to market valuation of the hedge portfolio.

15. Other assets and other liabilities
Composition of other assets:(In € million)

31 March 201731 December 2016

2,279

2,265

67

93

Total non-current other assets

2,346

2,358

VAT receivables

1,812

1,589

Prepaid expenses

790

552

Other

539

435

Total current other assets

3,141

2,576

Total

5,487

4,934

Prepaid expenses
Others14

Airbus SE
Unaudited Condensed Interim IFRS Consolidated Financial Information
for the three-month period ended 31 March 2017

Composition of other liabilities:(In € million)

31 March 201731 December 2016

16,001

15,714

595

565

283

288

16,87916,567

Customer advance payments

25,77624,115

Tax liabilities (excluding income tax)

1,202

1,047

Others

3,069

2,373

988

917

Total current other liabilities

31,03528,452

Total

47,91445,019Other liabilities
Customer advance payments
OthersDeferred income
Total non-current other liabilities
Other liabilities

Deferred income

16. Total equity
Equity attributable to equity owners of the parent (including purchased treasury shares) amounts to€5,623 million (prior year-end: €3,657 million) representing an increase of €+1,966 million. This is due to anincrease in other comprehensive income of €+1,335 million, principally related to the mark to market revaluationof the hedge portfolio, and a net income for the period of €+608 million.
The total number of shares issued is 772,912,869 as of 31 March 2017 and 31 December 2016. The Company’s
shares are exclusively ordinary shares with a par value of €1.00. In the first three months 2017, the Company
issued no new shares (first three months 2016: 93,000).
During the first quarter 2017, the number of treasury stock held by the Company remained at 184,170 as of 31
December 2016. No shares were sold back to the market nor cancelled (first three months 2016: 7,238,962
shares).
Non-controlling interests decreased to €-18 million (prior year-end: €5 million).

17. Provisions
Provisions are comprised of the following:(In € million)

31 March 201731 December 2016

Provisions for pensions

8,556

8,656

Other provisions

7,943

8,313

Total

16,49916,969Thereof non-current portion

10,651

10,826

Thereof current portion

5,848

6,143

Other provisions are presented net of programme losses against inventories (see Note 13 “Inventories”) anddecreased by €-334 million.

15

Airbus SE
Unaudited Condensed Interim IFRS Consolidated Financial Information
for the three-month period ended 31 March 2017

An H225 Super Puma helicopter was involved in an accident on 29 April 2016. Management is cooperating fully
with the authorities to determine the precise cause of the accident. An estimate of the related future costs has
been prepared and is included in other provisions.
Airbus makes estimates and provides, across the programmes, for costs related to in service technical issues
which have been identified and for which solutions have been defined, which reflects the latest facts andcircumstances. Contractually, Airbus is not liable towards operators for any incidental, indirect or consequential
damages. However, in view of overall commercial relationships and factual circumstances, contract adjustments
may occur, and be considered on a case by case basis.

18. Cash flows, securities and financing liabilities
Cash flows
Cash used for operating activities amounts to €-1,356 million (first quarter 2016 adjusted: €2,287 million).
Gross cash flow from operations (before change in other operating assets and liabilities) amounts to €-19 million(first quarter 2016: €+434 million). Change in other operating assets and liabilities amounts to €-1,337 million (firstquarter 2016 adjusted: €-2,721 million), mainly related to increase on inventories, partly offset by advancepayments received.
Cash provided by investing activities amounts to €+261 million (first quarter 2016: €-395 million). This
comprises the impact of disposals for a total of €+906 million (first quarter 2016: €+9 million), which includes thesale of the defence electronics business (see Note 3 “Acquisitions and disposals”), and change in securities of€+285 million (first quarter 2016: €+384 million). This was partly offset by purchases of intangible assets andproperty, plant and equipment of €-482 million (first quarter 2016: €-563 million) and payments for investments inassociates and other investments and long-term financial assets of €-450 million (first quarter 2016: €-115
million).
Cash provided by financing activities amounts to €+159 million (first quarter 2016: €-2,103 million). This
corresponds to changes in long-term and short-term financing liabilities (first quarter 2016: €+2,479 million).
Securities
Non-current securities with a remaining maturity of more than one year decreased by €-93 million to €9,804
million (prior year-end: €9,897 million). The movement is related to the cash management policy of Airbus.
Current securities with a remaining maturity of one year or less decreased by €-217 million to €1,334 million(prior year-end: €1,551 million).

