Unaudited Condensed IFRS Consolidated
Financial Information of Airbus SE
for the year ended 31 December 2017

Unaudited Condensed IFRS Consolidated Financial Information of Airbus SE for the year ended 31 December 2017 ..... 1
Unaudited Condensed IFRS Consolidated Income Statements .......................................................................................... 2
Unaudited Condensed IFRS Consolidated Statements of Comprehensive Income ............................................................ 3
Unaudited Condensed IFRS Consolidated Statements of Financial Position...................................................................... 4
Unaudited Condensed IFRS Consolidated Statements of Cash Flows ............................................................................... 6
Unaudited Condensed IFRS Consolidated Statements of Changes in Equity..................................................................... 8
Notes to the Unaudited Condensed IFRS Consolidated Financial Statements as at 31 December 2017 ........................... 91.

The Company........................................................................................................................................................ 92.

Accounting policies ............................................................................................................................................... 93.

Acquisitions and disposals .................................................................................................................................. 11

4.

Segment information ........................................................................................................................................... 13

5.

Revenues and gross margin ............................................................................................................................... 14

6.

Research and development expenses ................................................................................................................ 14

7.

Share of profit from investments accounted for under the equity method and other income from investments .. 15

8.

Other income and other expenses ...................................................................................................................... 15

9.

Total finance costs .............................................................................................................................................. 15

10.

Income tax........................................................................................................................................................... 15

11.

Earnings per share .............................................................................................................................................. 15

12.

Intangible assets and property, plant and equipment .......................................................................................... 16

13.

Investments accounted for under the equity method........................................................................................... 16

14.

Other investments and other long-term financial assets ..................................................................................... 16

15.

Inventories........................................................................................................................................................... 16

16.

Trade receivables and trade liabilities ................................................................................................................. 17

17.

Provisions............................................................................................................................................................ 17

18.

Other financial assets and other financial liabilities ............................................................................................. 17

19.

Other assets and other liabilities ......................................................................................................................... 18

20.

Total equity.......................................................................................................................................................... 19

21.

Net cash .............................................................................................................................................................. 19

22.

Litigation and claims............................................................................................................................................ 21

23.

Number of employees ......................................................................................................................................... 24

24.

Events after the reporting date ............................................................................................................................ 24

Airbus SE
Unaudited Condensed IFRS Consolidated Financial Information
for the year ended 31 December 2017

Unaudited Condensed IFRS Consolidated Income Statements(In € million)

Note

2017

2016

Revenues

5

66,767

66,581(59,160)(61,317)

7,607

5,264

(872)

(997)

Cost of sales
Gross margin

5

Selling expenses(1,567)(1,726)

Research and development expenses

6(2,807)(2,970)

Other income

8

981

2,689

Other expenses

8

(336)

(254)

Share of profit from investments accounted for under the equity method

7

333

231

Other income from investments

7

82

21

3,421

2,258

Administrative expenses

Profit before finance costs and income taxes
Interest income

189

247

Interest expense

(517)

(522)

Other financial result

1,477

(692)
(967)

Total finance costs

9

1,149

Income taxes

10(1,693)

(291)

2,877

1,000

2,873

995

4

5

Profit for the period
Attributable to:Equity owners of the parent (Net income)Non-controlling interests
Earnings per share

€

€

Basic

11

3.71

1.29

Diluted

11

3.70

1.29

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

2

Airbus SE
Unaudited Condensed IFRS Consolidated Financial Information
for the year ended 31 December 2017

Unaudited Condensed IFRS Consolidated Statements of Comprehensive Income(In € million)

2017

2016

Profit for the period

2,877

1,000

Remeasurement of the defined benefit pension plans
Share of remeasurement of the defined benefit pension plansfrom investments accounted for under the equity method

116(1,649)61(102)

Income tax relating to items that will not be reclassified

(26)

365

Other comprehensive income
Items that will not be reclassified to profit or loss:

Items that may be reclassified to profit or loss:
Foreign currency translation differences for foreign operations
Change in fair value of cash flow hedges
Change in fair value of available-for-sale financial assets
Share of changes in other comprehensive income
from investments accounted for under the equity method

(526)

(174)

10,636

(247)

396

(53)

(3)

(35)

Income tax relating to items that may be reclassified(2,881)(7)

Other comprehensive income, net of tax

7,773(1,902)

Total comprehensive income of the period

10,650(902)

10,611

(917)

39

15

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

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

3

Airbus SE
Unaudited Condensed IFRS Consolidated Financial Information
for the year ended 31 December 2017

Unaudited Condensed IFRS Consolidated Statements of Financial Position
Note

2017

2016

Intangible assets

12

11,62912,068Property, plant and equipment

12

16,61016,9133

5

Investments accounted for under the equity method

13

1,678

1,608

Other investments and other long-term financial assets

14

4,204

3,655

Non-current other financial assets

18

2,980

976

Non-current other assets

19

2,295

2,358

3,598

7,557

21

10,944

9,897

53,94155,037(In € million)

AssetsNon-current assets

Investment property

Deferred tax assets
Non-current securities
Current assets
Inventories

15

31,46429,688Trade receivables

16

8,358

8,101

Current portion of other long-term financial assets

14

529

522

Current other financial assets

18

1,979

1,257

Current other assets

19

2,907

2,576

914

1,110

Current tax assets
Current securities

21

1,627

1,551

Cash and cash equivalents

21

12,016

10,14359,79454,948Assets and disposal group of assets classified as held for sale3

Total assets

4

202

1,148

113,937

111,133

Airbus SE
Unaudited Condensed IFRS Consolidated Financial Information
for the year ended 31 December 2017

Note

(In € million)

2017

2016

Equity and liabilities
Equity attributable to equity owners of the parent
Capital stock

775

773

Share premium

2,826

2,745

Retained earnings

7,007

4,987

Accumulated other comprehensive income

2,742(4,845)

Treasury shares

(2)

(3)

13,348

3,657

3

(5)

20

13,351

3,652

Non-current provisions

17

10,153

10,826Long-term financing liabilities

21

8,984

8,791

Non-current other financial liabilities

18

6,948

13,313

Non-current other liabilities

29

Non-controlling interests
Total equity (1)Liabilities
Non-current liabilities

17,19016,279Deferred tax liabilities

981

1,292

Non-current deferred income

199

288

44,45550,7896,143

Current liabilities
Current provisions

17

6,575

Short-term financing liabilities

21

2,212

1,687

Trade liabilities

16

13,444

12,532Current other financial liabilities

18

2,185

5,761

Current other liabilities

19

29,193

27,535

1,481

1,126

Current tax liabilities

935

917

56,02555,701

106991

Total liabilities

100,586

107,481

Total equity and liabilities

113,937

111,133

Current deferred income
Disposal group of liabilities classified as held for sale(1)

3

As of 31 December 2017, the accumulated other comprehensive income, previously classified within equity relating to assets and disposal groups
classified as held for sale, amounts to € 65 million.

