AIRBUS - 2019 Financial Statements

2.5 Operational Assets and Liabilities Notes to the IFRS Consolidated Financial Statements / Provisions for pensions – As of 31 December 2019, the changes in actuarial assumptions resulted overall in a total net increase in pension liability of € 2,687 million, principally reflecting the weakening of interest rates in Germany, France, Canada and the UK, partly compensated by the contributions made into the various pension vehicles of € 1,758 million (see “– Note 31: Post-Employment Benefits”). The decrease in other provisions is mainly due to the changes in provisions for onerous contracts. Movements in other provisions during the year were as follows: (In € million) Balance at 1 January 2019 Exchange differences Increase from passage of time Additions Reclassification / Change in consolidated group Used Released Balance at 31 December 2019 Onerous contracts 5,489 48 0 1,408 (870) (2,007) (113) 3,955 Outstanding costs 1,324 2 0 412 (8) (426) (90) 1,214 Aircraft financing risks (1) 6 0 0 1 1 0 (3) 5 Obligation from services and maintenance agreements 651 0 18 28 0 (98) (28) 571 Warranties 327 1 1 100 (28) (62) (16) 323 Personnel-related provisions (2) 920 0 4 595 (40) (468) (28) 983 Litigation and claims (3) 587 0 0 416 3 (50) (45) 911 Asset retirement 153 1 22 29 0 0 (2) 203 Other risks and charges 2,359 7 0 812 (134) (294) (354) 2,396 Total 11,816 59 45 3,801 (1,076) (3,405) (679) 10,561 (1) See “– Note 27: Sales Financing Transactions”. (2) See “– Note 30: Personnel-Related Provisions”. (3) See “– Note 38: Litigation and Claims”. Provisions for onerous contracts in 2019 mainly include the release, utilisation and net presentation of the A380 and A220 programme losses against inventories, partly compensated by the A400M net charge recorded (see “– Note 11: “Revenue and Gross Margin”). Personnel-related provisions include restructuring provisions and other personnel charges. For more details, see “– Note 30: Personnel-Related Provisions”. Following adoption of IFRIC 23, uncertain tax liabilities formerly included under provisions for other risks and charges have been reclassified to current income tax liabilities (see “– Note 4: Change in Accounting Policies and Disclosures”). 24. Provisions, Contingent Assets and Contingent Liabilities Provisions — The determination of provisions, e.g. for onerous contracts, warranty costs, restructuring measures and legal proceedings is based on best available estimates. In general, in the aerospace sector, the contractual and technical parameters considered for provision calculations are complex. Hence uncertainty exists with regard to the timing and amounts of expenses to be taken into account. The majority of other provisions are generally expected to result in cash outflows during the next 1 to 12 years. (In € million) 31 December 2019 2018 Provisions for pensions 8,353 7,072 Other provisions 10,561 11,816 Total 18,914 18,888 thereof non-current portion 12,542 11,571 thereof current portion 6,372 7,317 42 Airbus / Financial Statements 2019