AIRBUS - 2019 Financial Statements

Notes to the IFRS Company Financial Statements /

Credit Risk The Company is exposed to credit risk to the extent of non- performance by its counterparts with regard to financial instruments or issuers of financial instruments for gross cash investments. However, it has policies in place to avoid concentrations of credit risk and to ensure that credit risk is limited. As far as central treasury activities are concerned, credit risk resulting from financial instruments is managed by the Company. In order to ensure sufficient diversification, a credit limit system is used. The Company monitors the performance of the individual financial instruments and the impact of market developments on their performance and takes appropriate action on foreseeable adverse development based on pre-defined procedures and escalation levels. Sales of products and services are made to customers after having conducted appropriate internal credit risk assessment. The booked amount of financial assets represents the maximum credit exposure. The credit quality of financial assets can be assessed by reference to external credit rating (if available) or internal assessment of customers’ creditworthiness by way of internal risk pricing methods. In 2019, the total receivables, neither past due nor impaired amount to €33 million (in 2018: €250 million).

The Company measures loss allowances at an amount that represents credit losses resulting from default events that are possible within the newt 12 months, unless the credit risk on a financial instrument has increased significantly since initial recognition, as described in section 37.7 “Impairment losses” of the Notes to the Consolidated Financial Statements. In 2019, an amount of € 31 million of impairment losses on financial assets is recognised in profit and loss (2018: € 0 million). 14.2 Carrying Amounts and Fair Values of Financial Instruments Financial instruments – The Company’s financial assets mainly consist of cash, short to medium-term deposits and securities. The Company’s financial liabilities include intragroup liabilities, obligations towards financial institutions and issued bonds. The Company has the same classification and accounting policies as the Group. Please refer to section 37.1 “Financial Risk Management” of the Notes to the Consolidated Financial Statements for more information. The Company classifies its financial assets in one of the following categories: (i) at fair value through OCI, (ii) at fair value through profit and loss and (iii) at amortised cost. Classification depends on the Company’s business model for managing the financial assets and the contractual terms of the cash flows. The Company assigns its financial instruments (excluding its at-cost investments, which are outside the scope of IFRS 9 “Financial Instruments”) into classes based on their category in the statement of financial position.

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

Financial instruments total

Financial assets and liabilities at amortised cost

Fair value through profit or loss

Fair value through OCI

Amortised cost

Fair value

Book value

Fair value

(In € million)

Assets Other investments and long-term financial assets Equity instruments

1,094

0 0 0

0

0

1,094 1,838

1,094 1,895

Loans

0 0

1,838 1,895

Trade receivables

32

32

32

32

Other financial assets

4,843 8,574

4,843 8,574

Derivative instruments

4,843

0 0

0

0

Current account Airbus companies

0 0

8,574 8,574

Securities

13,066

0

0

13,066 13,066

Cash and cash equivalents

7,014

652

463

463

8,129

8,129

Total

12,951

13,718

10,907 10,964 37,576 37,633

Liabilities Financing liabilities Issued bonds and commercial papers Liabilities to financial institutions and others

0 0 0

0 0 0

2,435 2,517

2,435

2,517

89

90

89

90

Internal loans payable Other financial liabilities Derivative instruments

4,056 4,180

4,056

4,180

4,691

4,691

4,691

0 0 0

0

0

Current accounts Airbus companies

0

32,510 32,510

32,510 32,510

Total

4,691

39,090 39,297 43,781 43,988

106

Airbus / Financial Statements 2019