La sobreexplotación de los mantos acuíferos su grado, ritmo e incidencia espacial.

litigation

9.1 Contingent liabilities

GEA Group Aktiengesellschaft has issued or instructed the issue of both bank and group guarantees in favor of customers or lenders. The obligations presented in the following table relate to contingent liabilities for which the primary creditor is not a consolidated company.

Bank guarantees Group guarantees

(EUR thousand) 2011 2010 2011 2010

Guarantees for prepayments 934 431 538 725

Warranties 3,343 11,123 55 63

Performance guarantees 19,140 55,527 307,836 351,474

Other declarations of liability 488 2,318 22,824 14,691

Total 23,905 69,399 331,253 366,953

of which attributable to Lurgi/Lentjes 22,261 67,437 314,588 347,619

Most of the bank and group guarantees are attributable to Lurgi and Lentjes (see section 3). The other guarantees relate mainly to customers of unconsolidated companies, banks, and employees of former subsidiaries. The beneficiaries are entitled to assert claims under the guarantees if the primary debtor fails to meet its contractual obligations, for example in the case of late or defective delivery, non-compliance with warranted performance parameters, or failure to repay loans in accordance with the contractual requirements.

The terms vary depending on the nature of the guarantee. The weighted average term of the group guarantees is 2.9 years (previous year: 2.5 years).

All guarantees issued by or on the instructions of GEA Group Aktiengesellschaft are issued on behalf of and with recourse against the primary debtor.

In addition to the liability risks resulting from bank and group guarantees, there are risks in particular from court, arbitration, or out-of-court disputes (see section 9.4) that could result in cash outflows.

9.2 Other financial obligations

Other financial obligations as of December 31, 2011, are composed of the following items:

(EUR thousand) 12/31/2011 12/31/2010

Rental and lease obligations 232,453 252,891

Purchase commitments 425,782 434,787

Obligations under agreements to acquire companies – 384,930

Total 658,235 1,072,608

Rental and lease agreements

Obligations under rental and lease agreements amounting to EUR 232,453 thousand (previous year: EUR 252,891 thousand) relate primarily to land and buildings, and to a lesser extent to technical equipment and machinery. The leases run until no later than 2031. Payments are spread over future fiscal years as follows:

(EUR thousand) 12/31/2011 2012 69,057 2013 42,590 2014 28,730 2015 23,822 2016 19,719 Thereafter 48,535

Total interest expenses 232,453

Expenses related to rental and lease agreements in fiscal year 2011 amounted to EUR 97,827 thousand (previous year: EUR 103,582 thousand), of which EUR 15,147 thousand (previous year: EUR 14,282 thousand) was attributable to variable payments. Subleases resulted in income of EUR 12,026 thousand in fiscal year 2011 (previous year: EUR 16,245 thousand). These subleases give rise to claims for rental income of EUR 6,252 thousand (previous year: EUR 37,159 thousand) over the coming years.

Sale and leaseback transactions relating to buildings resulted in future payments at the reporting date of EUR 38,467 thousand (previous year: EUR 74,743 thousand).

Purchase commitments

EUR 415,433 thousand (previous year: EUR 432,003 thousand) of the purchase commitments is attributable to inventories and EUR 10,349 thousand (previous year: EUR 2,784 thousand) to items of property, plant, and equipment.

Notes to the Consolidated Financial Statements

9.3 Contingent assets

On September 15, 2006, GEA Group Aktiengesellschaft won a judgment in its favor on the cause of action in the arbitration proceedings against Flex-N-Gate Corp., Urbana, Illinois, U.S.A. This requires Flex-N-Gate to compensate GEA Group Aktiengesellschaft for losses incurred as a result of the collapse of the sale of the Dynamit Nobel plastics business to Flex- N-Gate in the fall of 2004. In the second part of the proceedings, the court of arbitration ruled on the amount of compensation in favor of GEA Group Aktiengesellschaft on March 19, 2010. After Flex-N-Gate appealed the decision, the award was overturned by the Higher Regional Court in Frankfurt on February 17, 2011. GEA Group Aktiengesellschaft has appealed the decision of the Higher Regional Court to the German Federal Court of Justice (BGH). A decision by the BGH is not expected before the second half of 2012.

In 2008, GEA Group Aktiengesellschaft instituted arbitration proceedings against Ukraine at the International Centre for Settlement of Investment Disputes (ICSID), the court of arbitration of the World Bank Group. These related to the enforcement of an arbitration award made by the International Chamber of Commerce (ICC) in 2002 against a former Ukrainian near- government entity. GEA’s complaint has since been dismissed.

9.4 Litigation

Award proceedings

In the award proceedings described in the last annual reports, a court settlement between the parties was agreed on January 30, 2012, before the Dortmund Regional Court. The award proceedings relate to the control and profit transfer agreement entered into in 1999 between the former Metallgesellschaft AG (whose legal successor is GEA Group Aktiengesellschaft) and the former GEA Aktiengesellschaft, which was later merged with it. In this settlement, GEA Group Aktiengesellschaft undertook to increase the share-based compensation and grant a higher cash settlement, based on the court’s proposal.

