Financial
Statements
2020

Financial
Statements2

Airbus / Financial Statements 2020

1
Airbus SE IFRS Consolidated Financial Statements

2
Notes to the IFRS Consolidated Financial Statements

3
Airbus SE IFRS Company Financial Statements

4
Notes to the IFRS Company Financial Statements

5
Other Supplementary Information
Including the Independent Auditor’s Report

Airbus / Financial Statements 20203

Chapter

1
4

Airbus / Financial Statements 2020

1
Airbus SE
IFRS Consolidated
Financial Statements
Airbus SE – IFRS Consolidated Income Statement
for the years ended 31 December 2020 and 20196

Airbus SE – IFRS Consolidated Statementof Comprehensive Income for the years ended
31 December 2020 and 20197

Airbus SE – IFRS Consolidated Statementof Financial Position for the years ended
31 December 2020 and 20198

Airbus SE – IFRS Consolidated Statementof Cash Flows for the years ended
31 December 2020 and 201910

Airbus SE – IFRS Consolidated Statementof Changes in Equity for the years ended
31 December 2020 and 201911

Airbus / Financial Statements 2020

5

1. Airbus SE – IFRS Consolidated Financial Statements /Airbus SE – IFRS Consolidated Income Statement
for the years ended 31 December 2020 and 2019(In € million)

Note

Revenue

12

Cost of sales
Gross margin12

Selling expenses

2020

2019

49,91270,478(44,250)(59,973)

5,662

10,505

(717)

(908)

Administrative expenses

13(1,423)(5,217)

Research and development expenses

14(2,858)(3,358)Other income

15

132

370

Other expenses

15(1,458)(356)

Share of profit from investments accounted for under the equity method

16

39

299

Other income from investments

16

113

4

(510)

1,339

(Loss) Profit before financial result and income taxes
Interest income

140

228

Interest expense

(411)

(339)

Other financial result
Total financial result

17

Income taxes

18

Loss for the period

(349)

(164)

(620)

(275)

(39)

(2,389)(1,169)(1,325)(1,133)(1,362)(36)

37

Attributable toEquity owners of the parent (Net income)Non-controlling interests

Earnings per share

€

€

Basic

19

(1.45)(1.75)

Diluted19(1.45)(1.75)

The accompanying notes are an integral part of these Consolidated Financial Statements (IFRS).

6

Airbus / Financial Statements 2020

1. Airbus SE – IFRS Consolidated Financial Statements /Airbus SE – IFRS Consolidated Statement of Comprehensive Income
for the years ended 31 December 2020 and 2019(In € million)

Note

Loss for the period

2020

2019

(1,169)(1,325)(1,537)(2,669)

(133)

267

Other comprehensive income
Items that will not be reclassified to profit or loss:
Remeasurement of the defined benefit pension plans

32

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

18

(96)

(130)

373

410

(204)

54

3,648

(1,434)(61)

136

Items that may be reclassified to profit or loss:
Foreign currency translation differences for foreign operations
Change in fair value of cash flow hedges

38

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

18

51

3

(907)

342

Other comprehensive income, net of tax

1,134(3,021)

Total comprehensive income for the period(35)(4,346)Equity owners of the parent(25)(4,364)Non-controlling interests

(10)

18

Attributable to1

The accompanying notes are an integral part of these Consolidated Financial Statements (IFRS).

Airbus / Financial Statements 2020

7

1. Airbus SE – IFRS Consolidated Financial Statements /Airbus SE – IFRS Consolidated Statement of Financial Position
for the years ended 31 December 2020 and 2019(In € million)

Note

2020

2019

AssetsNon-current assets
Intangible assets

20

16,19916,591

Property, plant and equipment

21

16,674

17,2942

2

Investments accounted for under the equity method

9

1,578

1,626

Investment property

Other investments and other long-term financial assets

22

3,855

4,453

Non-current contract assets

23

48

91

Non-current other financial assets

26

3,483

1,033

Non-current other assets

27

483

522

Deferred tax assets

18

4,023

5,008

Non-current securities

37

5,350

11,066

51,69557,686

Total non-current assets
Current assets
Inventories

24

30,401

31,550Trade receivables

23

5,132

5,674

Current portion of other long-term financial assets

22

468

449

Current contract assets

23

1,074

1,167

Current other financial assets

26

2,432

2,060

Current other assets

27

2,216

2,423

620

1,784

Current tax assets
Current securities

37

1,618

2,302

Cash and cash equivalents

37

14,4399,314

58,40056,72300

110,095

114,409

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

Total assets

8

Airbus / Financial Statements 2020

1. Airbus SE – IFRS Consolidated Financial Statements /

2020

2019

Capital stock

785

784

Share premium

3,599

3,555

Retained earnings

250

2,241

1,853

(523)

(In € million)

Note

Equity and liabilities
Equity attributable to equity owners of the parent

Accumulated other comprehensive income
Treasury shares
Total equity attributable to equity owners of the parent
Non-controlling interests

Total equity

(42)

(82)

6,445

5,975

11

15

35

6,456

5,990

Liabilities
Non-current liabilities
Non-current provisions

25

13,99812,542Long-term financing liabilities

37

14,082

8,189

Non-current contract liabilities

23

19,212

16,980Non-current other financial liabilities

26

5,657

7,498

Non-current other liabilities

27

436

384

Deferred tax liabilities

18

451

398

Non-current deferred income

32

54

Total non-current liabilities

53,86846,045

6,545

6,372

1

Current liabilities
Current provisions

25

Short-term financing liabilities

37

3,013

1,959

Trade liabilities

23

8,722

14,808Current contract liabilities

23

24,67526,426

Current other financial liabilities

26

1,769

2,647

Current other liabilities

27

3,160

6,817

1,311

2,780

Current deferred income

576

565

Total current liabilities

49,77162,37400

Total liabilities

103,639

108,419

Total equity and liabilities

110,095

114,409

Current tax liabilities

Disposal group of liabilities classified as held for sale

The accompanying notes are an integral part of these Consolidated Financial Statements (IFRS).

Airbus / Financial Statements 2020

9

1. Airbus SE – IFRS Consolidated Financial Statements /Airbus SE – IFRS Consolidated Statement of Cash Flowsfor the years ended 31 December 2020 and 2019(In € million)

Note

Operating activities
Loss for the period attributable to equity owners of the parent (Net income)(Loss) Profit for the period attributable to non-controlling interests
Adjustments to reconcile profit for the period to cash provided by operating activities:
Interest income
Interest expense
Interest received
Interest paid
Income tax expense
Income tax paid
Depreciation and amortisation
11
Valuation adjustments
Results on disposals of non-current assets
Results of investments accounted for under the equity method
Change in current and non-current provisions
Contribution to plan assets (1)Change in other operating assets and liabilities
Inventories
Trade receivables
Contract assets and liabilities
Trade liabilities
23
Other assets and liabilities
26, 27
Cash provided by (used for) 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
Acquisitions of subsidiaries, joint ventures, businesses and non-controlling interests (net of cash)
Payments for investments accounted for under the equity method, other investments and otherlong-term financial assets
Proceeds from disposals of investments accounted for under the equity method, other investments
and other long-term financial assets
Dividends paid by companies valued at equity
9
Disposals of non-current assets and disposal groups classified as assets held for sale and liabilities
directly associatedPayments for investments in securities
37
Proceeds from disposals of securities
37
Cash provided by (used for) investing activities
Financing activities
Increase in financing liabilities
37
Repayment of financing liabilities
37
Cash distribution to Airbus SE shareholders
35
Payments for liability for puttable instruments
Changes in capital and non-controlling interests
Change in treasury shares
Cash provided by (used for) financing activities
Effect of foreign exchange rate changes on cash and cash equivalents

2019(1,133)(36)(1,362)
37

(140)
411
82
(205)
39
79
2,831
95
9
(39)
1,138
(314)
(8,237)152351
848(5,523)(4,065)(5,420)

(228)
339
151
(187)
2,389
(1,476)
2,927
600
(77)
(299)
475
(1,752)
2,216
117
29
1,297
(1,625)
2,398
3,753

(1,759)228(481)(2,340)
112
8

(565)

(952)

408
(8)

358
210

0
(337)
6,640
4,126

137
(2,861)
2,464(2,864)

7,102
(445)
0
91
89
(4)
6,833
(414)

402
(562)
(1,280)
319
194
(31)
(958)
(45)

Net increase (decrease) in cash and cash equivalents

5,125

(114)

Cash and cash equivalents at beginning of period

9,314

9,428

14,4399,314

Cash and cash equivalents at end of period(1) Thereof € 331 million contributions for retirement and deferred compensation plans in 2020 (2019: € 1,758 million).

The accompanying notes are an integral part of these Consolidated Financial Statements (IFRS).

10

2020

Airbus / Financial Statements 202037

1. Airbus SE – IFRS Consolidated Financial Statements /Airbus SE – IFRS Consolidated Statement of Changes in Equity
for the years ended 31 December 2020 and 2019
Equity attributable to equity holders of the parent
Accumulated othercomprehensive income(In € million)

Foreign
Financial
Cashcurrency
CapitalShare Retained assets atflow translation Treasury
Note stock premium earnings fair value hedges adjustments shares

Balance at 1 January
2019, as reported
Restatements (1)Balance at 1 January
2019, restated (1)Noncontrolling
Total interests

Total
equity

777

2,941

5,923

492

(1,473)

1,115

(51)

9,724

(5)

9,719

0

0

(122)

0

0

0

0

(122)

0

(122)

492 (1,473)

777

2,941

5,801

1,115

(51)

9,602

(5)

9,597

Loss for the period00(1,362)

0

0

0

0

(1,362)37(1,325)

Other comprehensive
income00(2,345)327(1,048)64

0(3,002)(19)(3,021)

Total comprehensive
income for the period00(3,707)327(1,048)64

0(4,364)18(4,346)

Capital increase

35

7

614

0

0

0

0

0

621

0

621

Share-based payment(IFRS 2)

33

0

0

76

0

0

0

0

76

0

76

Cash distribution to
Airbus SE shareholders /Dividends paid to
non-controlling interests

35

0

0

(1,280)

0

0

0

0

(1,280)0(1,280)

0

0

1,351

0

0

0

0

1,351

2

1,353

0

0

0

(31)

(31)

0

(31)

819 (2,521)

1,179

(82)

5,975

15

5,990

Equity transaction(IAS 27)
Change in treasury
shares000Balance at
31 December 2019

35

784

3,555

2,241

Loss for the period00(1,133)

0

0

0

0

(1,133)(36)(1,169)Other comprehensive
income00(1,268)

(171)

2,783

(236)

0

1,108

26

1,134

Total comprehensive
income for the period00(2,401)

(171)

2,783

(236)

0

(25)

(10)

(35)

Capital increase

35

1

44

0

0

0

0

0

45

0

45

Share-based payment(IFRS 2)

33

0

0

42

0

0

0

0

42

0

42

Cash distribution to
Airbus SE shareholders /Dividends paid to
non-controlling interests

35

0

0

0

0

0

0

0

0

0

0

0

0

368

0

0

0

0

368

6

374

0

0

0

0

0

0

40

40

0

40

785

3,599

250

648

262

943

(42)

6,445

11

6,456

Equity transaction(IAS 27)
Change in treasury
sharesBalance at
31 December 2020

35

1(1) Opening balance figures are restated due to the application of IFRIC 23.

The accompanying notes are an integral part of these Consolidated Financial Statements (IFRS).

Airbus / Financial Statements 202011

Chapter

2
12

Airbus / Financial Statements 2020

2
Notes to the
IFRS Consolidated
Financial Statements
2.1

Basis of Preparation

15

2.2

Airbus Structure

21

2.3

Segment Information

26

2.4

Airbus Performance

28

2.5

Operational Assets and Liabilities

34

2.6

Employees Costs and Benefits

47

2.7

Capital Structure and Financial Instruments

60

2.8

Other Notes

79

2.9

Appendix “Simplified Airbus Structure”

82

Airbus / Financial Statements 202013

2. Notes to the IFRS Consolidated Financial Statements /Contents /2.1

Basis of Preparation

15

1.
2.
3.
4.
5.
6.

The Company
Impact of the COVID-19 pandemic
Signiﬁcant Accounting Policies
Key Estimates and Judgements
Change in Accounting Policies and Disclosures
Brexit

15
15
17
18
20
21

22.
23.
24.
25.
26.

14

2.2

Airbus Structure

21

7.
8.
9.

21
22

10.

Scope of Consolidation
Acquisitions and Disposals
Investments Accounted for under
the Equity Method
Related Party Transactions

2.3

Segment Information

26

11.

Segment Information

26

2.4

Airbus Performance

28

12.
13.
14.
15.
16.

28
29
29
29

17.
18.
19.

Revenue and Gross Margin
Administrative Expenses
Research and Development Expenses
Other Income and Other Expenses
Share of Proﬁt from Investments Accounted
for under the Equity Method and Other Income
from Investments
Total Financial Result
Income Taxes
Earnings per Share

29
30
30
34

2.5

Operational Assets and Liabilities

34

20.
21.

Intangible Assets
Property, Plant and Equipment

34
37

Airbus / Financial Statements 2020

23
25

27.
28.

Other Investments and Other Long-Term
Financial Assets
Contract Assets and Contract Liabilities, Trade
Receivables and Trade Liabilities
Inventories
Provisions, Contingent Assets and Contingent
Liabilities
Other Financial Assets and Other Financial
Liabilities
Other Assets and Other Liabilities
Sales Financing Transactions

39
39
40
41
42
44
44

2.6

Employees Costs and Beneﬁ ts

47

29.
30.
31.
32.
33.
34.

Number of Employees
Personnel Expenses
Personnel-Related Provisions
Post-Employment Beneﬁts
Share-based Payment
Remuneration

47
47
47
47
53
55

2.7

Capital Structure and Financial Instruments

60

35.
36.
37.
38.

Total Equity
Capital Management
Net CashFinancial Instruments

60
61
61
65

2.8

Other Notes

79

39.
40.
41.

Litigation and Claims
Auditor Fees
Events after the Reporting Date

79
81
81

2.9

Appendix “Simpliﬁ ed Airbus Structure”

82

2. Notes to the IFRS Consolidated Financial Statements /2.1 Basis of Preparation

2.1 Basis of Preparation
1.

The Company

T he accompanying IFRS Consolidated Financial Statements
present the ﬁnancial position and the results of operations ofAirbus SE together with its subsidiaries referred to as “theCompany”, a European public limited-liability company (Societas
Europaea) with its seat (statutaire zetel) 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.

2.

The Company’s reportable segments are Airbus, Airbus
Helicopters and Airbus Defence and Space (see “– Note 11:
Segment Information”). The Company is listed on the European
stock exchanges in Paris, Frankfurt am Main, Madrid, Barcelona,
Valencia and Bilbao. The IFRS Consolidated Financial Statements
were authorised for issue by the Company’s Board of Directors
on 17 February 2021.

Impact of the COVID-19 pandemic

The COVID-19 pandemic, the resulting health and economiccrisis and actions taken in response to the spread of thepandemic, including government measures and travel limitations
and restrictions, have resulted in signiﬁcant disruption to theCompany’s business operations and supply chain. A numberof measures have been taken by the Company to implement
stringent health and safety procedures while taking account ofstock levels and production lead-times.
The aerospace industry including the financial health ofoperators, airlines, lessors and suppliers, commercial aircraft
market, demand for air travel and commercial air trafﬁc havebeen severely impacted by the COVID-19 pandemic. As a result,airlines have reduced capacity, grounded large portions of theirﬂeets temporarily, sought to implement measures to reduce
cash spending and secure liquidity. Some airlines are also
seeking arrangements with creditors, restructuring or applying
for bankruptcy or insolvency protection, which may have further
consequences for the Company and its order book as well asother consequences resulting from the related proceedings.
On 8 April 2020, the Company announced its decision toadapt commercial aircraft production rates to 40 per monthfor the A320 Family, two per month for A330 and six per
month for A350 in response to the new COVID-19 market
environment. Subsequently, the rate for A350 was further
reduced to ﬁve per month. This represented a reduction of the
March 2020 pre-COVID-19 average rates of roughly one third.
With these new rates, the Company intends to preserve its ability
to meet customer demand while protecting its ability to further
adapt as the global market evolves.
The Company is monitoring the evolution of the COVID-19
pandemic and will continue to assess further impacts going
forward. The main elements related to the Consolidated Financial
Statements considered as of 31 December 2020 are detailed
in the following sections. A consistent set of assumptions has
been applied for each of the below elements.
The Company’s business, results of operations and ﬁnancial
condition have been and will continue to be materially affectedby the COVID-19 pandemic, and the Company continues toface signiﬁcant risks and uncertainties related to the COVID-19
pandemic and its resulting health and economic crisis.

2.1

Going concern and associatedliquidity measures

On 23 March 2020, the Company has announced measures tobolster its liquidity and balance sheet in response to the COVID-19
pandemic, including a new € 15 billion credit facility partiallytermed out by bond and USPP issuances, the withdrawal of 2019
dividend proposal with cash value of € 1.4 billion, the suspensionof voluntary top up pension funding and strong focus on support
to customers and delivery. In parallel, governmental partners
have supported the aerospace sector since the beginning of thecrisis either through direct support to airlines and suppliers, or
through partial unemployment schemes. With these decisions,the Company has available liquidity to cope with additional
cash requirements, including the amended production rates
as described above.

2

On 21 October 2020, the Company signed a new € 6 billion
Revolving Syndicated Credit Facility also partially terming out
the € 15 billion credit facility by € 3 billion in order to reﬁnance its
existing € 3 billion Revolving Syndicated Facility (see “– Note 37:
Net Cash”).
As of 31 December 2020, the Company has a net cash position of€ 4.3 billion with a total liquidity of € 33.6 billion, before deducting
short-term ﬁnancing liabilities.
Based on the above, management considers the Company has
sufﬁcient resources to continue operating for at least 12 months
and that there are no material uncertainties about the Company’s
ability to continue as a going concern.

2.2

Goodwill impairment

As a result of the deterioration in the economic environment
and the uncertainty in the business outlook, the Company has
performed impairment tests of goodwill throughout the year andalso as at 31 December 2020, which leads to no impairment
being necessary (see “– Note 20: Intangible Assets”).
These tests have been performed in line with existing
methodology for each of the Company’s cash generating units(CGUs). Cash ﬂow projections are based on latest operativeplanning and expected cash ﬂows beyond the planning horizon

Airbus / Financial Statements 202015

2. Notes to the IFRS Consolidated Financial Statements /2.1 Basis of Preparation

through a terminal value. The latest operative planning includes
management’s best assessment of future production rates,
aircraft deliveries and order in-take, together with any mitigating
actions that the Company may implement. These have beenused to derive cash ﬂow projections for the years 2021 until
2025, and thereafter for the terminal value.
In addition, the Company performed a comparison with the fairvalue of each CGU derived from the market capitalisation. The
market capitalisation as of 31 December 2020 amounts to€ 70.4 billion and signiﬁcantly exceeds the equity of the Company.

2.3

Other Investments and Other
Long-Term Financial Assets /Joint Ventures

The Company’s main investments have been impacted by thehigh volatility in ﬁnancial markets in 2020 with the variation
recorded either through ﬁnancial result or OCI. The impact inﬁnancial result amounts to € -136 million for a loan to OneWeb
Communications and € -226 million for the investment in Dassault
Aviation. The impact in OCI for € -206 million includes theinvestment in OneWeb Communications and other investments.
For further information on Dassault and OneWeb investments,
please see “– Note 22: Other Investments and Other Long-Term
Financial Assets”.

2.4

Workforce adaptation

In June 2020, Airbus announced plans to adapt its global
workforce, principally in France, Germany, Spain and the UK,
and resize its commercial aircraft activity in response to the
COVID-19 crisis. This adaptation was expected to result in a
reduction of around 15,000 positions no later than summer 2021.
Working time adaptation and mitigation measures supportedby the governments have reduced the number of positions
subject to the restructuring plan. Taking into consideration theactual departures since the initial announcement, the remaining
number of positions subject to the restructuring plan amounts
to approximately 6,100 as of 31 December 2020, including preretirement headcount under German Altersteilzeit (“ATZ”).
In addition, Airbus Defence and Space completed the consultation
process with the Company’s European works council on thed ivision’s planned restructuring. The plan presented to theemployee representatives initially foresaw the reduction ofaround 1,900 positions including pre-retirement headcountunder German Altersteilzeit (“ATZ”) until the end of 2021. However
this number was also subsequently reduced to approximately
1,400 positions reﬂecting departures which occurred after the
initial announcement.
I n November 2020, a reconciliation of Interest Agreement
involving approximately 100 positions has been signed inGermany within Airbus Helicopters and hence, a provision has
been recorded accordingly.
As of 30 September 2020, a restructuring provision wasrecognised for an amount of € 1.2 billion including mainly thecost of voluntary and compulsory measures taking into accountmanagement’s best estimate of the impact of the working time

16

Airbus / Financial Statements 2020

adaptation and government support measures. Total payments
to employees affected by the plan would amount to approximately€ 1.5 billion, including the settlement of other accrued employee
beneﬁts.
As of 31 December 2020, the provision amounts to € 1.0 billion,
reduced mainly by the costs incurred in the fourth quarter.

2.5

Operational assets

The Company has performed a comprehensive review of
its operational assets and liabilities taking into account theamended production rates and expected future deliveries. This
review has resulted in charges being recorded in 2020 for an
amount of € 1.3 billion, including an impairment of inventories
considered at risk of € 355 million, additional provisions
relating to A380 programme of € 279 million, a write-off ofcapitalised development costs of € 101 million, provisions for
supplier commitments of € 157 million and provisions coveringvarious commercial risks of approximately € 401 million.

2.6

Deferred tax

As of 31 December 2020, the recoverability of deferred tax
assets has been assessed based on the latest operating planningand resulting from the COVID-19 pandemic. This has led todeferred tax asset impairments amounting to € 356 million in2020 including tax losses carried forward (see “– Note 18: Income
Taxes”).

2.7

Hedge accounting

The Company has maintained its hedge accounting policies
as deﬁned in the 2019 year-end Financial Statements. In the
Company’s assessment the risk of future cancellations thatare not yet materialised has been included. When transactions
are no longer expected to occur in accordance with the hedge
designation, the accumulated gains or losses on the hedging
instrument have been reclassiﬁed to ﬁnancial result. The impact
in ﬁnancial result amounts to € -48 million as of 31 December
2020, mainly relating to the widebody programmes.
The increase of the counterparty credit risk and credit spreadis included in the determination of the fair value of the hedges andhad limited impact on the measurement of hedge ineffectiveness.
The Company performed a material roll-over campaign for anominal amount of US$ 31 billion in the third quarter to re-alignthe hedging portfolio to the last available long term delivery plan,
including roll-overs at historical rates for a nominal amount of
US$ 8 billion in July 2020 as part of the liquidity measures. In
this way, the Company mitigates the cash ﬂow impacts occurring
when the gains or losses on the forward hedges do not coincidewith the currency gains or losses on the underlying commercial
transactions (see “– Note 38: Financial Instruments”).
In the Company’s assessment the risk of aircraft rescheduling
beyond the risk management and the risk of future cancellations,notably due to potential airlines default, have been included. The
Company will continue to review this position going forward to
identify any potential trigger for hedge disqualiﬁcation.

2. Notes to the IFRS Consolidated Financial Statements /2.1 Basis of Preparation

2.8

Expected credit loss

The Company has also considered the impact of COVID-19
pandemic on the expected credit loss of its ﬁnancial instruments(mainly loans, trade and lease receivables). The amount and timingof the expected credit losses, as well as the probability assigned
thereto, has been based on the available information at the endof 2020. As a result of this review no signiﬁcant credit losses havebeen recorded in 2020 (see “– Note 22: Other Investments andOther Long-Term Financial Assets”).

3.

2.9

Pensions

The COVID-19 pandemic has a signiﬁcant impact on market
ﬂuctuations (mainly impacting the interest rates and asset market
values). The increase on the net pension liability for 2020 amounting
to € 1.6 billion is recognised mainly in other comprehensive income
and is subject to future volatility (see “– Note 25: Provisions,Contingent Assets and Contingent Liabilities”).

Signiﬁcant Accounting Policies

Basis of preparation — The Company’s 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”) and Part 9 of Book 2of the Netherlands Civil Code. When reference is made to IFRS,
this intends to be EU-IFRS.
The Consolidated Financial Statements have been preparedon a historical cost basis, unless otherwise indicated. They areprepared and reported in euro (“€”) and all values are rounded
to the nearest million appropriately. Due to rounding, numberspresented may not add up precisely to the totals provided andpercentages may not precisely reﬂect the absolute ﬁgures.
The Company describes the accounting policies applied in eachof the individual notes to the Financial Statements and avoids
repeating the text of the standard, unless this is considered
relevant to the understanding of the note’s content. The
Company’s accounting policies and methods are unchanged
compared to 31 December 2019. The implementation of otheramended standards has no material impact on the Company’s
Consolidated Financial Statements as of 31 December 2020.
The most signiﬁcant accounting policies are described below,
and have been updated accordingly.
Revenue recognition — Revenue is recognised when the
Company transfers control of the promised goods or services
to the customer. The Company measures revenue, for theconsideration to which the Company is expected to be entitledin exchange for transferring promised goods or services. Variableconsiderations are included in the transaction price when it is highly
probable that there will be no signiﬁcant reversal of the revenue
in the future. The Company identiﬁes the various performanceobligations of the contract and allocates the transaction priceto these performance obligations. Advances and pre-delivery
payments (contract liabilities) are received in the normal courseof business and are not considered to be a signiﬁcant ﬁnancing
component as they are intended to protect the Company from thecustomer failing to complete its contractual obligations.
Incurred inefficiency cost such as the unexpected cost of
materials, labour hours expended or other resources consumed
do not generate revenue as they do not contribute to theCompany’s progress in satisfying the performance obligations.
Revenue from the sale of commercial aircraft is recognised
at a point in time (i.e. at delivery of the aircraft). The Company
estimates the amount of price concession granted by theCompany’s engine suppliers to their customers as a reductionof both revenue and cost of sales.

An aircraft can remain in storage under a bill-and-holdarrangement. In such cases, revenue is recognised when therequirements for the transfer of control under a bill-and-holdarrangement are fulﬁlled.
Revenue from the sale of military aircraft, space systems
and services — When control of produced goods or renderedservices is transferred over time to the customer, revenue isrecognised over time, i.e. under the percentage of completion
method (“PoC” 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 reasonablemargin) for the work completed to date, in the event ofcontract termination at the convenience of customers (e.g.
Tiger contract); or– it creates a good which is controlled by the customer as thegood is created or enhanced (e.g. Euroﬁghter contracts, someborder security contracts, A400M development); or– the customer simultaneously receives and consumes
the beneﬁts provided by the Company (e.g. maintenancecontracts).

2

For the application of the over time method (PoC method), themeasurement of progress towards complete satisfaction of aperformance obligation is based on inputs (i.e. cost incurred).
When none of the criteria stated above have been met, revenue
is recognised at a point in time. Revenue is recognised at thedelivery of aircraft under IFRS 15 from the sale of militarytransport aircraft, from the A400M launch contract and mostof NH90 serial helicopters’ contracts.
Provisions for onerous contracts — The Company records
provisions for onerous contracts when it becomes probablethat the total contract costs will exceed total contract revenue.
Before a provision for onerous contracts is recorded, the related
assets under construction are measured at their net realisablevalue and written-off if necessary. Onerous contracts are
identiﬁed by monitoring the progress of the contract together
with the underlying programme status. An estimate of the related
contract costs is made, which requires signiﬁcant and complex
assumptions, judgements and estimates related to achieving
certain performance standards (see “– Note 4: Key Estimatesand Judgements”, “– Note 12: Revenue and Gross Margin”
and “– Note 25: Provisions, Contingent Assets and Contingent
Liabilities”).

Airbus / Financial Statements 202017

2. Notes to the IFRS Consolidated Financial Statements /2.1 Basis of Preparation

Research and development expenses — The costs forinternally generated research are expensed when incurred. The
costs for internally generated development are capitalised when:– the product or process is technically feasible and clearlydeﬁned (i.e. the critical design review is ﬁnalised);– adequate resources are available to successfully complete
the development;– the beneﬁts from the assets are demonstrated (a market exists
or the internal usefulness is demonstrated) and the costs
attributable to the projects are reliably measured;– the Company intends to produce and market or use thedeveloped product or process and can demonstrate its
proﬁtability.
Income tax credits granted for research and development
activities are deducted from corresponding expenses or from
capitalised amounts when earned.
Capitalised development costs, are recognised either as
intangible assets or when the related development activities
lead to the construction of specialised tooling for production(“jigs and tools”), or involve the design, construction and testingof prototypes and models, as property, plant and equipment.
Capitalised development costs are generally amortised overthe estimated number of units produced. If the number of units
produced cannot be estimated reliably, they are amortised overthe estimated useful life of the internally generated intangible
asset. Amortisation of capitalised development costs is
recognised in cost of sales.
Inventories are measured at the lower of acquisition cost
(generally the average cost) or manufacturing cost and net
realisable value. Manufacturing costs comprise all costs that are
directly attributable to the manufacturing process, such as directmaterial and labour, and production related overheads (based on
normal operating capacity and normal consumption of material,
labour and other production costs), including depreciation
charges. Net realisable value is the estimated selling price inthe ordinary course of the business less the estimated costs tocomplete the sale.
Transactions in foreign currency, i.e. transactions in currencies
other than the functional currency of an entity of the Company,
are translated into the functional currency at the foreign exchange
rate prevailing at the transaction date. Monetary assets andliabilities denominated in foreign currencies at the end of thereporting period are remeasured into the functional currency atthe exchange rate in effect at that date. Except when deferred in

4.

Non-monetary assets and liabilities denominated in foreign
currencies that are stated at historical cost are translated intofunctional currency at the foreign exchange rate in effect at thedate of the transaction. Translation differences on non-monetaryﬁnancial assets and liabilities that are measured at fair value arereported as part of the fair value gain or loss. However, translationdifferences of non-monetary ﬁnancial assets measured at fairvalue and classiﬁed as fair value through other comprehensive
income (“OCI”) are included in accumulated other comprehensive
income (“AOCI”).
Hedge accounting — Most of the Company’s revenue isdenominated in US dollar (“US$”), while a major portion of its
costs are incurred in euro. The Company is signiﬁcantly exposedto the risk of currency changes, mainly resulting from US$/€exchange rates. Furthermore, the Company is exposed, though
to a much lesser extent, to foreign exchange risk arising fromcosts incurred in currencies other than the euro and to othermarket risks such as interest rate risk, commodity price andequity price risk.
In order to manage and mitigate those risks, the Company
enters into derivative contracts. The Company applies hedge
accounting to its derivative contracts whenever the relevant IFRS
criteria can be met. Hedge accounting ensures that derivative
gains or losses are recognised in proﬁt or loss (mainly in revenue)
in the same period that the hedged items or transactions affectproﬁt or loss.
The major portion of the Company’s derivative contracts is
accounted for under the cash ﬂow hedge model. The fair value
hedge model is used only for certain interest rate derivatives.
Derivative contracts which do not qualify for hedge accounting
are accounted for at fair value through proﬁt and loss; any related
gains or losses being recognised in ﬁnancial result.
The Company’s hedging strategies and hedge accounting
policies are described in more detail in “– Note 38: Financial
Instruments”.

Key Estimates and Judgements

The preparation of the Company’s Consolidated Financial
Statements requires the use of estimates and assumptions. In
preparing these Financial Statements, management exercises its
best judgement based upon its experience and the circumstancesprevailing at that time. The estimates and assumptions are basedon available information and conditions at the end of the ﬁnancial
period presented and are reviewed on an ongoing basis. Key
estimates and judgements that have a signiﬁcant inﬂuence on theamounts recognised in the Company’s Consolidated Financial
Statements are mentioned below:

18

equity as qualifying cash ﬂow hedges (see “– Note 38: Financial
Instruments”), these foreign exchange remeasurement gains andlosses are recognised, in line with the underlying item:– in proﬁt before ﬁnance costs and income taxes if the substanceof the transaction is commercial (including sales ﬁnancing
transactions); and– in ﬁnance costs for ﬁnancial transactions.

Airbus / Financial Statements 2020

Impairment of long-life assets, work in progress and ﬁnishedaircraft — In testing long-life assets such as jigs and tools andcapitalised development costs for impairment, the Company
makes estimates on the number and timing of aircraft units to
be delivered in the future, the margin of these aircraft, and thediscount rate associated with the aircraft programme. For aircraftthat may need to be remarketed, the impairment of working
progress and ﬁnished aircraft is assessed based on an estimationof the future selling price and associated remarketing costs.

2. Notes to the IFRS Consolidated Financial Statements /2.1 Basis of Preparation

Revenue recognition for per formance obligationstransferred over time — The PoC method is used to recogniserevenue for performance obligations transferred over time.
This method places considerable importance on accurate
estimates at completion as well as on the extent of progress
towards completion. For the determination of the progress ofthe performance obligations, signiﬁcant estimates include total
contract costs, remaining costs to completion, total contract
revenue, contract risks and other judgements. The managementof the operating divisions continually review all estimates involvedin such performance obligations and adjusts them as necessary(see “– Note 23: Contract Assets and Contract Liabilities, Trade
Receivables and Trade Liabilities”).
Provisions — The evaluation of provisions, such as onerous
contracts and restructuring measures are based on best
available estimates. Onerous contracts are identified bymonitoring the progress of the contract and the underlying
programme performance. The associated estimates of therelevant contract costs require signiﬁcant judgement related toperformance achievements. Depending on the size and natureof the Company’s contracts and related programmes, the extent
of assumptions, judgements and estimates in these monitoringprocesses differs. In particular, the introduction of commercial
or military aircraft programmes (e.g. A400M) or major derivative
aircraft programmes involves an increased level of estimatesand judgements associated with the expected development,
production and certification schedules and expected cost
components (see “– Note 25: Provisions, Contingent Assets
and Contingent Liabilities”).
In view of overall commercial relationships, contract adjustments
may occur, and must be considered on a case by case basis.
Estimates and judgements are subject to change based on new
information as contracts and related programmes progress.
Furthermore, the complex design and manufacturing processesof the Company’s industry require challenging integration andcoordination along the supply chain including an ongoingassessment of suppliers’ assertions which may additionallyimpact the outcome of these monitoring processes.
A restructuring provision is recognised when the Company has
developed a detailed formal plan for the restructuring and has
raised a valid expectation in those affected that it will carry out
the restructuring by starting to implement the plan or announcing
its main features to those affected by it. The measurement of a
restructuring provision is at the best estimate of the anticipatedcosts and includes only the direct expenditures arising from therestructuring, which are those amounts that are both necessarily
entailed by the restructuring and not associated with the ongoing
activities of the Company.
Hedge accounting — The hedge portfolio covers a large portionof the Company’s highly probable forecasted transactions derived
from its commercial activities. The Company makes estimatesand judgement in assessing the highly probable criteria of theforecasted transactions, in order to anticipate future events, asrisk of future cancellations of orders (see “– Note 38: Financial
Instruments”).

order to anticipate future events. The actuarial assumptions may
differ materially from actual developments due to changing market
and economic conditions and therefore result in a signiﬁcantchange in post-retirement employee beneﬁt obligations andthe related future expenses (see “– Note 32: Post-Employment
Beneﬁts”).
Legal contingencies — Airbus companies are parties tolitigations related to a number of matters as described in“– Note 39: Litigation and Claims”. The outcome of these matters
may have a material effect on the ﬁnancial position, results ofoperations or cash ﬂows of the Company. Management regularly
analyses current information concerning these matters andprovides provisions for probable cash outﬂows, including theestimate of legal expenses to resolve the matters. Internal andexternal lawyers are used for these assessments. In making
the decision regarding the need for provisions, management
considers the degree of probability of an unfavourable outcome
and the ability to make a sufﬁciently reliable estimate of theamount of loss. The ﬁling of a suit or formal assertion of a claim
against the Airbus companies or the disclosure of any such suitor assertion, does not automatically indicate that a provision
may be appropriate.
Income taxes — The Company operates and earns income innumerous countries and is subject to changing tax laws in multiple
jurisdictions within these countries. Signiﬁcant judgements arenecessary in determining the worldwide income tax liabilities.
Although management believes that it has made reasonableestimates about the ﬁ nal outcome of tax uncertainties, noassurance can be given that the ﬁnal tax outcome of thesematters will be consistent with what is reﬂected in the historicalincome tax provisions. At each end of the reporting period, theCompany assesses whether the realisation of future tax beneﬁts
is probable to recognise deferred tax assets. This assessment
requires the exercise of judgement on the part of managementwith respect to, among other things, beneﬁts that could be
realised from available tax strategies and future taxable income,as well as other positive and negative factors.

2

The recorded amount of total deferred tax assets could be
reduced, through valuation allowances recognition, if estimatesof projected future taxable income and beneﬁts from available tax
strategies are lowered, or if changes in current tax regulations
are enacted that impose restrictions on the timing or extent of
the Company’s ability to utilise future tax beneﬁts. The basis forthe recoverability test of deferred tax assets is the same as theCompany’s latest operative planning also taking into accountcertain qualitative aspects regarding the nature of the temporary
differences. Qualitative factors include but are not limited toan entity’s history of planning accuracy, performance records,
business model, backlog, existence of long-term contracts aswell as the nature of temporary differences (see “– Note 18:
Income Taxes”).
Other subjects that involve assumptions and estimates are further
described in the respective notes (see “– Note 8: Acquisitions
and Disposals”, “– Note 20: Intangible Assets” and “– Note 23:
Contract Assets, Contract Liabilities and Trade Receivables,
and Trade Liabilities”).

Employee beneﬁts — The Company accounts for pension
and other post-retirement beneﬁts in accordance with actuarial
valuations. These valuations rely on statistical and other factors in

Airbus / Financial Statements 202019

2. Notes to the IFRS Consolidated Financial Statements /2.1 Basis of Preparation

5.

Change in Accounting Policies and Disclosures

The accounting policies applied by the Company in preparation of its 2020 year-end Consolidated Financial Statements are thesame as applied for the previous year. Other than that, amendments, improvements to and interpretations of standards effectivefrom 1 January 2020 have no material impact on the Consolidated Financial Statements.

New, Revised or Amended IFRSs Issued, not Applicable but AnticipatedImpact of the initial application of COVID 19-related Rent Concessions Amendment to IFRS 16
In May 2020, the IASB issued COVID-19-related Rent
Concessions (Amendment to IFRS 16) that provides practicalrelief to lessees in accounting for rent concessions occurring asa direct consequence of COVID-19, by introducing a practical
expedient to IFRS 16.
The practical expedient permits a lessee to elect not toassess whether a COVID-19-related rent concession is alease modiﬁ cation. A lessee that makes this election shallaccount for any change in lease payments resulting from the
COVID-19-related rent concession the same way it would
account for the change applying IFRS 16 if the change were
not a lease modiﬁcation.

The Company has elected to apply the amendment to IFRS 16
in advance of its effective date. The Company has applied thepractical expedient retrospectively to all rent concessions thatmeet the conditions of the practical expedient and has accounted
for them in the same manner as for a resolution of a contingency
that ﬁ xes previously variable lease payments. As such, theCompany has not updated the discount rate used to remeasure
the lease liability and used the remeasured consideration witha corresponding adjustment to the right-to-use. The Company
assessed that the application of this amendment has nomaterial impact on the Consolidated Financial Statements asof 31 December 2020.

New, Revised or Amended IFRSs Issued but not yet Applied
A number of new or revised standards, amendments and improvements to standards as well as interpretations are not yet effective
for the year ended 31 December 2020 and have not been applied in preparing these Consolidated Financial Statements and early
adoption is not planned:
IASB effective date
for annual reporting periods
beginning on or afterEndorsement
statusAmendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 “Interest Rate
Benchmark Reform – Phase 2”

1 January 2021

Endorsed

Amendments to IFRS 4 “Extension of the Temporary Exemption from
Applying IFRS 9”

1 January 2021

Not yet endorsed

Amendments to IFRS 3 “Reference to the Conceptual Framework”

1 January 2022

Not yet endorsed

Amendments to IAS 16 “Property, Plant and Equipment – Proceeds before
Intended Use”

1 January 2022

Not yet endorsedStandards and amendments

Amendments to IAS 37 “Onerous Contracts – Cost of Fulfilling a Contract”

1 January 2022

Not yet endorsed

Annual Improvements to IFRS Standards 2018–2020

1 January 2022

Not yet endorsed

IFRS 17 “Insurance Contracts”

1 January 2023

Not yet endorsed

Amendments to IAS 1 “Classification of Liabilities as Current or Non-current”

1 January 2023

Not yet endorsed

Amendments to IAS 8 “Definition of Accounting Estimates”

1 January 2023

Not yet endorsed

Amendments to IAS 1 “Disclosure of Accounting Policies”

1 January 2023

Not yet endorsed

Amendments to IFRS 9, IAS 39 and IFRS 7 “Interest Rate Benchmark Reform – Phase 2”
Following the ﬁnancial crisis, the reform and replacement of somebenchmark interest rates such as LIBOR and other Interbank
Offered Rates (“IBORs”) has become a priority for global
regulators. There is still uncertainty around the timing and precise
nature of these changes.
The Company’s treasury is managing the transition plan, sothat the existing contracts that refer to LIBORs shall be adjusted
to ensure contract continuity and address term and credit
differences between LIBORs and alternative reference rates.

