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At 31 December 2012
Annual Report
107th financial year

Table of contents

  • Page 1
    Annual Report At 31 December 2012 107th financial year

  • Page 2
    Annual Report At 31 December 2012

  • Page 3

  • Page 4
    ... available on the corporate website www.fiatspa.com (Investor Relations/Shareholder Info/Shareholder Meetings) contains complete information and instructions relating to the rights exercisable by Shareholders. The Annual Report and Annual Report on Corporate Governance are available at the Company...

  • Page 5
    ... Highlights Fiat Group around the World Group Brands Shareholders Key Events in 2012 A Responsible Global Group Report on Operations Main Risks and Uncertainties to which Fiat S.p.A. and its Subsidiaries are Exposed Financial Review - Fiat Group Commercial Performance by Segment Mass-Market Brands...

  • Page 6
    ...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 and indirect subsidiaries. The terms "Fiat", "Fiat Group" or simply "Group" are used to...

  • Page 7
    ... Montezemolo Gian Maria Gros-Pietro (2)(3) Patience Wheatcroft (1)(3) INDEPENDENT AUDITORS Reconta Ernst & Young S.p.A. (1) Member of the Nominating, Corporate Governance and Sustainability Committee. (2) Member of the Internal Control and Risk Committee. (3) Member of the Compensation Committee.

  • Page 8

  • Page 9
    ... Dear Shareholders, I am pleased to present Fiat Group's 2012 Annual Report. We closed the year with all targets achieved or exceeded, including revenues of nearly â,¬84 billion and trading profit above â,¬3.8 billion. Worldwide shipments of passenger cars and light commercial vehicles increased...

  • Page 10
    ... Shareholders, The 2012 Annual Report is the first to consolidate Chrysler Group's results for a full year and starts to reï¬,ect the benefits of our alliance. What Fiat and Chrysler have accomplished over the past three and a half years in terms of sharing and integrating know-how, best practices...

  • Page 11
    ... our key markets, with revenues up 50% and trading profit nearly double the prior year's level. In China, we opened a new plant in Changsha and began local production of the Fiat Viaggio, representing just the first step in our plans for development in the world's largest car market. In India, we...

  • Page 12
    ...of local communities and the environment, as well as to the legacy that we intend to leave future generations. Our commitment to operating responsibly and promoting a model of sustainable development is part of the tradition and values of the Group that continue to be recognized internationally. For...

  • Page 13

  • Page 14
    The Group at a Glance 14 16 18 23 26 34 Highlights Fiat Group around the World Group Brands Shareholders Key Events in 2012 A Responsible Global Group

  • Page 15
    ... savings shares into ordinary shares on January 1st. For prior years, comparable data is not available. Note 13 to the Consolidated Financial Statements provides additional information on the calculation of basic and diluted earnings per share. (4) Includes capitalized R&D and R&D charged directly...

  • Page 16
    ... in the Assurance Statement issued by SGS and published in the Fiat Group 2012 Sustainability Report. (1) Includes Chrysler Group for the full year. (2) Restated to include Chrysler Group and exclude companies transferred to Fiat Industrial S.p.A. on 1 January 2011. (3) Data for 2011 and 2010 has...

  • Page 17
    16 The Group at a Glance Fiat Group around the World Fiat Group around the World The Group carries out industrial and financial services activities in the automobile sector through companies located in approximately 40 countries and it has commercial relationships with customers in more than 140...

  • Page 18
    17 16 Brands 77 R&D Centers 158 Plants 214,836 Employees The Group at a Glance North America South America Rest of World 54% 34% 48 16 14% 22% 19 5 8% 3% 14 4

  • Page 19
    ...-size segments. Consistent with the operational integration of Fiat and Chrysler, in 2011 the Group established a new organizational structure suited to the global scale of the business, with four operating regions for the mass-market car brands - NAFTA (U.S., Canada and Mexico), LATAM (Central and...

  • Page 20
    ... its relaunch in 2007. Fiat Professional Professionals serving professionals. Fiat's commercial vehicle brand offers large and small businesses an extensive range of models for every working and transport need. Fiat Professional's vehicles are designed to minimize operating costs and maximize pro...

  • Page 21
    ... capable vehicles. The Jeep® brand delivers customers an experience that no other automotive brand can possibly offer. Dodge For nearly 100 years, Dodge has defined passionate and innovative vehicles that stand apart in performance and style. Building upon its rich heritage of muscle cars, racing...

  • Page 22
    ... in 2012 it celebrated 75 years in business. As part of the integration between Fiat and Chrysler Group, Mopar® expanded its coverage in the EMEA area with the integration of service, spare parts and customer service programs. The decision of the two partners to share components and systems across...

  • Page 23
    ... production systems: from body welding to machining and engine assembly. Comau applies its significant know-how in automation to a wide range of industrial applications, as well as producing industrial robots for a variety of specialized applications and giving customers a high level of service...

  • Page 24
    ...detailed information on operating performance and on business strategies and projections for the plan period by attending sector conferences and investor meetings. Shareholders can also contact the Company at the following: The Group at a Glance For holders of Fiat shares: Toll-free number in Italy...

  • Page 25
    ... the S&P 500 increased by 11.7% year-over-year. In Italy, the national stock market index posted a modest 4% gain, reversing the previous year's negative trend (down ~25% vs. 2010) that resulted from the Euro-zone debt crisis. Major Shareholders At the date of this Report, Fiat had a total of 1,250...

  • Page 26
    ...5.00 4.00 (1) For 2011, the calculation assumes conversion of all Fiat S.p.A. preference and savings shares into ordinary shares on January 1st. Reference Price per Share (*) (figures in â,¬) 28.12.12 3.79 Ordinary shares (Source: Reuters) (*) Equivalent to closing auction price. 3.00 2.00 01...

  • Page 27
    ... Key Events in 2012 Key Events in 2012 JANUARY Fiat announces achievement of "Ecological Event" (3rd Performance Event in the Chrysler Group Amended and Restated LLC Operating Agreement) and ownership interest in Chrysler increases a further 5% to 58.5%. Dodge Dart included in Kelley Blue Book...

  • Page 28
    ... selling cars in Europe (2011: 118.2 g/km). Fiat is also first in group ranking (average emissions down 2.6 g/km to 123.3 g/km). At Geneva Motor Show, Ferrari presents the F12 Berlinetta, its most powerful street car ever. The new model receives accolades for its innovative design and engineering...

  • Page 29
    ... On May 21st, Fiat S.p.A. completes mandatory conversion of all preference and savings shares into ordinary shares approved by shareholders on 4 April 2012. Fiat and Tata agree to transfer Fiat brand commercial and distribution activities in India to a separate Fiat Group company to enable greater...

  • Page 30
    ... 3.3% of Chrysler equity). Once purchase of the two tranches is complete, Fiat will hold 65.17% of Chrysler. On July 16th, Fiat issues â,¬600 million bond (7.75%, due October 2016). Fiat Group Automobiles S.p.A. (FGA) and PSA Peugeot Citroën (PSA) sign agreement to transfer FGA shareholding in...

  • Page 31
    30 The Group at a Glance Key Events in 2012 SEPTEMBER Fiat S.p.A. included in DJSI World and Europe for 4th consecutive year, with a score of 91/100 compared to average of 74/100 for the sector. Membership in the DJSI World and Europe is limited to companies judged best-inclass in economic, ...

  • Page 32
    ... the Jeep Grand Cherokee "SUV of Texas" by the Texas Auto Writers Association. On October 10th, Moody's lowers Fiat S.p.A.'s Corporate Family Rating from 'Ba2' to 'Ba3' and, in accordance with their methodology, also lowers ratings on notes issued by Fiat Finance & Trade Ltd. S.A. and Fiat Finance...

  • Page 33
    ...Key Events in 2012 DECEMBER The international press road tests the new Maserati Quattroporte before debut at 2013 Detroit Auto Show. Ferrari receives "Supercar of the Year" from BBC's Top Gear and "Golden Steering Wheel" from Autobild/Bild am Sonntag for F12 Berlinetta. At annual Top Gear Awards...

  • Page 34

  • Page 35
    ...A Responsible Global Group A Responsible Global Group " A commitment to operating responsibly and promoting sustainable development is intrinsic to Fiat Group's tradition and values. Over time that commitment has led to a sustainability strategy that is integrated with the Group's business model...

  • Page 36
    ... 6% of Fiat S.p.A.'s free-ï¬,oat shares. As a result of the increasing integration of sustainability-related issues in the Group's business model, this year's Annual Report includes a more expanded sustainability section. The objective is to further increase the level of information available to...

  • Page 37

  • Page 38
    ...Research, Innovation and Sustainable Mobility Environmental Performance of Plants and Non-Manufacturing Processes Employees and Local Communities Corporate Governance Transactions between Group Companies and with Related Parties Subsequent Events and Outlook Financial Review - Fiat S.p.A. Motion for...

  • Page 39
    ... financial condition of European institutions, which could result in greater volatility, reduced liquidity, widening of credit spreads and lack of price transparency in credit markets. In addition, widespread austerity measures in Europe and in any other countries in which the Group operates could...

  • Page 40
    ... are all highly competitive 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...

  • Page 41
    ... their share in existing markets and/or to expand into new markets through the development of innovative, high-quality products that provide adequate profitability. On 30 October 2012, the Group outlined its strategic direction in response to the continued crisis in the European car industry...

  • Page 42
    ... sales of vehicles and service parts, reducing costs or both, the Group's financial condition and results of operations may be materially adversely affected. As a result, any adverse development for Chrysler and the related integration could have a material adverse effect on the Group's business...

  • Page 43
    ... members of management to effectively manage the Group and individual areas of business. The loss of any senior executive, manager or other key employees without an adequate replacement or the inability to attract, retain and incentivize senior executive managers, other key employees or new quali...

  • Page 44
    ... covenants that limit Chrysler's ability to, among other things: incur or guarantee additional secured indebtedness; pay dividends or make distributions or purchase or redeem capital stock; make certain other restricted payments; incur liens; transfer and sell assets; enter into sale and lease-back...

  • Page 45
    ... Chrysler with consideration in the form of a non-refundable upfront payment which is payable prior to the launch of the new financing service, as well as on-going revenue sharing opportunities and commitments with respect to available funding, approval and penetration rates, price competitiveness...

