OFII Guarantee Fees OFII Guarantee Fees SurveySurvey

Results & FindingsResults & Findings

The survey was conducted across our entire membership The survey was conducted across our entire membership and we received thirty three responses. Any references to and we received thirty three responses. Any references to

company names or practices that may have been included in company names or practices that may have been included in the responses have been removed to ensure confidentiality. the responses have been removed to ensure confidentiality.

E-mail E-mail sweber@ofii.orgsweber@ofii.org if you have any questions or if you have any questions or comments. comments.

Question #1: Question #1: Please indicate by Yes or No if you pay the Please indicate by Yes or No if you pay the following types of guarantee fees to foreign affiliates:following types of guarantee fees to foreign affiliates: a) Debt a) Debt     b) Performance     b) Performance     c) Other     c) Other

Two-thirds of respondents paid one or multiple Two-thirds of respondents paid one or multiple forms of guarantee fees to foreign affiliates.forms of guarantee fees to foreign affiliates.

64 percent, 21 of 33, said they paid one or multiple guarantee fees.64 percent, 21 of 33, said they paid one or multiple guarantee fees.

Nearly all of those paying fees, paid only with Nearly all of those paying fees, paid only with respect to debt respect to debt

90 percent, 19 of 21, paid only Debt. 90 percent, 19 of 21, paid only Debt. 2 paid Performance fees in addition to Debt fees2 paid Performance fees in addition to Debt fees 2 also were provided guarantees on real estate Leases but only 1 2 also were provided guarantees on real estate Leases but only 1

paid a fee for this guarantee paid a fee for this guarantee

Large majority held debt and paid fees on that Large majority held debt and paid fees on that debt.debt.

70 percent of those with debt, 21 of 30, paid guarantee fees on that 70 percent of those with debt, 21 of 30, paid guarantee fees on that debt.debt.

Question #2:Question #2: For those that responded yes in Question 1, For those that responded yes in Question 1, please indicate please indicate A)A) how the amount of the fee is determined how the amount of the fee is determined and and B)B) whether it is part of your transfer pricing analysis and whether it is part of your transfer pricing analysis and documentation?documentation?

Responses to Question 2A varied significantly and did not lend themselves to Responses to Question 2A varied significantly and did not lend themselves to interpretation. To receive a sample of written responses, redacted to ensure interpretation. To receive a sample of written responses, redacted to ensure

confidentiality, please e-mail confidentiality, please e-mail sweber@ofii.orgsweber@ofii.org..

Less than a third of respondents reported using Less than a third of respondents reported using third party consultation and analysis in fee third party consultation and analysis in fee

determination.determination. 23 percent, 5 of 22, reported third party input in fee determination23 percent, 5 of 22, reported third party input in fee determination

Less than a third reported that their Global Parent Less than a third reported that their Global Parent set the amount of fees.set the amount of fees.

23 percent, 5 of 22, said the Global Parent23 percent, 5 of 22, said the Global Parent

Almost one-third reported including fees in their Almost one-third reported including fees in their transfer pricing analysis and documentation.transfer pricing analysis and documentation.

32 percent, 7 of 22, included fees32 percent, 7 of 22, included fees

Question #3:Question #3: If you answered yes to question 1, what If you answered yes to question 1, what rate did you charge for your guarantee fee?rate did you charge for your guarantee fee?

The The averageaverage rate (mean) charged for a guarantee fee rate (mean) charged for a guarantee fee was 24 basis points.was 24 basis points.

A majority of companies paid fees of less than 15 A majority of companies paid fees of less than 15 basis points to their foreign affiliate.basis points to their foreign affiliate.

13 companies, 60 percent 13 companies, 60 percent of those paying fees, pay between of those paying fees, pay between 0 0 and 15 bps.and 15 bps.

The The rangerange of fees paid was from 5 – 100 bps of fees paid was from 5 – 100 bps.. 13 paid between 5 – 15 bps (60 percent)13 paid between 5 – 15 bps (60 percent) 4 paid pay between 15 – 30 bps (18 percent) 4 paid pay between 15 – 30 bps (18 percent) 2 paid between 30 – 50 bps (9 percent)2 paid between 30 – 50 bps (9 percent) 3 paid between 45 – 60 bps (14 percent)3 paid between 45 – 60 bps (14 percent)