AIRBUS - 2019 Financial Statements

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

Balance at 1 January 2018

Changes in consolidation scope

Balance at 31 December 2018

Exchange differences Additions

Reclassi- fication (1) Disposals (1)

Depreciation / Impairment

(In € million)

Land, leasehold improvements and buildings, including buildings on land owned by others Technical equipment and machinery Other equipment, factory and office equipment

5,091

9

84

172

166

(40)

(301)

5,181

8,066

70

391

69

888

(50)

(1,412)

8,022

939

10

147

0

50

(15)

(229)

902

Construction in progress

2,514

(7)

1,381

11 (1,223)

(8)

0

2,668

Total

16,610

82 2,003

252

(119)

(113)

(1,942)

16,773

(1) Includes property, plant and equipment from entities disposed and reclassified to assets and disposal groups classified as held for sale (see “– Note 7: Acquisitions and Disposals”).

Property, plant and equipment increased by €+521 million to €17,294 million (2018: €16,773 million), mainly due to the application of IFRS 16 offset by depreciation in the period. Property, plant and equipment includes right-of-use assets for an amount of € 1,543 million as of 31 December 2019. For details on assets related to lease arrangements on sales financing, see “– Note 27: Sales Financing Transactions”.

PROPERTY, PLANT AND EQUIPMENT BY GEOGRAPHICAL AREAS

31 December

2019

2018

(In € million)

7,912

7,630

France

4,322

4,281

Germany

1,991

2,144

UK

Spain

1,405

1,500

1,664

1,218

Other countries

2

Total

17,294

16,773

The Company as Lessee The Company leases mainly real estate assets, cars and equipment (such as land, warehouses, storage facilities and offices). Short-term leases and leases of low-value assets refer mainly to IT equipment ( e.g. printers, laptops and mobile phones) and other equipment. The Company incurred interest expense on lease liabilities of € 14 million. The expense in relation to short-term and low-value assets is insignificant. There are no significant variable lease payments included in the Company’s lease arrangements. The discount rate used to determine the right-of-use asset and the lease liability for each country and leased asset is calculated based on the incremental borrowing rate at inception of the lease. The Company calculated the rate applicable to each lease contract on the basis of the lease duration. The maturity analysis of lease liabilities, based on contractual undiscounted cash flows is shown in Note 37.1 – Financial Risk Management.

Real Estate Leases The Company leases land and buildings mainly for its operational business warehouses including logistic facilities, offices, production halls and laboratories. The major leases are located in France, Germany, Spain, the US and the UK. As lease contracts are negotiated on an individual basis, lease terms contain a wide range of different terms and conditions. Leases are typically made for a fixed period of 3-25 years and may include extension, termination and other options, which provide operational flexibility to the Company. In November 2019, additional clarifications were issued by the IFRS Interpretations Committee. Consequently, economic terms should be taken into account when determining the enforceable period of a lease. Based on its lease portfolio, the Company considers that there are no economic consequences leading to a reassessment of the previously assessed enforceable period.

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Airbus / Financial Statements 2019