Airbus // Universal Registration Document 2021

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.

2

2021

2020

2019

(In € million)

Net Cash position at 1 January Initial application impact of IFRS 16 Gross Cash Flow from operations (1)

4,312

12,534

13,281 (1,352) 3,391 2,176 (2,092) (2,340)

0

0

4,078

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

984

Changes in other operating assets and liabilities (working capital) (2)

(1,551) (1,928)

Cash used for investing activities (3)

thereof industrial capital expenditures

3,511

3,475

Free Cash Flow (4)

thereof M&A transactions

(32)

(551)

(92)

3,543

(6,811)

3,567

Free Cash Flow before M&A (5)

thereof Cash Flow from customer financing (net)

28

124

58

Free Cash Flow before customer financing

3,483 3,515

(7,486) (6,935)

3,417

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

3,509 (1,280) (1,752)

0

0

(533)

(314)

Contribution to plan assets of pension schemes (6) Changes in capital and non-controlling interests Change in treasury shares / share buyback

138 (22) 237

89 (4)

194 (31)

Others

(631)

(1)

Net Cash position at 31 December

7,643

4,312

12,534

(1) 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 (€27 million in 2021, €70 million in 2020, €102 million in 2019). 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). (2) Including customer financing, excluding some perimeter change impacts from changes in consolidation. (3) Does not reflect change in securities (net investment of € -1,186 million in 2021, net disposal of €6,303 millio in 2020, net investment of € -397 million in 2019), which are classified as cash and not as investments solely for the purposes of this net cash presentation. Excluding bank activities. (4) 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 indicator that reflects the amount of Cash Flow generated from operations after cash used in investing activities. (5) 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 indicator that reflects

Free Cash Flow excluding those Cash Flows from the disposal and acquisition of businesses. (6) In 2020, thereof €331 million contributions for retirement and deferred compensation plans.

Changes in Other Operating Assets and Liabilities (Working Capital)

The net cash position as of 31 December 2021 was €7.6 billion, a 77.2% increase from 31 December 2020. 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 €4.1 billion for 2021, which mainly reflects higher EBIT Adjusted and includes a €0.6 billion provision consumption related to the restructuring plan.

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 €1.0 billion for 2021, versus a negative impact of € -8.2 billion for 2020. In 2021, the contributors to the positive working capital variation from 2020 to 2021 were the change in trade liabilities (€+5.7 billion), which reflected the production adaptation plan set out in April 2020 in response to the COVID-19 pandemic, the change in other assets and liabilities (€+4.5 billion), mainly due to the negative impact of the payment of penalties in 2020, and the change in inventories (€+2.3 billion), which reflected

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Airbus / Registration Document 2021