AIRBUS - 2019 Financial Statements

2.7 Capital Structure and Financial Instruments Notes to the IFRS Consolidated Financial Statements /

36.3 Financing Liabilities Financing liabilities comprise obligations towards financial institutions, issued corporate bonds, depositsmade by customers of Airbus Bank, borrowings received from joint ventures and other parties as well as finance lease liabilities. Financing liabilities are recorded initially at the fair value of the proceeds received, net of transaction costs incurred. Subsequently, financing liabilities are measured at amortised cost, using the effective interest rate method with any difference between proceeds (net of transaction costs) and redemption amount being recognised in total finance income (cost) over the period of the financing liability.

Financing liabilities to financial institutions may include liabilities from securities lending transactions. In securities lending transactions, the Company receives cash from its counterparty and transfers the securities subject to the lending transaction as collateral. The counterparty typically has the right to sell or repledge the securities pledged. The amount of cash received is recognised as a financing liability. The securities pledged are not derecognised, but remain on the Company’s Statement of Financial Position.

31 December

2019

2018

(In € million)

Bonds and commercial papers

6,491

6,659

244

267

Liabilities to financial institutions

156

229

Loans

1,298

307

Lease liabilities

0

1

Others (1)

8,189

7,463

Total long term financing liabilities

106

86

Liabilities to financial institutions

Loans

127

70

262

23

Lease liabilities

1,464

1,284

Others (1)

Total short term financing liabilities

1,959

1,463

Total

10,148

8,926

(1) Included in “others” are financing liabilities to joint ventures.

Long-term financing liabilities , mostly comprising of bonds and lease liabilities, increased by €+726 million to €8,189 million (2018: € 7,463 million), mainly due to the application of IFRS 16 (see “– Note 2: Accounting Policies”). It was partly offset by the conversion of the convertible bond issued on 1 July 2015 for an amount of € 500 million. The conversion price was € 99.54 per ordinary share. Short-term financing liabilities increased by €+496 million to €1,959 million (2018: €1,463 million). The increase in short-term financing liabilities is mainly related to the application of IFRS 16. The Company has issued several euro-denominated bonds under its EMTN programme and three stand-alone US dollar- denominated bonds on the US institutional market under Rule 144A. It has also issued a euro-denominated exchangeable bonds into Dassault Aviation shares. Furthermore, the Company has long-term US dollar-denominated loans outstanding with the Development Bank of Japan (“DBJ”).

The Company can issue commercial paper under the so-called “ billet de trésorerie ” programme at floating or fixed interest rates corresponding to the individual maturities ranging from 1 day to 12 months. The programme has been set up in 2003 with a maximum volume of €2 billion, increased in 2013 to a maximum volume of €3 billion. The Company established in April 2015 a US$2 billion commercial paper programme which has been increased to US$3 billion in April 2016. As of 31 December 2019, there were no outstanding amounts under this US commercial paper. The commercial paper issuance activity was limited during the course of 2019.

2

63

Airbus / Financial Statements 2019