Chrysler 2010 Annual Report Download - page 233

FIAT GROUP
CONSOLIDATED
FINANCIAL
STATEMENTS
AT 31 DECEMBER
2010
NOTES
232
The warranty provision represents management’s best estimate of commitments given by the Group for contractual, legal, or constructive obligations
arising from product warranties given for a specified period of time which begins at the date of delivery to the customer. This estimate has been calculated
considering past experience and specific contractual terms. This provision also includes management’s best estimate of the costs that are expected to be
incurred in connection with product defects that could result in a larger recall of vehicles. This provision for risks is developed through an assessment of
reported damages or returns on a case-by-case basis.
The restructuring provision classified as Continuing Operations at 31 December 2010 comprises the estimated amount of benefits payable to employees
on termination in connection with restructuring plans amounting to €162 million, other costs for exiting activities amounting to €27 million and other costs
totalling €13 million. The total balance relates to the restructuring programs of the following sectors (in € million): Fiat Group Automobiles 88; Components 48;
Fiat Powertrain 17; Production Systems 10; Metallurgical Products 7; other sectors 32.
The restructuring provision classified as Discontinued Operations comprises at 31 December 2010 the estimated amount of benefits payable to employees
on termination in connection with restructuring plans totalling €43 million, other costs for exiting activities amounting to €1 million and other costs totalling
€49 million; the total balance at 31 December 2010 relates to restructuring programs of the sectors FPT Industrial (€53 million), Agricultural and Construction
Equipment (€24 million) and Trucks and Commercial Vehicles (€16 million).
The restructuring provision at 31 December 2009 comprised the estimated amount of benefits payable to employees on termination in connection with
restructuring plans amounting to €294 million, other costs for exiting activities amounting to €32 million and other costs totalling €33 million. Taken overall
the balance related to the restructuring programs in the following sectors (in € million): Fiat Group Automobiles 101, Components 73; Agricultural and
Construction Equipment 50, FPT Powertrain Technologies 63, Trucks and Commercial Vehicles 17; Production Systems 15; Metallurgical Products 9; other
sectors 31.
The provision for other risks represents the amounts set aside by the individual companies of the Group principally in connection with contractual and
commercial risks and disputes. The more significant balances of these provisions are as follows:
At 31 December 2010 At 31 December 2009
Continuing Discontinued
(€ million) Operations Operations Total Total
Sales incentives 378 637 1,015 829
Legal proceedings and other disputes 535 252 787 743
Commercial risks 277 431 708 677
Environmental risks 33 38 71 71
Indemnities 60 - 60 53
Other reserves for risk and charges 739 82 821 724
Total Other risks 2,022 1,440 3,462 3,097