Airbus Group SE

Financial
Statements 2015

1. AIRBUS GROUP SE – IFRS CONSOLIDATED FINANCIAL STATEMENTS
2. NOTES TO THE IFRS CONSOLIDATED FINANCIAL STATEMENTS
3. IFRS COMPANY FINANCIAL STATEMENTS
4. NOTES TO THE IFRS COMPANY FINANCIAL STATEMENTS
5. OTHER SUPPLEMENTARY INFORMATIONINCLUDING THE INDEPENDENT AUDITOR’S REPORT

1. AIRBUS GROUP SE – IFRS CONSOLIDATEDFINANCIAL STATEMENTS

Airbus Group SE
IFRS Consolidated Income Statements
for the years ended 31 December 2015 and 2014

(In € million)

Note

Revenues

10

64,45060,713

Cost of sales

10(55,599)(51,776)

Gross margin

10

8,851

8,937

11
13
13
12
12

(1,065)(1,586)(3,460)
474
(222)
1,016
54

(1,063)(1,538)(3,391)
330
(179)
840
55

Profit before finance costs andincome taxes

4,062

3,991

Interest income
Interest expense
Other financial result
Total finance costs

14

183
(551)
(319)
(687)

142
(462)
(458)
(778)

Income taxes

15

Selling expenses
Administrative expenses
Research and development expenses
Other income
Other expenses
Share of profit from investments accounted for under the equity method
Other income from investments

Profit for the period

2015

2014

(677)

(863)

2,698

2,350

2,696

2,343

2

7

€
3.43
3.42

€
2.99
2.99

Attributable to:Equity owners of the parent (Net income)Non-controlling interests
Earnings per share
Basic
Diluted16
16

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

Airbus Group SE
IFRS Consolidated Statements of Comprehensive Income
for the years ended 31 December 2015 and 2014
(In € million)

2015

2014

Profit for the period
Other comprehensive income
Items that will not be reclassified to profit or loss:
Remeasurement of the defined benefit liability (asset)
Remeasurement of the defined benefit liability (asset) from investments
using the equity method
Related tax on items that will not be reclassified to profit or loss

2,698

2,350

761

(2,034)

(36)
(235)

(131)
577

222
(866)
(3,833)366

244(6,748)
358
90

2

(19)

(142)
1,112
(2,649)(22)
1,961(5,724)

Total comprehensive income of the period

49(3,374)Attributable to:Equity owners of the parent
Non-controlling interests

76
(27)

(3,362)(12)

Items that will be reclassified to profit or loss:
Foreign currency translation differences for foreign operations
Effective portion of changes in fair value of cash flow hedges
Net change in fair value of cash flow hedges transferred to profit or loss
Net change in fair value of available-for-sale financial assets
Net change in fair value of available-for-sale financial assets
transferred to profit or loss
Changes in other comprehensive income from investments accounted
for using the equity method
Related tax on income and expense recognized directly in equity
Other comprehensive income, net of tax

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

Airbus Group SE
IFRS Consolidated Statements of Financial Position
at 31 December 2015 and 2014

(In € million)

Note

2015

2014

Intangible assets

17

12,55512,758Property, plant and equipment

18

17,127

16,321

AssetsNon-current assets

Investment property

66

67

Investments accounted for under the equity method

7

1,326

3,391

Other investments and other long-term financial assets

19

2,492

1,769

Non-current other financial assets

23

1,096

586

Non-current other assets

24

2,166

1,822

Deferred tax assets

15

6,759

5,717

Non-current securities

34

9,851
53,438

5,989
48,420Inventories

20

29,051

25,355Trade receivables

21

7,877

6,798

Current portion of other long-term financial assets

19

178

167

Current other financial assets

23

1,402

1,164

Current other assets

24

2,819

2,389

Current assets

Current tax assets
Current securities

34

Cash and cash equivalents

34

Assets and disposal group of assets classified as held for sale

6

Total assets

860

605

1,788

3,183

7,489

7,271

51,46446,932

1,779
106,681750
96,102Equity and liabilities
Equity attributable to equity owners of the parent
Capital stock

785

785

Share premium

3,484

4,500

Retained earnings

6,316

2,989

Accumulated other comprehensive income(4,316)(1,205)

Treasury shares

(303)

(8)

5,966

7,061

32

7
5,973

18
7,079

Non-current provisions

22

9,871

10,400Long-term financing liabilities

34

6,335

6,278

Non-current other financial liabilities

23

14,038

9,922

Non-current other liabilities

24

14,993

12,849Deferred tax liabilities

15

1,200

1,130

263
46,700267
40,846
5,712

Non-controlling interests
Total equity
Non-current liabilities

Non-current deferred income
Current liabilities
Current provisions

22

5,209

Short-term financing liabilities

34

2,790

1,073

Trade liabilities

21

11,763

10,183Current other financial liabilities

23

5,021

3,480

Current other liabilities

24

27,03725,222Current tax liabilities

908

738

Current deferred income

1,049

1,089

53,77747,497

231
100,708680
89,023

106,681

96,102

Disposal group of liabilities classified as held for sale
Total liabilities

6

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

Airbus Group SE
IFRS Consolidated Statements of Cash Flowsfor the years ended 31 December 2015 and 2014

(In € million)

Note

2015

2014

2,696

2,343

2

7

Interest income

(183)

(142)

Interest expense

551

462

Interest received

131

99

Interest paid

(388)

(303)

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:

Income tax expense

677

863

Income tax paid

(595)

(115)

2,466

2,150

Depreciation and amortization

9

Valuation adjustments

487

562

Results on disposals of non-current assets

(234)

(93)

(1,016)(840)

Results of investments accounted for under the equity method
Change in current and non-current provisions

(54)

415

Reimbursement from / contribution to plan assets

(217)

(462)

Change in other operating assets and liabilities:(723)(2,386)- Inventories(4,133)(3,252)- Trade receivables(1,378)(700)- Trade liabilities

1,603

130

- Advance payments received

3,752

1,715

- Other assets and liabilities

(417)

(387)

- Customer financing assets

(193)

124

- Customer financing liabilities

43

(16)

3,600

2,560

(2,924)(2,548)78

232

Cash provided by operating activities

Investments:- 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-controllinginterests (net of cash)

6

(13)

(47)

- Proceeds from disposals of subsidiaries (net of cash)- Payments for investments in associates, joint ventures,
other investments and other long-term financial assets- Proceeds from disposals of associates, joint ventures,
other investments and other long-term financial assets

6

127

(34)

(258)

(36)

1,731

1,083

- Dividends paid by companies valued at equity
Disposals of non-current assets and disposal groups classified
as assets held for sale and liabilities directly associated

7

34

143

Payments for investments in securities

127

0(7,151)(5,526)

Proceeds from disposals of securities

4,790

3,510

Cash (used for) investing activities(3,459)(3,223)

Increase in financing liabilities

34.3

1,254

2,038

Repayment of financing liabilities

34.3

(262)

(1,108)32

Cash distribution to Airbus Group SE shareholders

(945)

(587)

Dividends paid to non-controlling interests

(3)

(2)

Changes in capital and non-controlling interests

195

52

0

102

Change in treasury shares
Share buyback

(264)

0

Cash (used for) provided by financing activities

32

(25)

495

Effect of foreign exchange rate changes on cash and cash equivalents

171

256

Net increase in cash and cash equivalents

287

88

7,289

7,201

Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

34.1

7,576

7,289

Thereof presented as cash and cash equivalents
Thereof presented as part of disposal groups classified as held for sale

34.1
6.3

7,489
87

7,271
18

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

Airbus Group SE
IFRS Consolidated Statements of Changes in Equity
for the years ended 31 December 2015 and 2014

(In € million)

Capital
stock

Share
premium

Note

Balance at 1 January 2014

Equity attributable to equity holders of the parent
Retained
Accumulated other comprehensive income
earnings Available-forCash flow
Foreign currency
sale financial
hedgestranslation
assetsadjustments (1)Treasuryshares

Total

Non-controllinginterests

Total
equity10,906

783

5,049

2,167

625

1,101

1,189

(50)

10,864

42

Profit for the period

0

0

2,343

0

0

0

0

2,343

7

2,350

Other comprehensive income

00(1,585)45(4,411)246

0(5,705)(19)(5,724)(3,374)

Total comprehensive income of the period

0

0

758

45

(4,411)246

0(3,362)(12)

Capital increase

32

2

50

0

0

0

0

0

52

0

52

Capital decrease

32

0

(12)

0

0

0

0

0

(12)

0

(12)

Share-based Payment (IFRS 2)

30

(5)

0

0

0

0

(5)

0

(5)

(589)

0

0

Cash distribution to Airbus Group N.V. Shareholders /dividends paid to non-controlling interests

0

(587)

0

0

0

0

0

(587)

(2)

Equity transaction (IAS 27)

0

0

(3)

0

0

0

0

(3)

7

4

Change in non-controlling interests

0

0

0

0

0

0

0

0

(17)

(17)
72

Change in treasury shares

32

0

0

72

0

0

0

0

72

0

Cancellation of treasury shares

32

0

0

0

0

0

0

42

42

0

42

785

4,500

2,989

670

(3,310)

1,435

(8)

7,061

18

7,079

Profit for the period

0

0

2,696

0

0

0

0

2,696

2

2,698

Other comprehensive income

0

0

491

165

(3,554)278

0(2,620)(29)(2,649)

0

0

3,187

165

(3,554)

278

0

76

(27)

49

3

115

0

0

0

0

0

118

24

142

Balance at 31 December 2014

Total comprehensive income of the period
Capital increase32

Capital decrease

32

0

0

0

0

0

0

0

0

0

0

Share-based Payment (IFRS 2)

30

0

0

29

0

0

0

0

29

0

29

Cash distribution to Airbus Group N.V. Shareholders /dividends paid to non-controlling interests

32

0

(945)

0

0

0

0

0

(945)

(3)

(948)

0

0

61

0

0

0

0

61

(5)

56

0

0

53

0

0

0

0

53

0

53
(487)

Equity transaction (IAS 27)
Convertible bond

32

Change in treasury shares

32

0

0

(3)

0

0

0

(484)

(487)

0

Cancellation of treasury shares

(3)

(186)

0

0

0

0

189

0

0

0

Balance at 31 December 2015

785

3,484

6,316

835

(6,864)

1,713

(303)

5,966

7

5,973

(1) In 2015, €1 million are reclassified from currency translation adjustments to profit or loss.
The accompanying notes are an integral part of these Consolidated Financial Statements (IFRS).

2. NOTES TO THE IFRS CONSOLIDATEDFINANCIAL STATEMENTS

Notes to the IFRS Consolidated Financial Statements

Table of content
BASIS OF PRESENTATION............................................................................................................................... 3
1.

The Company ................................................................................................................................................................ 3

2.

Significant accounting policies ...................................................................................................................................... 33.

Key estimates and judgements ...................................................................................................................................... 5

4.

Change in accounting policies and disclosures.............................................................................................................. 7

GROUP STRUCTURE ......................................................................................................................................... 8
5.

Scope of consolidation .................................................................................................................................................. 8

6.

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

7.

Investments accounted for under the equity method ................................................................................................... 11

8.

Related party transactions ............................................................................................................................................ 14

SEGMENT INFORMATION ............................................................................................................................ 15
9.

Segment information ................................................................................................................................................... 16

GROUP PERFORMANCE ................................................................................................................................ 19
10. Revenues, cost of sales and gross margin .................................................................................................................... 19
11. Research and development expenses ........................................................................................................................... 20
12. Share of profit from investments accounted for under the equity method and other income from investments ......... 20
13. Other income and other expenses ................................................................................................................................ 20
14. Total finance costs ....................................................................................................................................................... 21
15. Income tax ................................................................................................................................................................... 21
16. Earnings per share ....................................................................................................................................................... 24

OPERATIONAL ASSETS AND LIABILITIES .............................................................................................. 25
17. Intangible assets .......................................................................................................................................................... 25
18. Property, plant and equipment ..................................................................................................................................... 28
19. Other investments and other long-term financial assets .............................................................................................. 29
20. Inventories ................................................................................................................................................................... 30
21. Trade receivables and trade liabilities ......................................................................................................................... 30
22. Provisions, contingent assets and contingent liabilities ............................................................................................... 32
23. Other financial assets and other financial liabilities .................................................................................................... 33
24. Other assets and other liabilities .................................................................................................................................. 34
25. Sales financing transactions......................................................................................................................................... 34

EMPLOYEES COSTS AND BENEFITS.......................................................................................................... 38
26. Number of employees.................................................................................................................................................. 38
27. Personnel expenses ...................................................................................................................................................... 38
28. Personnel-related provisions........................................................................................................................................ 38
29. Post-employment benefits ........................................................................................................................................... 38
30. Share-based payment ................................................................................................................................................... 44
31. Remuneration .............................................................................................................................................................. 47

1

Notes to the IFRS Consolidated Financial Statements

CAPITAL STRUCTURE AND FINANCIAL INSTRUMENTS .................................................................... 51
32. Total equity.................................................................................................................................................................. 51
33. Capital management .................................................................................................................................................... 52
34. Net cash ....................................................................................................................................................................... 53
35. Information about financial instruments ...................................................................................................................... 56

OTHER NOTES .................................................................................................................................................. 70
36. Litigation and claims ................................................................................................................................................... 70
37. Auditor fees ................................................................................................................................................................. 72
38. Events after the reporting date ..................................................................................................................................... 72

2

Notes to the IFRS Consolidated Financial Statements

BASIS OF PRESENTATION
1.

The Company

The accompanying IFRS Consolidated Financial Statements present the financial position and the results of operations of Airbus
Group SE, the “Company” or “Airbus Group”, (formerly Airbus Group N.V.) and its subsidiaries (the “Group”), legally seated in
Amsterdam (current registered office at Mendelweg 30, 2333 CS Leiden, The Netherlands). On 28 May 2015, the legal form of theGroup has changed from a Dutch public limited company (N.V.) to a European company (SE) and is consistently subject to the lawsof the Dutch Civil Code. Airbus Group 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 Group’s Board of Directors on
23 February 2016. They are prepared and reported in euro (“€”) and all values are rounded to the nearest million appropriately.

2.

Significant accounting policies

Basis of preparation — The Group’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 with Part 9 of Book 2 of the Netherlands Civil Code. When reference is made to IFRS, this intends to be
EU-IFRS. The Consolidated Financial Statements have been prepared on a historical cost basis, unless otherwise indicated.
Airbus Group describes the accounting policies applied in each of 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 most significant
accounting policies are set out below:
Revenue recognition – Revenue is recognised to the extent that it is probable that the economic benefit arising from the ordinary
activities of the Group will flow to the Group, that revenue can be measured reliably and that the recognition criteria, for each type ofrevenue-generating activity (sales of goods and services and construction contracts), have been met. Revenue is measured at the fairvalue of the consideration received or receivable.
Revenues from the sale of commercial aircraft are recognised when the aircraft is delivered, risks and rewards of ownership havebeen transferred to the customer and revenues can be measured reliably except for launch customer contracts (see “Revenue fromconstruction contracts” below). Revenues from sales of aircraft (and related cost of sales) always include the engine component.
Customers will generally benefit from a concession from the engine manufacturer, negotiated directly between the customer and theengine manufacturer. When reliable information exists, the engine prices considered in our revenues (and cost of sales) reflect theeffect of the concessions.
Revenue from construction contracts - Construction contract accounting is applied for military programmes, space projects as well
as for launch customer contracts in the civil aircraft business if customers have signiﬁcantly inﬂuenced the structural design andtechnology of the aircraft type under the contract. As a result of certain airline customers’ increasing involvement in the development
and production process of the A350 XWB programme, the Group applies IAS 11 to a ﬁxed number of launch customer contracts of
the A350 XWB programme. When the outcome can be estimated reliably, revenues and contract costs are recognised as revenue andexpensed respectively by reference to the percentage of completion of the contract activity at the end of the reporting period (“PoCmethod”). Contract revenues include the purchase price agreed with the customer considering escalation formulas, contract
amendments and claims and penalties when assessed as probable. The PoC method used depends on the contract. The method isbased either on inputs (i.e. costs incurred for development contracts) or outputs (i.e. contractually agreed technical milestones,
delivered units).
Whenever the outcome of a construction contract cannot be estimated reliably – for example during the early stages of a contract orduring the course of a contract’s completion – all related contract costs that are incurred are immediately expensed and revenues arerecognised only to the extent of those costs being recoverable (the “early stage”, also called “zero profit margin” method of
accounting) (see Note 3 “Key estimates and judgements”).

3Notes to the IFRS Consolidated Financial Statements

Provision for loss making contracts – The Group records provisions for loss making contracts when it becomes probable that the
total contract costs will exceed total contract revenues. Before a provision for loss making contracts is recorded, the related assets
under construction are written-off. Loss making sales contracts are identiﬁed by monitoring the progress of the contract as well as theunderlying programme and updating the estimate of contract costs, which requires signiﬁcant and complex assumptions, judgements
and estimates related to achieving certain performance standards as well as estimates involving warranty costs (see Note 3 “Keyestimates and judgements”, Note 10 “Revenues, cost of sales and gross margin” and Note 22 “Provisions, contingent assets andcontingent liabilities”).
Research and development expenses – Research and development activities can be either contracted or self-initiated.
The costs for contracted research and development activities, carried out in the scope of externally financed research anddevelopment contracts, are expensed when the related revenues are recorded.
The costs for self-initiated research are expensed when incurred. The costs for self-initiated development are capitalised when:

the product or process is technically feasible and clearly defined (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 tothe projects are reliably measured.

the Group intends to produce and market or use the developed product or process and can demonstrate its profitability.

Income tax credits granted for research and development activities are deducted from corresponding expenses or from capitalisedamounts when earned.
Development costs which are capitalised, are recognised either as intangible assets or, when the related development activities lead tothe construction of specialised tooling for production (“jigs and tools”), or involve the design, construction and testing of prototypes
and models, as property, plant and equipment. Capitalised development costs are generally amortised over the estimated number ofunits produced. If the number of units produced cannot be estimated reliably, capitalised development costs are amortised over theestimated useful life of the internally generated intangible asset. Amortisation of capitalised development costs is recognised in costof 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 direct material and labour,and production related overheads (based on normal operating capacity and normal consumption of material, labour and otherproduction costs), including depreciation charges. Net realisable value is the estimated selling price in the ordinary course of thebusiness less the estimated costs to complete the sale. Inventories include work in progress arising under construction contracts forwhich revenues are recognised based on output methods.
Transactions in foreign currency, i.e. transactions in currencies other than the functional currency of a Group entity, are translated
into the functional currency at the foreign exchange rate prevailing at the transaction date. Monetary assets and liabilities
denominated in foreign currencies at the end of the reporting period are remeasured into the functional currency at the exchange ratein effect at that date. Except when deferred in equity as qualifying cash flow hedges (see Note 35 “Information about financial
instruments”), these foreign exchange remeasurement gains and losses are recognised, in line with the underlying item:in the profit before finance costs and income taxes if the substance of the transaction is commercial (including sales financing
transactions), andin the finance costs for financial transactions.

Non-monetary assets and liabilities denominated in foreign currencies that are stated at historical cost are translated into functional
currency at the foreign exchange rate in effect at the date of the transaction. Translation differences on non-monetary financial assets
and liabilities that are measured at fair value are reported as part of the fair value gain or loss. However, translation differences of
non-monetary financial assets measured at fair value and classified as available for sale are included in Accumulated othercomprehensive income (“AOCI”).

4Notes to the IFRS Consolidated Financial Statements

Hedge accounting – Most of the Group’s revenue is denominated in US dollar (“US$”), while a major portion of its costs is incurredin euro. The Group is significantly exposed to the risk of changes in US$/€ exchange rates. Furthermore, the Group is exposed,though to a much lesser extent, to foreign exchange risk arising from costs incurred in currencies other than the euro and to othermarket risks such as interest rate risk, commodity price and equity price risk.
In order to manage and mitigate those risks, the Group enters into derivative contracts. The Group applies cash flow 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 as part of the revenue) in the same period that the hedged items or transactions affectprofit or loss.
The major portion of the Group’s derivative contracts is accounted for under the cash flow hedge model. The fair value hedge modelis used only for certain interest rate derivatives. Derivative contracts which do not qualify for hedge accounting are accounted for atfair value through profit and loss, any related gains or losses being recognised in financial result.
The Group’s hedging strategies and hedge accounting policies are described in more detail in Note 35 “Information about financial
instruments”.

3.

Key estimates and judgements

The preparation of the Group’s consolidated ﬁnancial statements requires the use of estimates and assumptions. In preparing thesefinancial statements, management exercises its best judgement based upon its experience and the circumstances prevailing at thattime. 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. Key estimates and judgements that have a signiﬁcant inﬂuence on the amounts recognised in
the Group’s Consolidated Financial Statements are mentioned below:
Revenue recognition on construction contracts – The PoC method is used to recognise revenue under construction contracts. Thismethod places considerable importance on accurate estimates at completion as well as on the extent of progress towards completion.
For the determination of the progress of the construction contract signiﬁcant estimates include total contract costs, remaining costs tocompletion, total contract revenues, contract risks and other judgements.
The management of the operating Divisions continually review all estimates involved in such construction contracts and adjusts themas necessary (see Note 21 “Trade receivables and trade liabilities” for further information).
Provisions – The determination of provisions, for example for contract losses, warranty costs, restructuring measures and legal
proceedings is based on best available estimates. Loss making contracts are identiﬁed by monitoring the progress of the contract aswell as the underlying programme and updating the estimate of contract costs, which also requires signiﬁcant judgement related toachieving certain performance standards as well as estimates involving warranty costs. Depending on the size and nature of theGroup’s contracts and related programmes, the extent of assumptions, judgements and estimates in these monitoring processes
differs. In particular, the introduction of new commercial or military aircraft programmes (such as the A350 XWB and the A400M)
or major derivative aircraft programmes particularly involves an increased level of estimates and judgements associated with the
expected development, production and certiﬁcation schedules and expected cost components.
The Group makes estimates and provides, across the programmes, for costs related to in service technical issues which have been
identified and for which solutions have been defined, which reflects the latest facts and circumstances. The Group is contractually
liable for the repair or replacement of the defective parts but not for any other damages whether direct, indirect, incidental orconsequential (including loss of revenue, profit or use). However, in view of overall commercial relationships, contract adjustments
may occur, and 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 processes of the Group’s industry require challenging integration andcoordination along the supply chain including an on-going assessment of suppliers’ assertions which may additionally impact theoutcome of these monitoring processes (see Note 10 “Revenues, cost of sales and gross margin” and Note 22 “Provisions, contingent
assets and contingent liabilities” for further information).

5Notes to the IFRS Consolidated Financial Statements

Employee benefits – The Group accounts for pension and other post-retirement benefits in accordance with actuarial valuations.
These valuations rely on statistical and other factors in 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 significant change inpost-retirement employee benefit obligations and the related future expense (see Note 29 “Post-employment benefits”).
Legal contingencies – Group companies are parties to litigations related to a number of matters as described in Note 36 “Litigationand claims”. The outcome of these matters may have a material effect on the financial position, results of operations or cash flows of
the Group. Management regularly analyses current information about these matters and provides provisions for probable cash
outflows, including the estimate of legal expenses to resolve the matters. Internal and external 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 the amount of loss. The filing of a suit or formal assertion of aclaim against Group companies or the disclosure of any such suit or assertion, does not automatically indicate that a provision may beappropriate.
Income taxes – The Group operates and earns income in numerous countries and is subject to changing tax laws in multiple
jurisdictions within these countries. Significant judgements are necessary in determining the worldwide income tax liabilities.
Although management believes that it has made reasonable estimates about the final outcome of tax uncertainties, no assurance canbe given that the final tax outcome of these matters will be consistent with what is reflected in the historical income tax provisions.
At each end of the reporting period, the Group 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 management with 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.
The recorded amount of total deferred tax assets could be reduced, through valuation allowances recognition, if estimates ofprojected future taxable income and benefits from available tax strategies are lowered, or if changes in current tax regulations areenacted that impose restrictions on the timing or extent of the Group’s ability to utilise future tax benefits. The basis for therecoverability test of deferred tax assets is the same as the Group’s latest five year operative planning also taking into account certain
qualitative aspects regarding the nature of the temporary differences. Qualitative factors include but are not limited to an entity’s
history of planning accuracy, performance records, business model, backlog, existence of long-term contracts as well as the nature of
temporary differences (see Note 15 “Income tax”).
Other subjects that involve assumptions and estimates are further described in the respective notes (see Note 6 “Acquisitions anddisposals”, Note 17 “Intangible assets” and Note 21 “Trade receivables and liabilities”.

6Notes to the IFRS Consolidated Financial Statements

4.

Change in accounting policies and disclosures

First-time application
The accounting policies applied by the Group for preparing its 2015 year-end Consolidated Financial Statements are the same as lastyear except for the first time application of IFRIC 21 “Levies” which has not had a material impact on the Group’s Consolidated
Financial Statements or on its basic and diluted earnings per share.

New, revised or amended IFRS standards and interpretations 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 forthe year ended 31 December 2015 and have not been applied in preparing these Consolidated Financial Statements and early
adoption is not planned:

S tandards and amendments
IFRS 9 "Financial instruments"
IFRS 15 "Revenue from contracts with customers"
Amendment to IAS 1 "Disclosure initiative"
Amendments to IFRS 10 and IAS 28 "Sale or contribution of assets between
an investor and its associate or joint venture"
Amendments to IFRS 11 "Accounting for acquisition of interests in joint operations"
Amendments to IAS 16 and IAS 38 "Clarification of acceptable methodsof depreciation and amortisation"
Annual improvements to IFRS 2012-2014

IAS B effective date
for annual reporting
periods beginningon or afterEndorsement
status

1 January 2018
1 January 2018
1 January 2016

Not yet endorsed
Not yet endorsed
Endorsed

1 January 2016

Not yet endorsed
Endorsed

1 January 2016
1 January 2016

EndorsedEndorsed

IFRS 9 “Financial instruments”
IFRS 9, published in July 2014, replaces the existing guidance in IAS 39 “Financial instruments: recognition and measurement”.
IFRS 9 includes revised guidance on the classification and measurement of financial instruments, including a new expected credit
loss model for calculating impairment on financial assets, and the new general hedge accounting requirements. It also carries forward
the guidance on recognition and derecognition of financial instruments from IAS 39.
An assessment of the materiality of IFRS 9 impact on the Group’s Financial Statements is currently being performed.
IFRS 15 “Revenue from contracts with customers”
On May 2014, the IASB issued IFRS 15 which establishes a single comprehensive framework for determining when to recogniserevenue and how much revenue to recognise. IFRS 15 will replace the current revenue recognition standards IAS 18 “Revenue” andIAS 11 “Construction contracts” and related interpretations when it becomes effective.
IFRS 15 will require the Group to identify the different performance obligations it assumes under a contract, and account for themseparately based on their relative stand-alone selling prices. For all contracts, including long-term construction contracts currently
accounted for under the PoC method, the group will only be able to recognise revenue once certain conditions providing evidence
that control of a good or service has transferred to the customer are met. In certain circumstances, the standard considers work inprogress to be controlled by the customer, in which case it would be inappropriate for an entity to recognise work in progress as an
asset on its balance sheet. Furthermore, the standard requires an entity to accrue interest on advance payments if the contract with thecustomer contains a significant financing component.
The Group is currently assessing the impact of these and other accounting changes that will arise under IFRS 15. It has, however,identified the changes highlighted above as potentially creating a material impact on the Group’s Consolidated Income Statement andConsolidated Statement of Financial Position.

7

Notes to the IFRS Consolidated Financial Statements

GROUP STRUCTURE
5.

Scope of consolidation

Consolidation – The Group’s Consolidated Financial Statements include the financial statements of Airbus Group SE and allmaterial subsidiaries controlled by the Group. The Group’s subsidiaries prepare their ﬁnancial statements at the same reporting dateas the Group’s Consolidated Financial Statements (see Appendix “Group structure chart”).
Subsidiaries are entities controlled by the Group including so-called Structured Entities (“SE”) which are created to accomplish anarrow and well-defined objective (see Note 25 “Sales financing transactions”). They are fully consolidated from the date control
commences to the date control ceases.
The assessment of the control of SE is performed in three steps. In a first step, the Group identifies the relevant activities of the SE(which may include managing lease receivables, managing the sale or re-lease at the end of the lease and managing the sale or release on default) and in a second step, the Group assesses which activity is expected to have the most significant impact on the SE’s
return. Finally, the Group determines which party or parties control this activity.
The Group’s interests in equity-accounted investees comprise investments in associates and joint ventures. Investments in associates
and in joint ventures are accounted for using the equity method and are initially recognised at cost.
The ﬁnancial statements of the Group’s investments in associates and joint ventures are generally prepared for the same reporting
period as for the parent company. Adjustments are made where necessary to bring the accounting policies and accounting periods inline with those of the Group.

Perimeter of consolidation
31 December
2015
262

Number of companies
Fully consolidated entities
Investments accounted for using the equity method:in joint venturesin associates
Total

2014
286

53

50

19
334

17
353

For more details related to unconsolidated and consolidated SE, please refer to Note 25 “Sales financing transactions”.

6.

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 Group.
The determination of the fair value of the acquired assets and the assumed liabilities which are the basis for the measurement of
goodwill requires significant estimates. Land, buildings and equipment are usually independently appraised while marketablesecurities are valued at market prices. If any intangible assets are identified, depending on the type of intangible asset and thecomplexity of determining its fair value, the Group either consults with an independent external valuation expert or develops the fairvalue 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 made by management regarding the future performance of the assets
concerned and the discount rate applied.

8

Notes to the IFRS Consolidated Financial Statements

Loss of control, loss of joint control, loss of significant influence – Upon loss of control of a subsidiary, the assets and liabilities
and any components of the Group’s equity related to the subsidiary are derecognised. Any gain or loss arising from the loss ofcontrol is recognised within Other income or Other expenses in the Consolidated Income Statement. If the Group retains any interestin the previous subsidiary, such interest is measured at fair value at the date the control is lost.
Assets and liabilities of a material subsidiary for which a loss of control 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.
When the loss of significant influence or the loss of joint control of an investment accounted under the equity method is highly
probable and will occur in the coming 12 months, this associate or joint venture is classified as an asset held for sale.
Sale of investment in an associate or joint venture – Any gain or loss arising from the disposal of investment accounted for underthe equity method is recognised within share of profit from investments accounted for under the equity method.

6.1

Acquisitions

There were no material acquisitions in 2015 and 2014.

6.2

Disposals

On 14 January 2015, Airbus Group and Safran completed the first phase of the integration process of Airbus Safran Launchers
Joint Venture (“ASL”) enabling the entity to become operational. Coordination and programme management of the civil activitiesof the launcher business as well as relevant participations have been transferred to ASL during this first phase. The assets andliabilities associated with the first phase were classified as held for sale as at 31 December 2014.
Airbus Group received 50% of issued shares in ASL initially recognised at €56 million as at-equity investment. The loss of control inthe business resulted in a capital gain of €49 million, which is reported in Airbus Defence and Space division in other income.
During the second phase, Safran and Airbus Group intend to integrate within the joint venture all the remaining contracts, assets andindustrial resources, related to space launchers and associated propulsion systems.
On 16 June 2015, ASL, the French state and CNES, the French space agency, have reached an agreement to transfer CNES's stake in
Arianespace to ASL. On 12 August 2015, ASL was awarded the Ariane 6 development contract by the European Space Agency.
The second phase will be initiated and implemented once all legal and financial terms and conditions are finalised between bothpartners. The joint venture will then be fully equipped for all design, development, production and commercial activities related tocivil and military launchers and associated propulsion systems.
On 20 August 2015 Airbus Defence and Space GmbH, Rohde & Schwarz GmbH und Co. KG, Thales Electronic Systems GmbH andNorthrop

Grumman

Litef

GmbH

sold

their

sharesin

Elektroniksystem

undLogistikGmbH(“ESG”)

toE-Sicherheitsbeteiligungen GmbH. Airbus Group recognised a €59 million gain in share of profit from investments accounted forunder the equity method, which is reported in Airbus Defence and Space division. The assets and liabilities of this company wereclassified as held for sale as at 31 December 2014.
On 1 October 2015, Airbus sold its shares in its fully owned subsidiary Cimpa SAS to Sopra Steria Group. The gain on this disposal
which is recognised in other income for €72 million, is reported in Airbus division.
On 28 February 2014, EADS North America, Inc., Herndon (VA, USA) sold 100% of the assets and liabilities of its Test & Services
division to Astronics Corp., East Aurora (NY, USA), for a total consideration of €51 million, which is reported in Airbus Defence
and Space division.
On 7 March 2014, Astrium Services GmbH, Ottobrunn (Germany) disposed of 100% of the shares of ND Satcom GmbH,
Immenstaad (Germany) to Quantum Industries S.à.r.l., Luxembourg (Luxembourg) with economic effect as of 1 March 2014 leading
to a negative consideration of €9 million, which is reported in Airbus Defence and Space division.