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

5

Airbus SE
Unaudited Condensed IFRS Consolidated Financial Information
for the year ended 31 December 2017

Unaudited Condensed IFRS Consolidated Statements of Cash Flows
2017

2016

2,873

995

4

5

Interest income

(189)

(247)

Interest expense

517

522

Interest received

149

139

Interest paid

(501)

(378)

Income tax expense

1,693

291

Income tax paid

(152)

(559)

Depreciation and amortization

2,298

2,294

Valuation adjustments(1,755)

1,132

Results on disposals of non-current assets(773)(1,870)Results of investments accounted for under the equity method

(333)

(231)

Change in current and non-current provisions

805

1,321

Contribution to plan assets

(458)

(290)

266

1,245

Note

(In € million)

Operating activities:
Profit for the period attributable to equity owners of the parent (Net income)
Profit for the period attributable to non-controlling interests
Adjustments to reconcile profit for the period to cash provided by operating activities:

Change in other operating assets and liabilities: (1)(2,572)(3,477)-Trade receivables

621(1,215)-Trade liabilities

1,419

2,398

-Advance payments received

1,268

4,628

-Other assets and liabilities and others(470)(1,089)Cash provided by operating activities (1) (2)

4,444

4,369

(2,558)(3,060)

177

72

3

(23)

(120)

3

377

731

(913)

(691)

532

182

218

192

-Inventories

Investing activities:-Purchases of intangible assets, property, plant and equipment, investment property-Proceeds from disposals of intangible assets, property, plant and equipment,
investment property-Acquisitions of subsidiaries, joint ventures, businesses and non-controlling interests(net of cash)-Proceeds from disposals of subsidiaries (net of cash)-Payments for investments accounted for under the equity method, otherinvestments and other long-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-Disposals of non-current assets and disposal groups classified as assets held forsale and liabilities directly associated

893

1,527

(3,767)(2,280)-Proceeds from disposals of securities

2,534

2,617

Cash (used for) investing activities(2,530)(830)

3-Payments for investments in securities

Financing activities:
Increase in financing liabilities

21

1,703

3,297

Repayment of financing liabilities

21

(419)

(1,725)

Cash distribution to Airbus SE shareholders

20(1,043)(1,008)Dividends paid to non-controlling interests

20

(3)

(4)

Changes in capital and non-controlling interests

20

83

60

Share buyback

20

0

(736)

6

Airbus SE
Unaudited Condensed IFRS Consolidated Financial Information
for the year ended 31 December 2017

Note

(In € million)

Cash provided by (used for) financing activities

2017

2016

321

(116)

Effect of foreign exchange rate changes on cash and cash equivalents

(374)

60

Net increase in cash and cash equivalents (1)

1,861

3,483

Cash and cash equivalents at beginning of period (1)10,1606,677

21

12,021

10,160

thereof presented as cash and cash equivalents (1)21

12,016

10,143

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

3

5

17

Cash and cash equivalents at end of period (1)

(1)
(2)

Customer financing flows previously disclosed in separate line items on the face of the cash flow statement are now included within the cash flows
from “other assets/ liabilities and others”.
The 2017, cash provided by operating activities has been positively impacted by certain agreements reached with Airbus’ suppliers and customers
relating to the settlement of claims and negotiation on payment terms.

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

7

Airbus SE
Unaudited Condensed IFRS Consolidated Financial Information
for the year ended 31 December 2017

Unaudited Condensed IFRS Consolidated Statements of Changes in Equity
Equity attributable to equity holders of the parent
Accumulated othercomprehensive income
Availablefor-salefinancial Cash flow
assetshedgesForeigncurrencytranslation
adjustments

Treasuryshares

Total

Noncontrollinginterests

Total
equity

(303)

5,966

7

5,973

0

0

995

5

1,000

(289)

(175)

0

(1,912)

(65)

(289)

(175)

0

(917)

15

(902)

0

0

0

0

60

0

60

31

0

0

0

0

31

0

31

0

(1,008)

0

0

0

0

(1,008)

0

0

38

0

0

0

0

38

(23)

15

0

0

(2)

0

0

0

(511)

(513)

0

(513)

(14)

(797)

0

0

0

0

811

0

0

0

773

2,745

4,987

770

(7,153)

1,538

(3)

3,657

(5)

3,652

Profit for the period
Other comprehensive
incomeTotal comprehensive
income of the period

0

0

2,873

0

0

0

0

2,873

4

2,877

0

0

151

369

7,757

(539)

0

7,738

35

7,773

0

0

3,024

369

7,757

(539)

0

10,61139 10,650

Capital increase

2

81

0

0

0

0

0

83

0

83

Capital decrease
Share-based
payment (IFRS 2)
Cash distribution to
Airbus SE
shareholders /dividends paid to
non-controllinginterests
Equity transaction(IAS 27)
Change in noncontrolling interests
Change in treasury
sharesCancellation oftreasury shares
Balance at 31
December 2017

0

0

0

0

0

0

0

0

0

0

0

0

36

0

0

0

0

36

0

36

0

0

(1,043)

0

0

0

0

(1,043)

0

0

3

0

0

0

0

3

(28)

(24)

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

1

1

0

1

0

0

0

0

0

0

0

0

0

0

775

2,826

7,007

1,139

604

999

(2)

13,348(In € million)

Capital
stock

Share
premium

Retainedearnings

Balance at 1
January 2016

785

3,484

6,316

835

(6,864)

1,713

Profit for the period
Other comprehensive
incomeTotal comprehensive
income of the period

0

0

995

0

0

0

0

(1,383)

(65)

0

0

(388)

Capital increase
Share-based
payment (IFRS 2)
Cash distribution to
Airbus SE
shareholders /dividends paid to
non-controllinginterests
Equity transaction(IAS 27)
Change in treasury
sharesCancellation oftreasury shares
Balance at 31
December 2016

2

58

0

0

0

0

10 (1,902)(4) (1,012)(3) (1,046)

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

8

3 13,351

Airbus SE
Unaudited Condensed IFRS Consolidated Financial Information
for the year ended 31 December 2017

Notes to the Unaudited Condensed IFRS Consolidated Financial Statements as at 31
December 2017
1. The Company
The accompanying Unaudited Condensed IFRS Consolidated Financial Statements present the financial position and theresults of operations of Airbus SE, the “Company”, and its subsidiaries, 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. On 12 April 2017, the Company changed its name from Airbus Group SE to Airbus SE, following
approval at the Annual General Meeting. Therefore, the Company together with its subsidiaries is referred to as “Airbus”
and no longer the “Group”, and the segment formerly known as Airbus is referred to as “Airbus Commercial Aircraft”.
In this new set-up, Airbus retains Airbus Defence and Space and Airbus Helicopters as Divisions. In 2017, Airbus
continued to report under the existing reportable segments. The Company is listed on the European stock exchanges in
Paris, Frankfurt am Main, Madrid, Barcelona, Valencia and Bilbao. The Unaudited Condensed IFRS Consolidated
Financial Statements were authorised for issue by the Company’s Board of Directors on 14 February 2018.

