Mercedes 2010 Annual Report Download - page 98

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Other financial commitments and off-balance-sheet
transactions
In the context of its normal business operations, the Group has
entered into other financial commitments in addition to the liabili-
ties shown in the consolidated balance sheet at December 31,
2010. These other financial commitments primarily relate to pur-
chasing commitments and commitments to invest in replacement
and expansion of property, plant and equipment. The Group has
also committed to make payments in connection with rental and
leasing agreements for the use of production facilities and other
property, plant and equipment. In addition, particularly Daimler
Financial Services has made irrevocable loan commitments within
the framework of its business operations.
The table below provides an overview of these other financial
commitments and their maturities:
The Group’s off-balance-sheet transactions relate to transactions
in the context of which Daimler has provided guarantees and
thus continues to be subject to risk. However, this does not include
warranties the Group provides on its products in the context
of its vehicle sales.
The guarantees reported by the Group (excluding product war-
ranties) principally represent financial guarantees that require
us to make certain payments if a guarantee holder fails to meet
its financial obligations. The maximum potential obligation result-
ing from these guarantees amounts to €1.1 billion at December
31, 2010 (end of 2009: €1.5 billion); the corresponding provi-
sions amount to €0.2 billion at the end of the year (end of 2009:
€0.2 billion).
Most of the financial guarantees relate to the situations described
as follows: In connection with the transfer of a majority interest
in Chrysler, Daimler guaranteed payments of up to US$200 million
into the Chrysler pension plans. The term of this guarantee
is limited until August 2012. The Group also provided guarantees
for other Chrysler obligations; at December 31, 2010, these
guarantees amounted to €0.3 billion, whereby Chrysler provided
€0.2 billion on an escrow account as collateral for the guaran-
teed obligations. Another financial guarantee of €0.1 billion relates
to bank loans of Toll Collect GmbH, the operator company of
the toll-collection system for trucks in Germany.
Payments falling due:
Total
within
1 year
in
1-3 years
in
4-5 years
after
5 years
In millions of euros
Purchasing commitments, investments in property, plant and equipment 7,420 6,017 1,086 168 149
Future lease payments under rental and leasing agreements 2,150 297 504 396 953
Irrevocable loan commitments 1,910 1,624 262 24 -
Other risks arise from an additional guarantee that the Group
provided for obligations of Toll Collect GmbH towards the Federal
Republic of Germany. This guarantee is related to the completion
and operation of the toll-collection system. A claim on this guaran-
tee could primarily arise if for technical reasons toll revenue
is lost or if certain contractually defined parameters are not fulfilled,
if the Federal Republic of Germany makes additional claims or
the final operating permit is not granted. Furthermore, arbitration
proceedings have been initiated against the Group. The maximum
obligation that could result from this guarantee is substantial, but
cannot be reasonably estimated.
Furthermore, the Group has issued a number of smaller guaran-
tees, some of which specify that Daimler guarantees the financial
obligations of companies which supply us with parts, vehicle
components or services or which lease production facilities to us.