16

Airbus SE
Unaudited Condensed Interim IFRS Consolidated Financial Information
for the three-month period ended 31 March 2017

Financing liabilities
Composition of financing liabilities:(In € million)

31 March 201731 December 2016

Bonds

5,963

6,013

Liabilities to financial institutions

2,112

2,072

Loans

294

331

Liabilities from finance leases

365

374

1

1

8,735

8,791

OthersLong-term financing liabilities
Bonds

234

0

Liabilities to financial institutions

257

351

Loans

266

332

Liabilities from finance leases

15

15

Others

1,067

989

Short-term financing liabilities

1,839

1,687

The increase in short-term financing liabilities is mainly related to higher commercial paper programmes.

19. Financial instruments
Composition of derivative financial instruments:(In € million)

31 March 201731 December 2016

Non-current positive fair values

853

893

Current positive fair values

296

258

Total positive fair values of derivative financial instruments

1,149

1,151

Non-current negative fair values-4,886-6,544Current negative fair values-4,245-4,476

Total negative fair values of derivative financial instruments-9,131-11,020

Total net fair value of derivative financial instruments-7,982-9,869The volume of hedged US dollar-contracts was US$99.9 billion as at 31 March 2017 (prior year-end US$102.4
billion). The US dollar spot rate was 1.07 US$/€ and 1.05 US$/€ at 31 March 2017 and at 31 December 2016,
respectively. The average US dollar hedge rate for the hedge portfolio of Airbus decreased to 1.18 US$/€ as at 31
March 2017 compared to 1.19 US$/€ as at 31 December 2016.

17

Airbus SE
Unaudited Condensed Interim IFRS Consolidated Financial Information
for the three-month period ended 31 March 2017

Carrying amounts and fair values
Fair values of financial instruments have been determined with reference to available market information at theend of the reporting period and the valuation methodologies as described in detail in Note 35.2 to the 2016
Consolidated Financial Statements. For the first three months 2017, Airbus has applied the same methodologies
for the fair value measurement of financial instruments.
Carrying amount is a reasonable approximation of fair value for all classes of financial instruments listed in thefirst table of Note 35.2 to the 2016 Consolidated Financial Statements, with the exception of:

31 March 2017
(In € million)

31 December 2016

Book value

Fair value

Book value

Fair value

Issued bonds and commercial papers-6,197-6,385-6,013-6,217

Liabilities to financial institutions
and other financing liabilities-3,997-3,996-4,076-4,086

Financing liabilities

As explained in Note 35.2 to the 2016 Consolidated Financial Statements, no fair value can be determined forcertain unlisted equity investments and European Governments refundable advances.
The following table allocates the financial assets and liabilities measured at fair value to the three levels of the fairvalue hierarchy(1):31 March 2017
(In € million)

31 December 2016

Level 1

Level 2

Level 3

Total

Level 1

Level 2

Level 3

Total

1,662

0

0

1,662

1,597

0

0

1,597

0

1,149

0

1,149

0

1,148

3

1,151

11,13800

11,138

11,4462

0

11,448
7,048

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

4,780

1,129

0

5,909

5,513

1,535

0

17,5802,278

019,85818,5562,685

321,2440-9,111-20-9,1310-11,009-11-11,020

0

0

-38

-38

0

-11,009-49-11,058

Financial liabilities measured
at fair value
Derivative instruments
Other liabilities
Total

0

0

-32

-32

0

-9,111-52-9,163(1) The fair value hierarchy consists of the following levels:- 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, either directly (i.e. as prices) orindirectly (i.e. derived from prices);- Level 3: inputs for the asset or liability that are not based on observable market data.

18

Airbus SE
Unaudited Condensed Interim IFRS Consolidated Financial Information
for the three-month period ended 31 March 2017

The development of financial instruments of Level 3 is as follows:

Financial assets

Financial liabilites(In € million)
Balance at 1 January 2016
Profit or loss
Settlements
Balance at 31 March 2016

Commodity
swap
agreements
46
-3
-8
35

Total
46
-3
-8
35

Balance at 1 January 2017
Profit or loss
Other comprehensive income
Settlements
Balance at 31 March 2017

3
0
0
-3
0

3
0
0
-3
0

Written Commodity
put options on
swap
Earn-out
NCI interests agreements agreements
-64
0
-10
0
0
0
38
0
0
-26
0
-10
-28
0
6
0
-22

-11
-8
0
-1
-20

-10
0
0
0
-10

Total
-74
0
38
-36
-49
-8
6
-1
-52

For a description of the valuation techniques, inputs and process used in the fair value measurement of thesefinancial instruments and a description of sensitivity analysis performed, refer to Note 35.2 of the Consolidated
Financial Statements. There is no material difference between the outcome of sensitivity analysis performed
at 31 March 2017, compared to the outcome disclosed in the year-end financial statements.

