AIRBUS - 2019 Financial Statements

2.5 Operational Assets and Liabilities Notes to the IFRS Consolidated Financial Statements / On-Balance Sheet Operating and Finance Leases The future minimum operating lease payments (undiscounted) due from customers to be included in revenue, and the future minimum lease payments (undiscounted) from investments in finance leases to be received in settlement of the outstanding receivable at 31 December 2019 are as follows: (In € million) Aircraft under operating lease Finance lease receivables Not later than 1 year 14 7 Later than 1 year and not later than 5 years 30 2 Later than 5 years 0 0 31 December 2019 44 9 Financing Liabilities Financing liabilities from sales financing transactions are mainly based on variable interest rates (see “– Note 36.3: Financing Liabilities”) and entered into on a non-recourse basis ( i.e. in a default event, the creditor would only have recourse to the aircraft collateral). (In € million) 31 December 2019 2018 Loans 24 22 Liabilities to financial institutions 0 0 Total sales financing liabilities 24 22 Customer Financing Cash Flows Direct customer financing cash flows amount to €58 million in 2019 (2018: €79 million). The Company endeavours to limit its sales financing exposure by sharing its risk with third parties usually involving the creation of a structured entity. Apart from investor interest protection, interposing a structured entity offers advantages such as flexibility, bankruptcy remoteness, liability containment and facilitating sell-downs of the aircraft financed. An aircraft financing structured entity is typically funded on a non-recourse basis by a senior lender and one or more providers of subordinated financing. When the Company acts as a lender to such structured entities, it may take the role of the senior lender or the provider of subordinated loan. The Company consolidates an aircraft financing structured entity if it is exposed to the structured entity’s variable returns and has the ability to direct the relevant remarketing activities. Otherwise, it recognises only its loan to the structured entity under other long-term financial assets. At 31 December 2019 the carrying amount of its loans from aircraft financing amounts to € 349 million (2018: € 502 million). This amount also represents the Company’s maximum exposure to loss from its interest in unconsolidated aircraft financing structured entities. 46 Airbus / Financial Statements 2019