9Notes to the IFRS Consolidated Financial Statements

On 10 July 2014, Airbus Defence and Space sold its Test & Services activities to a consortium consisting of ACE Management
S.A., Paris (France) and IRDI S.A., Toulouse (France). The disposal was performed via an acquisition company Test & Mesures
Groupe SAS in which Airbus Defence and Space will retain temporarily 33.5%. The total consideration received amounted to€35 million (thereof €28 million consideration received in cash and €7 million for the shares in Test & Mesures Groupe SAS). The
amount of net assets sold was €31 million. The Group recognised a €7 million capital gain on the sale of the Test & Services
activities reported in other income, which is reported in Airbus Defence and Space division.
On 27 November 2014, Airbus Group in an off-market lock trade sold to Dassault Aviation a total of 810,072 Dassault Aviation
shares at a price of €980 per share representing a total amount of €794 million pre-transaction costs. The gain recognised in share of
profit from investments accounted for under the equity method amounted to €343 million and reported in “Others / HQ / Conso.”
segment.
On 9 December 2014, Airbus Group signed a share purchase agreement with the State of Finland to sell its entire 26.8% share in
Patria Oyj to the Finnish defence, security and aviation services provider for a total consideration of €133 million. The transaction
was closed on 11 December 2014 and the Group recognised a €47 million capital gain within share of profit from investments
accounted for under the equity method. The transaction has been reported in Airbus Defence and Space division.

6.3

Assets and disposal groups classified as held for sale

As of 31 December 2015, Airbus Group accounted for non-current assets / disposal groups classified as held for sale in the amount of€1,779 million (2014: €750 million). The disposal groups in 2015 include liabilities directly associated with non-current assets
classified as held for sale amounting to €231 million (2014: €680 million). The assets and disposal groups classified as held for salecomprise the following transactions:
On 25 March 2015, Airbus Group sold 1,612,407 Dassault Aviation shares, corresponding to 17.5% of the Dassault Aviation’s sharecapital, of which 460,688 shares (5%) were sold to Dassault Aviation for €980 per share and 1,151,719 shares (12.5%) were sold toinstitutional investors at €1,030 per share. On 14 April 2015, Airbus Group sold an additional 115,172 shares (1.25%) to institutional
investors at €1,030 per share.
As of 31 March 2015, the remaining equity investment in Dassault Aviation with the carrying amount of €1,320 million has beenclassified as an asset held for sale (reported in “Others / HQ / Conso.” segment) as Airbus Group intends to pursue market
opportunities to sell the remainder of this investment. Prior to the reclassification, the carrying amount included the Airbus Group
interest in Dassault Aviation’s first quarter 2015 result and a negative catch-up on 2014 of €-119 million.
In 2015, Airbus Group has recognised €748 million (€697 million in share of profit from investments accounted for under the equity
method and €51 million in other income) representing the net capital gain on partial disposal after transaction costs.
As of 31 December 2015, Airbus Group holds 23.60% of Dassault Aviation’s share capital and 24.71% of associated voting rights
and the carrying amount of the assets held for sale amounts to €1,253 million. As of 31 December 2014, the carrying amount of theinvestment in Dassault Aviation was €2,429 million recognised in investment accounted for under the equity method.
On 17 June 2015, Airbus signed an agreement with Singapore-based ST Aerospace Ltd. (STA) to offer passenger-to-freighter (P2F)
conversion solutions for its A320 and A321 aircraft. STA will acquire an additional 20% of the shares of Elbe Flugzeugwerke(EFW), Dresden (Germany) by way of a contribution in kind and a capital increase to EFW. Consequently, 45% of the shares of
EFW will be retained and the Group will effectively lose its control over EFW (reported in Airbus division). The transaction has beenclosed on 4 January 2016.
On 17 December 2015, DS Holding SAS (France) and Astrium International Holdings B.V. (as beneficiaries) and a buyer signed asale purchase agreement in respect to the companies which form the business communications perimeter. The sale is subject toclosing conditions. The transaction has been reported in Airbus Defence and Space division.

10Notes to the IFRS Consolidated Financial Statements

The assets and disposal group of assets and liabilities classified as held for sale consist of:
31 December(In € million)

2015
144

2014

Intangible assets
Property, plant and equipment

1250

Non-current financial assets

1,253

0

Inventory

75

447

Trade receivables

84

262

Other assets

110Cash and cash equivalents
Assets and disposal group of assets classified as held for sale

87

18

1,779

750

23

Provisions

69

3

Customer advance payments

0674

Other liabilities
Disposal group of liabilities classified as held for sale

7.

3

231

680

Investments accounted for under the equity method
31 December
2015
1,264
62
1,326

(In € million)
Investments in joint ventures
Investments in associates
Investments accounted for under the equity method

7.1

162

2014
885
2,506
3,391

Investments in joint ventures

The joint ventures in which the Group holds interests are structured in separate incorporated companies. Under the joint arrangementagreements, unanimous consent is required from all parties to the agreement for all relevant activities. The Group and its partners
have rights to the net assets of the company through the terms of the contractual agreements.
The Group’s material joint ventures are MBDA S.A.S., Paris (France), Atlas Elektronik GmbH (“Atlas”), Bremen (Germany) andGIE ATR, Blagnac (France), as parent companies of their respective groups. Neither of these joint venture companies is publicly
listed.
The Group held a 37.5% stake in MBDA at 31 December 2015 and 2014, which is a joint venture between the Group, BAE Systems
and Finmeccanica. MBDA offers missile systems capabilities that cover the whole range of solutions for air dominance, groundbased air defence and maritime superiority, as well as advanced technological solutions for battlefield engagement.
Atlas is a joint venture of Thyssen Krupp and the Group (which held a 49% stake at 31 December 2015 and 2014). It provides
maritime and naval solutions above and below the ocean surface and holds a leading position in all fields of maritime hightechnology from command and control systems to coastal surveillance systems and in in-house support.
GIE ATR is manufacturing advanced turboprop aircraft. It is a 50% joint venture between Alenia Aermacchi, a Finmeccanica Group
company and Airbus Group. Both Alenia Aermacchi and Airbus Group provide airframes which are assembled by GIE ATR in
France. The members of ATR GIE are legally entitled to the whole benefits of the company and are liable for the commitments of thecompany. GIE ATR is obliged to transfer its cash to each member of the joint venture.

11

Notes to the IFRS Consolidated Financial Statements

The following table summarises financial information for MBDA, Atlas and GIE ATR based on their consolidated financial
statements prepared in accordance with IFRS:(In € million)
Revenues
Depreciation and amortisation

MBDA
2015
2014

Atlas
2015

2014

GIE ATR
2015
2014

2,875
(86)

2,394
(83)

405
(14)

416
(14)

1,760
(50)

1,367
(142)

Interest income
Interest expense

2
(15)

16
(1)

3
(4)

1
(5)

1
(2)

0
(1)

Income tax expense
Profit from continuing operations

(74)
218

(64)
148

(2)
(2)

(9)
12

0
340

0
127

Other comprehensive income
Total comprehensive income (100%)
Non-current assets
Current assets

65
283
2,010
5,384

(189)
(41)
1,967
5,298

9
7
248
437

(15)
(3)
197
555

16
356
94
639

29
156
119
583

thereof cash and cash equivalents
Non-current liabilities

1,420
1,249

1,521
1,307

132
344

255
297

5
111

5
366

thereof non-current financial liabilities (excluding trade andother payables and provisions)
Current liabilities

9
5,811

13
5,845

2
173

3
293

0
159

0
100

26
334

26
113

2
168

2
162

0
463

0
236

thereof current financial liabilities (excluding trade and otherpayables and provisions)
Total equity (100%)

MBDA(In € million)
Group's interest in equity on investee
Goodwill
Fair value adjustments and modifications for differencesin accounting policies
Carrying amount of the investment at 31 December

Atlas

GIE ATR

2015
125
282

2014
42
282

2015
82
257

2014
79
257

2015
232
0

2014
118
0

(13)
394

(18)
306

(9)
330

(9)
327

0
232

0
118

The development of these investments is as follows:(In € million)
Group's interest in equity on investee
at beginning of the year
Result from continuing operations attributable to the Group
Other comprehensive income attributable to the Group
Dividends received during the year
Carrying amount of the investment at 31 December

MBDA
2015
2014

Atlas
2015

2014

GIE ATR
2015
2014

306
84
28
(24)
394

327
(1)
4
0
330

351
6
(7)
(23)
327

118
170
8
(64)
232

381
56
(74)
(57)
306

93
64
14
(53)
118

The Group’s share of contingent liabilities of MBDA and of Atlas as of 31 December 2015 is €399 million (2014: €329 million) and€9 million (2014: €15 million), respectively.

12

Notes to the IFRS Consolidated Financial Statements

Furthermore, the Group has interests in a number of individually immaterial joint ventures, being accounted for under the equity
method. They are stated in aggregate in the following table:(In € million)
Group's interest in equity on investee at beginning of the year
Result from continuing operations attributable to the Group
Other comprehensive income attributable to the Group
Dividends received during the year
New joint ventures
Carrying amount of the investment at 31 December

2015
134

2014
139

(10)
6

(7)
2

(1)
179
308

0
0
134

The Group’ share of contingent liabilities of its joint ventures as of 31 December 2015 amounts to €0 million (2014: €2 million).

7.2

Investments in associates

In 2015, the Group has interests in a number of individually immaterial associates, being accounted for under the equity method.
They are stated in aggregate in the following table:(In € million)
Group's interest in equity on investee at beginning of the year
Result from continuing operations attributable to the Group
Other comprehensive income attributable to the Group

2015
77

2014
147

40
(29)

76
(35)

Dividends received during the year
Disposal of shares
Carrying amount of the investment at 31 December

(10)
(16)
62

(20)
(91)
77

As of 31 December 2014, the Group’s only individually material investment in associates was Dassault Aviation (42.11%) with acarrying amount of €2,429 million. Following the partial sale of Dassault Aviation shares in the financial year 2015 (for more details,
please see Note 6 “Acquisitions and disposals”), the remaining equity investment in Dassault Aviation has been reclassified as asset
held for sale.
The cumulative unrecognised comprehensive loss amounts for these associates to €-117 million and €-147 million as of 31 December
2015 and 2014, respectively (thereof €+30 million for the period).

13

Notes to the IFRS Consolidated Financial Statements

8.

Related party transactions(In € million)

Sales of goods Purchases ofand services
goods andand otherservices andincome other expense

Receivables
due as of
31 December

Payablesdue as of
31 December

Otherliabilities /Loans
received as of
31 December

2015
Total transactions with associates
Total transactions with joint ventures

7

40

96

4

79

1,771

121

1,850

14

544

7

116

3

5

79

2,141

122

1,451

13

601

2014
Total transactions with associates
Total transactions with joint ventures

Transactions with unconsolidated subsidiaries are immaterial to the Group’s consolidated financial statements.
A part of the shares in Dassault Aviation were sold back to Dassault Aviation during 2015 and 2014 (for more details, please see
Note 6 “Acquisitions and disposals”).
As of 31 December 2015, the Group granted guarantees of €503 million to Air Tanker group in the UK (2014: €474 million).
For information regarding the funding of the Group’s pension plans, which are considered as related parties, please refer to Note 29“Post-employment benefits”.
The information relative to compensation and benefits granted to members of the Executive Committee and Board of Directors aredisclosed in Note 31 “Remuneration”.

14Notes to the IFRS Consolidated Financial Statements

SEGMENT INFORMATIONThe Group operates in three reportable segments which reflect the internal organizational and management structure according to thenature of the products and services provided.


Airbus — Development, manufacturing, marketing and sale of commercial jet aircraft of more than 100 seats; aircraft conversion andrelated services; development, manufacturing, marketing and sale of regional turboprop aircraft and aircraft components.

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



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

The following table presents information with respect to the Group’s business segments. As a rule, inter-segment transfers are carriedout on an arm’s length basis. Inter-segment sales predominantly take place between Airbus and Airbus Defence and Space andbetween Airbus Helicopters and Airbus. The Group’s activities managed in the US, the holding function of the Group’s
Headquarters, the Airbus Group bank and other activities not allocable to the reportable segments, combined together withconsolidation effects, are disclosed in the column “Others / HQ / Conso.”.
Airbus Group uses EBIT pre-goodwill impairment and exceptionals as a key indicator of its economic performance. The term
“exceptionals” refers to such items as depreciation expenses of fair value adjustments relating to the former EADS merger and theAirbus combination, as well as impairment charges thereon. It also comprises disposal impacts related to goodwill and fair value
adjustments from these transactions.

15Notes to the IFRS Consolidated Financial Statements

9.

Segment information

Business segment information for the year ended the 31 December 2015 is as follows:(In € million)
Total revenues
Internal revenues
Revenues
EBIT pre-goodwill
impairment andexceptionals
thereof:- depreciation andamortisation- research and development
expenses- share of profit frominvestments accounted forunder the equity method- additions to otherprovisions
Impairment anddisposal of goodwill
Exceptionals depreciation /disposalProfit before financecosts and income taxes
Interest result
Other financial result
Income taxes
Profit for the period

Airbus45,854(764)
45,090AirbusHelicopters
6,786
(633)
6,153

AirbusDefenceand S pace
13,080(163)
12,917

2,301

427

745

3,473

613

4,086

(1,608)

(159)

(654)

(2,421)(45)(2,466)(2,702)

(325)

(344)

(3,371)(89)(3,460)

179

4

159

342

674

1,016

897

616

2,009

3,522

263

3,785

0

0

0

0

0

0

(14)

0

(9)

(23)

(1)

(24)

2,287

427

736

3,450

612

4,062
(368)
(319)
(677)
2,698

16

Total Others / HQ /segments
Conso. Consolidated
65,720296
66,016(1,560)(6)(1,566)64,160290
64,450Notes to the IFRS Consolidated Financial Statements

Business segment information for the year ended the 31 December 2014 is as follows:(In € million)
Total revenues
Internal revenues
Revenues
EBIT pre-goodwill
impairment andexceptionals
thereof:- depreciation andamortisation- research and development
expenses- share of profit frominvestments accounted forunder the equity method- additions to otherprovisions
Impairment anddisposal of goodwill
Exceptionals depreciation /disposalProfit before financecosts and income taxes
Interest result
Other financial result
Income taxes
Profit for the period

Airbus42,280(749)
41,531

AirbusHelicopters
6,524
(528)
5,996

AirbusDefenceand S pace
13,025(297)
12,728

2,671

413

409

3,493

547

4,040

(1,419)

(157)

(540)

(2,116)(34)(2,150)(2,667)

(325)

(360)

(3,352)(39)(3,391)

62

4

176

242

598

840

1,148

523

1,580

3,251

178

3,429

0

0

(6)

(6)

0

(6)

(25)

0

(16)

(41)

(2)

(43)

2,646

413

387

3,446

545

3,991
(320)
(458)
(863)
2,350

17

Total Others / HQ /segments
Conso. Consolidated
61,829482
62,311(1,574)(24)(1,598)60,255458
60,713

Notes to the IFRS Consolidated Financial Statements

S egment capital expenditures(In € million)
AirbusAirbus Helicopters

2015
2,001
280

2014
1,713
303

552
91
2,924

497
35
2,548

S egment assets(In € million)
AirbusAirbus Helicopters
Airbus Defence and Space

2015
47,857
10,172
19,3882014
41,342
10,24817,660

Others / HQ / Conso.
Total segment assets

738
78,155

3,337
72,587

UnallocatedDeferred and current tax assets
Securities
Cash and cash equivalents
Assets classified as held for sale
Total assets

7,619
11,6397,489
1,779
106,681

6,322
9,172
7,271
750
96,102

Airbus Defence and Space
Others / HQ / Conso.
Total capital expenditures(1)(1) Excluding expenditure for leased assets.

The property, plant and equipment by geographical areas is disclosed in Note 18 “Property, plant and equipment”. The revenues bygeographical areas are disclosed in Note 10 “Revenues, cost of sales and gross margin”.

18Notes to the IFRS Consolidated Financial Statements

GROUP PERFORMANCE
10. Revenues, cost of sales and gross margin
Revenues
Revenues are mainly comprised of sales of goods and services, as well as revenues associated with construction contracts accounted
for under the PoC method, contracted research and development and customer financing.
(In € million)
Revenues from construction contracts

2015
9,860
54,59064,4508,328

Other revenues (1)Total (2)Thereof service revenues including sale of spare parts

2014
7,916
52,79760,7138,279(1) Includes mainly revenues from sales of commercial aircraft recognised under IAS 18.
(2) For more details, please see Note 9 “Segment information”.

Revenues increased by 6.2% mainly at Airbus. The revenue growth in Airbus results from a more favourable foreign exchange
impact and an overall increase in deliveries to 635 aircraft (629 in the previous year). Airbus Helicopters contributed also positively
mainly due to a higher level of services activity. Airbus Defence and Space revenues were broadly stable and include revenues
related to the A400M programme of €1,648 million (2014: €1,561 million).
Revenues by geographical areas based on the location of the customer are as follows:(In € million)
EuropeAsia - PacificNorth America
M iddle East
Latin America
Other countries
Total

2015
20,06018,755
10,217
8,612
4,096
2,710
64,4502014
20,254
19,379
9,731
6,520
3,844
985
60,713

Cost of sales and gross margin
Cost of sales increased by 7.4%. The increase was primarily due to business growth at Airbus, an increase in the A350 XWB
programme support costs, and negative foreign exchange revaluation impacts from pre-delivery payments. This was partly offset by alower net charge related to A400M programme of €290 million (in 2014: €551 million).
Further included in cost of sales are amortisation expenses of fair value adjustments of non-current assets in the amount of€24 million (2014: €43 million).
Inventories recognised as an expense during the period amount to €45,289 million (in 2014: €41,523 million).
The gross margin decreased by €-86 million to €8,851 million compared to €8,937 million in 2014. Included is the net charge on the
A400M programme recorded in the second quarter of 2015 and a negative foreign exchange impact in Airbus. The gross margin rate
decreased from 14.7% to 13.7%.
The A350 XWB Entry into service occurred at the end of 2014, with the first A350 being delivered to Qatar Airways on 22
December 2014. In 2015, Airbus has delivered fourteen additional aircraft. The industrial ramp-up preparation is underway andassociated risks will continue to be closely monitored in line with the schedule, aircraft performance and overall cost envelope, as per
customer’s commitment. Despite the progress made, significant challenges remain with the ramp-up acceleration.

19

Notes to the IFRS Consolidated Financial Statements

An additional eleven A400M aircraft were delivered in 2015, resulting in twenty-one cumulative deliveries up to 31 December 2015.
Industrial efficiency and military capability remain a challenge during the ramp up phase. Management is working with thecustomers to agree a schedule of military capability enhancement and deliveries as well as reviewing the escalation formulae.
Industrial recovery measures have been identified and management is focused on delivery, but risk remains. The mission capability
roadmap (including the achievement of the respective milestones) and the delivery plan remain under negotiation with
OCCAR/Nations and are expected to be finalised in 2016.
Management reviewed the programme evolution and estimated contract result driven to a large extent from the implications of theaccident, as well as the impact of low inflation on the price revision formula, delays in military functionality and deliveries,
commercial negotiations, cost reduction targets and challenges in the industrial ramp-up, together with associated mitigation actions.
As a result of this review, Airbus Defence and Space recorded an additional net charge of €290 million in the second quarter of 2015.
The detailed review continued in the second half of 2015 however no further net charges were deemed necessary.
The A400M SOC 1 and 1.5 milestones remain to be achieved. SOC 1 fell due end October 2013 and SOC 1.5 fell due end December
2014. The associated termination rights became exercisable by OCCAR/Nations on 1 November 2014 and 1 January 2016
respectively. SOC 2 fell due end December 2015 and is still in the 12-month grace period. Management judges that it is highly
unlikely that any of these termination rights will be exercised.
The A400M programme remains in a critical phase and the associated risks will continue to be closely monitored.

11. Research and development expenses
Research and development expenses increased by 2.0% primarily reflecting R&D activities on the A350 XWB programme at Airbus.
In addition, an amount of €154 million of development costs has been capitalised, mainly related to the H160 and Single Aisle NEO
programmes.

12. Share of profit from investments accounted for under the equity method
and other income from investments(In € million)
Share of profit from investments in associates (1)Share of profit from investments in joint ventures
S hare of profit from investments accounted for under the equity method
Other income from investments

2015
773
243
1,016
54

2014
721
119
840
55

(1) This includes a significant impact from the investment in Dassault Aviation. For more details, please see Note 6 “Acquisitions and disposals”.

13. Other income and other expenses
Other income increased by €+144 million. This increase is mainly due to the capital gain of €72 million related to the disposal of
Cimpa SAS, the net gain of €51 million from the partial sale of Dassault Aviation held for sale shares that occurred in the second
quarter and the capital gain of €49 million following the completion of the first phase of the creation of ASL (see Note 6“Acquisitions and disposals”). It also includes income from rental properties (€50 million in 2015 compared to €67 million in 2014).
Other expenses increased by €-43 million, mainly due to costs associated with disposals in Airbus Defence and Space.

20

Notes to the IFRS Consolidated Financial Statements

14. Total finance costs
Interest income derived from the Group’s asset management and lending activities is recognised as interest accrues, using theeffective interest rate method.

(In € million)
Interest on European government refundable advances
Others(1)

Total interest result
Change in fair value measurement of financial instruments
Unwinding of discounted provisions
Foreign exchange translation of monetary items
OthersTotal other financial result
Total

2015

2014

(280)
(88)
(368)

(205)
(115)
(320)

(119)
(101)
(74)
(25)
(319)
(687)

(240)
(117)
(121)
20
(458)
(778)

(1) In 2015, the total interest income amounts to €183 million (in 2014: €142 million) for financial assets which are not measured at fair value through profit orloss. For financial liabilities which are not measured at fair value through profit or loss €-551 million (in 2014: €-462 million) are recognised as total interest
expenses. Both amounts are calculated by using the effective interest method.

15. Income tax
The expense for income taxes is comprised of the following:(In € million)
Current tax expense
Deferred tax expense
Total

2015

2014

(661)
(16)

(546)
(317)

(677)

(863)

In 2015, €42 million of current tax income and €-56 million of deferred tax expense relate to prior years.
Main income tax rates and main changes impacting the Group:

Countries

2015

2016

> 2016

Netherlands
France25.00%

25.00%

25.00%

38.00%

34.43%

34.43%

Germany

30.00%

30.00%

30.00%

Spain

28.00%

25.00%

25.00%(1)

20.25%

20.00%

18.00%

UK(1) 20% from 1 April 2015 until 31 March 2017, 19% from 1 April 2017 until 31 March 2020 and 18% from 1 April 2020.

21

Notes to the IFRS Consolidated Financial Statements

The following table shows a reconciliation from the theoretical income tax (expense) using the Dutch corporate tax rate to thereported income tax (expense):(In € million)
Profit before income taxes* Corporate income tax rate
Expected (expense) for income taxes
Effects from tax rate differentials
Capital gain on disposals
Income from investments / associates
Tax credit
Change of tax rate
Change in valuation allowances
Non-deductible expenses and tax-free income
Other
Reported tax (expense)

2015
3,375
25.0%
(844)
(329)

2014
3,213
25.0%
(803)
(270)

328
84
66
(90)
96
0
12
(677)

0
265
77
(47)
(72)
(25)
12
(863)

Changes in valuation allowances represent reassessments of the recoverability of deferred tax assets based on future taxable profits ofcertain companies mainly for Airbus in Germany and Airbus Defence and Space in the United Kingdom (“UK”). The amount ofchange in valuation allowances of €96 million in 2015 (2014: €-72 million) excludes a positive impact of €1 million (2014:€4 million) from a change in tax rates which is presented in the line “change of tax rate”.
As the Group 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 recognise adeferred tax liability. For temporary differences arising from investments in associates the Group recognises deferred tax liabilities.
The rate used reflects the assumptions that these differences will be recovered from dividend distribution unless a management
resolution for the divestment of the investment exists at the closing date. For joint ventures, the Group assesses its ability to control
the distribution of dividends based on existing shareholder agreements and recognises deferred tax liabilities accordingly.
As of 31 December 2015, the aggregate amount of temporary differences associated with investments in subsidiaries, branches andassociates and interests in joint arrangements, for which deferred tax liabilities have not been recognised, amounts to €117 million.
Companies in deficit situations in two or more subsequent years recorded a total deferred tax asset balance of €52 million (in 2014:€115 million). Assessments show that these deferred tax assets will be recovered in future through either (i) own projected profits, or(ii) profits of other companies integrated in the same fiscal group (“régime d’intégration fiscale” in France, “steuerliche Organschaft”
in Germany) or (iii) via the “loss surrender-agreement” in UK.
Deferred taxes on net operating losses (“NOL”), trade tax loss carry forwards and tax credit carry forwards:(In € million)
NOL
Trade tax loss carry forwards
Tax credit carry forwards
Tax effect
Valuation allowances
Deferred tax assets on NOL’s
and tax credit carry forwards

France
701
0
0
241
(3)

Germany
1,945
1,955
0
560
(244)

S pain
384
0
317
413
(100)

UK
2,984
0
0
537
(65)

238

316

313

472

Other 31 December 31 December
countries
2015
2014
489
6,503
6,410
0
1,955
2,240
6
323
398
98
1,849
2,080
(11)
(423)
(440)
87

1,426

1,640

NOLs, capital losses and trade tax loss carry forwards are indefinitely usable in France, Germany, UK and in Spain. In Spain, tax
credit carry forwards still expire after 18 years. The first tranche of tax credit carry forwards (€14 million) will expire in 2023.

22

Notes to the IFRS Consolidated Financial Statements

Roll forward of deferred taxes:
In € million
Net deferred tax asset beginning of the year
Deferred tax (expense) in income statement
Deferred tax recognised directly in AOCI (IAS 39)
Deferred tax on remeasurement of the net defined benefit liability

2015
4,587
(16)
1,112
(235)

2014
2,279
(317)
1,961
577

OthersNet deferred tax asset at year-end

111
5,559

87
4,587

2015
(86)
2,612

2014
(51)
1,465

1,313
3,839

1,548
2,962

Details of deferred taxes recognised cumulatively in equity are as follows:In € million
Available-for-sale investments
Cash flow hedges
Deferred tax on remeasurement of the net defined benefit liability
Total

Deferred income taxes as of 31 December 2015 are related to the following assets and liabilities:
Movement throughOther
income statement
1 January 2015
movements
Deferred(In € million)
Intangible assets
Property, plant and equipment
Investments and other long-term
financial assets
Inventories
Receivables and other assets
Prepaid expenses
Provision for retirement plans
Other provisions
Liabilities
Deferred income
Net operating loss and tax credit
carry forwards
Deferred tax assets / (liabilities)
before offsetting
Valuation allowances on deferred
tax assets
Set-off
Net deferred tax assets /(liabilities)

DeferredDeferredtax
tax assets liabilities

OCI /R&D tax
IAS 19 Others (1)credits

31 December 2015
tax
Deferred
benefit Deferredtax(expense) tax assets liabilities

50
490

(475)
(1,355)

0
0

(1)
(10)

0
0

(59)
354

53
832

(538)
(1,353)

332
1,219
397

(167)
(457)
(2,267)

(35)
0
(115)

80
(8)
(1)

0
0
0

(181)
(173)
208

186
1,333
837

(157)
(752)
(2,615)

2
1,897
2,422
2,335
53

0
0
(498)
(871)
(22)

0
(235)
0
1,389
0

0
13
(2)
1
0

0
0
0
0
0

0
(156)
(550)
713
(7)

3
1,519
1,999
4,007
98

(1)
0
(627)
(440)
(74)

2,080

0

0

82

(51)

(262)

1,849

0

11,277(6,112)

1,004

154

(51)

(113)

12,716(6,557)(578)(4,982)

0
4,982

(127)
0

8
0

0
0

97
0

(600)
(5,357)

0
5,357

5,717

(1,130)

877

162

(51)

(16)

6,759

(1,200)(1) “Others” mainly comprises changes in the consolidation scope and foreign exchange rate effects.

23Notes to the IFRS Consolidated Financial Statements

Deferred income taxes as of 31 December 2014 are related to the following assets and liabilities:

Movement throughincome statement

Other
movements(In € million)
Intangible assets
Property, plant and equipment
Investments and other long-term
financial assets

1 January 201431 December 2014
DeferredDeferredDeferredDeferredtax OCI /R&D tax tax benefit Deferredtax(1)
tax assets liabilities IAS 19 Others
credits (expense) Tax assets liabilities
146
(456)
0
3
0
(118)
50
(475)
418
(1,284)
0
24
0
(23)
490
(1,355)Inventories
Receivables and other assets
Prepaid expenses

337
1,116
246
3

(155)
(236)
(2,866)
(6)

(30)
0
599
0

0
(10)
(17)
0

0
0
0
0

13
(108)
168
5

332
1,219
397
2

(167)
(457)
(2,267)0

Provision for retirement plans
Other provisions
Liabilities
Deferred income

1,137
2,425
795
82

0
(347)
(971)
(46)

577
0
1,392
0

20
1
(10)
0

0
0
0
0

163
(155)
258
(5)

1,897
2,422
2,335
53

0
(498)
(871)
(22)

2,441

0

0

74

12

(447)

2,080

0

9,146

(6,367)

2,538

85

12

(249)

11,277(6,112)

Net operating loss and tax credit
carry forwards
Deferred tax assets / (liabilities)
before offsetting
Valuation allowances on deferred
tax assets
Set-off
Net deferred tax assets /(liabilities)

(500)

0

0

(10)

0

(68)

(578)

0

(4,913)

4,913

0

0

0

0

(4,982)

4,982

3,733

(1,454)

2,538

75

12

(317)

5,717

(1,130)(1) “Others” mainly comprises changes in the consolidation scope and foreign exchange rate effects.

16. Earnings per share
Basic earnings per share - The weighted average number of ordinary shares used for the basic earnings per share computation does
not include those shares for which a financial liability was recognised, and equity reduced, under the share buyback program (seeNote 32.1 “Equity attributable to equity owners of the parent”).

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

2015

2014

€2,696 million
785,621,099€2,343 million
782,962,385€ 3.43€ 2.99Diluted earnings per share - The Group’s categories of dilutive potential ordinary shares are stock option plans (“SOP”), sharesettled performance units for Executive Committee members relating to long-term incentive plans (“LTIP”) and the convertible
bonds issued on 1 July 2015 (see Note 34.3 “Financing liabilities”). In 2015, the average price of Airbus Group shares exceeded theexercise price of the SOP as well as the share-settled performance units and therefore 359,335 shares (in 2014: 1,193,364 shares)
were considered in the calculation of diluted earnings per share. The dilutive effect of the convertible bonds was also considered in
the calculation of diluted earnings per share in 2015, by adding back €3 million of interest expense to the profit for the period
attributable to equity owners of the parent (2014: no adjustment) and by including 2,511,495 of dilutive potential ordinary shares.

Profit for the period attributable to equity owners of the parent (Net income)Weighted average number of ordinary shares (diluted) (1)Diluted earnings per share(1) Dilution assumes conversion of all potential ordinary shares.