20. Litigation and claims
Airbus is involved from time to time in various legal and arbitration proceedings in the ordinary course of its
business, the most significant of which are described below. Other than as described below, Airbus is not awareof any material governmental, legal or arbitration proceedings (including any such proceedings which are pendingor threatened), during a period covering at least the previous twelve months which may have, or have had in the
recent past significant effects on Airbus SE’s or Airbus’ financial position or profitability.
If the Company concludes that the disclosures relative to contingent liabilities can be expected to prejudiceseriously its position in a dispute with other parties, the Company limits its disclosures to the nature of the dispute.
WTO
Although Airbus is not a party, Airbus 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 aparallel 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 theState 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 Commercial Aircraft 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, andto comply with the WTO’s recommendations and rulings. Because the US did not agree, the matter is now under
WTO 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 from the 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.

19Airbus SE
Unaudited Condensed Interim IFRS Consolidated Financial Information
for the three-month period ended 31 March 2017

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 for several years.
GPT
Promptedbyawhistleblower’s

allegations,Airbusconducted

internal

auditsandretained

PricewaterhouseCoopers (“PwC”) to conduct an independent review relating to GPT Special Project Management
Ltd. (“GPT”), a subsidiary that Airbus acquired in 2007. The allegations called into question a service contract
entered into by GPT prior to its acquisition by Airbus, relating to activities conducted by GPT in Saudi Arabia.
PwC’s report was provided by Airbus 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. Airbus is in continuing engagement with the authorities.
Eurofighter Austria
In March 2012, the German public prosecutor, following a request for assistance by the Austrian publicprosecutor, launched a criminal investigation into alleged bribery, tax evasion and breach of trust by current andformer employees of EADS Deutschland GmbH (renamed on 1 July 2014 Airbus Defence and Space GmbH) andEurofighter Jagdflugzeug GmbH as well as by third parties relating to the sale of Eurofighter aircraft to Austria in
2003. After having been informed of the investigation in 2012, Airbus retained the law firm Clifford Chance toconduct a fact finding independent review. Upon concluding its review, Clifford Chance presented its fact finding
report to Airbus in December 2013. Airbus provided the report to the public prosecutors in Germany. Airbus’
request for access to the prosecutor’s file is pending. Airbus Defence and Space GmbH settled with the tax
authorities in August 2016 on the question of deductibility of payments made in connection with the Eurofighter
Austria campaign. In February 2017, the Austrian Federal Ministry of Defence has raised criminal allegations
against Airbus Defence and Space GmbH for wilful deception and fraud in the context of the sale of theEurofighter aircraft to Austria and respective damage claims. After the Austrian Federal Ministry of Defence raised
its criminal allegations, the Austrian public prosecutor opened an investigation. Airbus is cooperating fully with theauthorities.
Investigation by the UK SFO and France’s PNF into Civil Aviation BusinessIn the context of review and enhancement of its internal compliance improvement programme, Airbus discovered
misstatements and omissions relating to information provided in respect of third party consultants in certain
applications for export credit financing for Airbus customers. In early 2016, Airbus informed the UK, German andFrench Export Credit Agencies (“ECAs”) of the irregularities discovered. Airbus made a similar disclosure to the
UK Serious Fraud Office (“SFO”). In August 2016, the SFO informed Airbus that it had opened an investigation
into allegations of fraud, bribery and corruption in the civil aviation business of Airbus relating to irregularities
concerning third party consultants (business partners). In March 2017, France’s Parquet National Financier(“PNF”) informed Airbus that it had also opened a preliminary investigation into the same subject and that the two
authorities will act in coordination going forward. Airbus is cooperating fully with both authorities. The SFO andPNF investigations and any enforcement action potentially arising as a result could have negative consequences
for Airbus. The potential imposition of any monetary penalty (and the amount thereof) arising from the SFO andPNF investigations would depend on factual findings, and 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. Investigationsof this nature could also result in (i) civil claims or claims by shareholders against Airbus (ii) adverse
consequences on Airbus’ ability to obtain or continue financing for current or future projects (iii) limitations on theeligibility of group companies for certain public sector contracts and/or (iv) damage to Airbus’ business or
reputation via negative publicity adversely affecting Airbus’ prospects in the commercial market place.

