AIRBUS - 2019 Financial Statements

2.6 Employees Costs and Benefits Notes to the IFRS Consolidated Financial Statements /

32. Share-Based Payment

Share-based compensation — Until 2015, the Company operated a Performance and Restricted Unit Plan or LTIP which qualifies as a cash-settled share-based payment plan under IFRS 2 “Share-based Payment”. The grant of the units will not physically be settled in shares (except with regard to the Company Executive Committee Members). For details of the conversion of some Performance Units granted to Executive Committee Members into equity-settled plans see “– Note 33.1: Remuneration-Executive Committee”. Since 2016, the Company operates a Performance Units and Performance Share Plan , which is granted in units as well as in shares. For plans settled in cash, provisions for associated services received are measured at fair value by multiplying the number of units expected to vest with the fair value of one LTIP unit at the end of each reporting period, taking into account the extent to which the employees have rendered service to date. The fair value of each LTIP unit is determined using a forward pricing 32.1 LTIP In the years 2014 and 2015, the Board of Directors of the Company approved the granting of LTIP Performance and Restricted Units. Since 2016, it has approved a LTIP Performance Units and Performance Share Plan. Additionally, since 2019 it has approved exceptional grants under an Equity Pool as described above. The Company hedges the share price risk inherent in the cash- settled LTIP units by entering into equity swaps where the reference price is based on the Airbus SE share price. To the extent that cash-settled LTIP units are hedged, compensation expense recognised for these units will effectively reflect the reference price fixed under the equity swaps. In order to avoid any dilution of its current shareholders out of equity-settled LTIP units, the Company performs share buybacks to meet its

model. Changes of the fair value are recognised as personnel expenses of the period, leading to a remeasurement of the provision. Since 2018, the Company operates also exceptional grants of Performance and Restricted Units as well as Performance and Restricted Shares under an Equity Pool. Such exceptional grants are validated by specific resolutions from the Board of Directors. Accounting principles and methodology are the ones applied for LTIP as described above. Besides the equity-settled parts from LTIP 2016 onwards, the Employee Share Ownership Plan (“ESOP”) is an additional equity-settled share-based payment plan. Under this plan, the Company offers its employees Airbus SE shares at fair value matched with a number of free shares based on a determining ratio. The fair value of shares provided is reflected as personnel expenses in the Company’s Consolidated Income Statement with a corresponding increase in equity. obligations to its employees, following the decisions of the Board of Directors and approval of the AGM. In 2019, compensation expense for LTIPs (incl. Equity Pool) including the effect of the equity swaps amounted to €104 million (2018: €69 million). As of 31 December 2019, provisions of € 144 million (2018: €140 million) relating to LTIP have been recognised. The life-time of the Performance and Restricted Units as well as Performance Shares is contractually fixed (see the description of the respective tranche in the following table). For the units, the measurement is next to other market data, mainly affected by the share price as of the end of the reporting period (€130.48 as of 31 December 2019) and the life-time of the units.

The fair value of units and shares granted per vesting date is as follows (LTIP plan 2019):

Expected vesting date (In € per unit / share granted)

Fair value of Performance Units and Shares

May 2023 – Performance Shares

112.92

May 2023 – Performance Units

112.83

May 2024 – Performance Units

108.44

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Airbus / Financial Statements 2019