24

2015

2014

€2,699 million
788,491,929€2,343 million
784,155,749€ 3.42€ 2.99

Notes to the IFRS Consolidated Financial Statements

OPERATIONAL ASSETS AND LIABILITIES
17. Intangible assets
Intangible assets comprise (i) goodwill (see Note 5 “Scope of consolidation”) (ii) capitalised development costs (see Note 2“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(3 to 10 years) to their estimated residual values.
Intangible assets as of 31 December 2015 and 2014 comprise the following:(In € million)
Goodwill

31 December 2015
Gross Amortisation/amount Impairment
10,995(1,088)

Capitalised development costs
Other intangible assets
Total

2,686
3,375
17,056(1,027)(2,386)(4,501)

1 January 2015
Gross Amortisation/amount Impairment
11,077(1,098)Net book
value
9,907
1,659
989
12,5552,507
3,265
16,849(819)(2,174)(4,091)

Net book
value
9,979
1,688
1,091
12,758Net book value(In € million)
Goodwill

Balance at
Changes in
Balance at
1 January Exchange
consolidation ReclassifiAmortisation/ 31 December
2015 differences Additions
scope cation (1) Disposals Impairment
2015
9,979
60
0
0
(107)
(25)
0
9,907

Capitalised development costs
Other intangible assets

1,688
1,091

20
17

154
211

0
0

0
(37)

0
(11)

(203)
(282)

1,659
989

Total

12,758

97

365

0

(144)

(36)

(485)

12,555(In € million)
Goodwill

Balance at
Changes in
Balance at
1 January Exchange
consolidation ReclassifiAmortisation/ 31 December
2014 differences Additions
scope cation (1) Disposals Impairment
2014
9,872
82
0
54
(23)
(6)
0
9,979

Capitalised development costs
Other intangible assets

1,597
1,031

15
34

225
195

(4)
94

(6)
27

(2)
(8)

(137)
(282)

1,688
1,091

Total

12,500

131

420

144

(2)

(16)

(419)

12,758(1) Includes intangible assets reclassified to assets of disposal groups classified as held for sale (see Note 6 “Acquisitions and disposals”).

Development costs
The Group has capitalised development costs in the amount of €1,659 million as of 31 December 2015 (€1,688 million as of
31 December 2014) as internally generated intangible assets mainly for the Airbus A380 (€412 million) and A350 XWB(€765 million) programmes. The amortisation for the A380 programme development costs is performed on a unit of production basis.
Capitalisation for development costs of the A350 XWB programme started in the second quarter of 2012 when the first aircraft
entered the final assembly line.

25Notes to the IFRS Consolidated Financial Statements

Impairment tests
The Group assesses at each end of the reporting period whether there is an indication that 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 in the fourth quarter of each financial year irrespective ofwhether there is any indication for impairment. An impairment loss is recognised in the amount by which the asset’s carrying amountexceeds 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 to which goodwill isallocated. The discounted cash flow method is particularly sensitive to the selected discount rates and estimates 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 are calculated 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 cash-generating units 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 theresulting valuation and therefore the amount of a potential impairment charge.
These estimates are influenced by several assumptions including growth assumptions of CGUs, availability and composition of
future defence and institutional budgets, foreign exchange fluctuations or implications arising from the volatility of capital markets.
Cash flow projections take into account past experience and represent management’s best estimate about future developments.
As of 31 December 2015 and 2014, goodwill was allocated to CGUs or group of CGUs, which is summarized in the following
schedule:(In € million)

AirbusGoodwill as of 31 December 2015
Goodwill as of 31 December 2014

6,759
6,768

Airbus Airbus Defence
Helicopters
and S pace299
310

Others / HQ

Consolidated

14
14

9,907
9,979

2,835
2,887

The goodwill mainly relates to the creation of the Group in 2000 and the Airbus Combination in 2001.

General assumptions applied in the planning process
The basis for determining the recoverable amount is the value in use of the CGUs. Generally, cash flow projections used for theGroup’s impairment testing are based on operative planning.
The operative planning, which covers a planning horizon of five years, 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 2% (in 2014: 2%).



future interest rates projected per geographical market, for the European Monetary Union, the UK and the US.

future exchange rates of 1.25 US$/€ (in 2014: 1.35 US$/€) to convert in € the portion of future US$ which are not hedged.



perpetuity growth rate of terminal values of 1% (in 2014: 1%).

The Group follows an active policy of foreign exchange risk hedging. As of 31 December 2015, the total hedge portfolio withmaturities up to 2023 amounts to US$102 billion (US$88 billion as of 31 December 2014) and covers a major portion of the foreignexchange exposure expected over the period of the operative planning (2016 to 2020). The average US$/€ hedge rate of the US$/€hedge portfolio until 2023 amounts to 1.28 US$/€ (previous year: 1.33 US$/€) and for the US$/₤ hedge portfolio until 2021 amounts
to 1.58 US$/₤ (previous year: 1.59 US$/₤). For the determination of the operative planning in the CGUs, management assumed
future exchange rates of 1.25 US$/€ from 2016 onwards to convert in € the portion of future US$ which are not hedged.
General economic data derived from external macroeconomic and financial studies has 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 of these Consolidated Financial Statements, have been applied in the individual
CGUs.

26

Notes to the IFRS Consolidated Financial Statements

Airbus The planning takes into account the decision to ramp-up progressively A320 Programme deliveries to 60 a/c per month. Long Range
deliveries increase progressively throughout the planning period from 64 a/c in 2016 to 92 a/c in 2019 incorporating the introduction of
A330 Neo deliveries in 2017. Furthermore A350 delivery rates increase significantly throughout the plan. For A380, Management
believes that the programme will remain stable in the foreseeable future.
 In the absence of long-term financial reference, expected cash flows generated beyond the planning horizon are considered through aterminal value. The terminal value reflects management’s assessment of a normative operating year based on an outlook of a fullaeronautic cycle over the next decade.
 Long-term commercial assumptions in respect of market share, deliveries and market value are based on General Market Forecast
updated in 2015. The development of market share per segment considers enlargement of the competition as per current best
assessment. Current market evolutions are considered through sensitivities.
 Due to the huge hedge portfolio, the carrying value and the planned cash flows of the CGU Airbus are materially influenced.
 Cash flows are discounted using a euro weighted WACC of 8.4% (in 2014: 9.4%).

Airbus Helicopters The planning takes into account the ramp-up of our medium segment driven by the H145 and the H175 which have been certified in2014, the continuing deliveries of NH90 and a continuous growth of our support and services activity.
 Long-term commercial assumptions in respect of market share, deliveries and market value are based on Helicopter market forecast
considering the decrease of last two years in the civil and parapublic market partially driven by decrease of investment in oil and gas,needs of helicopter fleet renewal and growth markers and the increase of Airbus Helicopters market share in this environment. Current
market evolutions are considered through sensitivities.
 Cash flows are discounted using a euro weighted WACC of 8.2% (in 2014: 9.0%).

Airbus Defence and Space
Airbus Defence and Space strategy is based on future core activities. The operative planning until 2020 considers a significant
change in the portfolio which will be finalized until 2017 after the sale of non-core activities.
 The planning period is characterised by a strong forecasted order intake across Military Aircraft and Space Systems.
 The major products driving significant growth are A400M programme, including export contracts, Tankers, light and medium transport
aircraft and satellites, along with significant results from the foundation of ASL.
 Airbus Defence and Space assumes a further increase in profitability over the planning period, driven by higher programme
performance and cost synergies.
 Airbus Defence and Space free cash flow target is also expected to grow leveraging on a solid cash generation from current contracts
and businesses as well as future order intakes (Military Aircraft, Satellites, Communication Intelligence and Security) and improvement
on A400M programme.
 Cash flows are discounted using a Euro weighted WACC of 8.0% (in 2014: 8.7%).

27

Notes to the IFRS Consolidated Financial Statements

18. 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
Site improvements

10 to 50 years
6 to 30 years

Technical equipment and machinery

3 to 20 years

Jigs and tools (1)Other equipment, factory and office equipment

5 years
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).

For details on assets related to lease arrangements on sales financing, please refer to Note 25 “Sales financing transactions”.
Property, plant and equipment as of 31 December 2015 and 2014 comprise the following:(In € million)
Land, leasehold improvements andbuildings including buildings onland owned by others
Technical equipment and machinery
Other equipment, factory and officeequipment (1)Construction in progress
Total

31 December 2015
Gross Depreciation/amount Impairment

Net book
value

(2)

1 January 2015
Gross Depreciation/amount Impairment

Net book
value (2)9,518
20,296(4,349)(11,946)

5,169
8,350

8,874
18,850(4,066)(10,604)

4,808
8,246

4,324
2,574
36,712(3,290)0(19,585)

1,034
2,574
17,1274,195
2,105
34,024(3,033)0(17,703)

1,162
2,105
16,321(1) Buildings, technical equipment and other equipment accounted for in fixed assets under finance lease agreements for net amounts to €364 million(2014: €154 million). Depreciation amounts to €14 million (2014: €10 million) and related accumulated depreciation €94 million (2014: €79 million).
(2) Include the net book value of “aircraft under operating lease” (see Note 25 “Sales financing transactions”).

Net book value(In € million)
Land, leasehold improvements andbuildings including buildings onland owned by others
Technical equipment and machinery
Other equipment, factory and officeequipment
Construction in progress
Total(In € million)
Land, leasehold improvements andbuildings including buildings onland owned by others
Technical equipment and machinery
Other equipment, factory and officeequipment
Construction in progress
Total

Balance at
Changes in
Balance at
1 January Exchange
consolidation ReclassifiDepreciation/ 31 December
2015 differences Additions
scope cation (1) Disposals Impairment
2015

4,808
8,246

33
154

339
508

0
0

372
869

(79)
(154)

(304)
(1,273)

5,169
8,350

1,162
2,105
16,321

38
24
249

377
1,811
3,035

0
0
0

0
(1,366)
(125)

(199)
0
(432)

(344)
0
(1,921)

1,034
2,574
17,127

Balance at
Changes in
Balance at
1 January Exchange
consolidation ReclassifiDepreciation/ 31 December
2014 differences Additions
scope cation (1) Disposals Impairment
2014

4,559
7,182

40
164

125
405

98
66

345
1,518

(52)
(4)

(307)
(1,085)

4,808
8,246

1,308
2,536
15,585

52
30
286

183
1,500
2,213

19
(7)
176

36
(1,935)
(36)

(136)
(19)
(211)

(300)
0
(1,692)

1,162
2,105
16,321(1) Includes property, plant and equipment reclassified to assets of disposal groups classified as held for sale (see Note 6 “Acquisitions and disposals”).

In 2015, the Group capitalised €8 million of borrowing cost on the production of qualifying assets (2014: €20 million). The Group’s
borrowing rate at the end of 2015 was 2.06% (2014: 2.12%).

28

Notes to the IFRS Consolidated Financial Statements

Property, plant and equipment by geographical areas
31 December
2015
7,035
4,294
3,015
1,560
1,105
17,009(In € million)
FranceGermanyUK
Spain
Other countries
Property, plant and equipment by geographical areas

(1)

2014
6,438
4,428
2,891
1,534
817
16,108(1) Property, plant and equipment by geographical areas excludes leased assets of €118 million (2014: €213 million).

Off-balance sheet commitments
Commitments related to property, plant and equipment comprise contractual commitments for future capital expenditures andcontractual commitments for purchases of “Land, leasehold improvements and buildings including buildings on land owned byothers” (€320 million as of 31 December 2015 compared to 2014 of €276 million).
Future nominal operating lease payments (for the Group as a lessee) for rental and lease agreements not relating to aircraft sales
financing amount to €844 million as of 31 December 2015 (2014: €756 million), and relate mainly to procurement operations (e.g.
facility leases, car rentals).
Maturities as of 31 December 2015 and 31 December 2014 are as follows:(In € million)
Not later than 1 year
Later than 1 year and not later than 5 years
Later than 5 years
Total

2015
158
393
293
844

2014
150
347
259
756

(In € million)
Other investments
Other long-term financial assets
Total non-current other investments and other long-term financial assets

31 December
2015
1,232
1,260
2,492

2014
617
1,152
1,769

Current portion of other long-term financial assets
Total

178
2,670

167
1,936

19. Other investments and other long-term financial assets

Other investments mainly comprise the Group’s participations, the most significant at 31 December 2015 being the participations in
AviChina (Group share: 5.0%) amounting to €199 million (2014: €140 million) and CARMAT SAS (Group share: 24.2%,
2014: 24.2%) amounting to €43 million (2014: €68 million).
Other long-term financial assets and the current portion of other long-term financial assets encompass other loans in the amountof €717 million and €876 million as of 31 December 2015 and 2014, and the Group’s sales finance activities in the form of financelease receivables and loans from aircraft financing (see Note 25 “Sales financing transactions”).

29Notes to the IFRS Consolidated Financial Statements

20. Inventories
In € million
Raw materials and manufacturing supplies
Work in progress
Finished goods and parts for resale
Advance payments to suppliers
Total

In € million
Raw materials and manufacturing supplies
Work in progress
Finished goods and parts for resale
Advance payments to suppliers
Total

Gross amount
3,229
25,58531 December 2015
Write-down(476)(5,150)Net book value
2,753
20,435

3,134
3,559
35,507(779)(51)(6,456)

2,355
3,508
29,051Gross amount
3,219
21,66731 December 2014
Write-down(502)(4,412)Net book value
2,717
17,2552,964
3,233
31,083(768)(46)(5,728)

2,196
3,187
25,355The increase in work in progress of €+3,180 million is mainly driven by Airbus and Airbus Defence and Space programmes, partly
offset by Airbus Helicopters programmes. Finished goods and parts for resale increased at Airbus Defence and Space and at Airbus
Helicopters, partly compensated by a decrease at Airbus. Advance payments to suppliers increased at Airbus.
Write downs for inventories are recorded when it becomes probable that total estimated contract costs will exceed total contract
revenues. In 2015, write downs of inventories in the amount of €-410 million (2014: €-501 million) are recognised in cost of sales,
whereas reversal of write downs amounts to €66 million (2014: €160 million). At 31 December 2015 €9,246 million of work inprogress and €1,863 million of finished goods and parts for resale were carried at net realisable value.

21. Trade receivables and trade liabilities
Trade receivables arise when the Group provides goods or services directly to a customer with no intention of trading the receivable.
Trade receivables include claims arising from revenue recognition that are not yet settled by the debtor as well as receivables relating
to construction contracts. Trade receivables are initially recognised at their transaction price and are subsequently measured atamortised cost less any allowance for impairment. Gains and losses are recognised in the Consolidated Income Statement when thereceivables are derecognised or impaired as well as through the amortisation process.
Allowance for doubtful accounts involves significant management judgement and review of individual receivables based on
individual customer creditworthiness, current economic trends including potential impacts from the EU sovereign debt crisis andanalysis of historical bad debts.
Assets and liabilities relative to constructions contracts - In the construction contract business, an asset or liability is classified as
current when the item is realised or settled within the Group’s normal operating cycle for such contracts and as non-current
otherwise. As a result, assets and liabilities relating to the construction contract business such as trade receivables and payables andreceivables from PoC method, that are settled as part of the normal operating cycle are classified as current even when they are notexpected to be realised within 12 months after the reporting period.

30Notes to the IFRS Consolidated Financial Statements

Trade receivables
31 December
In € million

2015

2014

Receivables from sales of goods and services

8,153

7,087

Allowance for doubtful accounts

(276)

(289)

Total

7,877

6,798

1,819

2,224

Thereof trade receivable not expected to be collected within 1 year
The trade receivables increased by €+1,079 million, mainly in Airbus Defence and Space.

In application of the PoC method, as of 31 December 2015 an amount of €2,936 million (in 2014: €1,941 million) for construction
contracts is included in the trade receivables net of related advance payments received.
The aggregate amount of costs incurred and recognised profits (less recognised losses) to date amounts to €71,813 million (in2014: €68,543 million).
The gross amount due from customers for contract work, on construction contracts recognized under the PoC method, is the net
amount of costs incurred plus recognised profits less the sum of recognised losses and progress billings. In 2015, it amounts to€9,190 million (in 2014: €3,828 million). Due to the nature of certain contracts and the respective recognition of revenues, theseincurred costs also include associated work in progress and respective contract losses.
The gross amount due to customers for contract work on construction contracts recognized under the PoC method, is the net
amount of costs incurred plus recognised profits less the sum of recognised losses and progress billings for all contracts in progress
for which progress billings exceed costs incurred plus recognised profits (less recognised losses). In 2015, the gross amount due tocustomers amounts to €77 million (in 2014: €2,535 million).
The respective movement in the allowance for doubtful accounts in respect of trade receivables during the year was as follows:In € million
Allowance balance at 1 January

2015

2014

(289)

(314)

Foreign currency translation adjustment

0(1)

Utilisations / disposals

15

34(Additions)

(2)

(8)

31 December

(276)

(289)

Based on historic default rates, the Group believes that no allowance for doubtful accounts is necessary in respect of trade receivables
not past due in the amount of €5,373 million (in 2014: €4,917 million).

Trade liabilities
As of 31 December 2015, trade liabilities amounting to €129 million (€280 million as of 31 December 2014) will mature after morethan one year.

31Notes to the IFRS Consolidated Financial Statements

22. Provisions, contingent assets and contingent liabilities
Provisions – The determination of provisions, for example for contract losses, warranty costs, restructuring measures and legal
proceedings is based on best available estimates.
In general, as the contractual and technical parameters to be considered for provisions in the aerospace sector are rather complex,
uncertainty exists with regard to the timing and amounts of expenses to be taken into account.
The majority of the company’s other provisions are generally expected to result in cash outflows during the next 1 to 12 years.

(In € million)
Provision for pensions (Note 29)
Other provisions (Note 22)

31 December
2015
7,615
7,465

2014
8,250
7,862

Total
Thereof non-current portion
Thereof current portion

15,0809,871
5,209

16,112
10,4005,712

Movements in provisions during the year were as follows:

ReclassiIncrease
fication/
Balance atfromChange in
1 January Exchange passage
consolidated
2015 differences of time Additionsgroup(In € million)

Used

Balance at
31 December
Released2015

Contract losses

900

1

0

630

(554)

(303)

(318)

356

Outstanding costs

2,369

32

0

1,553

(14)

(1,330)

(179)

2,431

Aircraft financing risks
Obligation from services
and maintenanceagreements

687

106

42

22

0

(206)

(33)

618

598

28

11

134

0

(171)

0

600

Warranties
Personnel-related

438

2

2

77

(7)

(95)

(32)

385

1,255
144

2
5

5
0

550
87

(42)
2

(483)
(63)

(142)
(45)

1,145
130

130

0

2

1

28

0

0

161

1,341
7,862

16
192

1
63

731
3,785

(168)
(755)

(151)
(2,802)

(131)
(880)

1,639
7,465

(1)

(2)

provisions
Litigation and claims (3)Asset retirement
Other risks and charges
Total(1) See Note 25 “Sales financing transactions”(2) See Note 28 “Personnel-related provisions”(3) See Note 36 “Litigation and claims”

In 2015, provision for contract losses mainly includes A350 XWB programme (€136 million) and several Airbus Defence and Space
programmes (€133 million). The additions to the contract losses provision include the net charge of €290 million for the A400M
programme before netting with work in progress. “Reclassification/Change in consolidated group” mainly relates to offsetting of
A400M programme contract provisions to respective inventories (see Note 10 “Revenues, costs of sales and gross margin”).
The majority of the addition to provisions for outstanding costs relates to Airbus Defence and Space (€1,008 million) andcorresponds among others to the Boarder Security business, to the Eurofighter programme and to diverse tasks to complete on
construction contracts, as well as to Airbus Helicopters (€490 million), mainly for the NH90 and Tiger programmes.

32

Notes to the IFRS Consolidated Financial Statements

Contingent assets and contingent liabilities – Airbus Group is exposed to technical and commercial contingent obligations due tothe nature of its businesses. To mitigate this exposure, Airbus Group has subscribed a Global Aviation Insurance Programme (GAP).
When the Company has obtained insurance coverage from third parties for these risks, any reimbursement is recognised separately
only when it is virtually certain to be received. Information required under IAS 37 “Provisions, contingent liabilities and contingent
assets” is not disclosed if the Group concludes that disclosure can be expected to prejudice seriously its position in a dispute withother parties. Negotiations concerning an insurance reimbursement relating to an Airbus commercial insurance case are currently
ongoing.
For other contingent liabilities, please refer to Note 36 “Litigation and Claims” and Note 10 “Revenues, cost of sales and grossmargin” (mainly A400M).
Other commitments include contractual guarantees and performance bonds to certain customers as well as commitments for future
capital expenditures and amounts which may be payable to commercial intermediaries if future sales materialise.

23. Other financial assets and other financial liabilities
Other financial assets
31 December
In € million
Positive fair values of derivative financial instruments (1)Others

2015
931
165

2014
502
84

Total non-current other financial assets
Positive fair values of derivative financial instruments (1)Receivables from related companies
Others

1,096
349
616
437

586
208
582
374

Total current other financial assets
Total

1,402
2,498

1,164
1,750

(In € million)
European Governments refundable advances
Liabilities for derivative financial instruments (1)Others31 December
2015
6,716
6,703
619

2014
6,020
3,271
631

Total non-current other financial liabilities
European Governments refundable advances
Liabilities for derivative financial instruments (1)Liabilities to related companies
OthersTotal current other financial liabilities
Total
Thereof other financial liabilities due within 1 year

14,038
570
3,884
80
487
5,021
19,059
5,021

9,922
508
2,232
50
690
3,480
13,402
3,470(1) See Note 35 “Information about financial instruments”

Other financial liabilities(1) See Note 35 “Information about financial instruments”.

Refundable advances from European governments are provided to the Group to finance research and development activities forcertain projects on a risk-sharing basis, i.e. they have to be repaid to the European Governments subject to the success of the project.

33

Notes to the IFRS Consolidated Financial Statements

24. Other assets and other liabilities
Other assets
31 December
In € million
Prepaid expenses
Others

2015
2,051
115

2014
1,603
219

Total non-current other assets
Value added tax claims
Prepaid expenses

2,166
1,450
663

1,822
1,371
487

OthersTotal current other assets
Total

706
2,819
4,985

531
2,389
4,211

(In € million)

31 December
2015

2014

Customer advance payments
OthersTotal non-current other liabilities(1)
Customer advance payments
Tax liabilities (excluding income tax)
OthersTotal current other liabilities
Total
Thereof other liabilities due within 1 year

14,472521
14,993
23,612885
2,540
27,03742,03026,313

Other liabilities

12,231
618
12,84922,174675
2,373
25,222
38,071
24,291(1) Of which €8,252 million (2014: €7,840 million) relate to construction contracts mainly in Airbus Defence and Space (2015: €7,007 million and2014: €6,499 million) and Airbus Helicopters (2015: €1,246 million and 2014: €1,273 million).

25. Sales financing transactions
Sales financing – With a view to facilitating aircraft sales for Airbus and Airbus Helicopters, the Group may enter into either
on-balance sheet or off-balance sheet sales financing transactions.
On-balance sheet transactions where Airbus is lessor are classified as operating leases, finance leases and loans, inventory and to aminor 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 18 “Property, plant and equipment”). Rental income from operating leases is recorded asrevenues on a straight-line basis over the term of the lease.
(ii) finance leases and loans – When, pursuant to a financing transaction, substantially all the risks and rewards of ownership of thefinanced aircraft reside with a third party, the transaction is characterised as either a finance lease or a loan. In such instances,
revenues 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 is recorded on the statement of financial position (on balance sheet) in long-term financial
assets, net of any accumulated impairments.
(iii) inventory - Second hand aircraft acquired as part of a commercial buyback transaction, returned to the Group after a payment
default or at the end of a lease agreement are classified as inventory held for resale if there is no subsequent lease agreement in force(see Note 20 “Inventories”).

34Notes to the IFRS Consolidated Financial Statements

Off-balance sheet commitments – Financing commitments are provided to the customer either as backstop commitments before
delivery, asset value guarantees at delivery, operating head-lease commitments or counter guarantees:(i) Backstop commitments are guarantees by Airbus, made when a customer-order is placed, to provide financing to the customer inthe event that the customer fails to secure sufficient funding when payment becomes due under the order. Such commitments are notconsidered to be part of gross customer financing exposure (see below) as (i) the financing is not in place, (ii) commitments may betransferred in full or part to third parties prior to delivery, (iii) past experience suggests it is unlikely that all such proposed financings
actually will be implemented and, (iv) the Group retains the asset until the aircraft is delivered and does not incur an unusual risk inrelation thereto. In order to mitigate customer credit risks for the Group, such commitments typically contain financial conditions
which guaranteed parties must satisfy in order to benefit therefrom.
(ii) Asset value guarantees are guarantees whereby the Group guarantees a portion of the value of an aircraft at a specific date afterits 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 in comparison to the estimated future
value of each aircraft, and (ii) the exercise dates of outstanding asset value guarantees are distributed through 2025. It is management
policy that the present value of the guarantee given does not exceed 10% of the sales price of the aircraft.
As of 31 December 2015, the nominal value of asset value guarantees provided to beneficiaries amounts to €781 million (2014:€861 million), excluding €97 million (2014: €146 million) where the risk is considered to be remote. The present value of the risk
inherent in asset value guarantees where a settlement is being considered probable is fully provided for and included in the total ofprovisions recognised for asset value risks of €550 million (2014: €618 million) (see Note 22 “Provisions, contingent assets andcontingent liabilities”).
(iii) Operating head-lease commitments – The Group has entered into head-lease sub-lease transactions in which it acts as a lessee
under an operating head-lease and lessor under the sub-lease. The Group’s gross customer financing exposure to operating head-leasecommitments, determined as the present value of the future head-lease payments, was €92 million in 2015 (2014: €135 million).
Exposure – In terms of risk management, the Group manages its gross exposure arising from its sales financing activities (“grosscustomer financing exposure”) separately for (i) customer’s credit risk and (ii) asset value risk.
Gross customer financing exposure is the sum of (i) the book 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 and thenet present value of head-lease commitments, (iv) the book value of second hand aircraft for resale before impairment, and (v) the
outstanding value of any other investment in sales financing SEs before impairment. This gross customer financing exposure may
differ from the value of related assets on the Group’s statement of financial position and related off balance sheet contingent
commitments, mainly because (i) assets are recorded in compliance with IFRS, but may relate to transactions that are financed on alimited recourse basis and (ii) the carrying amount of the assets on the Consolidated Statement of Financial position may have beenadjusted for impairment losses.
Gross customer financing exposure amounts to US$1.5 billion (€1.4 billion) (2014: US$1.3 billion (€1.1 billion)).
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 from resale and potential cost ofdefault. This valuation model yields results that are typically lower than residual value estimates by independent sources in order toallow for what management believes is its conservative assessment of market conditions and for repossession and transformation
costs. The net exposure is fully provided for by way of impairment losses and other provisions.
Impairment losses and provisions – For the purposes of measuring an impairment loss, each transaction is tested individually.
Impairment losses relating to aircraft under operating lease and second hand aircraft for resale (included in inventory) are recognised
for any excess of the aircraft’s carrying amount over the higher of the aircraft’s value in use and its fair value less cost to sell.
Impairment allowances are recognised for finance leases and loans when their carrying amounts exceed the present value of
estimated future cash flows (including cash flows expected to be derived from a sale of the aircraft). Under its provisioning policy forsales financing risk, the Group records provisions as liabilities for estimated risk relating to off-balance sheet commitments.

35

Notes to the IFRS Consolidated Financial Statements

Security – Sales financing transactions, including those that are structured through SE (see below), are generally collateralised by theunderlying aircraft. Additionally the Group benefits from protective covenants and from security packages tailored according to theperceived risk and the legal environment.
The Group endeavours to limit its sales financing exposure by sharing its risk with third parties usually involving the creation of an
SE. Apart from investor interest protection, interposing an SE offers advantages such as flexibility, bankruptcy remoteness, liability
containment and facilitating sell-downs of the aircraft financed. An aircraft financing SE is typically funded on a non-recourse basis
by a senior lender and one or more providers of subordinated financing. When the Group acts as a lender to such SEs, it may take therole of the senior lender or the provider of subordinated loan. The Group consolidates an aircraft financing SE if it is exposed to theSE’s variable returns and has the ability to direct the relevant remarketing activities. Otherwise, it recognises only its loan to the SE
under other long-term financial assets. At 31 December 2015 the carrying amount of its loans from aircraft financing amounts to€553 million (2014: €426 million). This amount also represents the Group’s maximum exposure to loss from its interest in
unconsolidated aircraft financing SEs.

On-balance sheet operating and finance leases
The minimum future operating lease payments (undiscounted) due from customers to be included in revenues, and the future
minimum lease payments (undiscounted) from investments in finance leases to be received in settlement of the outstanding
receivable at 31 December 2015 are as follows:
Aircraft underoperating leaseIn € million

Finance leasereceivable (1)Not later than 1 year

47

32

Later than 1 year and not later than 5 years

87

127

Later than 5 years
31 December 2015

5

54

139

213

(1) Includes €45 million of unearned finance income.

Off-balance sheet commitments
Operating head-lease commitments comprise operating lease payments due by Airbus as lessee under head-lease transactions. As of
31 December 2015 and as of 31 December 2014, the scheduled payments owed under sales financing head-leases are as follows:In € million
Not later than 1 year
Later than 1 year and not later than 5 years
Later than 5 years
Total aircraft lease commitments (1)Of which commitments where the transaction has been sold to third parties
Total aircraft lease commitments where the Group bears the risk (not discounted)

31 December
2015
62
98
0
160
(149)
11

2014
69
142
2
213
(191)
22

(1) Backed by sublease income from customers with an amount of €119 million in 2015 (2014: €159 million).

Financing liabilities
Financing liabilities from sales financing transactions are mainly based on variable interest rates (see Note 34.3 “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
2015
94
0
94

In € million
Loans
Liabilities to financial institutions
Total sales financing liabilities

36

2014
46
0
46

Notes to the IFRS Consolidated Financial Statements

Customer financing exposure
The on-balance sheet assets relating to sales financing, the off-balance sheet commitments and the related financing exposure (notincluding asset value guarantees) as of 31 December 2015 and 2014 are as follows:(In € million)
Operating leases (1)31 December 2015
AirbusAirbus Helicopters
337
0

Total
337

31 December 2014
AirbusAirbus Helicopters
327
0

Total
327

Finance leases and loans

779

61

840

546

78

624

Inventory
Other investments

179
28

0
0

179
28

169
0

0
0

169
0

On-balance sheet customer financing
Off-balance sheet customer financing

1,323
84

61
8

1,384
92

1,042
126

78
9

1,120
135

Non-recourse transactions on balance sheet
Off-balance sheet adjustments

(17)
(24)

0
0

(17)
(24)

(10)
(55)

(6)
0

(16)
(55)

Gross customer financing exposure
Collateral values

1,366
(922)

69
(20)

1,435
(942)

1,103
(743)

81
(37)

1,184
(780)

Net exposure
Operating leases

444
(220)

49
0

493
(220)

360
(114)

44
0

404
(114)

Finance leases and loans
On-balance sheet commitments - provisions (2)

(113)
0

0
(49)

(113)
(49)

(179)
(3)

0
(44)

(179)
(47)

On-balance sheet commitments - inventories
Off-balance sheet commitments - provisions (2)

(93)
(18)

0
0

(93)
(18)

(42)
(22)

0
0

(42)
(22)

Asset impairments and provisions

(444)

(49)

(493)

(360)

(44)

(404)

(1) For 2015 and 2014, depreciation amounts to €27 million and €31 million respectively and related accumulated depreciation is €203 million and €162
million respectively.
(2) See Note 22 “Provisions, contingent assets and contingent liabilities”.

37Notes to the IFRS Consolidated Financial Statements

EMPLOYEES COSTS AND BENEFITS
26. Number of employees(In € million)
31 December 201531 December 2014

Airbus72,816

AirbusHelicopters
22,520AirbusDefenceand S pace
38,206

Total
segments
133,542

Others / HQ
3,032

Consolidated
136,574

73,95822,93938,637

135,534

3,088

138,622

27. Personnel expenses(In € million)

2015

2014

Wages, salaries and social contributions
Net periodic pension cost (see Note 29 "Post-employment benefits")

13,022598

12,291
549

Total

13,62012,84028. Personnel-related provisions
Several German Group companies provide life time working account models, being employee benefit plans with a promised returnon 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 expense in that period, recognised inother personnel charges.

