AIRBUS - 2019 Financial Statements

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

Liquidity Risk The Company’s policy is to maintain sufficient cash and cash equivalents at any time to meet its present and future commitments as they fall due. It manages its liquidity by holding adequate volumes of liquid assets and maintains a committed credit facility (€3.0 billion as of 31 December 2019 and 2018) in addition to the cash inflow generated by its operating business. The Company continues to keep within its asset portfolio the focus on low counterparty risk. In addition, it maintains a set of other funding sources, and accordingly may issue bonds, notes and commercial papers or enter into security lending

agreements. Adverse changes in the capital markets could increase its funding costs and limit its financial flexibility. Further, the management of the vast majority of the Company’s liquidity exposure is centralised by a daily cash concentration process. This process enables it to manage its liquidity surplus as well as its liquidity requirements according to the actual needs of its subsidiaries. In addition, management monitors the Company’s liquidity reserve as well as the expected cash flows from its operations.

The contractual maturities of the Company’s financial liabilities, based on undiscounted cash flows and including interest payments, if applicable, are as follows:

Carrying amount

Contractual cash flows < 1 year

1 year - 2 years

2 years - 3 years

3 years - 4 years

4 years - 5 years > 5 years

(In € million)

31 December 2019 Non-derivative financial liabilities

(26,828)

(28,307)

(17,306)

(1,718)

(484)

(1,293)

(1,310)

(6,196)

Derivative financial liabilities

(3,994)

(6,160)

(1,559)

(1,540)

(1,442)

(998)

(519)

(102)

Total

(30,822)

(34,467) (18,868)

(3,258)

(1,923)

(2,291)

(1,829)

(6,298)

31 December 2018 Non-derivative financial liabilities

(28,302)

(29,843)

(20,541)

(429)

(1,452)

(726)

(1,075)

(5,620)

Derivative financial liabilities

(2,755)

(4,479)

(1,806)

(1,075)

(868)

(492)

(157)

(81)

Total

(31,057)

(34,322) (22,347)

(1,504)

(2,320)

(1,218)

(1,232)

(5,701)

Non-derivative financial liabilities included in the table above comprise financing liabilities as presented in “– Note 37.2: Carrying Amounts and Fair Values of Financial Instruments”. Due to their specific nature, namely their risk-sharing features and uncertainty about the repayment dates, the European Governments’ refundable advances, which amount to € -4,277 million at 31 December 2019 (€ -4,577 million at 31 December 2018) are not included.

Lease Liabilities The maturity analysis of lease liabilities, based on contractual undiscounted cash flows is as follows:

(In € million) Not later than 1 year

(262)

Later than 1 year and not later than 5 years

(768)

Later than 5 years

(606)

Total undiscounted lease liabilities at 31 December 2019

(1,636)

Lease liabilities included in the statement of financial position at 31 December 2019

(1,560)

Current

(262)

Non-current

(1,298)

Credit Risk The Company is exposed to credit risk to the extent of non- performance by either its customers ( e.g. airlines) or its counterparts with regard to financial instruments or issuers of financial instruments for gross cash investments. However, it has policies in place to avoid concentrations of credit risk and to ensure that credit risk is limited. As far as central treasury activities are concerned, credit risk resulting from financial instruments is managed by the Company. In order to ensure sufficient diversification, a credit limit system is used.

The Company monitors the performance of the individual financial instruments and the impact of market developments on their performance and takes appropriate action on foreseeable adverse development based on pre-defined procedures and escalation levels. Sales of products and services are made to customers after having conducted appropriate internal credit risk assessment. In order to support sales, primarily at Airbus, Airbus Helicopters and ATR, the Company may agree to participate in customer financing, on a case-by-case basis either directly or through

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Airbus / Financial Statements 2019