2. Accounting policies
The Unaudited Condensed Consolidated Financial Statements have been prepared in accordance with International
Financial Reporting Standards (“IFRS”) issued by the International Accounting Standards Board (“IASB”) as endorsed by
the European Union (“EU”) as at 31 December 2017 and Part 9 of Book 2 of the Netherlands Civil Code. They areprepared and reported in euro (“€”) and all values are rounded to the nearest million appropriately. Due to rounding,numbers presented may not add up precisely to the totals provided and percentages may not precisely reflect theabsolute figures.
Use of estimates and judgment
In preparing Airbus’ Unaudited Condensed Consolidated Financial Statements, Airbus’ management makes assumptions
and estimates. The underlying assumptions used for the main estimates are similar to those described in Airbus’
Consolidated Financial Statements as of 31 December 2016. Changes in the underlying circumstances in light of new
information are described in the notes of the Unaudited Condensed Consolidated Financial Statements.
IFRS 15 “Revenue from contracts with customers”
In May 2014, the IASB issued IFRS 15 which establishes a single comprehensive framework for determining when torecognise revenue and how much revenue to recognise. IFRS 15 will replace the current revenue recognition standards
IAS 18 “Revenue” and IAS 11 “Construction contracts” and related interpretations.
Airbus will adopt the new standard on 1 January 2018, using the full retrospective transition method. Accordingly, thecomparative 2017 results included in the 2018 financial statements will be restated, and equity will be adjusted as of
1 January 2017. Airbus will elect practical expedients for completed contracts and contract modifications.
Airbus is completing the restatement of its comparative financial statements.
Airbus has estimated the impact that the initial application of IFRS 15 will have on its consolidated financial statements.
The estimated impact of the adoption of this standard is summarised below.
As of 1 January 2017:(In € billion)

EquityAs reported at
31 December 2016

Estimated adjustments due to theadoption of IFRS 15

Estimated adjusted opening
balance at 1 January 2017

3.7

(2.1)

1.6

9

Airbus SE
Unaudited Condensed IFRS Consolidated Financial Information
for the year ended 31 December 2017

The actual impacts may differ from the estimates above when adopting the standard as of 1 January 2018. The practicalimplementation on the Airbus’ accounting policies relating to IFRS 15 are subject to change until Airbus presents its first
financial statements that include the date of initial application.
IFRS 15 will not impact the overall profitability over the lifetime of contracts and the cash flows. As such IFRS 15
quantitative impacts on equity are phasing differences.
Revenue from construction contracts
Airbus has compared its current accounting policies and practices to the requirements of the new standard. As a result of
this analysis, Airbus expects that the adoption of IFRS 15 will have a significant impact on the timing of revenue
recognition on certain long-term construction contracts that are currently accounted for under IAS 11. The mostsignificant changes will result from the following:•

Several performance obligations will be identified instead of recognising a single contract margin under IAS11(e.g. A400M, NH90 contracts). In some cases, the over-time (e.g. PoC method) revenue recognition criteria are notfulfilled under IFRS 15. In particular, on A350 launch contracts, on A400M series production and certain NH90
contracts, revenue and production costs relative to the manufacture of aircraft will hence be recognised at a point oftime (e.g. upon delivery of the aircraft to the customer).

•

Under IFRS 15, measurement of the revenue will take into account variable consideration constraints in order toachieve high likelihood that a significant reversal of the recognised revenue will not occur in the future. The
constraint in assessing revenue at completion for some contracts will generate a decrease in recognised revenue.

•

Under IFRS15, for the application of the overtime method (PoC method), the measure of the progress towards
complete satisfaction of a performance obligations will be based on inputs (i.e. cost incurred) rather than on outputs(i.e. milestones achieved). At Airbus current long-term construction contracts progress is usually measured based on
milestones achieved (e.g. Tiger programme, satellites, orbital infrastructures). Under IFRS 15, Airbus will measureprogress of work performed using a cost-to-cost approach, whenever control of the work performed transfers to thecustomer over time.

Revenue from the sale of commercial aircraft
With respect to the commercial aircraft business, other than sales made under the A350 launch contracts describedabove, IFRS 15 will not change the timing of recognising revenue, which will continue to be recognised when thecustomer takes delivery of the aircraft.
IFRS 15 will impact the presentation of the revenue. Under IAS 18, Airbus recognizes revenues based on the amount of
its contracts with its customer, unless it has confirmation of the amount of the price concession. In contrast, IFRS 15
requires Airbus to estimate the amount of price concession in all cases and to treat the price concession as a reductionof revenue and cost of sales. Under IFRS 15, revenue and cost of sales will be decreased by the amount of theestimated concession granted by Airbus engine supplier to their customers. This change in presentation triggers anequal decrease between revenue and cost of sales for an amount of € 7.4 billion in 2017 with no impact on Gross
Margin, EBIT and on the Cash Flows of the company.
Impacts on the disclosures
IFRS 15 requires a disclosure of the unperformed performance obligations (represent obligations under binding contracts
which are not or not fully completed). In its 2018 financial statements, Airbus will elect the practical expedient which willallow disclosing the unperformed performance obligations as at 31 December 2018 without comparative figures.

10

Airbus SE
Unaudited Condensed IFRS Consolidated Financial Information
for the year ended 31 December 2017

3. Acquisitions and disposals
Acquisitions
On 16 October 2017, Airbus and Bombardier Inc. (“Bombardier”) signed an agreement that brings together Airbus’
global reach and scale with Bombardier’s newest, state-of-the-art jet aircraft family. Under the agreement, Airbus will
provide procurement, sales and marketing, and customer support expertise to the C Series Aircraft Limited Partnership(“CSALP”), the entity that manufactures and sells the C Series. At closing, Airbus will acquire a 50.01% interest in
CSALP. Bombardier and Investissement Québec will own approximately 31% and 19%, respectively. The transaction
has been approved by the Boards of Directors of both Airbus and Bombardier, as well as the Cabinet of the Governmentof Québec. The transaction remains subject to regulatory approvals, as well as other conditions usual in this type oftransaction.
On 9 March 2016, Airbus Commercial Aircraft acquired 100% of the shares of the Navtech Inc. Group (“Navtech”), a
leading global provider of flight operations solutions, and has recognised goodwill of € 104 million. The purchase priceallocation ended on 9 March 2017. No adjustment was made on the goodwill.
Navtech provides aviation services with a suite of flight operations products, aeronautical charts, navigation datasolutions, flight planning, aircraft performance and crew planning solutions. Navtech generates annual revenues ofapproximately US$ 40 million and employs over 250 employees, mainly based in Waterloo (Canada) and in Hersham
and Cardiff (UK).
Disposals
On 17 October 2017, Airbus and StandardAero Aviation Holdings, Inc signed a sale purchase agreement for Vector
Aerospace Holding SAS (“Vector”) which was closed on 3 November 2017. Vector is a global aerospace
maintenance, repair and overhaul company, providing quality support for turbine engines, components, and fixed androtary-wing aircraft. It generated revenues of € 638 million in 2016 and employs approximately 2,200 people in
22 locations. Airbus Helicopters received € 542 million and recognized a non-material gain which is reflected in otherincome.
On 28 February 2017, Airbus sold its defence electronics business, a leading global provider of mission-criticalsensors, integrated systems and services for premium defence and security applications mainly based in Ulm(Germany), to affiliates of KKR & Co. L.P. (the acquirer), a leading global investment firm. The German defence
electronics business was sold for € 823 million, Airbus Defence and Space recognised a net gain on sale of € 604 million.
The closing for the French defence electronics business will occur after full separation of the business sold from Airbus
other business activities and is expected to take place in 2018. The divestment is part of the strategic review of the
Airbus Defence and Space business portfolio. The assets and liabilities of this company were classified as a disposalgroup held for sale as of 31 December 2016. With respect to extending security clearance for the Airbus Defence andSpace business, Airbus made a 25.1% reinvestment into Hensoldt Holding Germany GmbH, a subsidiary of theacquirer which now holds the transferred business. The reinvestment took the form of an equity investment of € 6 million
and a shareholder loan of € 109 million. In addition, the reinvestment agreement provides for a combined put/call option
mechanism which is subject to full separation being achieved and will then allow the acquirer to take over Airbus’ equity
investment and shareholder loan at a pre-determined price at any time, and Airbus to sell them to the acquirer at thatprice after three years.
On 3 April 2017, Airbus sold its 49% stake in Atlas to Thyssen Krupp.
On 17 June 2015, Airbus Commercial Aircraft signed an agreement with Singapore-based ST Aerospace Ltd. (“STA”) tooffer passenger-to-freighter (“P2F”) conversion solutions for its A320 and A321 aircraft. Elbe Flugzeugwerke’s(“EFW”), Dresden (Germany), assets and liabilities were classified as disposal groups held for sale as of 31 December
2015. On 4 January 2016, STA acquired an additional 20% of the shares by way of a contribution in kind and a capitalincrease to EFW, and consequently, Airbus lost the control of EFW. Airbus retains 45% of the shares of EFW with11