(In € million)
Restructuring measures /pre-retirement part-time
work
Other personnel charges
Total

ReclassiIncrease
fication/
Balance atfromChange in
1 January
Exchange passage
consolidated
2015 differences of time Additions
group

425
830
1,255

1
1
2

4
1
5

67
483
550

(20)
(22)
(42)

Used

Balance at
31 December
Released
2015

(148)
(335)
(483)

(64)
(78)
(142)

265
880
1,145

(In € million)

31 December
2015

2014

Provision for retirement plans (see Note 29.1)
Provision for deferred compensation (see Note 29.2)
Total

6,867
748
7,615

7,567
683
8,250

29. Post-employment benefits

38Notes to the IFRS Consolidated Financial Statements

29.1 Provisions for retirement plans
When Group employees retire, they receive indemnities as stipulated in retirement agreements, in accordance with regulations andpractices of the countries in which the Group operates.
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 to receive a complementary pension from defined contribution schemes ARRCO(Association pour le régime de retraite complémentaire des salaries) and AGIRC (Association générale des institutions de retraite descadres). Moreover, French law stipulates that employees are paid retirement indemnities in the form of lump sums on the basis of thelength of service, which are considered as defined obligations.
Germany - The Group has a pension plan (P3) for executive and non-executive employees in place. Under this plan, the employer
provides contributions for the services rendered by the employees, which are dependent on their salaries in the respective 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 that are not covered by this plan
receive retirement indemnities based on 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 thetime period served as an executive.
Parts of the pension obligation in Germany are funded by assets invested in specific funding vehicles. Besides a relief fund(“Unterstützungskasse”), the Group has implemented a Contractual Trust Arrangement. The Contractual Trust Arrangement structureis that of a bilateral trust arrangement. Assets that are transferred to the relief fund and the Contractual Trust Arrangement qualify asplan assets under IAS 19.
United Kingdom - the Airbus Group UK Pension Scheme (“the Scheme”) 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 well as all
personnel, who were recruited by one of the Group companies located in the UK and participating in the scheme. The majority of the
Scheme’s liabilities relate to Airbus Defence and Space Ltd. The major part of the obligation is funded by scheme assets due tocontributions 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 andappropriate assets to cover the Scheme’s obligations. Since 1 November 2013, this plan is generally closed for new joiners, whoparticipate in a separate defined contribution plan.
Moreover, the Group participates in the UK in several funded trustee-administered pension plans for both executive and nonexecutive employees with BAE Systems being the principal employer. These plans qualify as multi-employer defined benefit plans
under IAS 19 “Employee benefits”. The Group’s most significant investments in terms of employees participating in these BAE
Systems UK pension plans is Airbus Operations Ltd. Participating Airbus Operations Ltd employees have continued to remain
members in the BAE Systems UK pension plans due to the UK pension agreement between the Group and BAE Systems and achange in UK pensions legislation enacted in April 2006.
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 the Group investments
participate are currently underfunded. BAE Systems has agreed with the trustees various measures designed to make good theunderfunding. These include (i) regular contribution payments for active employees well above such which would prevail for fundedplans and (ii) extra employers’ contributions.
Based on detailed information about the different multi-employer pension schemes provided by BAE Systems, the Group is able toappropriately and reliably estimate the share of its participation in the schemes, i.e. its share in plan assets, defined benefit obligations(“DBO”) and pension costs. The information enables the Group to derive keys per plan to allocate for accounting purposes anappropriate proportion in plan assets, defined benefit obligations and pension costs to its UK investments as of the reporting date,taking into account the impact of contributions as well as future extra contributions agreed by BAE Systems with the trustees.
Therefore, the Group accounts for its participation in BAE Systems’ UK defined benefit schemes under the defined benefit
accounting approach in accordance with IAS 19.

39

Notes to the IFRS Consolidated Financial Statements

In 2015, the share of Airbus in BAE Systems’ main scheme amounts to 20.96% (in 2014: 19.65%). The impact of this change ismainly reflected in the remeasurements of the period.
BAE Systems, Airbus and the trustees agreed to work towards a sectionalisation of the Main Scheme in 2016, which remains subject
to Trustee approval. In a first step, in December 2015, BAE Systems, Airbus Operations Ltd. and the scheme trustees agreed on an
allocation of the deficit of the BAE Systems Pension Scheme (“Main Scheme”) to BAE Systems and Airbus based in principle oneach member’s last employer. This methodology is considered to represent a better estimate of the deficit allocation than the relative
payroll contributions of active members and has been reflected in the allocation of the IAS 19 pension deficit in the Main Scheme at
31 December 2015. The impact of this change on the amounts allocated at 31 December 2015 is a decrease of €106 million in theGroup’s share of the reported IAS 19 deficit.
In the event that an employer who participates in the BAE pension schemes fails or cannot be compelled to fulfil its obligations as aparticipating employer, the remaining participating employers are obliged to collectively take on its obligations. The Group considers
the likelihood of this event as remote.

Risks
The defined benefit obligation exposes the Group to actuarial risks, including the following ones:
Market price risk – The return on plan assets is assumed to be 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 defined benefit liability increases accordingly. Moreover, themarket values of the plan assets are subject to volatility, which also impacts the net liability.
Interest rate risk – The level of the defined benefit obligation is significantly impacted by the applied discount rate. The low interest
rates, particular in the €-denominated market environment, lead to a relatively high net pension liability. If the decline in returns ofcorporate bonds will continue, the defined benefit obligation will further increase in future periods, which can only be offset partiallyby the positive development of market values of those corporate bonds included in plan assets. Generally, the pension obligation issensitive to movements in the interest rate leading to volatile results in the valuation.
Inflation risk – The pension liabilities can be sensitive to movements in the inflation rate, whereby a higher inflation rate could leadto an increasing liability. Since some pension plans are directly related to salaries, increases in compensations could result inincreasing pension obligations. A fixed interest rate has been agreed for the deferred compensation plan P3, which is financed by theemployees.
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 pension liability.
The weighted-average assumptions used in calculating the actuarial values of the most significant retirement plans as of 31 December
are as follows:

Assumptions in %Discount rate

Germany
2015
2014
2.4
1.9

Pension plans inFrance
UK
2015
2014
2015
2.5
2.1
3.9

Rate of compensation increase
Rate of pension increase
Inflation rate

2.75
1.7
1.7

2.5
- / 1.7
1.7

3.25
1.7
1.7

2.5
- / 2.0
1.7

3.0
2.9
3.0

Multi-employer (UK)
2014
2015
2014
3.8
3.9
3.6
3.0
2.8
2.9

3.2
2.3 - 3.2
3.2

3.2
2.3 - 3.2
3.2

For Germany and France, the Group derives the discount rate used to determine the defined benefit obligation from yields on highquality corporate bonds with an AA rating. The determination of the discount rate is based on the iBoxx€ Corporates AA bond data
and uses the granularity of single bond data in order to receive more market information from the given bond index. The discountrate for the estimated duration of the respective pension plan is then extrapolated along the yield curve. In the UK it is determinedwith 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 the respective employers, derived from the assumed inflation rate and adjusted bypromotional or productivity scales.

40Notes to the IFRS Consolidated Financial Statements

Rates for pension payment increases are deviated from the respective inflation rate for the plan.
Inflation rate for German plans corresponds to the expected increase in cost of living. In the UK, the inflation assumptions arederived by reference to the difference between then yields on index-linked and fixed-interest long-term government bonds.
For the calculation of the German pension obligation, the “2005 G” mortality tables (generation tables) as developed by Professor
Dr. Klaus Heubeck are applied. For the UK schemes, the Self-Administered Pensions S1 mortality tables based on year of birth (aspublished by the Institute of Actuaries) is used in conjunction with the results of an investigation into the actual mortality experienceof scheme members. In France, INSEE (Institute for French Statistics) tables are applied.
The development of the defined benefit obligation is set out below:
Defined benefit obligation(In € million)
Balance as of 1 January 2014

Plan assets

Share of
Share of
PensionmultiTotal Pension
multiplans employer
definedplans employerof theplan inbenefitof theplan inGroup
UK obligation
Group
UK

Total
plan
Total
assets provisions

8,822

3,460

12,282(3,768)(2,705)(6,473)

5,809

Service cost

288

63

351

0

0

0

351

Interest cost and income

309

160

469

(144)

(127)

(271)

198

(143)

0

(143)

116

0

116

(27)

161

65

226

0

0

0

226

Settlements
Remeasurements: Actuarial and losses arisingfrom changes in demographic assumptions
from changes in financial assumptions

1,370

584

1,954

0

0

0

1,954

from changes in experience adjustments

165

(134)

31

0

0

0

31

0

(140)

(162)

(302)

(302)

Change in consolidation, transfers and others

(77)

4

(73)

0

0

0

(73)

Benefits paid

(323)

(129)

(452)

130

129

259

(193)

0

(380)

(94)

(474)

(474)

53

264

317

(51)

(199)

(250)

67

10,625

4,337

14,962(4,237)(3,158)(7,395)

7,567

from plan assets

Contributions by employer and other plan participantsForeign currency translation adjustment
Balance as of 31 December 2014 /1 January 2015
Service cost

358

81

439

0

0

0

439

Interest cost and income

219

175

394

(105)

(130)

(235)

159

0

0

0

0

0

0

0

(2)

0

(2)

0

0

0

(2)

from changes in financial assumptions(642)(1,218)(1,860)000(1,860)from changes in experience adjustments

213

(44)

169

0

0

0

169

0

0

0

67

898

965

965

Settlements
Remeasurements: Actuarial (gains) and losses arisingfrom changes in demographic assumptions

from plan assets
Change in consolidation, transfers and others

(95)

5

(90)

0

0

0

(90)

Benefits paid

(338)

(168)

(506)

139

168

307

(199)
(362)

Contributions by employer and other plan participantsForeign currency translation adjustment
Balance as of 31 December 2015

0

0

0

(245)

(117)

(362)

54

279

333

(50)

(202)

(252)

81

10,392

3,447

13,839(4,431)(2,541)(6,972)

6,867

Change in net defined benefit liability (asset)
On 1 April 2014, Dutch Space B.V., Leiden (Netherlands) settled its own pension scheme and transferred its obligation and related
plan assets to the pension scheme of the industry sector “Electrotechnical and Metal” as managed by its pension fund PME.
Considering an additional payment of €2 million, the settlement gain amounted to €25 million. The company pays a yearly premium
to the PME without any further obligation for additional contributions. The pension scheme of the PME qualifies as a defined
contribution plan.

41

Notes to the IFRS Consolidated Financial Statements

In 2015, contributions in the amount of €241 million (2014: €372 million) are made into the pension plans of the Group, mainly
relating to the Contractual Trust Arrangement with €130 million (2014: €265 million), the Airbus Group UK scheme with €58
million (2014: €50 million) and the relief fund in Germany with €50 million (2014: €50 million).
Contributions of approximately €400 million are expected to be made in 2016.
The weighted average duration of the defined benefit obligation for retirement plans and deferred compensation is 14 years at 31
December 2015 (31 December 2014: 15 years).
The split of the defined benefit obligation for retirement plans and deferred compensation between active, deferred and pensioner
members for the most significant plans is as follows (as of 31 December 2015 unless otherwise noted):

Germany
FranceUK (1)
Share of multi-employer scheme in UK (M ain Scheme) (2)

Active46%
99%
69%

Deferred
6%0%12%Pensioner
48%
1%
19%

32%

19%

49%

(1) As of 5 April 2013
(2) As of 31 March 2014

The following table shows how the present value of the defined benefit obligations of retirement plans and deferred compensation
would have been influenced by changes in the actuarial assumptions as set out for 31 December 2014:

Impact on defined benefit obligations
Change as of 31 December
Change in actuarial assumptions
Present value of the obligation
Discount rate
Rate of compensation increase
Rate of pension increase
Life expectancy

Increase by 0.5%-point
Decrease by 0.5%-point
Increase by 0.25%-point
Decrease by 0.25%-point
Increase by 0.25%-point
Decrease by 0.25%-point
Increase by 1 year
Reduction by 1 year2015
14,680(1,007)
1,062
188
(305)
256
(369)
283
(411)

2014
15,706(1,333)
1,416
356
(457)
345
(452)
421
(537)

Sensitivities are calculated based on the same method (present value of the defined benefit obligation 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 DBO than disclosed above. If the assumptions change at a different
level, the effect on the DBO is not necessarily in a linear relation.

42

Notes to the IFRS Consolidated Financial Statements

The fair value of the plan assets for retirement plans and deferred compensation can be allocated to the following classes:(In € million)

31 December 2015
QuotedUnquoted
pricespricesEquity securities
EuropeTotal

31 December 2014
QuotedUnquoted
pricesprices

Total

990

0

990

1,086

0

1,086

Rest of the world

0

0

0

102

0

102

Emerging markets
Global

221
1,454

0
0

221
1,454

248
1,452

0
0

248
1,452

1,549

0

1,549

2,289

0

2,289

1,715

0

1,715

1,317

0

1,317

Pooled investment vehicles
Commodities

273
119

0
0

273
119

310
176

15
0

325
176

Hedge funds
Derivatives

251
0

0
(58)

251
(58)

121
0

0
(47)

121
(47)

Property

331

4

335

346

5

351

Cash and money market funds
Others

48
252

0
(64)

48
188

197
2

0
(143)

197
(141)

7,203

(118)

7,085

7,646

(170)

7,476

Bonds
Corporates
Governments

The majority of funded plans apply broadly an asset-liability matching (ALM) framework. The strategic asset allocation (SAA) of
the plans takes into account the characteristics of the underlying obligations. Investments are widely diversified, such that the failureof any single investment would not have a material impact on the overall level of assets. A large portion of assets in 2014 consists offixed income instruments, equities, and although the Group also invests in property, commodities and hedge funds. The Group isreassessing the characteristics of the pension obligations from time to time or as required by the applicable regulation or governanceframework. This typically triggers a subsequent review of the SAA.
The amount recorded as provision in the Consolidated Statement of Financial Position can be allocated to the significant countries asfollows:

Recognised provision for retirement plans(In € million)
Defined benefit obligation
Plan assets
Recognised in the statements of financial
position as of 31 December 2014
Defined benefit obligation
Plan assets
Recognised in the statements of financial
position as of 31 December 2015

Pension plans of the Group
Germany
FranceUK
Others
8,144
1,561
909
11
3,392
17
828
0

S hare ofmultiemployer
plan in the UK
4,337
3,158

Total
14,962
7,395

4,752
7,793
3,464

1,544
1,545
17

81
1,044
950

11
10
0

1,179
3,447
2,541

7,567
13,839
6,972

4,329

1,528

94

10

906

6,867

Employer’s contribution to state and private pension plans, mainly in Germany and France, are to be considered as defined
contribution plans. Contributions in 2015 amount to €689 million (in 2014: €674 million).

43Notes to the IFRS Consolidated Financial Statements

29.2 Provisions for deferred compensation
This amount represents obligations that arise if employees elect to convert part of their remuneration or bonus into an equivalentcommitment for deferred compensation which is treated as a defined benefit post-employment plan. The development for the DBO
and plan assets (“PA”) is as follows:

Change in net defined benefit liabilities (assets):2015(In € million)

2014

DBO

PA

Total

DBO

PA

Total

744

(81)

663

529

(74)

455

Service cost

137

0

137

85

0

85

Interest cost

14

0

14

18

0

18

Interest income

0

(2)

(2)

0

(3)

(3)

from changes in financial assumptions

(34)

0

(34)

121

0

121

from changes in experience adjustments

0

0

0

6

0

6

from plan assets

0

3

3

0

(1)

(1)

Transfer and change in consolidation

(15)

0

(15)

(12)

0

(12)

Benefits paid

(5)

0

(5)

(3)

0

(3)

Additions

0

0

0

0

(3)

(3)

0

(33)

(33)

0

0

0

841

(113)

728

744

(81)

663

Balance as of 1 January

Remeasurements: Actuarial and losses arising

Contributions
Balance as of 31 December

Recognised as:(In € million)

2015

2014

Provision
Other non-current and current assets

748
20

683
20

Total

728

663

The portion of the obligation, which is not protected by the pension guarantee association or PSV (“Pensions-Sicherungs Verein”) incase of an insolvency of the Group companies concerned, is covered by securities. Trust agreements between the trust and theparticipating companies stipulate that some portions of the obligation must be covered with securities in the same amount, whileother portions must be covered by 115% leading to an overfunding of the related part of the obligation. These amounts are recognised
as other non-current and current assets.

30. Share-based payment
Share based compensation – In 2007, the Group introduced a performance and restricted unit plan (or LTIP) which qualifies as acash settled share-based payment plan under IFRS 2. The grant of so called “units” will not physically be settled in shares (except
with regard to Group Executive Committee members). For details of the conversion of some performance units granted to Executive
Committee members into equity-settled plans please refer to Note 31.1 ”Remuneration-Executive Committee”.
For plans settled in cash, provisions for associated services received are measured at fair value by multiplying the number of 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 theemployees have rendered service to date. The fair value of each LTIP unit is determined using a forward pricing model. Changes ofthe fair value are recognised as personnel expense of the period, leading to a remeasurement of the provision.
Besides the equity settled SOP that have been granted in the past, the Group offers its employees under the employee shareownership plan (“ESOP”), which is an additional equity settled share-based payment plan, Airbus Group shares at fair value
matched with a number of free shares based on a determining ratio. The fair value of shares provided is reflected as personnel
expense in the Group’s Consolidated Income Statements with a corresponding increase in equity.

44Notes to the IFRS Consolidated Financial Statements

30.1 Stock option plans (“SOP”) and long-term incentive plan (“LTIP”)
Based on the authorisation given to it by the Shareholders’ meetings, the Group’s Board of Directors approved SOPs in 2006 and2005 (see dates below). These plans provide to the members of the Executive Committee as well as to the Group’s senior
management the grant of options for the purchase of the Group’s shares.
For all of the Group’s SOPs, the granted exercise price exceeded the share price at the grant date.
In 2015, 2014, 2013, 2012, 2011 and 2010, the Board of Directors of the Company approved the granting of LTIP performance andrestricted units.
In 2014, the Group decided to hedge the share price risk inherent in the cash-settled LTIP units by entering in equity swaps where thereference price is based on the Airbus Group share price. To the extent that LTIP units are hedged, compensation expense recognised
for these units will effectively reflect the reference price fixed under the equity swaps.
In 2015, compensation expense for LTIPs including the effect of the equity swaps amounted to €175 million (in 2014: €156 million).
For the SOPs, expenses were neither recognised in 2015 nor in 2014.
The fair value of units granted per vesting date is as follows (LTIP plan 2015):
Expected vesting date(In € per unit granted)

FV of restricted and performance
units to be settled in cash

July 2019

56.92

July 2020

53.90

As of 31 December 2015 provisions of €320 million (2014: €314 million) relating to LTIP have been recognised.
The lifetime of the performance and restricted units is contractually fixed (see the description of the respective tranche). The
measurement is next to other market data, mainly affected by the share price as of the end of the reporting period (€62.00 as of
31 December 2015) and the lifetime of the units.
The principal characteristics of the SOPs as at 31 December 2015 are summarized in the table below:

Date of Shareholders’ meeting
Grant date
Number of options granted
Number of options outstanding
Total number of eligible employees

Vesting conditions

S OP 2005

S OP 2006

11 M ay 2005

4 M ay 2006

9 December 2005

18 December 2006

7,981,760

1,747,500

0
1,608

264,500
221

50% of options may be exercised after a period of two years from thedate of grant of the options; 50% of options may be exercised as of thethird anniversary of the date of grant of the options (subject to specificprovisions contained in the Insider Trading Rules — see “Part 2/3.1.3
Governing Law — Dutch Regulations”)

Expiry dateConversion right

8 December 2015
One option for one share

16 December 2016

Vested100%

100%

Exercise price€ 33.91€ 25.65

Exercise price conditions

110% of fair market value of the shares at the date of grant

Number of exercised options

5,205,471(1) As regards the SOP 2005, part of the options granted to the Group’s top executives were performance related.

45

1,276,500

Notes to the IFRS Consolidated Financial Statements

The following table summarises the development of the number of outstanding stock options:

Tranches

Number of options
Balance at
1 January

Exercised

Forfeited

Balance at
31 December

2,449,997
1,729,141(700,696)(1,668,678)(20,160)(60,463)

1,729,141
0706,125
511,750(194,375)(241,750)

0(5,500)511,750
264,500

2,240,891(1,910,428)(65,963)

264,500

SOP 2005
2014
2015

SOP 2006
2014
2015
Total options
for all tranches

The weighted average share price at the date of exercise for share options exercised in 2015 was €60.65 (2014: €50.06).
The principal characteristics of the performance and restricted units of the LTIPs as at 31 December 2015 are summarized below:
Gra nt da te

LTIP 2 0 10
10 Nove mbe r 2010

LTIP 2 0 11
9 Nove mbe r 2011

LTIP 2 0 14
13 Nove mbe r 2014

LTIP 2 0 15
29 Oc tobe r 2015

Units

P e rfo rma n c e

P e rfo rma n c e

P e rfo rma n c e

Re s tric te d

P e rfo rma n c e

Numbe r ofunits gra nte d (1)2,891,540 977,780 2,606,900 880,225

Re s tric te d

LTIP 2 0 12
LTIP 2 0 13
13 De c e mbe r 201217 De c e mbe r 2013 (3)P e rfo rma n c e a n d re s tric te d u n it p la n
Re s P e rfo rRe s P e rfo rRe s tric te dma n c e tric te dma n c e
tric te d

2,119,160

621,980

1,241,020

359,760

1,110,230

291,420926,416 239,604

601,800 1,202,576

355,120

1,109,650

290,840

926,416 239,604

Numbe rof units
outs ta nding0

Tota l numbe rof e ligible
be ne fic ia rie s

1,711

Ve s tingc onditions

The pe rforma nc e a nd re s tric te d units will ve s t if the pa rtic ipa nt is s till e mploye d by a Group c ompa ny a t the re s pe c tiveve s ting da te s a nd, in the c a s e of pe rforma nc e units , upon a c hie ve me nt of mid- te rm bus ine s s pe rforma nc e .
Ve s ting s c he dule is ma de up of four pa yme nts (from the LTIP 2014 onwa rds two pa yme nts ) ove r two ye a rs .

S ha re pric e pe r
unit is limite d a t
the ve s ting(2)
da te s to

Ve s tingda te sNumbe r ofve s te d units

0

1,621,252 430,509 2,024,076

1,771

-

1,797

1,709

€55.66-

1,621€92.34

1,564€94.90€112.6225% e a c h:in Ma y 2014
in Nove mbe r 2014
in Ma y 2015
in Nove mbe r 2015

25% e a c h:
25% e a c h e xpe c te d: 25% e a c h e xpe c te d:in Ma y 2015
in Ma y 2016
in Ma y 201750% e a c h e xpe c te d:in Nove mbe r 2015
in Nove mbe r 2016
in Nove mbe r 2017
in J une 2018
25% e a c h e xpe c te d:in Ma y 2017
in Ma y 2018
in J une 2019
in Ma y 2016
in Nove mbe r 2017
in Nove mbe r 2018
in Nove mbe r 2016

3,693,272

1,524,034

916,700

417,472

Re s tric te d

2,000

2,800

600

0

0

0

50% e a c he xpe c te d:in J une 2019
in J uly 2020

00(1) 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 Group) during theperformance period, the Board of Directors can decide to review the vesting of the performance units including the 50% portion which is not subject toperformance conditions (additional vesting condition).
(2) 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, each valued with the respective reference share price of €27.83 (for LTIP 2012), €46.17 (for LTIP 2013), €47.45 (for LTIP 2014) and €56.31(for LTIP 2015).
(3) Date, when the vesting conditions were determined.

46

Notes to the IFRS Consolidated Financial Statements

30.2 Employee share ownership plan (“ESOP”)
In 2015, the Board of Directors approved a new ESOP. Eligible employees were able to purchase a fixed number of previously
unissued shares at fair value (4, 6, 9, 19, 37, 74 or 148 shares). The Group matched each fixed number of shares with a number offree Airbus Group shares based on a determined ratio (4, 5, 6, 11, 16, 25 and 39 free shares, respectively). During a lockup period ofat least one year or, provided the purchase took place in the context of a mutual fund (regular savings plan), of five years, employees
are restricted from selling the shares, but have the right to receive all dividends paid. Employees who directly purchased Airbus
Group 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 26 February 2015 and amounted to €51.63. Investing through the mutual fund led to a pricewhich corresponds to the average price at the Paris stock exchange during the 20 trading days immediately preceding 26 February
2015, resulting in a price of €49.70. The Group issued and sold 477,985 ordinary shares with a nominal value of €1.00 each.
Compensation expense (excluding social security contributions) of €25 million was recognised in connection with ESOP.
An ESOP 2014 was not implemented.

31. Remuneration
31.1 Remuneration – Executive Committee
The Group’s key management personnel consist 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 be summarised as follows:(In € million)
Executive Committee, incl. Executive Board Member
Salaries and other short term benefits (including bonuses)
Post-employment benefit costs
Share-based remuneration (“LTIP award”, including associated hedge result)
Termination benefits
Other benefits
Social charges
Non-Executive Board Members
Short-term benefits (including social charges)
Total expense recognised

2015
Total

2014
Total

23.2

23.2

7.5
15.4
3.5
0.8
6.5

8.7
16.7
4.1
0.6
4.9

1.5
58.4

1.5
59.7

For additional information regarding the remuneration of Executive Committee Members (including the CEO), please also refer tothe Report of the Board of Directors, chapter 4.4 “Remuneration Report”.
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 2015 for Executive
Committee members based on estimated performance achievement at year-end was €13.4 million (2014: €14.9 million).
In 2015, the Company does not recognise any high salary taxes for Executive Committee members subject to French tax jurisdictions
under the “Taxe sur les hauts revenus”, requiring for 2014 and 2015 exceptional 50% charges on individual annual remuneration
exceeding €1 million (2014: €3.6 million).
Post-employment benefit cost
The pension defined benefit obligation of the Executive Committee, including the CEO, at 31 December 2015 amounted to€61.6 million (2014: €81.6 million). The disclosed defined benefit obligation reflects the total outstanding balance for all Executive
Committee members subject to a defined benefit plan and in charge at the end of the respective balance sheet date.

47

Notes to the IFRS Consolidated Financial Statements

Share-based remuneration (“LTIP award”)
The share-based payment expenses result from not yet forfeited units granted to the Executive Committee Members under the Airbus
Group LTIP which are re-measured to fair value as far as they are cash settled.
In 2015, the members of the Executive Committee were granted 175,802 performance units for LTIP 2015 and 8,850 additional units
for LTIP 2014 (2014: 190,460 units) the respective share price of these performance units at grant date was €10.3 million (2014:€9.1 million). Fair value of outstanding LTIP balances at the end of 2015 for all Executive Committee Members was €21.6 million(2014: €18.8 million). The total number of outstanding performance and restricted units amounted to 775,744 at 31 December 2015 (2014:
823,493), granted to the current members of the Executive Committee.

Also basing on the intention of the Board of Directors to increase the long-term commitment of Executive Committee members to thesuccess of the company the Board has authorized the Executive Committee members to opt for partial conversion of the otherwise
cash settled LTIP plans 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 plan. By the end of February 2016, Executive
Committee members will accordingly decide on the split for the 2015 LTIP plan. After overall performance assessment of each of theplans, 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.
Number of performance units granted to Executive Committee Members

LTIP 2011 (2)337,280

LTIP 2012 (3)275,900

LTIP 2013

LTIP 2014

Total number of units granted

LTIP 2010 (1)413,984

203,000

199,310

Number of cash-settled units

263,228

227,949

199,925

138,300

147,269

Number of equity-settled units

150,756

109,33175,97564,70052,041

Date of conversion
Share price at date of conversion

31 December 2012 31 December 2012 28 February 2013 28 February 2014 28 February 2015
€ 29.50€ 29.50€ 39.70€ 53.39€ 55.33(1) Based on performance achievement of 136% for performance units under 2010 LTIP.
(2) Based on performance achievement of 128% for performance units under 2011 LTIP.
(3) Based on performance achievement of 100% for performance units under 2012 LTIP.

SOPs
To the other current members of the Executive Committee and to the Group’s senior management, the number of outstanding stock
options amounted to 264,500 at 31 December 2015 (2014: 2,240,891). During the year 2015, the Executive Committee members
have exercised 241,085 options (2014: 188,128) granted under the various SOP’s. 137,500 options (2014: 118,000) were exercisedby former Executive Committee Members. As all Airbus Group SOPs vested before 2012 no related personnel expense wasrecognised in 2015 or in 2014.
Other benefits
Other benefits include expenses for Executive Committee members’ company cars and accident insurance. There were no
outstanding liabilities at 31 December 2015 or 2014 respectively.

48

Notes to the IFRS Consolidated Financial Statements

31.2 Remuneration – Chief Executive Officer (“CEO”)
The total remuneration of the CEO and Executive member of the Board of Directors related to the reporting periods 2015 and 2014
can be summarized as follows:
CEO (Tom Enders):(In € million)
Base salary
Annual variable pay
Post-employment benefits costs
Share based remuneration ("LTIP award")
Other benefits
Social charges

(1)

2015
1,400,004
1,659,000
1,079,861

2014
1,400,004
1,750,000
1,043,679

2,401,751
69,05011,3682,798,039
68,415
11,172(1) Expense related to share-based payment plans as recognised in the annual period (service period) including the result from the hedge of cash-settled sharebased payment: refer to Note 30 “Share-based payment” for details. The pay-out from vested cash settled LTIP in 2015 was €3,148,629 (2014: €2,374,997).

Annual variable pay
The annual variable pay is based on estimated performance achievement as at the balance sheet date and difference between theprevious 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 as well as interest costs on
employee’s contribution to the defined benefit plan.
For the CEO, Tom Enders, the pension defined benefit obligation including deferred compensation amounted to €17,118,048 as of
31 December 2015 (€18,584,426 as of 31 December 2014), whilst the amount of current service and interest cost related to his
pension promise accounted for in the fiscal year 2015 represented an expense of €1,079,861 (2014: €1,043,679). This amount has
been accrued in the Consolidated Financial Statements.
Share-based remuneration
The tables below gives an overview of the interests of the current executive members of the Board of Directors, Tom Enders as CEO, underthe various LTIP’s of the Group:

Performance units plan (LTIP)
LTIP
Granted date
Performance units

2010

2011

2012

2013

2014

2015

54,40051,40050,30030,30029,50024,862Re-evaluation of PU

136%

128%

100%

100%

100%

100%

PUs re-evaluated73,98465,79250,30030,30029,50024,862in cash27,744

24,67200

00

in shares

18,496

0

0

0

0

0

in cash0

24,672

37,72515,15029,50024,862in shares

0

16,448

12,57515,15000June 2019

July 2020

Vested in 2015

Outstanding 2015

Vesting scheduleCash-settled units
Equity-settled units

For vesting dates, please refer to Note 30.1 "SOP and LT IP"
0 November 2016 November 2017 November 2018

Vesting of all performance units granted to the CEO is subject to performance conditions
Fair value of outstanding LTIP balances at the end of 2015 for the CEO was €3,460,607 (2014: €3,287,645).

Other benefits
The CEO, Tom Enders, is entitled to accident insurance coverage and a company car. In 2015, the total amount expensed was €69,050(2014: €68,415). The company has not provided any loans to / advances to / guarantees on behalf of the CEO.