  • Page 46
    ... dealers and retail customers do not otherwise have sufficient access to such financing, Chrysler's and Fiat's vehicle sales and market share may suffer, which would adversely affect the Group's business prospects, earnings and financial position. Risks associated with Chrysler's pension plans...

  • Page 47
    46 Report on Operations Financial Review - Fiat Group Financial Review - Fiat Group Operating Performance Fiat with Chrysler 83,957 71,474 6,731 1,835 (103) 3,814 107 (91) 15 (138) 3,677 (1,641) 2,036 625 1,411 2012 Fiat excluding Chrysler 35,566 31,098 2,999 1,037 (77) 355 110 (91) 63 (107) 204 ...

  • Page 48
    ...of the mark-to-market of the Fiat stock option-related equity swaps (a â,¬34 million gain for 2012 and â,¬108 million loss for 2011), net financial expense increased by â,¬171 million, mainly reï¬,ecting higher net debt levels. Profit before taxes was â,¬2,036 million. Excluding Chrysler, there was...

  • Page 49
    ... LATAM APAC EMEA Luxury and Performance Brands Components and Production Systems Other Eliminations and adjustments Total Fiat Group (*) Includes Chrysler from 1 June 2011. (1) Includes â,¬2,017 million unusual income from measurement of the stake in Chrysler upon acquisition of control, net of the...

  • Page 50
    ... Net revenues Trading profit EBIT Shipments (units in thousands) Vehicles shipments in the LATAM region totaled 979,000 units for 2012, representing an increase of 5% over the prior year (on a pro-forma basis) and the Group's all-time record for the region. The Brazilian market reacted positively...

  • Page 51
    ... on Operations Financial Review - Fiat Group APAC (â,¬ million) 2012 3,128 260 255 103 2011 1,513 88 63 53 Change 1,615 172 192 50 2011 pro-forma 2,086 144 119 74 Change 1,042 116 136 29 Net revenues Trading profit EBIT Shipments (units in thousands) Vehicle shipments in the APAC region...

  • Page 52
    ... services. Maserati In 2012, Maserati shipped a total of 6,288 cars, a 2% increase over 2011. In the U.S., shipments totaled 2,904 vehicles, representing the best volume performance in 8 years and confirming the U.S. as the brand's number one market. Revenues totaled â,¬634 million for the year...

  • Page 53
    ... launched during the second half of 2011. Electronic Systems also reported robust performance (+21%) on the back of higher sales of telematic and body products to external customers. The After Market business line also posted a marginal improvement in revenues (+2%), with increases in the U.S. and...

  • Page 54
    ... in bond maturities. In addition, repayment of medium-term borrowing totaling â,¬1.5 billion was more than offset by â,¬1.9 billion in new medium-term borrowings. Dividends of â,¬58 million were paid during the year (on Fiat preference and savings shares and to minority shareholders of subsidiaries...

  • Page 55
    ... December 2011), primarily from the dealer network, that were sold to jointly-controlled financial services companies (FGA Capital Group). At constant exchange rates, working capital decreased â,¬0.7 billion, with Chrysler reporting a â,¬1.3 billion decrease and Fiat excluding Chrysler reporting an...

  • Page 56
    ... Net debt Industrial Activities Financial Services Cash, cash equivalents and current securities Undrawn committed credit lines Total available liquidity (a) Includes current financial receivables from FGA Capital Group. (b) Includes value of intercompany agreements recognized as finance leases...

  • Page 57
    ... includes companies that provide retail and dealer finance, leasing and rental services in LATAM, APAC, and EMEA and for Ferrari worldwide. Financial Services also includes FGA Capital (the joint venture between Fiat Group Automobiles and Crédit Agricole), which is accounted for under the equity...

  • Page 58
    ... and performance brands (Ferrari) Total Mass-market brands (LATAM, APAC, EMEA) The Group offers financial services in Europe, Latin America and China directly through its financial services companies. In other markets, Fiat Group sales activities are supported by vendor programs offered jointly...

  • Page 59
    ... first quarter of 2013). The Dealer Finance business line, launched in December 2009, currently serves the networks in Europe (Germany, Switzerland, Belgium, the UK and Italy), the U.S. and Japan. FFS reported consolidated revenues of approximately â,¬47 million for the year, up 57% over 2011, due...

  • Page 60
    ... liabilities Current securities Cash and cash equivalents Net debt (a) Includes current debt payable by FGA Capital to other Fiat Group companies. (b) Includes fair value of derivative financial instruments. Net Debt by Activity for Fiat excluding Chrysler 31.12.2012 Fiat excluding Chrysler (17...

  • Page 61
    ... Consolidation of Chrysler net debt Cash (paid)/received for 16% ownership interest in Chrysler (Disbursements) for purchase of interests held in Chrysler by Canada and US Treasury and UST rights under Equity Recapture Agreement Net industrial debt at beginning of year after Chrysler consolidation...

  • Page 62
    ...related to operating leases Change in working capital Total C) Cash from/(used in) investing activities: Investments in: Property, plant and equipment and intangible assets (net of vehicles leased out) Subsidiaries and other equity investments Cash and cash equivalents from consolidation of Chrysler...

  • Page 63
    ... in cash related primarily to a net increase in borrowings (approximately â,¬1.1 billion in net bond proceeds and â,¬0.5 billion in other debt), which was partially offset by dividend payments to Fiat S.p.A. shareholders and minorities in group subsidiaries (â,¬58 million). Financial Services Cash...

  • Page 64

  • Page 65
    Commercial Performance by Segment

  • Page 66
    ... to 1,652,000 units and the Group closed the year with 33 consecutive months of yearover-year sales gains. In Canada, sales increased 6% to 244,000 vehicles, and in Mexico, sales were up 10% to 93,000 vehicles. (2) "Sales" represent sales to end customers as reported by the Chrysler dealer network.

  • Page 67
    ... vehicle market grew 6% in 2012 to 1.7 million vehicles. The Group's total market share was 14.2% for the year (14.3% in 2011). Key performers included the Chrysler 200 (+97%) and 300 (+89%), and the Jeep Wrangler (+21%). Fiat 500 sales in the U.S. and Canada totaled 52,000 vehicles for the year...

  • Page 68
    ... in market demand. The Group's best-selling products continued to perform well, led by the continued success of the Palio and Novo Uno. Fiat retained its leadership in the A and B segments with a combined share of 30.2%. The Jeep, Chrysler, Dodge and Ram brands posted strong sales performance with...

  • Page 69
    ... units. Throughout the year, both sales and shipments were affected by the reduced product availability associated with customs delays for imported vehicles and components. In other LATAM markets, shipments totaled approximately 50,000 units (-4% versus 2011). During the fourth quarter, significant...

  • Page 70
    ...Vehicle shipments in the APAC region (excluding JVs) totaled approximately 103,000 units for 2012, up 39% over the prior year (on a pro-forma basis). Demand increased in most of the Group's key markets (India, China, Japan, Australia), but contracted slightly in South Korea. The Group's retail sales...

  • Page 71
    ... as the Group's second best-selling vehicle in China (after the Jeep Compass). In terms of network development, plans are underway to double the number of Fiat dealerships in China by the end of 2013. The Chrysler brand also returned to the Chinese and Japanese markets in 2012. Making its comeback...

  • Page 72
    ...-17% Report on Operations France Germany UK Italy Spain Poland Rest of Europe Europe (UE27+EFTA) Other Total Sales Associates and JVs Grand Total (*) -11% Pro-forma calculation including Chrysler shipments as if consolidated from 1 January 2011. Vehicle shipments in the EMEA region totaled 1,012...

  • Page 73
    ... the best-selling commercial vehicles in its category for the 6th consecutive year and registered its highest ever segment share. Products and Awards During the first quarter, the Fiat brand presented the 2012 model year Punto, now also available with TwinAir Turbo and MultiJet II engines. Also...

  • Page 74
    ... one market, with positive performance for all models, in particular the California and FF. In Europe, the brand posted strong performances in Germany and the United Kingdom, but sales in Italy were severely impacted by general economic conditions and new tax measures introduced during the year...

  • Page 75
    ...109 vehicles). In China, sales to end customers were in line with the prior year at 454 vehicles. In 2012, Ferrari shipped a total of 7,318 street cars to the network, representing a 5% increase over the prior year and an all-time record for the brand. For 8-cylinder models, there was a 3% year-over...

  • Page 76
    ... outside Europe for the first time (California in September and China in November). During 2012, Maserati shipped 6,288 cars to the network, a 2% increase over 2011. In the U.S., shipments totaled 2,904 vehicles (+19%), representing the best volume performance in 8 years and confirming the U.S. as...

  • Page 77
    ...NAFTA and China largely compensated for difficult trading conditions in other European markets and a mixed performance in Brazil, which was particularly weak in the first half of the year. During the year, Magneti Marelli concluded several major agreements for development of innovative products in...

  • Page 78
    ... Clutch system for Fiat/Chrysler; and GDI injector pumps for BYD Auto (China). Suspension Systems Revenues were â,¬476 million, down 19% over 2011 on the back of contractions in demand in Italy and Poland for all brands of Fiat Group, the business line's principal customer. In Brazil, performance...

  • Page 79
    ...included development of the integrated electronic xenon bulb (Fine X) and a new infotainment system for BMW. Exhaust Systems Revenues for 2012 totaled â,¬598 million, down 14% over the prior year. The decrease was attributable to the overall contraction in demand in the business line's core markets...

  • Page 80
    ... unit closed the year with volumes down 5% and revenues down 8% (to â,¬104 million in 2012 from â,¬114 million in 2011). Comau (Production Systems) During 2012, Comau's core market posted positive performance, however, results varied by region. In North America and Asia, demand remained high with...

  • Page 81

  • Page 82
    ... for sustainability-related issues, formulating proposals to the Board of Directors as appropriate. The Committee also reviews the annual Sustainability Report. Stakeholder Engagement Fiat Group regularly engages with a broad range of stakeholders, both as part of its normal business activities...

  • Page 83
    ... and socially sustainable products that are also affordable. Global Innovation As part of the collaboration between Fiat and Chrysler, activities have expanded from development of common models and platforms to also include plans for shared research and innovation. In 2012, the Group launched...

  • Page 84
    ... systems, analyzing materials and electromagnetic compatibility, conducting noise and vibration analyses and driving simulations. CRF in numbers Employees at year end Co-funded research programs, approved under the EU's 7th Framework Program (*) (2007-2013) of which: approved in 2012 (*) 2012...