20

Airbus / Financial Statements 2020

The changed reference rates will also impact systems, processes
and risk and valuation models.
The Company is mainly exposed to LIBORs under Airbus Bank
loan assets portfolio for an amount of € 309 million (for a notionalamount of US$ 530 million) and the interest rate swaps based on
USD-Libor used in the hedge relationship as developed under“– Note 38: Financial Instruments”.

2. Notes to the IFRS Consolidated Financial Statements /2.2 Airbus Structure

6.

BrexitOn 29 March 2017, the UK triggered Article 50 of the Lisbon
Treaty, the mechanism to leave the European Union (“Brexit”).
In June 2018, the Company published its Brexit Risk
Assessment outlining its expectations regarding the material
consequences and risks for the Company arising from the UK
leaving the European Union without a deal. In September 2018,
the Company launched a project to mitigate the risks andanticipate possible consequences associated with Brexit andits impact on the Company’s business and production activities.
Signiﬁcant progress was made in mitigating the identiﬁed risks
through for example the modiﬁcation of the Company’s customs
and IT systems, and the stockpiling of parts associated withtransportation and logistics.

The UK left the European Union in an orderly manner on
31 January 2020 under the terms of the Withdrawal Agreement,
opening a transition period until 31 December 2020.
On 30 December 2020, the UK Parliament ratiﬁed the EU-UK
Trade and Cooperation Agreement (“TCA”) but it still awaits
ratiﬁcation by the European Parliament and the Council of theEuropean Union before ﬁnal conclusion and entry into force.
The TCA is expected to prevent the disruption a no-deal scenario
would have created. Preliminary analysis conﬁrms that although
Brexit will result in a requirement for increased areas of vigilance,
additional administrative work and reduced industrial ﬂexibility,
the continuity of the Company’s business operations and supply
chain in particular are not materially threatened.

2.2 Airbus Structure
7.

Scope of Consolidation

Consolidation — The Company’s Consolidated Financial
Statements include the Financial Statements of Airbus SE
and all material subsidiaries controlled by the Company. The
Company’s subsidiaries prepare their Financial Statements at thesame reporting date as the Company’s Consolidated Financial
Statements (see Appendix “Simpliﬁed Airbus Structure” chart).
Subsidiaries are entities controlled by the Company including
so-called structured entities, which are created to accomplish
a narrow and well-deﬁned objective. They are fully consolidated
from the date control commences to the date control ceases.
The assessment of control of a structured entity is performed inthree steps. In a ﬁrst step, the Company identiﬁes the relevant
activities of the structured entities (which may include managing
lease receivables, managing the sale or re-lease at the end of

the lease and managing the sale or re-lease on default) and in asecond step, the Company assesses which activity is expected
to have the most signiﬁcant impact on the structured entities’
return. Finally, the Company determines which party or parties
control this activity.
The Company’s interests in equity-accounted investees
comprise investments in associates and joint ventures. Suchinvestments are accounted for under the equity method andare initially recognised at cost.

2

The Financial Statements of the Company’s investments inassociates and joint ventures are generally prepared for thesame reporting period as for the parent company. Adjustments
are made where necessary to bring the accounting policies andaccounting periods in line with those of the Company.

PERIMETER OF CONSOLIDATION
31 December(Number of companies)

Fully consolidated entities

2020

2019

177

185

58

52

Investments accounted for under the equity method
in joint venturesin associates

25

25

Total

260

262

For more details related to unconsolidated and consolidated structured entities, see “– Note 28: Sales Financing Transactions”.

Airbus / Financial Statements 202021

2. Notes to the IFRS Consolidated Financial Statements /2.2 Airbus Structure8.

Acquisitions and Disposals

Business combinations are accounted for using the acquisition
method, as at the acquisition date, which is the date on which
control is transferred to the Company.
The determination of the fair value of the acquired assets andthe assumed liabilities which are the basis for the measurementof goodwill requires signiﬁcant estimates. Land, buildings andequipment are usually independently appraised while marketablesecurities are valued at market prices. If intangible assets are
identiﬁed, depending on the type of intangible asset and thecomplexity of determining its fair value, the Company either
consults with an independent external valuation expert ordevelops the fair value internally, using appropriate valuation
techniques which are generally based on a forecast of the total
expected future net cash ﬂows.
These evaluations are linked closely to the assumptions madeby management regarding the future performance of the assets
concerned and the discount rate applied.
Loss of control, loss of joint control, loss of signiﬁ cantinﬂuence — Upon loss of control of a subsidiary, the assets
and liabilities and any components of the Company’s equity

8.1

Airbus paid to Bombardier a consideration of US$ 591 million ofwhich US$ 531 million was received at closing and US$ 60 million
to be paid over the 2020-22 period under certain conditions.
The agreement also provides for the cancellation of Bombardier
warrants owned by Airbus, as well as releasing Bombardierof its future funding capital requirement to ACLP, previously
performed through the non-voting participation Class B common
units in ACLP.

When the loss of signiﬁcant inﬂuence or the loss of joint control
of an investment accounted under for the equity method is highly
probable and is expected to occur in the coming 12 months, thisassociate or joint venture is classiﬁed as an asset held for sale.
Sale of investment in an associate or joint venture — Anygain or loss arising from the disposal of investment accounted
for under the equity method is recognised within share of proﬁt
from investments.

The call rights of Airbus in respect of all IQ’s interests in ACLP
at fair market value have been extended by an additional three
years to January 2026.
The effect of this equity transaction on the equity attributable tothe owners of ACLP amounts to € -53 million.
As part of this transaction, Airbus, via its wholly owned subsidiary
Stelia Aerospace, has also acquired the A220 and A330 work
package production capabilities from Bombardier in Saint
Laurent, Québec. Under this non-material transaction, the fairvalue of the net assets acquired amount to US$ -4 million.

Disposals

On 23 December 2019, the Company ﬁnalised the sale of PFW
Aerospace GmbH to Hutchinson Holding GmbH. Since 2011,
Airbus held 74.9% in PFW Aerospace GmbH, a key supplier in theaerospace industry, while Safeguard held the remaining 25.1%.
Airbus received a consideration of € 103 million and recogniseda gain of € 57 million, reported in other income. Assets andliabilities of the disposed company were previously classiﬁed
as held for sale.

22

Assets and liabilities of a material subsidiary for which a loss ofcontrol is highly probable are classiﬁed as assets and liabilities
held for sale when the Company has received sufﬁcient evidence
that the loss of control will occur in the 12 months after theclassiﬁcation. These assets and liabilities are presented after
elimination of intercompany transactions.

Acquisitions

On 12 February 2020, Bombardier transferred its remaining
shares in Airbus Canada Limited Partnership (“ACLP”) to
Airbus and Investissement Québec (“IQ”). As per the agreement,
Airbus acquired an additional 29.64% of the issued shares in
ACLP. This agreement brings the shareholdings in ACLP for
Airbus and IQ to 75% and 25%, respectively.

8.2

related to the subsidiary are derecognised. Any gain or loss
arising from the loss of control is recognised within other income
or other expenses in the Consolidated Income Statement. If theCompany retains any interest in the previous subsidiary, suchinterest is measured at fair value at the date the control is lost.

Airbus / Financial Statements 2020

On 30 July 2019, the Company sold its shares in Alestis
Aerospace S.L. to Aciturri Aeronáutica S.L., a company
headquartered in Miranda de Ebro, Spain. The Company
recognised a gain for an amount of € 45 million in Airbus. Assets
and liabilities of the disposed company were previously classiﬁed
as held for sale.

2. Notes to the IFRS Consolidated Financial Statements /2.2 Airbus Structure

8.3

Cash Flows from Disposals including Assets and Disposal Groups
Classified as Held for Sale

The following table provides details on cash ﬂows from disposals (resulting in assets and liabilities disposed) of subsidiaries, joint
ventures and businesses:(In € million)

Total selling price received by cash and cash equivalents

2020

2019

0

173

Cash and cash equivalents included in the disposed subsidiaries

0

(36)

Total

0

137

In 2019, the aggregate cash ﬂows from disposals of subsidiaries and assets and disposals groups classiﬁed as held for sale resulted
mainly from the sale of PFW Aerospace GmbH and Alestis Aerospace S.L.

9.

Investments Accounted for under the Equity Method
31 December(In € million)

2020

2019

Investments in joint ventures

1,367

1,444

Investments in associates

211

182

1,578

1,626

Total

Investments accounted for under the equity method decreased by € -48 million to € 1,578 million (2019: € 1,626 million). They
mainly include the equity investments in ArianeGroup, MBDA and ATR GIE.

9.1

Investments in Joint Ventures

The joint ventures in which the Company holds an interest are structured in separate incorporated companies. Under joint arrangementagreements, unanimous consent is required from all parties to the agreement for all relevant activities. The Company and its partners
have rights to the net assets of these entities through the terms of the contractual agreements.
The Company’s interest in its joint ventures, accounted for under the equity method, is stated in aggregate in the following table:(In € million)

2020

2019

Carrying amount of the investments at 1 January

1,444

1,484

Share of results from continuing operations

31

264

Share of other comprehensive income

(57)

(82)

Dividends received during the year

(49)

(225)

Others

(2)

3

1,367

1,444

Carrying amount of the investments at 31 December

The Company’s individually material joint ventures are
ArianeGroup, Paris (France), MBDA S.A.S., Paris (France),
and ATR GIE, Blagnac (France), as parent companies of theirrespective groups. These joint venture companies are notpublicly listed.
ArianeGroup is a 50% joint venture between the Company andSafran. ArianeGroup is the head company in a group comprising
several subsidiaries and affiliates, all leading companies
in their ﬁ elds, such as: APP, Arianespace, Cilas, Eurockot,
Eurocryospace, Europropulsion, Nuclétudes, Pyroalliance,

2

Regulus, Sodern and Starsem. ArianeGroup inherits a richportfolio of products and services, enabling it to deliver innovativeand competitive solutions to numerous customers around theworld.
The Company holds a 37.5% stake in MBDA at 31 December
2020, which is a joint venture between the Company, BAE
Systems and Leonardo. MBDA offers missile systems capabilities
that cover the whole range of solutions for air dominance,
ground-based air defence and maritime superiority, as well as
advanced technological solutions for battleﬁeld engagement.

Airbus / Financial Statements 202023

2. Notes to the IFRS Consolidated Financial Statements /2.2 Airbus Structure

ATR GIE manufactures advanced turboprop aircraft. It is a
50% joint venture between Leonardo group company and theCompany. Both Leonardo and the Company provide airframes
which are assembled by ATR GIE in France. The members of

ATR GIE are legally entitled exclusively to the beneﬁts and are
liable for the commitments of the Company. ATR GIE is obliged
to transfer its cash to each member of the joint venture.

The following table summarises ﬁnancial information for ArianeGroup, MBDA and ATR GIE based on their Consolidated Financial
Statements prepared in accordance with IFRS:
ArianeGroupMBDA(In € million)

2020

2019

2020

2019

2020

2019

Revenue

2,718

3,069

3,592

3,703

398

1,438

Depreciation and amortisation

(128)

(128)

(143)

(126)

(6)

(33)
0

Interest income

9

4

5

13

0

Interest expense

(27)

(15)

(17)

(26)

0

0

9

(71)

(119)

(127)

1

(3)

Profit from continuing operations

(6)

133

279

268

(138)

106

Other comprehensive income

(14)

(79)

(157)

(79)

0

0

106

Income tax expense

Total comprehensive income (100%)

(20)

54

122

189

(138)

Non-current assets

6,111

6,207

2,687

2,718

262

252

Current assets

6,260

6,610

7,841

7,707

835

729

642

828

2,851

2,906

9

6

1,152

1,067

1,104

1,114

165

166

thereof cash and cash equivalents
Non-current liabilities
thereof non-current financial liabilities(excluding trade and other payables and provisions)
Current liabilities
thereof current financial liabilities(excluding trade and other payables and provisions)

483

517

3

5

0

0

7,075

7,601

8,821

8,693

901

592

53

57

27

25

0

0

Total equity (100%)

4,144

4,149

603

618

31

223

Equity attributable to the equity owners of the parent

4,144

4,145

603

618

31

223

0

4

0

0

0

0

Non-controlling interests

ArianeGroupMBDA

ATR GIE(In € million)

2020

2019

2020

2019

2020

2019

The Company’s interest in equity on investee

2,072

2,073

226

232

15

111

244

244

282

282

0

0

(1,519)(1,519)

0

0

0

0

Airbus Defence and Space PPA (including 2016 Ariane 6 catch-up)

(71)

(52)

0

0

0

0

Contingent liability release adjustment

(36)

(30)

0

0

0

0

Fair value adjustments and modifications for differences inaccounting policies

(23)

(19)

(10)

(11)

0

0

Dividend adjustment

0

0

0

(53)

0

0

Elimination of downstream inventory

2

2

0

0

(5)

(5)

669

699

498

450

10

106

Goodwill
PPA adjustments, net of tax

Carrying amount of the investment at 31 December

24

ATR GIE

Airbus / Financial Statements 2020

2. Notes to the IFRS Consolidated Financial Statements /2.2 Airbus Structure

The development of these investments is as follows:
ArianeGroupMBDA

ATR GIE

2020

2019

2020

2019

2020

2019

Carrying amount of the investment at 1 January

699

722

450

463

106

146

Share of results from continuing operations

(22)

52

107

101

(68)

54

Share of other comprehensive income

(8)

(38)

(57)

(30)

5

(3)
(90)

(In € million)

Dividends received during the year

0

(38)

0

(84)

(33)

Changes in consolidation

0

0

0

0

0

0

Others

0

0

(2)

(1)

0

(1)

669

699

498

450

10

106

Carrying amount of the investment at 31 December

The Company’s share of contingent liabilities as of 31 December 2020 relating to MBDA is € 450 million (2019: € 412 million).

9.2

Investments in Associates

The Company’s interests in associates, accounted for under the equity method, are stated in aggregate in the following table:(In € million)

Carrying amount of the investment at 1 January

2020

2019

182

209

Share of results from continuing operations

8

35

Share of other comprehensive income

32

(14)

Dividends received during the year

(44)

(21)

Changes in consolidation

28

0

Disposal of shares

5

0

OthersCarrying amount of the investment at 31 December

0

(27)

211

182

The cumulative unrecognised comprehensive loss for these associates amounts to € -97 million and € -52 million as of 31 December
2020 and 2019, respectively (thereof € -45 million for the period).

10.

2Related Party Transactions(In € million)

Sales of
Purchases ofgoods andgoods andservices andservices and Receivables atother income other expenses 31 December

Loans granted /Other receivables
Liabilities atdue at31 December
31 December

Loans received /Other liabilities
due at31 December

2020
Total transactions
with associates

9

42

6

13

101

16

Total transactions
with joint ventures

2,596

186

1,294

1,176

5

1,275

Total transactions
with associates

4

204

5

36

97

7

Total transactions
with joint ventures

2,069

268

1,289

1,432

2

1,222

2019

Transactions with unconsolidated subsidiaries are immaterial to
the Company’s Consolidated Financial Statements.
As of 31 December 2020, the Company granted guarantees of€ 129 million to Air Tanker Group in the UK (2019: € 129 million).

For information regarding the funding of the Company’s pension
plans, which are considered as related parties, see “– Note 32:
Post-Employment Beneﬁts”.
The information relative to compensation and beneﬁts granted
to Members of the Executive Committee and Board of Directors
are disclosed in “– Note 34: Remuneration”.

Airbus / Financial Statements 202025

2. Notes to the IFRS Consolidated Financial Statements /2.3 Segment Information

2.3 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 — Development, manufacturing, marketing and saleof commercial jet aircraft of more than 100 seats, aircraft
conversion and related services; development, manufacturing,marketing and sale of regional turboprop aircraft and aircraftcomponents. It also includes the holding function of theCompany and its bank activities.
– Airbus Helicopters — Development, manufacturing,marketing and sale of civil and military helicopters; provisionof helicopter related services.

11.

– Airbus Defence and Space — Military Aircraft design,development, delivery, and support of military aircraft suchas combat, mission, transport and tanker aircraft and theirassociated 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. ConnectedIntelligence provision of services around data processing
from platforms, secure communication and cyber security. In
addition, the main joint ventures design, develop, deliver, andsupport missile systems as well as space launcher systems.
Unmanned Aerial Systems design, development, delivery andservice support.

Segment Information

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 Spaceand between Airbus Helicopters and Airbus. The activities related to innovation and digital transformation, which were formerly
reported in the column “Transversal/Eliminations”, are now included in the business segment Airbus under the new segment
structure. Consolidation effects will continue to be reported in the column “Eliminations”.
The Company uses EBIT as a key indicator of its economic performance.
Business segment information for the year ended 31 December 2020 is as follows:

Eliminations

Consolidated
Airbus(In € million)

AirbusTotal revenue

34,2506,251

10,446

050,947

Internal revenue
Revenue
thereofsales of goods at a point in timesales of goods over time
services, including sales of spare parts
Profit (Loss) before financial result and income taxes (EBIT)
thereofdepreciation and amortisation
research and development expenses
share of profit from investments accounted
for under the equity method
additions to other provisions (1)Interest result
Other financial result
Income taxes(689)
33,561

(271)
5,980

(75)
10,37100(1,035)49,912

31,33137
2,193(1,330)

3,144
273
2,563
455

2,921
4,084
3,366
408

0
0
0
(43)

37,396
4,394
8,122
(510)

(1,951)(2,436)

(208)
(273)

(672)
(225)

0
76

(2,831)(2,858)(80)(2,371)

6
(398)

113
(980)

0
(11)

39
(3,760)
(271)
(349)
(39)

Loss for the period(1) See “– Note 25: Provisions, Contingent Assets and Contingent Liabilities”.

26

AirbusDefenceand Space

AirbusHelicopters

Airbus / Financial Statements 2020

(1,169)

2. Notes to the IFRS Consolidated Financial Statements /2.3 Segment Information

Business segment information for the year ended 31 December 2019 is as follows:
AirbusDefenceand Space

Eliminations

Consolidated
Airbus(In € million)

AirbusAirbusHelicopters

Total revenue

54,775

6,007

10,907071,689Internal revenue
Revenue
thereofsales of goods at a point in timesales of goods over time
services, including sales of spare parts
Profit before financial result and income taxes (EBIT) (1)thereofdepreciation and amortisation
research and development expenses (1)share of profit from investments accounted
for under the equity method
additions to other provisions(696)
54,079

(429)
5,578

(86)
10,82100(1,211)70,47850,577
21
3,481
1,794

2,924
278
2,376
414

3,457
3,942
3,422
(881)

0
0
0
12

56,958
4,241
9,279
1,339

(2,130)(2,816)

(160)
(291)

(555)
(302)

(82)
51

(2,927)(3,358)63(1,573)

8
(429)

228
(1,788)

0
(11)

299
(3,801)

Interest result
Other financial result
Income taxes

(111)
(164)
(2,389)Loss for the period(1,325)(1) Restated due to new segment presentation.

Segment capital expenditures

31 December(In € million)

2020

2019

Airbus

1,191

1,678

Airbus Helicopters

113

163

Airbus Defence and Space

455

498

0

1

1,759

2,340

Eliminations

Total capital expenditures(1)2(1) Excluding expenditure for leased assets.

Segment assets

31 December(In € million)

2020

2019

Airbus

65,18064,723

Airbus Helicopters

8,757

9,407

Airbus Defence and Space

16,701

17,456

Eliminations(6,593)(6,651)

Total segment assets

84,04584,935

UnallocatedDeferred and current tax assets

4,643

6,792

Securities

6,968

13,368Cash and cash equivalents

14,439

9,314

0

0

110,095

114,409

Assets classified as held for sale
Total assets

Revenue by geographical areas is disclosed in “– Note 12: Revenue and Gross Margin”. Property, plant and equipment by geographicalareas is disclosed in “– Note 21: Property, Plant and Equipment”.

Airbus / Financial Statements 202027

2. Notes to the IFRS Consolidated Financial Statements /2.4 Airbus Performance

Segment order backlog

31 December
2020

2019

(In € million)(in %)(In € million)(in %)

Airbus324,67587424,082

90

Airbus Helicopters

15,782

4

16,627

3

Airbus Defence and Space

33,505932,263

7

(835)

0

(1,484)0373,127100

471,488

100

Eliminations
Total

As of 31 December 2020, the total backlog represents theaggregate amount of the transaction price allocated to theunsatisﬁed and partially unsatisﬁed performance obligations to
the Company’s customers. Backlog commitments are relative to
the Company’s enforceable contracts with its customers where
it is probable that the consideration will be collected. The valueof the backlog is measured in accordance with the revenue
recognition standard (IFRS 15). As a result, contractual rebates,
engines concessions, and variable considerations are taken
into consideration for measurement. Contracts stipulated in acurrency different than the presentation currency are translated

to euro using the spot rate as of 31 December 2020 and 2019respectively. Adjustments to the value of the backlog could result
from changes in the transaction price. The backlog valuation isbased on the estimates and assumptions (see “– Note 4: Key
Estimates and Judgements”) and will mainly be released into
revenue over a period of seven years.
The decrease reflects the higher number of deliveries ascompared to order intake, the weakening of the US dollar and athorough reassessment of the recoverability of the order backlog.

2.4 Airbus Performance
12.

Revenue and Gross Margin

Revenue decreased by € -20,566 million to € 49,912 million (2019: € 70,478 million). The decrease is mainly driven by Airbus(€ -20,518 million) reﬂecting lower deliveries of 566 aircraft (in 2019: 863 aircraft) in line with the production adaptation plan set out
in April 2020 in response to the COVID-19 pandemic (see “– Note 2: Impact of the COVID-19 pandemic”).
Revenue by geographical areas based on the location of the customer is as follows:(In € million)

2020

2019

Asia-Pacific

13,087

22,625

Europe20,325

22,591

North America

8,688

12,036

Middle East

3,123

7,053

Latin America

983

1,851

Other countries

Total

The gross margin decreased by € -4,843 million to € 5,662 million
compared to € 10,505 million in 2019. It mainly reﬂects lower
deliveries and lower cost efﬁciency at Airbus. The gross marginrate decreased from 14.9% to 11.3%.
As of 31 December 2018, the Company’s largest A380 operator
reviewed its aircraft ﬂeet strategy going forward and concluded it
is forced to restructure and reduce its A380 order by 39 aircraft.
As a consequence of this decision, deliveries of the A380 willcease in 2022.

28

Airbus / Financial Statements 2020

3,706

4,322

49,91270,478At year-end 2018, the Company impaired specific A380
assets in the amount of € 167 million, recognised an onerous
contract provision for an amount of € 1,257 million and updated
the measurement of refundable advances including interest
accretion for a total amount of € 1,426 million. As a consequence,
the recognition of the onerous contract provision as well asother speciﬁc provisions and the remeasurement of the liabilities
affected the consolidated income statement before taxes by
a net € 463 million in EBIT and positively impacted the otherﬁnancial result by € 177 million.

2. Notes to the IFRS Consolidated Financial Statements /2.4 Airbus Performance

In 2019, the Company recorded an additional net charge of€ 99 million in EBIT as part of its continuous assessment of assets
recoverability and quarterly review of onerous contract provision
assumptions. In 2020, the Company recorded an additional net
charge of € 320 million in EBIT.
As of 31 December 2020, the Company has delivered a total of
97 A400M aircraft including nine aircraft in 2020.
The COVID-19 pandemic is weighing on the performance ofdevelopment, production, ﬂight testing, aircraft delivery andretroﬁt activities. The Company continued with development
activities toward achieving the revised capability roadmap. Retroﬁt
activities are progressing in close alignment with the customer.
In the fourth quarter 2019, an update of the contract estimate
at completion was performed and an additional charge of€ 1,212 million recorded. This reﬂ ected mainly the updated
estimates on the export scenario during the launch contract
phase as well as some cost increases in particular for retroﬁt
and an updated view on applicable escalation. In 2020, an
update of the contract estimate at completion conﬁrmed the13.

2019 position. A charge of € 63 million has been recorded in2020 reﬂecting mainly the variation of price escalation indexes.
Risks remain on the development of technical capabilities andassociated costs, on aircraft operational reliability in particularwith regard to power plant, on cost reductions and on securingexport orders in time as per the revised baseline.
Due to the suspension of defence export licences to Saudi
Arabia by the German Government until 31 March 2020,
and the consequential inability of the Company to execute acustomer contract, a revised Estimate at Completion (EAC) was
performed as of 31 December 2019. As a result, a € 221 million
impairment charge mainly on inventories on top of a € 112 million
ﬁnancial expense related to hedge ineffectiveness has beenrecognised in 2019. In the fourth quarter 2020 the Company
updated its contract estimate at completion which conﬁrms the2019 assessment. The Company continues to engage with its
customer to agree a way forward on this contract. The outcomeof these negotiations is presently unclear but could result infurther signiﬁcant ﬁnancial impacts.

Administrative Expenses

Administrative expenses decreased by € -3,794 million to € 1,423 million (2019: € 5,217 million), mainly due to the ﬁnal agreements
reached in 2019 with the French Parquet National Financier (PNF), the U.K. Serious Fraud Ofﬁce (SFO) and the US Departmentof State (DoS).

14.

Research and Development Expenses

Research and development expenses decreased by € -500 million to € 2,858 million compared to € 3,358 million in 2019.

15.

Other income decreased by € -238 million to € 132 million
compared to € 370 million in 2019.

16.

2

Other Income and Other Expenses
Other expenses increased by € +1,102 million to € -1,458 million
compared to € -356 million in 2019, mainly due to therestructuring provision recorded in 2020 in response to the
COVID-19 pandemic. For more details, see “– Note 2: Impactof the COVID-19 pandemic”.

Share of Proﬁt from Investments Accounted for under
the Equity Method and Other Income from Investments(In € million)

Share of profit from investments in joint ventures

2020

2019

31

265

Share of profit from investments in associates

834

Share of profit from investments accounted for under the equity method

39

299

Other income from investments

113

4

Share of profit from investments under the equity method and other income from investments decreased by € -151 million
to € 152 million compared to € 303 million in 2019.

Airbus / Financial Statements 202029

2. Notes to the IFRS Consolidated Financial Statements /2.4 Airbus Performance17.

Total Financial Result

Interest income derived from the Company’s asset management and lending activities is recognised as interest accrues, using
the effective interest rate method.
(In € million)

2020

2019

Interests on European Governments’ refundable advances

(108)

(96)

Others

(163)

(15)

Total interest result

(1)

(271)

(111)

Change in fair value measurement of financial instruments

111

68
(69)

Foreign exchange translations on monetary items(28)

Unwinding of discounted provisions

(25)

(46)

Others

(407)

(117)

Total other financial result

(349)

(164)

Total

(620)

(275)

(1) In 2020, the total interest income amounts to € 140 million (2019: € 228 million) for financial assets which are not measured at fair value through profit or loss. For financial liabilities
which are not measured at fair value through profit or loss € -411 million (2019: € -339 million) are recognised as total interest expenses. Both amounts are calculated by using theeffective interest method.

Total financial result deteriorated by € -345 million to€ -620 million compared to € -275 million in 2019. This isdriven by a decrease of € -160 million in interest result and the18.

remeasurement on the A350 Repayable Launch Investment(“RLI”) (see “– Note 26: Other Financial Assets and Other
Financial Liabilities”).

Income Taxes

The expense for income taxes is comprised of the following:(In € million)

2020

2019

Current tax expense

227(2,903)

Deferred tax expense

(266)

514

Total

(39)

(2,389)Main income tax rates and main changes impacting the Company:

30(Rate in %)

2020

2021

> 2021

Netherlands

25.00

25.00

25.00

France

32.02

28.41

25.83

Germany

30.00

30.00

30.00

Spain

25.00

25.00

25.00

UK

19.00

19.00

19.00

Airbus / Financial Statements 2020

2. Notes to the IFRS Consolidated Financial Statements /2.4 Airbus Performance

The following table shows a reconciliation from the theoretical income tax (expense) using the Dutch corporate tax rate to thereported income tax (expense):
2020(In € million)

2019

Profit before income taxes(1,130)1,064

Corporate income tax rate

25.0%

25.0%

283

(266)

(4)

(439)

Capital gains and losses on disposals/mergers

(3)

21

Income from investment and associates

24

74

Expected (expense) for income taxes
Effects from tax rate differentials / Change of tax rate

Tax credit
Change in valuation allowances (1)

13

49

(356)

(467)

Non-deductible final agreements reached with PNF, SFO and DoS(899)

Tax contingencies

147

(331)

Other non-deductible expenses and tax-free income

(143)

(131)

Reported tax (expense)(39)(2,389)(1) Reassessments of the recoverability of deferred tax assets based on future taxable profits.

The income tax expense amounts to € -39 million (2019:€ -2,389 million). It corresponds to an effective income tax rate of-3.5% driven by the negative pre-tax result in 2020 offset bydeferred tax impairments and tax-free revaluation of certain
equity investments.
In 2019, the high effective tax rate was mainly driven by the nondeductibility of the penalties accounted for in the 2019 accounts(see “– Note 39: Litigation and Claims”). It also comprises
deferred tax impairments and tax risk updates partially offset by
the sales of PFW Aerospace GmbH and Alestis Aerospace S.L.
at a reduced tax rate (see “– Note 8: Acquisitions and Disposals”).
As the Company controls the timing of the reversal of temporary
differences associated with its subsidiaries (usually referred to as“outside basis differences”) arising from yet undistributed proﬁts

and changes in foreign exchange rates, it does not recognisea deferred tax liability. For temporary differences arising frominvestments in associates the Company recognises deferred
tax liabilities. The rate used reﬂects the assumptions that thesedifferences will be recovered from dividend distribution unlessa management resolution for the divestment of the investment
exists at the closing date. For joint ventures, the Company
assesses its ability to control the distribution of dividends basedon existing shareholder agreements and recognises deferred
tax liabilities accordingly.
As of 31 December 2020, the aggregate amount of temporary
differences associated with investments in subsidiaries, branches
and associates and interests in joint arrangements, for which
deferred tax liabilities have not been recognised, amounts to€ 123 million.

Airbus / Financial Statements 2020

231

2. Notes to the IFRS Consolidated Financial Statements /2.4 Airbus Performance

Deferred tax on net operating losses (“NOLs”), trade tax loss carry forwards and tax credit carry forwards are:(In € million)

NOL

31 December
2020

31 December
2019

2,107

7,625

6,962

0

3,263

2,544

Germany

Spain

UK

Other
countries

726

3,159

58

1,575

0

3,263

0

0

FranceTrade tax loss carry forwards

0

0

277

0

2

279

299

Tax effect

188

962

291

299

543

2,283

2,073

Valuation allowances

(112)

(878)

(263)

(170)

(504)

(1,927)(1,588)

76

84

28

129

39

356

485

Tax credit carry forwards

Deferred tax assets on NOLs
and tax credit carry forwards

NOLs, capital losses and trade tax loss carry forwards are indeﬁnitely usable under certain restrictions in France, Germany, the UK
and Spain. They are usable for 20 years in Canada. In Spain, R&D tax credit carry forwards will expire after 18 years.
Roll forward of deferred tax:
(In € million)

2020

2019

Net deferred tax assets at 1 January

4,610

3,516

Deferred tax expense in income statement

(266)

514

Deferred tax recognised directly in AOCI

(893)

308

Deferred tax on remeasurement of the net defined benefit pension plans

358

442

Others

(237)

(170)

Net deferred tax assets at 31 December

3,572

4,610

(In € million)

2020

2019

Financial assets at fair value through OCI

(128)

(151)

Details of deferred tax recognised cumulatively in equity are as follows:

(86)

830

Deferred tax on remeasurement of the net defined benefit pension plans

2,494

2,136

Total

2,280

2,815

Cash flow hedges

32

Airbus / Financial Statements 2020

2. Notes to the IFRS Consolidated Financial Statements /2.4 Airbus Performance

Deferred income taxes as of 31 December 2020 are related to the following assets and liabilities:
1 January 2020

Other movements

Movement throughincome statement

31 December 2020

R&D
tax
credits

Deferredtax benefit(expense)

Deferredtax
assetsDeferredtax
liabilities

Deferredtax
assetsDeferredtax
liabilities

OCI/
IAS 19Intangible assets

221

(503)

0

(10)

0

(11)

186

(489)

Property, plant and equipment

0

(4)

0

(53)

30

(313)

(In € million)

Others

(1)

55

(281)

Investments and other long-term
financial assets

1,897

(38)

0

(14)

0

(754)

1,174

(83)

Inventories

2,636

(37)

0

(15)

0

(1,099)3,088(1,603)

Receivables and other assets

1,937(1,310)(1,086)

53

0

1,171

2,457

(1,692)(2)

Prepaid expenses

13

0

0

0

0

(15)

0

Provisions for retirement plans

961

0

451

(16)

0

(208)

1,188

0

Other provisions

2,026

(557)

0

(4)

0

248

2,043

(330)

Liabilities

1,528(3,642)

160

(83)

0

338

1,966

(3,665)

Deferred income

19

(236)

0

2

0

151

53

(117)

NOLs and tax credit carry forwards

2,073

0

0

(69)

(43)

322

2,283

0

Deferred tax assets (liabilities)
before offsetting

13,366(6,604)

(475)

(160)

(43)

90

14,468(8,294)

Valuation allowances on deferred
tax assets(2,152)

0

(59)

48

(83)

(356)

(2,602)0

Set-off(6,206)

6,206

0

0

0

0

(7,843)

7,843

Net deferred tax assets(liabilities)

5,008

(398)

(534)

(112)

(126)

(266)

4,023

(451)

(1) “Others” mainly comprises changes in the consolidation scope and foreign exchange rate effects.

Deferred income taxes as of 31 December 2019 are related to the following assets and liabilities:
1 January 2019

Other movements

Movement throughincome statement

31 December 2019

R&D
tax
credits

Deferredtax benefit(expense)

Deferredtax
assetsDeferredtax
liabilities

Deferredtax
assetsDeferredtax
liabilities

OCI/
IAS 19Intangible assets

147

(462)

0

(16)

0

49

221

(503)

Property, plant and equipment613(1,011)

0

(3)

0

176

55

(281)
(38)

(In € million)

Others(1)

Investments and other long-term
financial assets

1,416

(14)

0

21

0

436

1,897

Inventories

1,416

(13)

0

(3)

0

1,199

2,636

(37)

Receivables and other assets

646(1,681)

319

51

0

1,292

1,937

(1,310)0Prepaid expenses

12

0

0

0

0

1

13

Provisions for retirement plans

695

(57)

884

11

0

(573)

961

0

1,890

44

0

(17)

0

(448)

2,026

(557)

887

(1,689)

0

(79)

0

(1,233)

1,528(3,642)Other provisions
Liabilities
Deferred income

0

(63)

0

3

0

(157)

19

(236)

NOLs and tax credit carry forwards

1,868

0

0

0

(33)

238

2,073

0

Deferred tax assets (liabilities)
before offsetting

9,590(4,946)

1,203

(32)

(33)

981

13,366(6,604)

Valuation allowances on deferred
tax assets(1,127)

0

(453)

0

(105)

(467)

(2,152)0

Set-off(3,628)

3,628

0

0

0

0

(6,206)

6,206

Net deferred tax assets(liabilities)

4,835(1,318)

750

(32)

(138)

514

5,008

(398)

2

(1) “Others” mainly comprises changes in the consolidation scope and foreign exchange rate effects.

Airbus / Financial Statements 202033

2. Notes to the IFRS Consolidated Financial Statements /2.5 Operational Assets and Liabilities

19.

Earnings per Share

Loss for the period attributable to equity owners of the parent (Net income)Weighted average number of ordinary shares

2020

2019

€ (1,133) million€ (1,362) million

783,178,191

777,039,858€ (1.45)€ (1.75)

Basic earnings per share

Diluted earnings per share — The Company’s dilutive potential ordinary shares are share-settled Performance Units relating toLong-Term Incentive Plans (“LTIP”).
As there is a loss in 2020, the effect of potentially dilutive ordinary shares is anti-dilutive.

Loss for the period attributable to equity owners of the parent (Net income),
adjusted for diluted calculation
Weighted average number of ordinary shares (diluted)

2020

2019

€ (1,133) million€ (1,362) million

783,178,191

777,039,858€ (1.45)€ (1.75)

Diluted earnings per share

2.5 Operational Assets and Liabilities
20.

Intangible Assets

Intangible assets comprise (i) goodwill (see “– Note 7: Scope of Consolidation”), (ii) capitalised development costs (see “– Note 3:
Signiﬁcant Accounting Policies”) and (iii) other intangible assets, e.g. internally developed software and acquired intangible assets.
Intangible assets with ﬁnite useful lives are generally amortised on a straight-line basis over their respective estimated useful lives(three to ten years) to their estimated residual values.
31 December 2020 and 2019 comprise the following:
31 December 2020
(In € million)GrossamountAmortisation /Impairment

Net book
value

Gross
amountAmortisation /Impairment

Net book
value

Goodwill

14,039(1,040)12,99914,062(1,043)13,0191,460

Capitalised development costs

3,210(1,952)

1,258

3,209

(1,749)Other intangible assets

4,807(2,865)

1,942

4,785

(2,673)

2,112

22,056(5,857)

16,19922,056(5,465)

16,591Total

34

31 December 2019

Airbus / Financial Statements 2020

2. Notes to the IFRS Consolidated Financial Statements /2.5 Operational Assets and Liabilities

NET BOOK VALUE(In € million)

Balance at
Changes in
1 January Exchange
consolidation
2020 differences Additions
scope

Reclassification

Balance at
Amortisation / 31 December
Disposals
Impairment
2020

Goodwill

13,019

(30)

10

0

0

0

0

12,999

Capitalised
development
costs

1,460

(9)

101

0

0

(72)

(222)

1,258

Other
intangible
assetsTotal(In € million)

2,112

(128)

199

1

(13)

3

(232)

1,942

16,591

(167)

310

1

(13)

(69)

(454)

16,199Balance at
Changes in
1 January Exchange
consolidation
Amortisation /2019 differences Additions
scope Reclassification (1) Disposals (1)Impairment

Balance at
31 December
2019

Goodwill

13,039

11

0

0

4

(35)

0

13,019

Capitalised
development
costs

1,582

8

134

13

49

7

(333)

1,460

Other
intangible
assets

Total

2,105

32

275

42

(104)

(8)

(230)

2,112

16,726

51

409

55

(51)

(36)

(563)

16,591(1) Includes intangible assets from entities disposed (see “– Note 8: Acquisitions and Disposals”).

Intangible assets decreased by € -392 million to € 16,199 million (2019: € 16,591 million). Intangible assets mainly relate to goodwillof € 12,999 million (2019: € 13,019 million).

Capitalised Development Costs
The Company has capitalised development costs in the amount of € 1,258 million as of 31 December 2020 (€ 1,460 million as of
31 December 2019), mainly for Airbus programmes (€ 754 million).

2

Impairment Tests
Each year the Company assesses whether there is an indicationthat a non-ﬁnancial asset or a cash generating unit (“CGU”) to
which the asset belongs may be impaired. In addition, intangible
assets with an indeﬁnite useful life, intangible assets not yet
available for use and goodwill are tested for impairment annually,irrespective of whether there is any indication for impairment.
An impairment loss is recognised in the amount by which theasset’s carrying amount exceeds its recoverable amount. For the
purpose of impairment testing, any goodwill is allocated to the
CGU or group of CGUs in a way that reﬂects the way goodwill
is monitored for internal management purposes.
The discounted cash flow method is used to determine
the recoverable amount of a CGU or the group of CGUs towhich goodwill is allocated. The discounted cash ﬂow method
is particularly sensitive to the selected discount rates andestimates of future cash ﬂows by management. Discount rates
are based on the weighted average cost of capital (“WACC”)

for the groups of cash-generating units. The discount rates arecalculated based on a risk-free rate of interest and a market
risk premium. In addition, the discount rates reﬂect the current
market assessment of the risks speciﬁc to each group of CGUs
by taking into account speciﬁc peer group information on beta
factors, leverage and cost of debt. Consequently, slight changes
to these elements can materially affect the resulting valuation andtherefore the amount of a potential impairment charge.
These estimates are inﬂuenced by several assumptions including
the growth rate of CGUs where a rate of 1% has been applied,
the increase of deliveries in the coming years, the availability
and composition of future defence and institutional budgets,and foreign exchange ﬂuctuations or implications arising fromthe volatility of capital markets. Cash ﬂow projections take into
account past experience and represent management’s best
estimate of future developments.

