2020 Financial Statements

2. Notes to the IFRS Consolidated Financial Statements / 2.7 Capital Structure and Financial Instruments – Level 3: inputs for the asset or liability that are not based on observable market data – fair values measured based on Level 3 input rely to a significant extent on estimates derived from the Company’s own data and may require the use of assumptions that are inherently judgemental and involve various limitations. The fair values disclosed for financial instruments accounted for at amortised cost reflect Level 2 input. Otherwise, the Company determines mostly fair values based on Level 1 and Level 2 inputs and to a lesser extent on Level 3 input. The following table presents the carrying amounts of the financial instruments held for the three levels of the fair value hierarchy as of 31 December 2020 and 2019, respectively: (In € million) 2020 2019 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Financial assets measured at fair value Equity instruments 1,780 0 465 2,245 1,988 0 528 2,516 Derivative instruments 0 4,424 0 4,424 0 1,224 216 1,440 Securities 6,968 0 0 6,968 13,368 0 0 13,368 Customer financing 0 0 237 237 0 0 350 350 Cash equivalents 9,654 512 0 10,166 7,014 652 0 7,666 Total 18,402 4,936 702 24,040 22,370 1,876 1,094 25,340 Financial liabilities measured at fair value Derivative instruments 0 (2,805) (12) (2,817) 0 (3,974) (20) (3,994) Other financial liabilities 0 0 0 0 0 0 (1,014) (1,014) Total 0 (2,805) (12) (2,817) 0 (3,974) (1,034) (5,008) The development of financial instruments of Level 3 is as follows: (In € million) Derivatives Participations Customer financing Total Written put options on NCI interests Commodity swap agreements Total Balance at 1 January 2019 165 489 510 1,164 (2,300) (26) (2,326) Business combination 0 0 0 0 0 0 0 Profit or loss 51 0 (160) (109) 0 (12) (12) Equity 0 39 0 39 1,286 0 1,286 Settlements 0 0 0 0 0 18 18 Release 0 0 0 0 0 0 0 Balance at 31 December 2019 216 528 350 1,094 (1,014) (20) (1,034) Business combination 0 0 0 0 0 0 0 Profit or loss (216) 0 (113) (329) 0 6 6 Equity 0 (63) 0 (63) 1,014 0 1,014 Settlements 0 0 0 0 0 2 2 Others 0 0 0 0 0 0 0 Balance at 31 December 2020 0 465 237 702 0 (12) (12) As at 31 December 2020, the fair value of the written put options on non-controlling interests (“NCI puts”) relating to ACLP is nil, mainly reflecting the latest projections on funding needs, slower ramp-up phasing and market projections. The fair value of these NCI puts are derived from a discounted cash flow analysis using the latest operating plan and a projection over the lifetime of the A220 programme. In addition, a post-tax WACC of 9.49% (2019: 7.5%) is used to discount the forecasted cash flows taking into account the impacts of the COVID-19 pandemic and the specificities of the programme. 72 Airbus / Financial Statements 2020