Mercedes 2009 Annual Report Download - page 232

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Failure to perform various obligations under the operating agree-
ment may result in penalties, additional revenue reductions
and damage claims that could become significant over time.
However, penalties and revenue reductions are capped at
€150 million per year until the final operating permit has been
issued and at €100 million per year following the issuance of
the final operating permit. These cap amounts are subject to a
3% increase for every year of operation.
Beginning in June 2006, the Federal Republic of Germany began
reducing monthly payments to Toll Collect GmbH by €8 million
in partial set-off against amounts claimed in the arbitration pro-
ceeding referred to below. This offsetting may require the
consortium members to provide additional operating funds to
Toll Collect GmbH.
The operating agreement calls for the submission of all disputes
related to the toll collection system to arbitration. The Federal
Republic of Germany has initiated arbitration proceedings against
Daimler Financial Services AG, Deutsche Telekom AG and the
consortium. According to the statement of claims received in
August 2005, the Federal Republic of Germany is seeking
damages including contractual penalties and reimbursement of
lost revenue that allegedly arose from delays in the operability
of the toll collection system. See Note 27 for additional information.
Each of the consortium members (including Daimler Financial
Services AG) has provided guarantees supporting the obligations
of Toll Collect GmbH towards the Federal Republic of Germany
relating to the completion and operation of the toll collection sys-
tem, which are subject to specific triggering events. In addition,
Daimler AG has guaranteed bank loans obtained by Toll Collect
GmbH. The guarantees are described in detail below:
– Guarantee of bank loans. Daimler AG issued a guarantee to third
parties up to a maximum amount of €115 million for bank loans
which could be obtained by Toll Collect GmbH. This amount
represents the Group’s 50% share of Toll Collect GmbH’s external
financing guaranteed by its shareholders.
– Equity maintenance undertaking. The consortium members
have the obligation to contribute, on a joint and several basis,
additional funds to Toll Collect GmbH as may be necessary
for Toll Collect GmbH to maintain a minimum equity (based on
German Commercial Code accounting principles) of 15% of
total assets (a so-called “equity maintenance undertaking”).
This obligation will terminate on August 31, 2015, when
the operating agreement expires, or earlier if the agreement is
terminated. Such obligation may arise if Toll Collect GmbH is
subject to revenue reductions caused by underperformance,
if the Federal Republic of Germany is successful in claiming
lost revenue against Toll Collect GmbH for any period the system
was not fully operational, or if Toll Collect GmbH incurs
penalties that may become payable under the above mentioned
agreements. If such penalties, revenue reductions or other
events reduce Toll Collect GmbH’s equity to a level below the
minimum equity percentage agreed upon, the consortium
members are obligated to fund Toll Collect GmbH’s operations to
the extent necessary to reach the required minimum equity.
Cofiroute’s risks and obligations are limited to €70 million.
Daimler Financial Services AG and Deutsche Telekom AG are
jointly obliged to indemnify Cofiroute for amounts exceeding
this limitation.
While Daimler’s maximum future obligation resulting from the guar-
antee of the bank loan can be determined (2009: €115 million),
the Group is unable to reasonably estimate the amount or range of
amounts of possible loss resulting from the financial guarantee
in form of the equity maintenance undertaking due to the various
uncertainties described above, although it could be material.
Only the guarantee for the bank loan is included in the above
disclosures for financial guarantees.
Obligations associated with product warranties are also not
included in the above disclosures. See Note 22 for provisions
relating to such obligations.
Other financial commitments. In connection with certain pro-
duction programs, Daimler has committed to purchase various
volumes of outsourced manufactured parts and components over
extended periods. The Group also has entered into service
arrangements for the provision of future services. In addition, the
Group has committed to purchase or invest in the construction
and maintenance of various production facilities. Amounts under
the latter arrangements represent commitments to purchase
plant or equipment in the future. As of December 31, 2009, com-
mitments to purchase outsourced manufactured parts and
components, to purchase services, and to invest in plant and
equipment are approximately €4.5 billion.