20

Airbus SE
Unaudited Condensed Interim IFRS Consolidated Financial Information
for the three-month period ended 31 March 2017

ECA financing
ECA financing continues to be suspended. Airbus is working with the relevant ECAs to re-establish ECA
financing.
Other investigations
In October 2014, the Romanian authorities announced an investigation relating to a border surveillance project inRomania. Airbus confirms that Airbus Defence and Space GmbH had been informed that the German prosecution
office is also investigating potential irregularities in relation to this project, a project in Saudi Arabia and a projectof Tesat-Spacecom GmbH & Co. KG. The public prosecutor in Germany has launched administrative proceedingsin the context of those investigations against Airbus Defence and Space GmbH and Tesat-Spacecom GmbH &Co. KG. Airbus has cooperated fully with the authorities. In October 2016, the German authorities announced thatthey were dropping their investigations into the Romanian and Saudi projects. The tax authorities may challenge
the tax treatment of business expenses in connection with the Romanian and Saudi projects.
In 2013, public prosecutors in Greece and Germany launched investigations into a current employee and former
managing directors and employees of Atlas Elektronik GmbH (“Atlas”), a wholly-owned company of Thyssenkrupp(prior to April 2017, a joint company of ThyssenKrupp and Airbus), on suspicion of bribing foreign officials and tax
evasion in connection with projects in Greece. The public prosecutor in Germany has launched an administrative
proceeding for alleged organisational and supervisory shortfalls against Atlas. The authorities in Greece havelaunched civil claims against Atlas. In 2015, the public prosecutor in Germany launched another investigation intocurrent and former employees and managing directors of Atlas on suspicion of bribery and tax evasion inconnection with projects in Turkey and extended the investigation in 2016 to five current and former employees ofAtlas’ current shareholder and former shareholder. A further investigation was also launched against two former
Atlas employees on suspicion of bribery in connection with projects in Pakistan. In 2016 two further investigations
were started by the Bremen public prosecutor with regard to operations in Indonesia and Thailand. With thesupport of its current and former shareholders, Atlas is cooperating fully with the authorities and is conducting its
own internal investigation. Settlement talks with the Bremen public prosecutor started in November 2016.
Airbus is cooperating with a judicial investigation against unknown persons in France related to Kazakhstan.
Airbus is cooperating with French judicial authorities pursuant to a request for mutual legal assistance made by
the government of Tunisia in connection with historical aircraft sales.
Review of business partner relationships
In light of regulatory investigations and commercial disputes, including those discussed above, Airbus has
determined to enhance certain of its policies, procedures and practices, including ethics and compliance. Airbus isaccordingly in the process of revising and implementing improved procedures, including those with respect to its
engagement of consultants and other third parties, in particular in respect of sales support activities and isconducting enhanced due diligence as a pre-condition for future or continued engagement and to inform decisions
on corresponding payments. Airbus has therefore engaged legal, investigative, and forensic accounting expertiseof the highest calibre to undertake a comprehensive review of all relevant third party business consultant
relationships and related subject matters. Airbus believes that these enhancements to its controls and practices
will best position it for the future, particularly in light of advancements in regulatory standards. Certain consultants
and other third parties have initiated commercial litigation and arbitration against Airbus seeking relief. The
comprehensive review and these enhancements of its controls and practices may lead to additional commercial
disputes or other civil law or criminal law consequences in the future, which could have a material impact on thefinancial statements, however at this stage it is too early to determine the likelihood or extent of any liability.

21

Airbus SE
Unaudited Condensed Interim IFRS Consolidated Financial Information
for the three-month period ended 31 March 2017

Commercial disputes
In May 2013, Airbus has been notified of a commercial dispute following the decision taken by Airbus to cease apartnership for sales support activities in some local markets abroad. Airbus believes it has solid grounds tolegally object to the alleged breach of a commercial agreement. However, the consequences of this dispute andthe outcome of the proceedings cannot be fully assessed at this stage. The arbitration will not be completed until
2018 at the earliest.
In the course of another commercial dispute, Airbus received a statement of claim alleging liability for refunding
part of the purchase price of a large contract which the customer claims it was not obliged to pay. The dispute iscurrently the subject of arbitration.

21. Number of employees
The number of employees as at 31 March 2017 is 130,289 as compared to 133,782 as at 31 December 2016.

22. Subsequent events
On 5 April 2017, Airbus placed bonds for a total of US$1.5 billion, with a 10 year-maturity tranche of US$750
million at a fixed coupon of 3.150%, and a 30 year-maturity tranche of US$750 million at a fixed coupon of
3.950%. Issuance and settlement of these bonds occurred on 10 April 2017.

22