49

Notes to the IFRS Consolidated Financial Statements

31.3 Remuneration – Board of Directors
The remuneration of the non-executive members of the Board of Directors was as follows:(In €)

Fixum

2015 (1)Attendance
fees

Total

Fixum

2014 (1)Attendancefees

Denis Ranque
M anfred Bischoff

180,000
80,00070,00025,000250,000
105,000

180,000
80,00070,00025,000250,000
105,000

Ralph D. Crosby

80,00035,000115,000

80,00035,000115,000

Hans-Peter Keitel

100,000

35,000135,000

100,000

30,000130,000

Hermann-Josef Lamberti

110,000

30,000140,000

110,000

35,000145,000

Anne Lauvergeon

100,000

30,000130,000

100,000

30,000130,000

Lakshmi N. M ittal

100,000

35,000135,000

100,000

30,000130,000

M aría Amparo M oraleda M orales

50,00020,00070,0000

00

Sir John Parker

110,000

30,000140,000

110,000

35,000145,000

M ichel Pébereau
Josep Piqué i Camps

100,000
41,66825,0000

125,000
41,668100,000
100,000

30,00015,000130,000
115,000

Jean-Claude Trichet
Total

Total

100,000

35,000135,000

100,000

35,000135,000

1,151,668

370,000

1,521,668

1,160,000

370,000

1,530,000(1) The Fixum related to 2014 was paid in 2015. The Fixum and the attendance fees for the last six months of 2015 will be paid in 2016.

50

Notes to the IFRS Consolidated Financial Statements

CAPITAL STRUCTURE AND FINANCIAL INSTRUMENTS
32. Total equity
32.1 Equity attributable to equity owners of the parent
Airbus Group’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:

2015

2014

Issued as at 1 January
Issued for ESOP784,780,585
1,539,014

783,157,6350Issued for exercised options
Cancelled
Issued as at 31 December

1,910,428-2,885,243
785,344,784

1,871,419-248,469
784,780,585-1,474,057
783,870,727
3,000,000,000-431,832
784,348,753
3,000,000,000(In number of shares)

Treasury shares as at 31 December
Outstanding as at 31 December
Authorised shares

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 the contribution forexercised options of €1,910,428 (in 2014: €1,871,419) in compliance with the implemented SOP’s and by employees of €1,539,014
million (in 2014: €0) under the ESOPs.
Share premium mainly results from contributions in kind in the course of the creation of Airbus Group, cash contributions from theGroup’s initial public offering, capital increases and reductions due to the issuance and cancellation of shares as well as cash
dividend payments to Airbus Group SE shareholders.
On 27 May 2015, the shareholders’ general meeting decided to distribute a gross amount of €1.20 per share, which was paidon 3 June 2015. For the fiscal year 2015, the Group’s Board of Directors proposes a cash distribution payment of €1.30 per share.
Retained earnings include mainly the profit of the period and the changes in other comprehensive income from remeasurements ofthe defined benefit liability net of tax which amounts to €491 million in 2015 (in 2014: €-1,585 million).
On 1 July 2015, Airbus Group issued a convertible bond for €500 million with a 7-year maturity (see Note 34.3 Financing liabilities).
Treasury shares represent the amount paid or payable for own shares held in treasury and relates to the share buyback in 2015.
On 27 May 2015, the Annual General Meeting (AGM) of the Company authorised the Board of Directors, for a period expiring at the
AGM to be held in 2016, to issue shares and grant rights to subscribe for shares in the Company’s share capital for the purpose of:

employee share ownership plans in the limit of 0.1% of the Company’s authorised share capital (see Note 30 “Share-based payment”)

funding the Company and its Group companies, provided that such powers shall be limited to an aggregate of 0.3% of the Company’s
authorised capital (see Note 34.3 “Financing liabilities”)

For each operation, such powers shall not extend to issuing shares or granting rights to subscribe for shares if there is no preferential
subscription right and for an aggregate issue price in excess of €500 million per share issuance.
Also on 27 May 2015, the AGM authorised the Board of Directors for an 18-month period to repurchase up to 10% of theCompany’s issued and outstanding share capital (i.e. issued share capital excluding shares held by the Company or its subsidiaries) ata price not exceeding €85 per share.
Airbus Group has appointed an Investment Services Provider to undertake a share buyback on behalf of the Company for a maximum
amount of €1 billion. The buyback will take place between 2 November 2015 and 30 June 2016. As of 31 December 2015, the Groupbought back €264 million of shares and recognised a financial liability of €223 million for its irrevocable share buyback commitment
at that date. Recognition of the financial liability led to a corresponding reduction of equity.

51

Notes to the IFRS Consolidated Financial Statements

Furthermore, the Annual General Meeting authorised both the Board of Directors and the CEO, with powers of substitution, that the
number of shares repurchased by the Company pursuant to the share buyback programme are cancelled. As per decisions of the Chief
Financial Officer upon delegation of the CEO, on 17 December 2015, a number of 2,885,243 shares have been cancelled.

32.2 Non-controlling interests
The non-controlling interests (NCI) from non-wholly owned subsidiaries amount to €7 million as of 31 December 2015 (in 2014:€18 million). These NCI do not have a material interest in the Group’s activities and cash flows.
Subsidiaries with NCI that are material to their stand-alone financial information are:Principal placeof business

Elbe
Flugzeugwerke
GmbH
Dresden(Germany)
2015
2014

Ownership interest
held by NCI
NCI (in € million)
Profit (loss) allocatedto NCI (in € million)

GEW
Technnologies(Pty) Ltd.
Pretoria(South Africa)
2015
2014

AlestisAerospace S .L.
La Rinconada(Spain)
2015
2014

PFW
AerospaceGmbH
Speyer(Germany)
2015
2014

35%
19

35%
21

25%
9

25%
11

38.09%(25)

38.84%(25)

25.10%(28)

25.10%
(21)

2

2

2

1

(7)

(10)

0

1

33. Capital management
The Group 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 Group. Consequently, operating liquidity is of great importance.
As part of its capital management, it is one of the Group’s objectives to maintain a strong credit rating by institutional rating
agencies. This enables the Group to contain its cost of capital which positively impacts its stakeholder value (entity value). Next toother non-financial parameters, the credit rating is based on factors such as, cash flow ratios, profitability and liquidity ratios. The
Group monitors these ratios to keep them in a range compatible with a strong rating.
Rating agency

Long term ratingStandard and Poor's
Moody's Investors Services
Fitch Ratings (unsolicited)

A
A2
A-

OutlookPositive
StableStable(1)

Short term rating
A-1
P-1
F-2

(1) The outlook with Standard and Poor’s has been changed to positive from stable in September 2015.

The Group’s stand-alone ratings reflect the strong backlog providing revenue visibility and Airbus leading market position, theGroup’s strong liquidity and improving credit metrics as well as management’s focus on programmes execution, profitability andcash generation improvement. The rating is constrained by the Group’s exposure to structural currency risk.
In accordance with the Group’s conservative financial policy, a strong rating is key to maintain a wide array of funding sources at
attractive conditions, to have broad access to long-term hedging and to strengthen Airbus’ position as a solid counterparty for its
customers and suppliers.
Among other indicators, the Group uses a Value Based Management approach in order to guide the Company towards sustainablevalue creation by generating financial returns above the cost of capital.
The key elements of the Value Based Management concept are:

the definition of financial returns,

the definition of the Company’s capital base, andthe measurement of value creation derived from the two above.

52

Notes to the IFRS Consolidated Financial Statements

The Group uses Return on Capital Employed (“RoCE”) to measure the value created by financial returns relative to its capital base.
RoCE, as defined by the Group, uses EBIT pre-goodwill impairment and exceptionals for the numerator and Average Capital
Employed for the denominator. The Average Capital Employed for the Group is defined as the average of the annual opening andclosing positions of Fixed Assets plus Net Operating Working Capital plus operating cash less Other Provisions.
Financial value is created if profits relative to the Group’s Capital Employed exceed the company’s cost of capital. Value can bemeasured by comparing RoCE to the WACC. A five year plan for a value creation ambition is constructed annually, and is composedof (1) RoCE, (2) EBIT pre-goodwill impairment and exceptionals, and (3) Free Cash Flow, which is defined as Cash provided byoperating activities and Cash used for investing activities less Change of securities, Contribution to plan assets for pensions andrealized Treasury swaps. The Company’s long-term aspiration is to reach the first quartile of RoCE performance among ouraerospace and defence peers.
The Group also monitors the level of dividends paid to its shareholders.
The Group generally satisfies its obligations arising from share-based payment plans by issuing new shares. In order to avoid any
dilution of its current shareholders out of these share-based payment plans, the Group has accordingly decided to buyback and cancel
its own shares following the decisions of the Board of Directors and approval of the Annual General Meeting. Apart from thispurpose, the Group generally does not trade with treasury shares.
The Group complies with the capital requirements under applicable law and its Articles of Association.

34. Net cash
The net cash-position provides financial flexibility to fund the Group’s operations, to react to the Group’s business needs and risk
profile and to return capital to the shareholders.

31 December(In € million)
Cash and cash equivalents

2015
7,489

2014
7,271

Current securities
Non-current securities

1,788
9,851

3,183
5,989

Short-term financing liabilities
Long-term financing liabilities(2,790)(6,335)(1,073)(6,278)Total

10,003

9,092

Derivative instruments recognised in the Group’s statement of financial position consist of (i) instruments that are entered into as
hedges of the Group’s operating activities or interest result, and (ii) embedded foreign currency derivatives that arise from separating
the foreign currency component from certain operating contracts. Cash flows resulting from the settlement of these derivatives are
therefore recorded as part of Group cash flow from operations. Similarly, financial assets and liabilities arising from customer
financing activities and refundable advances from European governments are considered part of the Group’s operating activities andrelated cash flows are hence recognised as cash flows from operating activities.

53

Notes to the IFRS Consolidated Financial Statements

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

2015
1,504

2014
2,280

Short-term securities (at fair value through profit and loss)
Short-term securities (available for sale)
Others

3,220
2,851
1

3,261
1,744
4

Total cash and cash equivalents
Recognized in disposal groups classified as held for sale
Recognized in cash and cash equivalents

7,576
87
7,489

7,289
18
7,271

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.

34.2 Securities
The majority of the Group’s securities consists of debt securities and are classified as available-for-sale financial assets and carried attheir fair values (see Note 35.2 “Carrying amounts and fair values of financial instruments” for more details on how available-forsale assets are accounted for).
The Group’s security portfolio amounts to €11,639 million and €9,172 million as of 31 December 2015 and 2014, respectively. The
security portfolio contains a non-current portion of available-for-sale-securities of €9,848 million (in 2014: €5,985 million) andsecurities designated at fair value through profit and loss of €3 million (in 2014: €4 million) as well as a current portion ofavailable-for-sale-securities of €1,788 million (in 2014: €3,183 million).
Included in the securities portfolio as of 31 December 2015 and 2014, respectively, are corporate and government bonds bearing
either fixed rate coupons (€10,956 million nominal value; comparably in 2014: €8,666 million) or floating rate coupons(€397 million nominal value; comparably in 2014: €250 million) and foreign currency Funds of Hedge Funds (€8 million nominal
value; 2014: €8 million).
When the Group enters into securities lending activities, the securities pledged as collateral continue to be recognised on the balance
sheet. There were no such securities pledged as of 31 December 2015 and 2014.

34.3 Financing liabilities
Financing liabilities comprise obligations towards financial institutions, issued corporate bonds, deposits made by customers of
Airbus Group Bank, borrowings received from joint ventures and other parties as well as finance lease liabilities. Financing liabilities
are recorded initially at the fair value of the proceeds received, net of 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 finance income (cost)” over the period of the financing liability.
Financing liabilities to financial institutions include liabilities from securities lending transactions. In securities lending transactions,
the Group receives cash from its counterparty and transfers the securities subject to the lending transaction as collateral. The amountof cash received is recognised as a financing liability. The securities lent are not derecognised, but remain on the Group’s balance
sheet.
The Group has issued several €-denominated bonds under its Euro Medium Term Note Programme (“EMTN”) and placed a US
dollar-denominated bond on the US institutional market under Rule 144A. It has also issued a convertible bond in euro. Furthermore,
the Group has long-term US dollar-denominated loans outstanding with the European Investment Bank (“EIB”) and the Development
Bank of Japan (“DBJ”).

54

Notes to the IFRS Consolidated Financial Statements

The terms and repayment schedules of these bonds and loans are as follows:
Principal
amountBond / Loan

Issuance
Coupon or
Effective Maturity
date interest rate interest rate
date

EM TN 15 years€ 500,000,000

Sep-03

5.50%

5.58%

Sep-18EM TN 7 years€ 1,000,000,000

Aug-094.625%

4.68%

Aug-16EM TN 10 years€ 1,000,000,000

Apr-142.375%

2.394%

Apr-24EM TN 15 years€ 500,000,000

Oct-142.125%

2.194%

Oct-29

US$1,000,000,000

Apr-13

2.70%

2.73%

Apr-23€ 500,000,000

Jul-151.386%

Jul-22

2.52%

USD Bond 10 years
CONVERTIBLE Bonds
7 years
DBJ 10 years

US$300,000,000

EIB 10 years

US$720,750,000

EIB 7 years

US$406,110,000

0.00%
3M US-Libor
Jan-11+1.15%
3M US-Libor
Aug-11+0.85%
3M US-Libor
Feb-13+0.93%

EIB 10 years

US$626,850,000

Dec-14

EIB 10 years

US$320,130,000

2.52%
6M US-Libor
Dec-15+0.559%Jan-21
Aug-21

Additional features
Interest rate swapped into
3M Euribor +1.72%
Interest rate swapped into
3M Euribor +1.57%
Interest rate swapped into
3M Euribor +1.40%
Interest rate swapped into
3M Euribor +0.84%
Interest rate swapped into
3M Libor +0.68%
Convertible into
Airbus Group SE shares at€99.54 per share
Interest rate swapped into
4.76% fixedInterest rate swapped into
3.2% fixedFeb-20Dec-24

Interest rate swapped into
3M Libor +0.61%

Dec-25The Group can issue commercial paper under the so called “billet de trésorerie” 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 amaximum volume of €2 billion, increased in 2013 to a maximum volume of €3 billion. As of 31 December 2015, there was nooutstanding amount under the programme. The Group signed in April 2015 the documentation of a $2 billion commercial paper
programme. As of 31 December 2015, the outstanding amount was $ 550 million.
Financing liabilities include outstanding debt of €129 million (2014: €147 million) relating to a loan Airbus received from Air 2 US
in 1999 by way of a reinvestment note amounting to US$800 million, bearing a fixed interest rate of 9.88%, and other liabilities
related to sales financing (see Note 25 “Sales financing transactions”).
On 1 July 2015, the Group issued convertible bonds for €500 million, with a 7-year maturity. The bonds bear a coupon of 0% andwere issued at 102% of par. Their effective interest rate, after separation of the equity conversion option, is 1.386%.
In December 2015, the Group entered into a US$320 million loan agreement with the EIB maturing in December 2025.
Not exceeding
Over 1 year
M ore than
1 yearup to 5 years
5 years(In € million)

Total

Bonds

1,523

550

2,893

4,966

Liabilities to financial institutions

349

1,112

1,001

2,462

Loans

255

163

240

658

Liabilities from finance leases

13

145

230

388

Others (1)

650

1

0

651

2,790

1,971

4,364

9,125

Bonds

1

1,543

2,374

3,918

Liabilities to financial institutions

22

526

1,225

1,773

Loans

285

243

181

709

Liabilities from finance leases

12

70

116

198

753

0

0

753

1,073

2,382

3,896

7,351

31 December 2015 (2)Others(1)

31 December 2014(2)(1) Included in “Others” are financing liabilities to joint ventures.
(2) Financing liabilities include non-recourse Airbus debt of €94 million in 2015 (€46 million in 2014).

55

Notes to the IFRS Consolidated Financial Statements

The aggregate amounts of financing liabilities maturing during the next five years and thereafter are as of 31 December 2015 and asof 31 December 2014, are as follows:(In € million)
1 year
2 years
3 years
4 years
5 years
Thereafter
Total

2015
2,790
228
835
252
656
4,364
9,125

2014
1,073
1,240
196
723
223
3,896
7,351

35. Information about financial instruments
35.1 Financial risk management
By the nature of its activities, the Group is exposed to a variety of financial risks: (i) market risks, in particular foreign exchange risk,
but also interest rate risk, equity price risk and commodity price risk, (ii) liquidity risk and (iii) credit risk. The Group’s overall
financial risk management activities focus on mitigating unpredictable financial market risks and their potential adverse effects on
the Group’s operational and financial performance.
The financial risk management of the Group is generally carried out by the Corporate Finance department at the Group under policies
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 established treasury committees and the Group’s Divisions.
The Group uses financial derivatives solely for risk mitigating purposes (“hedging”) and applies hedge accounting for a significant
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 Group manages a long-term hedge portfolio with maturities of several years covering its net exposure to US dollar sales, mainly
from the activities of Airbus. This hedge portfolio covers a large portion of the Group’s firm commitments and highly probable
forecast transactions.
Most of Group’s revenue is denominated in US dollars, while a major portion of its costs is incurred in euro and to some extent inother foreign currencies. Consequently, to the extent that the Group 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 the Group intends to generate
profits primarily from its operations rather than through speculation on exchange rate movements, it uses hedging strategies tomanage and minimise the impact of exchange rate fluctuations on these profits.
With respect to its commercial aircraft products, the Group typically hedges firmly committed sales in US dollars using a “first flow
approach”. Under that approach, the foreign currency derivatives the Group enters into are designated as a hedge of the first US
dollar inflows received from the customer at aircraft delivery in a given month. The strategy implies that only a portion of the
expected monthly customer payments made at aircraft delivery are hedged. For this reason, a reduction of monthly cash inflows as aresult of postponements or order cancellations have no impact on the effectiveness of the hedge as long as the actual gross US dollar
cash inflows received at aircraft delivery in a particular month exceed the portion designated as being hedged in that month.
Similarly, though to a much lesser extent, the Group hedges its expected foreign currency exposure arising from US dollar or poundsterling cash outflows in the commercial aircraft business on a first outflow basis.

56

Notes to the IFRS Consolidated Financial Statements

In military aircraft and non-aircraft businesses, the Group hedges in- and outflows in foreign currencies from firmly committed or
highly probable forecast sales and purchase contracts. Here, foreign currency derivatives are typically contracted 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 the variability in the range of potential outcomes taking into account macroeconomic 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 potentially significant
delays, the Group may use rollover strategies, usually involving F/X swaps.
For all foreign currency hedges of future cash flows which qualify for hedge accounting under IAS 39, the Group uses the cash flow
hedge model, which requires (i) recognising the effective portion of the fair value changes of the hedging derivatives in equity(within other comprehensive income) and (ii) recognising the effect of the hedge in profit or loss when the hedged cash flows affectprofit or loss.
In addition, the Group hedges currency risk arising from financial assets or liabilities denominated in currencies other than the euro,
including foreign currency receivable and payable accounts, as well as foreign currency denominated funding transactions or
securities. The Group applies hedge accounting if a mismatch in terms of profit or loss recognition of the hedging instrument andhedged item would otherwise occur. Frequently, however, the currency-induced gains or losses of the hedging instrument and thehedged item match in terms of profit or loss recognition (“natural hedge”), so no hedge accounting is required. Sometimes such gains
or losses may end up in different sections of the income statement (such as operating profit for the hedged item and financial result
for the hedging instrument). If so, the Group may choose to present the gains or losses of both the hedging instrument and the hedged
item in the same income statement line item if certain formal requirements are met.
As hedging instruments, the Group primarily uses foreign currency forwards, foreign currency options, some synthetic forwards andto a minor extent non-derivative financial instruments.
The Group also has foreign currency derivative instruments which are embedded in certain purchase contracts denominated in acurrency other than the functional currency of any substantial party to the contract, principally in US dollar and pound sterling. Ifsuch embedded derivatives are required to be accounted for separately from the host purchase contract, related gains or losses are
generally recognised in other financial result. However, if the embedded derivatives qualify for hedge accounting, the Group mightchoose to designate them as a hedging instrument in a hedge of foreign currency risk, in which case they are accounted for under the
cash flow hedge model as described above.
Interest rate risk – The Group uses an asset-liability management approach with the objective to limit its interest rate risk. The
Group undertakes to match the risk profile of its interest-bearing 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 futurescontracts, 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 of these derivatives and the portion of the hedged items’ fair value changethat is attributable to the hedged interest rate risk are recognised in profit and loss, where they offset to the extent the hedge iseffective.
A few interest rate swaps that have been entered into as a hedge of certain of the Group’s variable rate debt (see Note 34.3
“Financing liabilities”) are accounted for under the cash flow hedge model, and related fair value gains are recognised in OCI andreclassified to profit or loss when the hedged interest payments affect profit or loss.
The Group invests in financial instruments such as overnight deposits, certificates of deposits, commercial papers, other money
market instruments and short-term as well as medium-term bonds. For its financial instruments portfolio, the Group has an asset
management committee in place that meets regularly and aims to limit the interest rate risk on a fair value basis through a value-atrisk approach.
Commodity price risk – The Group is exposed to risk relating to fluctuations in the prices of commodities used in the supply chain.
The Group manages these risks in the procurement process and to a certain extent uses derivative instruments in order to mitigate therisks associated with the purchase of raw materials. To the extent that the gains or losses of the derivative and those of the hedged
item or transaction do not match in terms of profit or loss, the Group applies cash flow hedge accounting to the derivative
instruments.

57

Notes to the IFRS Consolidated Financial Statements

Equity price risk – The Group is to a small extent invested in equity securities mainly for operational reasons. The Group’s exposure
to equity price risk is hence limited. Furthermore, the Group is exposed under its LTIP to the risk of Airbus Group share priceincreases. The Group limits these risks through the use of equity derivatives that qualify for hedge accounting and have been
designated as hedging instruments in a cash flow hedge.
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-at-risk (“VaR”). The VaR of a portfolio is the estimated potential loss
that will not be exceeded over a specified period of time (holding period) from an adverse market movement with a specified
confidence level. The VaR used by the Group is based upon a 95% confidence level and assumes a 5-day holding period. The VaRmodel used is mainly based on the so called “Monte-Carlo-Simulation” method. Deriving the statistical behaviour of the markets
relevant for the portfolio out of market data from the previous two years and observed interdependencies between different markets
and prices, the model generates a wide range of potential future scenarios for market price movements.
The Group’s VaR computation includes the Group’s financial debt, short-term and long-term investments, foreign currency forwards,
swaps and options, commodity contracts, finance lease receivables and liabilities, foreign currency trade payables and receivables,
including intra-group payables and receivables affecting Group profit and loss.
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 arealistic 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% statisticalprobability that losses could exceed the calculated VaR.



the use of historical data as a basis for estimating the statistical behaviour of the relevant markets and finally determining the possible
range of future outcomes out of this statistical behaviour may not always cover all possible scenarios, especially those of an
exceptional nature.

The Group uses VaR amongst other key figures in order to determine the riskiness of its financial instrument portfolio and in order to
optimise the risk-return ratio of its financial asset portfolio. Further, the Group’s 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 of thisportfolio are measured and serve amongst other measures as a basis for the decisions of the Group’s Asset Management Committee.

58Notes to the IFRS Consolidated Financial Statements

A summary of the VaR position of the Group’s financial instruments portfolio at 31 December 2015 and 2014 is as follows:(In € million)
31 December 2015
FX hedges for forecast
transactions or firm commitments
Financing liabilities, financial assets(including cash, cash equivalents
securities and related hedges)
Finance lease receivables and liabilities,
foreign currency trade payables andreceivables
Commodity contracts
Equity swaps
Diversification effect
All financial instruments
31 December 2014
FX hedges for forecast
transactions or firm commitments
Financing liabilities, financial assets(including cash, cash equivalents
securities and related hedges)
Finance lease receivables and liabilities,
foreign currency trade payables andreceivables
Commodity contracts
Equity swaps
Diversification effect
All financial instruments

Total
VaR

Equity price
VaR

Currency Commodity price
VaR
VaR

Interest rate
VaR

1,814

0

1,870

0

181

210

162

82

0

15

91
7
11
(418)
1,715

0
0
11
(8)
165

24
3
0
(172)
1,807

0
6
0
0
6

83
0
0
(92)
187

1,052

0

1,135

0

122

407

401

33

0

32

55

0

19

0

57

9
17
(489)
1,051

0
17
(17)
401

2
0
(74)
1,115

9
0
0
9

0
0
(27)
184

The increase of total VaR as of 31 December 2015 is mainly attributable to a strong increase of market volatilities, in particularforeign exchange (“FX”) volatility in combination with an increased net foreign exchange portfolio in comparison to year end 2014.
The Group 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 FX hedging portfolio in the amount of€1,814 million (2014: €1,052 million) cannot be considered as a risk indicator for the Group in the economic sense.

Liquidity risk
The Group’s policy is to maintain sufficient cash and cash equivalents at any time to meet its present and future commitments as theyfall due. The Group manages its liquidity by holding adequate volumes of liquid assets and maintains a committed credit facility(€3.0 billion as of 31 December 2015 and 2014) in addition to the cash inflow generated by its operating business. The Group
continues to keep within the asset portfolio the focus on low counterparty risk. In addition, the Group 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 the Group’s funding costs and limit its financial flexibility.
Further, the management of the vast majority of the Group’s liquidity exposure is centralised by a daily cash concentration process.
This process enables the Group to manage its liquidity surplus as well as its liquidity requirements according to the actual needs of its
subsidiaries. In addition, management monitors the Group’s liquidity reserve as well as the expected cash flows from its operations.

59Notes to the IFRS Consolidated Financial Statements

The contractual maturities of the Group’s financial liabilities, based on undiscounted cash flows and including interest payments, if
applicable, are as follows:(In € million)
31 December 2015
Non-derivative financial liabilities
Derivative financial liabilities

Carrying Contractual
1 year
2 years
3 years
4 years
amount cash flows < 1 year – 2 years – 3 years – 4 years – 5 years> 5 years(22,074)(10,587)(23,355) (15,311)(12,690) (3,973)(832)(2,747)(1,113)(3,518)(408)(1,898)

(762)
(506)

(4,929)(48)

Total
31 December 2014
Non-derivative financial liabilities
Derivative financial liabilities(32,661)(36,045) (19,284)(3,579)(4,631)(2,306)(1,268)(4,977)(18,905)(5,503)(20,008) (11,625)(6,976) (2,293)(1,786)(1,747)(586)(1,413)

(956)
(895)

(353)
(543)

(4,702)
(85)

Total

(24,408)(26,984) (13,918)(3,533)(1,999)(1,851)(896)(4,787)

Non-derivative financial liabilities included in the table above comprise financing liabilities and finance lease liabilities as presented
in the tables of Note 35.2 “Carrying amounts and fair values of financial instruments”. Due to their specific nature, namely theirrisk-sharing features and uncertainty about the repayment dates, the European Governments refundable advances, which amount to€7,286 million at 31 December 2015 (€6,528 at 31 December 2014) are not included.

Credit risk
The Group is exposed to credit risk to the extent of non-performance by either its customers (e.g. airlines) or its counterparts withregard to financial instruments or issuers of financial instruments for gross cash investments. However, the Group has policies inplace 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 on Group level. In orderto ensure sufficient diversification, a credit limit system is used.
The Group monitors the performance of the individual financial instruments and the impact of the market developments on theirperformance and takes appropriate action on foreseeable adverse development based on pre-defined procedures and escalation levels.
Sales of products and services are made to customers after having conducted appropriate internal credit risk assessment. In order tosupport sales, primarily at Airbus and ATR, the Group may agree to participate in the financing of customers, on a case-by-casebasis, directly or through guarantees provided to third parties. In determining the amount and terms of the financing transaction,
Airbus and ATR take into account the airline’s credit rating and economic factors reflecting the relevant financial market conditions,
together with appropriate assumptions as to the anticipated future value of the financed asset.
The booked amount of financial assets represents the maximum credit exposure. The credit quality of financial assets can be assessedby reference to external credit rating (if available) or internal assessment of customers’ (such as airlines’) creditworthiness by way ofinternal risk pricing methods.
The following table breaks down the carrying amounts of the Group’s non-cash loans and receivables including finance leases,
separately showing those that are impaired, renegotiated or past due:(In € million)

2015

2014

Receivables, neither past due nor impaired
Not past due following negotiations and not impaired

7,795
139

6,592
94

Receivables impaired individually
Receivables not impaired and past due ≤ 3 months
Receivables not impaired and past due > 3 and ≤ 6 months
Receivables not impaired and past due > 6 and ≤ 9 months

170
1,062
432
157

405
1,173
271
95

Receivables not impaired and past due > 9 and ≤ 12 months
Receivables not impaired and past due > 12 months
Total

294
484
10,533

141
387
9,158

The 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.
At year-end there was no indication that any financial assets carried at fair value were impaired.

60

Notes to the IFRS Consolidated Financial Statements

35.2 Carrying amounts and fair values of financial instruments
Financial instruments – The Group’s financial assets mainly consist in cash, short to medium-term deposits and securities. The
Group’s 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 to market
conventions. The Group classifies its financial assets in the following three categories: (i) at fair value through profit or loss, (ii)loans and receivables and (iii) available-for-sale financial assets. Their classification is determined by management when firstrecognised and depends on the purpose for their acquisition.
Within the Group, all investments in entities which do not qualify for consolidation or equity-method accounting are classified as
non-current available-for-sale financial assets. They are included in the line other investments and other long-term financial assets in
the Consolidated Statement of Financial Position.
Available for sale financial assets – Financial assets classified as available-for-sale are accounted for at fair value. Changes in theirfair value other than impairment losses and foreign exchange gains and losses on monetary items are recognised directly within
AOCI. As soon as such financial assets are sold or otherwise disposed of, or are determined to be impaired, the cumulative gain orloss previously recognised in equity is recorded as part of Other income (Other expense) from investments in the Consolidated
Income Statement for the period. Interest earned on the investment is presented as interest income in the Consolidated Income
Statement using the effective interest method. Dividends earned on investment are recognised as Other income (Other expense) frominvestments in the Consolidated Income Statement when the right to the payment has been established.
In case of the impairment of debt instruments classified as available-for-sale, interest continues to be accrued at the original effective
interest rate on the reduced carrying amount of the asset and is recorded in ﬁnancial result. If, in a subsequent year, the fair value of adebt instrument increases and the increase can be objectively related to an event occurring after the impairment loss was recognisedin the Consolidated Income Statement, the impairment loss is reversed through the Consolidated Income Statement.
Financial assets at fair value through profit or loss – Within the Group, only derivatives not designated as hedges are categorized asheld for trading. Furthermore, the Group designates certain financial assets (such as investments in accumulated Money Market
Funds) at fair value through profit or loss at initial recognition if they are part of a group of financial assets that is managed and its
performance is evaluated on a fair value basis, in accordance with a documented risk management or investment strategy.
The Group assigns its financial instruments into classes based on their balance sheet category.

