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At 31 December 2011
Annual Report
106th financial year

Table of contents

  • Page 1
    Annual Report At 31 December 2011 106th financial year

  • Page 2
    ... 1) Motion for approval of the Statutory Financial Statements for the year ended 31 December 2011 and allocation of profit for the year 2) Election of the Boards of Directors and Statutory Auditors: a) Determination of the number of members of the Board of Directors and compensation b) Election of...

  • Page 3
    ... publication of this notice, indicating the additional items proposed. Conditions, procedures and deadlines for exercise of those rights are provided on the Company's website. Documentation Documentation relating to items on the agenda for each meeting and the Annual Report on Corporate Governance...

  • Page 4
    ... redemption value for the preference and savings shares of Fiat S.p.A. has been set as follows: n n â,¬3.317 per preference share â,¬3.458 per savings share In accordance with the provisions of Article 2437-ter of the Civil Code, calculation of the redemption price for each share class was based...

  • Page 5
    ... 260 Operating Performance by Sector Fiat Group Automobiles Chrysler Maserati Ferrari Components Fiat Powertrain Metallurgical Products Production Systems Financial Review - Fiat S.p.A. Motion for Approval of the Statutory Financial Statements and Allocation of 2011 Profit Fiat Group - Consolidated...

  • Page 6
    ... Statements under Article 154-bis of Legislative Decree 58/98 333 339 345 Reports of the Independent Auditors Reports of the Board of Statutory Auditors Motions for AGM In this document, the terms "Chrysler Group" or "Chrysler" are used to identify Chrysler Group LLC, together with its direct...

  • Page 7
    ... Vittorio Mincato (2) Pasquale Pistorio Ratan Tata Mario Zibetti (2) (3) (1) Member of the Nominating, Corporate Governance and Sustainability Committee Member of the Internal Control and Risk Committee Member of the Compensation Committee Secretary of the Board Franzo Grande Stevens (2) (3)

  • Page 8

  • Page 9
    ... objective: to create a company that is a leader in the global automobile sector, oriented toward innovation, secure in its values and dedicated to sustainable long-term development. " Revenues grew, trading profit doubled, net profit increased and net industrial debt decreased /s/ John Elkann...

  • Page 10
    ... billion at year-end 2010 being primarily attributable to the effect of initial consolidation of Chrysler's debt, acquisition of the U.S. Treasury and Canada's ownership interests in Chrysler and a healthy level of capital investment. The net debt position was reduced in the fourth quarter, however...

  • Page 11
    ... 2012. The objective of this transaction is to simplify the Company's capital and governance structure, as well as benefiting shareholders and satisfying market expectations by eliminating share classes which trade at a discount to the ordinary shares and with very limited turnover. Fiat-Chrysler...

  • Page 12
    ... and recovery at the very end of the year. Fiat-Chrysler expects to close 2012 with revenues above â,¬77 billion, trading profit between â,¬3.8 and â,¬4.5 billion, net profit between â,¬1.2 and â,¬1.5 billion, and net industrial debt between â,¬5.5 and â,¬6 billion. The Group expects that it will...

  • Page 13
    © Brian Wilson It is a rough road that leads to the heights of greatness. Lucius Annaeus Seneca

  • Page 14
    The Group at a Glance 14 16 24 26 2011 in Summary Group Brands Fiat Group around the World Operating Responsibly

  • Page 15
    14 The Group at a Glance 2011 in Summary 2011 in Summary 2011 Results - Fiat with Chrysler (*) Revenues Net Profit Available Liquidity 59,559 (â,¬ million) Trading Profit (**) 1,651 (â,¬ million) Net Industrial Debt 20,680 (â,¬ million) 2,392 (â,¬ million) 5,529 (â,¬ million) (â,¬ ...

  • Page 16
    ...Fiat excluding Chrysler Revenues (â,¬ million) Trading Profit (â,¬ million) 2011 37,382 2011 1,047 2010 35,880 2010 1,112 2009 32,684 2009 736 0 10,000 20,000 30,000 40,000 0 300 600 900 1,200 Net Industrial Debt (â,¬ million) Profit/(loss) (â,¬ million) 2011 2,449 2011...

  • Page 17
    ..., it also distributes Jeep brand vehicles. From January 2012, the activities of Fiat Powertrain - which researches, develops and produces engines (power output from 65 to 235 hp) and transmissions for passenger cars and light commercial vehicles (torque up to 400 Nm) - were transferred to Fiat Group...

  • Page 18
    ..., a line of legendary models developed in partnership with the Fiat brand and the enormous success of its conversion kits. Fiat Professional Taking care of our customers also means designing and building the right vehicles to meet their professional ambitions. Fiat Professional - the Fiat Group...

  • Page 19
    18 The Group at a Glance Group Brands Maserati For nearly a century, this legendary brand has produced unique cars recognized throughout the world for their unmistakable allure and elegance and technological excellence. Cars such as the Quattroporte - the ideal balance between luxury and ...

  • Page 20
    ...through numerous Formula 1 titles (16 times winner of the Constructors' championship and 15 times winner of the Drivers' championship) and, of course, an impressive series of legendary GT models - cars unique for their design, performance and pure driving pleasure that represent the best of Italian.

  • Page 21
    ...intuitive innovation - all at an extraordinary value - since the company was founded in 1925. The Chrysler brand continued that tradition in 2011 with a rejuvenated, stylish, well-crafted product lineup. Every 2011 model vehicle the brand sold was all-new or significantly refreshed. This succession...

  • Page 22
    ... In 2011, Chrysler Group officially elevated its in-house performance division - the Street and Racing Technology (SRT) team - to a separate company brand. The brand uses a successful product development formula to design, engineer and build benchmark American high-performance vehicles for Chrysler...

  • Page 23
    ... industry. Teksid's competitive advantages include: a high level of automation; upgrading technology to continuously improve quality standards; and close integration with the product development of its customers, which include the major global producers of cars, trucks, tractors and engines...

  • Page 24

  • Page 25
    ... of its capital goods businesses to Fiat Industrial, effective 1 January 2011, and the increase in its stake in Chrysler, Fiat has expanded and accelerated its integration with Chrysler Group with the objective of creating a global automaker positioned as an industry leader. The Group carries out...

  • Page 26
    25 16 Brands 77 R&D Centers 472 Companies 155 Plants 197,000 Employees NAFTA Mercosur Rest of World 36.0% 30.6% 47 16 19.0% 22.7% 19 5 8.8% 3.0% 12 5 The Group at a Glance

  • Page 27
    ... the Group's environmental and social performance. In addition, the Nominating, Corporate Governance and Sustainability Committee (a sub-committee of the Board of Directors) evaluates proposals relating to strategic guidelines on sustainability and reviews the annual Sustainability Report, reporting...

  • Page 28
    ... of the leading sustainability indexes and is used by the growing community of socially responsible investors to define sustainable investment universes, to benchmark their investment performance or to create index-linked products. Fiat S.p.A. is also a member of other major sustainability indexes...

  • Page 29
    ©iStockphoto.com/Jason Verschoor The safest road to hell is the gradual one - the gentle slope, soft underfoot, without sudden turnings, without milestones, without signposts. C. S. Lewis

  • Page 30
    ... - Fiat Group Corporate Governance Transactions between Group Companies and with Related Parties Subsequent Events and Outlook Operating Performance by Sector Fiat Group Automobiles Chrysler Maserati Ferrari Components Fiat Powertrain Metallurgical Products Production Systems Financial Review - Fiat...

  • Page 31
    .../(loss) per savings share (â,¬) Investments in tangible and intangible assets of which: capitalized R&D costs R&D expenditure Net industrial debt Employees at year end (*) Includes Chrysler from June 2011 (1) Note 13 to the Consolidated Financial Statements provides additional information on the...

  • Page 32
    ...the capital goods business. Report on Operations Through its Investor Relations function, Fiat maintains constant dialogue with individual shareholders, institutional investors and financial analysts, actively providing information to the market to consolidate and enhance confidence and the level...

  • Page 33
    ... trading volume 150 millions of shares 250 200 100 150 100 50 0 Jan 11 0 Feb 11 Mar 11 Apr 11 May 11 FIAT Jun 11 Jul 11 Aug 11 Sep 11 FTSE Italia Oct 11 Nov 11 Dec 11 DJ Eurostoxx Automotive 50 2011 started strongly for investors, with most equity markets continuing 2010's remarkable year-end...

  • Page 34
    ...) per savings share Reference price per share (*) (figures in â,¬) Monthly minimum and maximum price in 2011 (figures in â,¬) 30.12.11 3.550 3.072 3.254 Fiat Ordinary 10.00 8.00 Ordinary shares Preference shares Savings shares (Source: Reuters) (*) Equivalent to the closing auction price 6.00...

  • Page 35
    ...January 2011 Chrysler 300 and Jeep Compass unveiled at the North American International Auto Show in Detroit. On January 10th, Fiat increases ownership in Chrysler Group LLC from 20% to 25% following achievement of first of 3 Performance Events stipulated in alliance agreement (regulatory approval...

  • Page 36
    ... sign agreement for â,¬250 million in financing for Fiat R&D projects in Italy. In U.S. and Canada, first deliveries of the Fiat 500 Prima Edizione begin: the first Fiat cars sold in North America since 1983. Report on Operations Alfa Romeo showcases the Giulietta and MiTo at the Geneva Motor...

  • Page 37
    ... certain cooperation agreements). As a result, Fiat's ownership interest in Chrysler increases from 25% to 30%. April Chrysler Group presents 2012 Jeep Grand Cherokee SRT8® and Chrysler 300 SRT8® at the New York Auto Show. The restyled Delta with new trim and engine options goes on sale in Italy...

  • Page 38
    ... and 2011 Jeep Grand Cherokee (premium mid-size SUV) take first in their categories. June Agreement signed between Fiat Powertrain and Suzuki Motor Corporation for supply of 120 hp 1.6 MultiJet II diesel for the new Suzuki SX4, replacing the 135 hp 2.0 Fiat Powertrain engine used on the current SX4...

  • Page 39
    ...) and automatic transmission. Chrysler elevates its Street and Racing Technology (SRT®) team to a distinct performance brand. SRT designs, engineers and builds benchmark American high-performance models for Chrysler, Jeep and Dodge. The 2011 Chrysler Town & Country and Dodge Challenger rank...

  • Page 40
    ...: the new high-performance Grand Cherokee SRT8 with 470 hp 6.4 HEMI® engine; the 284 hp 3.6 Pentastar V6 gasoline engine to power the 2012 Jeep Wrangler and Jeep Wrangler Unlimited; and the special edition all-terrain Jeep Wrangler Arctic. September Fiat S.p.A. is included in the DJSI World and...

  • Page 41
    ... credit facility signed February 2009. On October 27th, the Board of Directors of Fiat S.p.A. passes a resolution to propose to Shareholders the conversion of the Company's preference and savings shares into Fiat ordinary shares for the purpose of simplifying the Company's capital and governance...

  • Page 42

  • Page 43

  • Page 44
    ...Fiat Powertrain Metallurgical Products (Teksid) Production Systems (Comau) Other Businesses and Eliminations TOTAL FIAT GROUP (1) Consolidated from 1 June 2011 (2) Investments in tangible and intangible assets (net of vehicles sold under buy-back commitments and leased out) (3) Includes capitalized...

  • Page 45
    ... affect the businesses and operations of the Group. Following the acquisition of control of Chrysler in 2011, nearly 45% of Group's on-going revenues are generated in the NAFTA region. Substantially all of Chrysler's vehicles sales occur in North America (U.S. and Canada). Although Chrysler is...

  • Page 46
    ...in terms of product quality, innovation, pricing, fuel economy, reliability, safety, customer service and financial services offered. Competition, particularly in pricing, has increased significantly in the Group's industry sector in recent years. In addition, partly as a result of the contraction...

  • Page 47
    ... of a controlling interest in Chrysler and the related alliance is intended to provide both Fiat and Chrysler with a number of long-term benefits, including sharing new vehicle platforms and powertrain technologies, as well as procurement benefits, management services and global distribution...

  • Page 48
    ... changes in tax treatment or purchase incentives for new vehicles, can substantially inï¬,uence the timing and level of revenues. The size and duration of such government measures are unpredictable and outside of the Group's control. Any adverse change in government policy relating to those measures...

  • Page 49
    ... adverse effect on Fiat's business prospects, financial condition and/or results of operations. Chrysler has been assigned a corporate credit rating of B2 (with a positive outlook) by Moody's Investor Service and B+ (with a stable outlook) by Standard & Poor's. Because Chrysler is more highly...

  • Page 50
    ...cover funding requirements for its industrial activities and for financing customers and dealers. Moreover, liquidity for industrial activities was also principally invested in variable-rate or short-term financial instruments. The Financial Services companies normally operate a matching policy to...

  • Page 51
    ... General Motors Company, one of Chrysler's main competitors. Pursuant to this agreement, Ally is neither obligated to provide financing to dealers, nor is Ally required to fund a certain number of vehicle sales or leases for customers. On the other hand, Chrysler must offer all subvention programs...

  • Page 52
    ... returns and any changes in applicable law related to funding requirements. Chrysler's defined benefit pension plans currently hold significant investments in equity and fixed income securities, as well as investments in less liquid instruments such as private equity, real estate and hedge funds...

