Siemens 2007 Annual Report Download - page 278

278 Notes to Consolidated Financial Statements
(in millions of €, except where otherwise stated and per share amounts)
other legally and economically in favor of the Federal Republic of Germany and
of the consortium member IBM. The guarantees ensure that BWI has suffi cient
resources to provide the required services and to fulfi ll its contractual obliga-
tions. These guarantees are listed as a separate item “HERKULES obligations” in
the table above due to their compound and multilayer nature. Total future pay-
ments potentially required by Siemens amount to €4.2 billion and will be reduced
by approximately €400 per year over the 10-year contract period. Yearly payments
under these guarantees are limited to €400 plus, if applicable, a maximum of €90
in unused guarantees carried forward from the prior year.
Other guarantees include indemnifi cations issued in connection with disposi-
tions of business entities. Such indemnifi cations protect the buyer from tax, legal
and other risks related to the purchased business entity. As of September 30, 2007
and 2006, the total accruals for Other guarantees amounted to €102 and €129,
respectively.
The increase in Guarantees of third-party performance and Other guarantees in
fi scal 2007 is due primarily to the contribution of the carrier-related operations
into NSN at the beginning of April 2007. As of September 30, 2007, Other guaran-
tees therefore includes the amounts related to the indemnifi cation provisions
related to the contribution of the carrier-related operations into NSN (see Note 4
for further information).
As of September 30, 2007, future payment obligations under non-cancellable
operating leases are as follows:
Total operating rental expense for the years ended September 30, 2007 and
2006 was €875 and €816, respectively.
As of September 30, 2007 and 2006, the Company has commitments to make
capital contributions of €103 and €173, respectively, to other non-consolidated
companies.
The Company is jointly and severally liable and has capital contribution obli-
gations as a partner in commercial partnerships and as a participant in various
consortiums.
2008 581
2009 475
2010 362
2011 261
2012 220
Thereafter 551