Chrysler 2011 Annual Report Download - page 221

Consolidated
Financial
Statements
at 31 December
2011
Notes
220
In addition, on 21 July 2011 the U.S. Treasury assigned Fiat its rights under the Equity Recapture Agreement. The Equity Recapture Agreement provides
Fiat the rights to the economic benefit associated with the membership interests held by the VEBA Trust once the VEBA Trust receives proceeds, including
certain distributions, in excess of $4.25 billion plus interest of 9% per annum from 1 January 2010 (“Threshold Amount”). Once the VEBA Trust receives
the Threshold Amount, any additional proceeds payable to the VEBA trust for Chrysler membership interest and any membership interest retained by the
VEBA Trust are to be transferred to Fiat for no further consideration. In addition, Fiat has the right to acquire VEBA Trust’s entire membership interest in
Chrysler at a price equivalent to the specified Threshold Amount, less any proceeds already received by the VEBA Trust on that interest. These rights have
been recognised in the Group’s Statement of Financial Position at €58 million ($75 million).
If the VEBA Trust seeks to transfer its membership interests, it must provide notice to Fiat and Fiat will have an irrevocable non−transferable first option to
purchase all or a portion of the offered securities at the same price and on the same terms and conditions as those negotiated by the VEBA Trust.
VM Motori
Following the acquisition of the 50% interest in the VM Motori group, the Fiat Group is party to a put and call agreement with General Motors under which
two years after the date of this acquisition Fiat will have the right to buy the residual interest in VM Motori from General Motors. Furthermore, General Motors
has a put option to sell its interest in VM Motori to Fiat if certain conditions occur.
Sales of receivables
The Group has discounted receivables and bills without recourse having due dates after 31 December 2011 and amounting to €3,858 million (€3,524
million at 31 December 2010), which refer to trade receivables and other receivables for €3,031 million (€2,761 million at 31 December 2010), and
receivables from financing for €827 million (€763 million at 31 December 2010). These amounts include receivables, mainly from the sales network, sold
to jointly-controlled financial services companies (FGA Capital) for €2,495 million (€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 equipment with an average term of 10-20 years and 3-5 years,
respectively. At 31 December 2011 the total future minimum lease payments under non-cancellable lease contracts are as follows:
At 31 December 2011 At 31 December 2010 (*)
(€ million)
due within
one year
due
between
one and
five years
due
beyond
five years Total
due within
one year
due
between
one and
five years
due
beyond
five years Total
Future minimum lease payments under operating lease agreements 136 325 227 688 34 91 99 224
(*) The amounts relate to Continuing Operations.
During 2011, the Group has recorded costs for lease payments of €118 million (€48 million included in Profit/(loss) from Continuing Operations in 2010).
Contingent liabilities
As a global group with a diverse business portfolio, the Group is exposed to numerous legal risks, particularly in the areas of product liability, competition
and antitrust law, environmental risks and tax matters, dealer and supplier relationship, intellectual property rights. The outcome of any current or future
proceedings cannot be predicted with certainty. These proceedings seek recovery for damage to property, personal injuries and in some cases include a
claim for exemplary or punitive damage. It is therefore possible that legal judgments could give rise to expenses that are not covered, or not fully covered,
by insurers’ compensation payments and could affect the Group’s financial position and results.
At 31 December 2011, contingent liabilities estimated by the Group for which no provisions have been recognised since an outflow of resources is
not considered to be probable and for which a reliably estimate can be made amount to approximately €100 million (approximately €131 million at 31
December 2010). Furthermore, contingent assets and expected reimbursement in connection with these contingent liabilities for approximately €14 million
(€17 million at 31 December 2010) have been estimated but not recognised.