REC Silicon Annual Report 2019

73 Notes to the consolidated financial statements, REC Silicon Group REC Silicon Annual Report 2019 COMMITMENTS, GUARANTEES, PLEDGES Purchase obligations consist of significant items for which the Group is contractually obligated to purchase from third parties at December 31, 2019 and 2018. Operating lease payments show contractual minimum future payments. In cases where contracts can be terminated or reduced, the reduced amount has been included as estimated payments in the first period subsequent to the reporting period. Consequently, the amounts presented in the table represent the estimated unavoidable portion of the Group’s expected future costs related to purchase obligations and lease payments. It does not reflect theGroup’s expected future cash outflows. Purchase obligations and operating lease payments are undiscounted and exclude the payment of amounts recognized for other assets, liabilities, and investments. Contractual purchase obligations and minimum operating lease payments at December 31, 2019 (USD INMILLION) TOTALFUTURE PAYMENTS 2020 2021 2022 2023 2024 AFTER 2024 Total purchase of goods and services 14.5 14.5 0.0 0.0 0.0 0.0 0.0 Total minimum operating lease payments 0.1 0.1 0.0 0.0 0.0 0.0 0.0 Total purchase obligations and minimum operating lease payments 14.6 14.6 0.0 0.0 0.0 0.0 0.0 Purchase obligations consist primarily of long-term contracts for Metallurgical Grade Silicon. Operating leases are short-term or low- value leases that meet the exceptions in IFRS 16 Leases. In 2018, REC Silicon entered into a supplemental agreement in relation to investment in the Yulin JV in China. According to the agreement, the currently outstanding amounts that REC Silicon agreed to pay to the other investor in the Yulin JV include USD 5.2 million in 2020 (note 9 and 29). This amount has not been included in the table above. GUARANTEES AND PLEDGES Bank guarantees at December 31, 2019 amounted to USD 4.7 million related to performance guarantees (REC Solar), and salary related liabilities. Restricted cash balances related to guarantees were USD 4.4million (see note 14). Bank guarantees at December 31, 2018 amounted to USD 4.7 million related to purchases of energy, performance guarantees (REC Solar), and salary related liabilities. Restricted cash balances related to guarantees were USD 4.4million (see note 14). The Group provided parent company guarantees for the REC Solar Group related to the performance of solar panels and systems and the sale of REC ScanModule AB. The Group has been provided with offsetting guarantees by REC Solar Holdings AS. The guarantees are valid for relevant warranty periods and are limited by warranties provided on solar panels and systems. Parent company guarantees for REC Solar were USD 54.7million at December 31, 2019 and 2018. The guarantees will decrease from2022 to 2039 when they will expire in their entirety. The Company has provided guarantees and indemnification agreements in connection with the bankruptcy of a former subsidiary (see notes 11, 17 and 30). 29