AIRBUS - 2019 Financial Statements

2.2 Airbus Structure Notes to the IFRS Consolidated Financial Statements /

7.

Acquisitions and Disposals

7.1 Business combinations are accounted for using the acquisition method, as at the acquisition date, which is the date on which control is transferred to the Company. The determination of the fair value of the acquired assets 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 marketable securities are valued at market prices. If intangible assets are identified, depending on the type of intangible asset and the complexity of determining its fair value, the Company either consults with an independent external valuation expert or develops the fair value internally, using appropriate valuation techniques which are generally based on a forecast of the total expected future net cash flows. These evaluations are linked closely to the assumptions made by management regarding the future performance of the assets concerned and the discount rate applied. 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 Company’s equity related to the subsidiary are derecognised. Any gain or In March 2019, the Company became party to a Debt Financing facility under a Note Purchase Agreements with OneWeb Communications for an amount of $ 200 million. The new financing was funded in three equal tranches and has been fully drawn during 2019. Based on the latest developments, a re-assessment of the OneWeb financial assets was performed in December 2019 leading to a decrease in the fair value of the equity investment by € 45 million recorded through OCI, and a depreciation of a loan by € 31 million recorded through financial result. The Company will continue to assess the recoverability of the One-Web investment. On 16 October 2017, Airbus, Bombardier Inc. (“Bombardier”) and Investissement Québec (“IQ”) signed an agreement that brings together Airbus’ global reach and scale with Bombardier’s newest, state-of-the-art jet aircraft family. Under the agreement, Airbus provides procurement, sales and marketing, and customer support expertise to the C Series Aircraft Limited Partnership (“CSALP”) , newly named Airbus Canada Limited Partnership (“ACLP”), the entity that manufactures and sells the A220. The partnership brings together two complementary product lines. On 8 June 2018, having received all required regulatory approvals, Airbus, Bombardier and IQ closed the C Series transaction effective on 1 July 2018. Acquisitions

loss arising from the loss of control is recognised within other income or other expenses in the Consolidated Income Statement. If the Company retains any interest in 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 the classification. 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 for the equity method is highly probable and is expected to 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 under the equity method is recognised within share of profit from investments. On 1 July 2018, Airbus has obtained control of ACLP when it acquired 50.01% Class A ownership units in ACLP. Bombardier and IQ owned at this date 33.55% and 16.44%, respectively. Airbus has consolidated ACLP using the full integration method effective from 1 July 2018. At closing, Airbus paid US$1 per share to assume a net liability. Technology and inventories are the main assets acquired. Airbus has assumed the liabilities of ACLP which are mainly related to customer contracts in the backlog, trade payables, advance payments received and refundable advance liabilities. The functional currency of ACLP is the US dollar. Bombardier continues with its current funding plan of ACLP and funded the second half of 2018 and 2019 cash shortfalls of ACLP for a total amount of $ 575 million. Bombardier has further agreed to continue to fund any cash shortfall up to a maximum aggregate amount of $350 million over 2020 and 2021. Bombardier funding is performed in consideration for non-voting participating Class B common units in ACLP. Airbus has the choice to reimburse Bombardier’s funding for the lower of the nominal amount plus a yearly 2% interest or an amount equal to the fair value of the shares of ACLP at the purchase date of Class A ownership units.

2

As at 31 December 2019, the shareholding structure is the following:

Voting rights Class A common units in %

Non-voting rights Class B common units in % Total in %

Shareholder

Airbus

50.26

0

46.02

Bombardier

33.72

100

39.31

IQ

16.02

0

14.67

21

Airbus / Financial Statements 2019