Mercedes 2013 Annual Report Download - page 236

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30. Financial guarantees, contingent liabilities
and other financial obligations
Financial guarantees. Financial guarantees principally represent
contractual arrangements. These guarantees generally provide
that in the event of default or non-payment by the primary debtor,
the Group will be required to settle such financial obligations.
The maximum potential obligation resulting from these guaran-
tees amounted to €772 million at December 31, 2013 (2012:
€968 million) and includes liabilities recognized in the amount
of €80 million (2012: €111 million). These amounts include
financial guarantees, which the Group issued for the benefit
of Chrysler in connection with the Chrysler transactions
entered into in 2007 and 2009. At December 31, 2013, these
guarantees amounted to €0.3 billion. For a portion of these
financial guarantees, Chrysler provided collateral of €0.2 billion
to an escrow account.
Contingent liabilities. Table  F.72 shows estimates
of the financial effects of contingent liabilities at December 31.
Guarantees under buyback commitments represent arrange-
ments whereby the Group guarantees specified trade-in
or resale values for sold vehicles. Such guarantees provide
the holder with the right to return purchased vehicles to
the Group, the right being primarily contingent on the future
purchase of vehicles or services. In connection with these
buyback commitments, provisions of €43 million have been
recognized as of December 31, 2013 (2012: €115 million).
Residual value guarantees related to arrangements for which
revenue recognition is precluded due to the Group’s obliga-
tion to repurchase assets sold to unrelated guaranteed parties
are included in other financial liabilities.
Other contingent liabilities comprise contingent liabilities which
constitute other guarantees as well as miscellaneous con-
tingent liabilities which do not constitute other guarantees.
As of December 31, 2013, the best estimate for potential
obligations from other guarantees for which no provisions had
yet been recognized was €42 million (2012: €35 million).
The miscellaneous contingent liabilities which do not constitute
other guarantees comprise in particular potential obligations
from liability and litigation risks as well as other tax respectively
customs duty risks; the best estimate for potential obliga-
tions as of December 31, 2013 amounts to €328 million (2012:
€95 million).
In 2002, our subsidiary Daimler Financial Services AG,
Deutsche Telekom AG and Compagnie Financière et Industrielle
des Autoroutes S.A. (Cofiroute) entered into a consortium
agreement in order to jointly develop, install, and operate under
a contract with the Federal Republic of Germany (operating
agreement) a system for the electronic collection of tolls for all
commercial vehicles over 12 tons GVW using German high-
ways. Daimler Financial Services AG and Deutsche Telekom AG
each hold a 45% equity interest and Cofiroute holds the remain-
ing 10% equity interest in both the consortium (Toll Collect GbR)
and the joint venture company (Toll Collect GmbH) (together
Toll Collect).
According to the operating agreement, the toll collection
system had to be operational no later than August 31, 2003.
After a delay of the launch date of the toll collection system,
which resulted in a loss of revenue for Toll Collect and in
payments of contractual penalties for delays, the toll collection
system was introduced on January 1, 2005 with on-board
units that allowed for slightly less than full technical performance
in accordance with the technical specification (phase 1).
On January 1, 2006, the toll collection system was installed and
started to operate with full effectiveness as specified in the
operating agreement (phase 2). On December 20, 2005, Toll
Collect GmbH received a preliminary operating permit as
specified in the operating agreement. Toll Collect GmbH expects
to receive the final operating permit, and continues to operate
the toll collection system under the preliminary operating permit
in the interim.
F.72
Composition of contingent liabilities
At December 31,
2013 2012
In millions of euros
Guarantees under buyback commitments 974 787
Other contingent liabilities 370 130
1,344 917
F.73
Composition of other financial obligations
(nominal amounts)
At December 31,
2013 2012
In millions of euros
Commitments from purchasing contracts 9,771 8,763
Long-term rental and leasing agreements 1,980 2,139
Irrevocable credit commitments 1,508 1,022
Other miscellaneous financial commitments 1,356 1,396
14,615 13,320