Chrysler 2011 Annual Report Download - page 293

Fiat S.p.A.
Statutory
Financial
Statements
at 31 December
2011
Notes
292
Significant changes to investments in subsidiaries occurring during the year were as follows:
following the purchase of the 5% equity interest held in Ferrari S.p.A. by Mubadala Development Company PJSC – with delivery of the shares to Fiat
S.p.A. and payment by Fiat S.p.A. of the consideration stipulated in the call option agreement exercised in 2010 (see Note 12) – a €132.4 million increase
in the carrying amount of the investment in Ferrari S.p.A. was recognized, which is equivalent to the consideration paid for the shares (€122.4 million)
and the cost of the call option premium (€10.0 million)
capital contributions were made to certain subsidiaries to strengthen their capital base in view of operating results and planned investments. The
subsidiaries concerned were Comau S.p.A. (€120.0 million), Maserati S.p.A. (€70.0 million) and Teksid Aluminum S.r.l. (€30.0 million). With regard to
Maserati S.p.A., Fiat S.p.A. has committed to further capital contributions during 2012 of up to a maximum of €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 entities, and the following transactions were carried out:
demerger of activities from Fiat Partecipazioni S.p.A. and transfer to Fiat Gestione Partecipazioni S.p.A.
merger of Business Solutions S.p.A. into Fiat Gestione Partecipazioni S.p.A.
contribution by Fiat S.p.A. of its interest in Rimaco S.A. (100%) to Fiat Gestione Partecipazioni S.p.A., with resulting capital increase
As these transactions involved companies under the direct control of Fiat S.p.A., recognition was based on existing values. Accordingly, the increase
in the investment in Fiat Gestione Partecipazioni S.p.A., totaling €616.0 million, corresponds to the sum of the carrying amounts of the shareholdings
transferred (€32.2 million for Rimaco S.A. and €36.4 million for Business Solutions S.p.A., the latter net of impairment losses which were also transferred),
as well as the net value of the assets and liabilities transferred by Fiat Partecipazioni S.p.A. (€547.4 million) determined on a pro rata basis with reference
to the book value of equity reported in the subsidiary’s financial statements at 31 December 2011.
Decreases relate to disposal of the investments in Fiat Finance North America Inc. and Fiat Switzerland S.A. discussed previously (see Note 3).
Impairment (losses)/reversals includes impairment losses and reversals arising from application of the cost method, as described in Note 2 above.
With regard to the shareholding in Fiat Group Automobiles S.p.A., the estimates and assumptions used in preparing the financial statements (see “Use of
Estimates”) provided reasonable support for maintaining the 31 December 2010 carrying amount unchanged. The current book value of the shareholding
(€5,524 million at 31 December 2011) reflects impairment losses of €2,907 million, recognized prior to 2005 and again in 2009, that could potentially be
reversed in future periods.
Similarly, the carrying amount of Fiat Powertrain Technologies S.p.A. was maintained unchanged, in consideration of the fact that its business consists
almost exclusively of supply to FGA.
For the remaining significant shareholdings – in particular, Magneti Marelli S.p.A. and Ferrari S.p.A. (recognized at historic cost) – no indications of
impairment were identified. This also takes into consideration the carrying amounts of equity recognized in the consolidated statement of financial position,
for which the recoverability of assets has already been adequately assessed. With regard to Magneti Marelli, the reduction in the book value of equity was
almost entirely attributable to non-recurring expense associated with writedowns of goodwill and fixed assets essentially related to repositioning of activities
in the plastics segment. The earnings outlook, which is also supported by diversification of the product and customer portfolio, as well as the geographic
mix, provides ample support for maintaining the existing carrying amount for the investment.