AIRBUS - 2020 Financial Statement

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

The Company tested the intangible assets for which an indicator of impairment was identified. In particular the Company tested the intangible assets associated with the main aircraft programmes and concluded that no impairment was necessary. As of 31 December 2020 and 2019, goodwill was allocated to CGUs or group of CGUs and is summarised in the following schedule:

Airbus Defence and

Airbus Helicopters

Consolidated Airbus

Airbus

Space Eliminations

(In € million)

Goodwill as of 31 December 2020

10,710 10,733

139

2,150

0 0

12,999

Goodwill as of 31 December 2019

129

2,157

13,019

The goodwill mainly relates to the creation of the Company in 2000 and the Airbus Combination in 2001. The annual impairment tests performed in 2020 led to no impairment charge. Sensitivities were also performed for growth rates (+/-1%) and discount rates (+/-1%), and in both cases led to no impairment charge.

General Assumptions Applied in the Planning Process

Airbus Helicopters – The planning takes into account the evolution of programmes based upon the current backlog and an assessment of order intake for platforms and services. – In the absence of long-term financial reference, expected cash flows generated beyond the planning horizon are considered through a terminal value. – Long-term commercial assumptions in respect of market share, deliveries and market value are based on the helicopter market forecast considering the decrease over recent years in the civil and parapublic market partially driven by decrease of investment in oil and gas, needs of helicopter fleet renewal and growth markers and the increase of Airbus Helicopters market share in this environment. – Cash flows are discounted using a euro weighted pre-tax WACC of 12.8% (2019: 10.7%). Airbus Defence and Space – Overall the defence and space markets are expected to have a moderate growth during the period of the operative planning horizon. – Business growth is underpinned by growing defence opportunities boosted after finalisation of the successful portfolio re-shaping programme. Underlying performance is improved by focusing on project delivery, cost control and efficiency. – In the absence of long-term financial reference, expected cash flows generated beyond the planning horizon are considered through a terminal value. – Cash flows are discounted using a euro weighted pre-tax WACC of 10.1% (2019: 8.5%).

The basis for determining the recoverable amount is the value in use of the CGUs. Generally, cash flow projections used for the Company’s impairment testing are based on operative planning. The operative planning, used for the impairment test, is based on the following key assumptions which are relevant for all CGUs: – increase of expected future labour expenses of 1.5% (2019: 2.0%); – future interest rates projected per geographical market, for the European Monetary Union, the UK and the US; – future exchange rate of 1.25 US$/€ (2019: 1.25 US$/€) to convert in euro the portion of future US dollar which is not hedged (see “– Note 38: Financial Instruments”); General economic data derived from external macroeconomic and financial studies have been used to derive the general key assumptions. In addition to these general planning assumptions, the following additional CGU speci f ic assumptions, which represent management’s current best assessment as of the date of these Consolidated Financial Statements, have been applied in individual CGUs. Airbus – The planning takes into account both the current market condi tion and Airbus production rate, and includes management’s best estimates of the progressive increase in aircraft deliveries over the operative planning period. – In the absence of long-term financial reference, expected cash flows generated beyond the planning horizon are considered through a terminal value. – Due to the significant hedge portfolio, the carrying value and planned cash flows of the CGU Airbus are materially influenced. – Cash flows are discounted using a euro weighted pre-tax WACC of 14.1% (2019: 11.6%).

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Airbus / Financial Statements 2020