  • Page 53
    52 Report on Operations Research and Innovation Research and Innovation Following the demerger of activities by Fiat Group at the beginning of the year, Centro Ricerche Fiat (CRF) remained a subsidiary of Fiat to ensure continuity of support to Fiat Industrial, a number of service agreements ...

  • Page 54
    ... entire life cycle (i.e., production to dismantling). Major achievements in 2011 include: Application of MultiJet II Injection Rate Shaping (IRS) technology to 2.0L and 3.0L V6 diesel engines. During 2011, the IRS technology (developed and patented by CRF at its Research & Technology laboratories in...

  • Page 55
    ...fit in terms of driving performance. In 2011, CRF worked on the second generation MultiAir which, on the same engine hardware, offers new valve control capabilities for full control of the combustion process under all operating conditions, optimizing the compression ratio and level of exhaust gas...

  • Page 56
    ...". Vehicle life cycle and end-of-life. CRF has been using Life Cycle Assessment (LCA) for a number of years to assess environmental performance of its European projects and also to assist Fiat Group Automobiles in design choices that impact the eco-sustainability of products or processes. In 2011...

  • Page 57
    ... 2011, development in the area of human-machine interfaces and user dialog led to creation of a system to actively manage information and assist drivers based on workload, in order to reduce and control that workload, as well as increasing the effectiveness of communications and assistance given...

  • Page 58
    ...on-board systems interact and tap into existing information via a network. This also minimizes costs as the workload detection system primarily acts on the software used for management of the driver assist and interface systems. Process and product competitiveness. During 2011, CRF developed, tested...

  • Page 59

  • Page 60

  • Page 61
    ... culminated in the development of the 2012 Chrysler 300 and 2012 Dodge Charger, both with a fuel economy of 31 miles per gallon on the highway, 15% better than their predecessor 2011 models. It also led to the development of the all-new Dodge Dart, a small fuel-efficient vehicle with a verified...

  • Page 62
    ... medium-sized vehicles, the DDCT offers improved fuel economy over conventional automatic transmissions. Chrysler plans to introduce DDCT technology in the U.S. market in 2012. Chrysler entered into two commercial agreements with a key supplier, ZF, for the design, engineering and manufacture of new...

  • Page 63
    ... cost reduction strategies to ensure the affordability of such vehicles in the future. In the U.S., Chrysler is currently developing a fully-electrified version of the Fiat 500 with a 100 mile range, using battery technology developed by Chrysler Group. Due to its compact size and weight, the Fiat...

  • Page 64
    63 well-suited for electric technology. Chrysler plans to design, manufacture and sell this version of the Fiat 500 in North America. Production is scheduled to begin in 2012. In 2010, a 3-year demonstration project for a Ram truck plug-in hybrid was launched. This rear-wheel drive vehicle is ...

  • Page 65
    ... year-end 2010. The change was primarily attributable to the consolidation of Chrysler in June 2011 (55,687 employees). The remaining increase reï¬,ects other changes in the scope of operations and the positive difference between new hires (approximately 21,800) and departures (approximately 19,300...

  • Page 66
    ... in Italy, as well as France, Spain, Poland, Belgium, England, China, Brazil, Mexico, Canada and the U.S. Industrial relations During the year, collective bargaining led to several positive developments in labor relations: in Italy, Fiat and Fiat Industrial negotiated a new contractual system (CCSL...

  • Page 67
    ...which it replaces), with amendments to reï¬,ect the new structure of the Group post demerger. In Italy, Fiat worked for and achieved a step change in the system of industrial relations. Following the agreements signed on 15 June 2010 for Pomigliano, 23 December 2010 for Mirafiori and 4 May 2011 for...

  • Page 68
    ...the investment plan presented on 16 February 2011. On this basis, an agreement was concluded at the Ministry for Economic Development on 1 December 2011, under which Fiat will also transfer ownership of the plant to DR Motor Company at no cost once the company has satisfied its commitments relating...

  • Page 69
    ... managed the decline in production volumes through discontinuation of Saturday shifts and a reduction in temporary positions (more than 400 since September). In Brazil, in December 2010 the Group broke ground for construction of a new plant at Pernambuco and in March 2011 an agreement was signed...

  • Page 70
    ... with the running cost of the product to be replaced Energy: developed for research into energy loss in use, transfer and generation. This activity led to results which exceeded expectations The gradual extension of the WCM program at Chrysler plants also continued and to date more than 9,500...

  • Page 71
    ... all Group companies, with pay conditions simplified in terms of structure; a more ï¬,exible system of shifts and working hours, enabling greater ability to respond to changes in production requirements; a system of employee representation involving only those unions that signed the new agreement...

  • Page 72
    .... Finally, the new agreement provides UAW-represented employees with a simplified profit-sharing plan that is directly aligned with Chrysler's profitability. In Serbia, an agreement was signed for the Fiat Automobiles Serbia plant in Kragujevac in November 2011 setting out the agreed trade union...

  • Page 73
    ... in Chrysler. On 29 June 2011, Fiat Powertrain completed the acquisition of a 50% interest in VM Motori Group, a joint venture between General Motors and Fiat Powertrain specialized in design and production of diesel engines and parts. From that date, the investment has been accounted for using the...

  • Page 74
    ... relates to the consolidated group. Net revenues Net revenues for the Group for 2011 totaled â,¬59.6 billion. Fiat Group Automobiles (FGA) posted revenues of approximately â,¬28 billion, in line with 2010, with 2,032,900 passenger cars and light commercial vehicles shipped (-2.4% over the prior year...

  • Page 75
    ... million units. The passenger car market was in line with the prior year, while demand for LCVs was up 13.0%. FGA shipped a total of 772,700 passenger cars and LCVs, representing a 1.5% increase over 2010 and an all-time annual record. Including Chrysler Group brands, overall share in Brazil was 22...

  • Page 76
    ... lines recorded increases, with the Body Welding, Powertrain Systems and Robotics operations and activities in China, in particular, making a significant contribution. Other Businesses Other Businesses includes the contribution from the Group's publishing businesses, service companies and holding...

  • Page 77
    ...) for 2010. Efficiencies in purchasing and World Class Manufacturing only partially offset volume declines for passenger cars in Europe, in addition to an increase in advertising costs related to new model launches and higher R&D expenditure for future products. Chrysler reported trading profit of...

  • Page 78
    ...for 2010). Report on Operations Fiat Group reported other unusual income (net) of â,¬1,025 million for 2011. Unusual income totaled â,¬2,100 million, of which â,¬2,017 million related to the fair value re-measurement of the 30% ownership interest held in Chrysler prior to the acquisition of control...

  • Page 79
    ... for 2010) and related primarily to taxable income of companies operating outside Italy and employment-related taxes in Italy. Net profit for 2011 was â,¬1,651 million (â,¬222 million for 2010). Excluding Chrysler, unusuals and the mark-to-market of the two Fiat stock option-related equity swaps...

  • Page 80
    ... credit lines to Fiat Industrial as a consequence of the Demerger), payment of â,¬181 million in dividends (almost entirely to Fiat shareholders and minority shareholders of subsidiaries) and â,¬438 million for the purchase of the ownership interests held in Chrysler by the U.S. Treasury and Canada...

  • Page 81
    ... receivables Trade payables Current taxes receivable/(payable) & Other current receivables/(payables) Working capital (a) Inventory is reported net of the value of vehicles repurchased under buy-back commitments that are held for sale by Fiat Group Automobiles and Chrysler and those sold under buy...

  • Page 82
    ...-controlled financial services companies Other financial assets Other financial liabilities Current securities Cash and cash equivalents Net (debt)/cash Industrial Activities Financial Services (*) (a) (b) (c) Includes impacts of the Demerger which took effect 1 January 2011 Includes current...

  • Page 83
    ...the consolidated statements of income, financial position and cash ï¬,ows between Industrial Activities and Financial Services. Financial Services includes subsidiaries of Fiat Group Automobiles and Ferrari engaged in retail and dealer finance, leasing and rental activities, as well as FGA Capital...

  • Page 84
    ...Chrysler, revenues were approximately â,¬37.1 billion, up 4.0% over 2010, mainly due to growth for the Components businesses and Luxury & Performance brands. For FGA, revenues were resilient, remaining in line with 2010, despite difficult trading conditions in Europe. Trading profit for Industrial...

  • Page 85
    ... assets Property, plant and equipment Investments and other financial assets Leased assets Defined benefit plan assets Deferred tax assets Total non-current assets Inventory Trade receivables Receivables from financing activities Financial receivables from Discontinued Operations Current taxes...

  • Page 86
    ... jointly-controlled financial services companies Other financial assets Other financial liabilities Current securities Cash and cash equivalents Net (debt)/cash (a) Includes current debt payable by FGA Capital to other companies in the Fiat Group (b) Includes the value of intercompany agreements...

  • Page 87
    ... services companies Other financial assets Other financial liabilities Other current securities Cash and cash equivalents Net (debt)/cash (*) Includes impacts of the Demerger which took effect 1 January 2011 (a) Includes current debt payable by FGA Capital to other companies in the Fiat Group...

  • Page 88
    ... of year 2010 Demerger debt allocation Consolidation of Chrysler net debt (1) Cash (paid)/received for 16% ownership interest in Chrysler (Disbursements) for purchase of interests held in Chrysler by Canada and U.S. Treasury and UST rights under Equity Recapture Agreement Net industrial debt at...

  • Page 89
    ... current securities Other changes Cash from/(used in) investing activities of Discontinued Operations Total Cash from/(used in) financing activities: Net change in debt and other financial assets/liabilities Change in net financial receivables from Fiat Industrial Group Increase in share capital...

  • Page 90
    ... cash. Net debt repayments and disbursements for the purchase of the U.S. Treasury and Canada interests in Chrysler (â,¬438 million) and dividend payments (â,¬181 million) were only partially offset by the â,¬2.8 billion in cash received from Fiat Industrial Group in January. Financial Services Cash...

  • Page 91
    ... of production materials, and marketing and communications services. Coordination of the Group also encompasses centralized cash management, corporate and accounting, and internal audit services, including through specialized companies. Direction and coordination undertaken at group level enables...

  • Page 92
    ... Chrysler Group, on 1 September 2011 a new Group Executive Council (GEC) was formed which is now composed of 4 main groupings: regional operations, brands, industrial processes, and support/corporate functions. The Company adopted, effective 1 January 2011, procedures for transactions with related...

  • Page 93
    92 Report on Operations Corporate Governance several years of experience in the accounting and financial affairs of large companies may be appointed. In implementation of this provision, the Board of Directors has appointed the Chief Financial Officer as the manager responsible for the Company...

  • Page 94
    ... in the Annual Report on Corporate Governance. Fiat has administrative and accounting procedures in place that ensure a high degree of reliability in the system of internal control over financial reporting. Documents and financial information regarding the Company are made public, including via...

  • Page 95
    ... Related parties of an audit firm are considered to be entities belonging to the same network, as well as equity partners, shareholders, directors, members of management and supervisory bodies and employees of the audit firm. With reference to the "Conditions for the listing of shares of companies...

  • Page 96
    ... the Annual Report on Corporate Governance) to submit a minority list. Additional information provided to Shareholders on the candidates and lists presented are still available in the Investor Relations section of the Group website (www.fiatspa.com). The Board of Statutory Auditors' current term of...

  • Page 97

  • Page 98
    ...ed as unusual or atypical. Any related party transactions formed part of the normal business activities of companies in the Group. Such transactions are concluded at standard market terms for the nature of goods and/or services offered. ********** As part of the requirements of Legislative Decree...

  • Page 99
    ... would go ahead. Plans call for production of at least two new models for the export market, with production to reach 280,000 vehicles per year accompanied by a progressive return to full utilization of all plant employees. Investment is to commence in the second quarter of 2012 and retooling of the...

  • Page 100
    ... strategic direction laid out in the 5-year plans presented in November 2009 for Chrysler and April 2010 for Fiat. Having reviewed economic and trading conditions in the Group's four operating regions, Fiat confirms performance expectations for North America, Latin America and Asia-Pacific. Events...

  • Page 101
    Operating Performance by Sector

  • Page 102
    ...2010 27,860 607 515 1,652 722 2,081,800 57,611 Report on Operations Net revenues Trading profit/(loss) Operating profit/(loss) (*) Investments in tangible and intangible assets of which capitalized R&D costs Total R&D expenditure (**) Passenger car and LCV shipments (units) Employees at year end...

  • Page 103
    ... Sales Associate companies Grand Total In terms of market share in Europe, FGA recorded a 6.9% share for the year, representing a 0.8 percentage point decrease primarily attributable to the reduced weight of the Italian market and a shift in demand toward larger vehicle segments. The contraction...

  • Page 104
    ... 1.5% increase over 2010 and an all-time annual record. Including Chrysler Group brands, share in Brazil was 22.2% (+1.8 p.p. over the nearest competitor). Fiat brand retained its leadership for the 10th consecutive year, while maintaining pricing discipline in an increasingly competitive market. In...

  • Page 105
    ... complex and demanding market, and a key lever in increasing business and ensuring customer satisfaction. Accordingly, as part of the World Class Logistics program, numerous measures have been put in place to optimize the logistics process. Chrysler's spare parts distribution activities were also...

  • Page 106
    ..., at year-end 2011 the Customer Care Center had almost completed alignment of operating procedures for Fiat and Chrysler. Fiat Group Automobiles offers financial services in Europe, Latin America and China directly through its financial services companies. In other major markets, Fiat Group sales...