Airbus SE
Unaudited Condensed IFRS Consolidated Financial Information
for the year ended 31 December 2017

significant influence. As per 2016 financial statements, Airbus Commercial Aircraft has recognised in other income a € 19
million gain during the year.
On 2 June 2016, Airbus DS Holding SAS (France) and Astrium International Holdings B.V. (Netherlands), as
beneficiaries, and a French private equity firm, Apax Partners, closed the sale of the business communications
entities. The assets and liabilities of these entities were previously classified as disposal groups held for sale. The gain
resulting from this transaction of € 146 million was recognised in other income (reported in Airbus Defence and Space
Division).
On 14 June 2016, Airbus Group SAS sold approximately 1.33 million shares in Dassault Aviation, around 62% toinstitutional investors and 38% to Dassault Aviation, at a price of € 950 per share. The total gain on these transactions
amounted to € 528 million recognised in other income (reported in “Other / HQ / Conso.”). The remaining investment,
representing 10% of Dassault Aviation’s share capital, is classified as other investments and measured at fair value (see“– Note 14: Other Investments and Other Long-Term Financial Assets”). The resulting gain of € 340 million wasrecognised in other income (reported in “Other / HQ /Conso.”) in 2016. The Company also issued bonds exchangeable in
Dassault Aviation shares (see “– Note 21: Net Cash”). In the event of exchange in full of the bonds, Airbus will have fully
disposed of its Dassault Aviation stake.
On 20 May 2016, Airbus and Safran signed the second phase of the Master Agreement enabling the joint venture
ArianeGroup (formerly Airbus Safran Launchers, “ASL”) to be fully equipped for all design, development, production andcommercial activities related to civil and military launchers and associated propulsion systems. During the second phase,
Safran and Airbus integrated within the joint venture all the remaining contracts, assets and industrial resources, related
to space launchers and associated propulsion systems. On 30 June 2016, Airbus contributed the second phase assets
and liabilities in exchange for shares issued by Airbus Safran Launchers Holding, and also sold additional assets in
exchange for € 750 million in cash. In 2016, Airbus participation in ArianeGroup was accounted for at-equity for a € 677
million amount. In 2016, the loss of control in the business resulted in a capital gain of € 1,175 million recognised in otherincome (reported in Airbus Defence and Space Division). Airbus and Safran finalised the respective contribution balance
sheet in the third quarter 2016 in alignment with the provision of the Master Agreement. On 31 December 2016, thetransfer of the 34.68% of CNES’s stake in Arianespace to ArianeGroup was completed. ArianeGroup holds 74% of theshares of Arianespace. This change in the shareholder mix at Arianespace finalises the creation of a new launcher
governance in Europe.
The ArianeGroup joint venture transaction was finalised in 2017 with a final agreement on Airbus contribution balance
sheet leading to € 52 million additional capital gain on the period. The purchase price allocation was completed as of 30
June 2017. The purchase price was mainly allocated to identified intangible assets for a € 395 million value, a € 16 million
depreciation expense net of tax was recognised in 2017 (2016: € 7 million based on preliminary allocation). The
remaining goodwill is part of the value of the investment accounted for under the equity method in ArianeGroup(see “– Note 13: “Investments Accounted for under the Equity Method”).
Assets and disposal groups classified as held for sale
As of 31 December 2017, Airbus accounted for assets and disposal groups of assets classified as held for sale in theamount of € 202 million (2016: € 1,148 million). Disposal group of liabilities classified as held for sale as of 31 December
2017 amount to € 106 million (2016: € 991 million). The assets and disposal groups classified as held for sale are mainly
related to assets and liabilities from non-core businesses planned to be sold under the strategic portfolio review within
Airbus Defence and Space.

12

Airbus SE
Unaudited Condensed IFRS Consolidated Financial Information
for the year ended 31 December 2017

4. Segment information
Airbus operates in three reportable segments which reflect the internal organisational and management structure
according to the nature of the products and services provided.
•

Airbus Commercial Aircraft — Development, manufacturing, marketing and sale of commercial jet aircraft of morethan 100 seats; aircraft conversion and related services; development, manufacturing, marketing and sale ofregional turboprop aircraft and aircraft components.

•

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

•

Airbus Defence and Space — Military Aircraft designs, develops, delivers, and supports military aircraft such ascombat, mission, transport and tanker aircraft as well as Unmanned Aerial systems and their associated services.
Space Systems designs, develops delivers, and supports full range of civil and defence space systems fortelecommunications, earth observations, navigation, science and orbital systems. Communication, Intelligence &Security provides services around data processing from platforms, secure communication and cyber security. In
addition, the main joint ventures design, develop, deliver, and support missile systems as well as space launcher
systems.

The following table presents information with respect to Airbus’ business segments. As a rule, inter-segment transfers
are carried out on an arm’s length basis. Inter-segment sales predominantly take place between Airbus Commercial
Aircraft and Airbus Defence and Space and between Airbus Helicopters and Airbus Commercial Aircraft. The holding
function of Airbus, the Airbus Bank and other activities not allocable to the reportable segments, combined together withconsolidation effects, are disclosed in the column “Other / HQ / Conso.”.
Airbus uses EBIT as a key indicator of its economic performance.
Business segment information for the year ended 31 December 2017 is as follows:
AirbusCommercial
Aircraft

AirbusHelicopters

AirbusDefenceand Space

Total revenues

50,9586,450

10,804

68,212

55

68,267

Internal revenues

(919)

(476)

(100)

(1,495)(5)(1,500)50,0395,974

10,704

66,71750

66,767

3,428

337

212

3,977

(556)

3,421

(In € million)

Revenues
Profit before finance costs and income taxes(EBIT)

Total
segments

Other /
HQ /Conso.

Interest result

Consolidated(328)

Other financial result

1,477

Income taxes(1,693)

Profit for the period

2,877

Business segment information for the year ended 31 December 2016 is as follows:
AirbusCommercial
Aircraft

AirbusHelicopters

AirbusDefenceand SpaceTotal
segments

Other /
HQ /Conso.

