AIRBUS - 2020 Financial Statement

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

The net cash position on 31 December 2020 amounted to €4,312 million (2019: €12,534 million), with a gross cash position of €21,407 million (2019: €22,682 million). Derivative instruments recognised on the Company’s Statement of Financial Position consist of (i) instruments that are entered into as hedges of the Company’s operating activities or interest result, and (ii) embedded foreign currency derivatives that arise

from separating the foreign currency component from certain operating contracts. Cash flows resulting from the settlement of these derivatives are therefore recorded as part of cash flow from operations. Similarly, financial assets and liabilities arising from customer financing activities and refundable advances from European Governments are considered part of operating activities and related cash flows are hence recognised as cash flows from operating activities.

37.1 Cash and Cash Equivalents Cash and cash equivalents are composed of the following elements:

31 December

2020

2019

(In € million)

Bank account and petty cash

4,173

1,649

9,654

7,014

Short-term securities (at fair value through profit and loss)

512

652

Short-term securities (at fair value through OCI)

100

(1)

Others

Total cash and cash equivalents

14,439

9,314

Only securities with a maturity of three months or less from the date of the acquisition, that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, are recognised in cash equivalents. 37.2 Securities

37.3 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.

The majority of the Company’s securities consists of debt securities and are classified at fair value through OCI (see “– Note 38.2: Carrying Amounts and Fair Values of Financial Instruments”). The Company’s securities portfolio amounts to €6,968 million and € 13,368 million as of 31 December 2020 and 2019, respectively. The security portfolio contains a non-current portion of €5,350 million (2019: €11,066 million), and a current portion of €1,618 million (2019: €2,302 million). Included in the securities portfolio as of 31 December 2020 and 2019, respectively, are corporate and government bonds bearing either fixed rate coupons (€6,714 million nominal value; 2019: €12,908 million) or floating rate coupons (€108 million nominal value; 2019: €188 million), and foreign currency funds of fixed income funds (€2 million fair value; 2019: €5 million). When the Company enters into securities lending or other financing activities that involve the pledging of securities as collateral, the securities pledged continue to be recognised on the balance sheet. As of 31 December 2020, securities for an amount of €99 million were pledged as collateral for borrowings from banks (2019: €145 million).

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Airbus / Financial Statements 2020