Chrysler 2008 Annual Report Download - page 285

On 29 December 2008, there was a partial spin-off of the wholly-owned subsidiary Fiat Partecipazioni S.p.A. in favour of Fiat S.p.A.,
approved by Fiat S.p.A.’s Board of Directors on 20 October 2008 and in an Extraordinary General Meeting of Shareholders of Fiat
Partecipazioni S.p.A. on 14 October 2008, pursuant to the requirements of Article 2506-ter of the Civil Code (which refers to Article
2505 of the Civil Code) and Article 15 of the By-laws of Fiat S.p.A.
The transaction consisted of the transfer to Fiat S.p.A. of shares held by Fiat Partecipazioni S.p.A. in the subsidiaries Fiat Group
Automobiles S.p.A. (100.00%), Fiat Powertrain Technologies S.p.A. (100.00%), Magneti Marelli S.p.A. (99.99%), Maserati S.p.A.
(100.00%), Teksid S.p.A. (84.79%), Teksid Aluminum S.r.l. (100.00%), Fiat Netherlands Holding N.V. (39.44%), Iveco S.p.A. (39.44%)
and in the associate RCS MediaGroup S.p.A. (10.09%), in addition to €800,000 thousand in outstanding liabilities to Fiat Finance
S.p.A. maturing on 31 December 2008.
The effect of the transaction was to give Fiat S.p.A. the direct controlling interest in all of the Group's industrial sectors, in addition
to simplifying the Group’s structure in line with most recent market best practise, improving operating efficiency, providing
financial optimization and streamlining dividend flows, focusing the activities of Fiat Partecipazioni S.p.A. in real estate business in
favour of the Group and as in-house service provider.
Fiat S.p.A. accounted for the transaction consistently with the carrying value of the investment in Fiat Partecipazioni S.p.A. (“
in
continuità dei valori
”) in the December 2007 balance sheet which was replaced with the book values of the assets and liabilities
received and the residual value of the investment in Fiat Partecipazioni S.p.A. The transferred shareholdings were recognised by
Fiat S.p.A. at the value implied by the carrying value of Fiat Partecipazioni S.p.A. in its balance sheet at 31 December 2007. The
residual investment in Fiat Partecipazioni S.p.A. was recognised for an amount equal to the book value of equity at 31 December
2008. The difference arising from the transaction totalled €39,194 thousand and was accounted for as a balancing item to the
amount recognised in the equity reserve for spin-off difference (see Note 19).
Provisions of €2,759,986 thousand recognised on the investment in Fiat Partecipazioni S.p.A. at 31 December 2007 in relation to
residual impairment losses recognised in previous periods for Fiat Group Automobiles S.p.A. (€2,707,000 thousand) and Teksid
S.p.A. (€52,986 thousand), were subsequently reallocated to those shareholdings.
Other significant changes in investments in subsidiaries during the year were as follows:
At the end of 2008, Fiat S.p.A. increased the share capital and additional paid in capital of Fiat Powertrain Technologies S.p.A. by
€350,000 thousand to provide it with adequate financial resources to meet its operating requirements and planned capital
expenditures.
As discussed in Note 5 above, the compensation component from stock option plans based on Fiat S.p.A. shares but relating to
managers employed by other Group companies is treated as a capital contribution and recorded as an increase in the book value
of investee companies which directly or indirectly employ managers who are beneficiaries of the stock option plans. Conversely,
when, certain tranches of options are not vested as a result of performance objectives not being achieved, the related
compensation component recognised in previous periods is reversed and the value of the capital contribution recognised in prior
periods is correspondingly reduced in those companies which directly or indirectly employ managers who are beneficiaries of
those stock option plans. In 2008, net decreases of €5,959 thousand were recognised in investments in subsidiary companies,
Fiat S.p.A. Statutory Financial Statements at 31 December 2008284