Contingent Liabilities and Other Financial Commitments

Contingent liabilities

The following warranty contracts, guarantees and other contingent liabilities existed at the end of the reporting period:

Contingent Liabilities

 

 

Dec. 31, 2017

 

Dec. 31, 2018

 

 

€ million

 

€ million

Warranties

 

88

 

88

Guarantees

 

148

 

82

Other contingent liabilities

 

614

 

816

Total

 

850

 

986

The guarantees mainly comprise a declaration issued by Bayer AG to the trustees of the U.K. pension plans guaranteeing the pension obligations of Bayer Public Limited Company, Reading, United Kingdom, and Bayer CropScience Limited, Cambridge, United Kingdom. Under the declaration, Bayer AG – in addition to the two companies – undertakes to make further payments into the plans upon receipt of a payment request from the trustees. The net liability with respect to these defined benefit plans as of December 31, 2018, declined to €82 million (December 31, 2017: €148 million).

Other financial commitments

The other financial commitments were as follows:

Other Financial Commitments

 

 

Dec. 31, 2017

 

Dec. 31, 2018

 

 

€ million

 

€ million

1

The contingent financial commitment of approximately US$56 billion was translated at the closing rate and rounded.

Operating leases

 

801

 

1,271

Commitments under purchase agreements for property, plant and equipment

 

493

 

811

Contractual obligation to acquire intangible assets

 

83

 

224

Capital contribution commitments

 

149

 

464

Binding acquisition agreement with Monsanto Company, St. Louis, Missouri, U.S.A.1

 

47,000

 

Unpaid portion of the effective initial fund

 

1,005

 

965

Potential payment obligations under collaboration agreements

 

2,349

 

2,121

Revenue-based milestone payment commitments

 

1,923

 

2,187

Total

 

53,803

 

8,043

On June 7, 2018, Bayer acquired 100% of the outstanding shares of Monsanto Company, St. Louis, Missouri, United States, against a cash payment of US$128 per share. Further details of the acquisition of the Monsanto Company, St. Louis, Missouri, United States, are given in Note “Business combinations and other acquisitions.”

The maturities of the other financial commitments are as follows:

Maturities of Other Financial Liabilities

 

 

Operating leases

 

Payment obligations under collaboration agreements

 

Revenue-based milestone payment commitments

 

 

2017

2018

 

2017

2018

 

2017

2018

 

 

€ million

€ million

 

€ million

€ million

 

€ million

€ million

Maturing within 1 year

 

166

356

 

157

315

 

21

87

Maturing in 1–5 years

 

433

626

 

850

715

 

138

65

Maturing after 5 years

 

202

289

 

1,342

1,091

 

1,764

2,035

Total

 

801

1,271

 

2,349

2,121

 

1,923

2,187

The Bayer Group has entered into cooperation agreements with third parties under which it has agreed to fund various projects or has assumed other payment obligations based on the achievement of certain milestones or other specific conditions. The amounts shown represent the maximum payments to be made, and it is unlikely that they will all fall due. Since the achievement of the conditions for payment is highly uncertain, both the amounts and the dates of the actual payments may vary considerably from those stated in the table.

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