  • Page 85
    ... availability of the highly-efficient Pentastar V-6 engine to the Ram 1500 pickup, resulting in a 20% improvement in fuel economy over the V-6 engine it replaced. With its exceptionally low fuel consumption, reduced emissions and optimum performance, the engine (currently available on 13 vehicles...

  • Page 86
    ...markets during 2012. Research activities in this area are focused on optimizing dual clutch transmission systems through the development of integrated engine, transmission and vehicle control strategies that will bring benefits in terms of drivability and fuel economy. (7) Nitrogen Oxides. Report...

  • Page 87
    ... Sustainability Alternative Fuels and Propulsion Systems A key element in the Group's strategy to reduce emissions is to increase the use of alternative fuels. Fiat believes natural gas is the most effective and affordable solution currently available for reducing CO2 emissions and vehicle-related...

  • Page 88
    ...multimedia system. Real-time feedback on driving style enables immediate reductions in fuel consumption and emissions. Sustainable Materials Research and innovation for materials used in Group vehicles are concentrated in three areas: research on new materials and structures to reduce vehicle weight...

  • Page 89
    ... passive vehicle safety and promoting initiatives that encourage responsible driving behavior are fundamental to a philosophy that, over the years, has produced significant results. In 2012, for example, the new Fiat 500L, designed to meet the latest international standards and ensure customers the...

  • Page 90
    ...communication with customers. The 25 Contact Centers and around 1,000 customer care professionals located around the world manage some 10 million contacts a year. They offer a variety of services ranging from information, to complaint management and coordination of roadside assistance, where offered...

  • Page 91
    ... environmental performance are an integral part of its overall industrial strategy. Environmental Management System and World Class Manufacturing Fiat Group's Environmental Management System (EMS) formalizes its commitment to responsible management of the environment. Applied at all plants worldwide...

  • Page 92
    ...emissions over 2011 levels and 57% over 200712. Measures implemented at Group plants included introduction of advanced technologies and migration to paints with lower solvent levels. 2010 (10) 2011(9) 2012 (12) Excludes Chrysler Group, which was not part of Fiat Group in 2007. Report on Operations

  • Page 93
    ... Management Guidelines were extended to Chrysler Group. The guidelines establish methodologies and procedures oriented toward maximizing water recycling and reuse. For 2012, Group plants worldwide achieved 98.8% reuse of water utilized in the manufacturing cycle, resulting in total water savings...

  • Page 94
    ...advanced sand regeneration plant was installed. Logistics Efficient and environmentally sustainable logistics processes are key factors in value creation. In addition to minimizing cost and optimizing transport ï¬,ows, the Group has also been working to reduce logistics-related emissions throughout...

  • Page 95
    ...,836 employees, a 9% increase over year-end 2011 attributable in part to changes in the scope of operations. Employees by region and category Fiat Group worldwide 31 December 2012 Europe North America South America Asia Rest of World Total Total 88,625 73,713 46,949 5,360 189 214,836 Hourly 57,576...

  • Page 96
    ... to compete for key positions within the organization are all an essential part of the Group's commitment toward its employees. Through a structured global personnel management process, Fiat Group identifies and develops talent and fosters the motivation of employees. The Performance and Leadership...

  • Page 97
    96 Report on Operations Sustainability Diversity and Equal Opportunity Fiat Group considers diversity fundamental to success and seeks to foster a work environment where employees feel respected, valued and included. In addition, in the hiring process it seeks to attract personnel that are highly...

  • Page 98
    ...-being services - which at Italian plants, for example, is available through a team of specialist consultants - to Employee Assistance Programs and the Work-Life Resource & Referral Program at Chrysler Group, which provides information and advice on a variety of issues. Fiat Group also has a number...

  • Page 99
    ...000 hours worked). Effective safety management is also implemented through World Class Manufacturing tools and methodologies, active involvement of employees, development of specific know-how and appropriate investment, which in 2012 totaled â,¬168 million worldwide. Investment in health and safety...

  • Page 100
    ... shared solutions to attain high standards of competitiveness and reduce the impact on workers of measures adopted in response to market conditions in Europe, which were particularly critical in Italy. In Italy, Fiat Group companies applied the new contractual system (CCSL) signed at the end of 2011...

  • Page 101
    ... In 2012, the level of labor unrest at Fiat Group companies in Italy was significantly lower than previous years, both in terms of the number of instances and the number of employees taking part, despite appearances based on the level of public attention given to certain issues. Outside Italy, the...

  • Page 102
    ...European auto market resulted in a realignment of production levels in Poland. During the year, Fiat Group companies in Poland continued to use ï¬,exibility schemes initiated in 2011. The significant drop in production volumes associated with the negative trading conditions and outlook had a direct...

  • Page 103
    ...building the image and reputation of the Group. As part of the process of continuous improvement in the quality of services provided by the dealer network, during 2012 Fiat Group provided over 6.2 million hours of training to more than 165,000 technicians and sales staff. Local Communities The Group...

  • Page 104
    ... major local community initiatives and regularly assess whether the Group's activities are in line with the needs of those communities. On the basis of those assessments, programs may be further developed, extended to other areas, and even converted into a long-term commitment. Report on Operations

  • Page 105
    ... Report on Operations Corporate Governance Corporate Governance Foreword Fiat Group adheres to the Corporate Governance Code for Italian Listed Companies issued in December 2011, with modifications that take into account the specific characteristics of the Group. During February 2012, the Board...

  • Page 106
    ... on management of their core business. Subsidiaries headquartered outside Italy generally benefit from those activities. However, Chrysler Group LLC, which has a board of directors composed of a majority of members not affiliated with Fiat S.p.A., relies directly on capital markets funding...

  • Page 107
    ..., share capital increases by means of in-kind contributions of assets, acquisitions and disposals). Pursuant to Article 12 of the By-laws, after consultation with the Board of Statutory Auditors, the Board of Directors appoints one or more managers responsible for the Company's financial reporting...

  • Page 108
    ... the efficiency and effectiveness of business processes, reliability of financial information and compliance with laws and regulations, as well as the By-laws and internal procedures. The system, which has been developed on the basis of international best practice, consists of the following...

  • Page 109
    ...on Operations Corporate Governance The Company has developed a system of internal control and risk management in relation to financial reporting based on the model provided by the COSO Report aimed at ensuring the reliability, accuracy, completeness and timeliness of the information reported. The...

  • Page 110
    ... to Fiat's average market capitalization for the fourth quarter of 2011. Additional information provided to Shareholders on the candidates and lists presented are available in the Investor Relations section of the Group website (www.fiatspa.com). The Board of Statutory Auditors' current term of...

  • Page 111

  • Page 112
    ... and/or services offered. Information on transactions with related parties, including specific disclosures required by the Consob Communication of 28 July 2006, is provided in Note 37 to the Consolidated Financial Statements and in Note 29 to Fiat S.p.A.'s Financial Statements. Report on Operations...

  • Page 113
    ...in the Master Agreement. Ally Financial Inc. will continue to provide financial services to Chrysler and Fiat customers and dealers until 30 April 2013. Outlook At the end of Q3 2012, the Group outlined its strategic direction in response to the continued crisis in the European car industry, which...

  • Page 114
    ... on Operations 113 Financial Review - Fiat S.p.A. The following information is based on the 2012 financial statements prepared in accordance with the International Financial Reporting Standards ("IFRS") issued by the International Accounting Standards Board ("IASB"), as adopted by the European...

  • Page 115
    ... income taxes, the Company recognized a â,¬31 million credit for the year (â,¬44 million in 2011), which was primarily attributable to compensation received for tax losses contributed by Fiat S.p.A. to the national tax consolidation for the Group's Italian companies. Statement of Financial Position...

  • Page 116
    ... following items payable to the subsidiary Fiat Finance S.p.A.: a current account overdraft a short-term loan for â,¬900 million provided at market rates liabilities representing the negative fair value of the remaining equity swaps on Fiat and Fiat Industrial ordinary shares Non-current financial...

  • Page 117

  • Page 118
    ... approval the Statutory Financial Statements for the year ended 31 December 2012, which report a net loss of â,¬152,349,998. We propose that the loss be allocated to the Retained Profit reserve, bringing the value of the reserve to â,¬1,758,623,155. Report on Operations 20 February 2013 On behalf...

  • Page 119

  • Page 120
    ... of Cash Flows pursuant to Consob Resolution 15519 of 27 July 2006 Notes to the Consolidated Financial Statements Appendix I - Fiat Group Companies at 31 December 2012 Appendix II - Information required under Article 149-duodecies of the "Regolamento Emittenti" issued by Consob Attestation of the...

  • Page 121
    ...Consolidated Financial Statements at 31 December 2012 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) Result from investments: Share...

  • Page 122
    ... 2011 (*) 1,651 (160) (42) 452 (63) 15 202 Consolidated Financial Statements at 31 December 2012 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...

  • Page 123
    ... assets Property, plant and equipment Investments and other financial assets: Investments accounted for using the equity method Other investments and financial assets Leased assets Defined benefit plan assets Deferred tax assets Total Non-current assets Inventories Trade receivables Receivables...

  • Page 124
    ...Consolidated Financial Statements at 31 December 2012 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 Other financial liabilities Trade payables Current tax...

  • Page 125
    ... of bonds Issuance of other medium-term borrowings Repayment of 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...

  • Page 126
    ...at 31 December 2012 125 Statement of Changes in Consolidated Equity (â,¬ million) At 1 January 2011 Changes in equity for 2011 Effects of the Demerger Direct effects of the Demerger Effects of the Demerger on Treasury shares and on the Fiat S.p.A. Reserve for Share based payments Capital increase...

  • Page 127
    ...185 534 1,651 1,651 Net revenues Cost of sales Selling, general and administrative costs Research and development costs Other income/(expenses) TRADING PROFIT/(LOSS) Result from investments: Share of the profit/(loss) of investees accounted for using the equity method Other income/(expenses) from...

  • Page 128
    ... Non-controlling interests Provisions: Employee benefits Other provisions Debt: Asset-backed financing Other debt Other financial liabilities Trade payables Current tax payables Deferred tax liabilities Other current liabilities Liabilities held for sale TOTAL EQUITY AND LIABILITIES (14) (15...

  • Page 129
    ... of bonds Issuance of other medium-term borrowings Repayment of 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...

