2020 Financial Statements

2. Notes to the IFRS Consolidated Financial Statements / 2.5 Operational Assets and Liabilities (In € million) Balance at 1 January 2019 Exchange differences Additions Changes in consolidation scope Reclassi- fication (1) Disposals (1) Depreciation / Impairment (2) Balance at 31 December 2019 Land, leasehold improvements and buildings, including buildings on land owned by others 4,912 25 82 (52) 184 (8) (320) 4,823 Technical equipment and machinery 7,958 71 408 (88) 935 (15) (2,012) 7,257 Other equipment, factory and office equipment 890 7 169 (42) 170 (15) (222) 957 Construction in progress 2,668 24 1,332 (3) (1,315) 8 0 2,714 Right-of-use assets 1,697 6 201 (6) (28) (56) (271) 1,543 Total 18,125 133 2,192 (191) (54) (86) (2,825) 17,294 (1) Includes property, plant and equipment from entities disposed (see “– Note 8: Acquisitions and Disposals”). (2) Accelerated depreciation previously included in onerous contract provision has been offset with the release of the provision in the presentation of the Consolidated Statement of Cash Flows for the year ended 2019. Property, plant and equipment decreased by €-620 million to €16,674 million (2019: €17,294 million). Property, plant and equipment include right-of-use assets for an amount of €1,804 million as of 31 December 2020 (2019: €1,543 million). For details on assets related to lease arrangements on sales financing, see “– Note 28: Sales Financing Transactions”. PROPERTY, PLANT AND EQUIPMENT BY GEOGRAPHICAL AREAS (In € million) 31 December 2020 2019 France 7,736 7,912 Germany 4,350 4,322 UK 1,615 1,991 Spain 1,350 1,405 Other countries 1,623 1,664 Total 16,674 17,294 The Company as lessee The Company leases mainly real estate assets, cars and equipment (such as land, warehouses, storage facilities and offices). Short-term leases and leases of low-value assets refer mainly to IT equipment ( e.g. printers, laptops and mobile phones) and other equipment. The Company incurred interest expense on lease liabilities of €22 million. The expense in relation to short-term and low-value assets is insignificant. There are no significant variable lease payments included in the Company’s lease arrangements. The discount rate used to determine the right-of-use asset and the lease liability for each country and leased asset is calculated based on the incremental borrowing rate at inception of the lease. The Company calculated the rate applicable to each lease contract on the basis of the lease duration. The maturity analysis of lease liabilities, based on contractual undiscounted cash flows is shown in “– Note 38.1: Financial Risk Management”. Real estate leases The Company leases land and bui ldings mainly for its operational business warehouses including logistic facilities, offices, production halls and laboratories. The major leases are located in France, Germany, Spain, the US and the UK. As lease contracts are negotiated on an individual basis, lease terms contain a wide range of different terms and conditions. Leases are typically made for a fixed period of 3-25 years and may include extension, termination and other options, which provide operational flexibility to the Company. In November 2019, additional clarifications were issued by the IFRS Interpretations Committee. Consequently, economic terms should be taken into account when determining the enforceable period of a lease. Based on its lease portfolio, the Company considers that there are no economic consequences leading to a reassessment of the previously assessed enforceable period. 38 Airbus / Financial Statements 2020