AIRBUS - 2019 Registration Document

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

2.1 Operating and Financial Review

The following discussion and analysis is derived from and should be read together with the audited IFRS Consolidated Financial Statements as of and for the years ended 31 December 2018 and 2017 and the Unaudited Condensed Interim IFRS Consolidated Financial Information for the three- month period ended 31 March 2019 and 2018. These financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) issued by the International Accounting Standards Board as endorsed by the European Union, and with Part 9 of Book 2 of the Dutch Civil Code. When reference is made to “IFRS”, this intends to be EU-IFRS. The following discussion and analysis also contains certain “non-GAAP financial measures”, i.e. financial measures that either exclude or include amounts that are not excluded or included in the most directly comparable measure calculated and presented in accordance with IFRS. Specifically, the Company makes use of the non-GAAP financial measures ( i.e. Alternative Performance Measures) “EBIT Adjusted”, “net cash” and “Free Cash Flow”. The Company uses these non-GAAP financial measures to assess its consolidated financial and operating performance and believes they are helpful in identifying trends in its performance. These measures enhance management’s ability to make decisions with respect to resource allocation and whether the Company is meeting established financial goals. Non-GAAP financial measures have certain limitations as analytical tools, and should not be considered in isolation or as substitutes for analysis of the Company’s results as reported under IFRS. Because of these limitations, they should not be considered substitutes for the relevant IFRS measures. The Company also measures and communicates its performance on the basis of “EBIT” (reported). The Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in Section 2 of this Registration Document reflects the new segment structure as described in section 2.1.1.2. The 2017 financial information has been restated to provide comparative information with respect to the new segment structure. The Company has implemented IFRS 15 “Revenue from Contracts with Customers” on 1 January 2018. The Company has restated the comparative 2017 financial information under IFRS 15 when required. The 2016 financial information has not been restated under IFRS 15. For comparative purposes, the 2017 financial information before the application of IFRS 15 is also presented. The financial information that has not been restated is referred to as “reported” or “as reported”, i.e. not restated. In addition, the 2018 financial information has been prepared under IFRS 9 “Financial Instruments”, using the limited exemption in IFRS 9 relating to transition for classification and measurement of financial instruments and impairment. Accordingly, the Company has not restated the comparative periods. On 1 January 2019, the Company adopted the new standard IFRS 16 “Leases” using the modified retrospective method, with no restatement of comparative information, and the new interpretation IFRIC 23 “Uncertainty over Income Tax Treatment”, for which it has elected to apply the limited exemption relating to transition for classification and measurement, and accordingly has not restated comparative periods. Reporting in Registration Document

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Airbus / Registration Document 2018