  • Page 107
    ...â,¬629 million and a penetration rate of 3.8% on Group brand sales (2010: 40,447 vehicle rentals, financed value of â,¬493 million and 2.6% penetration rate for Group brands). For Latin America and China, financial services are provided by Banco Fidis in Brazil, Fiat Credito Compania Financiera in...

  • Page 108
    ... Report on Operations Net revenues Trading profit/(loss) Operating profit/(loss) (**) Investments in tangible and intangible assets of which capitalized R&D costs Total R&D expenditure (***) Vehicles shipped (units) Employees at year end (*) All figures are for June-December 2011, except vehicle...

  • Page 109
    ... all-new 8-speed transmission on the 2012 Chrysler 300 and Dodge Charger enhancing fuel performance to 31 miles per gallon on the highway. Chrysler Group vehicles received numerous awards during the year. In December, 11 vehicles were named a "Top Safety Pick for 2012" by the Insurance Institute for...

  • Page 110
    ... 113 6,159 714 2010 586 24 24 104 62 5,675 696 Report on Operations Net revenues Trading profit/(loss) Operating profit/(loss) (*) Investments in tangible and intangible assets of which capitalized R&D costs Total R&D expenditure (**) Vehicles shipped (units) Employees at year end (*) Includes...

  • Page 111
    ... on Operations Operating Performance by Sector Innovation and Products At the 2011 Geneva Motor Show in March, Maserati presented the new 450 hp GranCabrio Sport, a harderedged version of the highly successful GranCabrio complete with the new "Rosso Trionfale" body paint, evocative of the cars...

  • Page 112
    ... Report on Operations Net revenues Trading profit/(loss) Operating profit/(loss) (*) Investments in tangible and intangible assets of which capitalized R&D costs Total R&D expenditure (**) Type-approved vehicles shipped to the network (units) Employees at year end (*) Includes restructuring costs...

  • Page 113
    ... was named "Best Performance Engine" at the 2011 International Engine of the Year Awards. Ferrari has continued to invest in development of low emission technologies and now provides the High Emotion Low Emission (HELE) system on all new models. Significant investment has also gone into research at...

  • Page 114
    ... the first quarter of 2012, F.F.S. Japan KK, a wholly-owned subsidiary of Ferrari Financial Services S.p.A. incorporated in September 2011 and located in Tokyo, will begin offering financial services in Japan. The Dealer Finance business line, launched in December 2009, is currently active in the...

  • Page 115
    ...developed economies. Despite trading conditions, Magneti Marelli closed 2011 with revenues up 8.5% over the prior year, on the back of strong performance in Germany, Brazil and China, in addition to a recovery in North America. Growth in the light commercial vehicle (LCV) market also made a positive...

  • Page 116
    ... Transmission for Chrysler, a mechatronic transmission for PSA and a drive-by-wire throttle for VW in China. Suspension Systems Revenues were â,¬588 million for 2011, in line with the previous year. The effects of significant growth in the LCV market in Europe and positive performance in Brazil...

  • Page 117
    ...in Brazil for various models of Fiat, GM and Renault. Electronic Systems Revenues totaled â,¬722 million for the year, a 16% increase over the prior year attributable, in particular, to market growth in China (instrument clusters) and Europe (telematics and computer bodies), as well as new activity...

  • Page 118
    ...) 2011 4,450 131 134 269 59 87 12,552 2010 4,211 140 172 385 80 12,453 Report on Operations Net revenues Trading profit/(loss) Operating profit/(loss) (*) Investments in tangible and intangible assets of which capitalized R&D costs Total R&D expenditure (**) Employees at year end (*) Includes...

  • Page 119
    ... system on this type of engine. Launch is planned for 2012 on the new Fiat Panda. A turbo CNG version is also in development. MultiAir II technology will also be applied to 16v versions of the FIRE family, providing further reductions in CO2 emissions with no loss in performance. Production levels...

  • Page 120
    ... 2010 776 17 17 2 7,275 Report on Operations Net revenues Trading profit/(loss) Operating profit/(loss) (*) Investments in tangible and intangible assets Total R&D expenditure (**) Employees at year end (*) Includes restructuring costs and other unusual income/(expense) (**) Includes capitalized...

  • Page 121
    ...nancial markets has not had any significant inï¬,uence on investment by automakers related to new models launches for 2012 and 2013. In North America, since emerging from bankruptcy proceedings in 2009, both Chrysler and General Motors have regained momentum with their capital investment programs...

  • Page 122

  • Page 123
    122 Report on Operations Financial Review - Fiat S.p.A. Financial Review - Fiat S.p.A. The following information is based on the 2011 financial statements prepared in accordance with the International Financial Reporting Standards ("IFRS"), issued by the International Accounting Standards Board ...

  • Page 124
    ...EQUITY NET DEBT Non-current assets consisted almost entirely of controlling interests in the principal Group companies. The â,¬700 million increase in the value of investments over 31 December 2010, was mainly due to â,¬347 million of Fiat Industrial S.p.A. shares attributed to Fiat S.p.A. (related...

  • Page 125
    ... and stock grant plans through delivery of Fiat Industrial shares, as well as a change in the net receivable/payable position with subsidiaries related to consolidated taxes (IRES). Equity totaled â,¬9,053 million at 31 December 2011, a net decrease of â,¬3,651 million over 31 December 2010, mainly...

  • Page 126
    ... the Group As required by the Consob Communication of 28 July 2006, the following table provides a reconciliation between the net profit and equity of Fiat S.p.A. for the years ended 31 December 2011 and 2010 and the comparable items on a consolidated basis (portion attributable to owners of Fiat...

  • Page 127

  • Page 128
    ...127 Motion for Approval of the Statutory Financial Statements and Allocation of 2011 Profit Shareholders, We hereby submit the Statutory Financial Statements for the year ended 31 December 2011 for your approval. In order to strengthen the Group's capital and maintain a high level of liquidity, we...

  • Page 129
    ©iStockphoto.com/AVTG There are only two mistakes one can make along the road to truth; not going all the way, and not starting. Buddha

  • Page 130
    ...Consolidated Financial Statements at 31 December 2011 130 131 132 134 135 136 137 138 139 237 260 Consolidated Income Statement Consolidated Statement of Comprehensive Income Consolidated Statement of Financial Position Consolidated Statement of Cash Flows Statement of Changes in Consolidated Equity...

  • Page 131
    130 Consolidated Financial Statements at 31 December 2011 Income Statement Consolidated Income Statement (â,¬ million) (*) Net revenues Cost of sales Selling, general and administrative costs Research and development costs Other income (expenses) TRADING PROFIT/(LOSS) Gains (losses) on the ...

  • Page 132
    ... Financial Statements at 31 December 2011 PROFIT/(LOSS) (A) Gains/(Losses) on cash ï¬,ow hedges Gains/(Losses) on fair value of available-for-sale financial assets Gains/(Losses) on exchange differences on translating foreign operations Share of other comprehensive income of entities accounted...

  • Page 133
    ... from financing activities Financial receivables from Discontinued Operations Current tax receivables Other current assets Current financial assets: Current investments Current securities Other financial assets Cash and cash equivalents Total Current assets Assets held for sale and Discontinued...

  • Page 134
    ... 64.588 Consolidated Financial Statements at 31 December 2011 EQUITY AND LIABILITIES Equity: Equity attributable to owners of the parent Non-controlling interests Provisions: Employee benefits Other provisions Debt: Asset-backed financing Other debt Debt payable to Discontinued Operations Other...

  • Page 135
    ...other medium-term borrowings Changes in net financial receivables from Fiat Industrial group Net change in other financial payables and other financial assets/liabilities Increase in share capital Dividends paid (Purchase)/sale of ownership interests in subsidiaries Cash ï¬,ows from (used in) the...

  • Page 136
    ... or distributed Purchase and sale of shares in subsidiaries from/to non-controlling interests Increase in the reserve for share-based payments Total comprehensive income Other changes AT 31 DECEMBER 2010 Changes in equity for 2011 Effects of the Demerger Direct effects of the Demerger Effects of...

  • Page 137
    ... (5) Net revenues Cost of sales Selling, general and administrative costs Research and development costs Other income (expenses) TRADING PROFIT/(LOSS) Gains (losses) on the disposal of investments Restructuring costs Other unusual income (expenses) OPERATING PROFIT/(LOSS) Financial income (expenses...

  • Page 138
    ... 87 - Consolidated Financial Statements at 31 December 2011 ASSETS Intangible assets Goodwill and intangible assets with indefinite useful lives Other intangible assets Property, plant and equipment Investments and other financial assets: Investments accounted for using the equity method Other...

  • Page 139
    ...other medium-term borrowings Changes in net financial receivables from Fiat Industrial group Net change in other financial payables and other financial assets/liabilities Increase in share capital Dividends paid (Purchase)/sale of ownership interests in subsidiaries Cash ï¬,ows from (used in) the...

  • Page 140
    ...operations of Fiat S.p.A. to Fiat Industrial S.p.A. ("the Demerger") described below, from 1 January 2011 the Group is engaged in the manufacture and sale of automobiles and light commercial vehicles, engines, transmission systems, automotive-related components, metallurgical products and production...

  • Page 141
    ... its own, obtaining funds in the market and managing cash directly. This financial service structure within the Group means that any attempt to separate current and non-current debt in the consolidated Statement of financial position cannot be meaningful. Suitable disclosure as to the due date of...

  • Page 142
    ... in IAS 28 - Investments in Associates, but not control or joint control over the financial and operating policies. Investments in associates are accounted for using the equity method from the date that significant inï¬,uence commences until the date it ceases. When the Group's share of losses of...

  • Page 143
    ... that date, except for deferred tax assets and liabilities, assets and liabilities relating to employee benefit arrangements, liabilities or equity instruments relating to share-based payment arrangements of the acquiree or share-based payment arrangements of the Group entered into to replace share...

  • Page 144
    ...process. Capitalised development costs are amortised on a systematic basis from the start of production of the related product over the product's estimated average life, as follows: Consolidated Financial Statements at 31 December 2011 N° of years Vehicles Engines Components and Production Systems...

  • Page 145
    144 Consolidated Financial Statements at 31 December 2011 Notes Property, plant and equipment Cost Property, plant and equipment are stated at acquisition or production cost. Subsequent expenditures and the cost of replacing parts of an asset are capitalised only if they increase the future ...

  • Page 146
    ... value. Current securities include short-term or marketable securities which represent temporary investments of available funds and do not satisfy the requirements for being classified as cash equivalents; current securities include both available-for-sale and held for trading securities. Financial...

  • Page 147
    ...Consolidated Financial Statements at 31 December 2011 Notes Loans and receivables which are not held by the Group for trading (loans and receivables originating in the course of business), held-tomaturity securities and all financial assets for which published price quotations in an active market...

  • Page 148
    ... use and realisable value. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs for sale and distribution. Consolidated Financial Statements at 31 December 2011 The measurement of construction contracts...

  • Page 149
    .... If a change is made to a plan that significantly reduces the number of employees who are members of the plan or that alters the conditions of the plan such that employees will no longer be entitled to the same benefits for a significant part of their future service, or if such benefits will be...

  • Page 150
    ... of completion. Revenues also include lease rentals and interest income from financial services companies. Consolidated Financial Statements at 31 December 2011 Cost of sales Cost of sales comprises the manufacturing cost of products and the acquisition cost of purchased merchandise which have...

  • Page 151
    150 Consolidated Financial Statements at 31 December 2011 Notes Taxes Income taxes include all taxes based upon the taxable profits of the Group. Taxes on income are recognised in the income statement except to the extent that they relate to items directly charged or credited to other ...

  • Page 152
    ...further in 2011 following the acquisition of the control of Chrysler, as well as the realignment of certain minor activities. On the basis of these considerations, the Group recognised impairment losses in 2011 on goodwill, development costs and other tangible assets mainly in the sectors Fiat Group...

  • Page 153
    ...in the financial statements. Incentives At the later of time of sale or the time an incentive is announced to dealers, the Group records the estimated cost of sales allowances in the form of dealer and customer incentives as a reduction of revenue. There are numerous types of incentives used in the...

  • Page 154
    ... measurement of items in the Group's financial statements and had only limited effects on the disclosures for related party transactions provided in these consolidated financial statements. Accounting standards, amendments and interpretations effective from 1 January 2011 but not applicable to the...

  • Page 155
    ... January 2013. Following the issue of the new standard, IAS 28 - Investments in Associates has been amended to include accounting for investments in jointly-controlled entities in its scope of application (from the effective date of the standard). On 12 May 2011, the IASB issued IFRS 12 - Disclosure...

  • Page 156
    ...the acquisition of a 50% interest in VM Motori group was finalised; this is a joint venture with General Motors in the Fiat Powertrain sector specialising in the production of auto engines, industrial engines and spare parts. The interest has been consolidated using the equity method from that date...

  • Page 157
    ... relate to Continuing Operations. The combined balances of the Group's share in the principal income statement items of jointly controlled entities accounted for using the equity method are as follows: (â,¬ million) 2011 4,703 246 234 240 143 2010 (*) 4,422 224 220 163 127 Net revenues Trading...

  • Page 158
    ... to have acquired control of Chrysler under IAS 27 - Consolidated and Separate Financial Statements. Accordingly, Chrysler has been consolidated on a line-by-line basis by Fiat with effect from that date (for practical purposes, 1 June 2011). At 31 December 2010, Fiat held 200,000 Class B membership...