  • Page 130
    ... 2012 129 Notes to the Consolidated Financial Statements Principal activities Fiat S.p.A. is a corporation organised under the laws of the Republic of Italy. Fiat S.p.A. and its subsidiaries (the "Group") operate in approximately 40 countries. The Group is engaged in the manufacture and sale...

  • Page 131
    130 Consolidated Financial Statements at 31 December 2012 Notes materiality, the nature of the counterparty, the object of the transaction, the method for determination of the transfer price or the timing of the event (e.g., close to year end) - could give rise to doubts regarding the accuracy/...

  • Page 132
    ... in other companies Investments in other companies that are available-for-sale financial assets are measured at fair value, when this can be reliably determined. Gains or losses arising from changes in fair value are recognised directly in other comprehensive income until the assets are sold or are...

  • Page 133
    ... Group reports provisional amounts for the items for which the accounting is incomplete in the consolidated financial statements. Those provisional amounts are adjusted during the measurement period to reï¬,ect new information obtained about facts and circumstances that existed at the acquisition...

  • Page 134
    ...basis from the start of production of the related product over the product's estimated average life, as follows: N° of years Vehicles (including Engines) Components and Production Systems 3 -12 2 - 15 Consolidated Financial Statements at 31 December 2012 All other development costs are expensed as...

  • Page 135
    134 Consolidated Financial Statements at 31 December 2012 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 136
    ... of business), held-tomaturity securities and all financial assets for which published price quotations in an active market are not available and whose fair value cannot be determined reliably, are measured, to the extent that they have a fixed term, at amortised cost, using the effective interest...

  • Page 137
    ... highly effective throughout the financial reporting periods for which it is designated. All derivative financial instruments are measured in accordance with IAS 39 at fair value. When derivative financial instruments qualify for hedge accounting, the following accounting treatment applies: Fair...

  • Page 138
    ... to sell. Employee benefits The present value of a defined benefit obligation and the related current service cost for defined benefit pension plans and other longterm benefits are determined on an actuarial basis using the projected unit credit method. Under this method, the Group attributes...

  • Page 139
    ... generally to the date when the vehicles are made available to non-group dealers, or the delivery date in the case of direct sales. New vehicle sales with a buy-back commitment are not recognised at the time of delivery but are accounted for as operating leases when it is probable that the...

  • Page 140
    ... and agency fees in the case of direct sales. Cost of sales also includes provisions made to cover the estimated cost of product warranties at the time of sale to dealer networks or to the end customer. Revenues from the sale of extended warranties and maintenance contracts are recognised over the...

  • Page 141
    ... nor predicted. The main items affected by these situations of uncertainty are non-current assets (tangible and intangible assets), deferred tax assets, provision for employee benefits and allowances for inventories (including vehicles sold under buy-back agreement). The estimates and underlying...

  • Page 142
    ..., the Group assessed the recoverability of the book value at 31 December 2012 for the Net Capital Employed pertaining to the EMEA car mass market operations. Given the strategy announced on 30 October 2012, to redeploy the industrial assets in EMEA to produce a renewed product portfolio focused...

  • Page 143
    ..., the discount rates selected are based on yield curves of high quality corporate bonds in the relevant market. The expected returns on plan assets are determined considering various inputs from a range of advisors concerning long-term capital market returns, inï¬,ation, current bond yields and...

  • Page 144
    ... longer applies. These amendments are effective retrospectively for annual periods beginning on or after 1 January 2012. Accounting standards and amendments not yet applicable and not early adopted by the Group On 12 May 2011, the IASB issued IFRS 10 - Consolidated Financial Statements replacing SIC...

  • Page 145
    ..., the Group will apply the standard retrospectively from 1 January 2013, adjusting the opening balance sheet at 1 January 2012 and the income statement for 2012 as if the amendments to IAS 19 had always been applied. At the date of this Annual report, the Group estimated that the adoption effect as...

  • Page 146
    ...Company Private Limited, whose name was subsequently changed to Fiat Group Automobiles India Private Limited, was established in India and will assume responsibility for all commercial, distribution and service related activities from the current joint Tata Motors-Fiat dealerships assigned to manage...

  • Page 147
    ... assets held for sale and measured it at fair value, by recognising an unusual loss of â,¬91 million in the second quarter of 2012. Amounts reported in the Consolidated income statement and statement of cash ï¬,ows for 2011 include the operations of Chrysler which has been consolidated since 1 June...

  • Page 148
    ... of IFRS 3 - Business Combinations. During 2011, Fiat recognised the following accounting treatment for the business combination (effects in US Dollars translated into Euros using the exchange rate of 1.4385 at 1 June 2011): Consolidated Financial Statements at 31 December 2012 The previously held...

  • Page 149
    ... Group Initial Public Offering ("IPO") has been completed at the time the option is exercised. If a Chrysler Group IPO has not occurred, the exercise price for this option is determined using a defined market-based multiple, not to exceed Fiat's multiple, applied to Chrysler Group's reported...

  • Page 150
    ...the Note -Investment in Chrysler in the Consolidated Financial Statements at 31 December 2011. Other acquisitions or disposals No significant subsidiaries were acquired or disposed of in 2012. As discussed above during the year, the Group acquired additional interests in Chrysler with the following...

  • Page 151
    ... for assets sold with a buy-back commitment and for operating leases Interest income from customers and other financial income of financial services companies Other Total Net revenues (*) Amounts reported for 2011 include the consolidation of Chrysler from 1 June 2011. 2. Cost of sales Cost of...

  • Page 152
    ... typical sales and services operations of the Group. 6. Result from investments In 2012 the net gain, amounting to â,¬107 million (a net gain of â,¬131 million in 2011), consists mainly of the Group's share of â,¬94 million (â,¬146 million in 2011) in the net profit or loss of investees accounted...

  • Page 153
    ... stock option plans. In 2011, Interest income and other financial income included an income of â,¬72 million calculated after the Demerger on the basis of market values and relating to the early repayment of the outstanding medium-term financial receivables due from the Fiat Industrial group...

  • Page 154
    ... Financial Statements at 31 December 2012 Current taxes: IRAP (Italy) Other taxes Total Current taxes Deferred taxes for the period: IRAP (Italy) Other taxes Total Deferred taxes Taxes relating to prior periods Total Income taxes (*) Amounts reported for 2011 include the consolidation of Chrysler...

  • Page 155
    ... of the taxable income generated in the U.S. by Chrysler Group LLC to its minority shareholders due to the "tax transparency" of the company. In 2011 the tax effect of non-taxable income recognised on the acquisition of control of Chrysler arose from the fair value measurement of the 30% interest in...

  • Page 156
    ... for each company in the Group by assessing critically whether the conditions exist for the future recoverability of such assets on the basis of most recent forecasts from budgets and plans. Regarding the Italian entities, despite a tax loss for 2012 in the tax consolidation, the Group continued to...

  • Page 157
    ... by nature In 2012 the income statement includes personnel costs of â,¬8,116 million (â,¬6,320 million in 2011). In 2012, Fiat Group had an average number of employees of 205,112 (195,404 employees in 2011), whom 143,727 (140,216 employees in 2011) work for the Fiat Group excluding Chrysler and 61...

  • Page 158
    ...,913 1.172 Total 1,334 1,246,889 348 1,225,868 0.284 If all the preference and savings shares had been converted at the beginning of 2011 at the above-mentioned conditions, diluted earnings per ordinary share for 2011 would have been â,¬1.093. Consolidated Financial Statements at 31 December 2012

  • Page 159
    ... 2010 relate to Fiat Group post demerger to Fiat Industrial. 2,770 13,213 Net foreign exchange effects in 2012 arose mainly from changes in the Us Dollar/Euro rate. The increases in Goodwill and Brands in 2011 arise from the acquisition of the control of Chrysler and its subsequent consolidation...

  • Page 160
    ... respective markets with the exception of limited assembly activity of certain Chrysler Group vehicles in LATAM. On 1 January 2012, goodwill was reallocated to each region based on the relative value of the total invested capital of each region that comprised the former Chrysler operating segment...

  • Page 161
    ... operating cash ï¬,ows taken from the estimates included in the 2013 budget and the expected business performance, made in a prudent manner, taking account of the uncertainties of the global financial and economic situation, extrapolated for subsequent years by using the specific medium/long-term...

  • Page 162
    ... assets externally acquired Accumulated amortisation and impairment (*) The balances at 31 December 2010 relate to Fiat Group post demerger to Fiat Industrial. Consolidated Financial Statements at 31 December 2012 Development costs externally acquired Development costs internally generated

  • Page 163
    ... balances at 31 December 2010 relate to Fiat Group post demerger to Fiat Industrial. Additions of â,¬2,385 million in 2012 mainly refer to the car mass-market operations. In 2012, the Group wrote-down certain development costs by â,¬57 million (â,¬165 million in 2011). In 2012, the write-down has...

  • Page 164
    ... Industrial buildings Owned plant, machinery and equipment Plant, machinery and equipment leased under finance leases Total Plant, machinery and equipment Other tangible assets Advances and tangible assets in progress Gross carrying amount (*) The balances at 31 December 2010 relate to Fiat Group...

  • Page 165
    ... machinery and equipment Plant, machinery and equipment leased under finance leases Total Plant, machinery and equipment Other tangible assets Advances and tangible assets in progress Accumulated depreciation and impairment (*) The balances at 31 December 2010 relate to Fiat Group post demerger to...

  • Page 166
    ... in progress Net carrying amount (*) The balances at 31 December 2010 relate to Fiat Group post demerger to Fiat Industrial. Additions of â,¬5,149 million in 2012 mainly refer to the car mass-market operations. In 2011 the Group recognised impairment losses of â,¬302 million, classified as Other...

  • Page 167
    ... service. In 2011 the overall increase of â,¬9,671 million in Change in the scope of consolidation mainly had reï¬,ected the consolidation of Chrysler. At 31 December 2012, Property, plant and equipment of the Fiat Group excluding Chrysler reported as pledged as collateral for loans, mainly relates...

  • Page 168
    ... relating to the investment classified as available-for-sale, the positive changes in the cash ï¬,ow hedge reserve of Tofas-Turk Otomobil Fabrikasi A.S. of â,¬12 million and purchases and capitalisations of â,¬24 million. Consolidated Financial Statements at 31 December 2012 Investments accounted...