Total revenues

49,237

6,652

11,85467,74357

67,800Internal revenues

(646)

(448)

(118)

(1,212)(7)(1,219)48,591

6,204

11,736

66,531

50

66,581

1,543

308

(93)

1,758

500

2,258

(In € million)

Revenues
Profit before finance costs and income taxes(EBIT)

Consolidated

Interest result(275)

Other financial result(692)

Income taxes(291)

Profit for the period

1,000
13

Airbus SE
Unaudited Condensed IFRS Consolidated Financial Information
for the year ended 31 December 2017

5. Revenues and gross margin
Revenues of € 66,767 million (2016: € 66,581 million) were stable compared to previous year. An increase at Airbus
Commercial Aircraft (€ +1,721 million) was mostly driven by higher deliveries of 718 aircraft (in 2016: 688 aircraft), and afavourable foreign exchange impact. A decrease at Airbus Defence and Space (€ -1,050 million) was mainly due toperimeter changes for defence activities (see “– Note 3: Acquisitions and Disposals”) and includes A400M programme
revenues of € 1,880 million (2016: € 1,702 million).
The gross margin increased by € +2,343 million to € 7,607 million compared to € 5,264 million in 2016, mainly at Airbus
Defence and Space and Airbus Commercial Aircraft, reflecting improved business performance. In 2017, there werelower net charges related to the A400M (€ 1,299 million, compared to € 2,210 million in 2016) and A350 XWB
programmes (no charge, compared to € 385 million in 2016).
In 2017, Airbus Commercial Aircraft has delivered 78 A350 XWB aircraft. New order intakes, cancellations, delivery
postponements and other contractual agreements to the end of December 2017 have been reflected in the financial
statements.
The industrial ramp-up is progressing and associated risks continue to be closely monitored in line with the schedule,
aircraft performance and overall cost envelope, as per customer commitments. Despite the progress made, challenges
remain with recurring cost convergence as the ramp-up continues.
19 A400M aircraft were delivered in 2017. In total, 57 aircraft have been delivered as of 31 December 2017.
In 2017, Airbus continued with development activities toward achieving the revised capability roadmap.
As a result of the 2016 detailed contract reviews, Airbus Defence and Space had recorded a charge of € 2,210 million in
the fiscal year 2016. Given the order of magnitude of the cumulative programme loss, the Board of Directors mandated
the management in February 2017 to re-engage with customers to cap the remaining exposure.
In 2017, Airbus entered into discussions with OCCAR and the customer Nations that resulted in the signature of a
Declaration of Intent (“DOI”) on 7 February 2018 agreeing on a global re-baselining of the contract, including a revised
aircraft delivery schedule, an updated technical capability roadmap and a revised retrofit schedule. The DOI represents
an important step towards reaching a contractually binding agreement also mitigating the commercial exposure whilesatisfying customer needs with regard to capabilities and availability of the aircraft.
A detailed review of the program concluded in the fourth quarter of 2017 including an estimate of the financial impacts of
the above mentioned adaptations on schedule, capabilities and retrofit results in an update of the loss making contract
provision of € 1,299 million for the year 2017 (thereof € 1.149 million in the fourth quarter 2017). Airbus’ remaining
exposure going forward is expected to be more limited. Risks remain on development of technical capabilities and theassociated costs, on securing sufficient export orders in time, and on cost reductions as per the revised baseline. Airbus
intends to turn the DOI into a firm contract within 2018.
The A400M contractual SOC 1, SOC 1.5, SOC 2, SOC 2.5 and SOC 3 development milestones remain to be achieved.
SOC 1 fell due end October 2013, SOC 1.5 fell due end December 2014, SOC 2 end of December 2015 and SOC 2.5
end of October 2017. The associated termination rights became exercisable by OCCAR on 1 November 2014, 1 January
2016, and 1 January 2017, respectively. Management judges that it is highly unlikely that any of these termination rights
will be exercised.

6. Research and development expenses
Research and development expenses decreased by -5.5% primarily reflecting R&D activities on the A350 XWB
programme at Airbus Commercial Aircraft. In addition, an amount of € 219 million of development costs has been
capitalised, mainly related to the A330 Neo and H160 programmes.

14

Airbus SE
Unaudited Condensed IFRS Consolidated Financial Information
for the year ended 31 December 2017

7. Share of profit from investments accounted for under the equity method and other income frominvestments
Share of profit from investments under the equity method and other income from investments increased by € 163
million to € 415 million compared to € 252 million in 2016.

8. Other income and other expenses
Other income decreased by € -1,708 million to € 981 million compared to € 2,689 million in 2016. In 2017, it mainly
includes the capital gain of € 604 million from the sale of the defence electronics business. In 2016, it mainly included thecapital gain of € 1,175 million following the completion of the creation of ArianeGroup, the capital gain from the sale ofDassault Aviation shares of € 528 million and the revaluation at fair value of the remaining investment in Dassault
Aviation for € 340 million. For more details, please see “– Note 3: Acquisitions and Disposals”.
Other expenses increased to € -336 million compared to € -254 million in 2016. It includes the arbitral award relating to
the Republic of China (Taiwan). For more details please see “– Note 22: Litigation and Claims”.

9. Total finance costs
Total finance costs improved by € 2,116 million to € 1,149 million compared to € -967 million in 2016. This is mainly
related to a positive impact from both foreign exchange valuation of monetary items of €+439 million and the revaluationof financial instruments of € +743 million. In addition, it included the impact of the decrease in the European
Governments refundable advances primarily related to the A380 programme (see “– Note 18: Other Financial Assets andOther Financial Liabilities”).

10. Income tax
The income tax expense of € -1,693 million (2016: € -291 million) corresponds to an effective tax rate of 37.1% (2016:22.5%).
In 2017, the effective tax rate was mainly impacted by non-realised tax losses in the period leading to additional deferred
tax asset impairment. It also included an additional income tax charge related to the Corporate French surtax and the
reduction in deferred tax asset due to the income tax rate decrease in the US, both enacted end of 2017. This waspartially compensated by the disposal of the defence electronics business, which is taxed at a reduced rate. Without
these impacts, the effective tax rate would be approximately 26%.
In 2016, the effective tax rate was due to the sale of shares of Dassault Aviation and the creation of ASL, both subject tospecific tax treatment. These were partially compensated by additional income tax charges including the planned
reduction of the income tax rate in France from 34.43% to 28.92% enacted in December 2016. Without these impacts,
the effective tax rate would be approximately 28%.

11. Earnings per share

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

2017

2016

€ 2,873 million€ 995 million

773,772,702

773,798,837€ 3.71€ 1.29Diluted earnings per share – Airbus’ categories of dilutive potential ordinary shares are share-settled Performance
Units relating to Long-Term Incentive Plans (“LTIP”) and the convertible bond issued on 1 July 2015. In 2016, it also
included the last Stock Option Plan (“SOP”) expired in December 2016. During 2017, the average price of theCompany’s shares exceeded the exercise price of the share-settled Performance Units and therefore 505,536 shares(in 2016: 287,807 shares) were considered in the calculation of diluted earnings per share. The dilutive effect of the15Airbus SE
Unaudited Condensed IFRS Consolidated Financial Information
for the year ended 31 December 2017

convertible bond was also considered in the calculation of diluted earnings per share in 2017, by adding back € 7 millionof interest expense to the profit for the period attributable to equity owners of the parent (2016: € 7 million) and byincluding 5,022,990 of dilutive potential ordinary shares.

Profit for the period attributable to equity owners of the parent (Net income)

2017

2016

€ 2,880 million€ 1,002 million

779,301,228

779,109,634€ 3.70€ 1.29Weighted average number of ordinary shares (diluted) (1)Diluted earnings per share(1) Dilution assumes conversion of all potential ordinary shares.

12. Intangible assets and property, plant and equipment
Intangible assets decreased by € -439 million to € 11,629 million (2016: € 12,068 million) mainly due to the disposal of
Vector. Intangible assets mainly relate to goodwill of € 9,141 million (2016: € 9,425 million).
The annual impairment tests performed in 2017 led to no impairment charge.
The revised commercial outlook for the A380 programme has not triggered any impairment losses for capitalised
development costs or jigs and tools dedicated to the programme.
Property, plant and equipment decreased by € -303 million to € 16,610 million (2016: € 16,913 million) mainly at Airbus
Helicopters (€ -210 million), primarily driven by the disposal of Vector.