  • Page 159
    ... to have acquired control of Chrysler under IAS 27 - Consolidated and Separate Financial Statements. Accordingly Chrysler has been consolidated on a line-by-line basis by Fiat with effect from that date. On 21 July 2011, Fiat acquired all of the Class A membership interests in Chrysler Group held by...

  • Page 160
    ... in Chrysler Group to 58.5%. The assignment of these additional ownership interests did not require Fiat to pay any cash consideration. The increase in the membership interest will be recognised in the consolidated financial statements of Fiat in 2012. At the date of this Annual report Fiat holds...

  • Page 161
    ... June 2011 and in the interim report at 30 September 2011 were reduced by $814 million (â,¬567 million) to reï¬,ect the final determination of the deferred tax liabilities arising from the business combination, which took into account that Chrysler Group LLC is a limited liability company taxed as...

  • Page 162
    ... an additional 5% ownership interest in Chrysler on the occurrence of the Ecological Event, previously recognised in the Consolidated financial statements at zero, was recognised under Other investments and financial assets at fair value at the date of acquisition of control. The resulting gain of...

  • Page 163
    ... as an asset held for sale during the third quarter of 2011 and the investment in Fiat Switzerland that was sold to the Fiat Industrial group. For completeness it is recalled that in 2010, the Group acquired the following subsidiaries: the remaining 50% of the joint venture Fiat Powertrain Polska Sp...

  • Page 164
    ... Financial Statements at 31 December 2011 Costs of sales Interest cost and other financial expenses from financial services companies Total Cost of sales (*) The amounts reported include seven months of operations for Chrysler. (**) The amounts relate to Continuing Operations. 3. Selling...

  • Page 165
    164 Consolidated Financial Statements at 31 December 2011 Notes 5. Other income (expenses) This item consists of income arising from trading operations which is not attributable to the sale of goods and services, net of miscellaneous operating costs which cannot be allocated to specific ...

  • Page 166
    ...expenses of Chrysler of â,¬486 million (of which interest costs on employee benefit provisions of â,¬54 million), and net financial expenses of â,¬108 million arising from the equity swaps on Fiat S.p.A. and Fiat Industrial S.p.A. ordinary shares relating to certain stock option plans (for further...

  • Page 167
    ... by increased taxes arising from the consolidation of Chrysler (â,¬73 million). The income for taxes relating to prior periods mainly relates to benefits arising from the favourable outcome of certain tax proceedings. The effective tax rate of the Fiat Group for 2011 (excluding current and deferred...

  • Page 168
    ... â,¬204 million (â,¬23 million in 2010 for Continuing Operations). In 2011 the tax effect of non-taxable income recognised on the acquisition of control of Chrysler arises from the fair value measurement of the 30% interest in Chrysler prior to the acquisition of control and the right to receive an...

  • Page 169
    168 Consolidated Financial Statements at 31 December 2011 Notes The decrease of â,¬613 million in net deferred tax assets is mainly due to the following: the change in the scope of consolidation arising from the acquisition of control of Chrysler and the subsequent acquisition of further ...

  • Page 170
    ...2010 for Continuing Operations. Chrysler had an average of 55,188 employees during the period June-December 2011. 13. Earnings/(loss) per share As explained in Note 24 below, Fiat S.p.A. share capital is represented by three different classes of shares (ordinary shares, preference shares and savings...

  • Page 171
    ... effects arose from the stock option plans granted by Fiat S.p.A. on its ordinary shares since the exercise price exceeded â,¬10.25 per share (the average price of Fiat ordinary shares in 2010). The figures used to determine diluted earnings per shares for the Fiat Group are as follows: 2011...

  • Page 172
    ... government agencies and through the continuous use in commerce. As these rights have no legal, contractual, competitive or economic term that limits their useful lives, they were classified as intangible assets with indefinite useful lives. Consolidated Financial Statements at 31 December 2011...

  • Page 173
    ... cost of capital determined using the Capital Asset Pricing Model ("CAPM") technique in which the risk free rate has been calculated by referring to the yield curve of long-term U.S. government bonds and the beta coefficient and the debt/equity ratio have been extrapolated by analysing a group...

  • Page 174
    ... value in use, meaning the present value of an estimate of future cash ï¬,ows based on operating cash ï¬,ows derived from the respective 2010-2014 strategic plans, suitably revised by management to take account of expected developments and also the integration of Fiat with Chrysler, extrapolated...

  • Page 175
    ...- the scope of tures consolidation (11) (11) (29) (8) (48) (7) 1 (6) Reclassified to Assets held for sale - At 31 December 2011 2,280 2,157 4,437 705 416 5,558 Development costs externally acquired Development costs internally generated Total Development costs Patents, concessions and licenses...

  • Page 176
    ...the Group wrote-down certain development costs by â,¬165 million. This was made necessary mainly by an assessment of the effects of a convergence towards the use of a reduced number of platforms common to Fiat and Chrysler, which were accelerated in the period following the acquisition of control of...

  • Page 177
    ... 961 30,653 Land Owned industrial buildings Industrial buildings leased under finance leases Total Industrial buildings Owned plant, machinery and equipment Plant, machinery and equipment leased under finance leases Total Plant, machinery and equipment Assets sold with a buy-back commitment Other...

  • Page 178
    ... 2010 (*) 7 1,836 13 1,849 Land Owned industrial buildings Industrial buildings leased under finance leases Total Industrial buildings Owned plant, machinery and equipment Plant, machinery and equipment leased under finance leases Total Plant, machinery and equipment Assets sold with a buy...

  • Page 179
    ... 2010 (*) 365 1,967 47 2,014 Land Owned industrial buildings Industrial buildings leased under finance leases Total Industrial buildings Owned plant, machinery and equipment Plant, machinery and equipment leased under finance leases Total Plant, machinery and equipment Assets sold with a buy...

  • Page 180
    ... million in 2011 mainly relate to the Chrysler sector for the seven month period June-December 2011 and the sectors Fiat Group Automobiles, Magneti Marelli and Fiat Powertrain. During 2011, the Group reviewed the recoverable amount of certain buildings, plant, machinery and industrial equipment as...

  • Page 181
    ... controlled entity Fiat India Automobiles Limited. Changes in the scope of consolidation include â,¬35 million arising from the effects of accounting for V.M. Motori group, a joint venture acquired on 29 June 2011, using the equity method, and â,¬26 million relating to other Chrysler investments...

  • Page 182
    ... after the publication of the consolidated financial statements of the Fiat Group. At 31 December 2011, the stock market quotation of Investments in listed jointly controlled entities and listed associates is as follows: Stock market quotation 278 52 330 (â,¬ million) Carrying value 272 99...

  • Page 183
    ... assignment to the Chief Executive Officer of the shares vested under the 2009 Stock Grant Plan (see Note 25). As a result, at that date the investment in Fiat Industrial S.p.A. consisted of 34,215,333 ordinary shares (corresponding to 2.7% of share capital). Non-current financial receivables Non...

  • Page 184
    ... of the inventories of Chrysler Group LLC and its U.S. subsidiary guarantors are pledged as securities for debt outstanding. There were no inventories pledged as security at 31 December 2011 for the Fiat Group excluding Chrysler. The amount due from customers for contract work relates to the Comau...

  • Page 185
    ...accounts (*) The amounts relate to Continuing Operations. The carrying amount of Trade receivables is considered in line with their fair value. The amount of trade receivables of the Chrysler sector at 31 December 2011 is â,¬667 million. Substantially all the trade receivables of Chrysler Group LLC...

  • Page 186
    ... relate to Continuing Operations. Finance lease receivables refer to vehicles leased out under finance lease arrangements by the Fiat Group Automobiles and Ferrari sectors. The interest rate implicit in the lease is determined at the contract date for the whole of the lease term and is in line...

  • Page 187
    ...classified as cash equivalents. In particular: (â,¬ million) At 31 December 2011 52 147 199 At 31 December 2010 (*) 38 147 185 Current securities available-for-sale Current securities held for trading Total Current securities (*) The amounts relate to Continuing Operations. 21. Other financial...

  • Page 188
    ... rates and in commodity prices during the year, and to the change in the scope of consolidation arising from the acquisition of Chrysler and the change in fair value of the equity swaps on Fiat S.p.A. and Fiat Industrial S.p.A. ordinary shares. Consolidated Financial Statements at 31 December 2011...

  • Page 189
    ... at 31 December 2010) the notional amount of four equity swaps, renewed in 2011 and expiring in 2012, arrange to hedge the risk of an increase in the prices of Fiat S.p.A. and Fiat Industrial S.p.A. shares above the exercise price of the stock options granted to the Chief Executive Officer in...

  • Page 190
    ... Operations), net of the tax effect, from other comprehensive income to profit or loss. These items are reported in the following lines: (â,¬ million) 2011 65 (36) (19) 23 2010 (*) (64) (83) (19) (5) Currency risk Increase (Decrease) in Net revenues Decrease (Increase) in Cost of sales Financial...

  • Page 191
    ...in line with their fair value at the balance sheet date. 23. Assets and liabilities held for sale and Discontinuing Operations Assets and liabilities held for sale at 31 December 2011 include the investment in a small company in Brazil, which was classified as held for sale on acquisition, together...

  • Page 192
    ...share capital of Fiat S.p.A. is as follows: (number of shares) At 31 December 2011 1,092,680,610 103,292,310 79,912,800 1,275,885,720 At 31 December 2010 1,092,247,485 103,292,310 79,912,800 1,275,452,595 Ordinary shares Preference shares Savings shares Total shares issued Consolidated Financial...

  • Page 193
    ... stock option plan. On 22 February 2012, the Board of Directors of Fiat S.p.A. voted to submit a proposal to Shareholders (in the extraordinary session of the General Meeting called for 4 April 2012) for the conversion of the Company's preference and savings shares into Fiat S.p.A. ordinary shares...

  • Page 194
    ...each class of share is determined by the bylaws of Fiat S.p.A.; an additional paid-in capital reserve is established if a company issues shares at a price exceeding their nominal value. This reserve may not be distributed until the legal reserve has reached one fifth of share capital; a company may...

  • Page 195
    ... on Chrysler's ability to pay dividends to its members, the Board of Directors has decided not to propose a dividend on Fiat's ordinary shares. The objectives identified by the Group for managing capital are to create value for shareholders as a whole, safeguard business continuity and support the...

  • Page 196
    ... of the book value of the Reserve for share-based payments attributable to each plan and relating to the component of the plans which will be serviced by Fiat Industrial S.p.A. shares, calculated on the basis of the weighting of the quotations of the two shares at that date. Consolidated Financial...

  • Page 197
    ... Exchange gains/(losses) on translating foreign operations Share of Other comprehensive income of entities accounted for using the equity method Total Other comprehensive income The losses recognised directly in equity for the fair value adjustment of available-for-sale financial assets are due to...

  • Page 198
    ...share-based compensation plans relating to managers of Group companies or Chief Executive Officer of Fiat S.p.A. were in place. Stock option plans linked to Fiat S.p.A. and Fiat Industrial S.p.A. ordinary shares On 26 July 2004, the Board of Directors granted the Chief Executive Officer, as a part...

  • Page 199
    ...Vesting date 31 December 2010 Vesting portion 100% On 3 November 2006 the Board of Directors of Fiat S.p.A. approved (subject to the subsequent approval of Shareholders in general meeting, which was given on 5 April 2007) an eight year stock option plan, which granted certain managers of the Group...

  • Page 200
    ...Chief Executive Officer of Fiat S.p.A. without payment. Under this plan the rights vested in a single tranche on the approval of the Group's 2010 consolidated financial statements by the Board of Directors and the number of shares granted was determined as 25% of the rights granted in the event of...

  • Page 201
    ... Compensation Committee, the Board of Directors of Fiat S.p.A. voted to adopt a Long Term Incentive Plan, in the form of stock grants. Plan beneficiaries will be approximately 300 executives in key positions that have a significant impact on business results, excluding employees of Chrysler Group...

  • Page 202
    ... the employee renders service and classifies this by function in Cost of sales, Selling, general and administrative costs and Research and development costs. In 2011 this costs totalled â,¬1,383 million (â,¬937 million in 2010 for Continuing Operations). Pension benefits Group companies sponsor...

  • Page 203
    ...yet retired. Health care and life insurance plans Liabilities arising from these plans comprise obligations for health care and life insurance plans granted to employees and to retirees of the Group working in the United States and Canada and relating to the Chrysler sector. These plans are unfunded...

  • Page 204
    ... be serviced by Fiat Industrial S.p.A. shares was initially reclassified from the reserve for share-based payments in equity and measured on the basis of the pro-rata proportion of the book value of that reserve, calculated by taking into account the weighting of the stock market prices of Fiat and...

  • Page 205
    ...-term returns on the capital markets and on the outlook for inï¬,ation and bond yields, and also by taking into account asset make-up and the Group's investment strategy. The annual rate of increase in the cost of health care benefits in the United States was assumed to be 8.5% in 2011. The annual...

  • Page 206
    ...December December 2011 2010 25,106 (20,004) 5,102 419 (327) 92 103 (75) 120 Present value of funded obligations Fair Value of plan assets Present value of unfunded obligations Unrecognised actuarial gains (losses) Unrecognised past service cost Unrecognised assets Net liability Amounts at year end...

