31. 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, 2014

 

Dec. 31, 2015

 

 

€ million

 

€ million

2014 figures restated

Warranties

 

95

 

99

Guarantees

 

144

 

123

Other contingent liabilities

 

486

 

562

Total

 

725

 

784

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 and Bayer CropScience Limited. 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, 2015, amounted to €123 million (2014: €144 million).

Other financial commitments

The other financial commitments were as follows:

Other Financial Commitments

 

 

Dec. 31, 2014

 

Dec. 31, 2015

 

 

€ million

 

€ million

2014 figures restated

Operating leases

 

671

 

891

Orders already placed under purchase agreements

 

476

 

690

Capital contribution commitments

 

48

 

391

Unpaid portion of the effective initial fund

 

1,005

 

1,213

Potential payment obligations under R&D collaboration agreements

 

2,427

 

2,887

Revenue-based milestone payment commitments

 

2,169

 

2,241

Total

 

6,796

 

8,313

The nondiscounted future minimum lease payments relating to operating leases totaled €891 million (2014: €671 million). The maturities of the respective payment obligations were as follows:

Operating Leases 2014

 

 

Dec. 31, 2014

Maturing in

 

€ million

2015

 

174

2016

 

125

2017

 

98

2018

 

70

2019

 

59

2020 or later

 

145

Total

 

671

Operating Leases 2015

 

 

Dec. 31, 2015

Maturing in

 

€ million

2016

 

195

2017

 

155

2018

 

110

2019

 

94

2020

 

79

2021 or later

 

258

Total

 

891

Financial commitments resulting from orders already placed under purchase agreements related to planned or ongoing capital expenditure projects totaled €690 million (2014: €476 million).

On December 19, 2015, Bayer entered into an agreement to create a joint venture with CRISPR THERAPEUTICS AG, Basel, Switzerland. As of December 31, 2015, Bayer had capital contribution obligations of US$370 million in this connection to CRISPR THERAPEUTICS AG and the joint venture yet to be established. These obligations mature on December 31, 2020, at the latest.

The Bayer Group has entered into cooperation agreements with third parties under which it has agreed to fund various research and development projects or has assumed other payment obligations based on the achievement of certain milestones or other specific conditions. If all of these payments have to be made, their maturity distribution as of December 31, 2015, was expected to be as set forth in the following table. 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.

Potential Payment Obligations Under R&D Collaboration Agreements 2014

 

 

Dec. 31, 2014

Maturing in

 

€ million

2015

 

155

2016

 

198

2017

 

164

2018

 

130

2019

 

203

2020 or later

 

1,577

Total

 

2,427

Potential Payment Obligations Under R&D Collaboration Agreements 2015

 

 

Dec. 31, 2015

Maturing in

 

€ million

2016

 

262

2017

 

229

2018

 

96

2019

 

240

2020

 

78

2021 or later

 

1,982

Total

 

2,887

In addition to the above commitments, there were also revenue-based milestone payment commitments totaling €2,241 million (2014: €2,169 million), of which €2,237 million (2014: €2,157 million) was not expected to fall due until 2021 (2014: 2020) or later. These commitments are also highly uncertain.