  • Page 169
    ...markets in which the Group operates. At 31 December 2012, Inventories include those measured at net realisable value (estimated selling price less the estimated costs of completion and the estimated costs necessary to make the sale) amounting to â,¬1,293 million (â,¬1,343 million at 31 December 2011...

  • Page 170
    ...170 million at 31 December 2011). Substantially all of the inventories of Chrysler Group LLC and its U.S. subsidiary guarantors are pledged as securities for certain debt outstanding (see Note 28). The amount due from customers for contract work relates to the Production Systems and can be analysed...

  • Page 171
    ... Chrysler Group LLC and its U.S. subsidiary guarantors are pledged as securities for certain debt outstanding (see Note 28). Receivables from financing activities Receivables from financing activities, which relate to the business of financial services companies fully consolidated by Fiat (dealer...

  • Page 172
    ... residual values at 31 December 2012 and 2011 are not significant. Receivables for dealer financing are typically generated by sales of vehicles and are generally managed under dealer network financing programs as a component of the portfolio of the financial services companies. These...

  • Page 173
    ... of short-term or marketable securities which represent temporary investments, but which do not satisfy all the requirements for being classified as cash equivalents. In particular: (â,¬ million) Current securities available-for-sale Current securities held-for-trading Total Current securities At...

  • Page 174
    ...is offset by the value of the hedging derivative. The cash collateral relates to Chrysler derivative contracts. At 31 December 2012, the notional amount of outstanding derivative financial instruments is as follows: (â,¬ million) Consolidated Financial Statements at 31 December 2012 At 31 December...

  • Page 175
    ... accounting under IFRS and accordingly are defined as trading derivative financial instruments. For â,¬14 million (â,¬14 million at 31 December 2011), the notional amount of the derivative embedded in a bond with a return linked to inï¬,ation rates, as well as the notional amount of the related...

  • Page 176
    ... from investments Financial income/(expenses) Commodities price risk Decrease/(Increase) in Cost of sales Ineffectiveness - overhedges Taxes income/(expenses) Total recognised in the income statement (6) (5) (6) (4) (5) (2) (40) (6) 5 (105) (3) (3) (3) 13 Consolidated Financial Statements at...

  • Page 177
    ... million) At 31 December 2012 1 54 55 At 31 December 2011 6 60 66 Property, plant and equipment Investments and other financial assets Total Assets held for sale 24. Equity Consolidated shareholders' equity at 31 December 2012 rose by â,¬913 million over 31 December 2011, mainly due to the pro...

  • Page 178
    ... savings shares were offered at the same time to existing shareholders pursuant to article 2437-quater of the Italian civil code. At the conclusion of the offer period on 20 June 2012, a total of 36,244 shares resulting from the conversion of the Fiat preference shares had been purchased at a price...

  • Page 179
    ...in no case may the nominal value of the shares acquired exceed one fifth of share capital. For 2012, the Board of Directors has proposed to Shareholders at their annual general meeting not to recommend a dividend payment on Fiat's ordinary shares, given the Company's desire to maintain a high level...

  • Page 180
    ...the 2009 Stock Grant Plan (see Note 25 of the Consolidated Financial Statements at 31 December 2011) and has increased by 9,308 shares as a result of the conversion of the preference and savings shares discussed above. In addition, at their annual general meeting of 4 April 2012 Shareholders of Fiat...

  • Page 181
    ... directly in equity for the fair value adjustment of available-for-sale financial assets are due to a decrease in the fair value of the assets to which this relates. The tax effect relating to Other comprehensive income may be analysed as follows: 2012 Net balance 160 27 (359) 21 (151) 2011...

  • Page 182
    ...-based compensation plans relating to managers of Group companies and the Chief Executive Officer of Fiat S.p.A. were in place at 31 December 2012 and 2011. 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...

  • Page 183
    182 Consolidated Financial Statements at 31 December 2012 Notes The contractual terms of the plan are as follows: Plan Stock Option November 2006 Beneficiary Chief Executive Officer Expiry date 3 November 2014 Strike price (â,¬) 13.37 N° of options granted 5,000,000 Vesting date November 2007 ...

  • Page 184
    ... April 2012, the Compensation Committee amended and restated the Chrysler Group LLC 2009 Directors' Restricted Stock Unit Plan to allow grants having a one year vesting term to be granted on an annual basis. Prior to the change, Director RSUs were granted at the beginning of a three-year performance...

  • Page 185
    ... authorized the issuance of phantom shares of the company ("Phantom Shares"). Under the DPS Plan, Phantom Shares were granted to certain key employees as well as to the Chief Executive Officer in connection with his role as a member of the Chrysler Group Board of Directors. The grant to the Chief...

  • Page 186
    ... plans, Reserve for Employee leaving entitlements in Italy (TFR) and Other post-employment benefits. Moreover, Group companies additionally provide post-employment benefits under defined contribution plans. In this case, the Group pays contributions to public or private pension insurance plans...

  • Page 187
    ... Financial Statements at 31 December 2012 Notes 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 (relating to Chrysler...

  • Page 188
    ...-term employee benefits Total (*) The balances at 31 December 2010 relate to Fiat Group post demerger to Fiat Industrial. The main assumptions used to determine the net liability for the pension benefits were as follows: At 31 December 2012 (In %) At 31 December 2011 USA 5.0 3.8 n/a 7.5 Canada...

  • Page 189
    188 Consolidated Financial Statements at 31 December 2012 Notes The assumed health care cost trend rate has a significant effect on the amounts reported for postretirement health care and life insurance benefits. A one percentage point change in the assumed health care cost trend rate for U.S. ...

  • Page 190
    ... 9 n/a 2011 8 6 1 (68) (1) (54) n/a Consolidated Financial Statements at 31 December 2012 Pension benefits (â,¬ million) 2012 270 1,203 (1,434) 30 2 1 72 1,887 (230) (230) (240) (240) (470) 2011 120 667 (816) 4 36 11 286 - Current service cost Interest costs Expected return on plan assets Net...

  • Page 191
    ... bonds, as well as U.S., developed international and emerging market companies debt securities diversified by sector, geography and through a wide range of market capitalisation. Other assets include private equity, real estate and hedge funds. Private equity investments include those in limited...

  • Page 192
    ...(713) (1,062) (288) Consolidated Financial Statements at 31 December 2012 (809) The balances at 31 December 2010 relate to Fiat Group post demerger to Fiat Industrial. The best estimate of expected contributions to pension benefits and health care and life insurance plans for 2013 is as follows...

  • Page 193
    ... from product warranties given for a specified period of time beginning at the date of sale to the end customer. This estimate is principally based on assumptions regarding the lifetime warranty costs of each vehicle and each model year of that vehicle line, as well as historical claims experience...

  • Page 194
    ... In determining their best estimate of the liability, each Group company evaluates their legal proceedings on a case-by-case basis to estimate the probable losses that typically arise from events of the type giving rise to the liability. Their estimate takes into account, as applicable, the views of...

  • Page 195
    ... market 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 2012, debt secured by assets of the Fiat Group excluding...

  • Page 196
    .... Substantially all of the Notes were tendered for "Secured Senior Notes". Changes in bonds during 2012 are mainly due to: the issue by Fiat Finance and Trade Ltd S.A. as part of the Global Medium Term Notes Programme of guaranteed 5.00% notes at par having a principal of CHF 425 million and due...

  • Page 197
    ... from the market and managing cash directly, the Fiat Group intends to repay the bonds issued by Fiat Finance and Trade Ltd S.A. and by Fiat Finance North America Inc. in cash at maturity by utilising available liquid resources. The companies in the Fiat Group may from time to time buy back bonds on...

  • Page 198
    ... syndicated credit facility, 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 of the Net Debt/EBITDA ratio. At 31 December 2012, Chrysler has secured...

  • Page 199
    ... payments Interest expense Present value of minimum lease payments At 31 December 2012, the Fiat Group excluding Chrysler had outstanding financial lease agreements for certain Property, plant and equipment whose overall net carrying amount totals â,¬268 million (â,¬297 million at 31 December 2011...

  • Page 200
    ... (5,818) At 31 December 2011 Total Fiat Group (8,898) (â,¬ million) Chrysler (1,497) Chrysler (3,080) 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,¬58...

  • Page 201
    ... sales price and the repurchase price is recognised in the income statement as operating lease instalments on a straight-line basis over the lease term, the balance represents the remaining lease instalments yet to be recognised in income plus the repurchase price. Indirect tax payables includes...

  • Page 202
    ...non-cash items: Consolidated Financial Statements at 31 December 2012 unusual income totalling â,¬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...

  • Page 203
    ... Chrysler with consideration in the form of a non-refundable upfront payment which is payable prior to the launch of the new financing service, as well as on-going revenue sharing opportunities and commitments with respect to available funding, approval and penetration rates, price competitiveness...

  • Page 204
    ... 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 As a result of the occurrence of the Ecological Event in early January 2012, at the date of this Annual report, Fiat holds...

  • Page 205
    ... to sell its interest in VM Motori to Fiat if certain conditions occur. 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...

  • Page 206
    ... the dealer network and end customers of Fiat Industrial group for the sale of trucks and commercial vehicles in the same countries. APAC mainly earns its revenues from the sale of cars, engines and transmissions and related spare parts under the Chrysler group and Fiat brands mostly in China, Japan...

  • Page 207
    ... information is not provided. Details of the income statement by segment for the years ended 31 December 2012 and 2011 are as follows: Components and Production Other Systems activities 8,030 (2,341) 5,689 176 2 (11) 167 979 (448) 531 (85) (52) (12) (149) of which: Fiat Group excluding Chrysler...

  • Page 208
    ...from FGA Capital. (b) Includes the value of intercompany agreements recognized as finance leases (IFRIC 4). (c) Includes fair value of derivative financial instruments. 34. Information by geographical area The Group's parent company has its registered office in Italy. In 2012, revenues earned from...

  • Page 209
    ...is determined by taking into account all the information available as to the customer's solvency, the fair value of any guarantees received for the receivable and the Group's historical experience. The maximum credit risk to which the Group is theoretically exposed at 31 December 2012 is represented...

  • Page 210
    ...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 to optimise the management of funds and to reduce...

  • Page 211
    210 Consolidated Financial Statements at 31 December 2012 Notes Financial market risks The Group is exposed to the risks from ï¬,uctuations in foreign currency exchange and interest rates, the commodity prices associated with business operations, and, finally, the risk of a change in the price ...

