Commitments and contingencies not shown on the balance sheet at December 31, 2003 were as follows:
Liabilities on guarantees mainly consisted of advance payment guarantees, performance bonds, guarantees for warranty obligations and guarantees for bank loans provided on behalf of related companies. Liabilities on guarantees for continued operations largely relate to GEA, Lurgi Lentjes, and Zimmer. The liabilities on guarantees for discontinued operations all relate to solvadis.
Liabilities on warranties during the year under review related largely to divested companies. They also relate to security for pension commitments and warranties on customer contracts. There is also loan collateral for related companies.
The likely maturity of contingent liabilities arising from guarantees and warranties is up to five years. There are also contingencies with maturity periods that depend on the performance of contractually agreed obligations or the occurrence of certain events. These contingent liabilities are largely to customers, banks and employees of former subsidiaries. mg is faced with claims under its guarantees if the debtor is unable to meet its contractual obligations.
In addition to the contingent liabilities shown in the above table, there are warranty commitments of an amount customary for the industry at GEA, Lurgi, Lurgi Lentjes and Zimmer (for further information see Note 10c) ‘Other Provisions and Accrued Liabilities’).
Liabilities from providing collateral for third-party liabilities essentially include a realization agreement on collateralization for an industrial plant.
Other financial commitments at December 31, 2003 consist of:
Of the total rental and lease agreements, €191.689 million (prior year: €205.943 million) is attributable to Dynamit Nobel. These relate largely to real estate and equipment belonging to Dynamit Nobel Kunststoff GmbH, Weissenburg; the laboratory, technical and office buildings of CHEMETALL GMBH, Frankfurt am Main; and leases of office furniture and equipment. The leases on these premises run until the year 2019.
Other continued operations account for rental and lease commitments of €455.945 million (prior year: €411.743 million). They essentially relate to real estate used by GEA, the premises of mg vermögensverwaltungs-ag, Frankfurt am Main, and office space in New York. The leases on these premises run until no later than 2031. These commitments under rental and lease agreements are partly offset by claims arising from subletting agreements totaling €74.719 million (prior year: €67.719 million). For further information on leases please refer to Note 2) ‘Leasing’.
The order commitments attributable to continued operations largely relate to Dynamit Nobel (€86.588 million), Lurgi (€152.042 million) and Zimmer (€44.479 million).
In some factoring agreements entered into by Dynamit Nobel, the seller of the receivables assumed a blanket liability for the receivables sold; this liability amounted to less than ten percent of total receivables sold. In cases where the countervalue of the receivables has been paid in full, the maximum liability is shown under ‘factoring liability’, provided no provision has been established. There have been no significant defaults to date.