13. Investments accounted for under the equity method
Investments accounted for under the equity method increased by € 70 million to € 1,678 million (2016: € 1,608
million) and mainly include the equity investments in ArianeGroup, MBDA and ATR.

14. Other investments and other long-term financial assets(In € million)

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

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

2016
2,091
1,564
3,655
522
4,177

Other investments mainly comprise Airbus’ participations. The significant participations at 31 December 2017 include
the remaining investment in Dassault Aviation (Airbus share: 9.93%, 2016: 10.0%) amounting to € 1,071 million (2016:€ 876 million).
Other long-term financial assets and the current portion of other long-term financial assets encompass otherloans in the amount of € 1,521 million and € 1,147 million as of 31 December 2017 and 2016, and the sales financeactivities in the form of finance lease receivables and loans from aircraft financing.

15. Inventories
Inventories of € 31,464 million (2016: € 29,688 million) increased by € +1,776 million. This is driven by Airbus
Commercial Aircraft (€ +2,354 million), and mainly reflects an increase in work in progress associated with A350 XWB
ramp-up. This increase was partly compensated by a decrease in Airbus Helicopters (€ -455 million), mainly related tothe disposal of Vector (see “– Note 3: Acquisitions and Disposals”).

16Airbus SE
Unaudited Condensed IFRS Consolidated Financial Information
for the year ended 31 December 2017

16. Trade receivables and trade liabilities
The trade receivables of 8,358 million (2016: € 8,101 million) increased by € +257 million, mainly in Airbus Commercial
Aircraft.
The trade liabilities of € 13,444 million (2016: € 12,532 million) increased by € +912 million, mainly in Airbus
Commercial Aircraft.

17. Provisions
The majority of other provisions are generally expected to result in cash outflows during the next 1 to 12 years.
31 December
2017
8,361
8,367
16,728
10,153
6,575(In € million)

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

2016
8,656
8,313
16,96910,826
6,143

Provisions for pensions decreased mainly due to contributions made into the various pension vehicles and the strong
performance of plan assets.
Other provisions are presented net of programme losses against inventories (see “– Note 15: Inventories”).
A restructuring provision associated with the re-organisation of Airbus of € 160 million was recorded at year-end 2016,
following the communication of the plan to the employees and the European Works Council in November 2016. The
French social plan was agreed between Airbus and the works council in June 2017. The German social plan was agreed
between Airbus and the works councils in September 2017, however the reconciliation of interest is still underdiscussion.
In Airbus Helicopters, the restructuring plan launched in 2016 was signed by the three representative trade unions andvalidated by the Work Administration Agency (DIRECCTE) in March 2017.
An H225 Super Puma helicopter was involved in an accident on 29 April 2016. Management is cooperating fully with theauthorities to determine the precise cause of the accident. An estimate of the related net future costs has been preparedand is included in other provisions.

18. Other financial assets and other financial liabilities
Other Financial Assets
31 December(In € million)

2017

2016

Positive fair values of derivative financial instruments

2,901

893

79

83

2,980

976

Receivables from related companies

992

517

Positive fair values of derivative financial instruments

663

258

Others324

482

Total current other financial assets

1,979

1,257

Total

4,959

2,233

OthersTotal non-current other financial assets

17

Airbus SE
Unaudited Condensed IFRS Consolidated Financial Information
for the year ended 31 December 2017

Other Financial Liabilities
31 December(In € million)

2017

2016

Liabilities for derivative financial instruments

1,127

6,544

European Governments refundable advances

5,537

6,340

283

429

Total non-current other financial liabilities

6,948

13,313Liabilities for derivative financial instruments

1,144

4,476

European Governments refundable advances

364

730

Liabilities to related companies

334

116

Others343

439

Total current other financial liabilities

2,185

5,761

Total

9,133

19,074

Others

The total net fair value of derivative financial instruments improved by € +11,162 million to € +1,293 million (2016:€ -9,869 million) as a result of the devaluation of the US dollar versus the euro associated with the mark to market
valuation of the hedge portfolio.
As of 31 December 2017, the total hedge portfolio with maturities up to 2023 amounts to US$ 88.7 billion (2016: US$
102.4 billion) and covers a major portion of the foreign exchange exposure expected over the period of the operativeplanning. The average US$/€ hedge rate of the US$/€ hedge portfolio until 2023 amounts to US$/€ 1.23 (2016:
US$/€ 1.25) and for the US$/£ hedge portfolio until 2023 amounts to US$/£ 1.43 (2016: US$/£ 1.49).
The European Government refundable advances decreased by € -1,169 million to € 5,901 million (2016: € 7,070 million),primarily related to the update of the valuation of refundable advances from European Governments on A380 programme
to reflect the revised commercial outlook of the programme and current status of discussions with Nations on RLI
agreements restructuring. The corresponding impact is recorded in the financial result (see “– Note 9: Total Finance
Costs”).

19. Other assets and other liabilities
Other Assets
31 December(In € million)

2017

2016

Prepaid expenses

2,210

2,265

86

93

Total non-current other assets

2,295

2,358

Value added tax claims

1,892

1,589

Prepaid expenses

639

552

Others376

435

Total current other assets

2,907

2,576

Total

5,202

4,934

Others18

Airbus SE
Unaudited Condensed IFRS Consolidated Financial Information
for the year ended 31 December 2017

Other Liabilities
31 December(In € million)

Customer advance payments

2017

2016

16,65915,714531

565

Total non-current other liabilities

17,19016,279Customer advance payments

25,284

24,115

Tax liabilities (excluding income tax)

1,397

1,047

Others

2,512

2,373

Total current other liabilities

29,193

27,535

Total

46,38343,814

Others

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

Issued as at 1 January
Issued for ESOP

2017

2016

772,912,869

785,344,784

1,643,193

1,474,716

Issued for exercised options

0

224,500

Cancelled

0(14,131,131)

774,556,062

772,912,869

Issued as at 31 December
Treasury shares as at 31 December(129,525)(184,170)

Outstanding as at 31 December

774,426,537

772,728,699

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 € 13,348 million(2016: € 3,657 million) representing an increase of € +9,691 million. This is due to an increase in other comprehensive
income of € +7,738 million, principally related to the mark to market revaluation of the hedge portfolio of € +7,757 million,
and a net income for the period of € +2,873 million, partly offset by a dividend payment of € -1,043 million (€ 1.35 pershare).
The non-controlling interests (“NCI”) from non-wholly owned subsidiaries increased to € 3 million as of 31 December
2017 (2016: € -5 million). These NCI do not have a material interest in Airbus’ activities and cash flows. This increase ismainly related to the mark to market revaluation of the hedge portfolio.