Airbus / Financial Statements 202035

2. Notes to the IFRS Consolidated Financial Statements /2.5 Operational Assets and Liabilities

The Company tested the intangible assets for which an indicator of impairment was identiﬁed. In particular the Company tested
the intangible assets associated with the main aircraft programmes and concluded that no impairment was necessary.
As of 31 December 2020 and 2019, goodwill was allocated to CGUs or group of CGUs and is summarised in the following schedule:
AirbusDefence andSpace

Eliminations

Consolidated
Airbus(In € million)

AirbusAirbusHelicopters

Goodwill as of 31 December 2020

10,710

139

2,150

0

12,999Goodwill as of 31 December 201910,733

129

2,157

0

13,019The goodwill mainly relates to the creation of the Company in 2000 and the Airbus Combination in 2001.
The annual impairment tests performed in 2020 led to no impairment charge. Sensitivities were also performed for growth rates(+/-1%) and discount rates (+/-1%), and in both cases led to no impairment charge.

General Assumptions Appliedin the Planning Process
The basis for determining the recoverable amount is the value in
use of the CGUs. Generally, cash ﬂow projections used for theCompany’s impairment testing are based on operative planning.
The operative planning, used for the impairment test, is based on
the following key assumptions which are relevant for all CGUs:– increase of expected future labour expenses of 1.5% (2019:2.0%);– future interest rates projected per geographical market, for theEuropean Monetary Union, the UK and the US;– future exchange rate of 1.25 US$/€ (2019: 1.25 US$/€) toconvert in euro the portion of future US dollar which is nothedged (see “– Note 38: Financial Instruments”);
General economic data derived from external macroeconomic
and ﬁnancial studies have been used to derive the general key
assumptions.
In addition to these general planning assumptions, the following
additional CGU specific assumptions, which represent
management’s current best assessment as of the date ofthese Consolidated Financial Statements, have been applied
in individual CGUs.

Airbus– The planning takes into account both the current market
condition and Airbus production rate, and includes
management’s best estimates of the progressive increase inaircraft deliveries over the operative planning period.
– In the absence of long-term ﬁnancial reference, expected cash
ﬂows generated beyond the planning horizon are consideredthrough a terminal value.
– Due to the signiﬁcant hedge portfolio, the carrying value andplanned cash ﬂows of the CGU Airbus are materially inﬂuenced.
– Cash ﬂows are discounted using a euro weighted pre-tax
WACC of 14.1% (2019: 11.6%).

36

Airbus / Financial Statements 2020

Airbus Helicopters– The planning takes into account the evolution of programmes
based upon the current backlog and an assessment of orderintake for platforms and services.
– In the absence of long-term ﬁnancial reference, expected cash
ﬂows generated beyond the planning horizon are consideredthrough a terminal value.
– Long-term commercial assumptions in respect of market
share, deliveries and market value are based on the helicopter
market forecast considering the decrease over recent years
in the civil and parapublic market partially driven by decreaseof investment in oil and gas, needs of helicopter ﬂeet renewal
and growth markers and the increase of Airbus Helicoptersmarket share in this environment.
– Cash ﬂows are discounted using a euro weighted pre-tax
WACC of 12.8% (2019: 10.7%).

Airbus Defence and Space– Overall the defence and space markets are expected to havea moderate growth during the period of the operative planninghorizon.
– Business growth is underpinned by growing defence
opportunities boosted after ﬁ nalisation of the successful
portfolio re-shaping programme. Underlying performance isimproved by focusing on project delivery, cost control andefﬁciency.
– In the absence of long-term ﬁnancial reference, expected cash
ﬂows generated beyond the planning horizon are consideredthrough a terminal value.
– Cash ﬂows are discounted using a euro weighted pre-tax
WACC of 10.1% (2019: 8.5%).

2. Notes to the IFRS Consolidated Financial Statements /2.5 Operational Assets and Liabilities

21.

Property, Plant and Equipment

Property, plant and equipment is valued at acquisition or manufacturing costs less accumulated depreciation and impairment
losses. Items of property, plant and equipment are generally depreciated on a straight-line basis. The following useful lives are
assumed:Buildings

10 to 50 years

Site improvements

6 to 30 years

Technical equipment and machinery

2 to 20 years

Jigs and tools (1)5 years

Other equipment, factory and office equipment

2 to 10 years(1) If more appropriate, jigs and tools are depreciated using the number of production or similar units expected to be obtained from the tools (sum-of-the-units method).

Property, plant and equipment as of 31 December 2020 and 2019 comprises the following:
31 December 2020

31 December 2019GrossamountDepreciation /Impairment

Net book
value

Gross
amountDepreciation /Impairment

Net book
value

Land, leasehold improvements andbuildings, including buildings on land
owned by others

9,767(5,086)

4,681

9,879

(5,056)

4,823

7,068

23,144(15,887)

7,257(In € million)

Technical equipment and machinery

23,650(16,582)

Other equipment, factory and officeequipment (1)3,699(2,888)

811

3,782

(2,825)957

Construction in progress

2,310

0

2,310

2,714

0

2,714

Right-of-use assets (2)

2,426

(622)

1,804

1,793

(250)

1,543

41,852(25,178)

16,67441,312(24,018)

17,294

Total(1) Includes the net book value of aircraft under operating lease (see “– Note 28: Sales Financing Transactions”).
(2) The net book value of Land and Buildings under Right-of-use assets amounts to € 1,665 million.

NET BOOK VALUE(In € million)

Land, leasehold
improvements andbuildings, including
buildings on land
owned by others

4,823

(37)

104

(7)

168

(44)

(326)

4,681

Technical equipment
and machinery

7,257

(127)

328

(3)

1,158

(36)

(1,509)

7,068

Other equipment,
factory and officeequipment

957

(13)

83

0

79

(73)

(222)

811

Construction inprogress

2,714

(11)

1,008

2

(1,364)

(39)

0

2,310

Right-of-use assets

Total

2

Balance at
Changes in
Balance at
1 January Exchange
consolidation ReclassiDepreciation / 31 December
2020 differences Additions
scope
fication Disposals Impairment (1)
2020

1,543

(57)

605

15

(23)

(33)

(246)

1,804

17,294

(245)

2,128

7

18

(225)

(2,303)

16,674(1) Accelerated depreciation previously included in onerous contract provision has been offset with the release of the provision in the presentation of the Consolidated Statement of
Cash Flows for the year ended 2020.

Airbus / Financial Statements 202037

2. Notes to the IFRS Consolidated Financial Statements /2.5 Operational Assets and Liabilities(In € million)

Balance at
Changes in
1 January Exchange
consolidation ReclassiDepreciation /2019 differences Additions
scope fication (1) Disposals (1) Impairment (2)Balance at
31 December
2019

Land, leasehold
improvements andbuildings, including
buildings on land
owned by others

4,912

25

82

(52)

184

(8)

(320)

4,823

Technical equipment
and machinery

7,958

71

408

(88)

935

(15)

(2,012)

7,257

Other equipment,
factory and officeequipment

890

7

169

(42)

170

(15)

(222)

957

Construction inprogress

2,668

24

1,332

(3)

(1,315)

8

0

2,714

Right-of-use assets

Total

1,697

6

201

(6)

(28)

(56)

(271)

1,543

18,125

133

2,192

(191)

(54)

(86)

(2,825)

17,294(1) Includes property, plant and equipment from entities disposed (see “– Note 8: Acquisitions and Disposals”).
(2) Accelerated depreciation previously included in onerous contract provision has been offset with the release of the provision in the presentation of the Consolidated Statement of
Cash Flows for the year ended 2019.

Property, plant and equipment decreased by € -620 million to € 16,674 million (2019: € 17,294 million). Property, plant and equipment
include right-of-use assets for an amount of € 1,804 million as of 31 December 2020 (2019: € 1,543 million).
For details on assets related to lease arrangements on sales ﬁnancing, see “– Note 28: Sales Financing Transactions”.
PROPERTY, PLANT AND EQUIPMENT BY GEOGRAPHICAL AREAS
31 December(In € million)

2020

2019

France

7,736

7,912

Germany

4,350

4,322

UK

1,615

1,991

Spain

1,350

1,405

Other countries

1,623

1,664

16,674

17,294Total

The Company as lessee
The Company leases mainly real estate assets, cars andequipment (such as land, warehouses, storage facilities andofﬁces).
Short-term leases and leases of low-value assets refer mainly
to IT equipment (e.g. printers, laptops and mobile phones) andother equipment.
The Company incurred interest expense on lease liabilities of€ 22 million. The expense in relation to short-term and low-value
assets is insigniﬁcant.
There are no signiﬁcant variable lease payments included in the
Company’s lease arrangements.
The discount rate used to determine the right-of-use asset andthe lease liability for each country and leased asset is calculated
based on the incremental borrowing rate at inception of thelease. The Company calculated the rate applicable to each lease
contract on the basis of the lease duration.

38

Airbus / Financial Statements 2020

The maturity analysis of lease liabilities, based on contractual
undiscounted cash ﬂows is shown in “– Note 38.1: Financial
Risk Management”.

Real estate leases
The Company leases land and buildings mainly for its
operational business warehouses including logistic facilities,
ofﬁces, production halls and laboratories. The major leases arelocated in France, Germany, Spain, the US and the UK. As lease
contracts are negotiated on an individual basis, lease terms
contain a wide range of different terms and conditions. Leases
are typically made for a ﬁxed period of 3-25 years and may
include extension, termination and other options, which provide
operational ﬂexibility to the Company.
In November 2019, additional clariﬁcations were issued by the
IFRS Interpretations Committee. Consequently, economic terms
should be taken into account when determining the enforceable
period of a lease. Based on its lease portfolio, the Company
considers that there are no economic consequences leading toa reassessment of the previously assessed enforceable period.

2. Notes to the IFRS Consolidated Financial Statements /2.5 Operational Assets and Liabilities

Vehicle leases

Of f-Balance Sheet Commitments

The Company leases cars for management and other functions.
Vehicle leases typically run for an average period of three years
and do not provide renewal options.

Commitments related to property, plant and equipment
comprise contractual commitments for future capital
expenditures and contractual commitments for purchases of“Land, leasehold improvements and buildings including buildings
on land owned by others” (€ 335 million as of 31 December 2020,2019: € 429 million).

Other leases
The Company also leases IT equipment, machinery and otherequipment that combined are insigniﬁcant to the total leased
asset portfolio.

22.

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

2020

2019

Other investments

2,245

2,516

Other long-term financial assets

1,610

1,937

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

3,855

4,453

468

449

4,323

4,902

Current portion of other long-term financial assets

Total

Other investments mainly comprise the Company’s
participations and include the remaining investment in Dassault
Aviation (9.90%, 2019: 9.90%) amounting to € 742 million at
31 December 2020 (2019: € 968 million).
In December 2019, a reassessment of the OneWeb ﬁnancial
assets was performed leading to a decrease in the fair valueof the equity investment by € 45 million recorded through OCI,
and a depreciation of a loan by € 31 million recorded throughﬁnancial result.
In March 2020, OneWeb Communications filed under
Chapter 11 of the US Bankruptcy Code. Consequently,
the related ﬁ nancial assets were fully impaired, leading to
a decrease in the fair value of the equity investment by€ -137 million recorded through OCI and a depreciation of aloan by € -136 million recorded through ﬁnancial result.

23.

On 3 July 2020, OneWeb entered into an agreement with aconsortium led by Her Majesty’s Government HMG and Bharti
Global Limited for the acquisition of the OneWeb businessin connection with its court-supervised sale process. On
20 November 2020, OneWeb announced the achievementof all regulatory approvals together with its emergence from
Chapter 11 of the US Bankruptcy Code.
The completion of the transaction has no material impact on theConsolidated Financial Statements as of 31 December 2020.
Other long-term financial assets and the current portionof other long-term financial assets include other loans in
the amount of € 1,841 million as of 31 December 2020 (2019:€ 2,036 million), and the sales ﬁnancing activities in the formof ﬁnance lease receivables and loans from aircraft ﬁnancing.

2

Contract Assets and Contract Liabilities, Trade Receivables
and Trade Liabilities

Contract assets represent the Company’s right to considerationin exchange for goods or services that the Company has
transferred to a customer when that right is conditioned
by something other than the passage of time (e.g. revenue
recognised from the application of the PoC method before theCompany has a right to invoice).
Contract liabilities represent the Company’s obligation
to transfer goods or services to a customer for which theCompany has received consideration, or for which an amount ofconsideration is due from the customer (e.g. advance payments
received).

Net contract assets and contract liabilities are determinedfor each contract separately. For serial contracts, contract
liabilities are presented in current contract liabilities, if revenues
are expected within the next twelve months or material expenses
for the manufacturing process have already occurred. For longterm production contracts (e.g. governmental contracts such as
A400M, Tiger, NH90), contract liabilities are classiﬁed as current
when the relating inventories or receivables are expected to berecognised within the normal operating cycle of the long-term
contract.

Airbus / Financial Statements 202039

2. Notes to the IFRS Consolidated Financial Statements /2.5 Operational Assets and Liabilities

Trade receivables arise when the Company provides goods
or services directly to a customer with no intention of trading
the receivable. Trade receivables include claims arising fromrevenue recognition that are not yet settled by the debtor. Trade
receivables are initially recognised at their transaction prices
and are subsequently measured at amortised cost less any
allowances for impairment. Gains and losses are recognised in

the Consolidated Income Statement when the receivables are
derecognised, impaired or amortised.
Impairment and allowances of trade receivables andcontract assets are measured at an amount equal to thelife-time expected loss as described in “– Note 38: Financial
Instruments”.

Contract Assets, Contract Liabilities and Trade Receivables
Signiﬁcant changes in contract assets and contract liabilities during the period are as follows:
2020

2019

Contract
assetsContract
liabilities

Contract
assetsContract
liabilities

Revenue recognised that was included in the contract liability
balance at 1 January-(20,327)-(37,303)

Increases due to cash received, excluding amounts recognised
as revenue-

20,915 (1)-38,312

Transfers from contract assets recognised at 1 January(4,353)-(3,436)-

Increase as a result of changes in the measure of progress

4,188

-

3,941

-

(In € million)(1) Including final payments received from customers and others parties in anticipation.

As of 31 December 2020, trade receivables amounting to € 189 million (2019: € 203 million) will mature after more than one year.
The respective movement in the allowance for doubtful accounts in respect of trade receivables and contract assets during theperiod was as follows:(In € million)

2020

2019

Allowance balance at 1 January

(397)

(269)

Utilisations/disposals and business combinations

162

39

Additions

Allowance balance at 31 December

(71)

(167)

(306)

(397)

Trade Liabilities
Trade liabilities of € 8,722 million (2019: € 14,808 million) decreased by € -6,086 million, mainly in Airbus. This is in line with the
production adaptation plan set out in April 2020 in response to the COVID-19 pandemic (see “– Note 2: Impact of the COVID-19
pandemic”) and includes payments made to suppliers in anticipation.
As of 31 December 2020, trade liabilities amounting to € 67 million (2019: € 107 million) will mature after more than one year.

24.

Inventories
31 December 2020

(In € million)

Writedown

Net book
value

Gross
amountWritedown

Net bookvalue

Raw materials and manufacturing supplies

3,934

(606)

3,328

3,860

(581)

3,279

Work in progress

21,225(2,495)18,73022,553(2,034)

20,519Finished goods and parts for resale

5,919

(691)

5,228

4,729

(617)

4,112

Advance payments to suppliers

Total

40

Gross
amount31 December 2019

Airbus / Financial Statements 2020

3,173

(58)

3,115

3,704

(64)

3,640

34,251(3,850)30,401

34,846(3,296)31,5502. Notes to the IFRS Consolidated Financial Statements /2.5 Operational Assets and Liabilities

Inventories of € 30,401 million (2019: € 31,550 million) decreasedby € -1,149 million. This is driven by Airbus (€ -746 million), andmainly reﬂects a decrease in work in progress in line with the
production adaptation plan as well as A380 ramp down, partly
offset by an increase in stored aircraft reﬂ ecting customer
requests to defer deliveries, as well as other factors related tothe ongoing COVID-19 pandemic (see “– Note 2: Impact of the
COVID-19 pandemic”).

25.

In 2020, write-downs of inventories in the amount of € -950 million(2019: € -1,071 million) are recognised in cost of sales, whereas
reversal of write-downs amounts to € 24 million (2019: € 55 million).
At 31 December 2020, € 17,777 million of work in progress and€ 5,046 million of ﬁnished goods and parts for resale were carriedat net realisable value.
Inventories recognised as an expense during the period amountto € 32,985 million (2019: € 50,888 million).

Provisions, Contingent Assets and Contingent Liabilities

Provisions — The determination of provisions, e.g. for onerous
contracts, warranty costs, restructuring measures and legal
proceedings is based on best available estimates.
In general, in the aerospace sector, the contractual and technicalparameters considered for provision calculations are complex.

Hence uncertainty exists with regard to the timing and amountsof expenses to be taken into account.
The majority of other provisions are generally expected to resultin cash outﬂows during the next 1 to 12 years.

31 December(In € million)

2020

2019

Provisions for pensions

9,980

8,353

Other provisions

10,563

10,561

Total

20,543

18,914

thereof non-current portion

13,99812,542

thereof current portion

6,545

6,372

Provisions for pensions — As of 31 December 2020, the change in actuarial assumptions resulted overall in a total net increasein pension liability of € 1,627 million, principally reﬂecting the weakening of interest rates in Germany, France, Canada and the UK
partly compensated by the performance of the asset market values, resulting from market volatility related to the ongoing COVID-19
pandemic (see “– Note 2: Impact of the COVID-19 pandemic”).
Other provisions increased mainly due to the restructuring provision recorded in 2020 in response to the COVID-19 pandemic (see“– Note 2: Impact of the COVID-19 pandemic”), partly offset by a decrease in provisions for onerous contracts due to the utilisationand net presentation of the A380, A400M and A220 programme losses against inventories.

Airbus / Financial Statements 2020

241

2. Notes to the IFRS Consolidated Financial Statements /2.5 Operational Assets and Liabilities

Movements in other provisions during the year were as follows:
Balance at
1 January Exchange
2020 differences(In € million)

Increase
Reclassification /from
Change inpassageconsolidatedof time Additions
group

Balance at
31 December
Used Released
2020

Onerous contracts

3,955

(124)

0

547

(266)

(1,058)

(28)

3,026

Outstanding costs

1,214

(6)

0

434

3

(281)

(44)

1,320

Aircraft financing risks

(1)

5

0

0

0

0

0

2

7

Obligation from services
and maintenanceagreements

571

10

3

36

0

(57)

(10)

553

Warranties

323

(5)

(1)

82

(4)

(54)

(16)

325

983

(3)

1

1,507

(11)

(483)

(89)

1,905

911

(3)

0

255

0

(93)

(176)

894

203

(2)

1

1

0

0

(18)

185

2,396

(11)

(2)

898

(70)

(753)

(110)

2,348

10,561

(144)

2

3,760

(348)

(2,779)(489)

10,563

Personnel-related
provisions (2)Litigation and claims(3)

Asset retirement
Other risks and charges

Total(1) See “– Note 28: Sales Financing Transactions”.
(2) See “– Note 31: Personnel-Related Provisions”.
(3) See “– Note 39: Litigation and Claims”.

Provisions for onerous contracts in 2020 mainly include theutilisation and net presentation of the A380, A400M and A220
programme losses against inventories.
Personnel-related provisions include restructuring provisions
and other personnel charges. For more details, see “– Note 31:
Personnel-Related Provisions”.
Contingent assets and contingent liabilities — The Company
is exposed to technical and commercial contingent obligations
due to the nature of its businesses. To mitigate this exposure,
the Company has subscribed a Global Aviation Insurance
Programme (“GAP”). Information required under IAS 37

26.

“Provisions, Contingent Assets and Contingent Liabilities” isnot disclosed if the Company concludes that disclosure canbe expected to prejudice seriously its position in a dispute withother parties.
For other contingent liabilities, see “– Note 39: Litigation and
Claims” and “– Note 12: Revenue and Gross Margin” (mainly
A400M programme).
Other commitments include contractual guarantees andperformance bonds to certain customers as well as commitments
for future capital expenditures and amounts which may bepayable to commercial intermediaries if future sales materialise.

Other Financial Assets and Other Financial Liabilities

Other Financial Assets
31 December
2020

2019

3,451

996

32

37

Total non-current other financial assets

3,483

1,033

Receivables from related companies

1,158

1,148

(In € million)

Positive fair values of derivative financial instruments(1)

Others

973

444

301

468

Total current other financial assets

2,432

2,060

Total

5,915

3,093

Positive fair values of derivative financial instruments
Others(1) See “– Note 38: Financial Instruments”.

42

(1)

Airbus / Financial Statements 2020

2. Notes to the IFRS Consolidated Financial Statements /2.5 Operational Assets and Liabilities

Other Financial Liabilities
31 December(In € million)

2020

2019

Liabilities for derivative financial instruments (1)

1,834

2,434

European Governments’ refundable advances (2)

3,712

3,725

111

1,339

Total non-current other financial liabilities

5,657

7,498

Liabilities for derivative financial instruments (1)

983

1,560

200

552

130

159

OthersEuropean Governments’ refundable advances(2)

Liabilities to related companies
Others456

376

Total current other financial liabilities

1,769

2,647

Total

7,426

10,145

1,769

2,647

thereof other financial liabilities due within one year

(1) See “– Note 38: Financial Instruments”.
(2) Refundable advances from European G overnments are provided to the Company to finance research and development activities for certain projects on a risk-sharing basis,
i.e. they are repaid to the European Governments subject to the success of the project.

The total net fair value of derivative ﬁnancial instruments increasedby € +4,161 million to € +1,607 million (2019: € -2,554 million) as
a result of the weakened US dollar versus the euro associatedwith the mark to market valuation of the hedge portfolio.
The Company has signed amendments to the Frenchand Spanish A350 RLI contracts which the World Trade
Organization (“WTO”) considers the appropriate interest rate andrisk assessment benchmarks. The WTO has already ruled that
RLI is a valid instrument for governments to partner with industry
by sharing investment risks. This leads to a remeasurement of
the A350 RLI for an additional net amount of € 236 million in thethird quarter, using an equivalent estimated market rate at thedate of the amendments.

Overall, the European G overnments’ refundable advances
decreased by € -365 million to € 3,912 million (2019: € 4,277 million),
mainly due to payments made on the A380 programme for an
amount of € -505 million offset by the remeasurement describedabove.
The allocation of European G overnments’ refundable
advances between non-current and current presented in the
IFRS Consolidated Financial Statements ended 31 December
2020 is based on the applicable contractual repayment dates.

2

Airbus / Financial Statements 202043

2. Notes to the IFRS Consolidated Financial Statements /2.5 Operational Assets and Liabilities

27.

Other Assets and Other Liabilities

Other Assets
31 December
2020

2019

Cost to fulfil a contract

282

351

Prepaid expenses

76

86(In € million)

Others125

85

Total non-current other assets

483

522

Value added tax claims

1,025

1,252

Cost to fulfil a contract

557

626

Prepaid expenses

191

147

Others443

398

Total current other assets

2,216

2,423

Total

2,699

2,945

Other Liabilities
31 December
2020

2019

Others436

384

Total non-current other liabilities

436

384

Tax liabilities (excluding income tax)

749

614

Others

2,411

6,203

Total current other liabilities

3,160

6,817

Total

3,596

7,201

3,160

6,817

(In € million)

thereof other liabilities due within one year

28.

Sales Financing Transactions

Sales ﬁnancing — With a view to facilitating aircraft sales for
Airbus and Airbus Helicopters, the Company may enter intoeither on-balance sheet or off-balance sheet sales ﬁnancing
transactions.
On-balance sheet transactions where the Company is lessor
are classiﬁed as operating leases, ﬁnance leases and loans,inventories and to a minor extent, equity investments:(i) operating leases – Aircraft leased out under operating leases
are included in property, plant and equipment at cost lessaccumulated depreciation (see “– Note 21: Property, Plant andEquipment”). Rental income from operating leases is recorded
as revenue on a straight-line basis over the term of the lease;44

Airbus / Financial Statements 2020(ii) finance leases and loans – When, pursuant to a financing
transaction, substantially all the risks and rewards of ownershipof the financed aircraft reside with a third party, the transaction
is characterised as either a finance lease or a loan. In such
instances, revenue from the sale of the aircraft are recorded
upon delivery, while financial interest is recorded over time
as financial income. The outstanding balance of principal isrecorded on the Statement of Financial Position (on-balance
sheet) in long-term financial assets, net of any accumulated
impairments;(iii) inventories – Second hand aircraft acquired as part of acommercial buyback transaction, returned to Airbus after
a payment default or at the end of a lease agreement areclassified as inventories held for resale if there is no subsequent
lease agreement in force (see “– Note 24: Inventories”).

2. Notes to the IFRS Consolidated Financial Statements /2.5 Operational Assets and Liabilities

Off-balance sheet commitments — Financing commitments
are provided to the customer either as backstop commitments
before delivery, asset value guarantees at delivery or counter
guarantees:compliance with IFRS, but may relate to transactions that are
ﬁnanced on a limited recourse basis and (ii) the carrying amountof the assets on the Consolidated Statement of Financial Position
may have been adjusted for impairment losses.

(i) backstop commitments are guarantees by Airbus, madewhen a customer-order is placed, to provide financing to
the customer in the event that the customer fails to securesufficient funding when payment becomes due under the order.
Such commitments are not considered to be part of Gross
Customer Financing Exposure as (i) the financing is not in place,(ii) commitments may be transferred in full or part to third parties
prior to delivery, (iii) past experience suggests it is unlikely thatall such proposed financings actually will be implemented and(iv) Airbus retains the asset until the aircraft is delivered and does
not incur an unusual risk in relation thereto. In order to mitigate
customer credit risks for Airbus, such commitments typicallycontain financial conditions, such as condition precedents,
which guaranteed parties must satisfy in order to benefit
therefrom;

Gross Customer Financing Exposure amounts to US$ 0.6 billion(€ 0.5 billion) (2019: US$ 0.9 billion (€ 0.8 billion)).

(ii) asset value guarantees are guarantees whereby Airbus
guarantees a portion of the value of an aircraft at a specificdate after its delivery. Airbus considers the financial risks
associated with such guarantees to be acceptable, because(i) the guarantee only covers a tranche of the estimated future
value of the aircraft, and its level is considered prudent incomparison to the estimated future value of each aircraft, and(ii) the exercise dates of outstanding asset value guarantees
are distributed through 2031.
As of 31 December 2020, the nominal value of asset value
guarantees considered as variable considerations under
IFRS 15 provided to beneﬁ ciaries amounts to € 461 million(2019: € 656 million), excluding € 8 million (2019: € 9 million)
where the risk is considered to be remote. The present value ofthe risk inherent in asset value guarantees where a settlement
is being considered probable is fully provided for and includedin the total of contract liabilities for an amount of € 403 million(2019: € 551 million) (see “– Note 23: Contract Assets, Contract
Liabilities and Trade Receivables, and Trade Liabilities”).
Exposure — In terms of risk management, the Company
manages its gross exposure arising from its sales ﬁnancing
activities (“Gross Customer Financing Exposure”) separately
for (i) customer’s credit risk and (ii) asset value risk.
Gross Customer Financing Exposure is the sum of (i) thebook value of operating leases before impairment, (ii) the
outstanding principal amount of ﬁnance leases or loans due
before impairment, (iii) the guaranteed amounts under ﬁnancial
guarantees (iv) the book value of second hand aircraft for
resale before impairment, and (v) the outstanding value of any
other investment in sales ﬁnancing structured entities before
impairment. This Gross Customer Financing Exposure may differ
from the value of related assets on the Company’s Statementof Financial Position and related off-balance sheet contingent
commitments, mainly because (i) assets are recorded in

Net exposure is the difference between Gross Customer
Financing Exposure and the collateral value. Collateral value
is assessed using a dynamic model based on the net present
value of expected future receivables, expected proceeds fromresale and potential cost of default. This valuation model yields
results that are typically lower than residual value estimates by
independent sources in order to allow for what management
believes is its conservative assessment of market conditions andfor repossession and transformation costs. The net exposure isprovided for by way of impairment losses and other provisions.
Impairment losses and provisions — For the purpose ofmeasuring an impairment loss, each transaction is tested
individually. Impairment losses relating to aircraft under operatinglease and second hand aircraft for resale (included in inventory)
are recognised for any excess of the aircraft’s carrying amountover the higher of the aircraft’s value in use and its fair valueless cost to sell. Finance leases and loans are measured at fairvalue, based on the present value of estimated future cash ﬂows
(including cash ﬂows expected to be derived from a sale of theaircraft). Under its provisioning policy for sales ﬁnancing risk,
Airbus and Airbus Helicopters record provisions as liabilities
for estimated risk relating to off-balance sheet commitments.
Security — Sales ﬁnancing transactions, including those that are
structured through structured entities, are generally collateralisedby the underlying aircraft. Additionally, the Company beneﬁts
from protective covenants and from security packages tailoredaccording to the perceived risk and the legal environment.
The Company endeavours to limit its sales ﬁnancing exposureby sharing its risk with third parties usually involving the creationof a structured entity. Apart from investor interest protection,interposing a structured entity offers advantages such as
ﬂ exibility, bankruptcy remoteness, liability containment andfacilitating sell-downs of the aircraft ﬁnanced. An aircraft ﬁnancing
structured entity is typically funded on a non-recourse basis
by a senior lender and one or more providers of subordinatedﬁnancing. When the Company acts as a lender to such structured
entities, it may take the role of the senior lender or the providerof subordinated loan. The Company consolidates an aircraft
ﬁnancing structured entity if it is exposed to the structured
entity’s variable returns and has the ability to direct the relevant
remarketing activities. Otherwise, it recognises only its loan tothe structured entity under other long-term ﬁnancial assets. At
31 December 2020 the carrying amount of its loans from aircraft
ﬁnancing amounts to € 224 million (2019: € 349 million). This
amount also represents the Company’s maximum exposure
to loss from its interest in unconsolidated aircraft ﬁnancing
structured entities.

Airbus / Financial Statements 2020

245

2. Notes to the IFRS Consolidated Financial Statements /2.5 Operational Assets and Liabilities

On-Balance Sheet Operating and Finance Leases
The future minimum operating lease payments (undiscounted) due from customers to be included in revenue, and the future
minimum lease payments (undiscounted) from investments in finance leases to be received in settlement of the outstanding
receivable at 31 December 2020 are as follows:
Aircraft underoperating lease(In € million)

Finance leasereceivables

Not later than one year

61

Later than one year and not later than five years

19

12

Later than five years

00

31 December 2020

25

13

Financing Liabilities
Financing liabilities from sales financing transactions are mainly based on variable interest rates (see “– Note 37.3: Financing
Liabilities”) and entered into on a non-recourse basis (i.e. in a default event, the creditor would only have recourse to the aircraft
collateral).
31 December(In € million)

2020

2019

Loans

7

24

Liabilities to financial institutions

0

0

Total sales financing liabilities

7

24

Customer Financing Cash Flows
Direct customer ﬁnancing cash ﬂows amount to € 124 million in 2020 (2019: € 58 million).

Customer Financing Exposure
The on-balance sheet assets relating to sales ﬁnancing, the off-balance sheet commitments and the related ﬁnancing exposure(not including asset value guarantees) as of 31 December 2020 and 2019 are as follows:
31 December 2020
Airbus(In € million)

Operating leases(1)

AirbusHelicopters

31 December 2019
Total

AirbusAirbusHelicopters

Total

30

13

43

154

0

154

Finance leases and loans

365

31

396

471

39

510
8

Inventories

10

0

10

8

0

Other investments

10

0

10

4

0

4

On-balance sheet customer financing

415

44

459

637

39

676

12

2

14

95

9

104

Gross Customer Financing Exposure

427

46

473

732

48

780

Collateral values

(241)

(38)

(279)

(530)

(30)

(560)

Net exposure

186

8

194

202

18

220

Off-balance sheet customer financing

Operating leases

(22)

0

(22)

(65)

(7)

(72)

Finance leases and loans

(151)

(8)

(159)

(126)

(11)

(137)

On-balance sheet commitments – inventories

(6)

0

(6)

(6)

0

(6)

Off-balance sheet commitments – provisions (2)

(7)

0

(7)

(5)

0

(5)

(186)

(8)

(194)

(202)

(18)

(220)

Asset impairments, fair value
adjustments and provisions(1) For 2020 and 2019, depreciation amounts to € 8 million and € 9 million respectively and related accumulated depreciation is € 21 million and € 44 million respectively.
(2) See “– Note 25: Provisions, Contingent Assets and Contingent Liabilities”.

46

Airbus / Financial Statements 2020

2. Notes to the IFRS Consolidated Financial Statements /2.6 Employees Costs and Beneﬁts

2.6 Employees Costs and Beneﬁts
29.

Number of Employees

AirbusAirbusHelicopters

AirbusDefence andSpaceConsolidated
Airbus31 December 2020

78,48720,026

32,836

131,349

31 December 2019

80,98520,02433,922

134,93130.

Personnel Expenses(In € million)

2020

2019

Wages, salaries and social contributions

11,79913,347749

626

12,548

13,973

Net periodic pension cost (1)Total(1) See “– Note 32: Post-Employment Benefits”.

31.

Personnel-Related Provisions

Several German companies provide life-time working account models, being employee beneﬁt plans with a promised return on
contributions or notional contributions that qualify as other long-term employee benefits under IAS 19. The employees’ periodical
contributions into their life-time working accounts result in corresponding personnel expenses in that period, recognised in otherpersonnel charges.
The increase in Restructuring measures/ pre-retirement part-time work is mainly due to the restructuring provision recorded
in 2020 in response to the COVID-19 pandemic. For more details, see “– Note 2: Impact of the COVID-19 pandemic”.
Increase
Reclassification/
Balance atfromChange in
1 January Exchange passage
consolidated
2020 differencesof time Additionsgroup(In € million)

2

Balance at
31 December
Used Released
2020

Restructuring measures /pre-retirement part-time work

266

(1)

0

1,196

(13)

(178)

(7)

Other personnel charges

717

(2)

1

311

2

(305)

(82)

642

Total

983

(3)

1

1,507

(11)

(483)

(89)

1,905

32.

Post-Employment Beneﬁts

1,263

31 December(In € million)

2020

2019

Provisions for retirement plans

8,790

7,286

Provisions for deferred compensation

1,190

1,067

Retirement plans and similar obligations

9,980

8,353

Airbus / Financial Statements 202047

2. Notes to the IFRS Consolidated Financial Statements /2.6 Employees Costs and Beneﬁts

Plans description
When Company employees retire, they receive indemnities
as stipulated in retirement agreements, in accordance withregulations and practices of the countries in which it operates.
Provision for deferred compensation represents obligations thatarise if employees elect to convert part of their remuneration orbonus into an equivalent commitment for deferred compensation
which is treated as a deﬁned beneﬁt post-employment plan.
France — The French pension system is operated on a“pay as you go” basis. Besides the basic pension from the
French social security system, each employee is entitled toreceive a complementary pension from deﬁned contribution
schemes AGIRC-ARRCO (Association pour le régime deretraite complémentaire des salariés and Association générale
des institutions de retraite des cadres). Moreover, French law
stipulates that employees are paid retirement indemnities in theform of lump sums on the basis of the length of service, which
are considered as deﬁned beneﬁt obligations.
Germany — The Company has a pension plan (P3) for executive
and non-executive employees in place. Under this plan, theemployer provides contributions for the services rendered by
the employees, which are dependent on their salaries in therespective service period. These contributions are converted into
components which become part of the accrued pension liability
at the end of the year. Total beneﬁts are calculated as a career
average over the entire period of service. Certain employees thatare not covered by this plan receive retirement indemnities basedon salary earned in the last year or on an average of the last three
years of employment. For some executive employees, beneﬁts
are dependent on the ﬁnal salary of the respective individual at
the date of retirement and the time period served as an executive.
In 2018, Airbus introduced the new Airbus Pensions Plan (“APP”)
with security-linked beneﬁts in Germany, which all new entrants
after 1 January 2018 will join. Accordingly, the existing pension
plan has been closed for new entrants. As of 1 January 2019,deferred compensation, which is ﬁnanced by the employees,
is offered exclusively in APP for all employees. In 2020 theCompany transferred about half of the active population of the P3plan into APP. With effect as of 1 January 2020 these employees
will accrue future beneﬁts under APP but not in P3 anymore.
Beneﬁts related to past service are not affected by this transfer.
Parts of the pension obligation in Germany are funded byassets invested in speciﬁc funding vehicles. Besides a relief
fund (“Unterstützungskasse”), the Company has implemented
a Contractual Trust Arrangement. The Contractual Trust
Arrangement structure is that of a bilateral trust arrangement.
Assets that are transferred to the relief fund and the Contractual
Trust Arrangement qualify as plan assets under IAS 19.
In the trust arrangements between the trust and the participatingcompanies a minimum funding requirement is stipulated for the
portion of the obligation, which is not protected by the pension
guarantee association or Pensions-Sicherungs Verein in caseof an insolvency of the subsidiaries concerned. Some portionsof the obligation must be covered with securities in the sameamount, while other portions must be covered by 115%.
United Kingdom — The Company UK Pension Scheme (“theScheme”) was implemented by Airbus Defence and Space Ltd.,
Stevenage (UK) as the principal employer. This plan comprises
all eligible employees of Airbus Defence and Space Ltd. as well48

Airbus / Financial Statements 2020

as all personnel, who were recruited by one of the Company
subsidiaries located in the UK and participating in the scheme.
The major part of the obligation is funded by scheme assets due
to contributions of the participating companies. The Scheme
is a registered pension scheme under the Finance Act 2004.
The trustee’s only formal funding objective is the statutory
funding objective under the Pensions Act part 6 2004, which is
to have sufﬁcient and appropriate assets to cover the Scheme’s
obligations. Since 1 November 2013, this plan is generally closed
for joiners, who participate in a separate deﬁned contribution
plan.
Moreover, the Company participates in the UK in several funded
trustee-administered pension plans for both executive and nonexecutive employees with BAE Systems being the principal
employer. The Company’s most significant investments interms of employees participating in these BAE Systems UK
pension plans is Airbus Operations Ltd. Participating Airbus
Operations Ltd. employees have continued to remain membersin the BAE Systems UK pension plans due to the UK pension
agreement between the Company and BAE Systems and achange in the UK pensions legislation enacted in April 2006.
For the most signiﬁcant of these BAE Systems Pension Schemes,
the Main Scheme, BAE Systems, the Company and the scheme
Trustees agreed on a sectionalisation, which was implemented
on 1 April 2016. Although BAE Systems remains the only principal
employer of the Scheme, the Company has obtained powers
in relation to its section which are the same as if it were theprincipal employer.
Based on the funding situation of the respective pension
schemes, the pension plan trustees determine the contribution
rates to be paid by the participating employers to adequately
fund the schemes. The different UK pension plans in which theCompany investments participate are currently underfunded.
Airbus Operations Ltd. (for its section of the Main Scheme)
and BAE Systems (for the other schemes) have agreed withthe trustees various measures designed to make good theunderfunding. These include (i) regular contribution payments
for active employees well above such which would prevail for
funded plans and (ii) extra employers’ contributions.
In the event that an employer who participates in the BAE
Systems pension schemes fails or cannot be compelled to
fulﬁl its obligations as a participating employer, the remaining
participating employers are obliged to collectively take on its
obligations.
The Company considers the likelihood of this event as remote.
However, for the Main Scheme the Company considers thatits obligation is in principle limited to that related to its section.
In addition, the Company has two guarantees to cover its
obligation towards the Scheme and the BAE Systems pension
schemes. To mitigate its exposure, the ﬁrst guarantee covers
an amount up to GBP 400 million for an unlimited period oftime while the second one covers an uncapped amountterminating in 2046, respectively for the Scheme and the BAE
Systems Pension Schemes.
Canada — In 2018 Airbus acquired Airbus Canada Limited
Partnership (“ACLP”). ACLP sponsors deﬁned beneﬁt plans for
its salaried, hourly and executive employees. In 2020 Airbus
acquired Stelia Aeronautics Saint-Laurent Inc. which sponsors
a deﬁned beneﬁt plan for its salaried and hourly employees.

2. Notes to the IFRS Consolidated Financial Statements /2.6 Employees Costs and Beneﬁts

Actuarial risks for the Company
The deﬁned beneﬁt obligation (“DBO”) exposes the Company
to actuarial risks, including the following ones:

development of market values of those corporate bonds includedin plan assets. Generally, the pension obligation is sensitive to
movements in the interest rate leading to volatile results in thevaluation.