  • Page 212
    ... of the business) and to hedge completely the exposure resulting from firm commitments. Group companies may find themselves with trade receivables or payables denominated in a currency different from the functional currency of the company itself. In addition, in a limited number of cases, it may...

  • Page 213
    ... the return on investments, and the employment of funds, causing an impact on the level of net financial expenses incurred by the Group. In addition, the financial services companies provide loans (mainly to customers and dealers), financing themselves using various forms of direct debt or asset...

  • Page 214
    ...Consolidated Financial Statements at 31 December 2012 Assets at fair value available for sale: Investments at fair value with changes directly in other comprehensive income Investments at fair value through profit or loss Other non-current securities Current securities available-for-sale Financial...

  • Page 215
    ... FGA Capital group and, to the Chrysler Group in the first 5 months of 2011; the purchase of engines from the jointly-controlled entity Fiat India Automobiles Limited and from the VM Motori group; the purchase of commercial vehicles from the Fiat Industrial Group; the purchase of goods for the high...

  • Page 216
    ... Key Management Other Total other related parties and Fiat Industrial group Total unconsolidated subsidiaries Total of which related parties Total Effect on Total (%) (*) Investment classified as Asset held for sale. (**) The revenues and cost of sales relating to the Chrysler group refer in 2011...

  • Page 217
    ... Vehicles Company S.A.E. Other Total associates Fiat Industrial group Tata Steel IJmuiden BV Poltrona Frau group 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...

  • Page 218
    ...Other debt 118 118 4 4 68 68 40 230 26,062 0.9% Consolidated Financial Statements at 31 December 2012 FGA Capital group Società Europea Veicoli Leggeri-Sevel S.p.A. Other Total jointly-controlled entities Global Engine Alliance LLC Total associates Fiat Industrial group Total other related parties...

  • Page 219
    ... Chrysler with consideration in the form of a non-refundable upfront payment which is payable prior to the launch of the new financing service, as well as on-going revenue sharing opportunities and commitments with respect to available funding, approval and penetration rates, price competitiveness...

  • Page 220
    ...the following information is provided: name, location of registered office, country and share capital stated in original currency. Additionally, the percentage consolidated and the percentage interest held directly by Fiat S.p.A. or its subsidiary is also shown. Consolidated Financial Statements at...

  • Page 221
    ... Italy 4,476,441,927 EUR ----- SUBSIDIARIES CONSOLIDATED ON A LINE-BY-LINE BASIS Business Auto: Car Mass-Market brands NAFTA 0847574 B.C. Unlimited Liability Company Vancouver Auburn Hills Mezzanine LLC Auburn Hills Owner LLC Autodie LLC CG EC2 LLC Chrysler Canada Cash Services Inc. Chrysler Canada...

  • Page 222
    ...ce Country Share capital Currency dation Interest held by % interest held % of voting rights Chrysler Lease Receivables Limited Partnership Chrysler Mexico Holding, S. de R.L. de C.V. CPK Interior Products Inc. New CarCo Acquisition Canada Ltd. New CarCo Acquisition Holdings Canada Ltd. Operadora...

  • Page 223
    ... Consolidated Financial Statements at 31 December 2012 Appendix I Fiat Group 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 Chrysler India...

  • Page 224
    ... 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 Chrysler Management Austria GmbH Chrysler Mexico Investment Holdings Cooperatie U.A. Chrysler Nederland B.V. Chrysler...

  • Page 225
    224 Consolidated Financial Statements at 31 December 2012 Appendix I Fiat Group 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 Group ...

  • Page 226
    ... 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. Ferrari N.America Inc. Ferrari North Europe Limited...

  • Page 227
    226 Consolidated Financial Statements at 31 December 2012 Appendix I Fiat Group 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 ...

  • Page 228
    ...99 Magneti Marelli After Market Parts and Services S.p.A. Magneti Marelli ...Exhaust Systems Polska Sp. z o.o. Magneti Marelli France S.a.s. Magneti Marelli GmbH Magneti Marelli Holding U.S.A. Inc. Magneti Marelli Iberica S.A. Magneti Marelli India Private Ltd Magneti Marelli International Trading...

  • Page 229
    228 Consolidated Financial Statements at 31 December 2012 Appendix I Fiat Group 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 ...

  • Page 230
    .... Ltd. Kunshan Comau (Shanghai) Engineering Co. Ltd. Shanghai Comau (Shanghai) International Trading Co. Ltd. Comau Argentina S.A. Shanghai Buenos Aires Comau Canada Inc. Comau Deutschland GmbH Comau Estil Unl. Comau France S.A.S. Comau Inc. Comau India Private Limited Comau Pico Iaisa S.de R.L. de...

  • Page 231
    230 Consolidated Financial Statements at 31 December 2012 Appendix I Fiat Group 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 Pico ...

  • Page 232
    ... 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 Services Belgium N.V. Fiat Services d.o.o. Kragujevac Fiat Services Polska Sp. z o.o. Fiat Services S.p.A. Fiat...

  • Page 233
    ...ACCOUNTED FOR USING THE EQUITY METHOD Business Auto: Car Mass-Market brands APAC Fiat India Automobiles Limited GAC FIAT Automobiles Co. Ltd. FGA CAPITAL S.p.A. FAL Fleet Services S.A.S. FC France S.A. FGA Bank G.m.b.H. Ranjangaon Changsha Turin Trappes Trappes Vienna India 17,951,596,600 EMEA Italy...

  • Page 234
    ... 100.000 99.000 50.000 Consolidated Financial Statements at 31 December 2012 99.975 Koc Fiat Kredi Tuketici Finansmani A.S. Istanbul Bursa Atessa Paris Levent France Turkey 80,325,000 500,000,000 EUR TRY 50.00 37.86 Fiat Group Automobiles S.p.A. Fiat Group Automobiles S.p.A. 50.000 37.856

  • Page 235
    234 Consolidated Financial Statements at 31 December 2012 Appendix I Fiat Group 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 ...

  • Page 236
    ....85 Chrysler Group LLC 51.000 Components and Production Systems Marelli Cofap Fabricadora de Pecas Ltda Magneti Marelli Shock Absorbers (India) Private Limited Fabbrica Italia Mirafiori S.p.A. Fiat (China) Business Co., Ltd. Santo Andre Brazil 75,720,716 BRL 68.26 Consolidated Financial Statements...

  • Page 237
    ... Consolidated Financial Statements at 31 December 2012 Appendix I Fiat Group 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 2 Inc. Chrysler...

  • Page 238
    ... Fiat Finance S.p.A. Fiat Powertrain Technologies SpA 68.000 100.000 99.979 0.021 100.000 99.825 0.175 99.998 Consolidated Financial Statements at 31 December 2012 Itauna Bursa Turkey 90,000 TRY 99.89 Other Activities: Holding companies and Other companies Fiat Common Investment Fund Limited...

  • Page 239
    238 Consolidated Financial Statements at 31 December 2012 Appendix I Fiat Group Companies SUBSIDIARIES VALUED AT COST (continued) % of Group consoliName Registered Office Country Share capital Currency dation Interest held by % interest held % of voting rights Fiat Services S.p.A. Fiat Servizi ...

  • Page 240
    ... Financial Statements at 31 December 2012 Turin Modugno Turin Amaro Mumbai Bursa Turin Italy Italy Italy Italy India Turkey Italy 40,000 24,000 4,080,000 11,600 400,000 3,800,000 20,000 EUR EUR EUR EUR INR TRY EUR 24.25 25.00 25.00 26.03 24.00 28.00 25.00 Other Activities: Holding companies...

  • Page 241
    240 Consolidated Financial Statements at 31 December 2012 Appendix I Fiat Group Companies % of Group consoliName Registered Office Country Share capital Currency dation Interest held by % interest held % of voting rights OTHER COMPANIES VALUED AT COST Business Auto: Car Mass-Market brands EMEA...

  • Page 242

  • Page 243
    ...on Chrysler Group LLC reporting package consolidated into Fiat. Attestation related to the review of Internal Control Over Financial Reporting. Issuance of Comfort Letters connected with bond issues. Review of some aspects of internal control system and Tax related activities. Audit of 2012 Chrysler...

  • Page 244
    ...and for the year then ended 3.2 the report on operations includes a reliable operating and financial review of the Company and of the Group as well as a description of the main risks and uncertainties to which they are exposed. Consolidated Financial Statements at 31 December 2012 20 February 2013...

  • Page 245

  • Page 246
    Fiat S.p.A. Statutory Financial Statements at 31 December 2012 246 246 247 248 249 251 252 253 254 308 Income Statement Statement of Comprehensive Income Statement of Financial Position Statement of Cash Flows Statement of Changes in Equity Income Statement pursuant to Consob Resolution 15519 of 27 ...

  • Page 247
    ...item and in Note 29. Statement of Comprehensive Income (â,¬ thousand) 2012 (152,350) 26,330 26,330 (126,020) 2011 99,166 (41,677) (41,677) 57,489 PROFIT/(LOSS) (A) Gains/(losses) recognized directly in fair value reserve (investments in other companies) Income tax relating to components of other...

  • Page 248
    ... 2012 247 Statement of Financial Position (figures in â,¬) (*) Note 31 December 2012 31 December 2011 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...

  • Page 249
    ...investments Fair value adjustment to equity swaps on Fiat and Fiat Industrial shares Losses/(gains) on disposals Change in provisions for employee benefits and other provisions Change in deferred taxes Change in working capital TOTAL C) CASH FROM/(USED IN) INVESTING ACTIVITIES: Investments relating...

  • Page 250
    ... Provisions related to obligation to service portion of stock option and stock grant plans through delivery of Fiat Industrial shares Allocation of prior year profit: to the Legal reserve distributions to shareholders to retained profit Carryforward of reserve for the purchase of own shares Effect...

  • Page 251
    250 Fiat S.p.A. Statutory Financial Statements at 31 December 2012 Statement of Changes in Equity Statement of Changes in Equity Share premium reserve 1,082,245 Reserve available for the purchase of own shares 911,117 Reserve for own shares 288,883 Gains/ (losses) Retained recognized directly in ...

  • Page 252
    ... 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 discontinued operations PROFIT/(LOSS) Fiat S.p.A. - Statutory Financial Statements at 31 December 2012

  • Page 253
    ...Statement of Financial Position pursuant to Consob Resolution 15519 of 27 July 2006 (â,¬ thousand) Note 31 December 2012 of which related parties (Note 29) 31 December 2011 of which related parties (Note 29) ASSETS Non-current assets Intangible assets Property, plant and equipment Investments...

