Chrysler 2011 Annual Report Download - page 219

Consolidated
Financial
Statements
at 31 December
2011
Notes
218
31. Explanatory notes to the Statement of Cash Flows
The Statement of cash flows sets out changes in cash and cash equivalents during the year. As required by IAS 7 – Statement of Cash Flows, cash flows
are separated into operating, investing and financing activities. The effects of changes in exchange rates on cash and cash equivalents are shown separately
under the line item Translation exchange differences.
Cash flows from (used in) operating activities mostly derive from the Group’s main revenue producing activities.
The cash flows generated by the sale of vehicles under buy-back commitments, net of the amounts included in Profit/(loss) for the year, are included under
operating activities in a single line item which includes changes in working capital arising from these transaction.
Cash flows generated by operating lease arrangements are included in operating activities in a single line item which includes capital expenditures,
depreciation, impairment losses and changes in inventories.
For 2011, Other non-cash items (a negative balance of €1,106 million) include the reversal of the following non-cash items:
unusual income totalling €2,017 million arising from remeasurement of the 30% interest previously held in Chrysler and Fiat’s right to receive an additional
5% on the occurrence of the final Performance Event, which took place in early January 2012;
impairment losses on property, plant and equipment and other intangible assets amounting to €713 million;
the unusual expenses of €220 million arising on the revaluation of the inventories of Chrysler on initial consolidation as the consequence of measuring
the identifiable assets acquired and identifiable liabilities assumed at fair value, recognised in profit or loss for the period;
the negative change in fair value of €110 million arising from the equity swaps on the ordinary shares of Fiat S.p.A. and Fiat Industrial S.p.A.;
the share of the profit or loss of investees accounted for using the equity method and the impairment losses recognised during the period for investments
measured at cost totalling €123 million;
the other unusual income of €69 million resulting from changes in Other post-employment benefits in the Chrysler sector.
In 2010, with respect to Continuing Operations, Other non-cash items of €89 million included €134 million for the reversal of impairment losses on assets, a
€107 million gain in the mark-to-market value of two stock option-related equity swaps on Fiat shares, the share of the profit or loss of investees accounted
for using the equity method and the impairment losses recognised during the period for investments measured at cost.
Cash flows for income tax payments net of refunds amount to €532 million in 2011 (€724 million in 2010 with reference to the Fiat Group as a whole).
Interest of €1,569 million was paid and interest of €793 million was received in 2011 (interest of €1,727 million was paid in 2010 and interest of €1,248
million was received in 2010 with reference to the Fiat Group as a whole). Amounts indicated are inclusive of interest rate differentials paid or received on
interest rate derivatives.
The item Cash and cash equivalents from the consolidation of Chrysler, net of consideration paid for the additional 16% ownership interest, consists of the
cash and cash equivalents arising from the consolidation of Chrysler at the Acquisition date amounting to €6,505 million net of the consideration paid for
the acquisition of the additional 16% ownership interest, amounting to €881 million ($1,268 million), as explained in further detail in the Section – Investment
in Chrysler.
Finally, following the occurrence of the Technology Event and the Distribution Event, the rights associated with Fiat’s Class B membership interests
increased to 25% in January 2011 and to 30% in April 2011 without the payment of cash: these transactions have therefore not been included in the
Statement of cash flows.
The purchases in 2011 of the additional 6.031% and 1.508% fully-diluted ownership interests in Chrysler from the U.S. Treasury and the Canadian
government, at respective prices of $500 million and $125 million (€351 million and €87 million, respectively), have been classified under (Purchase)/sale of
ownership interests in subsidiaries. Comparative amounts relating mainly to the acquisition of the 5% interest in Ferrari S.p.A. in 2010 have been reclassified
on a consistent basis.