Market price risk — The return on plan assets is assumed tobe the discount rate derived from AA-rated corporate bonds.
If the actual return rate of plan assets is lower than the applied
discount rate, the net liability increases accordingly. Moreover,the market values of the plan assets are subject to volatility,
which also impacts the net liability.

Inﬂ ation risk — The pension liabilities can be sensitive to
movements in the inﬂation rate, whereby a higher inﬂation rate
could lead to an increasing liability. Since some pension plans
are directly related to salaries, increases in compensations
could result in increasing pension obligations. For the deferredcompensation plan P3, which is ﬁnanced by the employees aﬁxed interest rate has been agreed.

Interest rate risk — The level of the DBO is significantly
impacted by the applied discount rate. The low interest rates,
particular in the euro-denominated market environment, leadto a relatively high net pension liability. If the decline in returnsof corporate bonds continues, the DBO will further increase in
future periods, which might only be offset partially by the positive

Longevity risk — The pension liabilities are sensitive to the life
expectancy of its members. Rising life expectancies lead to anincrease in the valuation of the DBO.

Main average assumptions
The weighted average assumptions used in calculating the actuarial values of the most signiﬁcant retirement plans as of 31 December
2020 are as follows:
Pension plans inGermany(Rate in %)2020

FranceParticipation in
BAE Systems
Pension Scheme
in the UK

UK

2019

2020

2019

2020

2019

2020

Canada

2019

2020

2019

Discount rate

0.5

1.0

0.4

0.9

1.5

2.2

1.4

2.1

2.8

3.2

Rate of compensation increase

2.8

2.8

2.5

2.5

2.6

2.6

2.6

2.6

2.8

2.8

Rate of pension increase

1.4

1.4

1.5

1.7

2.6

2.8

2.7

2.8

1.8

1.8

Inflation rate

1.4

1.4

1.5

1.7

2.7

2.9

2.8

2.9

1.8

1.8

Discount rate — For Germany and France, the Company derives
the discount rate used to determine the DBO from yields on highquality corporate bonds with an AA rating. The determinationof the discount rate is based on the iBoxx € Corporates AA
bond data and uses the granularity of single bond data in orderto receive more market information from the given bond index.
The discount rate for the estimated duration of the respective
pension plan is then extrapolated along the yield curve. In the UK,
it is determined with reference to the full yield curve of AA-rated
sterling-denominated corporate bonds of varying maturities. The
salary increase rates are based on long-term expectations of therespective employers, derived from the assumed inﬂation rate
and adjusted by promotional or productivity scales.
Rate of pension increase — Rates for pension payment
increases are derived from the respective inﬂation rate for theplan.

Inﬂation rates — Inﬂation rate for German plans corresponds
to the expected increase in cost of living. In the UK, theinﬂation assumptions are derived by reference to the difference
between the yields on index-linked and ﬁxed-interest long-term
government bonds.

2

Mortality tables — For the calculation of the German pension
obligation, the “2018 G” mortality tables (generation tables) as
developed by Professor Dr. Klaus Heubeck are applied, while
the disability rates of the Heubeck Tables have been reduced
to 30%, to align with actual observation.
For the UK schemes, the Self-Administered Pensions S2
mortality tables based on year of birth (as published by theInstitute of Actuaries) is used in conjunction with the results ofan investigation into the actual mortality experience of scheme
members. In France, Institute for French Statistics (“INSEE”)
tables are applied.

Airbus / Financial Statements 2020

49

2. Notes to the IFRS Consolidated Financial Statements /2.6 Employees Costs and Beneﬁts

Provision for retirement and deferred compensation plans
The development of the provision for retirement and deferred compensation plans is set out below:
DBO

Plan assets

Pensionplans
of theCompany

Participation in
BAE Systems
Pension Scheme
in the UK

Total

Pensionplans
of theCompany

Participation in
BAE Systems
Pension Scheme
in the UK

Total

Total
provisions

Balance at 1 January 201913,562

3,475

17,037(6,973)(2,990)(9,965)

7,072

Service cost(including past service cost)
Interest cost and income

443

63

506

0

0

0

506

231

94

325

(120)

(79)

(198)

127

changes in demographic
assumptions

1,265

(32)

1,233

0

0

0

1,233

changes in financial assumptions

1,768

310

2,078

0

0

0

2,078

changes in experience adjustments

127

(4)

124

0

0

0

124

(In € million)

Remeasurements: actuarial (gains)and losses arising from

0

0

0

(615)

(128)

(744)

(744)

Changes in consolidation, transfersand others

plan assets

(132)

0

(132)

(13)

0

(13)

(145)

Benefits paid

(416)

(106)

(522)

151

106

257

(265)

Contributions by employer
and other plan participants

85

2

87

(1,674)(91)(1,765)(1,678)Foreign currency translation
adjustments

92

189

280

(77)

(161)

(235)

43

17,025

3,991

21,016(9,320)(3,343) (12,663)

8,353

Service cost(including past service cost)

590

72

662

0

0

0

662

Interest cost and income

168

76

244

(95)

(62)

(157)

87

(69)

(3)

(72)

0

0

0

(72)

changes in financial assumptions

1,645

578

2,223

0

0

0

2,223

changes in experience adjustments

(106)

27

(79)

0

0

0

(79)

0

0

0

(420)

(117)

(537)

(537)

11

0

11

(45)

0

(45)

(34)

Balance at 31 December 2019

Remeasurements: actuarial (gains)and losses arising fromchanges in demographic
assumptions

plan assets
Changes in consolidation, transfersand others
Benefits paid

(450)

(153)

(603)

147

153

300

(303)

Contributions by employer
and other plan participants

80

2

82

(256)

(83)

(339)

(257)

Foreign currency translation
adjustments

(116)

(220)

(336)

93

180

273

(63)

18,7784,370

23,148(9,896)(3,272) (13,168)

9,980

Balance at 31 December 2020

In the ﬁgures shown in the table, amounts of € 2,625 million and€ 1,435 million are included for the deﬁned beneﬁt obligation andplan assets for deferred compensation plans in Germany (2019:€ 2,275 million and € 1,208 million).

50

Airbus / Financial Statements 2020

The past service cost included in the service cost amounts to€ 106 million and € -6 million as of 31 December 2020 and 2019,respectively. The employer contributions amount to € 331 millionand € 8 million for other plan participants as of 31 December
2020 (2019: € 1,758 million and € 7 million respectively).

2. Notes to the IFRS Consolidated Financial Statements /2.6 Employees Costs and Beneﬁts

The funding of the plans is as follows:
31 December
2020

2019

(In € million)

DBO

Plan assets

DBO

Unfunded pension plans

1,716

0

2,530

0

Funded pension plans (partial)

21,432(13,168)

18,486(12,663)

Total

23,148(13,168)

21,016(12,663)

As of 31 December 2020, the change in ﬁnancial assumptions
mainly due to the further weakening of interest rates in Germany,
France, Canada and the UK resulted in a total net increase inpension liability of € 2,223 million.
In 2020, contributions for retirement and deferred compensationplans amount to € 331 million. This consists of:– payments made to the pension and deferred compensationplans of the Company of € 250 million (2019: € 1,669 million),
mainly relating to the Contractual Trust Arrangement inGermany of € 175 million (2019: € 1,593 million) as well as
to the Company UK scheme € 55 million (2019: € 59 million);

Plan assets– payments made to the participation in BAE Systems Pension
Scheme in the UK of € 81 million (2019: € 89 million).
Contributions of approximately € 677 million are expected to bemade in 2021.
The weighted average duration of the DBO for retirement plansand deferred compensation is 19 years at 31 December 2020
(31 December 2019: 18 years).

Pension obligations by countries and type of beneficiaries
The split of the DBO for retirement plans and deferred compensation between active, deferred and pensioner members for themost signiﬁcant plans is as follows:
ActiveDeferredPensioner

Germany

56%

8%

36%

France

99%

0%

1%

UK

65%

17%

18%

Participation in BAE System Pension Scheme (Main Scheme)

51%

16%

33%

Canada

88%

1%

11%

2

Pension obligations by countries and type of plans
The split of the present value of DBO for retirement plans and deferred compensation for the most signiﬁcant plans is as follows:
Present value of DBO

Plan assets

Retirement
plans

DeferredCompensation
plans

Retirement
plans

DeferredCompensation
plans

Germany

82%

France

100%

18%

82%

18%

-

100%

-

UK
Participation in BAE System Pension
Scheme (Main Scheme)

100%

-

100%

-

100%

-

100%

-

Canada

100%

-

100%

-

Airbus / Financial Statements 2020

51

2. Notes to the IFRS Consolidated Financial Statements /2.6 Employees Costs and Beneﬁts

Pension obligations sensitivity to main assumptions
The following table shows how the present value of the DBO of retirement plans and deferred compensation would have been
inﬂuenced by changes in the actuarial assumptions as set out for 31 December 2020:
Change in actuarial assumptions

Impact on DBO
Change at 31 December
2020

2019

23,14821,013

Increase by 0.5%-point(2,041)(1,807)

Decrease by 0.5%-point

2,347

2,074

Present value of the DBO
Discount rate
Rate of compensation increase
Rate of pension increase

Increase by 0.25%-point

176

184

Decrease by 0.25%-point

(169)

(160)

Increase by 0.25%-point

449

443

Decrease by 0.25%-point

(431)

(425)

Increase by one year

718

629

Life expectancy

Sensitivities are calculated based on the same method (present
value of the DBO calculated with the projected unit method)
as applied when calculating the post-employment benefit
obligations. The sensitivity analyses are based on a change of
one assumption while holding all other assumptions constant.

This is unlikely to occur in practice and changes of more than
one assumption may be correlated leading to different impacts
on the DBO than disclosed above. If the assumptions change
at a different level, the effect on the DBO is not necessarily ina linear relation.

Plan assets allocation
The fair value of the plan assets for retirement plans and deferred compensation can be allocated to the following classes:
2020

2019

QuotedpricesUnquoted
prices1,197

0Rest of the world

356

0

Emerging markets

503

0

2,820

194

Corporates

3,001

Governments(In € million)

Total

QuotedpricesUnquoted
prices

Total

1,197

1,095

0

1,095

356

429

0

429

503

535

0

535

3,014

1,816

177

1,993

271

3,272

1,828

242

2,070

2,332

0

2,332

2,010

0

2,010

295

0

295

415

0

415

Equity securities
EuropeGlobal
Bonds

Pooled investments vehicles
Commodities

0

0

0

0

0

0

Hedge funds

0

398

398

0

265

265

Derivatives

0

(129)

(129)

0

58

58

Property

0

464

464

0

563

563

Cash and money market funds

3

106

109

1,875

58

1,933

Others

0

1,357

1,357

0

1,296

1,296

10,507

2,661

13,16810,003

2,659

12,662

Balance at 31 December

The majority of funded plans apply broadly an asset-liability
matching framework. The strategic asset allocation of theplans takes into account the characteristics of the underlying
obligations. Investments are widely diversiﬁed, such that the
failure of any single investment would not have a material impact
on the overall level of assets. A large portion of assets in 202052

Airbus / Financial Statements 2020

consists of ﬁxed income and equity instruments, although theCompany also invests in property, commodities and hedge
funds. The Company reassesses the characteristics of thepension obligations from time to time or as required by theapplicable regulation or governance framework. This typicallytriggers a subsequent review of the strategic asset allocation.

2. Notes to the IFRS Consolidated Financial Statements /2.6 Employees Costs and Beneﬁts

Provisions by countries
The amount recorded as provision for retirement and deferred compensation plans can be allocated to the countries as follows:
Pension plans of the Company

Total

Germany

FranceUK

DBO

14,317

2,274

1,646

541

4,370

23,148Plan assets

8,179

22

1,358

337

3,272

13,168

Recognised at
31 December 2020

6,138

2,252

288

204

1,098

9,980

DBO

(In € million)

CanadaParticipation in BAE
Systems Pension
Scheme in the UK

13,089

2,017

1,492

427

3,991

21,016

Plan assets

7,705

23

1,319

273

3,343

12,663

Recognised at
31 December 2019

5,384

1,994

173

154

648

8,353

Contributions to defined contribution plans
Employer’s contribution to state and private pension plans, mainly in Germany and France, are to be considered as deﬁned
contribution plans. Contributions in 2020 amounted to € 813 million (2019: € 853 million).

33.

Share-based Payment

Share-based compensation — Until 2015, the Company
operated a Performance and Restricted Units Plan which
qualiﬁes as a cash-settled share-based payment plan under
IFRS 2 “Share-based Payment”.
Since 2016, the Company operates a Performance Units
and Performance Shares Plan. Performance Units qualify
as a cash-settled share-based payment plan under IFRS 2 andPerformance Shares qualify as an equity-settled share-based
payment plan under IFRS 2.
Plans granting Restricted Units, Performance Units and/or
Performance Shares are also mentioned as “LTIP” in the following
notes.
Since 2018, the Company operates also exceptional grantsof Performance and Restricted Units as well as Performanceand Restricted Shares under an Equity Pool. Such exceptional
grants are validated by speciﬁc resolutions from the Board of
Directors and qualify as cash-settled or equity-settled sharebased payment plans under IFRS 2. Accounting principles andmethodology are the ones applied for LTIP as described below.
For cash-settled plans, provisions for associated services
received are measured at fair value by multiplying the numberof units expected to vest with the fair value of one LTIP unit at
the end of each reporting period, taking into account the extent
to which the employees have rendered service to date. Changesof the fair value are recognised as personnel expenses of theperiod, leading to a remeasurement of the provision. The fairvalue of Performance Units is re-measured at each closing dateas far as they are not paid.
For equity-settled plans, compensation expense is measured
at the grant date at the fair value by multiplying the number ofshares expected to vest by the fair value of one LTIP share. The
compensation expense is accounting for over the vesting periodof each LTIP equity-settled plans.

The fair value of each LTIP share (equity or cash-settled plans)is determined using a forward pricing model and is basedon publicly available risk free rate, volatility and dividend rate.
Besides the equity-settled plans described above, the Employee
Share Ownership Plan (“ESOP”) is an additional equity-settled
share-based payment plan. Under this plan, the Company offers
its employees Airbus SE shares at fair value matched with anumber of free shares based on a determining ratio. The fairvalue of shares provided is reﬂected as personnel expenses
in the Company’s Consolidated Income Statement with acorresponding increase in equity.

33.1

2

LTIP

The Company hedges the share price risk inherent in the cashsettled LTIP units by entering into equity swaps where thereference price is based on the Airbus SE share price. To theextent that cash-settled LTIP units are hedged, compensation
expense recognised for these units will effectively reﬂect thereference price ﬁxed under the equity swaps. Up to the 2018 LTIP
plan, in order to avoid any dilution of its current shareholders outof equity-settled LTIP units, the Company used to perform sharebuybacks to meet its obligations to its employees, following thedecisions of the Board of Directors and approval of the AGM.
In 2020, compensation expense for LTIPs (incl. Equity Pool)
including the effect of the equity swaps amounted to € -2 million(2019: € 104 million), among which € -9 million for cash-settledplans (2019: € 77 million) and € 7 million for equity-settled plans(2019: € 27 million).
As of 31 December 2020, provisions of € 59 million (2019:€ 144 million) relating to LTIP units (cash-settled) have beenaccounted for.

Airbus / Financial Statements 202053

2. Notes to the IFRS Consolidated Financial Statements /2.6 Employees Costs and Beneﬁts

The lifetime of the Performance Units as well as Performance
Shares is contractually ﬁxed (see the description of the respective
tranche in the following table). For the units, the measurement isnext to other market data, mainly affected by the share price asof the end of the reporting period (€ 89.78 as of 31 December2020) and the lifetime of the units.

The fair value of units and shares granted in the frame of the LTIP 2020 plan is as follows:
Expected vesting date
Fair value of Performance Units and Shares(In € per unit / share granted)

May 2024 – Performance Shares
May 2024 – Performance Units
May 2025 – Performance Units

55.49251.04546.977

The principal characteristics of the LTIPs as at 31 December 2020 are summarised below:

Grant date (1)LTIP 2015 (7)LTIP 2016 (8)LTIP 2017 (9)LTIP 2018

LTIP 2019

LTIP 2020

29 October 2015

25 October 2016

30 October 201730 October 2018

29 October 201928 October 2020

Performance andRestricted Unit Plan
Units

Performance Units and Performance Shares Plan

Performance

Restricted

Units

SharesUnits

SharesUnits

SharesUnits

SharesUnits

SharesNumber of units
granted (2)926,398

240,972

615,792

621,198

421,638

425,702278,376

281,181247,508

247,508

420,004

420,004

Fair value at
grant date (3)56.92/
53.90

56.92/
53.90

45.13/
44.71

45.15

74.83/
71.69

76.76

84.09/
83.28

85.01

112.83/108.44112.9251.04/
46.98

55.49

Fair value of
Performance
Units as of
31 December
2020 (3)

-

-

85.88

-

88.76/
85.41-

87.10/
84.17-

84.64/
81.41-

75.49/
72.50-

Number of units/
shares granted
through Equity
Pool (4)

-

-

1,762

1,762

1,898

1,898

6,964

6,964

4,343

4,252

-

-

Number of units
outstanding (5)00212,293

0

197,470

199,502275,379

278,184

248,901

248,810420,004

420,004

Total numberof eligible
beneficiaries
Vesting
conditions
Share price perunit limited at
vesting dates
to (6)

Vesting dates
Number ofvested units

1,564

1,671

1,601

1,626

1,576

1,602

The Performance and Restricted Units and Performance Shares will vest if the participant is still employed by a company of the Groupat the respective vesting dates. Performance Units and Shares will vest upon achievement of mid-term business performance.
Vesting schedule is made up of two payments over two years.

€ 112.62

50% in June2019
50% in July
2020
646,328

223,822€ 105.34-

50% in May
2020
and 50%expected
100%
in Mayin June2021
2020
214,108429,335€ 147.62-€ 213.88-€ 244.12-€ 136.08-

50% each
50% each
50% each
50% each
expected:
expected:
expected:
expected:in June100%
in June100%
in June100%
in June100%
2021
expected
2022
expected
2023
expected2024
expectedin Junein Mayin Junein Mayin Junein Mayin Junein May
2022
2021
2023
2022
2024
2023
2025
2024
0

0

0

0

0

0

0

0

(1) Date, when the vesting conditions were determined.
(2) Based on 100% target performance achievement. A minimum of 50% of Performance Units will vest; 100% in case of on-target performance achievement; up to a maximum of 150%
in case of overachievement of performance criteria. In case of absolute negative results (cumulative EBIT of the Company) during the performance period, the Board of Directors candecide to review the vesting of the Performance Units including the 50% portion which is not subject to performance conditions (additional vesting condition).
(3) Values are provided for units corresponding per vesting date.
(4) Mirroring the respective plan rules and regulations, but granted at a different date based on specific Board of Directors’ resolutions.
(5) Including shares granted through the Equity Pool, if applicable.
(6) Corresponds to 200% of the respective reference share price. Overall, the pay-out for Performance Units is limited to a total amount of 250% of the units originally granted, eachvalued with the respective reference share price of € 56.31 (for LTIP 2015), € 52.67 (for LTIP 2016), € 73.81 (for LTIP 2017),€ 106.94 (for LTIP 2018), € 122.06 (for LTIP 2019) and € 68.04(for LTIP 2020).
(7) Based on performance achievement of 75% for Performance Units under LTIP 2015.
(8) Based on performance achievement of 75% for Performance Units under LTIP 2016.
(9) Based on performance achievement of 50% for Performance Units under LTIP 2017.

Additionally, the Board of Directors approved in 2020 the exceptional grant of 4,152 Restricted & Performance Units and 571
Restricted & Performance Shares under the Equity Pool with an average fair value of € 79.00. 5,899 Units and 2,787 Shares havevested in 2020. As of 31 December 2020, the number of units outstanding is 5,432 Units and 3,222 Shares.

54

Airbus / Financial Statements 2020

2. Notes to the IFRS Consolidated Financial Statements /2.6 Employees Costs and Beneﬁts

33.2

ESOP

In 2020 and 2019, the Board of Directors approved a new ESOP
scheme. Eligible employees were able to purchase a ﬁ xed
number of previously unissued shares at fair market value (5,10, 15, 30 or 100 shares in 2020, 5, 15, 30, 50 or 100 shares in2019). The Company matched each ﬁxed number of shares witha number of the Company free shares based on a determinedratio (4, 6, 7, 10 and 25 free shares, respectively in 2020, versus
4, 7, 10, 13 and 25 free shares, respectively in 2019). During acustody period of at least one year, employees are restricted fromselling the shares, but have the right to receive all dividends paid.
Employees who directly purchased the Airbus SE shares have, in
addition, the ability to vote at the Annual Shareholder Meetings.
The subscription price was equal to the closing price at the Paris
stock exchange on 12 February 2020 (2019: 13 February 2019)

and amounted to € 136.60 (2019: € 104.38). Investing througha mutual fund led to a price which corresponds to the average
price at the Paris stock exchange during the 20 trading days
immediately preceding 12 February 2020 (2019: 13 February2019), resulting in a price of € 136.00 (2019: € 97.76).
In 2020, the Company issued and sold 671,640 ordinary shares(2019: 1,332,840) with a nominal value of € 1.00 each.
In 2020, the Company issued and distributed 304,515 matchingordinary shares (2019: 451,452) with a nominal value of € 1.00
each. Compensation expense (excluding social security
contributions) of € 34 million (2019: € 47 million) was recognisedin connection with ESOP in 2020.

34.

Remuneration

34.1

Remuneration – Executive Committee

The Company’s key management personnel consists of Members of the Executive Committee and Non-Executive Board Members.
The Chief Executive Ofﬁcer (“CEO”), who chairs the Executive Committee, is the sole Executive Board Member. The annual
remuneration and related compensation costs of the key management personnel as expensed in the respective year can besummarised as follows:
2020

2019

Salaries and other short-term benefits (including bonuses)

16.1

16.5

Post-employment benefit costs

4.8

1.1

Share-based remuneration (“LTIP award”, including associated hedge result)

1.0

10.5

(In € million)

Executive Committee, including Executive Board Member

Termination benefits (1)Other benefits
Social charges

(2)

0

(0.4)

0.5

0.4

4.7

4.5

2

Non-Executive Board Members
Short-term benefits (including social charges)

Total expense recognised

2.2

2.4

29.3

35.0

(1) 2019 Termination benefits include the adjustment of the estimated amount accounted for in 2018 based on last information available and applicable law.
(2) Costs of benefits provided through applicable mandatory collective and social security plans are accounted for among social charges.

Salaries and Other Short-Term Benefits (Including Bonuses)
The amount of bonuses is based on estimated performance achievement as at the balance sheet date and difference between
previous year estimation and actual pay-out in the current year. Outstanding short-term beneﬁts (bonuses) at year-end 2020 for
Executive Committee Members based on estimated performance achievement at year-end was € 7.7 million (2019: € 7.5 million).

Post-Employment and Other Long-Term Benefits
The post-employment and other long-term beneﬁts deﬁned obligation for the Executive Committee, including the CEO, amounted
to € 32.8 million at 31 December 2020 (2019: € 29.8 million). The disclosed post-employment and other long-term beneﬁts reﬂect
the total outstanding balance for all Executive Committee Members in charge at the end of the respective balance sheet date.
In 2019, the deﬁned beneﬁt plan in France was frozen, leading to a remeasurement of past service cost recognised as a proﬁtin the Proﬁt & Loss which mainly explains the difference in the Post-employment beneﬁts costs between 2020 (€ 4.8 million) and2019 (€ 1.1 million).

Airbus / Financial Statements 202055

2. Notes to the IFRS Consolidated Financial Statements /2.6 Employees Costs and Beneﬁts

Share-Based Remuneration (“LTIP Award”)
The share-based payment expenses result from not yet forfeited units and shares granted to the Executive Committee Members
under the Company’s LTIP which are re-measured at fair value according to the methodology described in Note 33.
In 2020, the Members of the Executive Committee were granted 50,814 Performance Units (2019: 30,168) and 50,814 Performance
Shares (2019: 30,168). For LTIP 2020, the respective fair value of these Performance Units and Shares at grant date was € 7.6 million(2019: € 7.7 million). As of 31 December 2020, provisions of € 5.0 million (2019: € 15.4 million) relating to LTIP have been recognised.
The total number of outstanding Performance Units and Performance Shares granted to the current Members of the Executive
Committee amounted to 133,966 and 126,442 respectively at 31 December 2020 (2019: 134,398 Performance Units and 119,340
Performance Shares).
Until and including the plan 2015, based on the intention of the Board of Directors to increase the long-term commitment of Executive
Committee Members to the success of the Company, the Board has authorised the Executive Committee Members to opt for partial
conversion of the otherwise cash-settled LTIPs into share-settled plans at each grant date of any new LTIP, requiring a minimum
conversion rate into equity settlement of 25% of total granted Performance Units. At the conversion date, each Executive Committee
Member individually determined the split of equity and cash settlement for the formerly granted LTIP. After overall performanceassessment of each of the plans, the vesting dates as determined at the initial grant date apply to all cash-settled Performance
Units. However, units converted into equity settlement only vest at the last of the vesting dates of the respective plan.
Performance Units granted to Executive Committee Members until 31 December 2015 and vested in 2020 are summarised below:
LTIP 2015
Total number of units granted

189,476

Number of cash-settled units

143,217

Number of equity-settled units

46,259Date of conversion

28 February 2016

Share price at date of conversion

Termination Benefits
The following beneﬁts apply to Executive Committee Members,
except the CEO.
In the case of contract termination, the Executive Committee
Members are entitled to an indemnity equal to 1.5 times the
Total Target Remuneration (deﬁned as Base Salary and target
Annual Variable Remuneration) with respect to applicable local
legal requirements, if any.
This will not apply if the Executive Committee mandate is
terminated for cause, in case of dismissal, if the Executive
Committee Member resigns or has reached retirement age.
The Executive Committee Members’ contract includes a noncompete clause which applies for a minimum of one year andcan be extended at the Company’s initiative for a further year.
The Board of Directors has the discretion to waive or invoke
the extension of the non-compete clause when legally or
contractually possible. The compensation for each year thatthe non-compete clause applies is equal to 50% of the last

56

Airbus / Financial Statements 2020

€ 59.78

Total Annual Remuneration (deﬁned as Base Salary and Annual
Variable Remuneration most recently paid) with respect toapplicable local legal requirements, if any.
Past LTIP awards may be maintained in full or prorated, insuch cases as in case of retirement or if a mandate is notrenewed by the Company without cause, prorata being basedon the presence in the Company during performance periods.
The vesting of past LTIP awards follows the plans’ rules andregulations and is not accelerated in any case. LTIP awards areforfeited for Executives who leave the Company on their own
initiative, but this is subject to review by the Board of Directors.
The termination beneﬁts include assumptions about all effective,
known or planned terminations to date.

Other Benefits
Other benefits include expenses for Executive Committee
Members’ medical, death and disability coverage, company
car and other usual facilities as applicable.

2. Notes to the IFRS Consolidated Financial Statements /2.6 Employees Costs and Beneﬁts

34.2

Remuneration – CEO

The annual remuneration and related compensation costs of the CEO as expensed in the respective year can be summarised asfollows:
2020(In €)

Base salary(1)

Annual variable pay
Post-employment benefit costs
Share-based remuneration (“LTIP award”)

(2)

2019

1,350,000

1,392,045

1,357,262

1,436,250

1,179,332(2,694,448)

206,337

1,627,061

00Other benefits

33,79054,423Social charges (3)1,102,840

797,766

Termination benefits(1) For 2019, the base salary is composed of the prorated base salary paid to the former CEO (€ 420,455) up to 10 April 2019 and to the current CEO (€ 971,591) between 10 April
2019 and the end of 2019.
(2) Expense related to share-based payment plans as recognised in the annual period (service period) including the result from the hedge of cash-settled share-based payment (see“– Note 33: Share-Based Payment”).
(3) Social charges depends on the applicable regulation to the CEO. In France, social charges comprise benefits accrued through mandatory collective and state plans such aspension, death and disability or medical coverage.

Annual Variable Pay
The annual variable pay is based on estimated performance achievement as at the balance sheet date and difference between
the previous year’s estimation and actual pay-out in the current year.

Post-Employment Benefit Costs
Post-employment beneﬁt costs relate to the aggregated amount of current service and interest costs for deﬁned beneﬁt plan andcompany cost for contributions base plans.
Following the Board decision approved in the AGM 2020, the CEO pension rights are accrued through a deﬁned contributions planfrom 1 January 2020, which coexists with the former deﬁned beneﬁt pension plan.
The accrued pension rights under the former deﬁned beneﬁt plan have been frozen at the end of 2019 and remain unvested until
the retirement date of the CEO. The pension rights arising from the Company’s deﬁned contribution plan are deducted from thefrozen deﬁned pension rights.
As of 31 December 2020, the deﬁned beneﬁt obligation related to the frozen deﬁned beneﬁt commitment amounts to € 9,423,777(€ 9,167,371 in 2019). This obligation has been accrued in the 2020 Consolidated Financial Statements and will be updated annually
up to the retirement date of the CEO considering additional service cost and future changes on economic assumptions or otherfactors like salary increase.

2

For the ﬁscal year 2020, the cost related to the CEO’s pension rights accrued under Company’s plans during the year represented an
expense of € 1,179,332 (versus a net proﬁt of € (2,814,868) in 2019 due to the effect of the freeze of the deﬁned beneﬁt commitment).
The annual cost of pension rights accrued under applicable mandatory collective and state pension plans are accounted for amongsocial charges.

Airbus / Financial Statements 202057

2. Notes to the IFRS Consolidated Financial Statements /2.6 Employees Costs and Beneﬁts

Share-based Remuneration
The table below gives an overview of the interests of the CEO, under the various LTIPs of the Company:
Granted Date
Performance Units and Shares

LTIP 2015 (1)LTIP 2016 (1)LTIP 2017 (1)LTIP 2018 (1)LTIP 2019

LTIP 2020

10,656

11,392

8,808

8,416

11,06019,840

Revaluation

75%

75%

50%

100%

100%

100%

Performance Units and Shares revalued

7,992

8,544

4,404

8,416

11,06019,840

Vested in 2020in cash

5,994

2,136

0

0

0

0

in shares

1,998

4,272

0

0

0

0

in cash

0

2,136

2,202

4,208

5,530

9,920

in shares

0

0

2,202

4,208

5,530

9,920

May 2023

May 2024

Outstanding 2020

Vesting scheduleCash-settled units
Equity-settled units

For vesting dates, see “– Note 33.1: LTIP”
June 2020

May 2020

May 2021

May 2022(1) 2015 to 2018 awards were granted before the appointment of the CEO and could vest during the CEO’s mandate.

Vesting of all Performance Units and Performance Shares granted to the CEO is subject to performance conditions.
As of 31 December 2020, provisions of € 919,556 (2019: € 1,896,787) relating to Performance Units have been recognised. The
pay-out from vested cash-settled LTIP in 2020 was € 401,261 (2019: € 697,383) excluding social charges.

Termination Benefits
The termination beneﬁt applicable to the CEO is described in the Company’s Remuneration policy.

Other Benefits
As stipulated in the Company’s Remuneration Policy, the beneﬁts offered to the CEO are similar to the beneﬁts granted to otherexecutives of the Company and comprise, among other matters, medical, death and disability coverage (both through the Frenchsocial security system and mandatory collective Company’s plans), a company car and usual facilities. Costs of beneﬁts provided
through applicable mandatory collective and social security plans are accounted for among social charges. The monetary valueof other beneﬁts provided to the CEO in 2020 amounted to € 33,790 (2019: € 33,802).
The Company has not provided any loans to, advances to and guarantees on behalf of the CEO.

58

Airbus / Financial Statements 2020

2. Notes to the IFRS Consolidated Financial Statements /2.6 Employees Costs and Beneﬁts

34.3

Remuneration – Board of Directors

The remuneration of the Non-Executive Members of the Board of Directors was as follows:
2020
Fixum (1)(In €)

2019

AttendanceFees (2)

Total

Fixum (1)AttendanceFees (2)Total

Non-Executive Board Members
René Obermann (3)117,738

76,250193,988

100,000

102,000

202,000

Victor Chu

100,000

78,000178,000

100,000

107,000

207,000(4)

127,087

90,000217,087

114,176

105,000

219,176

Ralph D. Crosby Jr.

100,000

83,000183,000

100,000

108,500

208,500

Lord Drayson

120,000

80,000200,000

120,000

105,000

225,000

Mark Dunkerley (5)70,87948,000118,87900070,87958,000128,87900

0

130,000

93,000223,000

127,265

95,500222,765

Jean-Pierre Clamadieu

Stephan Gemkow(5)Catherine Guillouard (6)María Amparo Moraleda Martínez

130,000

85,000215,000

130,000

105,000

235,000

Claudia Nemat

100,000

80,000180,000

100,000

74,500174,500

Carlos Tavares

80,00070,000150,000

80,00065,000145,000

Denis Ranque (7)61,73135,00096,731

210,000

101,000

311,000

Hermann-Josef Lamberti (8)35,27435,00070,274

122,735

77,500200,235

1,243,588

911,250

2,154,838

1,304,176

1,046,000

2,350,176

Former Non-Executive Board Members

Total(1) Fixum includes a base fee for Board membership and Committee membership within the Audit Committee, the Remuneration, Nomination and Governance Committee (“RNGC”)
and/or the Ethics, Compliance & Sustainability Committee (“ECSC”) as the case may be. The fixum for the year 2020 was paid 50% in January 2020 and 50% in July 2020. The
fixum for the year 2019 was paid 50% in January 2019 and 50% in July 2019.
(2) 2020 attendance fees include the Board attendance fees and the fees in relation to Audit Committee, RNGC and ECSC meetings. The Board attendance fees related to the firstsemester 2020 were paid in July 2020, those related to the second semester 2020 were paid in January 2021. The Committees attendance fees related to full year 2020 were paidin January 2021.
(3) Chairman of the Board of Directors since 16 April 2020. Member of the Audit Committee until 16 April 2020. Member of the former Ethics & Compliance Committee between
30 July 2019 and 16 April 2020.
(4) Member of the former Ethics & Compliance Committee between 10 April 2019 and 16 April 2020. Chair of the ECSC since 16 April 2020.
(5) Member of the Board of Directors and of the Audit Committee since 16 April 2020.
(6) Chair of the Audit Committee since 10 April 2019.
(7) Chairman of the Board of Directors and of the former Ethics & Compliance Committee until 16 April 2020.
(8) Member of the Board of Directors and of the Audit Committee until 16 April 2020.

Airbus / Financial Statements 2020

259

2. Notes to the IFRS Consolidated Financial Statements /2.7 Capital Structure and Financial Instruments

2.7 Capital Structure and Financial Instruments
35.

Total Equity

35.1

Equity Attributable to Equity Owners of the Parent

The Company’s shares are exclusively ordinary shares with a par value of € 1.00. The following table shows the development of
the number of shares issued and fully paid:(In number of shares)

Issued as at 1 January
Issued for ESOP
Issued for convertible bondIssued at 31 December
Treasury shares

Outstanding at 31 December

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 € 6,445 million (2019:€ 5,975 million) representing an increase of € +470 million. Thisis mainly due to an increase in other comprehensive income,principally related to the mark to market revaluation of the hedge
portfolio of € +2,783 million offset by a change in actuarial gains
and losses of € -1,268 million, further compensated by a net loss
for the period of € -1,133 million.

2019

783,173,115

776,367,881

976,155

1,784,292

05,020,942

784,149,270

783,173,115(432,875)(862,610)

783,716,395

782,310,505

to 862,610 as of 31 December 2019, mainly due to the vested
shares in 2020 under LTIP 2016 (see “– Note 33: Share-based
Payment”). No shares were sold back to the market nor cancelled(2019: 0 shares).

Capital stock comprises the nominal amount of shares
outstanding. The addition to capital stock represents thecontribution for exercised options by employees of € 976,155(2019: € 1,784,292) in compliance with the implemented ESOPs.
In 2019, it represents the conversion of € 5,020,942 in relation to
the convertible bond issued in July 2015 redeemable in shares.

On 16 April 2020, the AGM of the Company authorised the Boardof Directors, for a period expiring at the AGM to be held in 2021,
to issue shares and to grant rights to subscribe for shares in the
Company’s share capital for the purpose of:– ESOPs and share-related LTIPs, provided that such powers
shall be limited to an aggregate of 0.14% of the Company’s
authorised share capital (see “– Note 33: Share-based
Payment”);– funding the Company and its subsidiaries, provided thatsuch powers shall be limited to an aggregate of 0.3% of
the Company’s authorised share capital (see “– Note 37.3:
Financing Liabilities”).

Share premium mainly results from contributions in kind in
the course of the creation of the Company, cash contributions
from the Company’s initial public offering, capital increases andreductions due to the issuance and cancellation of shares.

For each operation, such powers shall not extend to issuingshares or granting rights to subscribe for shares if there is nopreferential subscription right and for an aggregate issue pricein excess of € 500 million per share issuance.

Retained earnings include mainly the loss for the period and thechanges in other comprehensive income from remeasurementsof the deﬁned beneﬁt pension plans net of tax which amounts
to € -1,268 million in 2020 (2019: € -2,345 million).

Also on 16 April 2020, the AGM authorise d the Board of
Directors for an 18-month period to repurchase up to 10% of
the Company’s issued share capital at a price per share notless than the nominal value and not more than the higher ofthe price of the last independent trade and the highest current
independent bid on the trading venues of the regulated marketof the country in which the purchase is carried out.

On 23 March 2020, the Company has decided the withdrawalof 2019 dividend proposal with cash value of € 1.4 billion in
response to the COVID-19 pandemic (see “– Note 2: Impact of
the COVID-19 pandemic”). Given the ongoing volatility, there will
be no dividend proposal for 2020.
Treasury shares represent the amount paid or payable for own
shares held in treasury. During 2020, the number of treasury
stock held by the Company decreased to 432,875 compared

60

2020

Airbus / Financial Statements 2020

Furthermore, the AGM authorised both the Board of Directors
and the CEO, with powers of substitution, to establish the exact
number of the relevant shares to be cancelled.

2. Notes to the IFRS Consolidated Financial Statements /2.7 Capital Structure and Financial Instruments

35.2

Non-controlling interests

The non-controlling interests (“NCI”) from non-wholly owned subsidiaries decreased to € 11 million as of 31 December 2020(2019: € 15 million). These NCI do not have a material interest in the Company’s activities and cash ﬂows.

36.

Capital Management

The Company seeks to maintain a strong ﬁnancial proﬁle to safeguard its going concern, ﬁnancial ﬂexibility as well as shareholders’,
credit investors’ and other stakeholders’ conﬁdence in the Company. Consequently, operating liquidity is of great importance.
As part of its capital management, it is one of the Company’s objectives to maintain a strong credit rating by institutional rating
agencies. This enables the Company to contain its cost of capital which positively impacts its stakeholder value (entity value).
Next to other non-ﬁnancial parameters, the credit rating is based on factors such as cash ﬂow, proﬁtability and liquidity ratios. The
Company monitors these ratios to keep them in a range compatible with a strong rating.
Rating agency

Long-term rating

Outlook

Short-term rating

A

Negative

A-1

A2

Negative

P-1

BBB+

Negative

F-1

Standard and Poor’s
Moody’s Investors Services
Fitch Rating (unsolicited)

The stand-alone rating reﬂects the Company’s strong backlog
providing revenue visibility, leading market position, strong
liquidity and solid balance sheet. It also reﬂects the Company’s
reaction to the COVID-19 pandemic, including the adaptation of
the production rate to meet customer demand, cost reductions
and cash containment measures, as well as the uncertainties
related to the length of the outbreak and the recovery patternof demand for aircrafts post outbreak. Finally, it reﬂects the
management’s focus on programmes execution, proﬁtability
and cash generation improvement.
In accordance with the Company’s conservative financial
policy, a strong rating is key to maintain a wide array of funding
sources at competitive conditions, to have broad access to longterm hedging and to strengthen the Company’s position as aﬁnancially sound counterparty for its customers and suppliers.
A ﬁve year plan (previously: three year plan) for rating and a value
creation ambition is constructed annually, and is composed of(i) EBIT and (ii) Free Cash Flow, which is deﬁned as Cash provided

37.

by operating activities and Cash used for investing activities less
Change of securities, Contribution to plan assets for pensions,realised Treasury swaps and bank activities.
The Company uses the WACC to determine the Net Present
Value (“NPV”), which is used for any investment decision.
The Company also monitors the level of dividends paid to its
shareholders.
The Company generally satisﬁes its obligations arising from
ESOPs and Share Incentive Plans (“SIPs”) by issuing new shares.
In order to avoid any dilution of its current shareholders outof LTIPs, the Company performs share buybacks to meet its
obligations to its employees, following the decisions of the Boardof Directors and approval of the AGM. Apart from this purpose,
the Company generally does not trade with treasury shares.