  • Page 254
    ...investments Fair value adjustment to equity swaps on Fiat and Fiat Industrial shares Losses/(gains) on disposals Change in provisions for employee benefits and other provisions Change in deferred taxes Change in working capital TOTAL C) CASH FROM/(USED IN) INVESTING ACTIVITIES: Investments relating...

  • Page 255
    ...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 2012. Significant accounting policies Basis of...

  • Page 256
    ...financial services companies within the Group, on the basis of their individual requirements. The distribution of financial services activities within the Group has no impact on the presentation of financial liabilities for Fiat S.p.A. However, for the Consolidated Statement of Financial Position...

  • Page 257
    ...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 specific payments to...

  • Page 258
    ...that are not held for trading (i.e., available-for-sale financial assets), are initially measured at fair value. Any subsequent gains or losses resulting from changes in fair value determined by the market price are recognized directly in equity until the investment is sold or an impairment loss is...

  • Page 259
    ... income statement and as a reduction in contract work in progress when they become known. Any advances received from customers for services performed are presented as a reduction in inventory. If the value of advances received exceeds inventory, any excess is recognized as advances under other debt...

  • Page 260
    ...the income statement when incurred. Defined benefit plans are based on an employee's working life and on the salary or wage received by the employee over a predetermined period of service. Until 31 December 2006, the leaving entitlement payable to employees of Group companies in Italy (Trattamento...

  • Page 261
    ... 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 262
    ...the expected performance for 2013 and 2014 consistent with the updated financial plan communicated on 30 October 2012. The assumptions and results are also consistent with information provided in "Subsequent Events and Outlook" (Report on Operations). For the forecasts for subsequent years, prudent...

  • Page 263
    ...longer applies. These amendments are effective retrospectively for annual periods beginning on or after 1 January 2012 Accounting standards and amendments not yet applicable and not early adopted by the Company On 12 May 2011, the IASB issued IFRS 10 - Consolidated Financial Statements replacing SIC...

  • Page 264
    ... from 1 January 2013. The application of this new standard is not expected to have any significant effects on the Company's financial statement. On 16 June 2011, the IASB issued an amendment to IAS 1 - Presentation of Financial Statements requiring companies to group together items within...

  • Page 265
    ... a limited accounting effect and those that affect standards or interpretations that are not applicable to the Company IAS 1 - Presentation of Financial Statements: the amendment clarifies the way in which comparative information should be presented when an entity changes accounting policies or...

  • Page 266
    ... of the investment to the stock market price at year-end (â,¬1.255 per share). At the end of 2012, RCS MediaGroup (which reported a significant loss for 2011) presented a Development Plan for the period 2013-2015 to address the unfavorable economic environment and significant structural changes in...

  • Page 267
    ..., rental income on real estate and directors' fees received from Group companies in relation to Fiat S.p.A. employees serving as board members. Other revenues and income from third parties relate to miscellaneous income, cost charge-backs and other prior year income. The overall increase in other...

  • Page 268
    ...132 6,157 80,473 Fiat S.p.A. - Statutory Financial Statements at 31 December 2012 Costs for services rendered by Group companies and other related parties Costs for services rendered by third parties Compensation component from stock option and stock grant plans Leases and rentals Purchase of goods...

  • Page 269
    ...,430 5 383 388 27 11,845 2011 32,123 4,699 41 36,863 6 1,060 1,066 152 38,081 Financial income from Group companies and other related parties: - Interest income on current account with Fiat Finance S.p.A. - Fee income for sureties and unsecured guarantees - Other financial income Total financial...

  • Page 270
    ... Italy and income taxes reported in the financial statements is as follows: (â,¬ thousand) 2012 (50,436) (3,577) (15,168) 12 38,116 (31,053) (31,053) 2011 Fiat S.p.A. - Statutory Financial Statements at 31 December 2012 Theoretical income taxes Tax effect of permanent differences Taxes relating...

  • Page 271
    ... of the conditions for their future realization, using updated plans and related tax aspects. As a consequence, the total theoretical future tax benefit arising from deductible temporary differences (â,¬28,935 thousand at 31 December 2012 and â,¬30,095 thousand at 31 December 2011) and tax loss...

  • Page 272
    ... (475) 1,645 Fiat S.p.A. - Statutory Financial Statements at 31 December 2012 Goodwill relates to consideration paid in excess of fair value to acquire, at year-end 2011, the business units that provide internal audit and financial advisory services to Fiat S.p.A. and Group companies. Licenses and...

  • Page 273
    272 Fiat S.p.A. Statutory Financial Statements at 31 December 2012 Notes In 2011, changes in intangible assets were as follows: (â,¬ thousand) 31 December 2010 - Increases 1,330 1,330 Amortization - (Decreases) and Other changes - 31 December 2011 1,330 1,330 Goodwill - Gross carrying ...

  • Page 274
    ... over the prior year), while buildings mainly consists of the Company's headquarters at 250 Via Nizza, Turin. Plant and equipment primarily related to general fixtures and fittings for buildings. Other tangible assets comprised cars, office furniture and fixtures. At 31 December 2012, there were...

  • Page 275
    274 Fiat S.p.A. Statutory Financial Statements at 31 December 2012 Notes Investments in subsidiaries and changes during the year were as follows: Reclassification and other changes 590,000 648,912 (58,912) Impairment (losses)/ reversals (â,¬ thousand) Fiat Group Automobiles S.p.A. - Gross ...

  • Page 276
    ... book value of equity reported in the subsidiary's financial statements for the year ended 31 December 2012. The other increases related to the acquisition from Fiat Group Automobiles S.p.A. of the residual 3.29% holding in Fiat Partecipazioni S.p.A. (â,¬15.3 million) and the acquisition from Fiat...

  • Page 277
    ... plan. The investments in Fin. Priv. S.r.l. and Assicurazioni Generali S.p.A., which are classified as non-current financial assets and not held for trading, have been recognized at fair value. For Assicurazioni Generali S.p.A., a listed company, this corresponds to the market price of the shares...

  • Page 278
    ... Fees receivable for guarantees given Debt securities Total other financial assets Fees receivable for guarantees given represent the present value of fees to be received in future years for guarantees issued by the Company (mainly relating to loans of Group companies). Debt securities consist of...

  • Page 279
    ... on the account held with that company as part of the Group's centralized treasury management. At 31 December 2012, assets arising from derivative financial instruments represents the fair value of the two equity swaps on Fiat and Fiat Industrial shares entered into by Fiat Finance S.p.A., under...

  • Page 280
    ... â,¬0.217 per savings share) were partially offset by increases in the fair value measurement of investments in other companies (â,¬26,330 thousand recognized directly in equity) and net other increases. Share capital Share capital totaled â,¬4,476,442 thousand (fully paid) at 31 December 2012, an...

  • Page 281
    280 Fiat S.p.A. Statutory Financial Statements at 31 December 2012 Notes On 23 May 2012, withdrawing shareholders were paid the redemption amount which, in accordance with Article 2437-ter (3) of the Civil Code, was set at â,¬3.317 per preference share and â,¬3.458 per savings share. The 863,761 ...

  • Page 282
    ...exist on Chrysler's ability to distribute dividends, the Board of Directors has recommended to Shareholders that no dividend be paid in relation to the 2012 financial year. Fiat's stated objectives for capital management are to create value for Shareholders as a whole, to ensure business continuity...

  • Page 283
    ... already held. The authorization permitted the Company to purchase preference and savings shares redeemed as a result of shareholders exercising their right of withdrawal in relation to the conversion. As announced, the buy-back program is currently on hold and buy-backs are not obligatory under the...

  • Page 284
    ... during the year were as follows: Fiat S.p.A. - Statutory Financial Statements at 31 December 2012 Number of ordinary shares 31 December 2011 Assignment to Chief Executive Officer of shares vested under the 2009 stock grant plan Purchases following conversion of preference and savings shares into...

  • Page 285
    ... for managers of Group companies and the Chief Executive Officer of Fiat S.p.A. were in place at 31 December 2012 and 2011. 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 of...

  • Page 286
    ... no new shares being issued. The Company has the right to substitute shares vested under the Plan, in whole or in part, with a cash payment calculated on the basis of the official price of those shares published by Borsa Italiana on the vesting date. Fiat S.p.A. - Statutory Financial Statements at...

  • Page 287
    286 Fiat S.p.A. Statutory Financial Statements at 31 December 2012 Notes At 31 December 2012, the principal contractual elements of the Plan were as follows: Plan Retention LTI Beneficiary Chief Executive Officer Number of shares 7,000,000 Vesting date 22 February 2013 22 February 2014 22 ...

  • Page 288
    ... and length of service. Existing obligations relate to both active employees and retirees and include both defined contribution and defined benefit plans. In relation to defined contribution plans, the Company pays contributions to publicly or privately-administered pension institutions on the...

  • Page 289
    ... 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 2012 and 2011, provisions for post-employment benefits consisted...

  • Page 290
    ...option and stock grant plans for the year were as follows: 31 December 2011 121,604 Fair value adjustment 30,292 31 December 2012 124,947 (â,¬ thousand) Utilizations (26,500) Other changes (449) Provisions for stock option and stock grant plans Fiat S.p.A. - Statutory Financial Statements at 31...

  • Page 291
    ... 2011 2,150,000 12,892 2,162,892 Change (750,000) (857) (750,857) Debt payable to Group companies Financial guarantees Total non-current debt Debt payable to Group companies related to euro-denominated loans received from Fiat Finance S.p.A. with original maturity over 12 months. Given the...

  • Page 292
    ... an assessment of potential risks requiring recognition of contingent liabilities and given that those liabilities essentially related to guarantees provided on loans to Group companies, the present value of fees receivable (see other financial assets in Note 12) is considered the best estimate...

  • Page 293
    ... approved for 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. 24. Current debt At 31...

  • Page 294
    ... 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 payable: - VAT payable - Taxes withheld on payments to employees...

  • Page 295
    ... the customer - Florence-Bologna line - Novara-Milan line Contract work in progress is measured on the basis of the stage of completion in relation to the sales price, which in this case is the consideration contractually agreed for the activities directly carried out by Fiat S.p.A. Contract costs...

