Mercedes 2010 Annual Report Download - page 227

Consolidated Financial Statements | Notes to the Consolidated Financial Statements | 223
Other guarantees. Other guarantees principally comprise
pledges or indemnifications related to the quality or timing of
performance by third parties or participations in performance
guarantees of consortiums. As of December 31, 2010, the best
estimate for obligations under other guarantees for which
no provisions had yet been recorded was €50 million (2009:
€37 million).
In 2002, our subsidiary Daimler Financial Services AG, Deutsche
Telekom AG and Compagnie Financière et Industrielle des Auto-
routes 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 highways. Daimler
Financial Services AG and Deutsche Telekom AG each hold a 45%
equity interest and Cofiroute holds the remaining 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 contrac -
tual 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 tech-
nical specification (phase 1). On January 1, 2006, the toll collec-
tion system was installed and started to operate with full effective-
ness 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 pre-
liminary operating permit in the interim.
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 proceeding 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 Germa-
ny relating to the completion and operation of the toll collection
system, which are subject to specific triggering events. In ad-
dition, 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 €105 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.