AIRBUS - 2019 Financial Statements

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

24. Provisions, Contingent Assets and Contingent Liabilities

Provisions — The determination of provisions, e.g. for onerous contracts, warranty costs, restructuring measures and legal proceedings is based on best available estimates. In general, in the aerospace sector, the contractual and technical parameters considered for provision calculations are complex.

Hence uncertainty exists with regard to the timing and amounts of expenses to be taken into account. The majority of other provisions are generally expected to result in cash outflows during the next 1 to 12 years.

31 December

2019

2018

(In € million)

Provisions for pensions

8,353

7,072

10,561

11,816

Other provisions

Total

18,914

18,888

thereof non-current portion

12,542

11,571

6,372

7,317

thereof current portion

Provisions for pensions – As of 31 December 2019, the changes in actuarial assumptions resulted overall in a total net increase in pension liability of € 2,687 million, principally reflecting the weakening of interest rates in Germany, France, Canada and the UK, partly compensated by the contributions made into the various pension vehicles of € 1,758 million (see “– Note 31: Post-Employment Benefits”). The decrease in other provisions is mainly due to the changes in provisions for onerous contracts.

Movements in other provisions during the year were as follows:

Increase from passage of time Additions

Reclassification / Change in consolidated

Balance at 31 December 2019

Balance at 1 January 2019

Exchange differences

group Used Released

(In € million)

Onerous contracts

5,489

48

0

1,408

(870)

(2,007)

(113)

3,955

Outstanding costs

1,324

2

0

412

(8)

(426)

(90)

1,214

Aircraft financing risks (1)

6

0

0

1

1

0

(3)

5

Obligation from services and maintenance agreements

651

0

18

28

0

(98)

(28)

571

Warranties

327

1

1

100

(28)

(62)

(16)

323

Personnel-related provisions (2)

920

0

4

595

(40)

(468)

(28)

983

Litigation and claims (3)

587

0

0

416

3

(50)

(45)

911

Asset retirement

153

1

22

29

0

0

(2)

203

Other risks and charges

2,359

7

0

812

(134)

(294)

(354)

2,396

Total

11,816

59

45 3,801

(1,076) (3,405)

(679)

10,561

(1) See “– Note 27: Sales Financing Transactions”. (2) See “– Note 30: Personnel-Related Provisions”. (3) See “– Note 38: Litigation and Claims”.

Provisions for onerous contracts in 2019 mainly include the release, utilisation and net presentation of the A380 and A220 programme losses against inventories, partly compensated by the A400M net charge recorded (see “– Note 11: “Revenue and Gross Margin”). Personnel-related provisions include restructuring provisions and other personnel charges. For more details, see “– Note 30: Personnel-Related Provisions”. Following adoption of IFRIC 23, uncertain tax liabilities formerly included under provisions for other risks and charges have been reclassified to current income tax liabilities (see “– Note 4: Change in Accounting Policies and Disclosures”).

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Airbus / Financial Statements 2019