  • Page 207
    ... 3 2 (2,385) 522 Present value of obligations at the beginning of the year Change in scope of consolidation Current service cost Interest costs Contribution by plan participants Actuarial (gains) losses Benefits paid Exchange rate differences (Negative)positive past service cost (Gains) losses on...

  • Page 208
    ... gains and losses and past service costs that arose before the acquisition date. For the year ended 31 December 2011, the actuarial losses arising from calculating the present value of the obligation mainly arose from a reduction in the discount rates used by Chrysler at the end of the seven-month...

  • Page 209
    208 Consolidated Financial Statements at 31 December 2011 Notes The present value of the defined benefit obligations, the fair value of plan assets and the surplus or deficit of the plans at the end of 2011 and the four previous years are as follows: (â,¬ million) At 31 December 2011 25,201 ...

  • Page 210
    ... plans, manufacturing rationalisation costs of â,¬26 million and other costs of â,¬106 million. These provisions relate to business restructuring programs in the following sectors (in â,¬ million): Chrysler 116, Fiat Group Automobiles 110, Components 50, Fiat Powertrain 15, Production Systems...

  • Page 211
    ...149 million. In addition, during the year, Fiat closed a syndicated credit line amounting to â,¬1,950 million which is currently available only to the Fiat Group excluding Chrysler. This credit line was undrawn at 31 December 2011. At 31 December 2010 Other debt included amongst other things the...

  • Page 212
    ... price of financial instruments, if available, or discounting the related future cash ï¬,ows and using the interest rates stated in Note 19, suitably adjusted to take account of the Group's current creditworthiness. At 31 December 2011 debt secured on assets of the Fiat Group excluding Chrysler...

  • Page 213
    ... for New Secured Senior Notes. Changes in bonds during 2011 are mainly due to: the repayment on maturity of bonds having a nominal value of â,¬1,300 million and of â,¬1,000 million issued by Fiat Finance and Trade Ltd S.A. in 2001 and 2006 respectively as part of the Global Medium Term Notes...

  • Page 214
    ... to make early repayment if there is a change of the controlling shareholder of Fiat S.p.A. which leads to a resulting downgrading by the ratings agencies. In addition, the indenture of the Secured Senior Notes issued by Chrysler Group LLC includes negative covenants related to Chrysler's ability...

  • Page 215
    ... in order to fund the Group's investments. In addition the above new syndicated credit facility above, currently contemplates limits to the capability to extend guarantees or loans to Chrysler and make the increase of Fiat shareholding in Chrysler above the 60% threshold conditional to prior testing...

  • Page 216
    ... tranches maturing between 2012 and 2024. Other At 31 December 2011 the Fiat Group excluding Chrysler had outstanding financial lease agreements for certain Property, plant and equipment whose overall net carrying amount totals â,¬297 million (Note 16). At 31 December 2010 the corresponding balance...

  • Page 217
    ...Chrysler (3,080) Total (14,932) Consolidated net debt as presented in the Report on Operations Less: Current financial receivables, excluding those due from jointly controlled financial services companies, amounting to â,¬21 million at 31 December 2011 (â,¬12 million at 31 December 2010 relating...

  • Page 218
    ... the contract period in proportion to the costs expected to be incurred based on historical information. The carrying amount of Other current liabilities is considered in line with their fair value. Consolidated Financial Statements at 31 December 2011 Advances on buy-back agreements Indirect tax...

  • Page 219
    ...in exchange rates on cash and cash equivalents are shown separately under the line item Translation exchange differences. Cash ï¬,ows from (used in) operating activities mostly derive from the Group's main revenue producing activities. The cash ï¬,ows generated by the sale of vehicles under buy-back...

  • Page 220
    ... investment price as increased by a given interest rate; for the remaining amount of share capital of Teksid, the share of the accounting net equity at the exercise date. Chrysler Following the occurrence of the Ecological Event in early January 2012, at the date of this Annual report Fiat holds...

  • Page 221
    ... receivables, mainly from the sales network, sold to jointly-controlled financial services companies (FGA Capital) for â,¬2,495 million (â,¬2,376 million at 31 December 2010). Operating lease contracts The Group has entered operating lease contracts for the right to use industrial buildings and...

  • Page 222
    ... Crédit Agricole group. Chrysler generates its revenues from the design, development, production, distribution and sale of automobiles under the Chrysler, Jeep, Dodge and Ram brand names, and from the related parts and accessories (under the Mopar brand name). The segment's product line consists of...

  • Page 223
    ... amounts reported include seven months of operations. (**) Revenues from transactions with other operating segments include revenues between consolidated Group companies relating to different sectors. Intersegment sales are accounted for at transfer prices that are substantially in line with market.

  • Page 224
    ... Operations. (**) Revenues from transactions with other operating segments include revenues between consolidated Group companies relating to different sectors. Intersegment sales are accounted for at transfer prices that are substantially in line with market. In the Statement of Financial Position...

  • Page 225
    ... Chrysler Chrysler Adjust 3,258 546 742 9,740 (9,654) 1,967 32,575 1,967 31,251 91 (4,904) - FIAT Group 58,922 2,058 At 31 December 2011 Segment operating assets Tax assets Receivables from financing activities, Non-current Other receivables and Securities of industrial companies Cash and cash...

  • Page 226
    ...Comau Businesses adjustments Chrysler Chrysler Adjust 3,419 581 697 17,102 (17,501) 2,031 26,769 2,031 - FIAT Group 26,769 2,031 At 31 December 2010 Segment operating assets Tax assets Receivables from financing activities, Non-current Other receivables and Securities of industrial companies Cash...

  • Page 227
    ... of funds and access to the credit market and to financial instruments in general; finance market risk (principally relating to exchange rates, interest rates and commodity prices), since the Group operates at an international level in different currencies and uses financial instruments...

  • Page 228
    ... on the one hand the funds generated by or used in operating and investing activities and on the other the debt lending period and its renewal features or the liquidity of the funds employed and market terms and conditions. The Group has adopted a series of policies and procedures whose purpose is...

  • Page 229
    ... distribution of the Group's industrial activities compared to the markets in which it sells its products, and in relation to the use of external borrowing denominated in foreign currencies. The Group exposure to interest rate risk arises from the need to fund industrial and financial operating...

  • Page 230
    .../BRL, relating to Brazilian manufacturing operations and the related import and export ï¬,ows. Taken overall trade ï¬,ows exposed to changes in these exchange rates in 2011 made up approximately 80% of the exposure to currency risk from trade transactions. It is the Group's policy to use derivative...

  • Page 231
    ... December 2011 Notes Quantitative information on interest rate risk The manufacturing companies and treasuries of the Group make use of external funds obtained in the form of financing and invest in monetary and financial market instruments. In addition, Group companies make sales of receivables...

  • Page 232
    ...Financial Statements at 31 December 2011 Assets at fair value with changes directly in Other comprehensive income: Investments at fair value with changes directly in equity Investments at fair value through profit or loss Other non-current securities Current securities available-for-sale Financial...

  • Page 233
    ... of 2011 and companies of the Fiat Industrial group; the provision of services, recharges of research costs and the sale of materials to the jointly-controlled entity Fiat India Automobiles Limited; the sale of publishing products to the associate To-dis; the purchase of motor vehicles from the...

  • Page 234
    ... Fiat Industrial group Total unconsolidated subsidiaries Total of which related parties Total Effect on Total (%) - (*) The amounts relate to Continuing Operations. (**) The revenues and cost of sales relating to Chrysler Group and its associates refer in 2011 to the first five months and in 2010...

  • Page 235
    ... entities Chrysler Group Other Total associates Fiat Industrial group Tata Steel IJmuiden BV Poltrona Frau Directors, Statutory Auditors and Key Management Other Total other related parties and Fiat Industrial group Total unconsolidated subsidiaries Total of which related parties Total Effect on...

  • Page 236
    ...Other Total jointly-controlled entities Chrysler Group Total associates Fiat Industrial group Total other related parties and Fiat Industrial group Total unconsolidated subsidiaries Total of which related parties Total Effect on Total (%) (*) The amounts relate to Continuing Operations. 2,865 2,865...

  • Page 237
    ... would go ahead. Plans call for production of at least two new models for the export market, with production to reach 280,000 vehicles per year accompanied by a progressive return to full utilization of all plant employees. Investment is to commence in the second quarter of 2012 and retooling of the...

  • Page 238
    ...the list are grouped according to type of control, method of consolidation and classification by operating segment (pursuant to IFRS 8). For each company, the following information is provided: name, location of registered office, country and share capital stated in original currency. Additionally...

  • Page 239
    ... 2011 Appendix I Fiat Companies % of Group consoliName Registered Office Country Share capital Currency dation Interest held by % interest held % of voting rights CONTROLLING COMPANY Parent Company Fiat S.p.A. Turin Italy 4,465,600,020 EUR ----- SUBSIDIARIES CONSOLIDATED ON A LINE-BY-LINE...

  • Page 240
    ... Share capital Currency dation Interest held by % interest held % of voting rights FIAT AUTOMOBILES SERBIA DOO KRAGUJEVAC Fiat Automotive Finance Co. Ltd. Fiat Automoveis S.A. - FIASA (business Fiat Group Automobiles) Fiat Center (Suisse) S.A. Fiat Center Italia S.p.A. Fiat CR Spol. S.R.O. Fiat...

  • Page 241
    ... of the Class A Interests held by all members (including Fiat) arising from the occurrence of the final Performance Event contemplated by the Chrysler Group Amended and Restated LLC Operating Agreement (the "Ecological Event"). The ownership interest without giving effect to this final Event is 44...

  • Page 242
    ... Minority LLC CHRYSLER GROUP REALTY COMPANY LLC Chrysler Group Service Contracts LLC CHRYSLER GROUP VANS LLC Chrysler India Automotive Private Ltd. Wilmington Berlin Alcalá De Henares Trappes Beijing Wilmington São Paulo New Cairo U.S.A. Germany Spain France People's Rep.of China U.S.A. Brazil...

  • Page 243
    ....50 53.50 53.50 53.50 53.50 Global Engine Manufacturing Alliance LLC Wilmington Mopar (Shanghai) Auto Parts Trading Co. Ltd. Shanghai New CarCo Acquisition Canada Ltd. Toronto New CarCo Acquisition Holdings Canada Ltd. Toronto Operadora G.C. S.A. de C.V. Santa Fe Maserati Maserati S.p.A. Maserati...

  • Page 244
    ...East Europe GmbH Ferrari Financial Services AG Ferrari Financial Services Japan KK Ferrari Financial Services S.p.A. Ferrari Financial Services, Inc. Ferrari GE.D. S.p.A. Ferrari Japan KK Ferrari Management Consulting (Shanghai) CO., LTD Ferrari Maserati Cars International Trading (Shanghai) Co. Ltd...

  • Page 245
    244 Consolidated Financial Statements at 31 December 2011 Appendix I Fiat Companies SUBSIDIARIES CONSOLIDATED ON A LINE-BY-LINE BASIS (continued) % of Group consoliName Registered Office Country Share capital Currency dation Interest held by % interest held % of voting rights Automotive ...

  • Page 246
    ... Marelli India Private Ltd Magneti Marelli International Trading (Shanghai) Co. LTD Magneti Marelli Japan K.K. Magneti Marelli North America Inc. Magneti Marelli Powertrain (Shanghai) Co. Ltd. Magneti Marelli Powertrain India Private Limited Magneti Marelli Powertrain U.S.A. LLC Magneti Marelli...

  • Page 247
    246 Consolidated Financial Statements at 31 December 2011 Appendix I Fiat Companies SUBSIDIARIES CONSOLIDATED ON A LINE-BY-LINE BASIS (continued) % of Group consoliName Registered Office Country Share capital Currency dation Interest held by % interest held % of voting rights Magneti Marelli ...

  • Page 248
    ....000 100.000 100.000 100.000 Consolidated Financial Statements at 31 December 2011 FMA - Fabbrica Motori Automobilistici S.r.l. Pratola Serra FPT Powertrain Technologies do Brasil Industria e Comércio de Motores Ltda Campo Largo Metallurgical Products Teksid S.p.A. Turin Italy Mexico 71,403,261...

  • Page 249
    ... I Fiat Companies SUBSIDIARIES CONSOLIDATED ON A LINE-BY-LINE BASIS (continued) % of Group consoliName Registered Office Country Share capital Currency dation Interest held by % interest held % of voting rights Comau (Shanghai) Engineering Co. Ltd. Shanghai Comau (Shanghai) International Trading...

  • Page 250
    ... Ltd. Fiat Finance et Services S.A. Fiat Finance North America Inc. Fiat Finance S.p.A. Fiat Gestione Partecipazioni S.p.A. Fiat GmbH Fiat Group Marketing & Corporate Communication S.p.A. Fiat Group Purchasing France S.a.r.l. Fiat Group Purchasing S.r.l. Fiat Iberica S.A. Fiat Information Technology...

  • Page 251
    ...Consolidated Financial Statements at 31 December 2011 Appendix I Fiat Companies SUBSIDIARIES CONSOLIDATED ON A LINE-BY-LINE BASIS (continued) % of Group consoliName Registered Office Country Share capital Currency dation Interest held by % interest held % of voting rights Fiat U.K. Limited Fiat...