2

The Company complies with the capital requirements underapplicable law and its Articles of Association.

Net Cash

The net cash position provides ﬁnancial ﬂexibility to fund the Company’s operations, to react to business needs and risk proﬁle andto return capital to the shareholders. This ﬂexibility has been essential in managing the Company’s operations during the COVID-19
pandemic (see “– Note 2: Impact of the COVID-19 pandemic”).
31 December(In € million)

2020

2019

Cash and cash equivalents

14,439

9,314

Current securities

1,618

2,302

Non-current securities

5,350

11,066Gross cash position

21,407

22,682

Short-term financing liabilities(3,013)(1,959)Long-term financing liabilities(14,082)(8,189)4,312

12,534

Total

Airbus / Financial Statements 2020

61

2. Notes to the IFRS Consolidated Financial Statements /2.7 Capital Structure and Financial Instruments

The net cash position on 31 December 2020 amounted to€ 4,312 million (2019: € 12,534 million), with a gross cash positionof € 21,407 million (2019: € 22,682 million).
Derivative instruments recognised on the Company’s Statementof Financial Position consist of (i) instruments that are enteredinto as hedges of the Company’s operating activities or interest
result, and (ii) embedded foreign currency derivatives that arise

37.1

from separating the foreign currency component from certain
operating contracts. Cash ﬂows resulting from the settlementof these derivatives are therefore recorded as part of cash ﬂow
from operations. Similarly, ﬁnancial assets and liabilities arisingfrom customer ﬁnancing activities and refundable advancesfrom European Governments are considered part of operating
activities and related cash ﬂows are hence recognised as cash
ﬂows from operating activities.

Cash and Cash Equivalents

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

2020

2019

Bank account and petty cash

4,173

1,649

Short-term securities (at fair value through profit and loss)

9,654

7,014

Short-term securities (at fair value through OCI)

512

652

Others100(1)

14,439

9,314

Total cash and cash equivalents

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

37.2

Securities

The majority of the Company’s securities consists of debt
securities and are classiﬁ ed at fair value through OCI (see“– Note 38.2: Carrying Amounts and Fair Values of Financial
Instruments”).
The Company’s securities portfolio amounts to € 6,968 millionand € 13,368 million as of 31 December 2020 and 2019,respectively. The security portfolio contains a non-current
portion of € 5,350 million (2019: € 11,066 million), and a current
portion of € 1,618 million (2019: € 2,302 million).
Included in the securities portfolio as of 31 December 2020 and
2019, respectively, are corporate and government bonds bearing
either ﬁxed rate coupons (€ 6,714 million nominal value; 2019:€ 12,908 million) or ﬂoating rate coupons (€ 108 million nominal
value; 2019: € 188 million), and foreign currency funds of ﬁxed
income funds (€ 2 million fair value; 2019: € 5 million).
When the Company enters into securities lending or otherﬁnancing activities that involve the pledging of securities as
collateral, the securities pledged continue to be recognised on
the balance sheet. As of 31 December 2020, securities for an
amount of € 99 million were pledged as collateral for borrowings
from banks (2019: € 145 million).

62

Airbus / Financial Statements 2020

37.3

Financing Liabilities

Financing liabilities comprise obligations towards ﬁnancial
institutions, issued corporate bonds, deposits made by customersof Airbus Bank, borrowings received from joint ventures andother parties as well as ﬁnance lease liabilities. Financing liabilities
are recorded initially at the fair value of the proceeds received, netof transaction costs incurred. Subsequently, ﬁnancing liabilities
are measured at amortised cost, using the effective interest rate
method with any difference between proceeds (net of transaction
costs) and redemption amount being recognised in total ﬁnanceincome (cost) over the period of the ﬁnancing liability.
Financing liabilities to ﬁnancial institutions may include liabilities
from securities lending transactions. In securities lendingtransactions, the Company receives cash from its counterparty
and transfers the securities subject to the lending transaction
as collateral. The counterparty typically has the right to sell or
repledge the securities pledged. The amount of cash received
is recognised as a ﬁnancing liability. The securities pledged are
not derecognised, but remain on the Company’s Statement of
Financial Position.

2. Notes to the IFRS Consolidated Financial Statements /2.7 Capital Structure and Financial Instruments

31 December(In € million)

2020

2019

Bonds and commercial papers

12,032

6,491

Liabilities to financial institutions

418

244

Loans
Lease liabilities
Total long term financing liabilities

94

156

1,538

1,298

14,082

8,189

Bonds and commercial papers

1,075

0

Liabilities to financial institutions

111

106

Loans

94

127

Lease liabilities

260

262

Others (1)

1,473

1,464

Total short-term financing liabilities

3,013

1,959

17,095

10,148Total(1) Included in “others” are financing liabilities to joint ventures.

Long-term financing liabilities, mainly comprising of bonds andlease liabilities, increased by € +5,893 million to € 14,082 million(2019: € 8,189 million), mainly due to the issuance of two bonds
for a total of € 6 billion. The ﬁrst bond was split into a 5 yearmaturity tranche of € 750 million with a coupon of 1.625%, an
8 year-maturity tranche of € 750 million with a coupon of 2.00%
and a 12 year-maturity tranche of € 1 billion with a coupon of
2.375%.
The second bond was split into a six year-maturity tranche of€ 1.25 billion with a coupon of 1.375%, a ten year-maturity trancheof € 1.25 billion with a coupon of 1.625% and a 20 year-maturity
tranche of € 1 billion with a coupon of 2.375%.
Short-term financing liabilities increased by € +1,054 million
to € 3,013 million (2019: € 1,959 million). The increase in shortterm ﬁnancing liabilities is mainly related to the reclassiﬁcation of€ 1 billion of exchangeable bonds from long-term to short-term
due to maturity in June 2021.

The Company has issued several euro-denominated bonds
under its EMTN programme and three stand-alone US dollardenominated bonds on the US institutional market under Rule
144A. It has also issued a euro-denominated exchangeablebonds into Dassault Aviation shares. Furthermore, the Company
has long-term US dollar-denominated loans outstanding with theDevelopment Bank of Japan (“DBJ”).
The Company can issue commercial paper under its Negotiable
European Commercial Paper (“NEuCP”) programme at ﬂoating
or ﬁxed interest rates corresponding to the individual maturities
ranging from 1 day to 12 months. The programme has been set
up in 2003 with a maximum volume of € 2 billion, increased in2013 to € 3 billion and in 2020 to a maximum volume of € 11 billion.
In 2020, the Company established a Euro Commercial Paper(“ECP”) Programme with a maximum volume of € 4 billion. The
Company established in April 2015 a US$ 2 billion commercial
paper programme which has been increased to US$ 3 billion in
April 2016. As of 31 December 2020, there were no outstanding
amounts under any of its commercial paper programmes.

Airbus / Financial Statements 2020

263

2. Notes to the IFRS Consolidated Financial Statements /2.7 Capital Structure and Financial Instruments

The terms and repayment schedules of these bonds and loans are as follows:
Carrying amount(In € million)

Principal
amount31 December(In million)

2020

2019

Coupon Effective
Issuance or interest interest
date
rate
rate

Maturity
date

Additional features

US$ 1,000

845

896

Apr 2013

2.70%

2.77%

Apr 2023

Interest rate swapped
into 3M Libor +0.68%

EMTN 10 years€ 1,000

1,047

1,049

Apr 2014

2.375%

2.424%

Apr 2024

Interest rate swapped
into 3M Euribor +1.40%

EMTN 15 years

€ 500

571

555

Oct 2014

2.125%

2.208%

Oct 2029

Interest rate swapped
into 3M Euribor +0.84%

EMTN 10 years

€ 600

626

617

May 2016

0.875%

0.980%

May 2026

Interest rate swapped
into 3M Euribor +0.50%

EMTN 15 years

€ 900

983

940

May 2016

1.375%

1.502%

May 2031

Interest rate swapped
into 3M Euribor +0.66%-

Mar 2020

1.625%

1.798%

April 2025

- June 2020

1.375%

1.474% June 2026

US$ Bond 10 years

EMTN 5 years

€ 750

745

EMTN 6 years€ 1,250

1,243

EMTN 8 years

€ 750

745

EMTN 10 years€ 1,250

EMTN 12 years
EMTN 20 years-

Mar 2020

2%

1,237

- June 2020

1.625%

1.737% June 2030

€ 1,000

987- June 2020

2.375%

2.494%€ 1,000988-

2.375%

2.437% June 2040

Mar 2020

2.099%

April 2028

April 2032

Exchangeable bonds
5 years€ 1,078

1,075

1,068

Jun 2016

0.00%

0.333%Jun 2021

Exchangeable into
Dassault Aviation sharesissued at 103.75%

US$ Bond 10 years

US$ 750672

687

Apr 2017

3.15%

3.20%

Apr 2027

Interest rate swapped
into 3M Libor +0.87%

US$ Bond 30 years

US$ 750667

680

Apr 2017

3.95%

4.02%

Apr 2047

Interest rate swapped
into 3M Libor +1.61%

676-

July 2020,
Dec 2020

1.982%2.544%

2.77%3.09%

July 2026
toJuly 2029

13,107

6,491

Jan 2011

3M
US-Libor+1.15%

4.84%

Jan 2021

ACLP Private
placement

US$ 830

Bonds

DBJ 10 years

US$ 300

81

89

Others448

261

Liabilities tofinancial institutions

529

350

Interest rate swapped
into 4.76% fixed

Reconciliation of liabilities arising from ﬁnancing liabilities:
Non-cash movements
Balance at
1 January
2020

Cash
flows

Changesin scope

Foreignexchange
movements

Bonds and commercial papers

6,491

6,660

0

(44)

0

13,107

Liabilities to financial institutions

350

292

0

(47)

(66)

529

Loans

283

(73)

0

(22)

0

188

Finance lease liabilities

1,560

(331)

0

(36)

605

1,798

Others

1,464

109

0

(100)

0

1,473

Total

10,148

6,657

0

(249)

539

17,095(In € million)(1) Included in “other assets and liabilities” in the Statements of Cash Flows.

64

Airbus / Financial Statements 2020

Others(1)

Balance at
31 December2020

2. Notes to the IFRS Consolidated Financial Statements /2.7 Capital Structure and Financial Instruments

38.

Financial Instruments

38.1

Financial Risk Management

By the nature of its activities, the Company is exposed to a variety
of ﬁnancial risks: (i) market risks, in particular foreign exchangerisk, but also interest rate risk, equity price risk and commodity
price risk, (ii) liquidity risk and (iii) credit risk. The Company’s
overall ﬁnancial risk management activities focus on mitigating
unpredictable ﬁnancial market risks and their potential adverse
effects on the Company’s operational and ﬁnancial performance.
The ﬁnancial risk management of the Company is generally
carried out by the Treasury department of the Company underpolicies approved by the Board of Directors or by the Chief
Financial Ofﬁcer. The identiﬁcation, evaluation and hedging of the
ﬁnancial risks is in the joint responsibility of several establishedspeciﬁc committees such as the Foreign Exchange Committee
and the Asset Liability Management Committee, including theCompany business segments.
The Company uses ﬁnancial derivatives solely for risk mitigating
purposes (“hedging”) and applies hedge accounting for asigniﬁcant portion of its hedging portfolio.

Market Risk
Foreign exchange risk — Foreign exchange risk arises when
future commercial transactions or ﬁrm commitments, recognised
monetary assets and liabilities and net investments in foreign
operations are denominated in a currency that is not the entity’sfunctional currency.
The Company manages a long-term hedge portfolio withmaturities of several years covering its net exposure to US
dollar sales, mainly from the commercial activities of Airbus.
This hedge portfolio covers a large portion of the Company’s
ﬁrm commitments and highly probable forecasted transactions.
For Airbus, the highly probable criteria of the underlying foreign
currency exposure of cash ﬂow hedges is assessed based on
the IFRS15 backlog value analysis. This consists in reducing
the contractual ﬁrm backlog by all deliveries which cannot be
considered as highly probable due to the existence of either
cancellation rights, risk of bankruptcy or other risk of order
restructuring. The latter assessments is taking into accountcustomers’ situation and commercial aspects. The resulting
backlog is further adjusted to the foreign exchange management
hedging horizon. The highly probable underlying foreign currency
exposure is then caped to the production plan when applicable.
Most of the Company’s revenue is denominated in US dollars,
while a major portion of its costs is incurred in euro and to a lesser
extent in other foreign currencies. Consequently, to the extent
that the Company does not use ﬁnancial instruments to hedge
its exposure resulting from this currency mismatch, its proﬁts
will be affected by changes in the €/US$ exchange rate. As theCompany intends to generate proﬁts primarily from its operations
rather than through speculation on exchange rate movements,
it uses hedging strategies to manage and minimise the impact
of exchange rate ﬂuctuations on these proﬁts.

With respect to its commercial aircraft products, as of 30 June
2018, the Company adopted a new hedge strategy to hedge its
net exposure (US dollar revenue less US dollar cost) resulting
from commercial aircraft deliveries of speciﬁc aircraft types.
The strategy more closely aligns hedge accounting with risk
management activities.
Under the new strategy the foreign exchange derivatives usedas hedging instruments are designated as a hedge of a portionof the cash ﬂows received for each of a number of deliveries of a
speciﬁc aircraft type that are expected to occur in a given monthand hence will allow the hedge result to move along with thehedged deliveries in the event of a shift in deliveries.
If such a shift in hedged deliveries occurs, hedge ineffectivenesswill arise to the extent the maturities of the hedging instrument
and the expected timing of the hedged cash ﬂows are no longer
perfectly aligned. In order to minimise such ineffectiveness theCompany will close the timing gap by rolling over hedges to new
maturities, using foreign exchange swap contracts.
In addition, the Company will designate the risk of changes inthe spot element as the hedged risk in order to eliminate theineffectiveness resulting from changes in forward points between
different maturities. The forward element will be accounted for
as a cost of hedging similar to the time value of options.
Until 30 June 2018 the Company typically hedged firmly
committed sales in US dollar using a “ﬁrst ﬂow approach”. Under
that approach, the foreign currency derivatives the Company
entered into were designated as a hedge of the ﬁrst US dollar
inﬂows received from the customer at aircraft delivery in a given
month. The strategy implied that only a portion of the expected
monthly customer payments made at aircraft delivery were
hedged and that a reduction of monthly cash inﬂows as a resultof postponements or order cancellations had no impact on theeffectiveness of the hedge as long as the actual gross US dollar
cash inﬂows received at aircraft delivery in a particular monthexceeded the portion designated as being hedged in that month.
According to the prospective application requirement of IFRS 9,
the fair values of the legacy portfolio in place at inception of the
new strategy continue to be assigned to the previous ﬁrst ﬂow
hedge regime and remain in the hedge reserve in OCI, to berecognised in proﬁt and loss only at maturity of the originallyhedged cash ﬂows (unless those cash ﬂows are no longer
expected to occur).

2

As a result of prospective application, the hedging instruments
designated under the new strategy had a non-zero fair value athedge inception, which might create some small ineffectiveness.
Another source of ineffectiveness is the counterparty credit risk
inherent in the hedge portfolio. As such, credit risk is absent fromthe hedged cash ﬂows. However, since netting arrangements arein place with all the hedge counterparties and the Company hasa policy of trading with investment grade counterparties only, thecredit risk arising from its hedging instruments, and associatedchanges in credit risk, have historically been negligible and are
expected to remain so.

Airbus / Financial Statements 2020

65

2. Notes to the IFRS Consolidated Financial Statements /2.7 Capital Structure and Financial Instruments

The Company also hedges its expected foreign currency
exposure arising from US dollar or pound sterling cash outﬂows
in the commercial aircraft business on a ﬁrst outﬂow basis,though to a much lesser extent than US dollar cash inﬂows.
In military aircraft and non-aircraft businesses, the Company
hedges inﬂows and outﬂows in foreign currencies from ﬁrmly
committed or highly probable forecast sales and purchase
contracts. Here, foreign currency derivatives are typicallycontracted in lower volumes; they may be accounted for using
a ﬁrst ﬂow approach or are designated as hedges of speciﬁc
agreed milestone payments. The amount of the expected ﬂows
to be hedged can cover up to 100% of the equivalent of the net
US dollar exposure at inception. The coverage ratio considers thevariability in the range of potential outcomes taking into accountmacroeconomic movements affecting spot rates and interest
rates as well as the robustness of the commercial cycle.
In situations where the payment dates for hedged firmly
committed cash ﬂows are not ﬁxed and subject to potentiallysigniﬁcant delays, the Company may use rollover strategies,
usually involving foreign exchange swaps.
For all foreign currency hedges of future cash ﬂows which qualify
for hedge accounting under IFRS 9, the Company uses the cash
ﬂow hedge model, which requires (i) recognising the effective
portion of the fair value changes of the hedging derivatives inequity (within OCI) and (ii) recognising the effect of the hedge in
proﬁt or loss when the hedged cash ﬂows affect proﬁt or loss.
In addition, the Company hedges currency risk arising fromﬁnancial assets or liabilities denominated in currencies otherthan the euro, including foreign currency receivable andpayable accounts, as well as foreign currency denominatedfunding transactions or securities. The Company applies hedge
accounting if a mismatch in terms of proﬁt or loss recognition of
the hedging instrument and hedged item would otherwise occur.
Frequently, however, the currency-induced gains or losses of thehedging instrument and the hedged item match in terms of proﬁt
or loss recognition (“natural hedge”), so no hedge accounting isrequired. Sometimes such gains or losses may end up in different
sections of the income statement (such as operating proﬁt for thehedged item and ﬁnancial result for the hedging instrument). If
so, the Company may choose to present the gains or losses ofboth the hedging instrument and the hedged item in the same
income statement line item if certain formal requirements are met.
As hedging instruments, the Company primarily uses foreign
currency forwards, foreign currency options and to a minor
extent non-derivative ﬁnancial instruments. A hedge ratio of 1:1
is applied by the Company.
The Company also has foreign currency derivative instruments
which are embedded in certain purchase contracts denominatedin a currency other than the functional currency of any substantial
party to the contract, principally in US dollar and pound sterling.
If such embedded derivatives are required to be accounted forseparately from the host purchase contract, related gains orlosses are generally recognised in other ﬁnancial result. However,if the embedded derivatives qualify for hedge accounting,
the Company might choose to designate them as a hedging
instrument in a hedge of foreign currency risk, in which casethey are accounted for under the cash ﬂow hedge model as
described above.

66

Airbus / Financial Statements 2020

Interest rate risk — The Company uses an asset-liability
management approach with the objective to limit its interest
rate risk. It undertakes to match the risk proﬁle of its interestbearing assets with those of its interest-bearing liabilities. The
remaining net interest rate exposure is managed through several
types of interest rate derivatives, such as interest rate swaps
and interest rate futures contracts, in order to minimise risks
and ﬁnancial impacts.
The vast majority of related interest rate hedges qualify for hedge
accounting, and most of them are accounted for under the fairvalue hedge model. As a result, both the fair value changes ofthese derivatives and the portion of the hedged items’ fair valuechange that is attributable to the hedged interest rate risk arerecognised in proﬁt and loss, where they offset to the extent thehedge is effective.
A few interest rate swaps that have been entered into as a hedge
of certain of the Company variable rate debt (see “– Note 36.3:
Financing Liabilities”) are accounted for under the cash ﬂow
hedge model. Related fair value gains are recognised in OCI andreclassiﬁed to proﬁt or loss when the hedged interest payments
affect proﬁt or loss.
The Company has applied the relief introduced by theamendments made to IFRS 9 in September 2019 on hedge
accounting, having the effect that the IBOR reform should notcause hedge accounting to terminate.
The Company invests in ﬁnancial instruments such as overnight
deposits, certiﬁcates of deposits, commercial papers, othermoney market instruments and short-term as well as mediumterm bonds. For its ﬁnancial instruments portfolio, the Company
has an Asset Liability Management Committee in place thatmeets regularly and aims to limit the interest rate risk on a fairvalue basis through a value-at-risk approach, from which resultsa hedge ratio that is however not actively steered.
Commodity price risk — The Company is exposed to risk
relating to ﬂuctuations in the prices of commodities used in the
supply chain. It manages these risks in the procurement process
and to a certain extent uses derivative instruments in order tomitigate the risks associated with the purchase of raw materials.
To the extent that the gains or losses of the derivative and thoseof the hedged item or transaction do not match in terms of proﬁt
or loss, the Company applies cash ﬂow hedge accounting to thederivative instruments, with a hedge ratio of 1:1.
Equity price risk — The Company is to a small extent invested
in equity securities mainly for operational reasons. Its exposure
to equity price risk is hence limited. Furthermore, it is exposed
under its LTIP to the risk of the Company share price increases.
The Company limits these risks through the use of equity
derivatives that qualify for hedge accounting and have been
designated as hedging instruments in cash ﬂow hedges, witha hedge ratio of 1:1.
Sensitivities of market risks — The approach used to measure
and control market risk exposure of the Company’s ﬁnancial
instrument portfolio is, amongst other key indicators, the valueat-risk model (“VaR”). The VaR of a portfolio is the estimatedpotential loss that will not be exceeded over a speciﬁed periodof time (holding period) from an adverse market movement witha speciﬁed conﬁdence level. The VaR used by the Company
is based upon a 95% conﬁdence level and assumes a ﬁveday holding period. The VaR model used is mainly based on

2. Notes to the IFRS Consolidated Financial Statements /2.7 Capital Structure and Financial Instruments

the so-called “Monte-Carlo-Simulation” method. The model
generates a wide range of potential future scenarios for market
price movements by deriving the relevant statistical behaviourof markets for the portfolio of market data from the previous
two years and observed interdependencies between different
markets and prices.
The Company’s VaR computation includes the Company’s
ﬁnancial debt, short-term and long-term investments, foreign
currency forwards, swaps and options, commodity contracts,ﬁnance lease receivables and liabilities, foreign currency tradeliabilities and receivables and contract assets.
Although VaR is an important tool for measuring market risk,
the assumptions on which the model is based give rise to some
limitations, including the following:– a ﬁve-day holding period assumes that it is possible to hedge
or dispose of positions within that period. This is considered
to be a realistic assumption in almost all cases but may not be
the case in situations in which there is severe market illiquidity
for a prolonged period;– a 95% conﬁdence level does not reﬂect losses that may occur
beyond this level. Even within the model used there is a 5%
statistical probability that losses could exceed the calculated
VaR;– the use of historical data as a basis for estimating the statisticalbehaviour of the relevant markets and ﬁnally determining
the possible range of future outcomes out of this statisticalbehaviour may not always cover all possible scenarios,
especially those of an exceptional nature.
The Company uses VaR amongst other key ﬁgures in order todetermine the riskiness of its ﬁnancial instrument portfolio andin order to optimise the risk-return ratio of its ﬁnancial asset
portfolio. Further, its investment policy deﬁnes a VaR limit for the
total portfolio of cash, cash equivalents and securities. The total
VaR as well as the different risk-factor speciﬁc VaR ﬁgures ofthis portfolio are measured and serve amongst other measures
as a basis for the decisions of the Company’s Asset Liability
Management Committee.

A summary of the VaR position of the Company ﬁnancial instruments portfolio at 31 December 2020 and 2019 is as follows:

Total VaR

Equity price
VaR

Currency
VaR

Commodity
price VaR

Interest rate
VaR

Foreign exchange hedges for forecast transactions or firm
commitments

837

0

838

0

87

Financing liabilities, financial assets (including cash, cash
equivalents, securities and related hedges)

137

120

96

0

35

Finance lease receivables and liabilities, foreign currency
trade payables and receivables

39

0

35

0

24

Commodity contracts

3

0

0

3

0

(In € million)

31 December 2020

4

4

0

0

0

Diversification effectEquity swaps

(214)

(1)

(201)

0

(54)

All financial instruments

806

123

768

3

92

Foreign exchange hedges for forecast transactions or firm
commitments

643

0

643

0

179

Financing liabilities, financial assets (including cash, cash
equivalents, securities and related hedges)

113

34

78

0

71

Finance lease receivables and liabilities, foreign currency
trade payables and receivables

51

0

41

0

27

2

31 December 2019

Commodity contracts

3

0

0

3

0

Equity swaps

5

5

1

0

0

Diversification effect

(249)

(4)

(177)

0

(121)

All financial instruments

566

35

586

3

156

The increase of the total VaR as of 31 December 2020 is mainly attributable to a strong increase of market volatilities, in particularin €/$ and equity due to COVID-19 pandemic.
The Company uses its derivative instruments entirely for hedging purposes. As a result, the respective market risks of these hedging
instruments are – depending on the hedges’ actual effectiveness – offset by corresponding opposite market risks of the underlying
forecast transactions, assets or liabilities. Under IFRS 7, the underlying forecast transactions do not qualify as ﬁnancial instruments
and are therefore not included in the tables shown above. Accordingly, the VaR of the foreign exchange hedging portfolio in theamount of € 837 million (2019: € 643 million) cannot be considered as a risk indicator for the Company in the economic sense.

Airbus / Financial Statements 202067

2. Notes to the IFRS Consolidated Financial Statements /2.7 Capital Structure and Financial Instruments

Liquidity Risk
The Company’s policy is to maintain sufficient cash andcash equivalents at any time to meet its present and futurecommitments as they fall due. It manages its liquidity by holding
adequate volumes of liquid assets and maintains a committed
revolving credit facility (€ 6.0 billion as of 31 December 2020) as
well as a committed supplemental liquidity line (€ 6.2 billion as of
31 December 2020) in addition to the cash inﬂow generated byits operating business. The Company continues to keep within
its asset portfolio the focus on low counterparty risk. In addition,
it maintains a set of other funding sources, and accordingly may

issue bonds, notes and commercial papers or enter into security
lending agreements. Adverse changes in the capital markets
could increase its funding costs and limit its ﬁnancial ﬂexibility.
Further, the management of the vast majority of the Company’s
liquidity exposure is centralised by a daily cash concentration
process. This process enables it to manage its liquidity surplus
as well as its liquidity requirements according to the actual
needs of its subsidiaries. In addition, management monitors
the Company’s liquidity reserve as well as the expected cash
ﬂows from its operations.

The contractual maturities of the Company’s ﬁnancial liabilities, based on undiscounted cash ﬂows and including interest payments,
if applicable, are as follows:(In € million)

Carrying
amountContractual
cash flows< 1 year

1 year 2 years

2 years 3 years

3 years 4 years

4 years 5 years> 5 years(26,514)(29,007)(12,298)(774)(1,616)(1,465)(1,088)(11,766)

31 December 2020
Non-derivative financial liabilities
Derivative financial liabilities(2,817)(2,420)

(955)

(712)

(659)

(79)

(11)

(4)

(29,331)(31,427)(13,253)(1,486)(2,275)(1,544)(1,099)(11,770)

Non-derivative financial liabilities(26,828)(28,307)(17,306)(1,718)(484)(1,293)(1,310)(6,196)

Derivative financial liabilities(3,994)(6,160)(1,559)(1,540)(1,442)

(998)

(519)

(102)

(30,822)(34,467)(18,868)(3,258)(1,923)(2,291)(1,829)(6,298)Total
31 December 2019

Total

Non-derivative ﬁnancial liabilities included in the table above comprise ﬁnancing liabilities as presented in “– Note 38.2: Carrying
Amounts and Fair Values of Financial Instruments”. Due to their speciﬁc nature, namely their risk-sharing features and uncertainty
about the repayment dates, the European Governments’ refundable advances, which amount to € -3,912 million at 31 December
2020 (€ -4,277 million at 31 December 2019) are not included.

Lease liabilities
The maturity analysis of lease liabilities, based on contractual undiscounted cash ﬂows is as follows:
31 December(In € million)

2020

2019

Not later than one year

(260)

(262)

Later than one year and not later than five years

(925)

(768)

Later than five years(1,004)(606)

Total undiscounted lease liabilities at 31 December(2,189)(1,636)

Lease liabilities included in the Statement of Financial Position at 31 December(1,798)(1,560)Current
Non-current

68

Airbus / Financial Statements 2020

(260)

(262)

(1,538)(1,298)

2. Notes to the IFRS Consolidated Financial Statements /2.7 Capital Structure and Financial Instruments

Credit Risk
The Company is exposed to credit risk to the extent of nonperformance by either its customers (e.g. airlines) or its
counterparts with regard to ﬁnancial instruments or issuers ofﬁnancial instruments for gross cash investments. However, it
has policies in place to avoid concentrations of credit risk andto ensure that credit risk is limited.
As far as central treasury activities are concerned, credit risk
resulting from ﬁnancial instruments is managed by the Company.
In order to ensure sufﬁcient diversiﬁcation, a credit limit system
is used.
The Company monitors the performance of the individual
ﬁnancial instruments and the impact of market developments on
their performance and takes appropriate action on foreseeable
adverse development based on pre-deﬁned procedures andescalation levels.
Sales of products and services are made to customers after
having conducted appropriate internal credit risk assessment.
In order to support sales, primarily at Airbus, Airbus Helicoptersand ATR, the Company may agree to participate in customer
ﬁnancing, on a case-by-case basis either directly or throughguarantees provided to third parties. In determining the amountand terms of the ﬁnancing transaction, the Company takes
into account the airline’s credit rating and economic factors
reﬂecting the relevant ﬁnancial market conditions, together withappropriate assumptions as to the anticipated future value ofthe ﬁnanced asset.
The booked amount of ﬁnancial assets represents the maximum
credit exposure. The credit quality of ﬁnancial assets can beassessed by reference to external credit rating (if available) orinternal assessment of customers’ creditworthiness e.g. airlines
by way of internal risk pricing methods.
For further information relating to gross credit risk and impairment
see “– Note 38.7: Impairment Losses”.

38.2

Carrying Amounts and Fair
Values of Financial Instruments

Financial instruments — The Company’s ﬁnancial assets mainly
consist of cash, short to medium-term deposits and securities.
Its ﬁnancial liabilities include trade liabilities, obligations towards
ﬁnancial institutions, issued bonds and refundable advancesfrom European Governments. All purchases and sales of ﬁnancial
assets are recognised on the settlement date according tomarket conventions.
Financial assets at amortised cost — This category comprises
assets that are held for collection of contractual cash ﬂows where
those cash ﬂows represent solely payments of principal andinterest. It includes trade receivables.
Financial assets at fair value through OCI — This categorycomprises:(i) equity investments that are not held for trading. With the
exception of dividends received, the associated gains andlosses (including any related foreign exchange component)
are recognised in OCI. Amounts presented in OCI are notsubsequently transferred to profit and loss on derecognitionof the equity investment nor in the event of an impairment;(ii) debt instruments where contractual cash flows are solely
payments of principal and interest, and that are held both forsales and collecting contractual cash flows. Changes in their fairvalue other than impairment losses and foreign exchange gains
and losses on monetary items are recognised directly within
AOCI. Upon disposal of such financial assets, the cumulative
gain or loss previously recognised in equity is recorded aspart of other income (other expenses) from investments in
the Consolidated Income Statement for the period. Interest
earned on the investment are presented as interest income in
the Consolidated Income Statement using the effective interest
method. Dividends earned on investment were recognised
as other income (other expenses) from investments in theConsolidated Income Statement when the right to the payment
had been established.

2

Financial assets at fair value through proﬁt or loss — This
category comprises all other ﬁnancial assets (e.g. derivative
instruments) that are to be measured at fair value (including equity
investments for which the Company did not elect to presentchanges in fair value in OCI).
The Company assigns its ﬁnancial instruments into classes
based on their balance sheet category.

Airbus / Financial Statements 2020

69

2. Notes to the IFRS Consolidated Financial Statements /2.7 Capital Structure and Financial Instruments

The following table presents the carrying amounts and fair values of ﬁnancial instruments by class and by IFRS 9 measurement
category as of 31 December 2020:
Financial assets
and liabilities atamortised cost

Financial
instruments
total

Fair value
through profit
or loss

Fair value
through OCI

Amortised
cost

Fair
value

Book
value

Fair
value

Equity investments (1)

967

1,278

0

0

2,245

2,245

Customer financing(In € million)

AssetsOther investments and other long-term
financial assets

237

0

0

0

237

237

Other loans

0

0

1,841

1,841

1,841

1,841

Trade receivables

0

0

5,132

5,132

5,132

5,132

Contract assets

0

0

1,122

1,122

1,122

1,122

4,424

0

0

0

4,424

4,424

0

0

1,491

1,491

1,491

1,491

Other financial assets
Derivative instruments
Non-derivative instruments
Securities

0

6,968

0

0

6,968

6,968

9,654

512

4,273

4,273

14,43914,43915,282

8,758

13,85913,85937,89937,899Bonds and commercial papers

00(13,107)(13,997)(13,107)(13,997)

Liabilities to financial institutions
and others

00(2,190)(2,190)(2,190)(2,190)Finance lease liabilities

00(1,798)(1,798)(1,798)(1,798)(2,817)000(2,817)(2,817)

European Governments’ refundable
advances (2)00(3,912)(3,912)(3,912)(3,912)Others

0

0

(697)

(697)

(697)

(697)

Cash and cash equivalents

Total
Liabilities
Financing liabilities

Other financial liabilities
Derivative instruments

Trade liabilities

Total

0

0

(8,722)(8,722)(8,722)(8,722)(2,817)

0(30,426)(31,316)(33,243)(34,133)(1) Other than those accounted for under the equity method.
(2) The European Governments’ refundable advances of € -3,912 million are measured at amortised cost. Fair values cannot be reliably measured because their risk sharing natureand the uncertainty of the repayment dates give rise to a broad range of reasonable fair value estimates and make it impossible to reasonably assess the probabilities of the various
estimates within the range. This may change and reliable fair value measures become available as the related programmes approach the end of production.

70

Airbus / Financial Statements 2020

2. Notes to the IFRS Consolidated Financial Statements /2.7 Capital Structure and Financial Instruments

The following table presents the carrying amounts and fair values of ﬁnancial instruments by class and by IFRS 9 measurement
category as of 31 December 2019:
Financial assets
and liabilities atamortised cost

Fair value
through profit
or loss

Fair value
through OCI

Equity investments (1)

1,125

1,390

Customer financing

3500(In € million)

Amortised
cost

Financial
instruments
total

Fair
value

Book
value

Fair
value

0

0

2,516

2,516

0

0

350

350

AssetsOther investments and other long-term
financial assets

Other loans

0

0

2,036

2,036

2,036

2,036

Trade receivables

0

0

5,674

5,674

5,674

5,674

Contract assets

0

0

1,258

1,258

1,258

1,258

Other financial assets
Derivative instruments
Non-derivative instruments
Securities

1,440

0

0

0

1,440

1,440

0

0

1,653

1,653

1,653

1,653

0

13,3680013,36813,368Cash and cash equivalents

7,014

652

1,648

1,648

9,314

9,314

Total

9,929

15,41012,26912,26937,60937,60900(6,491)(6,696)(6,491)(6,696)

Liabilities
Financing liabilities
Bonds and commercial papers
Liabilities to financial institutions
and others

00(2,096)(2,098)(2,096)(2,098)Finance lease liabilities

00(1,560)(1,560)(1,560)(1,560)(3,994)00

0(3,994)(3,994)

Other financial liabilities
Derivative instruments
European Governments’ refundable
advances (2)00(4,277)(4,277)(4,277)(4,277)

Others0(1,014)

(859)

(859)

(1,873)(1,873)

Trade liabilities

Total

0

0

(14,808)(14,808)(14,808)(14,808)(3,994)(1,014)(30,091)(30,298)(35,099)(35,306)

2(1) Other than those accounted for under the equity method.
(2) The European Governments’ refundable advances of € -4,277 million are measured at amortised cost. Fair values cannot be reliably measured because their risk sharing natureand the uncertainty of the repayment dates give rise to a broad range of reasonable fair value estimates and make it impossible to reasonably assess the probabilities of the various
estimates within the range. This may change and reliable fair value measures become available as the related programmes approach the end of production.

Fair Value Hierarchy
Fair value of ﬁnancial instruments — The fair value of quoted
investments is based on current market prices. If the market
for ﬁ nancial assets is not active, or in the case of unlisted
ﬁnancial instruments, the Company determines fair values byusing generally accepted valuation techniques on the basisof market information available at the end of the reporting
period. Derivative instruments are generally managed on thebasis of the Company’s net exposure to the credit risk of eachparticular counterparty and fair value information is provided to
the Company’s key management personnel on that basis. For
these derivative instruments, the fair value is measured basedon the price that would be received to sell a net long position, ortransfer a net short position, for a particular credit risk exposure
as further described below.
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 forthe 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;

Airbus / Financial Statements 2020

71

2. Notes to the IFRS Consolidated Financial Statements /2.7 Capital Structure and Financial Instruments– Level 3: inputs for the asset or liability that are not basedon 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 ofassumptions that are inherently judgemental and involve
various limitations.

The fair values disclosed for ﬁnancial instruments accounted forat amortised cost reﬂect Level 2 input. Otherwise, the Company
determines mostly fair values based on Level 1 and Level 2 inputs
and to a lesser extent on Level 3 input.

The following table presents the carrying amounts of the ﬁnancial instruments held for the three levels of the fair value hierarchy
as of 31 December 2020 and 2019, respectively:
2020(In € million)

2019

Level 1

Level 2

Level 3

Total

Level 1

Level 2

Level 3

Total

1,780

0

465

2,245

1,988

0

528

2,516

0

4,424

0

4,424

0

1,224

216

1,440

6,968

0

0

6,968

13,3680013,368Financial assets measured at fair value
Equity instruments
Derivative instruments
Securities
Customer financing

0

0

237

237

0

0

350

350

9,654

512

0

10,166

7,014

652

0

7,666

18,402

4,936

702

24,04022,370

1,876

1,094

25,340Derivative instruments

0(2,805)(12)(2,817)

0(3,974)(20)(3,994)

Other financial liabilities

0

0

0

0

0

0

(1,014)(1,014)0(2,805)(12)(2,817)

0(3,974)(1,034)(5,008)Cash equivalents

Total
Financial liabilities measured at fair value

Total

The development of ﬁnancial instruments of Level 3 is as follows:(In € million)

Balance at 1 January 2019

Derivatives

Participations

Customerfinancing

165

489

510

Commodity
swap
agreements

Total

1,164

(2,300)(26)(2,326)

Business combination

0

0

0

0

0

0

0

Profit or loss

51

0

(160)

(109)

0

(12)

(12)

Equity

0

39

0

39

1,286

0

1,286

Settlements

0

0

0

0

0

18

18

ReleaseBalance at 31 December 2019
Business combination

0

0

0

0

0

0

0

216

528

350

1,094

(1,014)(20)(1,034)

0

0

0

0

0

0

0

(216)

0

(113)

(329)

0

6

6

Equity

0

(63)

0

(63)

1,014

0

1,014

Settlements

0

0

0

0

0

2

2

Others

0

0

0

0

0

0

0

Balance at 31 December 2020

0

465

237

702

0

(12)

(12)

Profit or loss

As at 31 December 2020, the fair value of the written put options
on non-controlling interests (“NCI puts”) relating to ACLP is nil,mainly reﬂecting the latest projections on funding needs, slower
ramp-up phasing and market projections.
The fair value of these NCI puts are derived from a discounted
cash ﬂow analysis using the latest operating plan and a projection
over the lifetime of the A220 programme.

72

Total

Written put
options on
NCI interests

Airbus / Financial Statements 2020

In addition, a post-tax WACC of 9.49% (2019: 7.5%) is used
to discount the forecasted cash ﬂows taking into account the
impacts of the COVID-19 pandemic and the speciﬁcities of the
programme.

2. Notes to the IFRS Consolidated Financial Statements /2.7 Capital Structure and Financial Instruments

Financial Assets Designated at Fair Value through Profit or Loss
The following types of ﬁnancial assets held at 31 December 2020 and 2019, respectively, are designated at fair value through proﬁt
or loss:(In € million)

Nominal amount at
initial recognition at
31 December 2020

Fair value at
31 December
2020

Nominal amount at
initial recognition at
31 December 2019

Fair value at
31 December
2019

9,654

9,654

7,009

7,009

2

2

5

5

9,656

9,656

7,014

7,014

Designated at fair value through profit
or loss at recognition:
Money market funds
Foreign currency funds of fixed income funds

Total

The Company manages these assets and measures their performance on a fair value basis.

