AIRBUS - 2019 Financial Statements

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

As of 31 December 2019 and 2018, goodwill was allocated to CGUs or group of CGUs and is summarised in the following schedule:

Airbus Defence and Space

Airbus Helicopters

Transversal / Eliminations

Consolidated Airbus

Airbus

(In € million)

Goodwill as of 31 December 2019

10,733

129

2,157

0

13,019

Goodwill as of 31 December 2018

10,759

128

2,152

0

13,039

The goodwill mainly relates to the creation of the Company in 2000 and the Airbus Combination in 2001. The annual impairment tests performed in 2019 led to no impairment charge.

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 the Company’s impairment testing are based on operative planning. The operative planning, used for the impairment test, is based on the following key assumptions which are relevant for all CGUs: – increase of expected future labour expenses of 2.0% (2018: 2.0%); – future interest rates projected per geographical market, for the European Monetary Union, the UK and the US; – future exchange rate of 1.25 US$/€ (2018: 1.25 US$/€) to convert in euro the portion of future US dollar which is not hedged (see “– Note 37: Information about Financial Instruments); General economic data derived from external macroeconomic and financial studies have been used to derive the general key assumptions. In addition to these general planning assumptions, the following additional CGU specific assumptions, which represent management’s current best assessment as of the date of these Consolidated Financial Statements, have been applied in individual CGUs. Airbus – The planning takes into account the current production rate assumptions and provides an assessment of expected future deliveries on that basis. – In the absence of long-term financial reference, expected cash flows generated beyond the planning horizon are considered through a terminal value. – Long-term commercial assumptions in respect of market share, deliveries and market value are based on General Market Forecast updated in 2019. 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 significant hedge portfolio, the carrying value and planned cash flows of the CGU Airbus are materially influenced. – Cash flows are discounted using a euro weighted pre-tax WACC of 11.6% (2018: 10.6%).

Airbus Helicopters – The planning takes into account the evolution of programmes based upon the current backlog and an assessment of order intake for platforms and services. – In the absence of long-term financial reference, expected cash flows generated beyond the planning horizon are considered through a terminal value. – Long-term commercial assumptions in respect of market share, deliveries and market value are based on the helicopter market forecast considering the decrease over recent years in the civil and parapublic market partially driven by 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 pre-tax WACC of 10.7% (2018: 10.4%). Airbus Defence and Space – Overall the defence and space markets are expected to grow at a steady rate during the period of the operative planning horizon. – Business growth is underpinned by growing defence opportunities boosted after finalisation of the successful portfolio re-shaping programme. Underlying performance is improved by focusing on project delivery, cost control and efficiency. – In the absence of long-term financial reference, expected cash flows generated beyond the planning horizon are considered through a terminal value. – Cash flows are discounted using a euro weighted pre-tax WACC of 8.5% (2018: 9.1%).

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Airbus / Financial Statements 2019