  • Page 252
    ... FOR USING THE EQUITY METHOD Fiat Group Automobiles FGA CAPITAL S.p.A. FAL Fleet Services S.A.S. FC France S.A. FGA Bank G.m.b.H. FGA Bank Germany GmbH FGA CAPITAL BELGIUM S.A. FGA Capital Danmark A/S FGA CAPITAL HELLAS S.A. FGA CAPITAL IFIC SA FGA CAPITAL IRELAND Public Limited Company FGA Capital...

  • Page 253
    ... at 31 December 2011 Appendix I Fiat Companies JOINTLY-CONTROLLED ENTITIES ACCOUNTED FOR USING THE EQUITY METHOD (continued) % of Group consoliName Registered Office Country Share capital Currency dation Interest held by % interest held % of voting rights FGA CAPITAL UK LTD. FGA CONTRACTS UK LTD...

  • Page 254
    ... Fiat Powertrain) FIAT POWERTRAIN TECHNOLOGIES SOLLERS Investment Company B.V. FIAT POWERTRAIN TECHNOLOGIES SOLLERS Limited Liability Company GAC FIAT Automobiles Co. Ltd. (business Fiat Powertrain) VM Motori S.p.A. VM North America Inc. Metallurgical Products New Delhi India People's Rep.of China...

  • Page 255
    ... 2011 Appendix I Fiat Companies SUBSIDIARIES ACCOUNTED FOR USING THE EQUITY METHOD (continued) % of Group consoliName Registered Office Country Share capital Currency dation Interest held by % interest held % of voting rights Bessemer Chrysler Jeep Dodge, Inc. in liquidation CG EC1 LLC Chrysler...

  • Page 256
    ... Registered Office Country Share capital Currency dation Interest held by % interest held % of voting rights SUBSIDIARIES VALUED AT COST Fiat Group Automobiles 0914098 BC Unlimited Liability Company Vancouver CANADA CH INVESTMENT CORPORATION (**) Canada Canada Brazil Italy Italy 1,000 0 25...

  • Page 257
    ... Financial Statements at 31 December 2011 Appendix I Fiat Companies SUBSIDIARIES VALUED AT COST (continued) % of Group consoliName Registered Office Country Share capital Currency dation Interest held by % interest held % of voting rights Chrysler Receivables Limited Partnership Windsor Canada...

  • Page 258
    ... FOR USING THE EQUITY METHOD Fiat Group Automobiles Utymat S.A. Santa Margarita I Els Monjos Spain 4,644,453 EUR 37.50 FGA Investimenti S.p.A. 37.500 Chrysler Arab American Vehicles Company S.A.E. Cairo Global Engine Alliance LLC Fiat Powertrain Hangzhou IVECO Automobile Transmission Technology Co...

  • Page 259
    ...December 2011 Appendix I Fiat Companies ASSOCIATED COMPANIES ACCOUNTED FOR USING THE EQUITY METHOD (continued) % of Group consoliName Registered Office Country Share capital Currency dation Interest held by % interest held % of voting rights Holding companies and Other companies Iveco-Motor Sich...

  • Page 260
    ... 33.68 MB Venture Capital Fund I Participating Company F N.V. Amsterdam Zastava-Kamioni D.O.O. Kragujevac 33.677 OTHER COMPANIES VALUED AT COST Fiat Group Automobiles Centro di Eccellenza su Metodi e Sistemi per le Aziende Competitive Consorzio Calef (Consorzio per la ricerca e lo sviluppo delle...

  • Page 261
    ... of tax credits and other contributions for research activities (4) Attestation of tax forms (5) Non-recurring activity for the Fiat Group consolidated financial statements connected with acquisition of control and initial consolidation of Chrysler Group LLC and subsidiaries (6) Primarily related to...

  • Page 262
    ... of the adequacy of the administrative and accounting procedures used for the preparation of the consolidated financial statements at 31 December 2011 was based on a process defined by Fiat in accordance with the Internal Control - Integrated Framework model issued by the Committee of Sponsoring...

  • Page 263
    ©iStockphoto.com/Amos Grima The road is life. Jack (John) Kerouac

  • Page 264
    ...della of Comprehensive redditività complessiva Income Statement Situazione patrimoniale-finanziaria of Financial Position Statement Rendiconto finanziario of Cash Flows Statement Variazioni patrimonio of Changes netto in Equity Income Nota integrativa Statement al bilancio pursuant d'esercizio to...

  • Page 265
    ... relevant line item and Note 30 Statement of Comprehensive Income (â,¬ thousand) 2011 99,166 (41,677) (41,677) 57,489 2010 441,959 (4,468) (4,468) 437,491 PROFIT/(LOSS) (A) Gains/(losses) recognized directly in fair value reserve (investments in other companies) Income tax relating to components...

  • Page 266
    ... of Financial Position (figures in â,¬) (*) Note 31 December 2011 31 December 2010 ASSETS Non-current assets Intangible assets Property, plant and equipment Investments Other financial assets Other non-current assets Deferred tax assets Total non-current assets CURRENT ASSETS Inventory Trade...

  • Page 267
    ... OF YEAR B) CASH FROM/(USED IN) OPERATING ACTIVITIES DURING THE YEAR: Profit/(loss) Amortization and depreciation Non-cash cost of stock option plans and other non-cash items Impairment losses/(reversals) on investments Fair value adjustment to equity swaps on Fiat and Fiat Industrial shares Losses...

  • Page 268
    ...own shares Provisions related to obligation to service portion of stock option and stock grant plans through delivery of Fiat Industrial shares (Provisions for stock option and stock grant plans) Allocation of prior year profit: to the Legal reserve distribution of dividends to shareholders balance...

  • Page 269
    ... and other income from investments Impairment (losses)/reversals on investments Gains/(losses) on disposals Other operating income Personnel costs Other operating costs Financial income/(expense) PROFIT/(LOSS) BEFORE TAXES Income taxes PROFIT/(LOSS) FROM CONTINUING OPERATIONS Profit/(loss) from...

  • Page 270
    ...Statement of Financial Position pursuant to Consob Resolution 15519 of 27 July 2006 (â,¬ thousand) Note 31 December 2011 of which related parties (Note 30) 31 December 2010 of which related parties (Note 30) ASSETS Non-current assets Intangible assets Property, plant and equipment Investments...

  • Page 271
    ... OF YEAR B) CASH FROM/(USED IN) OPERATING ACTIVITIES DURING THE YEAR: Profit/(loss) Amortization and depreciation Non-cash cost of stock option plans and other non-cash items Impairment losses/(reversals) on investments Fair value adjustment to equity swaps on Fiat and Fiat Industrial shares Losses...

  • Page 272
    ... Comprehensive Income, Cash Flows and Changes in Equity and the Notes to the Financial Statements are in thousands of euros, except where otherwise stated. As parent company, Fiat S.p.A. has also prepared consolidated financial statements for Fiat Group for the year ended 31 December 2011. Demerger...

  • Page 273
    ..., those accounting standards were also used to prepare the separate financial statements of the Parent Company, Fiat S.p.A., for the first time for the year ended 31 December 2006. The information required by IFRS 1 - First-time Adoption of International Financial Reporting Standards relating to...

  • Page 274
    .... Costs related to operating leases are recognized on a straight-line basis over the duration of the lease. Depreciation Depreciation is calculated on a straight-line basis over the estimated useful life of an asset as follows: Annual depreciation rate Buildings Plants Furniture Fixtures Vehicles...

  • Page 275
    ... in liquidity funds and other money market securities that are readily convertible into cash and for which the risk of changes in value is insignificant. Non-current debt includes liabilities related to financial guarantees. Financial guarantees are contracts where the Company undertakes to make...

  • Page 276
    ... is immediately transferred to the income statement. If hedge accounting cannot be applied, the gains or losses from the fair value measurement of derivative financial instruments are recognized immediately in the income statement Fiat S.p.A. - Statutory Financial Statements at 31 December 2011

  • Page 277
    ... use. Assets held for sale (or disposal groups) are measured at the lower of their carrying amount and fair value less disposal costs. Employee benefits Post-employment benefit plans The Company provides pension plans and other post-employment benefit plans to its employees. Pension plans...

  • Page 278
    ... fair value at the end of each reporting period until settled. Any subsequent changes in fair value are recognized in profit or loss. The compensation component from stock option plans based on Fiat S.p.A. shares relating to employees of other Group companies is recognized as a capital contribution...

  • Page 279
    ...set off at group level. Dividends payable Dividends payable are recognized as changes in equity in the period in which they are approved by Shareholders. Use of estimates Preparation of the financial statements and notes in conformity with IFRS requires that management make judgments, estimates and...

  • Page 280
    ... of the 2011 financial statements, measurement was based on FGA's estimated "value in use", which took into account expected performance for 2012 consistent with information provided in "Subsequent Events and Outlook" (Report on Operations). For the period 2013-2015, original plan targets were...

  • Page 281
    ... Taxes - Recovery of Revalued Non-Depreciable Assets will no longer apply. The amendment must be adopted retrospectively from 1 January 2012. On 12 May 2011, the IASB issued IFRS 10 - Consolidated Financial Statements that will replace SIC-12 - Consolidation - Special Purpose Entities and parts...

  • Page 282
    ..., are the same as those of the companies of which it is Parent. In addition to the information provided in Note 28, readers should also refer to the note on Risk Management in the Notes to the Consolidated Financial Statements. Fiat S.p.A. - Statutory Financial Statements at 31 December 2011

  • Page 283
    ...- Magneti Marelli S.p.A. - Fiat Powertrain Technologies S.p.A. - Fiat Netherlands Holding N.V. - Business Solutions S.p.A. Total dividends from subsidiaries Dividends from other companies Total dividends and other income from investments For 2011, dividends from other companies related to dividends...

  • Page 284
    ... of the year (the Florence-Bologna and Novara-Milan lines - see Note 26). Other revenues and income from Group companies and other related parties mostly related to the recovery of costs, rental income from real estate properties and to directors' fees paid by companies for duties performed by Fiat...

  • Page 285
    ... parties Compensation component from stock option and stock grant plans Leases and rentals Purchase of goods Depreciation of property, plant and equipment Amortization of intangible assets Misc. operating costs Total other operating costs Costs for services rendered by Group companies primarily...

  • Page 286
    ...- Statutory Financial Statements at 31 December 2011 Financial expense to Group companies and other related parties - Interest expense on current account with Fiat Finance S.p.A. - Interest expense on loans from Fiat Finance S.p.A. - Commissions and other charges payable to Fiat Netherlands Holding...

  • Page 287
    ...). The contracts in place at 31 December 2010 were renegotiated during the year and adjusted for the change in the underlying (consisting of 16,920,000 Fiat and Fiat Industrial shares at year-end 2011) resulting from the Demerger. At 31 December 2011, the notional value of those equity swaps, based...

  • Page 288
    ... the conditions for their future realization, using updated strategic plans and related tax plans. As a consequence, the total theoretical future tax benefit arising from deductible temporary differences (â,¬30,095 thousand at 31 December 2011 and â,¬7,785 thousand at 31 December 2010) and tax loss...

  • Page 289
    ... Goodwill relates to consideration paid in excess of fair value to acquire, effective 1 December 2011, the business units referred to previously (see Note 5) that provide internal audit and financial advisory services to Fiat S.p.A. and Group companies. Licenses and software relates to intangible...

  • Page 290
    ... of property, plant and equipment is recognized in the income statement under other operating costs (Note 6). Fiat S.p.A. - Statutory Financial Statements at 31 December 2011 Land and buildings include land for â,¬610 thousand (unchanged with respect to the previous year), while buildings mainly...

  • Page 291
    290 Fiat S.p.A. Statutory Financial Statements at 31 December 2011 Notes During 2010 changes in Property, plant and equipment were as follows: (â,¬ thousand) 31 December 2009 46,082 (16,877) 29,205 Additions - Depreciation (1,352) (1,352) (Decreases) and Other changes - 31 December 2010 46,...

  • Page 292
    ...) (58,346) (59,907) 1,561 157,456 157,456 Fiat S.p.A. - Statutory Financial Statements at 31 December 2011 100.00 31 December 2010 5,524,081 8,431,081 (2,907,000) 1,055,204 1,055,204 103,798 103,798 1,833,632 2,133,632 (300,000) 568,912 648,912 (80,000) 611,854 611,854 76,084 129,070 (52...

  • Page 293
    ... capital contributions during 2012 of up to a maximum of â,¬180.0 million to cover development costs for new models as part of the rationalization and simplification of the Group's legal structure, Fiat Gestione Partecipazioni S.p.A. was designated as the holding company for the Group's service...

  • Page 294
    ... sheet date (compared to a â,¬52.7 million difference at year-end 2010), with the company continuing to trade at a discount to book value. In consideration of the relative stake held, for which the current stock market price (inï¬,uenced by uncertainty in the eurozone and weak economic conditions in...

  • Page 295
    ... Financial Statements at 31 December 2011 Notes On 22 February 2012, the number of Fiat Industrial S.p.A. shares held to service the stock option and stock grant plans was 4,000,000 lower, as a result of allocation to the Chief Executive Officer of shares vested under the 2009 stock grant plan...

  • Page 296
    ... works on high speed rail sections during the latter part of the year. These receivables match the trade payables resulting from the progress of the works to be paid to the consortia CAV.E.T. and CAV.TO.MI. (see Note 24). Trade receivables due from Group companies and other related parties includes...

  • Page 297
    ...from Fiat S.p.A., to hedge against an increase in the share price above the exercise price of the stock options granted to the Company's Chief Executive Officer in 2004 and in 2006, as described in Note 7. The fair value of those equity swaps was based on market quotations at the balance sheet date...

