AIRBUS - 2020 Financial Statement

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

Provisions by countries The amount recorded as provision for retirement and deferred compensation plans can be allocated to the countries as follows:

Pension plans of the Company

Participation in BAE Systems Pension Scheme in the UK

Germany

France

UK Canada

Total

(In € million)

DBO

14,317

2,274

1,646

541

4,370

23,148

Plan assets

8,179

22

1,358

337

3,272

13,168

Recognised at 31 December 2020

6,138

2,252

288

204

1,098

9,980

DBO

13,089

2,017

1,492

427

3,991

21,016

Plan assets

7,705

23

1,319

273

3,343

12,663

Recognised at 31 December 2019

5,384

1,994

173

154

648

8,353

Contributions to defined contribution plans Employer’s contribution to state and private pension plans, mainly in Germany and France, are to be considered as defined contribution plans. Contributions in 2020 amounted to €813 million (2019: €853 million).

33. Share-based Payment Share-based compensation — Until 2015, the Company operated a Performance and Restricted Units Plan which qualifies as a cash-settled share-based payment plan under IFRS 2 “Share-based Payment”. Since 2016, the Company operates a Performance Units and Performance Shares Plan. Performance Units qualify as a cash-settled share-based payment plan under IFRS 2 and Performance Shares qualify as an equity-settled share-based payment plan under IFRS 2. Plans granting Restricted Units, Performance Units and/or Performance Shares are also mentioned as “LTIP” in the following notes. 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 and qualify as cash-settled or equity-settled share- based payment plans under IFRS 2. Accounting principles and methodology are the ones applied for LTIP as described below. For cash-settled plans, 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. Changes of the fair value are recognised as personnel expenses of the period, leading to a remeasurement of the provision. The fair value of Performance Units is re-measured at each closing date as far as they are not paid. For equity-settled plans, compensation expense is measured at the grant date at the fair value by multiplying the number of shares expected to vest by the fair value of one LTIP share. The compensation expense is accounting for over the vesting period of each LTIP equity-settled plans.

The fair value of each LTIP share (equity or cash-settled plans) is determined using a forward pricing model and is based on publicly available risk free rate, volatility and dividend rate. Besides the equity-settled plans described above, 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. 33.1 LTIP 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. Up to the 2018 LTIP plan, in order to avoid any dilution of its current shareholders out of equity-settled LTIP units, the Company used to perform share buybacks to meet its obligations to its employees, following the decisions of the Board of Directors and approval of the AGM. In 2020, compensation expense for LTIPs (incl. Equity Pool) including the effect of the equity swaps amounted to € -2 million (2019: €104 million), among which € -9 million for cash-settled plans (2019: €77 million) and €7 million for equity-settled plans (2019: €27 million). As of 31 December 2020, provisions of € 59 million (2019: € 144 million) relating to LTIP units (cash-settled) have been accounted for.

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Airbus / Financial Statements 2020