61

Notes to the IFRS Consolidated Financial Statements

The following tables present the carrying amounts and fair values of financial instruments by class and by IAS 39 measurement
category as of 31 December 2015 and 2014:31 December 2015
Fair Value
Fair Value through for hedge Available
profit or loss
relations for S ale
Held fortrading Designated(In € million)

Fair
value

Loans andReceivables andFinancialliabilities

Fair Amortised
value
Cost

Other(3)

Fair
value

Financial
Instruments
Total
Book
Value

Fair
value

AssetsOther investments and otherlong-term financial assets- Equity investments (1) (2)- Customer financings (3)- Other loans
T rade receivables

0
0
0
0

0
0
0
0

0
0
0
0

1,232
0
0
0

0
553
717
7,877

0
168
0
0

1,232
721
717
7,877

1,232
721
717
7,877

0
1,218
0
1,418
11,783

0
553
717
7,877
0
0
1,218
0
1,418
11,783

317
0
0
0
317

0
0
3
3,220
3,223

963
0
0
0
963

0
0
11,6362,851
15,719

0
0
0
0
168

1,280
1,218
11,6397,489
32,173

1,280
1,218
11,6397,489
32,17300

0

0(4,966)(5,091)

0(4,966)(5,091)

0
0

0
0

0
0

0
0

(3,771)0(3,822)00(388)(3,771)(388)(3,822)
(388)

(427)

0

(10,160)0000 (10,587) (10,587)

0
(74)
0
(501)

0
0
0
0

0
0
0
(10,160)0000(7,286)(1,112)(11,763)(28,898)(7,286)(1,112)(11,763)(29,074)

0 (7,286) (7,286)
0 (1,186) (1,186)
0 (11,763) (11,763)(388) (39,947) (40,123)

Other financial assets- Derivative instruments (6)- Non-derivative instruments
Securities
Cash and cash equivalents

Total
Liabilities
Financing liabilities- Issued bonds
and commercial papers- Liabilities to banks
and other financing liabilities- Finance lease liabilities(4)

Other financial liabilities- Derivative instruments (7)- European Governments
refundable advances (5)- OtherT rade liabilities

Total(1) Other than those accounted for under the equity method.
(2) For certain unlisted equity investments price quotes are not available and fair values may not be reliably measurable using valuation techniques because therange of reasonable fair value estimates is significant and the probabilities of the various estimates within the range cannot be reasonably assessed. These equity
investments are accounted for at cost, and their fair values as reported in the table above equal their carrying amounts. As of 31 December 2015, the aggregate
carrying amount of these investments was €404 million.
(3) This includes finance lease receivables, which are not assigned to an IAS 39 measurement category, but reported as “other”.
(4) Finance lease liabilities are accounted for in accordance with IAS 17 in a manner that is similar, though not identical in all respects, to amortised-costaccounting under IAS 39. They are therefore assigned to the category Other.
(5) The European Governments refundable advances of €7,286 million are measured at amortised cost. Fair values cannot be reliably measured because theirrisk sharing nature and 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.
(6) This includes credit value adjustments of €-47 million, of which €-28 million is recognised in OCI.
(7) This includes debit value adjustments of €117 million, of which €95 million is recognised in OCI.

62

Notes to the IFRS Consolidated Financial Statements

31 December 2014
Fair Value
Fair Value through for hedge Available
profit or loss
relations for S ale
Held fortrading Designated(In € million)

Fair
value

Loans andReceivables andFinancialliabilities

Other(3)Fair Amortised
value
Cost

Fair
value

Financial
Instruments
Total
Book
Value

Fair
value

AssetsOther investments and otherlong-term financial assets- Equity investments (1) (2)- Customer financings(3)- Other loans
T rade receivables

0
0
0
0

0
0
0
0

0
0
0
0

617
0
0
0

0
426
876
6,798

0
426
876
6,798

0
17
0
0

617
443
876
6,798

617
443
876
6,798

266
0
0
0
266

0
0
4
3,261
3,265

444
0
0
0
444

0
0
9,168
1,744
11,529

0
1,040
0
2,266
11,406

0
1,040
0
2,266
11,406

0
0
0
0
17

710
1,040
9,172
7,271
26,927

710
1,040
9,172
7,271
26,92700

0

0(3,918)(4,227)

0(3,918)(4,227)

0
0

0
0

0
0

0
0

(3,235)0(3,291)0

0(198)(3,235)(198)(3,291)
(198)

(370)

0

(5,133)

0

0

0

0

(5,503)(5,503)

0
(137)
0
(507)

0
0
0
0

0
0
0
(5,133)0000(6,528)(1,234)(10,183)(25,098)(6,528)(1,234)(10,183)(25,463)

Other financial assets- Derivative instruments (6)- Non-derivative instruments
Securities
Cash and cash equivalents

Total
Liabilities
Financing liabilities- Issued bonds
and commercial papers- Liabilities to banks
and other financing liabilities- Finance lease liabilities (4)Other financial liabilities- Derivative instruments (7)- European Governments
refundable advances (5)- OtherT rade liabilities

Total

0 (6,528) (6,528)
0 (1,371) (1,371)
0 (10,183) (10,183)(198) (30,936) (31,301)(1) Other than those accounted for under the equity method.
(2) For certain unlisted equity investments price quotes are not available and fair values may not be reliably measurable using valuation techniques because therange of reasonable fair value estimates is significant and the probabilities of the various estimates within the range cannot be reasonably assessed. These equity
investments are accounted for at cost, and their fair values as reported in the table above equal their carrying amounts. As of 31 December 2014, the aggregate
carrying amount of these investments was €409 million.
(3) This includes finance lease receivables, which are not assigned to an IAS 39 measurement category, but reported as “other”.
(4) Finance lease liabilities are accounted for in accordance with IAS 17 in a manner that is similar, though not identical in all respects, to amortised-costaccounting under IAS 39. They are therefore assigned to the category “Other”.
(5) The European Governments refundable advances of €6,528 million are measured at amortised cost. Fair values cannot be reliably measured because theirrisk sharing nature and 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.
(6) This includes credit value adjustments of €-18 million, of which €-7 million is recognised in OCI.
(7) This includes debit value adjustments of €31 million, of which €18 million is recognised in OCI.

63

Notes to the IFRS Consolidated Financial Statements

Fair value hierarchy
Fair value of financial instruments – The fair value of quoted investments is based on current market prices. If the market for
financial assets is not active, or in the case of unlisted financial instruments, the Group determines fair values by using generally
accepted valuation techniques on the basis of market information available at the end of the reporting period. Derivative instruments
are generally managed on the basis of the Group’s net exposure to the credit risk of each particular counterparty and fair value
information is provided to the Group’s key management personnel on that basis. For these derivative instruments, the fair value ismeasured based on the price that would be received to sell a net long position, or transfer 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 behierarchized according to the following levels of input:Level 1: quoted prices (unadjusted) in active markets for identical assets and liabilities;

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

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

The fair values disclosed for financial instruments accounted for at amortised cost reflect Level 2 input. Otherwise, fair values are
determined mostly based on Level 1 and Level 2 input and to a minor extent on Level 3 input.
The following tables present the carrying amounts of the financial instruments held at fair value across the three levels of the fairvalue hierarchy as of 31 December 2015 and 2014, respectively:

31 December 201531 December 2014

(In € million)
Financial assets measured at fair value

Level 1

Level 2

Level 3

Total

Level 1

Level 2

Level 3Total

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

828
0
11,474
3,941
16,243

0
1,234
165
2,130
3,529

0
46
0
0
46

828
1,280
11,6396,071
19,818

208
0
7,784
3,563
11,555

0
708
1,388
1,442
3,538

0
2
0
0
2

208
710
9,172
5,005
15,095000(10,587)0(10,587)

0
(74)
(74)

(10,587)(74)(10,661)000(5,503)0(5,503)

0
(137)
(137)

(5,503)(137)(5,640)The development of financial instruments of Level 3 is as follows:
Financial Assets(In € million)
1 January 2014
Total gains or losses in profit or loss
Settlements
31 December 2014
Total gains or losses in profit or loss
OCI
Settlements
31 December 2015

Commodity Other derivative
swap ageements
instruments
26
(1)
(23)
2
59
0
(15)
46

8
0
(8)
0
0
0
0
0

Financial Liabilities
Written put
Derivative options on NCI
Instrumentsinterests
34
(1)
(31)
2
59
0
(15)
46

(129)
2
0
(127)
0
60
3
(64)

Earn-outagreements

OthersLiabilities

(51)
38
3
(10)
0
0
0
(10)

(180)
40
3
(137)
0
60
3
(74)

The profit of the period impact attributable to Level 3 financial assets and liabilities which are still held by the Group as of 31
December 2015 was a gain of €46 million. The profit of the period impact attributable to Level 3 financial assets and liabilities which
are still held by the Group as of 31 December 2014 was a gain of €1 million and €24 million respectively.

64

Notes to the IFRS Consolidated Financial Statements

Financial assets classified as Level 3
The financial assets measured at fair value that are classified as Level 3 mainly consist of short-term commodity contracts whose
notional amounts vary with the actual volumes of certain commodity purchases made by the Group in specific months. For fair value
measurement purposes, the notional amounts, being the unobservable input, are set with reference to monthly commodity volumes
that management expects to purchase based on planning forecasts. The fair values are otherwise determined using observable market
data including quoted interest rates and pricing information obtained from recognised vendors of market data.
A deviation of 10% of actual monthly volumes purchased from expected monthly volumes purchased would increase or decrease(depending on whether actual volumes are 10% more or 10% less than expected volumes) the total Level 3 fair value of theseshort-term commodity contracts by less than €5 million.

Financial liabilities classified as Level 3
The financial liabilities measured at fair value that are classified as Level 3 consist of several written put options on non-controllinginterest (“NCI puts”) of Group subsidiaries. The fair values of these NCI puts (i.e. the net present value of their redemption amounton exercise) are derived from a discounted cash flow analysis of the latest operating planning figures of the respective entities.
The fair value measurements are performed on an annual basis in line with the operative planning cycle. Apart from the detailed
five-year operating planning figures, there are two unobservable inputs that significantly affect the values of the NCI puts: the
WACC used to discount the forecasted cash flows and the growth rate used to determine the terminal value. WACC and growth rates
as well as operating planning figures that were used for the determination of the level 3 fair values are derived from the input
perimeters as applied for the impairment test as disclosed in Note 17 “Intangible assets – Goodwill impairment tests”. An increase(decrease) of the discount rates by 50 basis points results in a decrease (increase) of the NCI put values by €5 million (€11 million).
An increase (decrease) in the growth rates by 50 basis points increases (decreases) the NCI put values by €5 million (€11 million)
respectively.
Another element of financial liabilities measured at fair value classified as Level 3 are earn-out payments that have been agreed withformer shareholders of entities acquired by the Group in business combinations. Fair value measurement is based on the expectation
regarding the achievement of defined target figures by the acquired entity or its ability to close identified customer contracts.

Financial assets designated at fair value through profit or loss
The following types of financial assets held at 31 December 2015 and 2014, respectively, are designated at fair value through profit
or loss:(In € million)
Designated at fair value through profit
or loss at recognition:- M oney market funds (accumulating)- Foreign currency funds of hedge funds
Total

Nominal amount at Fair value as ofNominal amount at Fair value as ofinitial recognition as of
31 December initial recognition as of
31 December
31 December 20152015
31 December 2014
2014

3,220
8
3,228

3,220
3
3,223

3,261
8
3,269

3,261
4
3,265

The Group manages these assets and measures their performance on a fair value basis.
In addition, the Group invests in non-accumulating Money Market Funds, which pay interest on a monthly basis. The fair value of
those funds corresponds to their nominal amount at initial recognition date amounting to €720 million (2014: €302 million).

Fair value measurement method
The methods the Group uses to measure fair values are as follows:
Equity instruments – The fair values of listed equity instruments reflect quoted market prices. The fair values of unlisted equity
instruments may not be reliably measured because the range of reasonable fair value estimates is significant and the probabilities ofthe various estimates within the range cannot be reasonably assessed. Those instruments are measured at cost, and their carrying
amounts used as a proxy for fair value.

65

Notes to the IFRS Consolidated Financial Statements

Customer financing assets and other loans – The carrying amounts reflected in the annual accounts are used as a proxy for fairvalue.
Trade receivables and other receivables – The carrying amounts reflected in the annual accounts are used as reasonable estimates offair value because of the relatively short period between the receivables’ origination and their maturity.
Securities – The fair values of securities reflect their quoted market price at the end of the reporting period.
Cash and cash equivalents include cash in hand, cash in banks, checks, fixed deposits as well as commercial papers and money
market funds. The carrying amounts reflected in the annual accounts are used as reasonable estimates of fair value because of therelatively short period between the origination of the instrument and its maturity or due date. The fair value of commercial papers isdetermined based on Level 2 input by discounting future cash flows using appropriate interest rates. The fair values of money market
funds are determined by reference to their quoted market price.
Derivatives – The fair values of derivative instruments reflect quoted market prices, where available, but in most cases are
determined using recognised valuation techniques such as option-pricing models and discounted cash flow models. The valuation isbased 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 and similar agreements and managed on the basis of net credit exposure, theirfair values reflect credit and debit value adjustments based on the net long or net short position that the Group has with eachcounterparty. Except for certain short-term commodity contracts discussed in the Level 3 section above, derivative fair values aremeasured based on Level 2 input.
Financing liabilities – The fair values disclosed for financing liabilities, other than those of issued bonds and issued 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$ 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 reasonable estimates of fair value
because of the relatively short period between the origination of these instruments and their maturity.
Trade liabilities and current other financial liabilities – For the same reason, carrying amounts are used 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 2015 and 2014:€(Interest rate in %)

2015

₤

US $
2014

2015

2014

2015

2014

6 months

-0.08

0.13

0.94

0.50

0.85

0.73

1 year

0.14

0.37

1.12

0.82

1.13

1.02

5 years

0.21

0.24

1.72

1.77

1.59

1.45

10 years

0.89

0.70

2.18

2.27

1.99

1.85

66

Notes to the IFRS Consolidated Financial Statements

35.3 Potential effect of set-off rights on recognised financial assets and liabilities
The Group reports all its financial assets and financial liabilities on a gross basis. With each derivative counterparty there are masternetting 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 as afinancial liability. The following tables set out, on a counterparty specific basis, the potential effect of master netting agreements andcollateralised borrowings on the Group’s financial position, separately for financial assets and financial liabilities that were subject tosuch agreements as of 31 December 2015 and 31 December 2014, respectively:

Derivative
instruments(In € million)
31 December 2015
Financial assets
Financial liabilities
31 December 2014
Financial assets
Financial liabilities

Gross amounts
Gross recognised set off
amountsin the financial
recognised
statements

Net amounts
presented in
the financial
statements

Related amounts not set off in thestatement of financial position
Financial
instruments

Cash collateral
receivedNet
amount1,280
10,587(1,280)(1,280)

0
0

0
9,307

1,280
10,587

0
0

710

0

710

(621)

0

89

5,503

0

5,503

(621)

0

4,882

35.4 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 Group through its use of derivatives.
The notional amounts of foreign exchange derivative financial instruments are as follows, specified by year of expected maturity:(In € million)
31 December 2015
Net forward sales contracts
FX options
Purchased US-dollar
put options
Written US-dollar
put options
FX swap contracts
31 December 2014
Net forward sales contracts
FX swap contracts

1 year

2 years

Remaining period
3 years
4 years
5 years

20,395

21,23420,041

14,655

4,086

(367)

(445)

2

79,601

0

0

0

3,536

3,399

441

0

0

7,376

0
906

0
0

0
0

3,536
0

3,399
0

441
0

0
0

0
0

7,376
906

19,834
1,274

17,852
145

16,479
0

9,328
0

4,556
0

477
0

(1,069)0(396)
067,061
1,419

67

6 years

7 years > 7 years

TotalNotes to the IFRS Consolidated Financial Statements

The notional amounts of interest rate contracts are as follows:(In € million)
31 December 2015
Interest rate contracts
Interest rate future contracts
31 December 2014
Interest rate contracts
Interest rate future contracts

Remaining period
4 years 5 years 6 years

1 year

2 years

3 years

7 years > 7 years

Total

1,382
1,032

36
0

1,194
0

1,152
0

7
0

864
0

4
0

3,232
0

7,871
1,032

833
176

1,376
0

30
0

918
0

853
0

0
0

1,070
0

0
0

5,080
176

Please also refer to Note 34.3 “Financing liabilities”.
The notional amounts of commodity contracts are as follows:
Remaining period(In € million)
31 December 201531 December 2014

1 year336
319

2 years
129
161

3 years
23
105

4 years
1120> 4 years
1
10

Total
500
615

The notional amounts of equity swaps are as follows:
Remaining period(In € million)
31 December 2015

1 year153

2 years76

3 years
52

4 years49> 4 years
19

Total
349

31 December 2014

209

146

75

23

0

453

35.5 Derivative financial instruments and hedge accounting disclosure
The development of the foreign exchange rate hedging instruments recognised in AOCI as of 31 December 2015 and 2014 is asfollows:(In € million)
1 January 2014
Unrealised gains and losses from valuations, net of tax
Transferredprofitoforhedging
loss forinstruments
the period, recorded
net of taxin
Changesin fairtovalues
AOCI, net of tax
31 December 2014 / 1 January 2015
Unrealised gains and losses from valuations, net of tax
Transferredprofitoforhedging
loss forinstruments
the period, recorded
net of taxin
Changesin fairtovalues
AOCI, net of tax
31 December 2015

Equity attributable
to equity ownersof the parent
1,101(4,658)247(4,411)(3,310)(2,842)(712)(3,554)(6,864)Non-controllinginterests
(2)
(19)
(1)
(20)
(22)
(54)
27
(27)
(49)

Total
1,099
(4,677)
246(4,431)(3,332)(2,896)(685)(3,581)(6,913)In the year 2015, an amount of €3,833 million (in 2014: €-358 million) was reclassified from equity mainly to revenues resulting
from matured cash flow hedges. No material ineffectiveness arising from hedging relationship has been determined.

68Notes to the IFRS Consolidated Financial Statements

In addition, a gain of €20 million was recognised in the profit of the period in 2015 (€35 million in 2014) on derivatives that were
designated as hedging instruments in a fair value hedge, and a loss of €-18 million (in 2014: €-34 million) attributable to the hedged
risk was recognised in the profit of the period on the corresponding hedged items. Corresponding with its carrying amounts, the fairvalues of each type of derivative financial instruments as of 31 December 2015 and 2014, respectively, is as follows:

2015
AssetsLiabilities(In € million)

2014
AssetsLiabilities

Foreign currency contracts – cash flow hedges

832(10,017)327(4,847)

Foreign currency contracts – not designated in a hedge relationship

182

(82)

154

(103)

Interest rate contracts – cash flow hedges

0

(40)

0

(15)

Interest rate contracts – fair value hedges

101

(8)

117

(26)

Interest rate contracts – not designated in a hedge relationship

80

(87)

105

(141)

Commodity contracts – cash flow hedges

0

(57)

0

(40)

Commodity contracts – not designated in a hedge relationship

46

(73)

2

(64)

Equity swaps – cash flow hedges

30

(7)

0

(94)

Embedded foreign currency derivatives – cash flow hedges

0

(31)

0

(111)

Embedded foreign currency derivatives – not designated in a hedge
relationship
Total

9

(185)

5

(62)

1,280

(10,587)710(5,503)35.6 Net gains or net losses
The Group’s net gains or net losses recognised in profit or loss in 2015 and 2014, respectively, are as follows:(In € million)
Financial assets or financial liabilities at fair value through profit or loss:
Held for trading
Designated on initial recognition

2015

2014

(178)
166

(308)
91

Available-for-sale financial assets
Loans and receivables (1)Financial liabilities measured at amortised cost

183
(182)
(192)

314
(163)
0

(1) Contain among others impairment losses.

Interest income from financial assets or financial liabilities through profit or loss is included in net gains or losses.

35.7 Impairment losses
The following impairment losses on financial assets are recognised in profit or loss in 2015 and 2014, respectively:(In € million)
Other investments and other long-term financial assets
Equity instruments
Customer financings

2015

2014

(49)
(25)

(14)
(16)

Other loans
Trade receivables
Total

(12)
(25)
(111)

(17)
(28)
(75)

69

Notes to the IFRS Consolidated Financial Statements

OTHER NOTES
36. Litigation and claims
Litigation and claims – Various legal actions, governmental investigations, proceedings and other claims are pending or may beinstituted or asserted in the future against the Group. Litigation is subject to many uncertainties, and the outcome of individual
matters is not predictable with certainty. The Group believes that it has made adequate provisions to cover current or contemplated
litigation risks. It is reasonably possible that the final resolution of some of these matters may require the Group to makeexpenditures, 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 used herein to mean that the chance of a future transaction or event occurring is morethan remote but less than likely.
Airbus Group 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 Group 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 Group SE’sor the Group’s financial position or profitability.
If the Group concludes that the disclosures relative to contingent liabilities can be expected to prejudice seriously its position in a
dispute with other parties, the Group limits its disclosures to the nature of the dispute.

WTO
Although Airbus Group is not a party, Airbus Group is supporting the European Commission in litigation before the WTO.
Following its unilateral withdrawal from the 1992 EU-US Agreement on Trade in Large Civil Aircraft, the US lodged a request on 6
October 2004 to initiate proceedings before the WTO. On the same day, the EU launched a parallel WTO case against the US in
relation to its subsidies to Boeing. On 19 December 2014, the European Union requested WTO consultations on the extension until
the end of 2040 of subsidies originally granted by the State of Washington to Boeing and other US aerospace firms until 2024.
On 1 June 2011, the WTO adopted the Appellate Body’s final report in the case brought by the US assessing funding to Airbus from
European governments. On 1 December 2011, the EU informed the WTO that it had taken appropriate steps to bring its measures
fully into conformity with its WTO obligations, and to comply with the WTO’s recommendations and rulings. Because the US did
not agree, the matter is now under WTO panel 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 panel 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 Group conducted internal audits and retained PricewaterhouseCoopers (“PwC”) to
conduct an independent review relating to GPT Special Project Management Ltd. (“GPT”), a subsidiary that Airbus Group acquiredin 2007. The allegations called into question a service contract entered into by GPT prior to its acquisition by Airbus Group, relating
to activities conducted by GPT in Saudi Arabia. PwC’s report was provided by Airbus Group 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 suggestthat improper payments were made by GPT. In August 2012, the SFO announced that it had opened a formal criminal investigation
into the matter. Airbus Group is cooperating fully with the authorities.

70

Notes to the IFRS Consolidated Financial Statements

Eurofighter Austria
In March 2012, the German public prosecutor, following a request for assistance by the Austrian public prosecutor, launched acriminal investigation into alleged bribery, tax evasion and breach of trust by current and former employees of EADS DeutschlandGmbH (renamed on 1 July 2014 Airbus Defence and Space GmbH) and Eurofighter Jagdflugzeug GmbH as well as by third parties
relating to the sale of Eurofighter aircraft to Austria in 2003. After having been informed of the investigation in 2012, Airbus Groupretained the law firm Clifford Chance to conduct a fact finding independent review. Upon concluding its review, Clifford Chancepresented its fact finding report to Airbus Group in December 2013. Airbus Group provided the report to the public prosecutors inGermany. Airbus Group is cooperating fully with the authorities.

Other investigations
Following the announcement of investigations by the Romanian authorities relating to the border surveillance project in Romania in
mid-October 2014, Airbus Group confirms that Airbus Defence and Space GmbH has been informed that the German prosecution
office is also investigating potential irregularities in relation to this project, a project in Saudi Arabia and a project of TesatSpacecom GmbH & Co. KG. The public prosecutor in Germany has launched administrative proceedings in the context of thoseinvestigations against Airbus Defence and Space GmbH and Tesat-Spacecom GmbH & Co. KG. Airbus Group is cooperating fully
with the authorities.
Public prosecutors in Greece and Germany launched investigations into a current employee and former managing directors andemployees of Atlas Elektronik GmbH, a joint company of ThyssenKrupp and Airbus Group, on suspicion of bribing foreign officials
and tax evasion. The public prosecutor in Germany has launched an administrative proceeding for alleged organisational andsupervisory shortfalls. The authorities in Greece have launched civil claims against Atlas Elektronik GmbH. In 2015 the publicprosecutor´s office in Bremen launched another investigation into current and former employees and managing directors of Atlas
Elektronik GmbH on suspicion of bribery and tax evasion in connection with projects in Turkey. With the support of its shareholders,the company is cooperating fully with the authorities and in consultation with the public prosecutor is assisting the further
clarification of the matter through its own internal investigation.

Commercial disputes
In May 2013, the Group has been notified of a commercial dispute following the decision taken by the Group to cease a partnershipfor sales support activities in some local markets abroad. The Group believes it has solid grounds to legally object to the alleged
breach of a commercial agreement. However, the consequences of this dispute and the outcome of the proceedings cannot be fully
assessed at this stage. The arbitration is not expected to be completed before the end of 2016.
In the course of another commercial dispute, the Group received a statement of claim alleging liability for refunding part of thepurchase price of a large contract which the customer claims it was not obliged to pay. The Group believes that this claim, whichgoes back many years, should be dismissed in principle. The dispute is currently the subject of arbitration.
In light of regulatory investigations and commercial disputes, including those discussed above, the Group has determined to enhancecertain of its policies, procedures and practices, including ethics and compliance. The Group is accordingly in the process of revisingand implementing improved procedures, including those with respect to its engagement of consultants and other third parties, inparticular in respect of sales support activities, and is conducting enhanced due diligence as a pre-condition for future or continued
engagement and corresponding payment. The Group believes that these enhancements to its controls and practices best position it for
the future, particularly in light of advancements in regulatory standards. The Group cannot exclude that these changes lead to
additional commercial disputes or other consequences in the future.

71

Notes to the IFRS Consolidated Financial Statements

37. Auditor fees
With reference to Section 2:382a(1) and (2) of the Netherlands Civil Code, the following fees for the financial year 2015 have been
charged by KPMG to the Company, its subsidiaries and other consolidated entities:

2015
In € thousand
Audit
Audit process, certification and examination of individual andconsolidated accounts

2014
In % In € thousand

In %

6,008

47.0

5,812

66.5

Additional tasks (1)S ub-total
Other services as relevant
Legal, tax, employment
S ub-total

6,160
12,168

48.2
95.2

2,344
8,156

26.9
93.4

608
608

4.8
4.8

573
573

6.6
6.6

Total

12,776

100.0

8,729

100.0

(1) Mainly transaction related work.

In 2015 and 2014, the Airbus Group was audited by KPMG only. Other audit firms have audit fees related to audit process,certification and examination of individual and consolidated accounts of €6 million in 2015 (2014: €6 million).

38. Events after the reporting date
There are no significant events after the reporting date.
These Consolidated Financial Statements have been authorized for issuance by the Board of Directors on 23 February 2016.

72

AIRBUS_2015_RD_EV_ORGA.pdf

1

24/02/16

18:21

AIRBUS GROUP SE(The Netherlands)

97.57%

Airbus Group
Limited(UK)

DADC Luft-und
Raumfahrt
Beteiligungs GmbH
(Germany)

Airbus Group SAS(France)
96.31%

Airbus DS SAS(France)

Airbus Defence
and Space, S.A.
(Spain)Airbus Group, Inc.
(USA)

2.43%

Airbus Helicopters
Holding(France)

Airbus DS
Holdings B.V.
(The Netherlands)

18.12%
3.69%

Airbus Defence
and Space GmbH
(Germany)

15.80%EADS CASAHOLDING(France)66.08%

Airbus DS Holding
SAS(France)

Airbus DS Holding
France SAS(France)
5%65%Stelia Aerospace(France)Elbe
FlugzeugwerkeGmbH(Germany)

50%*

ATR GIE(France)

Premium Aerotec
GmbH(Germany)

37.5%*MBDA Group

AirbusAirbus DS GmbH
(Germany)

Airbus Defence
and Space SAS(France)

Airbus Helicopters(France)

Astrium
España, S.L.
(Spain)EADS Casa
Espacio, S.L.
(Spain)Airbus Helicopters
DeutschlandGmbH(Germany)

Airbus Operations
SAS(France)

Astrium Services
GmbH (Germany)

CRI, S.A.
(Spain)AirbusHelicopters
UK Limited(UK)

Airbus Operations
GmbH(Germany)

Airbus Defence
and Space
Limited (UK)

Airbus Operations
Limited(UK)

Astrium Services
UK Limited(UK)

94.42%

Airbus(France)

Airbus Defence and Space
Airbus Helicopters
Airbus Group North America

EADS CASAFRANCE(France)95%

AirbusOperations, S.L.
(Spain)

5.58%

AirbusHelicopters
España, S.A.
(Spain)Infoterra Limited(UK)

Paradigm Secure
Communications
Limited(UK)

MBDA Group*Airbus Group owns indirectly 50% of ATR GIE and 37.50% of MBDA Group.
Subsidiaries held with no indication of ownership percentage are 100% owned.
Legal forms are indicated for information purposes and are not always part of the legal name.

Paradigm
Services Limited(UK)

Vector Aerospace
Holding SAS(France)3. IFRS COMPANY FINANCIAL STATEMENTS

Notes to the IFRS Company Financial Statements

Table of Content
AIRBUS GROUP SE - IFRS COMPANY FINANCIAL STATEMENTS ....................................................... 2
IFRS Company Income Statements for the years ended 31 December 2015 and 2014 ................................................. 2
IFRS Company Statements of Comprehensive Income for the years ended 31 December 2015 and 2014 .................. 3
IFRS Company Statements of Financial Position at 31 December 2015 and 2014 ........................................................ 4
IFRS Company Statements of Cash Flows for the years ended 31 December 2015 and 2014 ...................................... 5
IFRS Company Statements of Changes in Equity for the years ended 31 December 2015 and 2014 .......................... 61

Notes to the IFRS Company Financial Statements

AIRBUS GROUP SE - IFR S COMPANY FINANCIA L STA TEM ENTS

IFRS Company Income Statements for the years ended 31 December 2015 and2014(In € million)

Note

2015

2014

Operating income

476

457

Operating expenses

(634)

(561)

Income from Investments

9760

Loss/Impairment of Investments

(5)

(45)

(154)

611

4

Total Operating Result
Interest income

225

219

Interest expense

(133)

(132)

Other financial result

127

(119)

219

(32)

65

579

(11)

44

54

623

5

Total Financial Result

Profit before income taxes
Income taxes

6

Profit for the period2Notes to the IFRS Company Financial Statements

IFRS Company Statements of Comprehensive Income for the years ended 31
December 2015 and 2014
(In € million)

2015

2014

54

623

Net change in fair value of available-for-sale financial assets

26

84

Net change in fair value of cash flow hedges

00Other comprehensive income, net of tax

26

84

Total comprehensive income of the period

80

707

Profit for the period
Other comprehensive income
Items that will be reclassified to profit or loss:

3

Notes to the IFRS Company Financial Statements

IFRS Company Statements of Financial Position at 31 December 2015 and 2014
(In € million)

Note

31.12.2015

31.12.2014

01.01.2014

AssetsNon-current assets
Investments in subsidiaries and associates

7

14,521

14,243

14,379Long-term financial assets

8

3,594

3,128

3,054

Non-current other financial assets

8

7,979

3,321

2,333

5

5

3

Deferred tax assets

6

15

19

0

Non-current securities

12

Non-current other assets

9,593

5,809

4,179

35,707

26,52523,94811

9146

Current assets
Trade receivables
Current other financial assets

8

4,431

2,502

1,338

Current accounts Group companies

8

8,353

8,856

9,247

149

130

168

Current other assets
Current securities

12

1,683

3,077

2,430

Cash and cash equivalents

12

6,515

6,200

6,126

21,142

20,774

19,45556,84947,29943,403

785

785

783

Share premium

3,484

4,500

5,049

Retained earnings

4,939

4,237

4,139

Accumulated other comprehensive income

211

185

101

Treasury shares

(303)

(8)

(50)

Total assets

Liabilities and stockholders' equity
Stockholders' equity

11

Issued and paid up capital

Result of the year

54

623

31

9,170

10,322

10,053

Non-current liabilities
Long-term financing liabilities

12

5,394

5,551

3,514

Non current financial liabilities

8

7,960

3,405

2,360

Deferred tax liabilities

6

0

0

5

13,354

8,956

5,879

Current liabilities
Short-term financing liabilities

12

1,823

0

914

Current accounts Group companies

828,41525,64925,593Current financial liabilities

8

3,991

2,257

826

96

115

138

34,32528,021

27,471

56,84947,29943,403Current other liabilities

Total liabilities and stockholders' equity

4Notes to the IFRS Company Financial Statements

IFRS Company Statements of Cash Flows for the years ended 31 December
2015 and 2014
(In € million)

Note

2015

2014

54

623

Interest income

(225)

(219)

Interest expense

133

132

Interest received

206

257

Interest paid

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

(117)

(151)

Income tax received

30

Depreciation and amortization

5

44

Valuation adjustments

(240)

(83)

Deferred tax expense (income)

11

(44)

Results on disposals of non-current assets

0

(571)

Change in current and non-current provisions

2(7)

Change in other operating assets and liabilities:

(3)

157

- Trade receivables

(2)

137

- Other assets and liabilities
Cash (used for) provided by operating activities

(1)

20

(171)

138

(546)

(116)

0

708

(670)

(696)

44

368

Investments:- Acquisitions of subsidiaries, joint ventures, businesses and non-controlling interests- Proceeds from disposals of subsidiaries

7- Payments for long-term financial assets- Proceeds from disposals of associates, joint ventures,
other investments and other long-term financial assets

127

801

Payments for investments in securities- Repayments of other long term financial assets(6,877)(5,340)

Proceeds from disposals of securities

4,592

3,307

Cash used for investing activities(3,330)(968)

Draw-down in financing liabilities

788

2,010

Repayment of financing liabilities(136)(1,140)Change in current accounts Group companies

4,056

262

Cash distribution to Airbus Group SE shareholders

(945)

(587)

Changes in capital

171

52

0

102

Share buy-back

(264)

0

Cash provided by financing activities

3,670

699

Effect of foreign exchange rate changes on cash and cash equivalents

146

205

Net increase in cash and cash equivalents

315

74

6,200

6,126

6,515

6,200

Change in treasury shares

Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

125Notes to the IFRS Company Financial Statements

IFRS Company Statements of Changes in Equity for the years ended 31
December 2015 and 2014
Equity attributable to equity holders of the parent
Retained Accumulated other comprehensive
Treasury Total equity
earnings
incomesharesAvailable-forCash flow
sale financial
hedgesassetsCapital
stock

Share
premium

783

5,049

4,170

110

(9)

(50)

10,053

Profit for the period

0

0

623

0

0

0

623

Other comprehensive income

0

0

0

85

(1)

0

84

Total comprehensive income of the period

0

0

623

85

(1)

0

707

Capital increase

2

50

0

0

0

0

52

Share based payments (IFRS 2)

0

0

(5)

0

0

0

(5)

Cash distribution to Airbus Group SE Shareholders

0

(587)

0

0

0

0

(587)

Change in treasury shares

0

0

0

0

0

(12)

(12)

Sale/Cancellation of treasury shares

0

(12)

72

0

0

54

114

785

4,500

4,860

195

(10)

(8)

10,322

Profit for the period

0

0

54

0

0

0

54

Other comprehensive income

0

0

0

26

0

0

26

Total comprehensive income of the period

0

0

54

26

0

0

80

Capital increase

3

115

0

0

0

0

118

Share based payments (IFRS 2)

0

0

29

0

0

0

29

Cash distribution to Airbus Group SE Shareholders

0

(945)

0

0

0

0

(945)

Equity component convertible bond

0

0

53

0

0

0

53

Change in treasury shares

0

0

(3)

0

0

(484)

(487)

Cancellation of treasury shares

(3)

(186)

0

0

0

189

0

Balance at 31 December 2015

785

3,484

4,993

221

(10)

(303)

9,170

(In € million)
Balance at 1 January 2014

Balance at 31 December 20146

4. NOTES TO THE IFRS COMPANY FINANCIAL
STATEMENTS

Notes to the IFRS Company Financial Statements

Table of Content
BASIS OF PRESENTATION............................................................................................................................... 2
1.