Fair Value Measurement Method
The Company uses the following methods to measure fair values:

Derivatives — The fair values of derivative instruments reﬂect
quoted market prices, where available, but in most cases
are determined using recognised valuation techniques suchas option-pricing models (e.g. Black & Scholes model) anddiscounted cash flow models. The valuation is based on
observable market data such as currency rates, currency forward
rates, interest rates and yield curves, commodity forward prices
as well as price and rate volatilities obtained from recognised
vendors of market data. Furthermore, to the extent that these
instruments are subject to master netting arrangements andsimilar agreements and managed on the basis of net credit
exposure, their fair values reflect credit and debit value
adjustments based on the net long or net short position that
the Company has with each counterparty. Except for certain
short-term commodity contracts and derivatives presented in
the Level 3 section above, derivative fair values are measured
based on Level 2 input.

Equity instruments — The fair values of listed equity instruments
reﬂect quoted market prices. For non-listed equity investments
for which quoted market prices are not available, the Company
determines the fair values using valuation methods such as net
asset values, discounted cash ﬂow method or a comparable
valuation technique.
Customer ﬁnancing assets and other loans — The carrying
amounts reﬂected in the annual accounts are used as a proxyfor fair value.
Contract assets, trade receivables and other receivables —The carrying amounts reﬂected in the annual accounts are used
as reasonable estimates of fair value because of the relatively
short period between the receivables’ origination and theirmaturity.
Securities — The fair values of securities reﬂect their quoted
market price at the end of the reporting period.

Financing liabilities — The fair values disclosed for ﬁnancing
liabilities, other than those of issued bonds and commercial
papers, are determined based on Level 2 input by discounting
scheduled or expected cash ﬂows using appropriate market
interest rates. The fair values disclosed for the issued EMTN
and US dollar bonds reﬂect public price quotations that qualify
as Level 1 input. For issued commercial papers, the carrying
amounts reﬂected in the annual accounts are used as reasonableestimates of fair value because of the relatively short period
between the origination of these instruments and their maturity.

Cash and cash equivalents — include cash in hand, cash inbanks, checks, ﬁxed deposits as well as commercial papers
and money market funds. The carrying amounts reﬂected in theannual accounts are used as reasonable estimates of fair value
because of the relatively short period between the originationof the instrument and its maturity or due date. The fair valueof commercial papers is determined based on Level 2 input
by discounting future cash ﬂows using appropriate interest
rates. The fair values of money market funds are determined byreference to their quoted market price.

2

Trade liabilities and current other ﬁnancial liabilities — For
the same reason as trade receivables, carrying amounts areused as reasonable fair value approximations for trade liabilities
and current other ﬁnancial liabilities.

The following interest rate curves are used in the determination of the fair value in respect of the derivative ﬁnancial instruments asof 31 December 2020 and 2019:31 December
2020

2019

2020

€

(Rate in %)

2019

2020

US$

2019
£

6 months(0.45)(0.36)

0.22

1.93

0.15

0.90

1 year

(0.40)(0.28)

0.28

1.94

0.20

1.01

5 years(0.49)(0.20)

0.43

1.68

0.19

0.88

10 years(0.29)

0.13

0.93

1.85

0.40

1.02

Airbus / Financial Statements 202073

2. Notes to the IFRS Consolidated Financial Statements /2.7 Capital Structure and Financial Instruments

38.3

Potential Effect of Set-Off Rights on Recognised Financial Assets
and Liabilities

The Company reports all its ﬁnancial assets and ﬁnancial liabilities on a gross basis. With each derivative counterparty there are
master netting agreements in place providing for the immediate close-out of all outstanding derivative transactions and payment of
the net termination amount in the event a party to the agreement defaults or another deﬁned termination event occurs. Furthermore,securities lending transactions are accounted for as collateralised borrowings. As a result, the securities pledged as collateral continue
to be recognised on the balance sheet and the amount of cash received at the outset of the transaction is separately recognised asa ﬁnancial liability. The following tables set out, on a counterparty speciﬁc basis, the potential effect of master netting agreements
and collateralised borrowings on the Company’s Financial Position, separately for ﬁnancial assets and ﬁnancial liabilities that were
subject to such agreements as of 31 December 2020 and 2019, respectively:
Related amounts not
set off in Statementof Financial PositionGrossamounts
recognisedGrossamounts
recognised
set off in the
Financial
Statements

Net amounts
presented in
the Financial
Statements

Financial
instruments

Cashcollateral
received

Net amountFinancial asset

3,879

0

3,879

(1,519)

(77)

2,283

Financial liabilities

2,192

0

2,192

(1,519)0673

Financial asset

831

0

831

(789)

0

42

Financial liabilities

3,560

0

3,560

(789)

0

2,771

(In € million)

31 December 2020

31 December 2019

38.4

Notional Amounts of Derivative Financial Instruments

The contract or notional amounts of derivative ﬁnancial instruments shown below do not necessarily represent amounts exchangedby the parties and thus, are not necessarily a measure for the exposure of the Company through its use of derivatives.
The notional amounts of foreign exchange derivative financial instruments are as follows, speciﬁed by year of expected maturity:
Remaining period(In € million)

1 year

2 years

3 years

4 years

5 years> 5 years

Total

13,827

12,308

10,427

8,716

6,685

14,791

66,75431 December 2020
Net forward sales contracts
Foreign exchange options
Foreign exchange swap contracts

0

0

0

0

0

0

0

1,782

0

0

0

0

0

1,782

31 December 2019
Net forward sales contracts

23,543

18,108

16,95911,656

6,450

1,632

78,348Foreign exchange options

1,745

2,884

0

0

0

0

4,629

Foreign exchange swap contracts

4,054

0

0

0

0

0

4,054

The following table sets out the notional amount of foreign exchange hedges in place as of 31 December 2020 relating to thecommercial activities of Airbus, and the average euro converted rates applicable to corresponding EBIT.
2021

2022

2023

2024

2025+

Total

16,615

15,197

12,395

10,48526,27580,967

€/US$

1.21

1.23

1.26

1.26

1.30

1.26

£/US$

1.37

1.37

1.42

N/A

N/A

1.37

(In $ million)

Total hedges
Forward rates

In 2020 new hedge contracts of US$ 4.5 billion (2019: US$ 40.6 billion) were added at an average rate of 1.17 US$/€ (2019: 1.20 US$/€).

74

Airbus / Financial Statements 2020

2. Notes to the IFRS Consolidated Financial Statements /2.7 Capital Structure and Financial Instruments

As of 31 December 2020, the total hedge portfolio with maturities up to 2027 amounts to US$ 81.0 billion (2019: US$ 97.1 billion)
and covers a major portion of the foreign exchange exposure expected over the hedging horizon. The average US$/€ hedge rateof the US$/€ hedge portfolio until 2027 amounts to 1.26 US$/€ (2019: 1.23 US$/€) and for the US$/£ hedge portfolio until 2024
amounts to 1.37 US$/£ (2019: 1.37 US$/£).
(In £ million)

2021

2022

2023

2024

2025+

Total

Total hedges

285

327

298

155

58

1,123

0.89

0.89

0.89

0.91

0.92

0.89

Forward rates€/£

During the course of the year 2020, €/£ hedges were implemented in order to cover the GBP exposure of the Company.
The notional amounts of interest rate contracts are as follows:
Remaining period
2 years

3 years

4 years

109

0

815

0

0

0

Interest rate contracts

7162Interest rate future contracts00(In € million)

1 year

5 years

6 years

7 years > 7 years

Total

1,000

0

600

1,222

1,400

5,146

0

0

0

0

0

0

4

890

1,000

0

600

2,735

5,398

0

0

0

0

0

0

0

4 years> 4 years

Total

31 December 2020
Interest rate contracts
Interest rate future contracts
31 December 2019

Please also refer to “– Note 37.3: Financing Liabilities”.
The notional amounts of commodity contracts are as follows:
Remaining period(In € million)

1 year

2 years

3 years

31 December 2020

25

22

11

3

0

61

31 December 2019

25

36

20

12

3

96

2

The notional amounts of equity swaps are as follows:
Remaining period(In € million)

1 year

2 years

3 years

4 years> 4 years

Total

31 December 2020

32

23

17

8

0

80

31 December 2019

37

32

23

9

0

101

Airbus / Financial Statements 202075

2. Notes to the IFRS Consolidated Financial Statements /2.7 Capital Structure and Financial Instruments

38.5

Derivative Financial Instruments and Hedge Accounting Disclosure

The following table presents the reconciliation of AOCI, net of tax, resulting from cash ﬂow hedge accounting as of 31 December
2020 and 31 December 2019:31 December
2020

2019
Hedge reserve(In € million)

Opening balance
Foreign exchange contracts
OthersChanges in fair values
Foreign exchange contracts
OthersAmount reclassified to profit or loss (matured hedges)
Foreign exchange contracts

2,521

1,473

(3,161)

3,527

(111)

7

(3,272)

3,534

(484)

(1,894)

6

(2)

(478)

(1,896)

55

(207)

(4)

0

Amount classified to profit or loss (inefficiency)

51

(207)

Tax impact

916

(383)

(262)

2,521

OthersClosing balance

The following table presents the amounts relating to items designated as hedging instruments and hedge ineffectiveness for
cash-ﬂow hedges as of 31 December 2020:
Carrying values

OCI

Hedge
Amounts
Other changes
inefficiency reclassified fromin value of therecorded inhedge reserve
hedge reserve financial result to profit and loss

Asset

Liability

Changes in valuesof the hedging
instrument

Net forward sales contracts

3,840(2,530)(6,087)

2,934

55

(483)

Foreign exchange options

11

(14)

1

(9)

0

(1)

Embedded Derivatives

5

0

(115)

0

0

0
0

(In € million)

Foreign currency risk

Interest rate risk

0

(1)

(2)

0

0

Commodity swap risk

14

(27)

6

0

(4)

6

Equity swap risk

0

(16)

0

0

0

0

3,870

(2,588)(6,197)

2,925

51

(478)

Total

The following table presents the amounts relating to items designated as hedging instruments and hedge ineffectiveness for
cash-ﬂow hedges as of 31 December 2019:
Carrying values

OCI

Asset

Liability

Changes in valuesof the hedging
instrument

Net forward sales contracts

848(3,787)

699

2,824

(208)

Foreign exchange options

19

(58)

(1)

2

0

1

Embedded Derivatives

0

(18)

14

0

0

0

0

(3)

0

0

0

0

Commodity swap risk

9

(10)

(4)

0

0

(2)

Equity swap risk

20

0

0

0

0

0

896

(3,876)

707

2,826

(208)

(1,896)(In € million)

Other changes
in value of thehedge reserve

Hedge
Amounts
inefficiency
recorded in reclassified fromhedge reserve
financialresult (1) to profit and loss

Foreign currency risk

Interest rate risk

Total(1) It includes the financial expense of € 112 million on hedge ineffectiveness (see “– Note 12: Revenue and Gross Margin”).

76

Airbus / Financial Statements 2020

(1,895)

2. Notes to the IFRS Consolidated Financial Statements /2.7 Capital Structure and Financial Instruments

38.6

Net Gains or Net Losses

The Company’s net gains or net losses recognised in proﬁt or loss in 2020 and 2019, respectively, are as follows:(In € million)

2020

2019

(117)

(212)

Financial assets or financial liabilities at fair value through profit or loss
Held for trading
Designated on initial recognition

(277)

228

Financial assets at amortised cost

(598)

(155)

Financial assets at fair value through OCI (previously financial assets at fair value)75

26

Financial liabilities measured at amortised cost266

5

Net losses of € -194 million (2019: net gains of € 403 million) are recognised directly in equity relating to ﬁnancial assets at fair value.
Interest income from ﬁnancial assets or ﬁnancial liabilities through proﬁt or loss is included in net gains or losses.

38.7

Impairment Losses

Loss allowances — For its portfolio of debt instruments including
bonds, term deposits and commercial papers, the Company
measures loss allowances at an amount that represents credit
losses resulting from default events that are possible within thenext 12 months, unless the credit risk on a ﬁnancial instrument
has increased signiﬁcantly since initial recognition. In the eventof such signiﬁcant increase in credit risk the Company measuresloss allowances for that ﬁnancial instrument at an amount equal
to its life-time expected losses, i.e. at an amount equal to the
expected credit losses that result from all possible default events
over the expected life of that ﬁnancial instrument.
The Company applies the low credit risk exemption allowing
the Company to assume that there is no signiﬁcant increasein credit risk since initial recognition of a ﬁnancial instrument,

if the instrument is determined to have low credit risk at thereporting date. Similarly, the Company has determined that its
trade receivables and contract assets generally have low credit
risk. The Company applies the simpliﬁed approach permitted by
IFRS 9 of measuring expected credit losses of trade receivables
and contract assets on a lifetime basis from initial recognition.
Investment grade instruments — The Company considers
a signiﬁcant increase in credit risk to have occurred, if there isa downgrade by four notches such that the instrument moves
into a high yield bucket as a direct result of the downgrade. With
respect to instruments that were high yield at initial recognition,
a downgrade by four notches is considered as a signiﬁcant
increase in credit risk.

Stage 112-month ECLStage 2
Life-time ECLStage 3Credit impaired ECL

Total

4.17

0.27

0

4.44

Change in financial assets(0.29)

79.34

0

79.05

Change in risk parameters(0.25)(72)0(72.25)

At 31 December 2020

3.63

7.61

0

11.24

Stage 112-month ECLStage 2
Life-time ECLStage 3Credit impaired ECL

Total

At 1 January 2019

3.49

1.13

0

4.62

Change in financial assets

0.01(0.69)

00.37

Change in risk parameters

0.67(0.17)

00.04

At 31 December 2019

4.17

0.27

0

4.44

(In € million)

At 1 January 2020

(In € million)

Airbus / Financial Statements 2020

277

2. Notes to the IFRS Consolidated Financial Statements /2.7 Capital Structure and Financial Instruments

The following table breaks down the gross carrying amount of loans and receivables as of 31 December 2020 and 2019,
separately showing those that are impaired, renegotiated or past due:(In € million)

Renegotiated/
Not not past
past due/not
Gross Past due ≤due impaired impaired 3 months

Past due> 3 and ≤6 months

Past due
Past due> 6 and ≤ > 9 and ≤9 months 12 months

Past due >12 months Impairment

Total

31 December 2020
Tradereceivables

4,302

0

172

358

117

119

92

277

(305)

5,132

Contract assets

1,123

0

0

0

0

0

0

0

(1)

1,122

Others

2,396

4

431

302

130

23

10

366

(156)

3,506

Total

7,821

4

603

660

247

142

102

643

(462)

9,760

31 December 2019
Tradereceivables

4,461

113

458

231

165

100

64

478

(396)

5,674

Contract assets

1,266

0

0

0

0

0

0

0

(8)

1,258

Others

2,499

7

531

174

26

31

56

588

(231)

3,681

Total

8,226

120

989

405

191

131

120

1,066

(635)

10,613The management believes that the unimpaired amounts that are past due are still collectible in full, based on historic payment
behaviour and analysis of customer credit risk, including underlying customers’ credit ratings if they are available.
The following impairment losses on ﬁnancial assets are recognised in proﬁt or loss in 2020 and 2019, respectively:(In € million)

2020

Other loans

(143)

(33)

Trade receivables

(71)

(167)

Contract assets

Total

78

Airbus / Financial Statements 2020

2019

0

(6)

(214)

(206)

2. Notes to the IFRS Consolidated Financial Statements /2.8 Other Notes

2.8 Other Notes
39.

Litigation and Claims

Litigation and claims — Various legal actions, governmental
investigations, proceedings and other claims are pending or
may be instituted or asserted in the future against the Company.
Litigation is subject to many uncertainties, and the outcome ofindividual matters is not predictable with certainty. The Company
believes that it has made adequate provisions to cover current orcontemplated litigation risks. It is reasonably possible that the ﬁnal
resolution of some of these matters may require the Company tomake expenditures, in excess of established reserves, over an
extended period of time and in a range of amounts that cannot
be reasonably estimated. The term “reasonably possible” is usedherein to mean that the chance of a future transaction or event
occurring is more than remote but less than likely.
The Company is involved from time to time in various legal andarbitration proceedings in the ordinary course of its business,the most signiﬁcant of which are described below. Other thanas 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 the previous 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 tocontingent 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 thesame day, the EU launched a parallel WTO case against the US
in relation to its subsidies to Boeing.
Following a series of interim WTO panel decisions, in May 2018
the WTO held that the EU achieved compliance in respect ofthe majority of the subsidies at issue but considered that someremaining obligations required adjustments. The Company andthe EU took corrective actions that were reviewed by a WTO
panel. The decision of that panel is currently being appealed.
In the meantime, the WTO authorised the US to impose
US$ 7.5 billion in annual countermeasures. The United States
Trade Representative (“USTR”) imposed tariffs on a range ofimports to the US from the EU including 10% on the importationof large civil aircraft from the EU. Those tariffs went into effecton 18 October 2019. On 18 March 2020, the US increased the
additional duty rate imposed on aircraft imported from the EU to15%. On 12 January 2021, the US imposed an additional tariffof 15% on imports of aircraft manufacturing parts from certain
Member States of the EU delivered to the US.

The tariffs could have a material impact on the Financial
Statements, business and operations of the Company. Duties
on the importation of Airbus products into the US could resultin (i) increased costs for the aerospace and airline industries aswell as other industries that rely on air transport, (ii) weakening
demand for new aircraft and negatively affecting the ﬁnancial
condition of air carriers and lessors, (iii) decisions to defer, rejector reschedule the delivery of new aircraft or limit the routes uponwhich new aircraft will be used, (iv) increased costs to consumers,
and/or (v) damage to the Company’s business or reputation via
negative publicity adversely affecting the Company’s prospects
in the commercial market place.
Several years of proceedings also identiﬁed signiﬁcant unlawful
support to Boeing. In March 2019, the WTO found that the steps
by the US to address US subsidies to Boeing were inadequate.
In October 2020, the WTO announced its decision to authorise
the EU to impose US$ 4 billion in annual countermeasures. In
November 2020, the EU imposed tariffs on a range of imports
to the EU from the US including 15% on the importation of large
civil aircraft from the US.
The respective WTO authorisations to impose tariffs will remain
valid until the EU or the US prove to the WTO that they are in
full compliance, or until both parties agree to settle the dispute.

GPT
In August 2012, the UK Serious Fraud Ofﬁce (“SFO”) announced
that it had opened a formal criminal investigation in relation to
GPT Special Project Management Ltd (“GPT”). GPT is a UK
company that operated in the Kingdom of Saudi Arabia which theCompany acquired in 2007. GPT is now an indirect subsidiary ofAirbus Defence and Space. It ceased operations in April 2020.

2

The SFO’s investigation related to contractual arrangements that
had been put in place prior to GPT’s acquisition by the Company,
but which continued thereafter.
On 29 July 2020, the SFO requisitioned (required) GPT to appear
in court, and a series of hearings have followed. The single
charge against GPT relates to alleged historic corruption in theKingdom of Saudi Arabia between 2007 and 2012. No plea has
yet been entered. For legal reasons, neither the Company nor
GPT can comment further on it.
On 31 January 2020 the Company reached a ﬁnal agreement withinvestigating authorities in France, the UK and the US in relation
to all wrongdoing alleged against the Company and its controlledsubsidiaries, with the exception of the pre-existing and separate
investigation into GPT. The Deferred Prosecution Agreement of
31 January 2020 mentioned below under “Investigation by the
UK SFO, France’s PNF, US Departments of State and Justiceand Related Commercial Litigation” is not affected in any way
by the prosecution of GPT.

Airbus / Financial Statements 2020

79

2. Notes to the IFRS Consolidated Financial Statements /2.8 Other Notes

Eurofighter Austria
In 2017, the Austrian Federal Ministry of Defence raised criminal
allegations against Airbus Defence and Space GmbH andEuroﬁghter Jagdﬂugzeug GmbH for wilful deception and fraudin the context of the sale of the Euroﬁghter aircraft to Austria andrespective damage claims. After the Austrian Federal Ministryof Defence raised its criminal allegations, the Austrian publicprosecutor opened investigations against Airbus Defence andSpace GmbH, Euroﬁghter Jagdﬂugzeug GmbH and former andcurrent employees of the two entities including related to thecorresponding offset obligations. The Company has ﬁled several
submissions to the Austrian public prosecutor in response to
the allegations of deception in the procurement of Euroﬁghter
combat aircraft made by the Austrian Defence Minister. Since
the result of the investigations by the Austrian public prosecutor
did not conﬁrm the allegations of wilful deception and fraud, theAustrian authorities accordingly terminated the investigations
against Airbus Defence and Space GmbH and Euroﬁ ghter
Jagdﬂugzeug GmbH.

Investigation by the UK SFO, France’s
PNF, US Departments of State andJustice and Related Commercial
Litigation
The Company reached ﬁnal agreements (“the agreements”) with
the French Parquet National Financier (“PNF”), the UK Serious
Fraud Ofﬁce (“SFO”), and the US Department of Justice (“DoJ”)
resolving the authorities’ investigations into allegations of bribery
and corruption, as well as with the US Department of State(“DoS”) and the DoJ to resolve their investigations into inaccurate
and misleading ﬁlings made with the DoS pursuant to the US
International Trafﬁc in Arms Regulations (“ITAR”). The agreements
were approved and made public on 31 January 2020.
Under the terms of the agreements, the Company agreed to
pay penalties of € 3,597,766,766 plus interest and costs to the
French, UK and US authorities. This was recognised in the
Company’s 2019 accounts. The settlements with each authority
were as follows: PNF € 2,083,137,455, the SFO € 983,974,311,
the DoJ € 526,150,496 and the DoS € 9,009,008 of which€ 4,504,504 May be used for approved remedial compliancemeasures. All penalties have been paid, except for $ 1 million
that remains to be paid to the DoS by 28 January 2022.
Under the terms of the Convention judiciaire d’intérêt public(“CJIP”) with the PNF, the Company has an obligation to submit
its compliance programme to targeted audits carried out by
the Agence Française Anticorruption (“AFA”) over a period of
three years.
Under the terms of the Deferred Prosecution Agreement (“DPA”)
with the SFO, no independent compliance monitor will be
imposed on the Company in light of the continuing monitorshipto be conducted by the AFA.
Under the terms of the DPA with the DoJ, no independent
compliance monitor will be imposed on Airbus under theagreement with the DoJ, but the Company will periodically reporton its continuing compliance enhancement progress during
the three year term of the DPA and carry out further reviews asrequired by the DoJ.

80

Airbus / Financial Statements 2020

The agreements result in the suspension of prosecution fora duration of three years whereupon the prosecutions will
be extinguished if the Company complies with their terms
throughout the period.
Under the terms of the Consent Agreement with the DoS, the
DoS has agreed to settle all civil violations of the ITAR outlinedin the Company’s voluntary disclosures identified in theConsent Agreement, and the Company has agreed to retain an
independent export control compliance ofﬁcer, who will monitor
the effectiveness of the Company’s export control systems andits compliance with the ITAR for a duration of three years.
Any breach of the terms of the agreements by the Company
could lead to rescission by the authorities of the terms of theagreements and reopening of the prosecutions. Prosecution
could result in the imposition of further monetary penalties orother sanctions including additional tax liability and could havea material impact on the Financial Statements, business andoperations of the Company.
In addition to any pending investigation in other jurisdictions,the factual disclosures made in the course of reaching theagreements may result in the commencement of additional
investigations in other jurisdictions. Such investigations could
also result in (i) civil claims or claims by shareholders against theCompany, (ii) adverse consequences on the Company’s ability
to obtain or continue ﬁnancing for current or future projects,(iii) limitations on the eligibility of group companies for certain
public sector contracts, and/or (iv) damage to the Company’sbusiness or reputation via negative publicity adversely affecting
the Company’s prospects in the commercial market place.
Airbus will continue to cooperate with the authorities in the future,
pursuant to the agreements and to enhance its strong Ethics &Compliance culture within the Company.
Several consultants and other third parties have initiatedcommercial litigation and arbitration against the Company
seeking relief. The agreements reached with authorities maylead to additional commercial litigation and arbitration against
the Company and tax liability in the future, which could havea material impact on the Financial Statements, business andoperations of the Company.

Securities Litigation
In August 2020, a putative class action lawsuit was ﬁled in US
federal court in the state of New Jersey against Airbus SE andmembers of its current and former management. The lawsuit
was brought on behalf of alleged shareholders that purchased
or otherwise acquired Airbus SE securities in the US between
24 February 2016 and 30 July 2020, and asserts violationsof US securities laws. The complaint alleges that defendants
made false and misleading statements or omissions concerning,among other things, the Company’s agreements approvedon 31 January 2020 with the French PNF, the UK SFO, theUS DoJ and the US DoS as well as the Company’s historic
practices regarding the use of third party business partners
and anti-corruption compliance. The lawsuit seeks unquantiﬁed
damages. The Company believes it has solid grounds to defend
itself against the allegations. The consequences of such litigationand the outcome of the proceedings cannot be fully assessedat this stage, but any judgement or decision unfavourable to theCompany could have a material adverse impact on the Financial
Statements, business and operations of the Company.

2. Notes to the IFRS Consolidated Financial Statements /2.8 Other Notes

Other Investigations
The Company is cooperating fully with the authorities in a
judicial investigation in France related to Kazakhstan. In thisspirit, the Company asked to be interviewed by the investigating
magistrates and has been granted the status of “assisted
witness” in the investigation.
In 2019, the Company self-reported to German authorities
potentially improper advance receipt and communicationof conﬁdential customer information by employees of Airbus
Defence and Space GmbH. The information concerned relates
to two future German government procurement projects in the
programme line Connected Intelligence. The self-disclosure by
the Company follows an ongoing internal review with the supportof an external law ﬁrm. Both the German Ministry of Defence
and the Munich public prosecutor opened an investigation into
the matter. The Company will continue to fully cooperate with40.

relevant authorities. The investigation could have an impact on
Airbus Defence and Space GmbH’s and Airbus Secure Land
Communications GmbH’s ability to participate in future public
procurement projects in Germany and may have other legal
consequences.

Other Disputes
In the course of a 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 arbitralaward 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.

Auditor Fees

With reference to Section 2:382a (1) and (2) of the Netherlands Civil Code, the following fees for the ﬁnancial year 2020 have been
charged by EY to the Company, its subsidiaries and other consolidated entities:(In € thousand)

2020

2019

Audit of the Financial Statements

11,386

11,618Other audit engagements

308

220

Tax services

445

1,037

Other non-audit services

Total

447

1,726

12,586

14,601Other audit ﬁrms have audit fees related to audit process, certiﬁcation and examination of individual and consolidated accountsof € 5 million in 2020 (2019: € 6 million).

2
41.

Events after the Reporting Date

In response to the market environment, the Company is updating its production rate planning.
For its A320 Family aircraft, the new average production rates will now lead to a gradual increase in production from the current
rate of 40 per month to 43 and 45, respectively in the third and fourth quarter of 2021. The A220 monthly production rate will
increase from four to ﬁve aircraft per month from the end of the ﬁrst quarter of 2021. Widebody production is expected to remain
stable at current levels.

Airbus / Financial Statements 2020

81

82

Airbus / Financial Statements 2020

95.96%

99.99%

50%*

Airbus Helicopters

11.29%ATR GIE(France)50%*

Computadoras,Redese Ingenieria, S.A.
(Spain)Airbus Defence
and Space, S.A.
(Spain)For further information, please refer to the Company’s website.

Subsidiaries held with no indication of ownership percentage are 100% owned.
* Indirectly
Legal forms are indicated for information purposes and are not always part of the legal name.

MBDA(France)

37.5%*

Airbus Defence
and Space SAS(France)

Airbus DS Holding
SAS
4.04%
(France)

ArianeGroup

MBDA Group

45%

Elbe
FlugzeugwerkeGmbH(Germany)

Airbus Defence
and Space Holding
France SAS(France)

Ariane Group

88.71%

Airbus Defence
and Space GmbH
(Germany)

Airbus Defence and Space

Airbus Defence
and Space
Limited(UK)

Airbus Helicopters
DeutschlandGmbH(Germany)

Airbus Helicopters(France)

Airbus Helicopters
España, S.A.
(Spain)Airbus Group
Inc.
(USA)

Airbus Americas,
Inc.
(USA)

Premium Aerotec
GmbH(Germany)

Airbus Operations
GmbH(Germany)

Stelia Aerospace(France)

Airbus SAS(France)

Airbus Helicopters
UK Limited(UK)

Airbus Canada
LimitedPartnership(Canada)75,03%*

4.22%

95.78%

Airbus Operations
Limited(UK)

AirbusOperations, S.L.
(Spain)Airbus Operations
SAS(France)(The Netherlands)

AIRBUS SE

2. Notes to the IFRS Consolidated Financial Statements /2.9 Appendix “Simpliﬁed Airbus Structure”

2.9 Appendix “Simpliﬁed Airbus Structure”

2. Notes to the IFRS Consolidated Financial Statements /2

Airbus / Financial Statements 202083

Chapter

3
84

Airbus / Financial Statements 2020

3.
Airbus SE
IFRS Company
Financial Statements
IFRS Company Income Statement
for the years ended 31 December 2020 and 201986

IFRS Company Statement of Comprehensive Income
for the years ended 31 December 2020 and 201986

IFRS Company Statement of Financial Position
for the years ended 31 December 2020 and 201987

IFRS Company Statement of Cash Flowsfor the years ended 31 December 2020 and 201988

IFRS Company Statement of Changes in Equity
for the years ended 31 December 2020 and 201989

Airbus / Financial Statements 2020

85

3. Airbus SE – IFRS Company Financial Statements /IFRS Company Income Statement
for the years ended 31 December 2020 and 2019(In € million)

Note

2020

2019

Operating income

3,757

159

Operating expenses(159)(3,845)4234

Impairment of investments

10

(187)

1

Total operating result

7

3,453

(3,650)142

202

Interest expense

(190)

(176)

Other financial result

(248)

(36)

Income from investments

Interest income

Total financial result

8

Profit (loss) before income taxes
Tax income (expense)

9

Profit (loss) for the period

(296)

(10)

3,157

(3,660)

(3)

(5)

3,154

(3,665)IFRS Company Statement of Comprehensive Income
for the years ended 31 December 2020 and 2019(In € million)

2020

2019

Profit (loss) for the period

3,154(3,665)

Change in fair value of financial assets

(52)

143

Change in fair value of cash flow hedges

00Other comprehensive income, net of tax

(52)

143

3,102

(3,522)Other comprehensive income
Items that will be reclassified to profit or loss:

Total comprehensive income of the period

86

Airbus / Financial Statements 2020

3. Airbus SE – IFRS Company Financial Statements /IFRS Company Statement of Financial Position
for the years ended 31 December 2020 and 2019(In € million)

Note

2020

2019

AssetsNon-current assets
Investments in subsidiaries and associates

10

16,69016,960Long-term financial assets

11

1,345

1,794

Non-current other financial assets

11

2,424

3,066

44

0

Non-current other assets
Deferred tax assets

9

0

0

Non-current securities

15

5,021

10,811

25,524

32,631

492

32

Current assets
Trade receivables
Short-term financial assets

11

122

44

Current other financial assets

11

1,136

1,777

Current accounts Airbus companies

11

11,167

8,574

66

85

Current other assets
Current securities

15

1,592

2,255

Cash and cash equivalents

15

10,671

8,129

Total assets

25,246

20,89650,77053,527

Equity and liabilities
Stockholders’ equity

14

Capital Stock

785

784

Share premium

3,599

3,555

Retained earnings

1,581

5,204

Legal reserves

122

174

Treasury shares

(42)

(82)

Result of the year

3,154

(3,665)

9,199

5,970

3

Non-current liabilities
Long-term financing liabilities

15

11,356

6,580

Non-current other financial liabilities

11

2,023

2,898

Deferred tax liabilities

9

27

34

13,406

9,512

Current liabilities
Short-term financing liabilities

15

1,156

0

Current accounts Airbus companies

11

25,52732,510Current other financial liabilities

11

1,143

1,793

339

3,742

Current other liabilities

Total equity and liabilities

28,16538,04550,77053,527

Airbus / Financial Statements 2020

87

3. Airbus SE – IFRS Company Financial Statements /IFRS Company Statement of Cash Flowsfor the years ended 31 December 2020 and 2019
2020

2019

3,154

(3,665)Interest income

(142)

(202)

Interest expense

190

236

Interest received

231

176

Interest paid

(In € million)

Note

Operating Activities
Profit (loss) for the period (Net income)
Adjustments to reconcile profit for the period to cash provided by operating activities

(172)

(175)

Tax (income) expense

3

5

Results on disposals of assets

0(1)

Depreciation and amortisation

00Valuation adjustments

903

(72)

Dividends received

(42)

(34)

0

(1)

(4,063)

3,813

(469)

185

Change in current and non-current provisions
Change in other operating assets and liabilities
Trade receivables
Trade liabilities
Other assets and liabilities and others
Cash provided by operating activities

45

35(3,639)

3,593

62

80

Investing activities
(56)

(164)

Payments for long-term financial assets

(294)

(449)

Proceeds from long-term financial assets

383

306

7

-

Acquisitions of subsidiaries, joint ventures, businesses and non-controlling interests (net of cash)

10

Proceeds of subsidiaries, joint ventures, businesses and non-controlling interests (net of cash)

42

34

Payments for investments in securities(157)(2,687)

Proceeds from disposals of securities

6,508

2,361

Cash provided by (used for) investing activities

6,433

(599)

5,940

0

0

0

Dividends received

Financing activities
Increase in financing liabilities
Repayment of financing liabilities(9,672)

1,901

Cash distribution to Airbus SE shareholders

0(1,280)Change in capital

89

138

Change in treasury shares

(4)

(31)

Change in current accounts Airbus companies(3,647)728

Effect of foreign exchange rate changes on cash and cash equivalents

(306)

34

Net increase in cash and cash equivalents

2,542

243

Cash and cash equivalents at beginning of period

8,129

7,886

10,671

8,129

Cash provide by (used for) financing activities

Cash and cash equivalents at end of period

88

Airbus / Financial Statements 2020

15

3. Airbus SE – IFRS Company Financial Statements /IFRS Company Statement of Changes in Equity
for the years ended 31 December 2020 and 2019
Legal reserves (1)(In € million)

Note

Balance at 1 January 2019

Capital
stock

Share
premium

Retainedearnings

Financialassets atfair value

Cashflow Treasury
hedgessharesTotalequity

777

2,941

6,408

31

0

(51)

10,106

Profit for the period

00(3,665)000(3,665)

Other comprehensive income

0

0

0

143

0

0

143

Total comprehensive income for the period

00(3,665)143

00(3,522)

Capital increase

7

614

0

0

0

0

621

Share-based payment (IFRS 2)

0

0

76

0

0

0

76

Cash distribution to Airbus SE shareholders

00(1,280)000(1,280)Change in treasury shares

0

0

0

0

0

(31)

(31)

784

3,555

1,539

174

0

(82)

5,970

0

0

3,154

0

0

0

3,154

Balance at 31 December 2019
Profit for the period
Other comprehensive income

0

0

0

(52)

0

0

(52)

Total comprehensive income for the period

0

0

3,154

(52)

0

0

3,102

1

44

0

0

0

0

45

0

0

42

0

0

0

42

Capital increase

14

Share-based payment (IFRS 2)
Cash distribution to Airbus SE shareholders

14

0

0

0

0

0

0

0

Change in treasury shares

14

0

0

0

0

0

40

40

785

3,599

4,735

122

0

(42)

9,199

Balance at 31 December 2020
(1) The distribution of legal reserves is restricted by Dutch law.

3

Airbus / Financial Statements 202089

Chapter

4
90

Airbus / Financial Statements 2020

4.
Notes to the
IFRS Company
Financial Statements
4.1

Basis of Presentation

93

4.2

Company Performance

96

4.3

Operational Assets and Liabilities

99

4.4

Employees

102

4.5

Capital Structure and Financial Instruments

102

4.6

Other Notes

113

Airbus / Financial Statements 2020

91

4. Notes to the IFRS Company Financial Statements /Contents /4.1

Basis of Presentation

93

4.4

Employees

102

1.
2.
3.
4.
5.
6.

The Company
Impact of the COVID-19 pandemic
Signiﬁcant Accounting Policies
Key Estimates and Judgements
BrexitRelated Party Transactions

93
93
93
94
94
95

13.

Number of Employees

102

4.5

Capital Structure
and Financial Instruments

102

14.
15.
16.

Total Equity
Cash, Securities and Financing Liabilities
Information about Financial Instruments

102
104
107

4.2

Company Performance

96

7.
8.
9.

Total Operating Result
Total Financial Result
Income Tax

96
96
97

4.6

Other Notes

113

17.
18.

Auditor Fees
Events after the Reporting Date

113
113

4.3

Operational Assets and Liabilities

99

10.

Investments in Subsidiaries, Associates
and Participations
Financial Assets and Financial Liabilities
Commitments and Contingencies

99
101
101

11.
12.

92

Airbus / Financial Statements 2020

4. Notes to the IFRS Company Financial Statements /4.1 Basis of Presentation
1.

The Company

The Company’s principal activity is acting as a holding andmanagement company for the subsidiaries of Airbus SE, the“Company”, a listed company in the form of a European public
limited-liability company (Societas Europaea), legally seated in
Amsterdam (current registered ofﬁce at Mendelweg 30, 2333
CS Leiden, The Netherlands) and registered at the Dutch

2.

Commercial Register (Handelsregister) in The Hague under
number 24288945. The Company is listed on the European
stock exchanges in Paris, Frankfurt am Main, Madrid, Barcelona,
Valencia and Bilbao. The IFRS Financial Statements wereauthorised for issue by the Company’s Board of Directors on
17 February 2021.

Impact of the COVID-19 pandemic

Regarding the impact of the COVID-19 pandemic, please refer to “– Note 2: Impact of the COVID-19 pandemic” of the Consolidated
Financial Statements.

3.

Signiﬁcant Accounting Policies

Basis of preparation — The Company’s Financial Statements
are prepared in accordance with International Financial ReportingStandards (“IFRS”), issued by the International AccountingStandards Board (“IASB”) as endorsed by the European Union(“EU”) and with Part 9 of Book 2 of the Netherlands Civil Code.
They are prepared and reported in euro (“€”) and all values arerounded to the nearest million appropriately. Due to rounding,numbers presented may not add up precisely to the totals
provided and percentages may not precisely reﬂect the absolute
ﬁgures.
In the Company Financial Statements of Airbus SE, unlessotherwise disclosed, the same accounting principles have been
applied as set out in the Notes to the Consolidated Financial
Statements, except for the valuation of the investments aspresented under investments in subsidiaries and associates in
the Company Financial Statements. These policies have been
consistently applied to all years presented.
In the Company Financial Statements, the investments in
subsidiaries and associates are recorded at acquisition cost.
In the Company Income Statement, dividends received frominvestments are recorded as dividend income.

Due to this application, the Company equity and net result are notequal to the consolidated equity and net result. A reconciliationof the total shareholders’ equity and proﬁt for the period ispresented in “– Note 14: Total Equity” to the Company Financial
Statements.
The Company Financial Statements have been prepared on ahistorical cost basis, except for the equity instruments, securities
and derivative instruments that have been measured at fair value.
Regarding the application of new, revised or amended IFRS
issued and applying from 1 January 2020 and issued but not yet
applied please refer to “– Note 5: Change in Accounting Policies
and Disclosures” of the Consolidated Financial Statements.
In addition, no material changes are expected in the Company
Financial Statements of Airbus SE from the implementationof the new standards not yet applied. Further information
about Share-based payment and Employee Stock Ownership
Plans (ESOP) is presented in Note 33 and information about
Remuneration is presented in Note 34 of the Consolidated
Financial Statements.

4

Airbus / Financial Statements 202093

4. Notes to the IFRS Company Financial Statements /A number of new or revised standards, amendments and improvements to standards as well as interpretations are not yet effective
for the year ended 31 December 2020 and have not been applied in preparing these Financial Statements and early adoption is
not planned:
IASB effective date forannual reporting periods
beginning on or afterEndorsement
status

1 January 2021

Endorsed

Amendments to IFRS 4 “Extension of the Temporary Exemption
from Applying IFRS 9”

1 January 2021

Not yet endorsed

Amendments to IFRS 3 “Reference to the Conceptual Framework”

1 January 2022

Not yet endorsed

Amendments to IAS 16 “Property, Plant and Equipment – Proceeds before
Intended Use”

1 January 2022

Not yet endorsed

Amendments to IAS 37 “Onerous Contracts – Cost of Fulfilling a Contract”

1 January 2022

Not yet endorsed

Annual Improvements to IFRS Standards 2018–2020

1 January 2022

Not yet endorsed

IFRS 17 “Insurance Contracts”

1 January 2023

Not yet endorsed

Amendments to IAS 1 “Classification of Liabilities as Current or Non-current”

1 January 2023

Not yet endorsed

Amendments to IAS 8 “Definition of Accounting Estimates”

1 January 2023

Not yet endorsed

Amendments to IAS 1 “Disclosure of Accounting Policies”

1 January 2023

Not yet endorsedStandards and amendments
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 “Interest Rate
Benchmark Reform – Phase 2”

The information with regard to Capital Management is disclosed
in Note 36, further information about Litigation and Claims refers
to Note 39 and Events after the Reporting Date are disclosed in
Note 41 of the Consolidated Financial Statements.

