Financial Statements 2023

4. Notes to the IFRS Company Financial Statements 4.5 Capital Structure and Financial Instruments

Interest rate risk — The Company uses an asset ‑ liability management approach with the objective to limit its interest rate risk. It undertakes to match the risk profile of its interest ‑ bearing assets with those of its interest ‑ bearing liabilities. The remaining net interest rate exposure is managed through several types of interest rate derivatives, such as interest rate swaps and interest rate futures contracts, in order to minimise risks and financial impacts. The vast majority of related interest rate hedges qualify for hedge accounting, and most of them are accounted for under the fair value hedge model. As a result, both the fair value changes of these derivatives and the portion of the hedged items’ fair value change that is attributable to the hedged interest rate risk are recognised in Profit and Loss, where they offset to the extent the hedge is effective. The Company has applied the relief introduced by the amendments made to IFRS 9 in September 2019 on hedge accounting, having the effect that the IBOR reform should not cause hedge accounting to terminate. The Company invests in financial instruments such as overnight deposits, certificates of deposits, commercial papers, other money market instruments and short ‑ term as well as medium ‑ term bonds. For its financial instruments portfolio, the Company has an Asset Liability Management Committee in

place that meets regularly and aims to limit the interest rate risk on a fair value basis through a value ‑ at ‑ risk approach, from which results a hedge ratio that is however not actively steered. Commodity price risk — The Company manages a hedge portfolio for its subsidiaries. Owing to the Company’s back ‑ to ‑ back approach, its own exposure to commodity exchange risk is very limited. Equity price risk — The Company is to a small extent invested in equity securities mainly for operational reasons. Its exposure to equity price risk is hence limited. Furthermore, it is exposed under its LTIP to the risk of the Company share price increases. Sensitivities of market risks — The approach used to measure and control market risk exposure within the Company’s financial instrument portfolio is amongst other key indicators the value ‒ at ‒ risk (“VaR”). For information about VaR and the approach used by the Company to assess and monitor sensitivities of market risks please refer to “– Note 37.1: Financial Risk Management” of the Consolidated Financial Statements. The Company is part of the Group risk management process, which is more fully described in “– Note 37.1: Financial Risk Management” of the Consolidated Financial Statements.

A summary of the VaR position of the Company’s financial instruments portfolio at 31 December 2023 and 31 December 2022 is as follows:

(In € million)

Total VaR Equity price VaR Currency VaR Interest rate VaR

31 December 2023

Foreign exchange hedges

11

0

12

1

Financing liabilities, financial assets (including cash, cash equivalents, securities and related hedges)

150

70

29

141

Equity swaps

1

1

0

0

Diversification effect

(15)

(1)

(25)

(1)

All financial instruments

147

70

16

141

31 December 2022

Foreign exchange hedges

20

0

19

1

Financing liabilities, financial assets (including cash, cash equivalents, securities and related hedges)

194

66

18

175

Equity swaps

2

2

0

0

4

Diversification effect

(29)

0

(34)

(2)

All financial instruments

187

68

3

174

The decrease in the total VaR of €40 million (2022: €119 million) is mainly attributable to the interest rate volatility stabilisation after an exceptional year 2022. The derivative instruments entered into with external counterparties are passed on a 1:1 basis to Airbus entities. As a result, the respective market risks of the external derivative instruments are offset by corresponding opposite market risks of intragroup transactions.

135

Airbus

Financial Statements 2023