The Company ............................................................................................................................................................... 2

2.

Significant accounting policies ................................................................................................................................... 2

3.

Related party transactions .......................................................................................................................................... 4

COMPANY PERFORMANCE ............................................................................................................................ 5
4.

Total Operating Result................................................................................................................................................ 55.

Total financial result ................................................................................................................................................... 5

6.

Income tax .................................................................................................................................................................... 5

OPERATIONAL ASSETS AND LIABILITIES ................................................................................................ 7
7.

Investment in subsidiaries, associates and participations ........................................................................................ 7

8.

Financial assets and liabilities .................................................................................................................................... 99.

Commitments and Contingencies............................................................................................................................. 10

EMPLOYEES ...................................................................................................................................................... 10
10. Number of employees ................................................................................................................................................ 10

CAPITAL STRUCTURE AND FINANCIAL INSTRUMENTS .................................................................... 10
11. Total Equity ............................................................................................................................................................... 10
12. Cash, securities and financing liabilities .................................................................................................................. 12a) Cash and cash equivalents..................................................................................................................................... 12b) Securities ............................................................................................................................................................... 12c) Financing liabilities ............................................................................................................................................... 12
13. Information about financial instruments ................................................................................................................ 14a) Financial risk management ................................................................................................................................... 14b) Carrying amounts and fair values of financial instruments ................................................................................... 16c) Potential effect of set-off rights on recognised financial assets and liabilities ...................................................... 18d) Notional amounts of derivative financial instruments .......................................................................................... 18e) Derivative financial instruments and hedge accounting disclosure ...................................................................... 18f) Net gains or net losses........................................................................................................................................... 191

Notes to the IFRS Company Financial Statements

AIRBUS GROUP SE - IFR S COMPANY FINANCIA L STA TEM ENTS

BASIS OF PRESENTATION
1.

The Company

The Company’s principal activity is acting as a holding and management company for the subsidiaries of Airbus Group SE, the“Company”, a listed company in the form of a European Company (Societas Europaea), legally seated in Amsterdam (current
registered office at Mendelweg 30, 2333 CS Leiden, The Netherlands). On 28 May 2015, the legal form of the Company has changed
from a Dutch public limited company (formerly Airbus Group N.V.) to a European company (SE) and is consistently subject to thelaws of the Dutch Civil Code. The Company has its listings at the European Stock Exchanges in Paris, Frankfurt am Main, Madrid,
Barcelona, Valencia and Bilbao. The Financial Statements were authorised for issue by the Company’s Board of Directors on
23 February 2016. They are prepared and reported in euro (“€”) and all values are rounded to the nearest million appropriately.

2.

Significant accounting policies

Change of accounting framework as of 1 January 2015
Until end of financial year 2014, the Company made use of the option provided in section 2:362 (8) of the Dutch Civil Code, whichallows that the principles for the recognition and measurement of assets and liabilities and determination of the result of the Company
Financial Statements are the same as those applied for the Consolidated EU-IFRS Financial Statements.
As of 1 January 2015, the Company changed the basis for preparing the Company Financial Statements to IFRS as adopted by theEuropean Union being applicable for Company Financial Statements (a.o. IAS 27), as permitted by section 2:362 (8) of the Dutch
Civil Code.
As an internationally operating Company, Airbus Group SE has global institutional and private shareholders as well as otherstakeholders who are used to IFRS as internationally accepted and applied accounting standards, rather than to Dutch GAAP
requirements under the formerly applied option. Airbus’ management considers that the recognition of its investments at cost less
impairment in the Company Financial Statements is a more appropriate approach to provide a fair insight into the Company’s
Financial Position with regards to the determination of distributable equity and provides additional insight relating to the dividend
upstream within the Group and therefore complements the Airbus Group’s IFRS Consolidated Financial Statements.
As a result of the change in accounting framework in the Company Financial Statements, the following main differences can be
identified:••subsidiaries will now be measured at historic cost less impairment instead of net asset value,in the statement of income, dividend income is recognised instead of results from investments in accordance with theequity method, and•back-to-back hedges with subsidiaries are no longer presented on a net basis in the statement of financial position.

The comparative figures have been adjusted accordingly as from 1 January 2014 (transition date).

Reconciliation from previous GAAP to EU-IFRS
The overview below presents the impact of the change in accounting basis from Dutch GAAP into EU-IFRS shareholders’ equity in
the Company financial statements as per January 1, 2014 and December 31, 2014:
December 31, 2014
7,061

January 1, 2014

Restatement of investments from net asset value to EU-IFRS

3,047(1,068)

Restatement of investments at historical cost
Impairment of investments and intercompany financial assets

1,487(1,273)
10,322

1,487(1,230)10,053(In € million)
Previous GAAP

EU-IFRS2

10,864

Notes to the IFRS Company Financial Statements

For purposes of an impairment test as of 01.01.2014, management assessed the overall recoverability of its investments andintercompany loans following the principles of IFRS. The impairment test according to IFRS was performed by using the discounted
cash flow method (discount rate: pre-tax weighted average cost of capital (WACC) of 8.7%) considering assumptions of theoperative planning. Its relevant components are the country specific inflation and interest rates as well as an increase of future labour
expenses at a yearly average rate of 2%. For further details regarding the methods applied for impairment testing see also Note 7 of
the Company Financial Statements. As a result of the test an impairment of €1,230 million was recorded in the opening balance sheet
as of 01.01.2014. The impairment consists of €780 million related to investments and € 450 million in connection with intercompany
loans. As at year end 2014, intercompany loans were subject to an additional impairment in the amount of €43 million mainly
resulting from FX impacts.
Furthermore we provide a reconciliation of the Net Income from Dutch GAAP into EU-IFRS in the Company financial statementsfor 2014:(In € million)
Previous GAAP
Income from investments according to Dutch GAAP
Income from investments according to EU-IFRS
Impairment of intercompany financial assets according to EU-IFRS

2014
2,343
(2,412)
758

Other valuation differences

(43)
(23)

EU-IFRS

623

Basis of preparation — The Company’s Financial Statements are prepared in accordance with International Financial ReportingStandards (“IFRS”), issued by the International Accounting Standards Board (“IASB”) as endorsed by the European Union (“EU”)
and with Part 9 of Book 2 of the Dutch Civil Code. When applying IFRS in the Company Financial Statements, Airbus Group SE
applied the principles of IFRS 1 First-time Adoption of International Financial Reporting Standards (IFRS 1). According to IFRS 1 acompany applying for first time IFRS 1 shall develop accounting policies based on the standards and related interpretations which are
effective at the reporting date of its first annual EU-IFRS Financial Statements (31.12.2015). IFRS 1 also requires that those policies
be applied as of the date of transition to EU-IFRS (01.01.2014) and throughout all periods presented in the first EU-IFRS Financial
Statements.
In the Company Financial Statements of Airbus Group SE, unless otherwise disclosed, the same accounting principles have been
applied as set out in the Notes of the Consolidated Financial Statements, except for the valuation of the investments as presented
under investments in subsidiaries and associates in the Company Financial Statements. These policies have been consistently applied
to all years presented. In adopting IFRS for the first time, the company has not exercised the right of applying optional exemptions
which are granted to first-time IFRS adopters in the conversion from Dutch GAAP to EU-IFRS.
In the Company Financial Statements, the investments in subsidiaries and associates are recorded at acquisition cost less
impairments, whereas in prior years, investments in Group companies were stated at net asset value. As a consequence, thedetermination of the results in the Company Financial Statements changed compared to previous years. In the Company Statement of
Income, dividend received from investments is recorded as dividend income.
Due to this application, the Company equity and net result are not equal to the consolidated equity and net result. A reconciliation for
total shareholders’ equity and net income is presented in Note 11 to the Company Financial Statements.
The Company Financial Statements have been prepared on a historical cost basis, unless otherwise indicated.

Regarding the application of new, revised or amended IFRS standards issued but not yet applied please refer to Note 2 “Significant
accounting policies” of the Group’s Consolidated Financial Statements. Further information about Share-based payments andEmployee stock ownership plans (ESOP) are presented in Note 30 and information about Remuneration is presented in Note 31 of
the Consolidated Financial Statements.
The information with regard to Capital Management are disclosed in the Note 33, further information about Litigation and Claims
refer to Note 36 and Events after the reporting date are disclosed in Note 38 of the Group’s Consolidated Financial Statements.

3Notes to the IFRS Company Financial Statements

Unless reference is made to the accounting policies described in 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.

Use of estimates and judgements
The preparation of the Company Financial Statements in conformity with EU-IFRS requires the use of estimates and assumptions. In
preparing those financial statements, the management exercises its best judgement based upon its experience and the circumstancesprevailing at that 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. Actual results could differ from these estimates.
Key accounting estimates and judgements affecting the assessment and measurement of impairment are included in Note 7 in the
Company Financial Statements.

3.

Related party transactions

Key management personnel
The details regarding the compensation of key management personnel are described in Note 8 “Related party transactions” of theConsolidated Financial Statements.
Intercompany transactions
A comprehensive exchange of internal services between the subsidiaries of a multinational corporation like Airbus Group SE iscommon practice. In its responsibility as holding company to manage its subsidiaries and to assist the business activities conductedby companies of the Airbus Group and its subsidiaries, Airbus Group SE applies transfer prices for its business activities inconformity with market levels and in accordance with national and international tax requirements (arm’s length principle).
The following table discloses the related party intercompany transactions in 2015 and 2014:(In € million)
Rendering of services, dividend income andinterest income
Purchases of services, investment charge andinterest expenses
Intercompany receivables due as of 31 December
Intercompany payables due as of 31 December

Transactions
with subsidiaries
2015

Transactions
Transactions
with associates with subsidiaries
2015
2014

Transactions
with associates
2014

560

62

754

39

(724)
12,400

(4)
18

(649)
12,741(4)
18(32,414)(503)(29,041)(521)

Hedge relationships receivable as of 31 December

10,482

0

4,943

0

Hedge relationships payable as of 31 December(1,383)

0

(542)

0

For further information about granted guarantees to subsidiaries please refer to Note 9 of the Company Financial Statements.

4Notes to the IFRS Company Financial Statements

COMPANY PERFORMANCE
4.

Total Operating Result(In € million)
Operating Income
Corporate services rendered to Group companies

2015

2014

476

457

Operating expenses

(634)

(561)

Service fees charged by Group companies
Administrative expenses

(581)
(53)

(519)
(42)

Income from investments
Dividends received from Group companies

9
9

760
189

Result on sale of investments

0571

Loss/Impairment of Financial Assets

(5)

(45)

Book loss on investments
Impairment of intercompany financial assets
Impairment of investments

(5)
0
0

0
(43)
(2)

(154)

611

2015
92

2014
87

93
(1)

85
2

Other financial result

127

(119)

Equity instruments

159

(101)

Interest rate hedging

(11)

(7)

Financing costs

(9)

(7)

FX revaluation

(12)

(4)

219

(32)

Total Operating Result

5.

Total financial result(In € million)(1)

Interest result
Interest income from available-for-sale securities
OthersTotal financial result(1) In 2015, the total interest income amounts to €225 million (in 2014: €219 million) for financial assets which are not measured at fair value through profit orloss. For financial liabilities which are not measured at fair value through profit or loss €-133 million (in 2014: €-132 million) are recognised as total interest
expenses. Both amounts are calculated by using the effective interest method.

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.

6.

Income tax

The Company is tax registered in the Netherlands. The Company is heading a fiscal unity, which also includes Airbus Group Finance
B.V., Airbus DS Holdings B.V. and Airbus Defence and Space Netherlands B.V. and therefore the Company is severally and jointly
liable for income tax liabilities of the fiscal unity as a whole.

5Notes to the IFRS Company Financial Statements

Income taxes — The tax expense for the year comprises deferred tax. Tax is recognised in the statement of income, except to theextent that it relates to items recognised directly in Other Comprehensive Income.
The amount of income tax included in the Statement of Income is determined 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 andthe 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 is probable that they will be realised.
The expense for income taxes is comprised of the following:(In € million)
Current tax expense
Deferred tax (expense) income

2015
0

2014
0

(11)

44

Total

(11)

44

The following table shows reconciliation from the theoretical income tax expense using the Dutch corporate tax rate to the reportedtax (expense) income:(In € million)
Profit before income taxes

2015
65

2014
579

* Corporate income tax rate
Expected expense for income taxes

25.0%
(16)

25.0%
(145)

1

179

5
(1)
(11)

11
(1)
44

Non taxable income from investments
Income from other companies within the fiscal unity
Other
Reported tax (expense) / income
The first tranche of tax loss carry forwards (€20 million) will expire by the end of 2023.
Deferred income taxes as of 31 December 2015 are related to the following assets and liabilities:(In € million)
Securities
Financial instruments
Net operating loss and tax loss carry forwards
Deferred tax assets / (liabilities)
before offsetting
Set-off
Net deferred tax assets / (liabilities)

1 January 2015
DeferredDeferredTax
Tax assets liabilities
0
(31)
27
0
23
0

Other
movements

OCI Others
0
10
0
0
(3)
0

Movement
throughincomestatement

31 December 2015
DeferredDeferredtax benefit DeferredTax(expense) Tax assets liabilities
(21)
0
0
0
(3)
(30)
0
19
39

50

(31)

10

(3)

(11)

39

(24)

(31)
19

31
0

0
10

0
(3)

0
(11)

(24)
15

24
0

6

Notes to the IFRS Company Financial Statements

Deferred income taxes as of 31 December 2014 are related to the following assets and liabilities:(In € million)
Securities
Financial instruments
Net operating loss and tax loss carry forwards
Deferred tax assets / (liabilities)
before offsetting
Set-off
Net deferred tax assets / (liabilities)

1 January 2014
Deferred Deferred
Tax
Taxassets liabilities

Movement throughOther
income statement
movements

31 December 2014
Deferred DeferredDeferred tax
Tax
Tax
assets liabilities
benefit (expense)

OCI

0
3

(11)
0

(20)
0

0
24

0
27

(31)
0

3

0

0

20

23

0

6

(11)

(20)

44

50

(31)

(6)
0

6
(5)

0
(20)

0
44

(31)
19

31
0

Details of deferred taxes recognised cumulatively in equity are as follows:(In € million)
Available-for-sale investments

2015
(21)

2014
(31)

Cash flow hedges
Total

3
(18)

3
(28)

OPERATIONAL ASSETS AND LIABILITIES
7.

Investment in subsidiaries, associates and participations(In € million)
Balance at 1 January 2014
Additions
Disposals / redemptions
Impairments
Share based payments (IFRS 2)
Fair value changes through equity
Balance at 31 December 2014
AdditionsBook loss on investments
Share based payments (IFRS 2)
Fair value changes through equity
Balance at 31 December 2015

S ubsidiaries
14,164109(220)

Associates
65

Participations
150

24
174

Total
14,379
109
(262)
(2)
(5)
24
14,243

58
232

196
(5)
29
58
14,521

(42)
(2)

(5)
14,048
196
(5)
29

21

14,26821

Investments in subsidiaries, associated companies and participations
Investments in subsidiaries and associated companies are stated at cost, less impairment. Dividend income from the Company’s
subsidiaries and associated companies is recognised when the right to receive payment is established.
Available for sale participations are stated at fair value with changes in fair value recognised in Other Comprehensive Income.
For the purpose of impairment testing all consolidated subsidiaries are allocated to cash generating units (“CGU”) in a way they aremonitored for internal management purposes. At each balance sheet date, the Company reviews whether there is an indication that a
CGU to which its investments in subsidiaries and associated companies belong to are impaired.

7

Notes to the IFRS Company Financial Statements

An indication for impairment of the investments in subsidiaries and associated companies may include, respectively, management’s
downward adjustment of the strategic plan or a significant decrease in the share price of a publicly listed company. Further
indications for impairment of its investments may include other areas where observable data indicates that there is a measurable
decrease in the estimated future cash flows. These determinations require significant judgement. In making this judgement,
management evaluates, among other factors, the financial performance of and business outlook for its investments, including factors
such as industry and sector performance, changes in technology and operational and financing cash flow.
If any indication for impairment exists, the recoverable amount of the investments is estimated in order to determine the extent, if
any, of the impairment loss. An investment is impaired if the recoverable amount is lower than the carrying value. The recoverable
amount is defined as the higher of an investment’s fair value less costs to sell and its value in use.
The determination of the investment’s value in use is based on 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 extrapolated using
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 belongs to. The discounted cash flow method is particularly sensitive to theselected discount rates and estimates of future cash flows by management. Key assumptions used to determine the recoverable valueof the CGU are the expected future labour expenses, future interest rates, future exchange rates to convert in € the portion of future
US$ and GBP which are not hedged and the estimated growth rate of terminal values.
If the recoverable amount of an investment is estimated to be less than its carrying amount, the carrying amount of the investment isreduced to its recoverable amount. Any impairment loss is recognised immediately in the statement of income.
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 that would have been determined had no impairment loss beenrecognised in prior years.
Change of investments in subsidiaries
On 26 June 2015, Airbus Group SE has made a capital contribution of $146 million into Airbus Group Proj B.V., a 100% subsidiary,in the frame of the industrial partnership with OneWeb Ltd. for the design and manufacturing of microsatellites.
On 8 December 2015, Airbus Group SE entered into a partnership agreement to establish a Corporate venture capital fund, dubbed
Airbus Group Ventures, as well as a technology and business innovation center in Silicon Valley. On 25 November 2015, a firstinvestment of $5 million has been made into this fund.
On 15 December 2015, Airbus Group SE has made a capital increase of €19 million into Aero Ré S.A., thereby acquiring 50.9% of
the shares of the company.
On 25 July 2014, Airbus Group SE acquired 100% shares in Salzburg München Bank AG from Raiffeisenverband Salzburg followed
by a capital increase in December 2014. The total capital contribution amounted to €100 million.
On 13 November 2014, Airbus Group SE entered into a share purchase agreement with its subsidiary Sogerma S.A.S. to sell its
100% subsidiary Aerolia S.A.S. for a total consideration of €700 million. The transaction was closed on the same date, whereby theCompany recognized a €480 million capital gain within income from investments.
Change of investments in associated companies
On 9 December 2014, Airbus Group SE signed a share purchase agreement with the State of Finland to sell its entire 26.8% share in
Patria Oyj to the Finnish defence, security and aviation services provider for a total consideration of €133 million. The transaction
was closed on 11 December 2014 and the Company recognized a €91 million capital gain within income from investments.

8Notes to the IFRS Company Financial Statements

Information on principal investments of the Company

2015

%

2014

%

Company

Head office

50.90

0.00

Aero Ré S.A.

Bertrange (Luxembourg)

66.08

78.48

Airbus Defence and Space GmbH

Taufkirchen (Germany)

100.00100.00Airbus Defence and Space S.A.

Madrid (Spain)

97.57

97.46

Airbus DS Holdings B.V.

Leiden (Netherlands)

100.00100.00Airbus DS Ltd.

Newport (United Kingdom)

100.00100.00Airbus Group Bank GmbH

Munich (Germany)

100.00100.00Airbus Group Finance B.V.

Leiden (Netherlands)

100.00100.00Airbus Group Inc.

Herndon, VA (USA)100.00100.00AirbusGroup Limited

London (United Kingdom)

100.000.00

Airbus Group Proj B.V.

Leiden (Netherlands)

100.00100.00Airbus Group S.A.S.

Toulouse (France)

99.00

0.00

Airbus Group Ventures Fund I, L.P.

Mountain View, CA (USA)100.00100.00Airbus Helicopters Holding S.A.S.

Marignane (France)

100.00100.00Airbus S.A.S.

Toulouse (France)

100.00100.00DADC Luft-und Raumfahrt Beteiligungs GmbH

Ottobrunn (Germany)

100.00100.00Premium Aerotec GmbH

Augsburg (Germany)

Percentages represent share held directly by Airbus Group SE.
With effect of 1 January 2015, Airbus Operation GmbH contributed its A400M „IFA and Cargo Hold System“, Bremen business into
Airbus Defence and Space GmbH in turn to become a new shareholder. As a consequence Airbus Group SE’s participation in Airbus
Defence and Space GmbH was diluted from 78.48 % to 66.08%.

8.

Financial assets and liabilities

Financial assets and liabilities at 31 December 2015 and 2014 consist of the following:(In € million)
Long-term financial assets
Long-term loans Group companies
Long-term loans External
Non-current other financial assets
Positive fair values of derivative financial instruments

31 December
2015
3,594
3,583
11
7,979
7,979

2014
3,128
3,074
54
3,321
3,321

Current other financial assets
Positive fair values of derivative financial instruments
Current portion long-term loans Group companies

4,431
3,982
449

2,502
2,187
315

Current accounts Group companies (1)Receivables from subsidiaries
Liabilities to subsidiaries(20,062)
8,353(28,415)(16,793)8,856(25,649)

Non-current financial liabilities
Negative fair values of derivative financial instruments
Current financial liabilities
Negative fair values of derivative financial instruments(7,960)(7,960)(3,991)(3,991)(3,405)(3,405)(2,257)(2,257)(1) The receivables from and liabilities to subsidiaries include mainly transactions in connection with the cash pooling in Airbus Group SE.

9

Notes to the IFRS Company Financial Statements

9.

Commitments and Contingencies

Off-balance sheet commitments
Airbus Group SE issued guarantees on behalf of Group companies in the amount of €6,347 million (2014: €6,409 million). The commitmentsof these companies to third parties mainly relate to their operating business as described in Note 18 “Property, plant and equipment”, Note 25“Sales financing transactions” and Note 35 “Information about financial instruments” to the Consolidated Financial Statements. In addition,
the Company has entered into capital contribution commitments with Group companies in the amount of €54 million (2014: €0 million).

On 15 June 2015, Airbus Group SE announced an industrial partnership with OneWeb Ltd. for the design and manufacturing of
microsatellites with a total commitment amount of $166 million. On 26 June 2015, a first investment of $146 million has been madeinto this partnership.
On 8 December 2015, Airbus Group SE entered into a partnership agreement 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 amount of$150 million. On 25 November 2015, a first investment of $5 million has been made into this fund.

EMPLOYEES
10. Number of employees
The average number of the persons employed by the Company in 2015 was 3 (2014: 3).

CAPITAL STRUCTURE AND FINANCIAL INSTRUMENTS
11. Total Equity
Airbus Group’s shares are ordinary shares with a par value of €1.00. The following table shows the development of the number ofshares outstanding:(In number of shares)
Issued as at 1 January

2015
784,780,585

2014
783,157,635

Issued for ESOP
Issued for exercised options

1,539,014
1,910,428

0
1,871,419

Cancelled
Issued as at 31 December-2,885,243
785,344,784-248,469
784,780,585

Treasury shares as at 31 December-1,474,057
783,870,727-431,832
784,348,753

3,000,000,000

3,000,000,000

Oustanding as at 31 December
Authorised shares

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 the contribution forexercised options of €1,910,428 (in 2014: €1,871,419) in compliance with the implemented stock option plans and by employees of€1,539,014 million (in 2014: €0) under the Employee Stock Ownership Plans (“ESOP”).

10Notes to the IFRS Company Financial Statements

Share premium mainly results from contributions in kind in the course of the creation of Airbus Group, cash contributions from theInitial Public Offering, capital increases and reductions due to the issuance and cancellation of shares as well as cash distributions to
Airbus Group SE shareholders. On 27 May 2015, the Shareholders’ General Meeting decided to distribute a gross amount of €1.20
per share, which was paid on 3 June 2015. For the fiscal year 2015, the Group’s Board of Directors proposes a cash distribution
payment of €1.30 per share.
Accumulated other comprehensive income (“AOCI”) includes:•change from available-for-sale financial assets (see Note 13 “Information about financial instruments” b);•change in fair value of derivatives designated as cash flow hedges (see Note 13 “Information about financial instruments” b);Treasury shares represent the amount paid or payable for own shares held in treasury.

Authorisations granted by the Shareholders’ General Meeting of Airbus Group held on 27 May 2015:
On 27 May 2015, the Annual General Meeting of the Company authorised he Board of Directors, for a period expiring at the Annual
General Meeting to be held in 2016, to issue shares and grant rights to subscribe for shares in the Company’s share capital for the
purpose of:• employee share ownership plans in the limit of 0.1% of the Company’s authorised share capital (see Note 30 “Share based
payment” of the Group’s Consolidated Financial Statements);• funding the Company and its Group companies, provided that such powers shall be limited to an aggregate of 0.3% of theCompany’s authorised capital (see Note 34.3 “Financing liabilities of the Group’s Consolidated Financial Statements).
For each operation, such powers shall not extend to issuing shares or granting rights to subscribe for shares if there is no preferential
subscription right and for an aggregate issue price in excess of €500 million per share issuance.
Also on 27 May 2015, the Annual General Meeting of the Company authorised the Board of Directors for an 18-month period torepurchase up to 10% of the Company’s issued and outstanding share capital (i.e. issued share capital excluding shares held by theCompany or its subsidiaries) at a price not exceeding 85 euros per share.
Airbus Group has appointed an Investment Services Provider to undertake a share buyback on behalf of the Company for a maximum
amount of € 1 billion. The buyback will take place between 2 November 2015 and 30 June 2016. As of 31 December 2015 theCompany bought back €264 million of shares and recognised a financial liability of €223 million for its irrevocable share buybackcommitment at that date. Recognition of the financial liability led to a corresponding reduction of equity.

Furthermore, the Annual General Meeting authorised both the Board of Directors and the Chief Executive Officer, with powers of
substitution, that the number of shares repurchased by the Company pursuant to the share buyback programme are cancelled. As per
decisions of the Chief Financial Officer upon delegation of the Chief Executive Officer, on 17 December 2015, a number of
2,885,243 shares have been 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 2015 is as follows:

31 December
2015
2014
5,966
7,061

(In € million)
Consolidated Equity
AOCI - Restatement of investments from Consolidated to Company Financial Statements
Retained Earnings - Restatement of investments from Consolidated to Company Financial Statements
Retained Earnings - Valuation investments at historical cost
Retained Earnings - Impairment of financial assets

4,527(1,537)
1,487(1,273)

1,390
1,657
1,487
(1,273)Company's Equity

9,170

10,32211

Notes to the IFRS Company Financial Statements

The difference between the Net income according to the Consolidated Financial Statements and Company’s Financial Statements forthe year ended 31 December 2015 is as follows:(In € million)
Consolidated Net Income
Income from investments according to Consolidated Financial Statements
Income from investments according to Company Financial Statements
Loss on / Impairment of financial assets
Other valuation differences
Company's Net Income

2015
2,696

2014
2,343

(2,694)9(2,412)
760

(5)
48

(45)
(23)

54

623

12. Cash, securities and financing liabilitiesa)Cash and cash equivalents

Cash and cash equivalents are composed of the following elements:
31 December
2015(In € million)
Bank accounts
Short-term securities (at fair value through profit & loss)

444

Short-term securities (available for sale)

3,220
2,851

Total cash and cash equivalents

6,515

2014
1,195
3,261
1,744
6,200

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 recognized in cash equivalents.

b)

Securities(In € million)
Current securities (available for sale)Non-current securities (available for sale)

31 December
2015
1,683
9,590

2014
3,077
5,805

Non-current securities (at fair value through profit & loss)
Total securities

3
11,276

4
8,886

Included in the securities portfolio as of 31 December 2015 and 2014, respectively, are corporate and government bonds bearing
either fixed rate coupons (€10,604 million nominal value; comparably in 2014: €7,010 million) or floating rate coupons(€397 million nominal value; comparably in 2014: €247 million) and foreign currency Funds of Hedge Funds (€8 million nominal
value; 2014: €8 million).

c)Financing liabilities

Current and non-current classification – A financial asset or liability is classified as current if it is settled within 12 months after thereporting date, and as non-current otherwise.
Financing liabilities comprise obligations towards financial institutions, issued corporate bonds, and payables due to related parties.

12

Notes to the IFRS Company Financial Statements

The Company has received several €-denominated loans and one US $-denominated loan from Airbus Group Finance B.V.
(‘AGFBV’). It has also issued a convertible bond in Euro. Furthermore, the Company has long-term US dollar-denominated loans
outstanding with the European Investment Bank (‘EIB’) and the Development Bank of Japan (‘DBJ’). The terms and repayment
schedules of these bonds and loans are as follows:

Principal
amountin M io

Carrying amount
31-Dec-15

31-Dec-14

Coupon or
Effective
Maturity
interest rate interest rate

Additional features

Loans from Airbus Group Finance B.V.
3M Euribor
at variable rate
+1.85%
3M Euribor
at variable rate
+1.585%

Sep-18AGFBV 15 years (EM TN)

€ 500

€ 499

€ 499

AGFBV 7 years (EM TN)€ 1,000

€ 999

€ 999

AGFBV 10 years (EM TN)€ 1,000€ 1,021

€ 995

2.40%

2.45%

Apr-24AGFBV 15 years (EM TN)

€ 500

€ 497

€ 494

2.15%

2.24%

Oct-29AGFBV USD Loan 10 years$1,000

€ 919

€ 819

2.72%

2.80%

Apr-23

Billet de trésorerie programme

$550

€ 505

€0

DBJ 10 years

$ 300

€ 276

€ 247

EIB 10 years

$ 721

€ 567

EIB 7 years

$ 406

€ 373

EIB 10 years$ 627

EIB 10 years$ 320

Aug-16
Interest rate swapped into
3M Euribor +1.40%
Interest rate swapped into
3M Euribor +0.84%
Interest rate swapped into
3M US-Libor +0.68%

Loans from financial institutions
3M US-Libor
4.84%+1.15%
3M US-Libor
€ 594
3.20%
+0.85%
3M US-Libor€ 334
at variable rate
+0.93%

Aug-21

€ 576

€ 516

2.52%

Dec-24€ 294€0

6M US-Liborat variable rate
+0.56%

Dec-25

Share buyback commitment

€ 223

€0

Others

€ 11

€ 54

€ 457

€0

€ 7,217€ 5,551€ 5,394€ 1,823€ 5,551€0

2.52%

Jan-21

Interest rate swapped into
4.76% fixedInterest rate swapped into
3.2% fixedFeb-20Interest rate swapped into
3M Euribor +0.61%

Bond
Convertible Bond 7 years

€ 500

Total
Thereof non-current financing liabilities
Thereof current financing liabilities

0.00%

1.39%

Jul-22

Convertible into Airbus GroupSE shares at €99.54 per share

The Company can receive loans from issued commercial papers under the so called “billet de trésorerie” 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 in2003 with a maximum volume of €2 billion, increased in 2013 to a maximum volume of €3 billion.
The decrease in long-term financing liabilities is mainly due to a reclassification between long-term and short-term bonds, partly
offset by the issue of a convertible bond for €500 million on 1 July 2015, with a 7 year-maturity. This bond bears a coupon of 0% andwas issued at 102% of par. Its effective interest rate, after separation of the equity conversion option (€53 million), is 1.386%.
Included in the short-term financing liabilities is the irrevocable part of the share buyback commitment in the amount of €223
million.

