Airbus - 2022 Universal Registration Document

2. Management’s Discussion and Analysis of Financial Condition and Results of Operations / 2.1 Operating and Financial Review

increase linked to certain agreements reached with suppliers, and the change in trade receivables (€ +0.5 billion). This was partially offset by the change in inventories (€ -5.6 billion), which reflected the inventory build up to support ramp up and the higher advance payments made to suppliers, and the change in other assets and liabilities (€ -2.3 billion). European governments’ refundable advances. As of 31 December 2022, total European governments’ refundable advances liabilities, recorded on the statement of Financial Position in the line items “non-current other financial liabilities” and “current other financial liabilities” due to their specific nature, amounted to € 3.9 billion, including accrued interest. European governments’ refundable advances (net of reimbursements) remained stable in 2022 as compared to 2021. Please refer to the “Notes to the IFRS Consolidated Financial Statements – Note 26: Other Financial Assets and Other Financial Liabilities”. Cash Used for Investing Activities Management categorises cash used for investing activities into three components: (i) industrial capital expenditure, (ii) M&A transactions and (iii) others. Cash used for investing activities amounted to € -2.6 billion for 2022, to € -1.6 billion for 2021, and to € -2.2 billion for 2020. Capital expenditure. Capital expenditure includes product related development costs that are capitalised in accordance with IAS 38. See “– 2.1.2.2 Capitalised development costs”. Capital expenditure (investments in property, plant and equipment and intangible assets) amounted to € -2.5 billion for 2022, € -1.9 billion for 2021 and € -1.8 billion for 2020. In 2020, the decrease of capital expenditure reflected the prioritisation of projects. M&A transactions. In 2022, the € -0.2 billion figure mostly relates to the acquisition of 100% of the shares of ZF Luftfahrttechnik GmbH. ZF Luftfahrttechnik was subsequently renamed Airbus Helicopters Technik GmbH. In 2021, there were no significant M&A transactions. In 2020, the € -0.6 billion figure mostly relates to the acquisition of Bombardier’s additional 29.64% shares in Airbus Canada. Please refer to the “Notes to the IFRS Consolidated Financial Statements – Note 9: Acquisitions and Disposals”. Other disposals. In 2021, the Company divested to a 50% joint venture one of its sites in France. The Company received a consideration of € 310 million. Please refer to the “Notes to the IFRS Consolidated Financial Statements – Note 9: Acquisitions and Disposals”. Free Cash Flow The Company defines Free Cash Flow as the sum of (i) cash provided by operating activities and (ii) cash used for investing activities, minus (iii) change of securities, (iv) contribution to plan assets of pension schemes, (v) realised foreign exchange results on treasury swaps and (vi) Airbus Bank activities. It is an alternative performance measure and key indicator which allows the Company to measure the amount of Cash Flow generated

from operations after cash used in investing activities. As a result of the factors discussed above, Free Cash Flow amounted to €4.3 billion for 2022 as compared to €3.5 billion for 2021 and € -7.4 billion for 2020. Free Cash Flow before M&A Free Cash Flow before mergers and acquisitions 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 resulting from acquisitions and disposals of businesses. Free Cash Flow before M&A and Customer Financing Free Cash Flow before M&A and customer financing refers to Free Cash Flow before mergers and acquisitions adjusted for Cash Flow related to aircraft financing activities. It is an alternative performance measure and indicator that may be used occasionally by the Company in its financial guidance, especially when there is higher uncertainty around customer financing activities. For the fiscal year 2022, the Company’s Board of Directors proposes a cash distribution to shareholders of € 1.80 per share. The proposed payment date is 27 April 2023. For the fiscal year 2021, the Company’s Board of Directors proposed a cash distribution to shareholders of € 1.50 per share and cash distribution to shareholders amounted to € -1.2 billion in 2022. Given the global business environment, there was no cash distribution to shareholders proposed for the fiscal year 2020. This decision aimed at strengthening the Company’s financial resilience by protecting the net cash position and supporting its ability to adapt as the situation evolved. On 23 March 2020, the Company decided to withdraw the € -1.3 billion cash distribution to shareholders initially proposed for the fiscal year 2019, in response to the COVID-19 pandemic. Consequently, there was no cash distribution to shareholders in 2020. The cash outflows of € -0.6 billion, € -0.5 billion and € -0.3 billion in 2022, 2021 and 2020, respectively, primarily relate to contributions to the Contractual Trust Arrangements (“CTA”) in Germany for allocating and generating pension plan assets in accordance with IAS 19, the German relief fund, as well as to pension schemes and plan assets in the UK, Canada and to French benefit funds. Please refer to the “Notes to the IFRS Consolidated Financial Statements – Note 32: Post-Employment Benefits”. Change in Treasury Shares / Share Buyback Change in treasury shares amounted to €-36 million for 2022, to € -22 million for 2021 and to € -4 million for 2020. As of 31 December 2022 and 2021, the Company held 647,500 and 454,735 treasury shares, respectively. Contribution to Plan Assets of Pension Schemes Cash Distribution to Shareholders / Non-Controlling Interests

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Airbus / Universal Registration Document 2022