AIRBUS - 2019 Registration Document

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

2.1.3.2 Order Intake and Order Backlog Year-end order backlog consists of contracts signed up to that date. Only firm orders are included in calculating order backlog for commercial aircraft. A firm order is defined as one for which the Company receives a down payment on a definitive contract. Defence-related orders are included in the backlog upon enforcement of the signed contract (and the receipt, in most cases, of an advanced payment). Commitments under defence “umbrella” or “framework” agreements by governmental customers are not included in backlog until the Company is officially notified. Up until 1 January 2018, amounts of order backlog for commercial aircraft contracts reflected in the table below are derived from catalogue prices, escalated to the expected delivery date and, to the extent applicable, converted into euro (at the corresponding hedge rate for the hedged portion of expected cash flows, and at the period-end spot rate for the non-hedged portion of expected cash flows). The amount of defence-related order backlog is equal to the contract values of the corresponding programmes. Order intake is measured under IFRS 15 principles starting on 1 January 2018.

As of 31 December 2018, the total backlog and order intake represent the aggregate amount of the net transaction price allocated to the unsatisfied and partially unsatisfied performance obligations to the Company’s customers. The 2018 order backlog represents the contractual view. The value of the backlog is measured in accordance with the revenue recognition standard (IFRS 15) implemented from 1 January 2018 and reflects the recoverable amount of revenues under these contracts. As a result, contractual rebates, engine concessions variable considerations and recoverability are taken into consideration for measurement. Contracts stipulated in a currency different than the presentation currency are translated to euro using the spot rate as of 31 December 2018. Adjustments to the value of the backlog could result from changes in the transaction price. The backlog will mainly be released into revenue over a period of seven years. The significant reduction in order backlog value is mainly due to the adjustment for net prices versus list prices. The 2018 order intake value is measured consistently with IFRS 15. Prior year figures have not been restated for IFRS 15. 2017 and 2016 figures are based on catalogue prices for commercial aircraft activities.

Order Intake (1)

Year ended 31 December 2018

Year ended 31 December 2017

Year ended 31 December 2016

(In € billion) (In percentage) (2)

(In € billion) (In percentage) (2)

(In € billion) (In percentage) (2)

Airbus

41.5

73.7%

143.4

90.3% 114.9

84.3%

Airbus Helicopters

6.3

11.3%

6.5

4.1%

6.1

4.4%

Airbus Defence and Space

8.4

15.0%

8.9

5.6% 15.4

11.3%

Subtotal segmental order intake

56.3

100%

158.8

100% 136.4

100%

Transversal / Eliminations

(0.8)

(1.1)

(1.9)

Total

55.5

157.7

134.5

(1) Without options. (2) Before “Transversal / Eliminations”.

Order Backlog (1)

Year ended 31 December 2018

Year ended 31 December 2017

Year ended 31 December 2016

(In € billion) (In percentage) (2)

(In € billion) (In percentage) (2)

(In € billion) (In percentage) (2)

Airbus

411.7

89.1%

950.4

95.1% 1,010.2

95.0%

Airbus Helicopters

14.9

3.2%

11.2

1.1% 11.3

1.1%

Airbus Defence and Space

35.3

7.7%

37.4

3.8% 41.5

3.9%

Subtotal segmental order backlog

461.9

100%

999.0

100% 1,063.0

100%

Transversal / Eliminations

(2.4)

(2.1)

(2.6)

Total

459.5

996.8

1,060.4

(1) Without options. (2) Before “Transversal / Eliminations”.

the commercial agreement with Etihad. The commercial aircraft backlog stood at 7,357 aircraft as of 31 March 2019. Airbus Helicopters’ net orders of 66 units (first three months 2018: 104 units) included 20 Super Puma Family and 16 H145s. Airbus Defence and Space’s order intake by value totalled €1.1 billion.

First three months 2019. Airbus’ gross commercial aircraft orders totaled 62 (first three months 2018: 68 aircraft) and included 38 A350 XWBs. Net commercial aircraft orders of -58 (first three months 2018: 45 aircraft) after 120 cancellations mainly reflect the winding down of the A380 programme and

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Airbus / Registration Document 2018