AIRBUS - 2019 Financial Statements
2.7 Capital Structure and Financial Instruments Notes to the IFRS Consolidated Financial Statements /
– Level 3: inputs for the asset or liability that are not based on observable market data – fair values measured based on Level 3 input rely to a significant extent on estimates derived from the Company’s own data and may require the use of assumptions that are inherently judgemental and involve various limitations.
The fair values disclosed for financial instruments accounted for at amortised cost reflect Level 2 input. Otherwise, the Company determines mostly fair values based on Level 1 and Level 2 inputs and to a lesser extent on Level 3 input.
The following table presents the carrying amounts of the financial instruments held for the three levels of the fair value hierarchy as of 31 December 2019 and 2018, respectively:
2019
2018
Level 1 Level 2 Level 3 Total
Level 1 Level 2 Level 3 Total
(In € million)
Financial assets measured at fair value Equity instruments
1,988
0
528 2,516 1,778
0
489 2,267
0 1,224
216 1,440
0 1,152
165 1,317
Derivative instruments
13,368
0
0 13,368 12,794
0
0 12,794
Securities (1)
Customer financing
0
0
350
350
0
0
510
510
7,014
652
0 7,666 6,576
984
0 7,560
Cash equivalents
Total
22,370 1,876 1,094 25,340 21,148 2,136 1,164 24,448
Financial liabilities measured at fair value Derivative instruments
0 (3,974)
(20)
(3,994)
0 (2,729)
(26)
(2,755)
0
0 (1,014)
(1,014)
0
0 (2,300)
(2,300)
Other financial liabilities
Total
0 (3,974)
(1,034) (5,008)
0 (2,729) (2,326)
(5,055)
(1) Reclassified from Level 2 to Level 1.
The development of financial instruments of Level 3 is as follows:
Written put options on NCI interests
Commodity swap agreements Total
Customer financing Total
Derivatives Participations
(In € million)
Balance at 1 January 2018
0
478
770 1,248
0
(3)
(3)
Business combination
198
0
0
198
(2,247)
0 (2,247)
Profit or loss
25
0
(260)
(235)
0
(67)
(67)
Equity
0
23
0
23
0
0
0
Settlements
(58)
(12)
0
(70)
0
44
44
Release
0
0
0
0
(53)
0
(53)
Balance at 31 December 2018
165
489
510 1,164
(2,300)
(26) (2,326)
Business combination
0
0
0
0
0
0
0
Profit or loss
51
0
(160)
(109)
0
(12)
(12)
Equity
0
39
0
39
1,286
0 1,286
Settlements
0
0
0
0
0
18
18
Others
0
0
0
0
0
0
0
Balance at 31 December 2019
216
528
350 1,094
(1,014)
(20) (1,034)
The financial liabilities measured at fair value and classified as Level 3 consist mainly of the written put options on non- controlling interests (“NCI puts”) relating to ACLP (see “—Note 7: Acquisitions and Disposals”). The fair value of these NCI puts are derived from a discounted cash flow analysis using the latest operating plan and a projection over the life-time of the A220 programme.
In addition a post-tax WACC of 7.5% is used to discount the forecasted cash flows, taking into account the specificities of the programme (2018: 6.95%). The decrease in the fair value of the NCI puts reflects the latest projections on funding needs, ramp-up phasing and market projections.
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Airbus / Financial Statements 2019
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