  • Page 298
    ... to service a portion of the stock option and stock grant plans with Fiat Industrial S.p.A. shares. The principal remaining changes related to dividend payments of â,¬151,651 thousand (â,¬0.09 per ordinary share, â,¬0.31 per preference share and â,¬0.31 per savings share) and profit for the year of...

  • Page 299
    ... under the November 2006 stock option plan for managers Following is a reconciliation between the number of shares outstanding at 31 December 2009 and at 31 December 2011: (Purchases)/ sales of own shares (Purchases)/ sales of own shares - (shares in thousands) 31 December 2009 1,092,248 (38,568...

  • Page 300
    ... all three classes. On 27 October 2011, the Board of Directors of Fiat S.p.A. voted to submit a proposal to Shareholders (in the extraordinary session of the General Meeting called for 4 April 2012) for the conversion of the Company's preference and savings shares into Fiat S.p.A. ordinary shares at...

  • Page 301
    ... a high level of liquidity and restrictions on Chrysler's ability to pay dividends to its members, the Board of Directors has decided not to propose a dividend on ordinary shares. Fiat's stated objectives for capital management are to create value for Shareholders as a whole, to ensure business...

  • Page 302
    ...purchase of own shares to a maximum value of â,¬1.2 billion. The conditions approved by Shareholders on 26 March 2010 remained unchanged, including the limit of 10% of share capital for all three classes, and with authorization effective until 26 September 2011. Although the Program remained on hold...

  • Page 303
    ... thousand for the year attributable to fair value measurement of investments in Fiat Industrial S.p.A. (for shares not allocated to servicing the stock option and stock grant plans), Fin.Priv. S.r.l. and Assicurazioni Generali S.p.A. Stock option reserve At 31 December 2011, the stock option reserve...

  • Page 304
    ...No own shares were bought or sold either in 2011 or 2010. Details of authorizations given by Shareholders for the purchase of own shares are provided above. On 22 February 2012, the number of own shares was reduced by 4,000,000 following assignment of shares vested under the 2009 Stock Grant Plan to...

  • Page 305
    ...Vesting date 31 December 2010 Vesting portion 100% On 3 November 2006, the Board of Directors of Fiat S.p.A. approved (subject to the subsequent approval of Shareholders in general meeting, which was given on 5 April 2007) an eight year stock option plan, which granted certain managers of the Group...

  • Page 306
    ...of Fiat S.p.A. without payment. Under this plan the rights vested in a single tranche on the approval of the Group's 2010 consolidated financial statements by the Board of Directors and the number of shares granted is determined as 25% of the rights granted in the event of reaching the 2009 targets...

  • Page 307
    ... 2011, the contractual terms of the plan were therefore as follows: Plan Stock Grant 2009 (amended) Beneficiary Chief Executive Officer Number of shares 4,000,000 Fiat S.p.A. 4,000,000 Fiat Industrial S.p.A. Vesting date 1st Quarter 2010 (*) 1st Quarter 2011 (*) 1st January 2012 1st January 2012...

  • Page 308
    ... are accounted for using the corridor approach. Finally, the Company also grants certain other deferred benefits to employees, which are generally paid when the employee has completed a pre-determined length of service. Measurement of the related obligation reï¬,ects the probability of payment and...

  • Page 309
    ... employees and the Chief Executive Officer following additional or individual labor agreements. Such schemes are unfunded. Other long-term employee benefits This item mainly includes benefits which are due to employees who have completed a determined length of service. At 31 December 2011 and 2010...

  • Page 310
    ... items current service cost and net actuarial (gains) losses recognized during the year are recorded in the income statement item personnel costs (see Note 5) if relating to employees and in other operating costs (see Note 6) if relating to the Chief Executive Officer. Associated interest costs are...

  • Page 311
    ... 2006 stock option plan for managers. Other non-current provisions At 31 December 2011, this item totaled â,¬929 thousand (â,¬1,021 thousand at 31 December 2010) and mainly relates to future amounts to be paid to employees who left the Company in previous years under a long-term benefit program...

  • Page 312
    ... Maturing in 2012 Maturing in 2013 Total debt payable to Group companies The fair value of these loans at 31 December 2011 was â,¬2,163 million and was calculated using market rates of interest appropriately adjusted to reï¬,ect the credit spreads applicable to Fiat at the balance sheet date. The...

  • Page 313
    ... benefits to be paid represents the present value of benefits (see Note 20) to be paid to a former Chief Executive Officer and management personnel that have left the Company. A breakdown of other non-current liabilities by due date is as follows: (â,¬ thousand) 31 December 2011 1,050 5,834 11...

  • Page 314
    ...services and amounts due to CAV.E.T. and CAV.TO.MI. in relation to the work performed over the latter part of the year (see Note 14). Trade payables are due within one year and their carrying amount at the reporting date is deemed to approximate their fair value. 25. Current debt At 31 December 2011...

  • Page 315
    ...Consolidated IRES - Other debt payable to Group companies and other related parties - Total debt payable to Group companies and other related parties - Social security payables - Current amounts payable to employees, directors and statutory auditors - Dividends payable - Other Total other debt Taxes...

  • Page 316
    ... sales price, which in this case is the consideration contractually agreed for the activities directly carried out by Fiat S.p.A. Contract costs relating to the contract revenue recognized totaled â,¬ 98,106 thousand at 31 December 2011 (â,¬97,258 thousand at 31 December 2010). Changes in contract...

  • Page 317
    ... December 2010), related to VAT credits of Italian subsidiaries transferred to Fiat S.p.A. as part of the VAT consolidation, in addition to prior year amounts due to former subsidiaries transferred to Fiat Industrial Group under the Demerger. At 31 December 2011, debt payable to Group companies and...

  • Page 318
    ... of credit lines resulting from the decrease in borrowing requirements relating to the reduction in the scope of operations. Guarantees outstanding at 31 December 2010 (totaling approximately â,¬1,320.0 million) that had been issued on behalf companies transferred to Fiat Industrial Group as...

  • Page 319
    ... of the Board of Directors dated 18 February 2011 - and as part of the framework of the Partnership and Cooperation Agreement signed on 28 March 2011 by Politecnico di Torino, Fiat S.p.A., University of Windsor (Canada) and Chrysler for an International Masters in Automotive Engineering - Fiat...

  • Page 320
    ... position are, on one side, the cash generated by or used in operating and investing activities and, on the other, the maturity and renewal profile of debt and invested liquidity and prevailing market conditions. The Group has adopted a series of policies and procedures to optimize management...

  • Page 321
    ... mainly of loans received from Fiat Finance S.p.A. and liabilities related to advances on the sale of receivables to banks (see Note 25). In addition, non-current debt to Fiat Finance S.p.A. (see Note 21) include variable rate loans. The cost of these positions is affected by changes in short-term...

  • Page 322
    ... Risk Management S.p.A. Fiat Group International S.A. Sirio S.c.p.A. Teksid S.p.A. Other Group companies Total Group companies Other related parties Total Group companies and other related parties Total % of total line item Other operating income 2011 2010 405 429 1,051 1,227 1,432 70 504 70 498...

  • Page 323
    ... gain on the sale of the investment in Fiat Switzerland S.A. to CNH International S.A. (a Fiat Industrial Group Company). 31 December 2011 Counterparty (â,¬ thousand) Other financial assets 12,892 12,892 12,892 12,966 99% Trade receivables 582 156 738 1,681 2,419 4,863 50% Current financial...

  • Page 324
    ...), property rental payments (Fiat Group Automobiles S.p.A. and its subsidiaries) and to tax authorities for Group company VAT credits management of current accounts, obtaining short- and long-term loans, management of derivative financial instruments and financial advisory services (Fiat Finance...

  • Page 325
    ... Fiat S.p.A. Statutory Financial Statements at 31 December 2011 Notes purchases of administrative, tax, corporate assistance and consultancy services and related IT systems (Fiat Services S.p.A. and Fiat I.T.E.M. S.p.A.), public relations services (Fiat Group Marketing & Corporate Communication...

  • Page 326
    ...591 122,903 Cash and cash equivalents Current financial receivables: - from Group companies - from third parties Non-current debt: - due to Group companies - due to third parties Current debt: - due to Group companies - due to third parties Net financial position - due to Group companies - due to...

  • Page 327
    ... would go ahead. Plans call for production of at least two new models for the export market, with production to reach 280,000 vehicles per year accompanied by a progressive return to full utilization of all plant employees. Investment is to commence in the second quarter of 2012 and retooling of the...

  • Page 328
    327 List of equity investments with additional information required by Consob (Communication DEM/6064293 of 28 July 2006) Subsidiaries Share Capital (*) (â,¬) 745,031,979 745,031,979 20,260,000 20,260,000 40,000,000 40,000,000 369,500,000 Result for the latest financial year (*) (â,¬) 369,666,285 ...

  • Page 329
    ... Financial Statements at 31 December 2011 Notes List of equity investments (continued) Subsidiaries Share Capital (*) (â,¬) 361,054,062 Result for the latest financial year (*) (â,¬) (27,721,564) Equity (*) (â,¬) 919,387,476 % owned by Fiat S.p.A. 98.64 Number of shares 356,158,302 Book value...

  • Page 330
    ... List of equity investments with additional information required by Consob (Communication DEM/6064293 of 28 July 2006) Associate companies Share Capital (*) (â,¬) Result for the latest financial year (*) (â,¬) Equity owned by Fiat S.p.A. Number of shares Book value (â,¬) Company and registered...

  • Page 331
    ... on 6 June 2011 and tax returns ("Modello Unico", IRAP, Domestic Tax Consolidation and Form 770) (2) Non-recurring activities performed in relation to the consolidated financial statements of Fiat Group, in connection with the acquisition and first-time consolidation of Chrysler Group LLC and...

  • Page 332
    ...International Financial Reporting Standards, as endorsed by the European Union through Regulation (EC) 1606/2002 of the European Parliament and Counsel, dated 19 July 2002; c) provide a fair and correct representation of the financial conditions, results of operations and cash ï¬,ows of the Company...

  • Page 333
    ©iStockphoto.com/Danin Tulic

  • Page 334
    333 Reports of the Independent Auditors Auditors' Reports Motions for AGM

  • Page 335
    ...Group") as of and for the year ended 31 December 2011, which comprise the statement of financial position, the income statement, the statement of comprehensive income, the statement of changes in equity, the statement of cash ï¬,ows and the related notes to financial statements. These consolidated...

  • Page 336
    ... in the annual report on Corporate Governance are consistent with the consolidated financial statements of the Fiat Group as of and for the year ended 31 December 2011. DELOITTE & TOUCHE S.p.A. Signed by Colin Johnston Partner Turin, Italy 27 February 2012 This report has been translated...

  • Page 337
    ... statements of Fiat S.p.A. as of and for the year ended 31 December 2011, which comprise the statement of financial position, the income statement, the statement of comprehensive income, the statement of changes in equity, the statement of cash ï¬,ows and the related notes to financial statements...

  • Page 338
    ...letter b) included in the annual report on Corporate Governance are consistent with the financial statements of Fiat S.p.A. as of and for the year ended 31 December 2011. DELOITTE & TOUCHE S.p.A. Signed by Colin Johnston Partner Turin, Italy 27 February 2012 This report has been translated into...

  • Page 339
    ©iStockphoto.com/Vladimir Melnik

  • Page 340
    339 Reports of the Board of Statutory Auditors Auditors' Reports Motions for AGM

  • Page 341
    ... the annual report on Corporate Governance are consistent with the consolidated financial statements of the Fiat Group as of and for the year ended 31 December 2011." In application of Article 41 (3) of Legislative Decree 127/1991, the Board of Statutory Auditors did not review that information or...

  • Page 342
    ... Committee in relation its role as committee for internal control and audit, pursuant to Article 19 of Legislative Decree 39/2010, entailing, in particular, oversight of: the financial reporting process; the effectiveness of the systems of internal control, internal audit and risk management; the...

  • Page 343
    ... the Notes to the Financial Statements the Board of Directors reports that there were numerous transactions involving the sale of goods and services between the Company and other Group companies and related parties, and confirms that they took place at standard market terms for the nature of goods...

  • Page 344
    ... Group LLC for 2009 and 2010. The Statutory Auditors were also informed of the new organization of Fiat Group, following the demerger and acquisition of control of Chrysler, in which Fiat has adopted a more operational role and become a focused car company. On 1 September 2011, a new Group Executive...

  • Page 345
    ...of the Internal Control Committee. On the basis of the control and oversight activities carried out during the year, we find nothing that would prevent approval of the statutory financial statements for the year ended 31 December 2011 or the motions put forward by the Board of Directors. Turin, 28...

  • Page 346
    Motions for AGM 345 Auditors' Reports Motions for AGM

  • Page 347
    ... 1) Motion for Approval of the Statutory Financial Statements and Allocation of 2011 Profit Shareholders, We hereby submit the Statutory Financial Statements for the year ended 31 December 2011 for your approval. In order to strengthen the Group's capital and maintain a high level of liquidity, we...

  • Page 348
    ... number of members of the Board of Directors and compensation Shareholders, The term of office of the Board of Directors, elected on 27 March 2009, expires at the General Meeting called for approval of the 2011 financial statements. You are therefore called upon to: determine the size of the Board...

