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is also the rate used by one of respondent’s experts and by
petitioners’ expert, albeit in a discounted form.
Respondent relied on the expertise of Keith Reams, who used
a 1-percent rate to arrive at the royalties listed above. We
approve Reams’ approach, with the exception that the royalty rate
should be reduced to .75 percent.
C. Imbalance and Transfer Fees
Beginning in 1974, DHL performed delivery services in the
United States for DHLI. The services took the form of the
delivery of inbound items and the transfer of items passing
through the United States from one foreign jurisdiction to
another. Similarly, DHLI performed delivery (but no transfer)
services for DHL in DHLI’s international jurisdictions. Until
1987, no reimbursement (of any kind) was made to either entity.
In 1987, procedures were implemented that provided that the party
with excess outbound shipments to be delivered in the other’s
jurisdiction would pay a cost-plus-2-percent payment to the party
that handled the excess shipments. For 1987 through 1990, DHL
handled DHLI’s shipments that were in excess of DHL’s outbound
shipments (to be delivered outside the United States). Similar
provisions were made for payment for transfer items, which
occurred only in connection with the movement of items through
the United States, and so payments were to be made only by DHLI
to DHL. Respondent does not question DHL’s and DHLI’s 1987
agreement or their methodology, but argues that imbalance
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