GEA Group Aktiengesellschaft intends to create contingent capital at its 2012 Annual General Meeting in order to create the new shares required by the settlement. The entry into force of the settlement is subject to the condition precedent that the contingent capital of GEA Group Aktiengesellschaft needed to settle the new shares is finally and absolutely entered in the commercial register. The award proceedings will be terminated with the entry into force of the settlement. Likewise, further information on the implementation of the settlement will be published when it enters into force.

Subject to the entry into force of the settlement, and based on the exchange ratio agreed in the settlement (31 shares of GEA Group Aktiengesellschaft for 15 shares of the former GEA AG), up to approximately 13.42 million new shares will be issued as increased compensation to those external shareholders of the former GEA AG who had already received the compensation provided for in the control and profit transfer agreement in 1999. A further up to approximately 1.68 million new shares of GEA Group Aktiengesellschaft may potentially have to be issued on request on the basis of the abovementioned exchange ratio to those shareholders of the former GEA AG who ceased to be shareholders of the former GEA AG in the course of the 2005 squeeze-out in return for a cash compensation payment in accordance with sections 327a ff. of the AktG. In return, these former GEA AG shareholders would then have to refund

In addition, those shareholders of the former GEA AG who received compensation payments on the basis of the control and profit transfer agreement will receive increased compensation in the total amount of approximately EUR 0.83 million.

Plant engineering

There are still some sector-specific legal disputes from the former plant engineering business in which the disputed amounts in some cases are in the high millions; often, they have been set too high for tactical reasons. The main legal disputes relating to the former plant engineering business include the following:

GEA Group Aktiengesellschaft is one of two defendants being sued by Panda Energy International (“Panda Energy”) in a district court in Texas (U.S.A.) for alleged deception in connection with claimed investments by Panda Energy in a project undertaken in Texas by the plant engineering business that GEA has since disposed of (“Texas District Court proceedings”). In December 2011, Panda energy first specified its claim for damages in these proceedings at a minimum of USD 104 million plus punitive damages and legal, expert, and court costs. GEA Group Aktiengesellschaft had initially applied for the complaint to be dismissed due to lack of jurisdiction of the ordinary courts. The District Court and later the Texas Court of Appeals denied this application. GEA Group Aktiengesellschaft then appealed to the Texas Supreme Court and applied for the Texas District Court proceedings to be suspended pending the decision on jurisdiction. A decision by the Texas Supreme Court is still outstanding. GEA Group Aktiengesellschaft believes that Panda Energy’s claims for compensation are unfounded and it will continue to defend itself against the complaint. There is also an action pending before a district court in New York (U.S.A.) filed by GEA Group Aktiengesellschaft in August 2011 against Panda Ethanol, Inc. (PEI), a subsidiary of Panda Energy. In these proceedings, GEA Group Aktiengesellschaft is asserting claims against PEI arising from assigned rights against PEI that it had acquired in the course of insolvency proceedings for the project company. A decision by the court is still outstanding.

Two subsidiaries of the former plant engineering business were sued in connection with an earlier plant engineering project for repayment of subsidies in a total amount of approximately EUR 22 million (including possible interest). Both defendant companies had made liability declarations in line with the amount of their investment in the now insolvent project company covering the obligation of the project company to pay back subsidies received under certain conditions. The basic issue in dispute is whether the subsidiaries can rely on an earlier restricting declaration made by the highest competent authority of a German federal state in their defense against the claims asserted against them under the liability declarations. Since the two subsidiaries have the different places of jurisdiction, the actions were filed in courts in both Düsseldorf and Frankfurt. During the reporting period, the plaintiff won in the Higher Regional Court in Düsseldorf and lost in the Higher Regional Court in Frankfurt. The GEA subsidiary has appealed the decision of the Higher Regional Court in Düsseldorf to the German Federal Court of Justice (BGH) on the grounds of denial of appeal. In the decision of the Higher Regional Court in Frankfurt, the plaintiff has appealed to the BGH.

Notes to the Consolidated Financial Statements

Dorries Scharmann AG

An action brought by the insolvency administrator of Dorries Scharmann AG against GEA Group Aktiengesellschaft is pending at the Dusseldorf Regional Court. The former Metallgesellschaft AG, the legal predecessor to GEA Group Aktiengesellschaft, held an interest in Schiess AG, which later became Dorries Scharmann AG. On the basis of that interest, the insolvency administrator is asserting various claims under company law, in particular for equity substitution, which amount to approximately EUR 20 million including possible interest. GEA Group Aktiengesellschaft considers the claims that have been asserted to be unfounded. The senior expert appointed by the court to decide matters relating to equity substitution has fully confirmed GEA Group Aktiengesellschaft’s opinion. GEA Group Aktiengesellschaft will continue to defend itself against all claims.

General

Further legal proceedings or official investigations have been or may be instituted against GEA Group companies as a result of earlier business disposals and operating activities. Adequate provisions have been recognized for all risks arising from both the legal disputes described above and other legal disputes being pursued by GEA Group in the course of its ordinary operating activities. However, the outcome of these proceedings cannot be predicted with any degree of certainty. It is therefore possible that the conclusion of the proceedings may result in expenses that exceed the amounts that may have been set aside for them.

10. Segment reporting