4.

Key Estimates and Judgements

The preparation of the Company Financial Statements requires
the use of estimates and assumptions. In preparing these
Financial Statements, management exercises its best judgement
based upon its experience and the circumstances prevailing atthat time. The estimates and assumptions are based on available
information and conditions at the end of the ﬁnancial period
presented and are reviewed on an ongoing basis.

5.

The details regarding the use of estimates and judgements aredescribed in “– Note 4: Key Estimates and Judgements” of theConsolidated Financial Statements.
Key accounting estimates and judgements affecting theassessment and measurement of impairment are included
in “– Note 10: Investments in Subsidiaries, Associates andParticipations” of the Company Financial Statements.

BrexitOn 29 March 2017, the UK triggered Article 50 of the Lisbon
Treaty, the mechanism to leave the European Union (“Brexit”).
In June 2018, the Company published its Brexit Risk
Assessment outlining its expectations regarding the material
consequences and risks for the Company arising from the UK
leaving the European Union without a deal. In September 2018,
the Company launched a project to mitigate the risks andanticipate possible consequences associated with Brexit andits impact on the Company’s business and production activities.
Signiﬁcant progress was made in mitigating the identiﬁed risks
through for example the modiﬁcation of the Company’s customs
and IT systems, and the stockpiling of parts associated withtransportation and logistics.

94

Unless reference is made to the accounting policies describedin the Consolidated Financial Statements, the main accounting
policies applied in the preparation of these Company Financial
Statements are described in each accounting area. These
accounting policies have been consistently applied to all ﬁnancial
years presented, unless otherwise stated.

Airbus / Financial Statements 2020

The UK left the European Union in an orderly manner on
31 January 2020 under the terms of the Withdrawal Agreement,
opening a transition period until 31 December 2020.
On 30 December 2020, the UK Parliament ratiﬁed the EU-UK
Trade and Cooperation Agreement (“TCA”) but it still awaits
ratiﬁcation by the European Parliament and the Council of theEuropean Union before ﬁnal conclusion and entry into force.
The TCA is expected to prevent the disruption a no-deal scenario
would have created. Preliminary analysis conﬁrms that although
Brexit will result in a requirement for increased areas of vigilance,
additional administrative work and reduced industrial ﬂexibility,
the continuity of the Company’s business operations and supply
chain in particular are not materially threatened.

4. Notes to the IFRS Company Financial Statements /6.

Related Party Transactions

Key Management PersonnelIntercompany Transactions

The details regarding the compensation of key management
personnel are described in “– Note 10: Related Party Transactions”
of the Consolidated Financial Statements.

A comprehensive exchange of internal services between thesubsidiaries of a multinational corporation like Airbus SE iscommon practice. In its responsibility as holding company tomanage its subsidiaries and to assist the business activities
conducted by Airbus companies and its subsidiaries, Airbus SE
applies transfer prices for its business activities in conformity withmarket levels and in accordance with national and internationaltax requirements (arm’s length principle).

The following table discloses the related party intercompany transactions in 2020 and 2019:(In € million)

Sales of Purchases
Loans
Loans
goods of goods
granted /received /
Hedge
and
and
Other
Other relationships
Hedge
services
services
receivables
liabilities
receivables relationships
and other and other Receivables at Liabilities atdue atdue atat of payables as aincome expenses 31 December 31 December 31 December 31 December 31 December 31 December

2020
Total transactions
with subsidiaries

3,825

(479)

11,617(24,426)

1,366(3,793)945(2,185)

Total transactions
with associates

68

(1)

42

0

101

(1,144)00

Total transactions
with subsidiaries

232

(185)

8,586

(31,520)

1,743(3,866)

3,761

(793)

Total transactions
with associates

39

(2)

21

0

96

(1,011)

0

0

2019

For further information about granted guarantees to subsidiaries please refer to “– Note 12: Commitments and Contingencies” of
the Company Financial Statements.
For further information about the impairment and the expected credit losses on receivables, please refer to “– Note 16.7: Impairment
Losses” of the Company Financial Statements.

4

Airbus / Financial Statements 2020

95

4. Notes to the IFRS Company Financial Statements /4.2 Company Performance
7.

Total Operating Result(In € million)

2020

2019

Operating income

3,757

159

Corporate services rendered to Airbus companies

3,757

159

Operating expenses(159)(3,844)Service fees charged by Airbus companies

(50)

(45)

Administrative expenses(109)(3,799)

Income from investments

(145)

34

42

34

(187)

0

0

0

Dividends received from Airbus companies
Impairment
Expense from investments
Gain (loss) on disposal of investments

Total operating result

0

1

3,454

(3,650)Administrative expenses decreased by € -3,690 million to € 109 million (2019: € 3,799 million), mainly due to the ﬁnal agreements
reached with the French Parquet National Financier (PNF), the U.K. Serious Fraud Ofﬁce (SFO) and the US Department of State (DoS).
Corporate services rendered to Airbus companies increased by € 3,598 million to € 3,757 million (2019: € 159 million), mainly due
to the agreement with Airbus companies regarding the Fine recharge.

8.

Total Financial Result
2020

2019

Interest result

(48)

26

Interest income from securities measured at fair value through OCI

53

87(In € million)

Interest income from securities measured at fair value through P&L

3

26

Interest income on financial assets measured at amortised cost

86

89

Interest expense on financial liabilities measured at amortised cost

(190)

(176)

Other financial result

(249)

(36)

77

31

Change in fair value measurement of financial assets

(174)

(79)

Impairment and Expected Credit Loss

(224)

(2)

72

14

(297)

(10)

Option liability exchangeable bond

Other

Total financial result

The Company is acting as a ﬁnancial market agent on behalf of its subsidiaries, therefore the fair value changes of derivatives arereported on a net basis.

96

Airbus / Financial Statements 2020

4. Notes to the IFRS Company Financial Statements /9.

Income Tax

The Company is tax registered in the Netherlands. The Company
is heading a ﬁscal unity, which also includes Airbus Finance B.V.
and Airbus Defence and Space Netherlands B.V. and therefore
the Company is severally and jointly liable for income tax liabilitiesof the ﬁscal unity as a whole.
Income taxes — The tax expense for the year comprises
deferred tax. Tax is recognised in the Income Statement, except
to the extent that it relates to items recognised directly in Other
Comprehensive Income.

The amount of income tax included in the Income Statement isdetermined in accordance with the rules established by the tax
authorities in the Netherlands, based on which income taxes
are payable or recoverable.
Deferred tax assets and/or liabilities, arising from temporary
differences between the carrying amounts of assets and liabilities
and the tax base of assets and liabilities, are calculated using
the substantively enacted tax rates expected to apply when they
are realised or settled. Deferred tax assets are recognised if it isprobable that they will be realised.

The expense for income taxes is comprised of the following:(In € million)

Current tax expense

2020

2019

0

0

Deferred tax expense

(3)

(5)

Total

(3)

(5)

The following table shows reconciliation from the theoretical tax income (expense) using the Dutch corporate tax rate to the reported
tax income (expense):
2020

2019

Profit before income taxes

3,157(3,660)

Corporate income tax rate

25.0%

25.0%

Expected income (expense) for income taxes

(789)

915

0

(899)

(In € million)

Non-deductible final agreements reahed with PNF, SFO and DoS
Non-taxable agreements reached with Airbus companies

901

0

Non-taxable income from investment and associates

(33)

(10)

Option liability exchangeable bond

19

7

Income from other companies within the fiscal unity

0(1)

Impairment on investment and associates

(79)

0

Other non-deductable expenses and tax-free income

(22)

(17)

Reported tax income (expense)

(3)

(5)

Deferred income taxes as of 31 December 2020 are related to the following assets and liabilities:
Movement
throughincomestatement

Othermovements

1 January 2020
Deferredtax assets

Deferredtax
liabilities

OCI

Securities

0

(50)

Financial instruments0

Net operating loss and tax loss carryforwards

31 December 2020

OthersDeferredtax benefit(expense)

Deferredtax assets

Deferredtax
liabilities

9

0

0

0

(41)

(6)

0

0

10

4

0

22

0

0

0

(12)

10

0

Deferred tax assets (liabilities)
before offsetting

22

(56)

9

0

(2)

14

(41)

Set-off

(22)

22

0

0

0

(14)

14

0

(34)

9

0

(2)

0

(27)

(In € million)

Net deferred tax assets (liabilities)

Airbus / Financial Statements 2020

497

4. Notes to the IFRS Company Financial Statements /Deferred income taxes as of 31 December 2019 are related to the following assets and liabilities:
Movement
throughincomestatement

Othermovements

1 January 2019
Deferredtax assets

Deferredtax
liabilities

OCI

Securities

0(8)

Financial instruments0

Net operating loss and tax loss carryforwards

31 December 2019

OthersDeferredtax benefit(expense)

Deferredtax assets

Deferredtax
liabilities

(42)

0

0

0

(50)

(1)

0

0

(5)

0

(6)

21

0

0

0

11

22

0

Deferred tax assets (liabilities) before
offsetting

21

(9)

(42)

0

5

22

(56)

Set-off

(9)

9

0

0

0

(22)

22

Net deferred tax assets (liabilities)

12

0

(42)

0

5

0

(34)

(In € million)

Details of deferred tax recognised cumulatively in equity are as follows:
31 December(In € million)

2020

2019

Financial instrument at fair value through OCI

(41)

(50)

Total

(41)

(50)

Deferred tax on net operating losses (“NOLs”), trade tax loss carry forwards and tax credit carry forwards are:
31 December(In € million)

NOL

2019

38

97

Tax credit carry forwards

00

Tax effect10

22

Valuation allowances

00Deferred tax assets on NOLs and tax credit carry forwards

10

22

The ﬁrst tranche of tax loss carry forwards (€ 38 million) will expire by the end of 2027.

98

2020

Airbus / Financial Statements 2020

4. Notes to the IFRS Company Financial Statements /4.3 Operational Assets and Liabilities
10.

Investments in Subsidiaries, Associates and Participations(In € million)

Balance at 1 January 2019

Subsidiaries

Associates

Participations

Total

15,60521

1,171

16,797

Additions

164

0

2

166

Share-based payment (IFRS 2)

76

0

0

76

Fair value changes through profit or loss

0

0

(79)

(79)

15,84521

1,094

16,960Additions

28

28

0

56

Disposals

(7)

0

0

(7)

Impairment(187)

Balance at 31 December 2019

(187)

0

0

Share-based payment (IFRS 2)

42

0

0

42

Fair value changes through profit or loss

0

0

(174)

(174)

15,72149

920

16,690

Balance at 31 December 2020

Investments in Subsidiaries, Associated Companies and Participations
Investments in subsidiaries and associated companies are statedat cost, less impairment. Dividend income from the Company’s
subsidiaries and associated companies is recognised when theright to receive payment is established.
The participations are stated at fair value with changes in fairvalue recognised in Proﬁt and Loss.
For the purpose of impairment testing all consolidated
subsidiaries are allocated to cash generating units (“CGU”) in a
way they are monitored for internal management purposes. At
each balance sheet date, the Company reviews whether there isan indication that a CGU to which its investments in subsidiaries
and associated companies belong to are impaired.
An indication for impairment of the investments in subsidiaries andassociated companies may include, respectively, management’s
downward adjustment of the strategic plan, a signiﬁcant decreasein the share price of a publicly listed company or a signiﬁcantdecrease in future sales. Further indications for impairment of
its investments may include other areas where observable data
indicates that there is a measurable decrease in the estimatedfuture cash ﬂ ows. These determinations require signiﬁ cantjudgement. In making this judgement, management evaluates,
among other factors, the ﬁnancial performance of and businessoutlook for its investments, including factors such as industry
and sector performance, changes in technology and operationaland ﬁnancing cash ﬂow.
If any indication for impairment exists, the recoverable amount of
the investments is estimated in order to determine the amount,
if any, of the impairment loss. An investment is impaired if
its recoverable amount is lower than its carrying value. The
recoverable amount is deﬁned as the higher of an investment’s
fair value less costs of disposal and its value in use.
The determination of the investment’s value in use is basedon calculations using pre-tax cash ﬂow projections based on
ﬁnancial budgets approved by management covering a ﬁve-year

period. Cash ﬂows beyond the ﬁve-year period are extrapolatedusing estimated growth rates. The discounted cash ﬂow method
is used to determine the recoverable amount of a CGU to which
its investments in subsidiaries and associated companies
belong. The discounted cash flow method is particularly
sensitive to the selected discount rates and estimates of
future cash ﬂows by management. Key assumptions used todetermine the recoverable value of the CGU are the expected
future labour expenses, future interest rates, future exchange
rates to translate into euro the portion of future US dollar andpound sterling which are not hedged and the estimated growthrate of terminal values.
If the recoverable amount of an investment is estimated to be lessthan its carrying amount, the carrying amount of the investment
is reduced to its recoverable amount. Any impairment loss isrecognised immediately in the Income Statement.
Impairment losses recognised in prior periods shall be reversed
only if there has been a change in the estimates or external market
information used to determine the investment’s recoverable
amount since the last impairment loss was recognised. The
recoverable amount shall not exceed the carrying amount thatwould have been determined had no impairment loss beenrecognised in prior years.

4

The annual impairment test performed in 2020 led to an
impairment charge of € 187 million (2019: € 0 million).
In November 2019, Airbus SE made further capital contribution
and loan into Proj BV. Based on the latest developments, a reassessment of the Proj BV ﬁnancial assets was performed in
December 2020 leading to a decrease in the fair value of theequity investment by € 187 million recorded through Proﬁt and
Loss, and a depreciation of a loan by € 127 million recorded
through ﬁnancial result. The Company will continue to assess
the recoverability of the investment.

Airbus / Financial Statements 2020

99

4. Notes to the IFRS Company Financial Statements /Change of Investments in Subsidiaries
In November 2020, Cobham plc / Advent International sold its
part in Air Tanker consortium to the other inverstors who jointly
exercice their pre-emption right on a pro-rata basis (€ 28 million).
Consequently, Airbus SE now holds 46% in Air Tanker Holdings
and 29% in Air Tanker Services.
During the year 2020, Airbus SE made further capital contributions
into Airbus Ventures Fund II for a total amount of € 15 million(2019: € 26 million).
During the year 2020, Airbus SE made further capital contributions
into Airbus Ventures Fund III for a total amount of € 13 million(2019: € 23 million). During the year 2020, new partner had
invested into Airbus Venture Fund III for a total commitmentsof US$ 50 million. Consequently, Airbus SE now holds 66% of
Airbus Venture Fund III (€ 7 million).

On 15 July 2019, Airbus SE entered into a partnership agreement
to establish a corporate venture capital fund, dubbed Airbus
Venture Fund III. The capital contribution of Airbus SE is€ 26 million.
On 13 December 2019, Airbus SE contributes its 100% subsidiary
DADC Luft-und Raumfahrt Beteiligung GmbH to its subsidiary
Airbus Defence and Space GmbH. In return for this contribution,
Airbus SE received additional shares in Airbus Defence andSpace GmbH for an equivalent amount.
On 29 November 2019, Airbus SE made a further capital
contribution of € 35 million into Airbus Proj BV.
During the year 2019, Airbus SE made further capital contributions
into Airbus Ventures Fund II for a total amount of € 23 million(2018: € 35 million).

On 1 March 2019, Airbus SE acquired 100% of the shares in
LaLux SE, a société anonyme de réassurance for a total amountof € 81 million. On 29 July 2019, LaLux SE has been merged
into Aero Ré SA.
Information on principal investments of the Company:
2020%

100.002019(1)

100.00

Head office
Bertrange (Luxembourg)
Taufkirchen (Germany)

88.71

88.71

Airbus Defence and Space GmbH

100.00100.00Airbus Defence and Space Limited

Stevenage (UK)100.00100.00Airbus Defence and Space Netherlands B.V.

Leiden (Netherlands)

100.00100.00Airbus Defence and Space S.A.

Madrid (Spain)

100.00100.00Airbus Bank GmbH

Munich (Germany)

100.00100.00Airbus Finance B.V.

Leiden (Netherlands)

100.00100.00Airbus Group Limited.

London (UK)100.00100.00Airbus Group Proj B.V.

Leiden (Netherlands)

95.78

95.78

Airbus S.A.S.

Toulouse (France)

9.90

9.90

Dassault Aviation S.A.

Paris (France)

100.00100.00Premium Aerotec GmbH

Augsburg (Germany)(1) Percentages represent share held directly by Airbus SE.

100

Company
Aero Ré S.A.

Airbus / Financial Statements 2020

4. Notes to the IFRS Company Financial Statements /11.

Financial Assets and Financial Liabilities

Financial assets at 31 December 2020 and 2019 are as follows:
31 December(In € million)

2020

2019

Long-term loans Airbus companies

1,345

1,794

0

0

Positive fair values of derivative financial instruments

2,424

3,066

Non-current financial assets

3,769

4,860

Positive fair values of derivative financial instruments

1,136

1,777

Current portion long-term loans Airbus companies

122

44

Long-term loans external(1)

11,167

8,574

Current financial assets

12,425

10,395

Total

16,194

15,255Current accounts Airbus companies(1) The receivables from subsidiaries include mainly transactions in connection with the cash pooling in Airbus SE. Terms and conditions are in agreement with the prevailing market
environment.

Financial liabilities at 31 December 2020 and 2019 are as follows:
31 December
2020(In € million)

2019

Negative fair values of derivative financial instruments

2,023

2,898

Non-current financial liabilities

2,023

2,898

1,143

1,793

Current accounts Airbus companies (1)Negative fair values of derivative financial instruments

25,52732,510Current financial liabilities

26,67034,303

Total

28,69337,201(1) The liabilities to subsidiaries include mainly transactions in connection with the cash pooling in Airbus SE. Terms and conditions are in agreement with the prevailing market
environment.

12.

Commitments and Contingencies

Off-Balance Sheet Commitments
Airbus SE issued guarantees on behalf of Airbus companies
in the amount of € 8,181 million (2019: € 7,040 million). The
commitments of these companies to third parties mainly relate
to their operating business as described in “– Note 21: Property,
Plant and Equipment”, “– Note 28: Sales Financing Transactions”
and “– Note 38: Financial Instruments” of the Consolidated
Financial Statements.
On 8 December 2015, Airbus SE entered into a partnershipagreement to establish a corporate venture capital fund, dubbed
Airbus Group Ventures, as well as a technology and business
innovation center in Silicon Valley with a total commitment amountof US$ 150 million. On 25 November 2015, a ﬁrst investment of
US$ 5 million has been made into this fund. During the year
2020, Airbus SE made further capital contributions into Airbus
Ventures Fund II for a total amount of US$ 15 million (total capital
contribution 31 December 2019: € 28 million).

On 1 April 2019, Airbus SE entered into a partnership agreementwith effective date 1 July 2019 to establish a venture capitalfund, dubbed Airbus Ventures Fund III, with a total commitment
amount of US$ 100 million. On 28 August 2019, a ﬁrst investment
of US$ 5 million has been made into this fund. During the year
2020, Airbus SE made further capital contributions into Airbus
Ventures Fund III for a total amount of US$ 6 million (total capital
contribution 31 December 2019: € 23 million).

4

In addition, the Company has two guarantees to cover its
obligation towards the Scheme and the BAE Systems pension
schemes. To mitigate its exposure, the ﬁrst guarantee covers anamount up to £ 400 million for an unlimited period of time while
the second one covers an uncapped amount terminating in
2046, respectively for the Scheme and the BAE Systems Pension
Schemes.

Airbus / Financial Statements 2020

101

4. Notes to the IFRS Company Financial Statements /4.4 Employees
13.

Number of Employees

The average number of persons employed by the Company in 2020 was 1 (2019: 1). The employees are situated in the Netherlands.

4.5 Capital Structure and Financial Instruments
14.

Total Equity

Airbus SE’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:(In number of shares)

Issued as at 1 January

2020

2019

783,173,115

776,367,881

976,155

1,784,292

Issued for convertible bond

05,020,942

Issued as at 31 December

784,149,270

783,173,115(432,875)(862,610)

Issued for ESOP

Treasury shares

Outstanding as at 31 December

783,716,395

782,310,505

Authorised shares

3,000,000,000

3,000,000,000

Holders of ordinary shares are entitled to dividends and are entitled to one vote per share at general meetings of the Company.
Capital stock comprises the nominal amount of shares
outstanding. The addition to capital stock represents thecontribution for exercised options by employees of € 976,155(in 2019: € 1.784.292) in compliance with the implemented
Stock Option Plans and the Employee Stock Ownership Plans(“ESOP”).

Legal reserves includes:– change from ﬁnancial assets at fair value (see “– Note 16.2:
Carrying Amounts and Fair Values of Financial Instruments”);– change in fair value of derivatives designated as cash ﬂow
hedges (see “– Note 16.2: Carrying Amounts and Fair Values”
of Financial Instruments).

Share premium mainly results from contributions in kind in thecourse of the creation of the Company, cash contributions fromthe Initial Public Offering, capital increases and reductions dueto the issuance and cancellation of shares.

According to Dutch law, the OCI is considered to be a Legal
Reserve and therefore distribution is restricted.

Retained earnings include mainly the proﬁt of the period andcash dividend payments to Airbus SE shareholders.
On 23 March 2020, the Company has decided the withdrawalof 2019 dividend proposal with cash value of € 1.4 billion in
response to the COVID-19 pandemic (see “– Note 2: Impact of the
COVID-19 pandemic” of the Consolidated Financial Statements).
Given the ongoing volatility, there will be no dividend proposal
for 2020.

102

Airbus / Financial Statements 2020

Treasury shares represent the amount paid or payable for own
shares held in treasury. During 2020, the number of treasury
stock held by the Company decrease to 432,875 comparedto 862,610 as of 31 December 2019, mainly due to the vested
shares in 2020 under the LTIP 2016 (see “– Note 33: Sharebased Payment” of the Consolidated Financial Statements). No
shares were sold back to the market nor cancelled in 2020(2019: 0 shares).

4. Notes to the IFRS Company Financial Statements /Authorisations Granted by the Annual General Meetingof Airbus SE Held on 16 April 2020
On 16 April 2020, the Annual General Meeting (“AGM”) of theCompany authorised the Board of Directors, for a period expiring
at the AGM to be held in 2021, to issue shares and to grantrights to subscribe for shares in the Company’s share capitalfor the purpose of:– ESOPs and share-related LTIPs, provided that such powers
shall be limited to an aggregate of 0.14% of the Company’s
authorised share capital (see “– Note 33: Share-Based
Payment”);– funding the Company and its subsidiaries, provided thatsuch powers shall be limited to an aggregate of 0.3% of
the Company’s authorised share capital (see “– Note 37.3:
Financing Liabilities”).

For each operation, such powers shall not extend to issuingshares or granting rights to subscribe for shares if there is nopreferential subscription right and for an aggregate issue pricein excess of € 500 million per share issuance.
Also on 16 April 2020, the AGM authorised the Board of
Directors for an 18 months period to repurchase up to 10% of
the Company’s issued share capital at a price per share notless than the nominal value and not more than the higher ofthe price of the last independent trade and the highest current
independent bid on the trading venues of the regulated marketof the country in which the purchase is carried out.
Furthermore, the AGM authorised both the Board of Directors
and the CEO, with powers of substitution, to establish the exact
number of the relevant shares to be cancelled.

Reconciliation Consolidated to Company Equity and Net Income
The difference between the total shareholders’ equity according to the Consolidated Financial Statements and Company’s Financial
Statements as at 31 December 2020 and 2019 is as follows:(In € million)

2020

2019

Consolidated equity

6,445

5,975

OCI – Restatement of investments from Consolidated to Company Financial Statements(1,731)

697

Retained Earnings – Restatement of investments from Consolidated to Company Financial Statements

4,683

(916)

Retained Earnings – Valuation investments at historical cost

1,487

1,487

Retained Earnings – Impairment of financial assets(1,685)(1,273)Company’s equity

9,199

5,970

The difference between the net income according to the Consolidated Financial Statements and Company’s Financial Statements
for the year ended 31 December 2020 and 2019 is as follows:
2020

2019

(1,133)(1,362)

4,668(2,303)42

34

Loss on / Impairment of financial assets

(412)

(31)

Other valuation differences

(22)

7

3,143

(3,665)(In € million)

Consolidated net income
Income from investments according to Consolidated Financial Statements
Income from investments according to Company Financial Statements

Company’s net income (Profit or loss for the period)

4

Airbus / Financial Statements 2020

103

4. Notes to the IFRS Company Financial Statements /15.

Cash, Securities and Financing Liabilities

15.1

Net Cash
31 December(In € million)

2020

2019

Cash and cash equivalents

10,671

8,129

Current securities

1,592

2,255

Non-current securitries

5,021

10,811Gross cash position

17,284

21,195

Short-term financing liabilities(1,156)0Long-term financing liabilities(11,356)(6,580)

Total

4,772

14,615The net cash position on 31 December 2020 amounted to € 4,772 (2019: € 14,615 million), with a gross cash position of € 17,284 million(2019: € 21,195 million).

15.2

Cash and Cash Equivalents

Cash and cash equivalents are composed of the following elements:
31 December
2020(In € million)

Bank accounts and petty cash

2019

405

463

9,654

7,014

Short-term securities (at fair value through OCI)

512

652

Short-term investment (at amortised cost)100

0

10,671

8,129

Short-term securities (at fair value through profit or loss)

Total cash and cash equivalents

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

15.3

Securities
31 December(In € million)

2020

2019

Current securities at fair value through OCI

1,592

2,255

Non-current securities at fair value through OCI

5,021

10,811

Total securities

6,613

13,066The majority of the Company’s securities consists of debt
securities and are classified at fair value through OCI(see “– Note 38.2: Carrying Amounts and Fair Values of Financial
Instruments” of the Consolidated Financial Statements).
Included in the securities portfolio as of 31 December 2020 and
2019, respectively, are corporate and government bonds bearing
either ﬁxed rate coupons (€ 6,357 million nominal value; 2019:€ 12,586 million) or ﬂoating rate coupons (€ 50 million nominal
value; 2019: € 121 million).

104

Airbus / Financial Statements 2020

When the Company enters into securities lending or otherﬁnancing activities that involve the pledging of securities as
collateral, the securities pledged continue to be recognised on
the balance sheet. As of 31 December 2020, securities for an
amount of € 99 million were pledged as collateral for borrowings
from banks (2019: € 145 million).

4. Notes to the IFRS Company Financial Statements /15.4

Financing Liabilities

Current and non-current classiﬁcation — A ﬁnancial asset or liability is classiﬁed as current if it is settled within 12 months after
the reporting date, and as non-current otherwise.
Financing liabilities comprise obligations towards ﬁnancial institutions, issued corporate bonds, and borrowing received fromjoint ventures and other parties.
The Company has received several euro-denominated loans and one US dollar-denominated loan from Airbus Finance B.V.
(“AFBV”). It has also issued a convertible bond in euro and euro-denominated exchangeable bonds into Dassault Aviation sharesand two stand-alone US dollar-denominated bonds on the US institutional market under Rule 144A. Furthermore, the Company
has long-term US dollar-denominated loans outstanding with the Development Bank of Japan (“DBJ”). The terms and repayment
schedules of these bonds and loans are as follows:
Carrying amount2019

Coupon orinterest rate

Effective
interest
rate

Maturity

Additional features

Principal
amount31 December(in million)

2020

Loans from Airbus Finance B.V.
AFBV 10 years (EMTN)€ 1,000€ 1,047€ 1,048

2.40%

2.45%

Apr. 2024

Interest rate swapped into
3M Euribor +1.40%

AFBV 15 years (EMTN)

€ 500

€ 571

€ 555

2.15%

2.24%

Oct. 2029

Interest rate swapped into
3M Euribor +0.84%

AFBV 10 years (EMTN)

€ 600

€ 626

€ 617

0.91%

1.01%

May 2026

Interest rate swapped into
3M Euribor +0.50%

AFBV 15 years (EMTN)

€ 900

€ 983

€ 940

1.41%

1.53%

May 2031

Interest rate swapped into
3M Euribor +0.66%

US$ 1,000

€ 845

€ 896

2.72%

2.80%

Apr. 2023

Interest rate swapped into
3M US-Libor +0.68%

US$ 100

€ 81

€ 89

3M US-Libor+1.15%

4.84%

Jan. 2021

Interest rate swapped
into 4.76% fixed

EMTN 5 years

€ 750

€ 745

€0

1.63%

1,80%

Apr. 2025

EMTN 6 years€ 1,250€ 1,243

€0

1,38%

1,47%

Jun. 2026

EMTN 8 years

€ 750

€ 745

€0

2.00%

2.10%

Apr. 2028

EMTN 10 years€ 1,250€ 1,237

€0

1.63%

1,74%

Jun. 2030

EMTN 12 years€ 1,000

€ 987

€0

2,38%

2.49%

Apr. 2032

EMTN 20 years€ 1,000

€ 988

€0

2.38%

2,44%

Jun. 2040

AFBV US$ Loan 10 years

Loans from financial institutions
DBJ 10 years

Bond

Exchangeable bond
5 years€ 1,078€ 1,075€ 1,068

0.00%

0.33%

June 2021

Exchangeable into Dassault
Aviation SA shares at€ 1,306.25 per share

US$ Bond 10 years

US$ 750

€ 672

€ 687

3.15%

3.20%

Apr 2027

Interest rate swapped
into 3M Libor +0.87%

US$ Bond 30 years

US$ 750

€ 667

€ 680

3.95%

4.02%

Apr 2047

Interest rate swapped
into 3M Libor +1.61%€ 12,512€ 6,580

Thereof non-current
financing liabilities€ 11,356€ 6,580

Thereof current
financing liabilities€ 1,156

€0

Total

4

Long-term financing liabilities, mainly comprising bonds and liabilities to ﬁnancial institutions, increased by € 4,776 million to€ 11,356 million (2019: € 6,580 million), mainly due to the issuance of two bonds for a total of € 6 billion.
The ﬁrst bond was split into a ﬁve year-maturity tranche of € 750 million with a coupon of 1.625%, an eight year-maturity trancheof € 750 million with a coupon of 2.00% and a 12 year-maturity tranche of € 1 billion with a coupon of 2.375%. The second bondwas split into a six year-maturity tranche of € 1.25 billion with a coupon of 1.375%, a ten year-maturity tranche of € 1.25 billion witha coupon of 1.625% and a 20 year-maturity tranche of € 1 billion with a coupon of 2.375%.

Airbus / Financial Statements 2020

105

4. Notes to the IFRS Company Financial Statements /Short-term financing liabilities increased by € 1,156 million to € 1,156 million (2019: € 0 million). The increase in short-term ﬁnancing
liabilities is mainly related to the issuance of commercial papers and the reclassiﬁcation of € 1 billion of exchangeable bonds fromlong-term to short-term due to maturity in June 2021.
The Company can issue commercial paper under its Negotiable European Commercial Paper (“NEuCP”) programme at ﬂoating
or ﬁxed interest rates corresponding to the individual maturities ranging from 1 day to 12 months. The programme has been set
up in 2003 with a maximum volume of € 2 billion, increased in 2013 to € 3bn and in 2020 to a maximum volume of € 11 billion. Asof 31 December 2020, there were no outstanding amounts under any of its commercial paper programmes.
On 21 October 2020, the Company signed a new € 6 billion Revolving Syndicated Credit Facility partially terming out the € 15 billion
credit facility by € 3 billion in order to reﬁnance its existing € 3 billion Revolving Syndicated Facility.
Reconciliation of liabilities arising from ﬁnancing liabilities is as follows:
Non-cash movements(In € million)

Bonds and commercial papers

Balance at
1 January
2020
2,435

Fair value
Foreignthrough profit
exchange
Cash flows
or loss movements
5,940

83

OthersBalance at
31 December
2020

(113)

13

8,358

Liabilities to financial institutions

89

0

0

(8)

0

81

Loans from Airbus Finance B.V.

4,056

0

89

(75)

3

4,073

Total

6,580

5,940

172

(196)

16

12,512OthersBalance at
31 December
2019

(469)

2,435

Non-cash movements(In € million)

Bonds and commercial papers

106

Balance at
1 January
2019
2,791

Fair value
Foreignthrough profit
exchange
Cash flows
or loss movements
0

88

25

Liabilities to financial institutions

87

0

0

2

0

89

Loans from Airbus Finance B.V.

3,868

0

168

17

3

4,056

Total

6,746

0

256

44

(466)

6,580

Airbus / Financial Statements 2020

4. Notes to the IFRS Company Financial Statements /16.

Information about Financial Instruments

16.1

Financial Risk Management

The Company acts as an intermediary for its subsidiaries when
they wish to enter into derivative contracts to hedge against
foreign exchange risk or other market risks such as interest raterisk, commodity price risk or equity price risk. The Company’s
practice is to set up a derivative contract with a subsidiary andat the same time enter into a back-to-back derivative transaction
with a bank. Contracts with subsidiaries being thus mirrored (ona one-to-one basis) by contracts with banks, the Company’s net
exposure is virtually zero. There are, however, a few derivative
contracts the Company holds in order to hedge its own market
risk exposure.
As the Company’s back-to-back hedge contracts are enteredinto with different counterparties, their fair values are reﬂected
separately in the statement of Financial Position and recognised
as other ﬁnancial assets and ﬁnancial liabilities as disclosed
in “– Note 11: Financial assets and liabilities” of the Company
Financial Statements.
In the Income Statement, the results of the back-to-back hedgetransactions, both realised and unrealised, are presented on a
net basis as the Company acts as an agent for its subsidiaries.
The Company’s overall ﬁnancial risk management activities andtheir objectives are described in detail in “– Note 38.1: Financial
Risk Management” of the Consolidated Financial Statements.

Market Risk
Foreign exchange risk — The Company manages a longterm hedge portfolio with maturities of several years for its
subsidiaries, mainly Airbus, and to a small extent for its joint
ventures or associates. This hedge portfolio covers a large
portion of Airbus’ ﬁrm commitments and highly probable forecast
transactions. As explained above, owing to the Company’s backto-back approach, its own exposure to foreign exchange risk
is very limited.
Interest rate risk — The Company uses an asset-liability
management approach with the objective to limit its interest
rate risk. It undertakes to match the risk proﬁle of its interestbearing assets with those of its interest-bearing liabilities. The
remaining net interest rate exposure is managed through several
types of interest rate derivatives, such as interest rate swaps
and interest rate futures contracts, in order to minimise risks
and ﬁnancial impacts.
The vast majority of related interest rate hedges qualify for hedge
accounting, and most of them are accounted for under the fairvalue hedge model. As a result, both the fair value changes ofthese derivatives and the portion of the hedged items’ fair valuechange that is attributable to the hedged interest rate risk arerecognised in proﬁt and loss, where they offset to the extent thehedge is effective.
A few interest rate swaps that have been entered into as a hedge
of certain of the Company variable rate debt (see “– Note 37.3:
Financing Liabilities”) are accounted for under the cash ﬂow
hedge model. Related fair value gains are recognised in OCI andreclassiﬁed to proﬁt or loss when the hedged interest payments
affect proﬁt or loss.
The Company invests in ﬁnancial instruments such as overnight
deposits, certiﬁcates of deposits, commercial papers, othermoney market instruments and short-term as well as mediumterm bonds. For its ﬁnancial instruments portfolio, the Company
has an Asset Liability Management Committee in place thatmeets regularly and aims to limit the interest rate risk on a fairvalue basis through a value-at-risk approach, from which resultsa hedge ratio that is however not actively steered.
Commodity price risk — The Company is exposed to risk
relating to ﬂuctuations in the prices of commodities used in the
supply chain. It manages these risks in the procurement process
and to a certain extent uses derivative instruments in order tomitigate the risks associated with the purchase of raw materials.
To the extent that the gains or losses of the derivative and thoseof the hedged item or transaction do not match in terms of proﬁt
or loss, the Company applies cash ﬂow hedge accounting to thederivative instruments, with a hedge ratio of 1:1.
Equity price risk — The Company is to a small extent invested
in equity securities mainly for operational reasons. Its exposure
to equity price risk is hence limited. Furthermore, it is exposed
under its LTIP to the risk of the Company share price increases.
The Company limits these risks through the use of equity
derivatives that qualify for hedge accounting and have been
designated as hedging instruments in cash ﬂow hedges, witha hedge ratio of 1:1.
Sensitivities of market risks —The approach used to measure
and control market risk exposure within the Group’s ﬁnancial
instrument portfolio is amongst other key indicators the value-atrisk (“VaR”). For information about VaR and the approach usedby the Company to assess and monitor sensitivities of market
risks please refer to “– Note 38.1: Financial Risk Management”
of the Consolidated Financial Statements.
The Company is part of the Group risk management process,which is more fully described in “– Note 38.1: Financial Risk
Management” of the Consolidated Financial Statements.

Airbus / Financial Statements 2020

4107

4. Notes to the IFRS Company Financial Statements /A summary of the VaR position of the Company’s ﬁnancial instruments portfolio at 31 December 2020 and 31 December 2019 is
as follows:

Total VaR

Equityprice VaR

Currency
VaR

Interest
rate VaR

Foreign exchange hedges

20

0

20

0

Financing liabilities, financial assets (incl. cash, cash equivalents, securities
and related hedges)

88

63

17

43

(In € million)

31 December 2020

4

4

0

0

Diversification effectEquity swaps

(25)

0

(35)

0

All financial instruments

87

67

2

43

Foreign exchange hedges

41

0

41

1

Financing liabilities, financial assets (incl. cash, cash equivalents, securities
and related hedges)

51

34

42

36

31 December 2019

Equity swaps

3

3

0

0

Diversification effect

(48)

(2)

(76)

(1)

All financial instruments

47

35

7

36

The increase in the total VaR compared to 31 December 2019 is mainly attribuable to the increase in Equity price VaR (€ 67 million in
2020; € 35 million in 2019) due to high equity volatility in 2020. Regarding the Currency Var, the volatility of €/US$ was compensatedby the fall in nominal value of foreign exchange hedges portfolio. The derivative instruments entered into with external counterparties
are passed on a 1:1 basis to Airbus entities. As a result, the respective market risks of the external derivative instruments are offset
by corresponding opposite market risks of intragroup transactions.

Liquidity Risk
The Company’s policy is to maintain sufﬁcient cash and cash equivalents at any time to meet its own and the Group’s present
and future commitments as they fall due. For information on how the Group monitors and manages liquidity risk, please refer to“– Note 37.1: Financial Risk Management” of the Consolidated Financial Statements.
The contractual maturities of the Company ﬁnancial liabilities, based on undiscounted cash ﬂows and including interest payments,
if applicable, are as follows:
Carrying
amountContractual
cash flows< 1 year

1 year2 years

2 years3 years

3 years4 years

Non-derivative financial liabilities(12,512)(14,656)(1,390)(230)(1,045)(1,208)(934)(9,847)

Derivative financial liabilities(3,166)(1,869)

(638)

(537)

(605)

(75)

(10)

(4)

(15,678)(16,525)(2,028)(767)(1,650)(1,283)(944)(9,851)(In € million)

4 years- More than
5 years
5 years

31 December 2020

Total
31 December 2019Non-derivative financial liabilities(6,580)(7,773)(125)(1,291)(124)(1,015)(1,100)(4,118)Derivative financial liabilities(4,691)(6,188)(1,741)(1,804)(1,421)

(862)

(298)

(62)

(11,271)(13,961)(1,866)(3,095)(1,545)(1,877)(1,398)(4,180)

Total

108

Airbus / Financial Statements 2020

4. Notes to the IFRS Company Financial Statements /Credit Risk
The Company is exposed to credit risk to the extent of
non-performance by its counterparts with regard to ﬁnancial
instruments or issuers of ﬁnancial instruments for gross cash
investments. However, it has policies in place to avoid concentrations of credit risk and to ensure that credit risk is limited.
As far as central treasury activities are concerned, credit risk
resulting from ﬁnancial instruments is managed by the Company.
In order to ensure sufﬁcient diversiﬁcation, a credit limit system
is used.
The Company monitors the performance of the individual
ﬁnancial instruments and the impact of market developments on
their performance and takes appropriate action on foreseeable
adverse development based on pre-deﬁned procedures andescalation levels.
Sales of products and services are made to customers after
having conducted appropriate internal credit risk assessment.
The booked amount of ﬁnancial assets represents the maximum
credit exposure. The credit quality of ﬁnancial assets can beassessed by reference to external credit rating (if available) orinternal assessment of customers’ creditworthiness by way ofinternal risk pricing methods.
In 2020, the trade receivables, neither past due nor impaired
amount to € 492 million (in 2019: € 32 million).
The Company measures loss allowances at an amount that
represents credit losses resulting from default events that are
possible within the next 12 months, unless the credit risk ona ﬁnancial instrument has increased signiﬁcantly since initialrecognition, as described in “– Note 37.7: Impairment losses”
of the Consolidated Financial Statements. In 2020, an amountof € 224 million of impairment losses on ﬁ nancial assets is
recognised in proﬁt and loss (2019: € 31 million).
For further information relating to gross credit risk and impairment
see “– Note 16.7: Impairment Losses”.

