page 74 Bombardier Inc. Annual Report 2003-04 financing arranged by the Corporation in fiscal year 2004 amounted to $4.8 billion. Bombardier anticipates that it will be able to satisfy its financing commitments to its cus- tomers in fiscal year 2005 through third-party financing. However, Bombardier’s ability to  satisfy its financing commitments may be affected by further financial difficulties in  the commercial airline industry in general and of certain customers in particular, and the Corporation’s current and future credit condition. In connection with the sale of certain of its products, mainly aircraft, the Corporation  provides financing support on behalf of certain customers in the form of credit and residual value guarantees in order to enhance their abil- ity to arrange third-party financing for their asset acquisition. These are described in note 24 to the Consolidated Financial Statements. Credit guarantees are triggered if customers do not perform during the term of the financ- ing (ranging from 2 to 20 years) under the relevant financing arrangements. Credit  guarantees provide support through limited payments to the guaranteed party to mitigate default-related losses. These guarantees are collateralized by the underlying assets. The  value of the underlying assets may be adversely affected by a number of factors including, but not limited to, an economic downturn. In the event of default, the Corporation usually acts as an agent for the guaranteed parties for the repossession, refurbishment and remarketing of the underlying assets. The Corporation typi- cally receives a fee for these services. In most The Corporation’s risk management frame- work for the credit and residual value risks consists of the following: risk control, risk measurement, risk monitoring and risk trans- fer. The Corporation practices active risk control through inclusion of protective covenants and securities into commercial contracts to miti- gate its exposure under these guarantees. Quantitative assessments of the risk relating When credit and residual value guarantees are provided in connection with a financing arrangement for the same underlying asset, residual value guarantees can only be exer- cised if the credit guarantee expires without having been exercised and, as such, are mutu- ally exclusive. The Corporation is occasionally involved in legal litigation, claims, investigations and other legal matters. It is the Corporation’s opinion that these contingencies have not had, and will not have, a material impact on its financial posi- tion, except for the potential effect of its claim against DaimlerChrysler described in note 24 to the Consolidated Financial Statements. circumstances, a claim under the guarantee may be made only upon sale of the underlying asset to a third party. In most cases, residual value guarantees are guarantees provided at the end of a financing arrangement, ranging from four to 20 years. Such guarantees provide protection to the  guaranteed parties in cases where the market  value of the underlying asset is below the  guaranteed value. In order to mitigate the Corporation’s exposure, the collateral must meet certain contractual return conditions on the expiry date of the guarantee. If a residual value guarantee is exercised, it provides for a limited payment to the guaranteed parties. A claim under the guarantee may typically be made only upon sale of the underlying asset to a third party.The value of the underlying asset may be adversely affected by a number of  factors including, but not limited to, an eco- nomic downturn.  In connection with its contracts with the Metronet companies for the modernization of the London Underground, the Corporation is committed to provide collateral in support of  its obligations. These commitments extend  to 2015. As at January 31, 2004, surety bonds amounting to £180 million ($435 million) were outstanding. The surety bonds are renewable each year. In the event that the bonds are  not renewed, the Corporation could have to  provide, within one year, alternate collat- eral (letters of credit, cash, etc.) which could reduce Bombardier’s availability under its  credit facilities.  to these guarantees and the determination of the related provisions to be recorded in the Consolidated Financial Statements, if any, are performed using a risk-pricing model. Risk monitoring comprises ongoing management reporting of exposures, as well as active credit watch, on-site credit due diligence and active intervention. In addition, asset value trends  for the Corporation’s products are closely  monitored. The Corporation also engages, from time to time, in risk transfer with third-party insurers in order to minimize its exposure to credit and residual value guarantees.  Commitments and contingencies