21. Net cash
The net cash-position provides financial flexibility to fund Airbus’ operations, to react to business needs and risk profileand to return capital to the shareholders.
31 December
2017

2016

Cash and cash equivalents

12,016

10,143Current securities

1,627

1,551

Non-current securities

10,944

9,897

Gross cash position

24,587

21,591

Short-term financing liabilities(2,212)(1,687)Long-term financing liabilities(8,984)(8,791)

Total

13,391

11,113(In € million)

19

Airbus SE
Unaudited Condensed IFRS Consolidated Financial Information
for the year ended 31 December 2017

The net cash position on 31 December 2017 was € 13,391 million (2016: € 11,113 million) with a gross cash position of€ 24,587 million (2016: € 21,591 million).
Cash and cash equivalents
Cash and cash equivalents are composed of the following elements:
31 December(In € million)

2017

2016

Bank account and petty cash

3,672

3,100

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

6,256

5,513

Short-term securities (available-for-sale)

2,085

1,535

OthersTotal cash and cash equivalents
Recognised in disposal groups classified as held for sale
Recognised in cash and cash equivalents

8

12

12,021

10,1605

1712,016

10,143Only securities with a maturity of three months or less from the date of the acquisition, that are readily convertible to
known amounts of cash and which are subject to an insignificant risk of changes in value, are recognised in cash
equivalents.
Securities
Airbus’ security portfolio amounts to € 12,571 million and € 11,448 million as of 31 December 2017 and 2016,
respectively. The security portfolio contains a non-current portion of available-for-sale-securities of € 10,944 million(in 2016: € 9,897 million) and a current portion of available-for-sale-securities of € 1,627 million (in 2016: € 1,551 million).
Financing liabilities
Not exceeding 1 year

Over 1 year up to 5 years

More than 5 years

Total

Bonds

512

1,524

5,027

7,063

Liabilities to financial institutions

290

1,397

325

2,012

Loans

144

200

185

529

Liabilities from finance leases

17

139

186

342

Others (1)

1,249

1

0

1,250

31 December 2017

2,212

3,261

5,723

11,196

0

1,581

4,432

6,013

Liabilities to financial institutions

351

1,573

499

2,423

Loans

332

213

118

663

Liabilities from finance leases

15

154

220

389

Others (1)

989

1

0

990

1,687

3,522

5,269

10,478(In € million)

Bonds

31 December 2016(1) Included in “others” are financing liabilities to joint ventures.

Long-term financing liabilities, mainly comprising bonds and liabilities to financial institutions, increased by€ 193 million to € 8,984 million (2016: € 8,791 million). The increase in long-term financing liabilities is mainly related tothe issuance of bonds. The increase in bonds corresponds principally to bonds issued on 10 April 2017, for a total of
US$ 1.5 billion, with a 10 year-maturity tranche of US$ 750 million at fixed coupon of 3.150%, and a 30 year-maturity
tranche of US$ 750 million at a fixed coupon of 3.950%.
Short-term financing liabilities increased by € 525 million to € 2,212 million (2016: € 1,687 million). The increase in
short-term financing liabilities is mainly related to the reclassification of an EMTN bond from long-term to short term due
to maturity in September 2018.

20

Airbus SE
Unaudited Condensed IFRS Consolidated Financial Information
for the year ended 31 December 2017

22. Litigation and claims
Airbus is involved from time to time in various legal and arbitration proceedings in the ordinary course of its business, themost significant of which are described below. Other than as described below, Airbus 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 Airbus’ financial position or profitability.
If the Company concludes that the disclosures relative to contingent liabilities can be expected to prejudice seriously its
position in a dispute with other parties, the Company limits its disclosures to the nature of the dispute.
WTO
Although Airbus is not a party, Airbus is supporting the European Commission in litigation before the WTO. Following its
unilateral withdrawal from the 1992 EU-US Agreement on Trade in Large Civil Aircraft, the US lodged a request on
6 October 2004 to initiate proceedings before the WTO. On the same day, the EU launched a parallel WTO case against
the US in relation to its subsidies to Boeing. On 19 December 2014, the European Union requested WTO consultations
on the extension until the end of 2040 of subsidies originally granted by the State of Washington to Boeing and other US
aerospace firms until 2024.
On 1 June 2011, the WTO adopted the Appellate Body’s final report in the case brought by the US assessing funding toAirbus Commercial Aircraft from European governments. On 1 December 2011, the EU informed the WTO that it had
taken appropriate steps to bring its measures fully into conformity with its WTO obligations, and to comply with the
WTO’s recommendations and rulings. Because the US did not agree, the matter is now under WTO review pursuant to
WTO rules.
On 23 March 2012, the WTO adopted the Appellate Body’s final report in the case brought by the EU assessing funding
to Boeing from the US. On 23 September 2012, the US informed the WTO that it had taken appropriate steps to bring its
measures fully into conformity with its WTO obligations, and to comply with the WTO’s recommendations and rulings.
Because the EU did not agree, the matter is now under WTO review pursuant to WTO rules.
Exact timing of further steps in the WTO litigation process is subject to further rulings and to negotiations between the US
and the EU. Unless a settlement, which is currently not under discussion, is reached between the parties, the litigation is
expected to continue for several years.
GPT
Prompted by a whistleblower’s allegations, Airbus conducted internal audits and retained PricewaterhouseCoopers(“PwC”) to conduct an independent review relating to GPT Special Project Management Ltd. (“GPT”), a subsidiary that
Airbus acquired in 2007. The allegations called into question a service contract entered into by GPT prior to its
acquisition by Airbus, relating to activities conducted by GPT in Saudi Arabia. PwC’s report was provided by Airbus to the
UK Serious Fraud Office (the “SFO”) in March 2012. In the period under review and based on the work it undertook,
nothing came to PwC’s attention to suggest that improper payments were made by GPT. In August 2012, the SFO
announced that it had opened a formal criminal investigation into the matter. Airbus is in continuing engagement with theauthorities.
Eurofighter Austria
In March 2012, the Munich public prosecutor, following a request by the Vienna public prosecutor, launched a criminal
investigation into alleged bribery, tax evasion and breach of trust against 16 individuals, among them former and current
employees of EADS Deutschland GmbH (renamed on 1 July 2014 Airbus Defence and Space GmbH) and Eurofighter
Jagdflugzeug GmbH. The proceedings are related to the sale of Eurofighter aircraft to the Republic of Austria in 2003.
After having been informed of the investigation in 2012, Airbus retained the law firm Clifford Chance to conduct an
independent fact finding review. Upon concluding its review, Clifford Chance presented its fact finding report to Airbus in21

Airbus SE
Unaudited Condensed IFRS Consolidated Financial Information
for the year ended 31 December 2017