16.2

Carrying Amounts and Fair
Values of Financial Instruments

Financial instruments — The Company’s ﬁnancial assets mainly
consist of cash, short to medium-term deposits and securities.
The Company’s ﬁnancial liabilities include intragroup liabilities,
obligations towards ﬁnancial institutions and issued bonds.
The Company has the same classiﬁ cation and accounting
policies as the Group. Please refer to “– Note 38.1: Financial
Risk Management” of the Consolidated Financial Statements
for more information.
The Company classiﬁes its ﬁnancial assets in one of the following
categories: (i) at fair value through OCI, (ii) at fair value throughproﬁt and loss and (iii) at amortised cost. Classiﬁcation depends
on the Company’s business model for managing the ﬁnancial
assets and the contractual terms of the cash ﬂows.
The Company assigns its ﬁnancial instruments (excluding its
at-cost investments, which are outside the scope of IFRS 9“Financial Instruments”) into classes based on their category in
the Statement of Financial Position.

The following table presents the carrying amounts and fair values of ﬁnancial instruments by class and by IFRS 9 measurement
category as of 31 December 2020:(In € million)

Financial assets
and liabilities
at amortised cost

Financial
instrument
total

Amortised
cost

Book
value

Fair value
through profit
or loss

Fair value
through OCI

920

0

0

0

920

920

0

0

1,467

1,568

1,467

1,568

0

0

492

492

492

492

3,560

0

0

0

3,560

3,560

0

0

11,167

11,167

11,167

11,167

Fair
value

Fair
value

AssetsOther investments and long-term financial assets
Equity investments
Loans
Trade receivables
Other financial assets
Derivative instruments
Current account Group companies
Securities
Cash and cash equivalents

Total

0

6,613

0

0

6,613

6,613

9,654

512

494

494

10,660

10,66014,134

7,125

13,62013,721

34,87934,980(9,185)

4Liabilities
Financing liabilities
Bonds and commercial papers

00(8,358)(9,185)(8,358)

Liabilities to financial institutions and others

0

0

(81)

(82)

(81)

(82)

Internal loans payable00(4,073)(4,106)(4,073)(4,106)(3,166)000(3,166)(3,166)00(25,527)(25,527)(25,527)(25,527)(3,166)0(38,039) (38,900)(41,205)(42,066)

Other financial liabilities
Derivative instruments
Current accounts Group companies

Total

Airbus / Financial Statements 2020

109

4. Notes to the IFRS Company Financial Statements /The following table presents the carrying amounts and fair values of ﬁnancial instruments by class and by IFRS 9 measurement
category as of 31 December 2019:(In € million)

Financial assets
and liabilities
at amortised cost

Financial
instrument
total

Fair value
through profit
or loss

Fair value
through OCI

Amortised cost

1,094

0

0

0

1,094

1,094

0

0

1,838

1,895

1,838

1,895

0

0

32

32

32

32

4,843

0

0

0

4,843

4,843

0

0

8,574

8,574

8,574

8,574

0

13,06600

13,066

13,066

Fair value Book value

Fair value

AssetsOther investments and long-term financial assets
Equity investments
Loans
Trade receivables
Other financial assets
Derivative instruments
Current account Group companies
Securities
Cash and cash equivalents

Total

7,014

652

463

463

8,129

8,129

12,951

13,718

10,907

10,96437,576

37,63300(2,435)(2,517)(2,435)(2,517)

Liabilities
Financing liabilities
Bonds and commercial papers
Liabilities to financial institutions and others

0

0

(89)

(90)

(89)

(90)

Internal loans payable00(4,056)(4,180)(4,056)(4,180)(4,691)00

0(4,691)(4,691)00(32,510)(32,510)(32,510)(32,510)(4,691)0(39,090) (39,297)(43,781)(43,988)

Other financial liabilities
Derivative instruments
Current accounts Group companies

Total

Fair Value Hierarchy
For further details please refer to “– Note 37.2: Carrying Amounts and Fair Values of Financial Instruments” of the Consolidated
Financial Statements.
The fair values disclosed for ﬁnancial instruments accounted for at amortised cost reﬂect Level 2 input.
The following table presents the carrying amounts of the ﬁnancial instruments held at fair value across the three levels of the fairvalue hierarchy as of 31 December 2020 and 2019, respectively:
31 December 2020
(In € million)

31 December 2019

Level 1

Level 2

Total

Level 1

Level 2

Total

920

0

920

1,094

0

1,094

Financial assets measured at fair value
Equity instruments

0

3,560

3,560

0

4,843

4,843

Securities

6,613

0

6,613

13,0660

13,066

Cash equivalents

9,654

512

10,166

7,014

652

7,666

17,187

4,072

21,25921,174

5,494

26,669Derivative instruments

0(3,166)(3,166)

0(4,691)(4,691)Other financial liabilities

0

0

0

0

0

0

0

(3,166)(3,166)

0(4,691)(4,691)

Derivative instruments

Total
Financial liabilities measured at fair value

Total

110

Airbus / Financial Statements 2020

4. Notes to the IFRS Company Financial Statements /Financial Assets Designated at Fair Value through Profit or Loss
The following types of ﬁnancial assets held at 31 December 2020 and 2019, respectively, are designated at fair value through proﬁt
or loss:
Nominal amountat initial recognition at
31 December 2020

(In € million)

31 December 2019

Designated at fair value through profit or loss at recognition
Money market funds (accumulating)

9,654

7,014

Total

9,654

7,014

The Company manages these assets and measures their performance on a fair value basis.

16.3

Potential Effect of Set-Off Rights on Recognised Financial Assets and Liabilities

The Company reports all its ﬁnancial assets and ﬁnancial liabilities on a gross basis. With each derivative counterparty there are
master netting agreements in place providing for the immediate close-out of all outstanding derivative transactions and payment of
the net termination amount in the event a party to the agreement defaults or another deﬁned termination event occurs. The following
tables set out, on a counterparty speciﬁc basis, the potential effect of master netting agreements on the Company’s ﬁnancial
position, separately for ﬁnancial assets and ﬁnancial liabilities that were subject to such agreements as of 31 December 2020
and 2019, respectively:

Derivative instruments(In € million)

Gross amounts
recognisedGross
set off in theamounts
FinancialrecognisedStatements

Related amounts not
set off in the Statementof Financial Position

Net amounts
presented in
the Financial
Statements

Financial
instruments

Cashcollateral
received

Net amount

31 December 2020
Financial assets

3,895

0

3,895

(1,520)(77)(2,298)Financial liabilities

2,305

0

2,305

(1,520)0785

31 December 2019
Financial assets

4,538

0

4,538

(1,480)0

3,058

Financial liabilities

4,295

0

4,295

(1,480)

0

2,815

16.4

Notional Amounts of Derivative Financial Instruments

The notional amount of interest rate contracts are as follows, speciﬁed by year of expected maturity:
Remaining period
1 year

2 years

3 years

4 years

Interest rate contracts

0

0

815

Interest rate future contracts

0

0

0

Interest rate contracts

00Interest rate future contracts00(In € million)

5 years

6 years

7 years> 7 years

Total

1,000

0

600

1,222

1,400

5,037

0

0

0

0

0

0

0

890

1,000

0

600

2,735

5,225

0

0

0

0

0

0

0

31 December 2020

4

31 December 2019

The notional amounts of equity swaps are as follows:
Remaining period(In € million)

1 year

2 years

3 years

4 years> 4 years

Total

31 December 2020

32

23

17

8

0

80

31 December 2019

37

32

23

9

0

101

Airbus / Financial Statements 2020

111

4. Notes to the IFRS Company Financial Statements /16.5

Derivative Financial Instruments and Hedge Accounting Disclosure

The following table presents the amounts relating to items designated as hedging instruments and hedge ineffectiveness as of
31 December 2020 under IFRS 9:
31 December
2020

2019

Carrying values

Carrying values

Asset

Liability

Asset

Liability

Net forward sales contracts

0

0

0

0

Foreign exchange options

0

0

0

0

412

0

236

0

0

0

0

0

(In € million)

Foreign currency risk

Interest rate risk
Commodity swap risk
Equity swap risk

Total

16.6

0

0

0

0

412

0

236

0

Net Gains or Net Losses

The Company’s net gains or net losses recognised in proﬁt or loss in 2020 and 2019, respectively are as follows:
31 December(In € million)

2020

2019

Financial assets or financial liabilities at fair value through profit or loss
94

(144)

(306)

(18)

(330)

69

75

26

Financial assets at fair value through profit or loss

(174)

(81)

Financial liabilities measured at amortised cost

423

7

Total

(218)

(141)

Held for trading
Designated on initial recognition
Financial assets at amortised cost

(1)

Financial assets at fair value through OCI(1) Including impairment and Expected Credit Losses on Financial assets at amortised cost

16.7

Impairment Losses

Loss allowances — For its portfolio of debt instruments including
bonds, term deposits and commercial papers, the Company
measures loss allowances at an amount that represents credit
losses resulting from default events that are possible within thenext 12 months, unless the credit risk on a ﬁnancial instrument
has increased signiﬁcantly since initial recognition. In the eventof such signiﬁcant increase in credit risk the Company measuresloss allowances for that ﬁnancial instrument at an amount equal
to its life-time expected losses, i.e. at an amount equal to the
expected credit losses that result from all possible default events
over the expected life of that ﬁnancial instrument.
The Company applies the low credit risk exemption allowing
the Company to assume that there is no signiﬁcant increasein credit risk since initial recognition of a ﬁnancial instrument,

112

Airbus / Financial Statements 2020

if the instrument is determined to have low credit risk at thereporting date. Similarly, the Company has determined that its
trade receivables and contract assets generally have low credit
risk. The Company applies the simpliﬁed approach permitted by
IFRS 9 of measuring expected credit losses of trade receivables
and contract assets on a lifetime basis from initial recognition.
Investment grade instruments — The Company considers
a signiﬁcant increase in credit risk to have occurred, if there isa downgrade by four notches such that the instrument moves
into a high yield bucket as a direct result of the downgrade. With
respect to instruments that were high yield at initial recognition,
a downgrade by four notches is considered as a signiﬁcant
increase in credit risk.

4. Notes to the IFRS Company Financial Statements /Stage 112-month ECL(In € million)

Stage 2
Life-time ECLStage 3Credit impaired ECL

Total

At 1 January 2020

4.4

0.3

0

4.7

Change in financial assets and risk parameters

(0.8)

93.6

0

92.8

At 31 December 2020

3.6

93.9

0

97.5

Stage 2
Life-time ECLStage 3Credit impaired ECL

Total

3.5

1.1

0

4.6

Change in financial assets and risk parameters

0.9

(0.8)

0

0.1

At 31 December 2019

4.4

0.3

0

4.7

Stage 112-month ECL(In € million)

At 1 January 2019

The following impairment losses on ﬁnancial assets are recognised in proﬁt or loss in 2020 and 2019, respectively:(In € million)

2020

2019

Loans

(158)

(31)

0

0

(158)

(31)

Trade Receivables

Total

For further information about the impairment on ﬁnancial assets, please refer to “– Note 10: Investments in Subsidiaries, Associates
and Participations” of the Company Financial Statements.

4.6 Other Notes
17.

Auditor Fees

Fees related to professional services rendered by the Company’s auditor, Ernst & Young Accountants LLP, for the ﬁscal year 2020
were € 2,198 thousand (in 2019: € 2,046 thousand). These fees relate to audit services only.

18.

Events after the Reporting Date

No events after Reporting Date.

4

Airbus / Financial Statements 2020113

Chapter

5
114

Airbus / Financial Statements 2020

5.
Other Supplementary
Information Including
the Independent
Auditor’s Report

Airbus / Financial Statements 2020

115

5. Other Supplementary Information Including the Independent Auditor’s Report /Other Supplementary Information
1.

Appropriation of Result

Articles 30 and 31 of the Articles of Association provide that the Board of Directors shall determine which part of the result shallbe attributed to the reserves. The General Meeting of Shareholders may dispose of a reserve only upon a proposal of the Board of
Directors and to the extent it is permitted by law and the Articles of Association. Dividends may only be paid after adoption of theannual accounts from which it appears that the shareholders’ equity of the Company is more than the amount of the issued andpaid-in part of the capital increased by the reserves that must be maintained by law.
It will be proposed at the Annual General Meeting of Shareholders that the Proﬁt for the period of € 3,143 million as shown in theincome statements for the ﬁnancial year 2020 is to be added to retained earnings and given the ongoing volatility, there will be no
dividend proposal for 2020.

2.

Independent Auditor’s Report

To: the General Meeting of Shareholders of Airbus SE
To: the shareholders and Board of Directors of Airbus SE

Report on the audit of the Financial Statements 2020 included in the annual report
Our opinion
We have audited the Financial Statements 2020 of Airbus SE (the Company), based in Amsterdam.
In our opinion the accompanying Financial Statements give a true and fair view of the Financial Position of Airbus SE as at 31 December
2020, and of its result and its cash ﬂows for 2020 in accordance with International Financial Reporting Standards as adopted by
the European Union (EU-IFRS) and with Part 9 of Book 2 of the Dutch Civil Code.
The Financial Statements comprise:– the Consolidated and Company Statement of Financial Position as at 31 December 2020;– the following statements for 2020: the consolidated and company income statement;– the Consolidated and Company Statements of Comprehensive Income, Changes in Equity and Cash Flows;– the notes comprising a summary of the signiﬁcant accounting policies and other explanatory information.

Basis for our opinion
We conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing. Our responsibilities underthose standards are further described in the “Our responsibilities for the audit of the Financial Statements” section of our report.
We are independent of Airbus SE in accordance with the EU Regulation on speciﬁc requirements regarding statutory audit ofpublic-interest entities, the “Wet toezicht accountantsorganisaties” (Wta, Audit ﬁrms supervision act), the “Verordening inzake deonafhankelijkheid van accountants bij assurance-opdrachten” (ViO, Code of Ethics for Professional Accountants, a regulation withrespect to independence) and other relevant independence regulations in the Netherlands. Furthermore we have complied withthe “Verordening gedrags- en beroepsregels accountants” (VGBA, Dutch Code of Ethics).
We believe the audit evidence we have obtained is sufﬁcient and appropriate to provide a basis for our opinion.

Our audit approach
Our understanding of the business
The Company is a global leader in aeronautics, aerospace and related services. The Company is structured in segments and wetailored our group audit approach accordingly. We paid speciﬁc attention in our audit to a number of areas driven by the operationsof the Group and our risk assessment. We refer to the key audit matters for those areas.
We start by determining materiality and by identifying and assessing the risks of material misstatement of the Financial Statements,
whether due to fraud, non-compliance with laws and regulations or error in order to design audit procedures responsive to thoserisks, and in order to obtain audit evidence that is sufﬁcient and appropriate to provide a basis for our opinion. The risk of notdetecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion,forgery, intentional omissions, misrepresentations, or the override of internal control.

116

Airbus / Financial Statements 2020

5. Other Supplementary Information Including the Independent Auditor’s Report /Materiality
Materiality€ 250 million (2019: € 347 million)

Benchmarkapplied5% of “normalized” EBIT Adjusted. (2019: 5% of EBIT Adjusted).

Explanation

We consider normalized EBIT Adjusted as the most appropriate benchmark as it best aligns with the expectations of
those charged with governance at Airbus and of users of the Company’s Financial Statements.
In determining this year’s materiality, we have considered the unique combination of macro-economic factors that led
to disruption in demand. We believe that in order to set materiality in the current uncertain economic times, we should
account for what is expected to be a relatively temporary phenomenon. Whilst we considered alternative benchmarks
to normalized EBIT Adjusted including revenue and total assets, we believe that a normalized EBIT Adjusted approachto materiality remains appropriate. This addresses the analysts’ consensus that the Company’s industry economics
including demand will return to previous levels over time. The normalized EBIT Adjusted is based on an historic ratio
comparing EBIT Adjusted to revenue.
We confirmed with the Audit Committee that they were satisfied that the level of materiality was appropriate. We kept
our assessment of materiality under review throughout our audit.

We have also taken into account misstatements and/or possible misstatements that in our opinion are material for the users of the
Financial Statements for qualitative reasons.
We agreed with the Audit Committee of the Board of Directors (the Audit Committee) that misstatements in excess of € 12 million
that are identiﬁed during the audit would be reported to them, as well as smaller misstatements that in our view must be reported
on qualitative grounds.

Scope of the Group audit
Airbus SE is at the head of a group of entities. The ﬁnancial information of this group is included in the Consolidated Financial
Statements of Airbus SE.
The entities are grouped into three business segments: Airbus, Airbus Helicopters and Airbus Defence and Space. The audit of
the three segments is performed jointly by EY and KPMG. The audit of the entities in scope is performed by either EY or KPMG
network ﬁrms.
Because we are ultimately responsible for the opinion, we are also responsible for directing, supervising and performing the Groupaudit. In this respect we have determined the nature and extent of the audit procedures to be carried out for group entities. Decisivewere the size and/or the risk proﬁle of the Group entities or operations. On this basis, we selected group entities for which an audit
or review had to be carried out on the complete set of ﬁnancial information or speciﬁc items.
Our group audit focused mainly on signiﬁcant group entities that are of signiﬁcant size, have signiﬁcant risks to the Company
associated with them or are considered for other reasons.
Because of the (international) travel restrictions and social distancing due to the COVID-19 pandemic, we needed to restrict or havebeen unable to visit management and component auditors to discuss, among others, the business activities and the identiﬁed
signiﬁcant risks or to review and evaluate relevant parts of the component auditor’s audit documentation and to discuss signiﬁcantmatters arising from that evaluation on site. Furthermore we were forced to perform our procedures to a greater extent remotely
due to the COVID-19 measures. In order to compensate for the limitations related to the absence of physical meetings and direct
observation, we used predominantly communication technology and written information exchange, attended calls and videoconferences with (local) management and local auditors throughout the audit and closing meetings, intensiﬁed communication withcomponent teams, required more granular reporting from component audit teams, and reviewed remotely the component teams’
working papers in order to obtain sufﬁcient and appropriate audit evidence to provide a basis for our opinion.
In total our audit procedures represent 92% of total consolidated revenue, 89% of total consolidated assets and 85% of total
consolidated EBIT and all adjustments to EBIT. The remaining 8% of revenues, 11% of total assets and 15% of total EBIT result
from entities, none of which individually represents more than 1% of revenues or EBIT. For those entities, we performed, amongst
others, analytical procedures to corroborate our assessment that the Financial Statements are free from material misstatements.
We executed an audit plan that includes participation in risk assessment and planning discussions, setting the direction of theGroup audit work (including instructions to the divisional and entity auditors), reviewing and discussing the planned audit approach,obtaining an understanding of the ﬁnancial reporting process and performing procedures on the Group consolidation, participatingin the evaluation of key accounting topics, reviewing the Financial Statements and participating in meetings with the managementof the Company and its divisions. In our audit instructions, we also included targeted audit procedures that address the A220,
A350, A380, A400M programmes as well as the risk of non-compliance with laws and regulations. We ensured that the audit teams
both at group and at component levels included the appropriate skills and competences which are needed for the audit of a listedclient in the aerospace industry. We furthermore executed ﬁle reviews at EY network teams and KPMG. We involved several EY
specialists to assist the audit team, including specialists from our tax, actuarial, treasury, valuation and compliance departments.

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5. Other Supplementary Information Including the Independent Auditor’s Report /By performing the procedures mentioned above at group entities, together with additional procedures at group level, we have beenable to obtain sufﬁcient and appropriate audit evidence about the Company’s ﬁnancial information to provide an opinion about
the Consolidated Financial Statements.

Our focus on fraud and non-compliance with laws and regulations
Our responsibility
Although we are not responsible for preventing fraud or non-compliance and cannot be expected to detect non-compliance withall laws and regulations, it is our responsibility to obtain reasonable assurance that the Financial Statements, taken as a whole, arefree from material misstatement, whether caused by fraud or error. Non-compliance with laws and regulations may result in ﬁnes,
litigation or other consequences for the Company that may have a material effect on the Financial Statements.

Our audit response related to fraud risks
In order to identify and assess the risks of material misstatements of the Financial Statements due to fraud, we obtained anunderstanding of the entity and its environment, including the entity’s internal control relevant to the audit and in order to design
audit procedures that are appropriate in the circumstances. As in all of our audits, we addressed the risk of management overrideof internal control. We do not audit internal control per se for the purpose of expressing an opinion on the effectiveness of theCompany’s internal control.
We considered available information and made enquiries of relevant executives, directors (including internal audit, legal, compliance,
human resources and regional directors) and the Ethics and Compliance Committee. As part of our process of identifying fraud risks,
we evaluated fraud risk factors with respect to ﬁnancial reporting fraud, misappropriation of assets and bribery and corruption inclose co-operation with our forensic and legal specialists. As the Company is a global company, operating in multiple jurisdictions,
we considered the risk of bribery and corruption. We refer to our Key Audit Matter “Litigation and claims and risk of non-compliancewith laws and regulations” for more details.
In our process of identifying fraud risks, we considered whether the COVID-19 pandemic gives rise to speciﬁc fraud risk factors
resulting from a decrease in the effectiveness of controls as a result of the general disruption associated with remote working,illness and workforce reductions, supply chain disruptions, or workarounds.
We evaluated the design and the implementation and, where considered appropriate, tested the operating effectiveness of internal
controls that mitigate fraud risks. In addition, we performed procedures to evaluate key accounting estimates for management
bias in particular relating to important judgement areas and signiﬁcant accounting estimates as disclosed in Note 4 to the Financial
Statements. We have also used data analysis to identify and address high-risk journal entries.
We incorporated elements of unpredictability in our audit. We considered the outcome of our other audit procedures and evaluatedwhether any ﬁndings were indicative of fraud or non-compliance. If so, we re-evaluate our assessment of fraud risk and its resulting
impact on our audit procedures.

Our audit response related to risks of non-compliance with laws and regulations
We assessed factors related to the risks of non-compliance with laws and regulations that could reasonably be expected to havea material effect on the Financial Statements from our general industry experience, through discussions with the management
board, reading minutes, inspection of internal audit and compliance reports and performing substantive tests of details of classesof transactions, account balances or disclosures.
We also inspected lawyers’ letters and correspondence with regulatory authorities and remained alert to any indication of (suspected)
non-compliance throughout the audit. Finally we obtained written representations that all known instances of non-compliance withlaws and regulations have been disclosed to us. We refer to our Key Audit Matter “Litigation and claims and risk of non-compliancewith laws and regulations” for more details.

Going concern
We performed the following procedures in order to identify and assess the risks of going concern and to conclude on theappropriateness of management’s use of the going concern basis of accounting. Management made a speciﬁc assessment of
the Company’s ability to continue as a going concern and to continue its operations for at least the next 12 months from when the
Financial Statements are authorized for issue. We discussed and evaluated the assessment including scenarios with management.
We exercised professional judgment and applied professional scepticism, and focused speciﬁcally on the process followed bymanagement to make the assessment, on instances of management bias that could represent a risk, on the impact that current
events and conditions have on the Company’s operations and forecasted cash ﬂows, in order to challenge management’s assertion
whether or not the Company will have sufﬁcient liquidity to continue to meet its obligations as they fall due. We involved specialists
to review the prospective ﬁnancial information and underlying assumptions.

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5. Other Supplementary Information Including the Independent Auditor’s Report /We consider based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may
cast signiﬁcant doubt on the Company’s ability to continue as a going concern. Should we have concluded that a material uncertainty
exists, we would be required to draw attention in our auditor’s report to the related disclosures in the Financial Statements or,if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditor’s report. However, future events or conditions may cause a company to cease to continue as a going concern.

General audit procedures
Our audit further included among others:– performing audit procedures responsive to the risks identiﬁed, and obtaining audit evidence that is sufﬁcient and appropriate toprovide a basis for our opinion;– evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures
made by management;– evaluating the overall presentation, structure and content of the Financial Statements, including the disclosures;– evaluating whether the Financial Statements represent the underlying transactions and events in a manner that achieves fairpresentation.

Our key audit matters
Key audit matters are those matters that, in our professional judgement, were of most signiﬁcance in our audit of the Financial
Statements. We have communicated the key audit matters to the Audit Committee. The key audit matters are not a comprehensive
reﬂection of all matters discussed.
The key audit matter ‘Settlement agreements reached with the French Parquet National Financier (PNF), the UK Serious Fraud Ofﬁce(SFO) and the US Department of Justice (DoJ) and US Department of State (DoS)’ which was included in our last year’s auditor’sreport, is no longer considered a key audit matter for this year as this was related to a one-off transaction.
These matters were addressed in the context of our audit of the Financial Statements as a whole and in forming our opinion thereon,
and we do not provide a separate opinion on these matters.
Revenue recognition(Reference is made to the disclosures on “– Note 3: Significant Accounting Policies”, “– Note 4: Key estimates and judgements”,“– Note 11: Segment Information” and “– Note 12: Revenues and gross margin” of the Financial Statements)

Risk

The Group revenue recognition is complex due to its wide range of activities (including the sale of commercial aircraft
and helicopters, sale of military aircraft and helicopters, sale of space systems and services), its various types ofcontracts including non-standard clauses and the duration of some contracts including long-term development
activities.
Recognition of revenue includes significant judgements and estimates including whether or not the contracts containmultiple performance obligations which should be accounted for separately and including the determination of themost appropriate method for revenue recognition of these performance obligations. This comprises the identificationof potential variable considerations reducing the consideration received, allocation of this consideration to the different
performance obligations and assessing if the performance obligations are satisfied over time or at a point in time. In
particular the amount of revenue and profit recognized in a year for performance obligations satisfied at a point intime is dependent on the transfer of control. For performance obligations satisfied over time this is dependent on theassessment of the stage of completion of performance obligations as well as estimated total revenues and estimatedtotal costs. The Company uses costs incurred as the method for determining stage of completion. Recognition ofrevenue for some activities may include the assessment of the ability to collect the customer consideration. In thecontext of COVID-19 pandemic, the deterioration of customer’s ability to pay can impact the measurement of revenues.

Our audit
approach

Our audit procedures included, amongst others, assessing the appropriateness of the Company’s accounting
policies related to revenue recognition according to IFRS15 “Revenue from contracts with customers”. In addition, we
evaluated the design and implementation and, where considered appropriate, tested the operating effectiveness ofinternal controls related to the completeness, accuracy and timing of the revenue recognized. We selected individual
revenue transactions to assess proper identification of the performance obligations in the contracts and allocationof the consideration amongst the performance obligation (such as the A400M contract and space contracts), thecompleteness and valuation of the variable considerations (including constraints applied, if applicable) included in thetransaction price (notably for A400M contract and residual value guarantee in the sale of some commercial aircrafts)
and the timing of transfer of control.
In order to evaluate the significant judgements and estimates made by management, we read supporting contractual
agreements, met with sales representatives and programme teams to understand the nature of the various obligations
to be rendered under the contract and discuss specific clauses that could prevent transfer of control (mostly for thesales of commercial aircrafts), obtained evidence of transfer of control such as proof of delivery, tested the costs
incurred, examined computation of costs progression and assessed the reasonableness of the estimated cost tocomplete included in the cost-to-cost method for performance obligation recognized over time (notably for A400M
development, Tiger and Eurofighter contracts and some border security and space contracts).

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Finally we determined that the appropriate disclosures were made in the Financial Statements.

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5. Other Supplementary Information Including the Independent Auditor’s Report /Estimations related to contract margin for the accounting of onerous contracts(Reference is made to the disclosure on “– Note 3: Significant Accounting Policies”, “– Note 4: Key estimates and judgements”,“– Note 12: Revenues and gross margin” and “– Note 25: Provisions, contingent assets and contingent liabilities” of the Financial Statements)

Risk

The Group owns a large portfolio of long-term contracts for which it needs to assess the contract margin in order torecognise a provision for onerous contract.
Provisions for onerous contracts such as for the A400M contract are recognized when it becomes probable thatthe present value of unavoidable costs of fulfilling the obligations under the contract exceeds the present value of
economic benefits expected to be received under the contract.
The determination of these contract margins and provisions for onerous contracts requires management’s significant
judgement and assumptions associated with estimated revenue and costs at completion of the programme, theachievement of technical milestones, production plan, performance guarantees as well as key risks such as expected
outcome from ongoing negotiations with customers, penalties for delay or non-compliance.

Our audit
approach

We evaluated the design and implementation and where considered appropriate tested the operating effectivenessof internal controls for accounting for onerous contracts and for the assessment of the contract margin.
We also performed substantive procedures on individually significant programmes. We evaluated management’s
assumptions in the determination of amongst others the stage of completion of a project and estimates to complete
for both revenue and costs. We tested the costs incurred to date and the accuracy and completeness of the data
used in developing these key estimates.
We also evaluated management’s assessment of key contract risks and opportunities to determine whether or notthese are appropriately reflected in the cost to complete forecasts, paid specific attention to technical and market
developments and ongoing negotiations with customers. We performed inquiries with the programme team and theHead of Programme in order to confirm our understanding on the programme status and associated risks which
may affect total estimated costs to complete.
We challenged management’s assumptions by discussing and reviewing correspondence with customers,
considered the accuracy and consistency of similar estimates made in previous years and corroborated theassumptions with the latest contractual information.
Finally we determined that the appropriate disclosures were made in the Financial Statements.

Recoverability of key programme assets - long-lived assets and inventory(Reference is made to the disclosures on “– Note 3: Significant Accounting Policies”, “– Note 19: Intangible Assets” and “– Note 21: Property,
Plant and Equipment” of the Financial Statements)

Risk

Finished aircraft and work in progress inventory, capitalized development costs, other intangible assets and jigs
and tools relating to the key programmes, such as the A220, A330, A350, A380, H160 and H175, were tested for
impairment in the context of COVID-19 and reduction of aircraft deliveries. The main estimates to determine if an
impairment of long-lived assets such as capitalized development costs, other intangible assets and jigs and tools has
to be recognized are the future cash flows (including the projected number of deliveries and the associated margin
per aircraft) and the appropriate discount rates. With the reduction of deliveries, some work in progress and finishedaircraft may no longer be fully recoverable due to cancellation of orders and resulting remarketing costs. Associateddepreciations depend on the estimate of the selling price, remarketing costs and other costs.
Owing to the inherent uncertainty involved in forecasting future costs and interpreting contractual and commercial
positions in determining impairments, especially in the COVID-19 context, this is a key audit area.

Our audit
approach

We evaluated the design and implementation and where considered appropriate tested the operating effectivenessof internal controls for identifying and recording impairments of long-lived assets and depreciations of Work inprogress and finished aircrafts.
We evaluated the impairment tests performed by testing the integrity of the management’s impairment model. We
assessed management’s assumptions for the discount rate and the determination of the forecasted revenue to berealized (including the timing of expected deliveries and estimated selling price), cost to be incurred (including any
contractual penalties) and the expected gross margin, including performing sensitivity to evaluate the impact ofchanging some assumptions such as the discount rate or key business parameters (price, growth rate for instance).
We also performed inquiry of the programme controller and Head of Programmes to confirm our understanding of
the status of the programme.
We tested the provision for depreciation of work in progress and finished goods by evaluating management’s
assumptions in the determination of likelihood of cancellation, future selling price, remarketing and other costs.
We challenged management’s assumptions by discussing and reviewing correspondence with customers andcomparing them with historical data, appraisers’ market value and agreements with customers.
Finally we determined that the appropriate disclosures were made in the Financial Statements.

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5. Other Supplementary Information Including the Independent Auditor’s Report /Valuation of derivative financial instruments and hedge accounting(Reference is made to “– Note 38: Financial instruments” of the Financial Statements)

Risk

The Company operates in a business environment that is exposed to currency volatility. A significant portion of theCompany’s revenue is denominated in US dollars, while a major part of its costs is incurred in Euro and, to a lesser
extent, in Pounds Sterling. In response to these risks the Company uses financial instruments (mainly currency
forwards) to mitigate the exposure to changes in market rates.
The Company applies cash flow hedge accounting. The accounting policy allows the Company to re-position theforeign currency hedges and avoid hedge disqualification when a hedged aircraft is postponed. This is conditioned by
the Company’s ability to demonstrate the absence of a reduction in the number of hedged aircrafts over the Foreign
Exchange management hedging horizon.
The magnitude of the Company’s hedge portfolio entails a significant “mark to market” valuation risk. Furthermore,in the COVID-19 context, potential changes in the delivery assumptions related to aircraft cancelations, customer
defaults and aircraft postponement beyond the Foreign exchange management hedging horizon could lead todisqualification of the associated cash-flow hedges.

Our audit
approach

For the audit of the foreign currency hedge portfolio, we used specialists who tested the controls around theCompany’s central treasury system, independently calculated the valuation of the treasury portfolio (by sample) andevaluated the application of the cash-flow hedge accounting rules.
We obtained counterparty confirmation of the outstanding financial instruments to verify the existence andownership of the hedge portfolio.
Based on a sample of financial derivative instruments we assessed that the fair value of the financial instruments
was correctly determined and no material exceptions were noted.
We verified the documentation of the hedged items supported by both the recoverable backlog and production
rate over the Foreign Exchange management hedging horizon. We tested the highly probable assessment of future
aircraft delivery performed by the Company and challenged key management assumptions pertaining to ordercancellation, airline default and aircraft rescheduling risks.
Finally we determined that the appropriate disclosures were made in the Financial Statements.

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5. Other Supplementary Information Including the Independent Auditor’s Report /Litigation and claims and risk of non-compliance with laws and regulations(Reference is made to the disclosures on “– Note 4: Key estimates and judgements”, “– Note 25: Provisions, contingent assets
and contingent liabilities” and “– Note 39: Litigations and claims” of the Financial Statements)

Risk

Litigation and claims involve amounts that are potentially significant and the estimate of the amount to be provided as
a liability, if any, is inherently subjective. The outcome of these matters may have a material effect on the Company’s
results and its Financial Position.
A part of the Company’s business is characterized by competition for individually significant contracts with customers
which are often directly or indirectly associated with governments. The process associated with these activities issusceptible to the risk of non-compliance with laws and regulations. In addition, the Company operates in a number ofterritories where the use of commercial intermediaries is normal practice. Certain entities of the Group remain underinvestigation by various law enforcement agencies for amongst others alleged irregularities concerning commercial
intermediaries. Breaches of laws and regulations in these areas can lead to fines, penalties, criminal prosecution,commercial litigation and restrictions on future business.

Our audit
approach

We planned and designed our audit approach to this area in conjunction with our in-house forensic specialists.
We evaluated the tone set by management and the Board of Directors and the Company’s approach to managing
this risk.
We assessed the overall control environment and evaluated and tested the Company’s policies, procedures andcontrols to identify and assess possible non-compliance.
Furthermore we tested the selection process of intermediaries, related contractual arrangements, payments tointermediaries and the Company’s responses to suspected breaches of policy and non-compliance with laws andregulations.
We made inquiries of the Board of Directors and the Audit Committee, as well as the Company’s internal andexternal legal advisors as to the areas of potential or suspected breaches of law and regulations relating to bribery,
including the status of ongoing investigations. To corroborate the results of those inquiries we vouched information
received with objective evidence, third parties and we reviewed related documentation.
We maintained a high level of vigilance to possible indications of significant non-compliance with laws andregulations relating to bribery and corruption whilst carrying out our other audit procedures. Accompanied by ourown legal advisors we met on several occasions with the Company’s external counsel to obtain their views about thestatus of ongoing investigations as well as their potential impact on the Financial Statements. We furthermore tested
journals entries and other transactions with unusual characteristics using amongst other data-analytics tools.
For (threatened) litigation cases and claims, we gained additional assurance by comparing management’s position
to the assessment from external parties such as external lawyers in those cases where a high amount of judgement
is involved.
We assessed that the disclosures in the Financial Statements reflect the current status of the investigations
regarding suspected breaches of law or regulations in accordance with accounting standards. We also assessed
the appropriateness of the contingent liability disclosure in the Financial Statements.

Report on other information included in the annual report
In addition to the Financial Statements and our auditor’s report thereon, the annual report contains other information that consists of:– the report of the Board of Directors including the remuneration report (we refer to www.airbus.com for the board report);– other information as required by Part 9 of Book 2 of the Dutch Civil Code.
Based on the following procedures performed, we conclude that the other information:– is consistent with the Financial Statements and does not contain material misstatements;– contains the information as required by Part 9 of Book 2 of the Dutch Civil Code and Section 2:135b and 2:145 sub-section 2of the Dutch Civil Code.
We have read the other information. Based on our knowledge and understanding obtained through our audit of the Financial
Statements or otherwise, we have considered whether the other information contains material misstatements. By performing theseprocedures, we comply with the requirements of Part 9 of Book 2 of the Dutch Civil Code and Section 2:135b sub-Section 7 of
the Dutch Civil Code and the Dutch Standard 720. The scope of the procedures performed is substantially less than the scope of
those performed in our audit of the Financial Statements.
The Board of Directors is responsible for the preparation of the other information, including the report of the Board of Directors inaccordance with Part 9 of Book 2 of the Dutch Civil Code, other information as required by Part 9 of Book 2 of the Dutch Civil Codeand the remuneration report in accordance with Sections 2:135b and 2:145 sub-section 2 of the Dutch Civil Code.

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5. Other Supplementary Information Including the Independent Auditor’s Report /Report on other legal and regulatory requirements
Engagement
We were appointed by the Annual General Meeting of as auditor of Airbus SE on 28 April 2016, as of the audit for the year 2016and have operated as statutory auditor since that date.

No prohibited non-audit services
We have not provided prohibited non-audit services as referred to in Article 5(1) of the EU Regulation on speciﬁc requirements
regarding statutory audit of public-interest entities.

Description of responsibilities for the Financial Statements
Responsibilities of the Board of Directors and the Audit Committee for the Financial Statements
The Board of Directors is responsible for the preparation and fair presentation of the Financial Statements in accordance with EUIFRS and Part 9 of Book 2 of the Dutch Civil Code. Furthermore, the Board of Directors is responsible for such internal control as
management determines is necessary to enable the preparation of the Financial Statements that are free from material misstatement,
whether due to fraud or error.
As part of the preparation of the Financial Statements, the Board of Directors is responsible for assessing the Company’s ability
to continue as a going concern. Based on the ﬁnancial reporting frameworks mentioned, the Board of Directors should prepare
the Financial Statements using the going concern basis of accounting unless the Board of Directors either intends to liquidate theCompany or to cease operations, or has no realistic alternative but to do so. The Board of Directors should disclose events andcircumstances that may cast signiﬁcant doubt on the Company’s ability to continue as a going concern in the Financial Statements.
The Audit Committee is responsible for overseeing the Company’s ﬁnancial reporting process.

Our responsibilities for the audit of the Financial Statements
Our objective is to plan and perform the audit engagement in a manner that allows us to obtain sufﬁcient and appropriate audit
evidence for our opinion.
Our audit has been performed with a high, but not absolute, level of assurance, which means we may not detect all material errors
and fraud during our audit.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably
be expected to inﬂuence the economic decisions of users taken on the basis of these Financial Statements. The materiality affects
the nature, timing and extent of our audit procedures and the evaluation of the effect of identiﬁed misstatements on our opinion.
We have exercised professional judgement and have maintained professional skepticism throughout the audit, in accordancewith Dutch Standards on Auditing, ethical requirements and independence requirements. The Our audit approach section above
includes an informative summary of our responsibilities and the work performed as the basis for our opinion.

Communication
We communicate with the Audit Committee regarding, amongst other matters, the planned scope and timing of the audit andsigniﬁcant audit ﬁndings, including any signiﬁcant ﬁndings in internal control that we identify during our audit. In this respect we also
submit an additional report to the Audit Committee in accordance with Article 11 of the EU Regulation on speciﬁc requirements
regarding statutory audit of public-interest entities. The information included in this additional report is consistent with our audit
opinion in this auditor’s report.
We provide the Audit Committee with a statement that we have complied with relevant ethical requirements regarding independence,and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence,
and where applicable, related safeguards.
From the matters communicated with the Audit Committee, we determine the key audit matters: those matters that were of mostsigniﬁcance in the audit of the Financial Statements. We describe these matters in our auditor’s report unless law or regulationprecludes public disclosure about the matter or when, in extremely rare circumstances, not communicating the matter is in the
public interest.

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Amsterdam, 17 February 2021
Ernst & Young Accountants LLP
signed by A.A. van Eimeren

Airbus / Financial Statements 2020123