13

Notes to the IFRS Company Financial Statements

13. Information about financial instrumentsa)Financial risk management

The Company acts as an intermediary for its subsidiaries when they wish to enter into derivative contracts to hedge against foreignexchange risk or other market risks such as interest rate risk, commodity price risk or equity price risk. The Company’s practice it to
set up a derivative contract with a subsidiary and at the same time enter into a back-to-back derivative transaction with a bank.
Contracts with subsidiaries being thus mirrored (on a one-to-one basis) by contracts with banks, the Company’s net exposure isvirtually 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 entered into with different counterparties, their fair values are reflected
separately in the statement of Financial Position and recognized as Other financial assets and Other financial liabilities as disclosed in
Note 8 of the Company Financial Statements.
In the Statement of Income the results of the back-to-back hedge transactions, both realized and unrealized, are presented on a net
basis as the Company acts as an agent for its subsidiaries.
The Company’s overall financial risk management activities and their objectives are described in detail in section 35.1 “Financial
risk management” of the Notes to the Consolidated Financial Statements.

Market risk
Foreign exchange risk – The Company manages a long-term 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 Group’s
firm commitments and highly probable forecast transactions. As explained above, owing to the Company’s back-to-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. The
Company undertakes to match the risk profile of its interest-bearing assets with those of its interest-bearing liabilities, the remaining
net interest rate exposure being managed through several types of interest rate derivatives. If the derivative instruments qualify forhedge accounting in the Company financial statements the Company applies cash flow hedge accounting or fair value hedge
accounting. For more information on the risk management and hedging strategies used by the Group please refer to section 35.1
“Financial Risk Management” of the Notes to the Consolidated Financial Statements.
Equity price risk – The Company is to a small extent invested in quoted equity securities mainly for strategic reasons. The
Company’s exposure to equity price risk is hence limited. Furthermore, Airbus Group is exposed under its Long-Term Incentive Plan
(LTIP) to the risk of Airbus Group share price movements. In order to limit these risks for the Group, the Company enters into
equity derivatives that reference the Airbus Group SE share price.
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-at-risk (“VaR”). For information about VaR and the approach used by
the Company to assess and monitor sensitivities of market risks please refer to section 35.1 “Financial Risk Management” in theNotes to the Consolidated Financial Statements.
The Company is part of the Group risk management process, which is more fully described in section 35.1 “Financial Risk
Management” in the Notes to the Consolidated Financial Statements.

14

Notes to the IFRS Company Financial Statements

A summary of the VaR position of the Company’s financial instruments portfolio at 31 December 2015 and 2014 is as follows:
Total
VaR

Equity price
VaR

Currency
VaR

Interest rate
VaR

19

0

19

0

50
11

22
11

29
0

28
0

Diversification effect
All financial instruments
31 December 2014

(39)
41

(8)
25

(39)
9

0
28

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

15

0

15

0

22

13

12

18

Equity swaps
Diversification effect

17
(20)

17
(6)

0
(24)

0
0

All financial instruments

34

24

3

18

(In € million)
31 December 2015
FX hedges
Financing liabilities, financial assets(incl. cash, cash equivalents, securities
and related hedges)
Equity swaps

The increase of total VaR compared to 31 December 2014 is mainly caused by to a strong increase of market volatilities particularly
in relation with interest rates and FX. The Company enters into derivative instruments mainly for hedging purposes of the Group.
The derivative instruments entered into with group-external counterparties are passed on a 1:1 basis to Airbus Group entities. As aresult, the respective market risks of the group-external derivative instruments are offset by corresponding opposite market risks ofintragroup 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 andfuture commitments as they fall due. For information on how the Group monitors and manages liquidity risk please refer to section
35.1 “Financial Risk Management” in the Notes to 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:(In € million)

Carrying Contractual
1 year
2 years
3 years
4 years More thanamount cash flows < 1 year – 2 years – 3 years – 4 years – 5 years
5 years

31 December 2015
Non-derivative financial liabilities(7,217)(8,064)(1,946)

(211)

(781)

(269)

(687)

Derivative financial liabilities(11,951)(13,698)(4,100)(3,635)(2,992)(1,976)(560)(4,170)
(435)

Total

(19,168)(21,762)(6,046)(3,846)(3,773)(2,245)(1,247)(4,605)(5,551)(6,405)(194)(1,193)

(230)

(749)

(237)

(3,802)31 December 2014
Non-derivative financial liabilities
Derivative financial liabilities(5,662)(7,567)(2,310)(1,789)(1,066)(615)(1,407)

(380)

Total

(11,213)(13,972)(2,504)(2,982)(1,296)(1,364)(1,644)(4,182)Credit risk
The Company is exposed to credit risk to the extent of non-performance by either the related parties to which it provides financing or
its counterparts with regard to financial instruments or issuers of financial instruments for gross cash investments. Although theCompany provides loans to Group companies its credit risk is limited to its direct subsidiaries. For the policies the Company has put

15

Notes to the IFRS Company Financial Statements

in place to avoid concentrations of credit risk and to ensure that credit risk is limited please refer to section 35.1 “Financial Risk
Management” of the Notes to the Consolidated Financial Statements.
In 2015, the total receivables, neither past due nor impaired amount to €4,946 million (in 2014: €4,226 million).

b)

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 classification and accounting policies as the Group. Please refer to section 35.1 “Financial Risk Management”
of the Notes to the Consolidated Financial Statements for more information.

The Company assigns its financial instruments (excluding its at-cost investments, which are outside the scope of IAS 39) into classes
based on their category in the statement of financial position.
The following tables present the carrying amounts and fair values of financial instruments by class and by IAS 39 measurement
category as of 31 December 2015 and 2014:

Loans andReceivables andFinancialliabilities

31 December 2015

(In € million)

Fair Value
Fair Value through for hedge
relationsprofit or loss

Available
for S aleHeld fortrading Designated

Fair
value

Book
value

Fair Amortised
value
Cost

0

199

199

Financial
Instruments
Total

Fair
value

Book
Value

Fair
value

0

0

199

199

AssetsOther investments andlong-term financial assets
Equity instruments
Loans
T rade Receivables

0

0

0

0

0

0

0

4,043

4,147

4,043

4,147

0

0

0

0

0

11

11

11

11
0
11,96011,899

0

61

0

0

0

0

0
11,960

0

0

0

0

0

8,353

8,353

8,353

8,353

Other financial assets
Derivative Instruments
Current account Group companies
Securities
Cash and cash equivalents

Total
Liabilities
Financing liabilities- Issued bonds and CP- Liabilities to banks
and other financing liabilities- Internal loans payable
Other financial liabilities

03

0 11,273 11,273

0

0

11,276

11,276

0
11,899

3,220
3,223

0 2,851 2,851
61 14,323 14,323

444
12,851444
12,955

6,515
42,357

6,515
42,461

0

0

0

0

0

962

992

962

992

0
0

0
0

0
0

0
0

0
0

2,309
3,945

2,338
4,070

2,309
3,945

2,338
4,070

- Derivative Instruments

11,901

0

50

0

0

0

0

11,951

11,951- Current accounts Group companies

011,901

0
0

0
50

0
0

0
0

28,41535,631

28,41535,81528,41547,582

28,41547,766Total

16

Notes to the IFRS Company Financial Statements

Loans andReceivables andFinancialliabilities

31 December 2014

(In € million)

Fair Value
Fair Value through for hedge
relationsprofit or loss

Available
for S aleFinancial
Instruments
Total

Held fortrading Designated

Fair
value

Book
value

Fair Amortised
value
Cost

Fair
value

Book
Value

Fair
value

0
0
0

157
0
0

157
0
0

0
3,445
9

0
3,649
9

0
0
0
0
0
0
0 8,882 8,882
0 1,744 1,744
0 10,783 10,783

0
8,856
0
1,195
13,505

0
8,856
0
1,195
13,709

157
3,445
9
0
5,507
8,856
8,886
6,200
33,060

157
3,649
9
0
5,507
8,856
8,886
6,200
33,264

AssetsOther investments andlong-term financial assets
Equity instruments
Loans
T rade Receivables

0
0
0

0
0
0

5,507
0
0
0
5,507

0
0
4
3,261
3,265

0

0

0

0

0

0

0

0

0

0
0

0
0

0
0

0
0

0
0

1,692
3,860

1,712
4,168

1,692
3,860

1,712
4,168

5,523
0
5,523

0
0
0

139
0
139

0
0
0

0
0
0

0
25,64931,201025,64931,5295,662
25,64936,863

5,662
25,64937,191Other financial assets
Derivative Instruments
Current account Group companies
Securities
Cash and cash equivalents

Total
Liabilities
Financing liabilities- Issued bonds and CP- Liabilities to banks
and other financing liabilities- Internal loans payable
Other financial liabilities- Derivative Instruments- Current accounts Group companies

Total

Fair value hierarchy
For further details please refer to Note 35.2 “Carrying amounts and fair values of financial instruments” in the Consolidated Financial
Statements.
The fair values disclosed for financial instruments accounted for at amortised cost reflect Level 2 input.
The following tables present the carrying amounts of the financial instruments held at fair value across the three levels of the fairvalue hierarchy as of 31 December 2015 and 2014, respectively:

31 December 2015
(In € million)
Financial assets measured at fair value
Equity instruments
Derivative instruments
Securities
Cash equivalents
Total
Financial liabilities measured at fair value
Derivative instruments
Other liabilities
Total

31 December 2014

Level 1

Level 2

Total

Level 1

Level 2

Total

199
0
11,112
3,941
15,252

0
11,961164
2,130
14,255

199
11,961
11,276
6,071
29,507

157
0
7,500
3,563
11,220

0
5,505
1,386
1,442
8,333

157
5,505
8,886
5,005
19,55300
011,951
0
11,951

11,951
0
11,951

0
0
0

5,662
0
5,662

5,662
0
5,662

17

Notes to the IFRS Company Financial Statementsc)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 2015 and 31 December
2014, respectively:(In € million)
Derivative
instruments
31 December 2015
Financial assets
Financial liabilities
31 December 2014
Financial assets
Financial liabilitiesd)Gross amounts
Gross recognised set off
amountsin the financial
recognised
statements

Net amounts
presented in
the financial
statements

Related amounts not set off in thestatement of financial position
Financial
instruments

Cash collateral
receivedNet
amount11,961
11,9510
0

11,961
11,951(2,754)(2,754)

0
0

9,207
9,197

5,505
5,662

0
0

5,505

(1,038)(1,038)

0
0

4,467
4,624

7 years > 7 years

Total

5,662

Notional amounts of derivative financial instruments

The maturity of hedged interest cash flows are as follows, specified by year of expected maturity:

Remaining period
4 years
5 years
6 years(In € million)

1 year

2 years

3 years

31 December 2015
Interest rate contracts

2,549

41

1,021

18

14

1,134

8

3,469

8,254

Interest rate future contracts

1,032

0

0

0

0

0

0

0

1,032

Interest rate contracts

833

2,537

30

1,000

0

0

1,088

0

5,488

Interest rate future contracts

176

0

0

0

0

0

0

0

176

31 December 2014

The notional amounts of equity swaps are as follows:(In € million)
31 December 201531 December 2014e)

1 year

2 years

153
209

76
146

Remaining period
3 years
4 years
52
75

49
23

> 4 years

Total

20
0

350
453

Derivative financial instruments and hedge accounting disclosure

In addition, a gain of €20 million was recognised in the profit of the period in 2015 (€35 million in 2014) on derivatives that were
designated as hedging instruments in a fair value hedge, and a loss of €-18 million (in 2014: €-34 million) attributable to the hedged
risk was recognised in the profit of the period on the corresponding hedged items. Corresponding with its carrying amounts, the fairvalues of each type of derivative financial instruments is as follows:18

Notes to the IFRS Company Financial Statements

2015

2014

(In € million)

AssetsLiabilities

AssetsLiabilities

Foreign currency contracts – cash flow hedges
Foreign currency contracts – not designated in a hedge relationship0
11,66926
11,671

0
5,265

9
5,282

Interest rate contracts – cash flow hedges
Interest rate contracts – fair value hedges

0
30

13
4

0
0

14
23

Interest rate contracts – not designated in a hedge relationshipCommodity contracts - not designated in a hedge relationship

100
130

100
130

138
104

136
104

31
11,960

7
11,951

0
5,507

94
5,662

Equity swaps – not designated in a hedge relationship
Total

f)

Net gains or net losses

The Company’s net gains or net losses recognised in profit or loss in 2015 and 2014 respectively are as follows:(In € million)
Financial assets or financial liabilities at fair value through profit or loss:

2015

2014

Held for trading
Designated on initial recognition
Available-for-sale financial assets
Loans and receivables (1)

70
165
183

(326)
185
206

375
(631)

338
(576)

162

(173)

Financial liabilities measured at amortised cost
Total(1) Contain among others impairment losses

195. OTHER SUPPLEMENTARY INFORMATIONINCLUDING THE INDEPENDENT AUDITOR’SREPORT

Other Supplementary Information
Other supplementary information

AIRBUS GROUP SE - IFR S COMPANY FINANCIA L STA TEM

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 shall be
attributed to the reserves. The general meeting of shareholders may dispose of a reserve only upon a proposal of the Board of Directors andto the extent it is permitted by law and the Articles of Association. Dividends may only be paid after adoption of the annual accounts fromwhich it appears that the shareholders’ equity of the company is more than the amount of the issued and paid-in part of the capital increasedby the reserves that must be maintained by law.

It will be proposed at the Annual General Meeting of Shareholders that the net income of €54 million as shown in the income statements
for the financial year 2015 is to be added to retained earnings and that a payment of a gross amount of €1.30 per share shall be made to theshareholders out of retained earnings.

2.

Events after the reporting date

For further information please see Note 38 of the Consolidated Financial Statements.

1

Independent auditor’s report
To: the General Meeting of Shareholders of Airbus Group SE

Report on the audit of the annual financial statements 2015
OpinionIn our opinion, the consolidated and company financial statements give a true and fair view of thefinancial position of Airbus Group SE as at December 31, 2015, and of its result and its cash flows for2015 in accordance with International Financial Reporting Standards as adopted by the European
Union (EU-IFRS) and with Part 9 of Book 2 of the Netherlands Civil Code.

What we have audited
We have audited the financial statements 2015 of Airbus Group SE, based in Amsterdam. The
financial statements include the consolidated financial statements and the company financial
statements.
The consolidated and company financial statements comprise:1
2
3

the consolidated and company statement of financial position as at December 31, 2015;
the following statements for 2015: the consolidated and company income statement and theconsolidated and company statements of comprehensive income, changes in equity and cash
flows; andthe 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 under those standards are further described in the ‘Our responsibilities for theaudit of the financial statements’ section of our report.
We are independent of Airbus Group SE in accordance with the “Verordening inzake deonafhankelijkheid van accountants bij assurance-opdrachten” (ViO) and other relevant independence
regulations in the Netherlands. Furthermore, we have complied with the “Verordening gedrags- en
beroepsregels accountants” (VGBA).
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.

KPMG Accountants N.V., registered with the trade register in the Netherlands under number 33263683, is a member firm of the KPMG network of independent
member firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity.

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Audit approach
Summary
Unqualified audit opinion

Materiality••

Overall materiality of EUR 200 million
5.9% of consolidated profit before tax

Key audit matters

Scope of the group audit•

Accounting for construction contracts, including
revenue recognition and loss provisions••

Valuation of inventories for contracts accounted forunder IAS 18 and completeness of provisions forcontract losses and customer service obligations•

Litigation and claims and risk of non-compliancewith laws and regulations••

Goodwill impairment

Coverage of 96% of Group revenue and 96% ofGroup total assets

Derivative financial instruments, including impact
on capitalisation of Airbus Group

Materiality
Misstatements can arise from fraud or error and are considered material if, individually or inaggregate, 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 ouraudit procedures and the evaluation of the effect of identified misstatements on our opinion.
Based on our professional judgement we determined the materiality for the financial statements as awhole at EUR 200 (2014: EUR 222) million. The materiality is determined with reference toconsolidated profit before income taxes (2015: 5.9%; 2014: 6.9%). We consider consolidated profit
before income taxes as the most appropriate benchmark given the nature of the business. We havealso taken into account misstatements and/or possible misstatements that in our opinion are material
for qualitative reasons for the users of the financial statements.
We agreed with the Board of Directors and Audit Committee that misstatements in excess of EUR 10
million, which 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 Group SE is head of a group of entities, hereafter referred to as “Airbus Group” or “Group”.
The financial information of this group is included in the financial statements of Airbus Group SE.
Because we are ultimately responsible for the opinion, we are also responsible for directing,supervising and performing the group audit. In this context, we have determined the nature andextent of the audit procedures to be performed for the group entities, based on the significanceand/or risk profile of entities or activities. On this basis, we selected group entities for which an audit
had to be carried out on the complete set of financial information or specific items.
Our group audit mainly focused on significant group entities. A significant part of the audit isperformed by other auditors within the KPMG network or by other non-KPMG audit firms. The
organisation and supervision of the audit of the financial statements is a crucial part of our work.

KPMG Accountants N.V., registered with the trade register in the Netherlands under number 33263683, is a member firm of the KPMG network of independent
member firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity.

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We scope entities into the group audit where they are of significant size, have significant risks to theGroup associated with them or are considered significant for other reasons. This resulted in coverageof 96% (2014: 96%) of total Group revenue and 96% (2014: 98%) of total Group assets. For
remaining entities, we performed, amongst others, analytical procedures to corroborate ourassessment that there are no significant risks of material misstatement within these entities.
The audit of the Airbus Group consolidation and the financial statements is performed at the Airbus
headquarters in Toulouse, France. Our involvement in the audit includes participation in risk
assessment and planning discussions, setting the direction of the group audit work (including
instructions to the divisional and entity auditors), review and discussion of the planned audit approach,obtaining an understanding of the financial reporting process, performing procedures on the Group
consolidation, participating in the evaluation of key accounting topics, reviewing the financial
statements and participating in meetings with Group and divisional management. As part of our Groupaudit instructions, we also issued specific questionnaires on key programs (A380, A350 and A400M)
and the risk of non-compliance with laws and regulations.
The audit of the three Airbus Group divisions (Airbus, Airbus Defence & Space and Airbus Helicopters)
is performed jointly by KPMG network firms and other non-KPMG audit firms. Meetings were heldwith the divisional auditors to discuss the findings reported to the group audit team, as well as filereviews.
By performing the procedures mentioned above at group entities, together with additional proceduresat group level, we have been able to obtain sufficient and appropriate audit evidence about thegroup’s financial information to provide an opinion on the financial statements.

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 Board of
Directors and Audit Committee. The key audit matters are not a comprehensive reflection of all
matters discussed.
These matters were addressed in the context of our audit of the financial statements as a whole andin forming our opinion thereon, and we do not provide a separate opinion on these matters.

KPMG Accountants N.V., registered with the trade register in the Netherlands under number 33263683, is a member firm of the KPMG network of independent
member firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity.

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Accounting for construction contracts, including revenue recognition and loss provisions
Description
The amount of revenue and profit recognised in a year is dependent on the assessment of the stageof completion of construction contracts as well as estimated total revenue and estimated total cost.
Significant estimates are made to assess the stage of completion based on milestones, estimated revenue andcosts for the key programmes such as A400M and A350 (contracts with launch customers only). Depending onthese assessments, the stage of completion is determined, revenue is recognised and loss provisions arerecorded when the contract margin is negative.
Provisions for contract losses relate mainly to the A400M and A350 launch customers and are recorded when it
becomes probable that estimated total contract costs will exceed estimated total contract revenues. Updates tothese provisions can have a significant impact on the Group’s result and financial position. The determination ofthese provisions is based on best available estimates and requires significant management judgement andassumptions associated with the technical development achievement and certification schedules, production
plan (including assumptions on ramp up), performance guarantees as well as expected outcome from ongoingnegotiations with customers.
A key risk is the A400M programme which remains in a critical phase. The A400M SOC 1 and 1.5 milestones
remain to be achieved and therefore the related contractual termination rights from OCCAR/Nations became
exercisable (SOC 1: as of 1 November 2015; SOC 1.5 as of 1 January 2016). Negotiations with OCCAR/Nations
on military functionality, price revision formula and commercial compensation remain ongoing and are targeted
for completion in 2016.
Reference is made to the disclosure on note 3 “Key estimates and judgements”, note 10 (Revenues) and note
22 (Provisions) of the financial statements.
Our response
We evaluated the design and implementation of internal controls for accounting for construction
contracts. We also performed detailed procedures on individually significant programs, including
discussions with the individual Head of Programme, and evaluated management’s assumptions in thedetermination of amongst others the stage of completion of a project, estimates to complete for both revenue
and costs, and any provisions for loss making contracts. We focused on management’s assessment of key
contract risks and opportunities to determine whether these are appropriately reflected in the cost to complete
forecasts, and paid specific attention for example to technical development, delivery plan and certification
schedules. We challenged management’s assumptions by discussing and reviewing correspondence withcustomers, considered the accuracy and consistency of similar estimates made in previous years andcorroborated the assumptions with the latest contractual information.
We paid particular attention to the loss provision for the A400M programme, including the EUR 290 million
additional net charge in 2015, as well as related disclosures. We discussed the extent to which management
assessed the impact on the programme of the accident on 9 May 2015, and the challenges regarding delays inmilitary functionality and deliveries, (commercial) negotiations with OCCAR/Nations, cost reduction targets andchallenges in the industrial ramp-up and the SOC 1 and 1.5 contractual termination rights. Apart from reviewing
underlying documentation, we also visited the Final Assembly Line in Seville and Bremen, and reviewed reports
from Corporate Audit related to the programme.

KPMG Accountants N.V., registered with the trade register in the Netherlands under number 33263683, is a member firm of the KPMG network of independent
member firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity.

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Valuation of inventories for contracts accounted for under IAS 18 and completeness of provisions for contract
losses and customer service obligations
Description
Inventories amount in total to EUR 29 billion, including work in progress of EUR 20 billion. Key
programmes (which are accounted for under IAS 18 Revenue recognition, for which revenue andcost of sales are recognised as each aircraft is delivered) in light of the risks mentioned below are the A380 and
the A350 contracts with non-launch customers. With respect to the A380, a key challenge is securing the order
flow.
Estimates of total contract costs and selling price per aircraft are necessary to determine if a net realisable value
impairment or provision for contract loss is required. In addition to the risk of contract cancellations, significant
costs or loss of revenue may be incurred in connection with remedial action required to correct any performanceissues detected. Due to the inherent uncertainty involved in forecasting future costs and interpreting contractualand commercial positions in determining impairments and provisions, this is a key audit area. Updates to theseprovisions can have a significant impact on the Group’s result and financial position.
Reference is made to the disclosures on note 3 “Key estimates and judgements”, and notes 20 (Inventories)
and 22 (Provisions) of the financial statements.
Our response
We evaluated the design and implementation of internal controls for identifying and recording
impairments and provisions and performed detailed procedures including inquiry of the Head ofProgrammes and corroboration with other audit evidence. We evaluated management’s assumptions in thedetermination of the forecast revenue to be received, costs to be incurred (including any contractual penalties)
and gross margin. Our evaluation was based on our assessment of the historical accuracy of the Group’s
estimates in previous periods and included an analysis of contingencies and impact of known technical issues on
cost forecasts and provisions.
Particular attention was paid to the commercial status of the A380 programme, including discussions with
Airbus management on the status and their ongoing commitment to the A380 programme.

Litigation and claims and risk of non-compliance with laws and regulations
Description
A part of the Group’s business is characterised by competition for individual significant contracts
with customers which are often directly or indirectly associated with governments. The process
associated with these activities is susceptible to the risk of non-compliance with laws and regulations. In
addition the Group operates in a number of territories where the use of commercial intermediaries is normal
practice. Subsidiaries of Airbus Group SE remain under investigation by various law enforcement agencies inGermany, Greece, UK, Romania and Austria. Breaches of laws and regulations can lead to fines, penalties,
criminal prosecution, litigation and restrictions on future business.
Litigation and claims involve amounts that are potentially significant and the estimate of the amount to beprovided as a liability, if any, is inherently subjective. The outcome of these matters may have a material effecton the Group’s result and financial position.
Reference is made to the disclosure on note 3 “Key estimates and judgements and note 36 (Litigation andclaims) of the financial statements.
Our response
Our audit procedures included, among others, assessment of documents with the Group's general
counsel and the group/divisional compliance officers on all significant legal and alleged compliancecases. In addition we obtained letters from the Group's legal counsel and external lawyers for all significant
litigation. We used our own forensic specialists to assess risks and perform procedures to identify actual andpotential non-compliance with laws and regulations relevant to the Group's business, analysed correspondencewith enforcement agencies, and monitored external sources of information. With respect to cases regarding
alleged non-compliance with laws and regulations, we assessed the adequacy of management’s response(including investigations and corrective actions).
We tested payments made to commercial intermediaries during the year, made inquiries of appropriate
personnel and evaluated the tone set by the Board and the Group’s approach in managing these compliance

KPMG Accountants N.V., registered with the trade register in the Netherlands under number 33263683, is a member firm of the KPMG network of independent
member firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity.

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Litigation and claims and risk of non-compliance with laws and regulations
risks. We also assessed whether the Group's disclosures detailing significant legal proceedings and suspected
breach in laws and regulations adequately disclose the contingent liabilities of the Group within note 36.
Particular attention was paid to the alleged compliance cases, the enhanced business development policies withregards to Ethics & Compliance and related disclosures.

Goodwill impairment
Description
Goodwill amounts to EUR 9.9 billion (2014: 10 billion) and represents 9% (2014:10%) of the balance
sheet total and 166% (2014: 141%) of total equity. There is a risk of irrecoverability of the Group's
significant goodwill balance due to weak demand in certain markets and aircraft market cyclicality. The Company
used assumptions such as growth rates, weighted average cost of capital and underlying foreign exchange
rates. Due to the inherent uncertainty involved in forecasting and discounting future cash flows, which are thebasis of the assessment of recoverability, this is one of the key judgemental areas.
Reference is made to the disclosure on note 17 (Intangible assets) of the financial statements.
Our response
In this area our audit procedures included, among others, testing of the group's budgeting
procedures upon which the forecasts are based and the principles and integrity of the Group's
discounted cash flow model. We used our own valuation specialist to assist us in evaluating the assumptions
and methodologies used by the Group, in particular relating to the discount rate used. We also evaluatedmanagement’s sensitivity analyses on the assumptions for each cash generating unit. We compared the sum of
the discounted cash flows to the group's market capitalisation to assess the reasonableness of those cash
flows. We also assessed whether the Group's disclosures about the sensitivity of the outcome of theimpairment assessment to changes in key assumptions reflected the risks inherent in the cash flow model.

Derivative financial instruments, including impact on capitalisation of Airbus Group
Description
Airbus Group operates in a business environment that is exposed to currency and interest rate
volatility. A significant portion of the Group’s revenue is denominated in US dollars, while a majorpart of its costs is incurred in Euro and, to a lesser extent, in pounds Sterling. In response to these risks theGroup uses financial instruments (mainly currency forwards) to mitigate the exposure to changes in market
rates. There is a high inherent risk of error in the group financial statements, both in the valuation of the financial
instruments and in the presentation and disclosure in the financial statements.
The magnitude of the Group’s hedge portfolio and potential significant changes in the exchange rate of the US
dollar versus the Euro could have a negative impact on the equity of the Group via the “mark to market”
valuation of the hedge portfolio. It therefore also has a major impact on the capitalisation of Airbus Group, withnet equity (as percentage of total assets) amounting to 5.6% per 31 December 2015 (2014: 7.4%).
Reference is made to note 35 (Information about financial instruments) of the financial statements.
Our response
For the audit of financial instruments we used specialists who tested the controls around the Group’s
central treasury system, independently calculated the valuation of the treasury portfolio and tested
the application of hedge accounting rules and the resulting accounting treatment. We also obtained counterparty
confirmation of the outstanding financial instruments to verify the existence and ownership. Finally, weevaluated whether appropriate disclosures relating to financial instruments were made in the financial
statements.

KPMG Accountants N.V., registered with the trade register in the Netherlands under number 33263683, is a member firm of the KPMG network of independent
member firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity.

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Responsibilities of the Board of Directors for the financial statements
The Board of Directors is responsible for the preparation and fair presentation of the financial
statements in accordance with EU-IFRS and with Part 9 of Book 2 of the Netherlands Civil Code andfor the preparation of the report of the Board of Directors in accordance with Part 9 of Book 2 of theNetherlands Civil Code. Furthermore, the Board of Directors is responsible for such internal control as
the Board of Directors determines is necessary to enable the preparation of the financial statementsthat are free from material misstatement, whether due to errors or fraud.
As part of the preparation of the financial statements, the Board of Directors is responsible forassessing the company’s ability to continue as a going concern. Based on the financial reporting
framework 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 the company or
to cease operations, or has no realistic alternative but to do so. The Board of Directors should disclose
events and circumstances that may cast significant doubt on the company’s ability to continue as agoing concern in the financial statements.

Our responsibilities for the audit of financial statements
Our objective is to plan and perform the audit to obtain sufficient and appropriate audit evidence forour opinion. Our audit has been performed with a high, but not absolute, level of assurance, whichmeans we may not have detected all errors and fraud. For a further description of our responsibilities
in respect of an audit of financial statements in general we refer to the website of the professional
body for accountants in the Netherlands (NBA) www.nba.nl/standardtexts-auditorsreport.

Report on other legal and regulatory requirements
Report on the Report of the Board of Directors and the other information
Pursuant to legal requirements of Part 9 of Book 2 of the Netherlands Civil Code (concerning ourobligation to report about the report of the Board of Directors and other information):••

We have no deficiencies to report as a result of our examination whether the report of the Boardof Directors, to the extent we can assess, has been prepared in accordance with Part 9 of Book 2of the Netherlands Civil Code, and whether the information as required by Part 9 of Book 2 of theNetherlands Civil Code has been annexed.
We report that the report of the Board of Directors, to the extent we can assess, is consistent
with the financial statements.

Engagement
We were engaged before 2003 for the first time as auditor of Airbus Group SE and operated as auditor
since then. We were re-appointed by the Annual General Meeting of Shareholders as auditor of Airbus
Group SE on May 27, 2015, for the year 2015, after which we will rotate off from the Airbus Groupaudit.
Amstelveen, February 23, 2016
KPMG Accountants N.V.

R.J. Aalberts RA

KPMG Accountants N.V., registered with the trade register in the Netherlands under number 33263683, is a member firm of the KPMG network of independent
member firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity.

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