  • Page 349
    ... outside the Group for which any of Fiat S.p.A.'s directors serve as non-executive directors. We are also proposing that the new term of office be for a period of three years, expiring on the date of the General Meeting called for approval of the 2014 financial statements, and that the annual fee...

  • Page 350
    ... referred to in point g) above, executive directors or executives with strategic responsibilities at any of the aforementioned entities. The Annual Report on Corporate Governance provides details of the number and names of the Company's independent directors. Auditors' Reports Motions for AGM

  • Page 351
    ...be provided at least 21 days prior to the date of the meeting. No individual shareholder, or shareholders connected by a relationship of control or significant inï¬,uence as defined in the Civil Code, may present or vote, even by means of an intermediary or a trustee company, more than one list of...

  • Page 352
    ...Election of the Statutory Auditors Shareholders, The term of office of the current Board of Statutory Auditors will expire on the date of the General Meeting called for approval of the 2011 financial statements. You are therefore called upon to elect new members to the Board which is to consist of...

  • Page 353
    ...Accordingly, we propose that, in accordance with Article 22 of Ministerial Decree 169/2010, compensation be set at an annual amount of â,¬100,000 for the Chairman and â,¬65,000 for the other Regular Auditors. 22 February 2012 On behalf of the Board of Directors /s/ John Elkann John Elkann CHAIRMAN

  • Page 354
    353 3) Audit Engagement: revision of fees Shareholders, As a result of the acquisition of a controlling interest in Chrysler Group LLC during 2011 and the consequent inclusion of Chrysler in the audit plan for Fiat Group's consolidated financial statements, and in consideration of the fact that, ...

  • Page 355
    ... Ernst & Young S.p.A. The Statutory Auditors" Shareholders, We propose that you approve the motion for an increase in fees for Reconta Ernst & Young S.p.A., as proposed by the Board of Statutory Auditors. 22 February 2012 On behalf of the Board of Directors /s/ John Elkann John Elkann CHAIRMAN

  • Page 356
    ...1998 means the Company together with its subsidiaries means the decision-making body which supports the CEO of the Company. The Group Executive Council is responsible for reviewing the operating performance of the businesses, setting performance targets, making key strategic and investment decisions...

  • Page 357
    ... means the LTI Plan proposed and described in the Report to the Shareholders issued by the Company pursuant to Article 114bis of the Financial Act means the Group's annual short term incentive plan that is linked to both the achievement of key financial metrics of operating performance of the Group...

  • Page 358
    ...to the Board in relation to individual compensation plans for the Chairman, Chief Executive Officer and other directors with specific responsibilities, as well as in relation to the establishment of performance targets for their variable compensation and, on an annual basis, verifying the level of...

  • Page 359
    ... in key positions toward the achievement of Company and Group performance targets, maintaining the interests of management continuously aligned to those of shareholders. D.2 Principles The principles and criteria applied in setting compensation for executive members of the Board of Directors, and...

  • Page 360
    ... for any other special offices granted thereto within the Boards of Directors of the Company's subsidiaries. Payment of short-term variable compensation is subject to the level of achievement of specific Group performance targets established annually by the Board of Directors, based on the...

  • Page 361
    ... (targeted annual performance bonus and annualized value of LTI awards) of the targeted Annual Total Direct Compensation. Special retention awards of equity may make the annualized component even greater. The current individual compensation plan of Executive Directors holding special offices...

  • Page 362
    ... be granted health and welfare benefits, private use of transport means and discounts on the purchase of Group's products. For security reasons, Executive Directors must travel with means of transport owned, leased or procured by the Group. For the same reasons, the Group may also bear part of the...

  • Page 363
    ...Plan is publicly available on the Company's website: www.fiatspa.com. I. Consistency with the long-term interests of the Company and the Risk Management Policy The long-term interests of the Company and the risk management policy of the Group are integral part of the Group's Internal Control System...

  • Page 364
    ... policy adopted by other Companies The determination of compensation levels is based on continuous monitoring of levels for the market in general and for the sector, including benchmarking against groups of a comparable size, complexity and standing." 22 February 2012 On behalf of the Board...

  • Page 365
    ...the Group and long term shareholder interests. The Plan (as defined below) takes the form of stock grants and entitles the relevant beneficiaries to receive, under specific conditions and without cash consideration, a number of Fiat S.p.A. (the "Company") ordinary shares (the "Shares") equivalent...

  • Page 366
    ... of the Company's and Group's performance. With these objectives, the Board of Directors, advised by the Compensation Committee, constantly monitors the effectiveness of existing incentive schemes in relation to the global market and, in particular, the industry in which the Group operates. The...

  • Page 367
    ... tools that are consistent with current market conditions and linked to key performance indicators for the Group. Tax effects of the Plan benefits are the responsibility of the Beneficiaries. Given its characteristics, no special funds (including the special fund for the encouragement of worker...

  • Page 368
    ... rights relating to each of the three yearly grant cycles will vest ratably upon each of three anniversary dates of the grant. The Plan is to be serviced through treasury shares bought on the market without issuing new shares and, therefore, would have no dilutive effects. The Company will purchase...

  • Page 369
    ... the annual non-cash cost of the proposed Plan was approximately â,¬150 million for the three year duration of the Plan. Those costs will be recalculated on the date that the proposals, if approved, become effective, on the basis of the price of Company Shares and the stated vesting conditions. For...

  • Page 370
    ...Executives holding key positions with significant impact on business results Chief Executive Officer of Fiat S.p.A. - 7,000,000 22/02/2012 - 4.8381 2012-2015 - 24,000,000 - - - 2012-2017 1 Official price reported on the Stock Exchange on 22 February 2012, the date on which the Board...

  • Page 371
    ... individuals in key positions toward the achievement of Company and Group performance targets. For that purpose, we asked you to authorize the use of 31,000,000 ordinary shares, in addition to the 16,920,000 shares already set aside to service other existing incentive plans. In relation to those...

  • Page 372
    ... related to the shares, such as, for example, stock lending). Own shares may be used to service existing incentive plans - as well as any additional plans that may be established by the Board in the future and subsequently submitted for the approval of Shareholders (based on the prices established...

  • Page 373
    ... savings shares into more liquid ordinary shares thus improving the ï¬,oat of the Company's ordinary shares and simplifying the transparency of Fiat's governance and capital structure. The following table shows historical information on the trading volume and prices of each class of shares currently...

  • Page 374
    ... pari passu to ordinary shares, preference shares and savings shares. With respect to governance rights, pursuant to article 145 of the Financial Act and article 6 of the Company's by-laws, savings shares do not grant the right to vote in the Company's general shareholders' meeting, while they grant...

  • Page 375
    ...the relevant class. Please note that, as of February 22, 2012, Fiat holds No. 34,568,458 ordinary treasury shares, equal to 2.71% of the share capital. 5. Intention of the controlling shareholder to do trading on the shares object of the Conversion By a press release issued on October 27, 2011 Exor...

  • Page 376
    ... to pay any cash adjustment to the Company. 9. Conversion ratios As announced in the press releases dated October 27, 2011 and February 22, 2012, the Board of Directors of Fiat S.p.A. resolved on those dates to propose to shareholders the compulsory conversion of preference and savings shares into...

  • Page 377
    ... its resolutions, the Board of Directors took October 26, 2011 (i.e. the day before the announcement of the Conversions proposal) as the last reference date with respect to the market price of ordinary, preference and savings shares. This reference date has been accordingly used for the purposes of...

  • Page 378
    ...and 31.6% for preference and savings shares respectively). On October 26, 2011 preference shares closed at a 33.7% discount with respect to ordinary shares, whilst savings shares closed at a 31.6% discount. The implied conversion ratios based on closing market prices on that day were therefore 0.663...

  • Page 379
    ... premia paid in precedent transactions, the Board of Directors used a three month period to calculate the converted class average historical share price in order to mitigate the impact of potential speculations and rumours close to the announcement date that might have affected the share price...

  • Page 380
    ... liquid security, traded on the market at higher valuations than the special shares and with full voting rights attached, and will maintain the rights to receive the 2011 dividend. The earnings attributable to the shareholders of the controlling company generated by the Group in a certain year being...

  • Page 381
    ... communicate to the market the results of such offers by a press release to be published within 2 business days of the closing of each offer. 12. Amount of preference and savings shares to be converted and of ordinary shares to be offered under the Conversions Subject to the conditions precedent...

  • Page 382
    .... 103,292,310 preference shares, both having a par value of â,¬3.53, should only savings shares be converted. 17. Changes to the ownership structure as a result of the Conversions Assuming that the current ownership of the share capital of the Company by the controlling shareholder (as described in...

  • Page 383
    ... right and (ii) the withdrawing shareholder is the account registered holder of the Withdrawal Shares on the date of the above communication. The Notice shall contain the following information: (i) the personal data of the withdrawing shareholder, including the tax code; (ii) the address of the...

  • Page 384
    ...residual Withdrawal Shares not purchased by the shareholders, said Withdrawal Shares will be offered by the directors of the Company on the market for one day (the offers under points (i) and (ii) are referred to as the "Offer"); (iii) if Withdrawal Shares are not fully sold after the Offer and - in...

  • Page 385
    ... new ordinary shares, through paid capital contributions, exclusively to executives employed by the Company and/or its subsidiaries in accordance with the relevant incentive plan. Pursuant to the resolutions adopted by the Board of Directors on 3 November 2006 and subsequent to the demerger to Fiat...

  • Page 386
    ...the common interests of the holders of preference and savings shares, in relation to which a dedicated funds are is approved in the respective Special Meetings of Shareholders, shall be borne by the Company up to a maximum annual amount of â,¬30,000 for each class. In order to ensure that the Common...

  • Page 387
    ... n Unchanged Net profit reported in the annual financial Unchanged statements shall be allocated as follows: n to the legal reserve, 5% of net profit until the amount of the reserve is equal to one-fifth of share capital; per share; n Unchanged n to savings shares, a dividend of up...

  • Page 388
    ...basis. Where the Board of Directors sees fit in relation Unchanged to the Company's operating results and within the conditions established by law, it may authorize the payment of interim dividends during the year. Any dividends unclaimed within five years of Unchanged the date they become payable...

  • Page 389
    ... of the Conversions, will be made available to the public, in the manner indicated in the Issuers Regulation, by the stock market trading day before the beginning of the Conversions period at the latest. 22 February 2012 On behalf of the Board of Directors /s/ John Elkann John Elkann CHAIRMAN

  • Page 390
    ...) ordinary shares in exchange for savings shares; 3) to establish that the conversion of preference shares and the payment of any relevant withdrawal share will take place subject to the condition that the conversion is approved by the relevant special meeting and the disbursement in relation to the...

  • Page 391
    ... which Shareholders may resolve to distribute. Where the Board of Directors sees fit in relation to the Company's operating results and within the conditions established by law, it may authorize the payment of interim dividends during the year. Any dividends unclaimed within five years of the date...

  • Page 392
    ... Fiat Industrial S.p.A., and to the resolutions adopted by the Extraordinary Shareholders' Meeting on 4 April, 2012, share capital may be increased by a maximum of â,¬33,962,406.25 through the issue of up to 9,566,875 new ordinary shares, through paid capital contributions, exclusively to executives...

  • Page 393
    ... two years. In the event of a change to the par value of shares, the amounts stated above shall be adjusted on a pro rata basis. Where the Board of Directors sees fit in relation to the Company's operating results and within the conditions established by law, it may authorize the payment of...

  • Page 394
    ... profit which Shareholders may resolve to distribute. In the event of a change to the par value of shares, the amounts stated above shall be adjusted on a pro rata basis. Where the Board of Directors sees fit in relation to the Company's operating results and within the conditions established by...

  • Page 395
    394 Other Corporate Publications and web CORPORATE GOVERNANCE SUSTAINABILITY REPORT http://www.fiatspa.com/en-us

  • Page 396
    ... but it is also actively used as a platform through which the Group and its brands can clearly and effectively communicate their message. Social networks are used as an integrated part of the Group's overall communication strategy to provide relevant and up-to-date corporate information to the...

  • Page 397
    .... +39 011 00.62709 Fax +39 011 00.63796 email: [email protected] Sustainability Tel. +39 011 00.63908 email: [email protected] Other Contacts: www.fiatspa.com/en-us/ sustainability/Pages/contatti.aspx Press Office Tel. +39 011 00.63088 Fax +39 011 00.62459 email: mediarelations...

  • Page 398
    ... on eco-responsible Cocoon Silk paper (150 gsm for internal pages and 300 gsm for cover) produced by Arjowiggins Graphic. Cocoon Silk is an extra-white coated paper made from 100% recycled fibers with EU Flower certification (FR/011/003). By using this paper, rather than a non-recycled paper, the...

  • Page 399

  • Page 400

  • Page 401
    Illustrations and creative design Atelier Roger Pfund, Communication visuelle S.A. Geneva, Switzerland Graphic design Sunday Turin, Italy Editorial coordination Sunday Turin, Italy Printing Graf Art - Officine Grafiche Artistiche Venaria (TO), Italy Printed in Italy March 2012

  • Page 402
    ... the leadership of this Group. I like to imagine the moment when each of us, in our own way, sets out on a course and makes choices, convinced of our own truth. Fiat S.p.A. Registered Office: 250 Via Nizza, Turin, ITALY Share Capital: â,¬4,465,600,020 Turin Companies Register/ Tax Code: 00469580013