Airbus - 2022 Universal Registration Document

2. Management’s Discussion and Analysis of Financial Condition and Results of Operations /

2.1 Operating and Financial Review

2.1.6.1 Cash Flows The Company generally finances its manufacturing activities and product development programmes, and in particular the development of new commercial aircraft, through a combination of flows generated by operating activities, customer advances, risk-sharing partnerships with subcontractors and European governments’ refundable advances. In addition, the Company’s military activities benefit from government-financed research and development contracts. If necessary, the Company may raise funds in the capital markets. The following table sets forth the variation of the Company’s consolidated net cash position over the periods indicated.

02

2022 7,740 5,512 1,421

2021

2020

(In €million)

Net Cash position at 1 January (1) Gross Cash Flow from operations (2)

4,724 4,078

12,770 3,061 ( 8,197) (2,226) ( 1,759) (7,362)

984

Changes in other operating assets and liabilities (working capital) (3)

(2,609) (2,464)

(1,551) (1,928)

Cash used for investing activities (4)

thereof industrial capital expenditures

4,324

3,511

Free Cash Flow (5)

(210)

(32)

(551)

thereof M&A transactions

4,534

3,543

( 6,811)

Free Cash Flow before M&A (6)

(146)

28

124

thereof Cash Flow from customer financing (net)

4,470 4,680 (1,181)

3,483 3,515

(7,486) (6,935)

Free Cash Flow before customer financing

Free Cash Flow before M&A and customer financing Cash distribution to shareholders / non-controlling interests

0

0

(601)

(533)

(314)

Contribution to plan assets of pension schemes (7) Changes in capital and non-controlling interests Change in treasury shares / share buyback

145 (36) 135

138 (22)

89 (4)

0

0

Change in liability for puttable instruments

(1,095) 9,431

(78)

(455)

Others (8)

Net Cash position at 31 December (1)

7,740

4,724

(1) The Company has decided to refine the net cash definition to include interest rate contracts related to fair value hedges which is also reflected in the 2022 balance. (2) Represents cash provided by operating activities, excluding (i) changes in other operating assets and liabilities (working capital), (ii) contribution to plan assets of pension schemes and (iii) realised foreign exchange results on treasury swaps (€ -44 million in 2022, € 27 million in 2021, € 70 million in 2020). It is an alternative performance measure and an indicator used to measure its operating cash performance before changes in other operating assets and liabilities (working capital). (3) Including customer financing, excluding some perimeter change impacts from changes in consolidation. (4) Does not reflect change in securities (net investment of € -344 million in 2022, net investment of € -1,186 million in 2021, net disposal of € 6,303 million in 2020), which are classified as cash and not as investments solely for the purposes of this net cash presentation. Excluding bank activities. (5) Does not reflect change of securities, change in cash from changes in consolidation, contribution to plan assets of pension schemes and realised foreign exchange results on treasury swaps. Excluding bank activities. Free Cash Flow is an alternative performance measure and key indicator that reflects the amount of cash flow generated from operations after cash used in investing activities. (6) Free Cash Flow before M&A refers to Free Cash Flow adjusted for net proceeds from disposals and acquisitions. It is an alternative performance measure and key indicator that

reflects Free Cash Flow excluding those cash flows from the disposal and acquisition of businesses. (7) In 2020, thereof €331 million contributions for retirement and deferred compensation plans. (8) Including both fair value and foreign exchange impacts on securities and financing liabilities.

Changes in Other Operating Assets and Liabilities (Working Capital)

The net cash position as of 31 December 2022 was € 9.4 billion, a 21.8% increase from 31 December 2021. It includes payments received in advance from certain customers and payments made to suppliers in anticipation. Please see further details below. Gross Cash Flow from Operations Gross Cash Flow from operations is an alternative performance measure and an indicator used by the Company to measure its operating cash performance before changes in working capital. Gross Cash Flow from operations increased to €5.5 billion for 2022, which mainly reflects EBIT Adjusted.

Changes in other operating assets and liabilities (working capital), comprises inventories, trade receivables, contract assets and contract liabilities (including customer advances), trade liabilities, and other assets and other liabilities. They resulted in a positive working capital variation of € 1.4 billion for 2022, versus a positive impact of € 1.0 billion for 2021. In 2022, the contributors to the positive working capital variation from 2021 to 2022 were the change in contract assets and contract liabilities (€ +5.6 billion), mainly due to a positive phasing impact from contracts assets and liabilities reflecting higher advance payments and a positive impact from net payments made to suppliers in anticipation, the change in trade liabilities (€+3.1 billion), which reflected higher volume and payment terms

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Airbus / Universal Registration Document 2022