December 2013. Airbus provided the report to the Munich public prosecution. Airbus has been fully cooperating with theauthorities. Regarding the question of deductibility of payments made in connection with the Eurofighter Austria
campaign, Airbus Defence and Space GmbH settled with the tax authorities in August 2016.
Since the result of the investigation by the public prosecution did not confirm the allegations of bribery, the Munich publicprosecution (Staatsanwaltschaft München I), in order to conclude the investigation in relation to Airbus Defence andSpace GmbH (Company), has issued an administrative penalty notice against the Company under the German Act on
Administrative Misdemeanours (“Ordnungswidrigkeitengesetz”). The notice is based on the allegation of a negligent
breach of supervisory duties of non-identified members of the Company’s former management. The notice alleges thatformer management negligently failed to ensure proper internal controls that would have prevented employees frommaking payments to business partners without proven documented services. The monetary penalty amounts to € 81.25
million (comprising an administrative fine of € 250,000 and € 81 million of disgorged profits). The notice explicitly
acknowledges the efforts of Airbus and its management to successfully install a completely overhauled compliancesystem starting in 2012. The Company, supported by its direct group shareholders and ultimately Airbus SE, has waived
any remedy against the notice.
In February 2017, the Austrian Federal Ministry of Defence raised criminal allegations against Airbus Defence and SpaceGmbH and Eurofighter Jagdflugzeug GmbH for wilful deception and fraud in the context of the sale of the Eurofighter
aircraft to Austria and respective damage claims. After the Austrian Federal Ministry of Defence raised its criminal
allegations, the Austrian public prosecutor opened an investigation against Airbus Defence and Space GmbH,
Eurofighter Jagdflugzeug GmbH and former and current employees of the two entities. On 18 September 2017, Airbus
filed a submission to the Vienna Public Prosecutor in response to the allegations of deception in the procurement ofEurofighter combat aircraft made by the Austrian Defence Minister. Airbus is cooperating fully with the authorities.
Investigation by the UK SFO and France’s PNF
In the context of review and enhancement of its internal compliance improvement programme, Airbus discovered
misstatements and omissions relating to information provided in respect of third party consultants in certain applications
for export credit financing for Airbus customers. In early 2016, Airbus informed the UK, German and French Export Credit
Agencies (“ECAs”) of the irregularities it had discovered. Airbus made a similar disclosure to the UK Serious Fraud Office(“SFO”). In August 2016, the SFO informed Airbus that it had opened an investigation into allegations of fraud, bribery
and corruption in the civil aviation business of Airbus relating to irregularities concerning third party consultants (business
partners). In March 2017, France’s Parquet National Financier (“PNF”) informed Airbus that it had also opened apreliminary investigation into the same subject and that the two authorities would act in coordination going forward.
Airbus is cooperating fully with both authorities including in respect of potential issues across Airbus' business. As part ofAirbus' engagement with the US authorities, the latter have requested information relating to conduct forming part of the
SFO/PNF investigation that could fall within US jurisdiction. Airbus is cooperating with the US authorities in close
coordination with the SFO and PNF. The SFO and PNF investigations and any penalties potentially levied as a result
could have negative consequences for Airbus. The potential imposition of any monetary penalty (and the amount thereof)or other sanction including tax liability arising from the SFO and PNF investigations will depend on the ultimate factualand legal findings of the investigation, and could have a material impact on the financial statements, business andoperations of Airbus. However, at this stage it is too early to determine the likelihood or extent of any such possible
consequence. Investigations of this nature could also result in (i) civil claims or claims by shareholders against Airbus (ii)adverse consequences on Airbus’ ability to obtain or continue financing for current or future projects (iii) limitations on theeligibility of group companies for certain public sector contracts and/or (iv) damage to Airbus’ business or reputation via
negative publicity adversely affecting Airbus’ prospects in the commercial market place.

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Airbus SE
Unaudited Condensed IFRS Consolidated Financial Information
for the year ended 31 December 2017

ECA Financing
The financing environment remains healthy. A high level of liquidity is available in the market at good rates for our
attractive portfolio of products. In 2017, ECA financing had not been made available to Airbus but Airbus and the ECAs
have now reached agreement on a process under which we are able to resume making applications for ECA-backed
financing for our customers across the group on a case-by-case basis. We anticipate a return to ECA cover in 2018 for alimited number of transactions while the level of appetite for commercial financing remains high.
Other Investigations
In 2014, the Munich public prosecutor investigated potential irregularities in relation to a project of Tesat-Spacecom
GmbH & Co. KG ”). The Munich public prosecutor launched administrative proceedings in the context of this investigation
against Tesat-Spacecom GmbH & Co. KG. In January 2018 the public prosecutor terminated the investigation against
individuals as well as the administrative fine procedure relating to Tesat-Spacecom GmbH & Co. KG.
In April 2017, the Munich public prosecutor terminated administrative proceedings against former EADS DeutschlandGmbH (now Airbus Defence and Space GmbH) with regard to border security projects in Romania and Saudi Arabia.
Already in 2016, corresponding investigations against former and current employees of the EADS group were
terminated.
Airbus is cooperating with a judicial investigation in France related to Kazakhstan. Airbus is not a party to theseproceedings. Airbus is cooperating with French judicial authorities pursuant to a request for mutual legal assistancemade by the government of Tunisia in connection with historical aircraft sales.
Following a review of its US regulatory compliance procedures, Airbus has discovered and subsequently informed
relevant US authorities of its findings concerning certain inaccuracies in filings made with the US Department of State
pursuant to Part 130 of the US International Traffic in Arms Regulations (“ITAR”) (a US export control regulation). Airbus
is cooperating with the US authorities. Airbus is unable to reasonably estimate the time it may take to resolve the matteror the amount or range of potential loss, penalty or other government action, if any, that may be incurred in connection
with this matter.
Review of Business Partner Relationships
In light of regulatory investigations and commercial disputes, including those discussed above, Airbus has determined toenhance certain of its policies, procedures and practices, including ethics and compliance and export control. Airbus isaccordingly in the process of revising and implementing improved procedures, including those with respect to its
engagement of consultants and other third parties, in particular in respect of sales support activities and is conducting
enhanced due diligence as a pre-condition for future or continued engagement and to inform decisions on corresponding
payments. Airbus engaged legal, investigative, and forensic accounting expertise of the highest calibre to undertake acomprehensive review of all relevant third party business consultant relationships and related subject matters. Airbus
believes that these enhancements to its controls and practices will best position it for the future, particularly in light ofadvancements in regulatory standards. Several consultants and other third parties have initiated commercial litigation
and arbitration against Airbus seeking relief. The comprehensive review and these enhancements of its controls andpractices has led to additional commercial litigation and arbitration against Airbus and may lead to other civil law orcriminal law consequences in the future, which could have a material impact on the financial statements, however at thisstage it is too early to determine the likelihood or extent of any liability.
Commercial Disputes
In May 2013, Airbus was notified of a commercial dispute following the decision taken by Airbus to cease a partnershipfor sales support activities in some local markets abroad. Airbus believes it has solid grounds to legally object to thealleged breach of a commercial agreement. However, the consequences of this dispute and the outcome of theproceedings cannot be fully assessed at this stage. The arbitration will not be completed until 2018 at the earliest.
23

Airbus SE
Unaudited Condensed IFRS Consolidated Financial Information
for the year ended 31 December 2017

In the course of another commercial dispute, Airbus received a statement of claim by the Republic of China (Taiwan)
alleging liability for refunding part of the purchase price of a large contract for the supply of missiles by subsidiary Matra
Défense S.A.S., which the customer claims it was not obliged to pay. An arbitral award was rendered on 12 January
2018 with a principal amount of € 104 million plus interest and costs against Matra Défense S.A.S. Airbus is studying theaward and considering the next steps.

23. Number of employees

AirbusAirbusCommercial

AirbusDefence

Total

AircraftHelicopters

and Spacesegments

Other / HQ

Consolidated

31 December 2017

74,542

20,10832,171

126,8212,621

129,442

31 December 2016

73,85222,50734,397130,756

3,026

133,782

24. Events after the reporting dateOn 7 February 2018, Airbus has signed a DOI with the A400M Launch Customer Nations (Germany, France, United
Kingdom, Spain, Turkey, Belgium, Luxemburg) defining the framework for achieving a mutually binding contract
amendment later in the year (see “– Note 5: Revenues and Gross Margin”).
On 9 February 2018, in line with standard airworthiness procedures the European Aviation Safety Agency (“EASA”) has
published an Emergency Airworthiness Directive following an issue identified on a limited number of recently delivered
Pratt & Whitney (“P&W”) GTF engines. Airbus has informed its affected A320neo family customers and operators.
Airbus and P&W are investigating the root cause of this recent finding.

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