  • Page 296
    ...December 2012, debt payable to Group companies and other related parties for consolidated VAT, totaling â,¬211,221 thousand (â,¬158,260 thousand at 31 December 2011), related to VAT credits of Italian subsidiaries transferred to Fiat S.p.A. as part of the VAT consolidation, in addition to prior year...

  • Page 297
    ... transferred to Fiat S.p.A. as part of the tax consolidation procedure for 2012 and debt relating to the domestic tax consolidation for 2011. Taxes payable and other debt are all due within one year and their carrying amount is deemed to approximate their fair value. 26. Guarantees granted...

  • Page 298
    ...: In 2011, Fiat S.p.A. issued guarantees in connection with agreements signed with a syndicate of Italian and international banks (lead-managed by Citibank International) for a three-year â,¬1,950 million facility for Fiat Finance S.p.A. and other Group companies. At 31 December 2012 (as also...

  • Page 299
    ... market conditions. The Group has adopted a series of policies and procedures to optimize management of financial resources and to reduce liquidity risk by: centralizing management of collections and payments, where it may be economically beneficial in relation the legal and tax environment...

  • Page 300
    ... to this fair value hierarchy. (â,¬ thousand) Fiat S.p.A. - Statutory Financial Statements at 31 December 2012 Note Level 1 Level 2 Level 3 Total Assets at fair value: Investments in other companies (available for sale) recognized at fair value directly in equity or through profit and...

  • Page 301
    ... FIASA Fiat Finance S.p.A. Fiat Finance and Trade Ltd. S.A. Fiat Finance North America Inc. Fiat France Fiat Services S.p.A. Fiat Services Polska Sp. z o.o. Fiat Finance et Services S.A. Fiat Group Marketing & Corporate Comm. S.p.A. Fiat Group Purchasing S.r.l. Fiat Partecipazioni S.p.A. Fiat Polska...

  • Page 302
    ... Other debt 6 137,891 205,989 343,886 6,744 350,630 364,460 96% Fiat S.p.A. - Statutory Financial Statements at 31 December 2012 Chrysler Group LLC Ferrari S.p.A. Fiat Group Automobiles S.p.A. Fiat Finance S.p.A. Fiat Group Marketing & C.C. S.p.A. Fiat Servizi per l'Industria S.c.p.A. Fiat Service...

  • Page 303
    ... (Fiat Finance S.p.A.) 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 S.p.A.), personnel and other management services...

  • Page 304
    ... also related to management of the portfolio of investments in subsidiaries, whose effects on the Company's earnings and financial position were as described above, in particular: dividends received from investees (see Note 1) subscription to capital increases of â,¬200.0 million for Fiat Group...

  • Page 305
    ...to the Shareholder Agreement, seeking registration of approximately 16.6% of Chrysler Group's outstanding equity interests currently owned by VEBA On 18 January 2013, Fiat Group Automobiles S.p.A. (FGA) and Mazda Motor Corporation (Mazda) signed a final agreement for the development and manufacture...

  • Page 306
    ...in the ordinary share capital of subsidiaries is also indicated. Share Capital (*) (â,¬) 745,031,979 Result for the latest financial year (*) (â,¬) (791,190,074) Equity (*) (â,¬) 1,484,682,749 % owned by Fiat S.p.A. 100.00 Number of shares 745,031,979 24,968,021 Book value (â,¬) 5,524,081,024...

  • Page 307
    306 Fiat S.p.A. Statutory Financial Statements at 31 December 2012 Notes List of equity investments (continued) Subsidiaries Company and registered office Fiat Finance S.p.A. - Turin At 31.12.11 At 31.12.12 Fiat Finance and Trade Ltd. S.A. - Luxembourg purchase At 31.12.12 Editrice La Stampa ...

  • Page 308
    ... 2010 and 2011 Separate Financial Statements. Other companies Company and registered office Fiat Industrial S.p.A. - Turin At 31.12.11 Allocation to the Chief Executive Officer of Fiat Industrial S.p.A. ordinary shares following vesting of rights related to the 2009 stock plan purchase fair value...

  • Page 309
    ... Ernst & Young S.p.A.(2) - 2012 Fees 3,170 680 3,850 Audit Attestation Other services Total (1) Includes â,¬3,053,000 fees for ISA 600 audit procedures on Chrysler Group LLC reporting package consolidated into Fiat. (2) Attestation related to review of Internal Control over Financial Reporting.

  • Page 310
    ... 2012 and for the year then ended. 3.2 the report on operations includes a reliable operating and financial review of the Company as well as a description of the main risks and uncertainties to which it is exposed. Fiat S.p.A. - Statutory Financial Statements at 31 December 2012 20 February 2013...

  • Page 311
    Auditors' Reports and Motions for AGM

  • Page 312
    311 Reports of the Independent Auditors Auditors' Reports and Motions for AGM

  • Page 313
    ... Financial Statements at December 31, 2012 Independent Auditors' Report pursuant to Articles 14 and 16 of Legislative Decree n. 39 dated January 27, 2010 To the Shareholders of Fiat S.p.A. 1. We have audited the consolidated financial statements of Fiat S.p.A. and its subsidiaries, (the "Fiat Group...

  • Page 314
    ... b) in the Annual Report on Corporate Governance, are consistent with the consolidated financial statements of the Fiat Group as of December 31, 2012. Turin, February 25, 2013 RECONTA ERNST & YOUNG S.P.A. Signed by Felice Persico Partner Auditors' Reports and Motions for AGM This report has been...

  • Page 315
    ... changes in equity and the related explanatory notes. The preparation of these financial statements in compliance with International Financial Reporting Standards as adopted by the European Union and with art. 9 of Legislative Decree n. 38/2005 is the responsibility of Fiat S.p.A.'s management. Our...

  • Page 316
    ... in the Annual Report on Corporate Governance, as required by the law. For this purpose, we have performed the procedures required under Auditing Standard 001 issued by the Italian Accounting Profession (CNDCEC) and recommended by CONSOB. In our opinion, the Report on Operations and the information...

  • Page 317

  • Page 318
    317 Reports of the Board of Statutory Auditors Auditors' Reports and Motions for AGM

  • Page 319
    ... 2, letter b) in the Annual Report on Corporate Governance, are consistent with the consolidated financial statements of the Fiat Group as of December 31, 2012." In application of Article 41 (3) of Legislative Decree 127/1991, the Board of Statutory Auditors did not review that information or the...

  • Page 320
    ... services: audit of the internal control system in relation to Fiat Group's financial reporting for the 2012 financial year - fees totaling â,¬680,000 agreed audit procedures for the reporting package prepared by Chrysler Group LLC for the purposes of the 2012 consolidated financial statements...

  • Page 321
    ...affirmation of the Directors in the Annual Report on Corporate Governance, as confirmed by the Board resolution of 22 February 2012, that: "Fiat Group adheres to the Corporate Governance Code for Italian Listed Companies issued in December 2011, with modifications that take into account the speci...

  • Page 322
    ... conclusion, we note that during the year, the Company verified the effective independence of the independent directors, and we confirm that the principles and procedures for verification were fairly applied in accordance with Article 3.c.5 of the Corporate Governance Code. We also confirmed our...

  • Page 323

  • Page 324
    Motions for AGM 323 Auditors' Reports and Motions for AGM

  • Page 325
    ... Statutory Financial Statements for the year ended 31 December 2012, which report a net loss of â,¬152,349,998. We propose that the loss be allocated to the Retained Profit reserve, bringing the value of the reserve to â,¬1,758,623,155. 20 February 2013 On behalf of the Board of Directors /s/ John...

  • Page 326
    ... means the members of the Group Executive Council and other key corporate executives reporting to the CEO means the Legislative Decree no. 58 of February 24, 1998 Annual Total Direct Compensation Board of Directors Board of Statutory Auditors CEO Chief Human Resources Officer Company Compensation...

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    ... of the Company on April 4, 2012 and described in the Report to the shareholders issued by the Company pursuant to Article 114-bis 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...

  • Page 328
    ... reï¬,ect current best practice in corporate governance. On 24 July 2007, as part of the continuous review of the system of corporate governance and to better align itself with best international practice as well as the recommendations of the Corporate Governance Code, the Board passed a resolution...

  • Page 329
    ... to the Board of Directors the proposal of an equity incentive plan (LTI). During 2012, the Committee was advised by the Company's management on a benchmark analysis, carried out on a European basis and taking into particular consideration the forty most traded companies on the Milan Stock Exchange...

  • Page 330
    ... above, in 2012 the Board of Directors, pursuant to Article 2389 third paragraph of the Italian Civil Code, resolved to grant to the non-Executive Directors who are also members of the Committees established by the Board the following annual fixed compensation: • Chair of the Internal Control and...

  • Page 331
    ... be purchased at a predetermined price (stock options) and in other cases provide for the granting of Fiat ordinary shares (stock grants). Details concerning such plans are available at the Company's website. With regard to allowances in the event of resignation or termination as well as health and...

  • Page 332
    ... target-based Annual Total Direct Compensation. F. Non-monetary benefits Executive Directors with specific functions may 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...

  • Page 333
    ...key positions, including Executives with Strategic Responsibilities, toward the achievement of Company and Group performance targets through the alignment of medium to long-term incentives to value creation for shareholders. The part of the LTI Plan linked to the performance of the Group is directly...

  • Page 334
    ...M. Insurance, social security or pension coverage The Board of Directors may also grant Executive Directors with specific functions with insurance policies covering accidental death, permanent disability and life insurance as well as with supplementary pension benefits. N. Other information Please...

  • Page 335
    ... to incentivize the executive directors and managers having a significant inï¬,uence on business results toward the achievement of Company and Group performance targets. For that purpose, on 4 April 2012 you approved a new 3-year incentive plan based on the Company's shares and authorized the use...

  • Page 336
    ... time limits or restraints and using procedures that best suit the interests of the Company, as permitted by law (including the transfer of rights 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...

  • Page 337

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    337 2013 Corporate Calendar JANUARY 30 Group Results for 4th Quarter and Full-Year 2012 FEBRUARY 20 Consolidated and Parent Company Financial Statements for 2012 APRIL 09 Annual General Meeting 29 Group Results for 1st Quarter 2013 JULY 30 Group Results for 2nd Quarter and 1st Half 2013 ...

  • Page 339
    338 Other Corporate Publications and Web CORPORATE GOVERNANCE INTERACTIVE REPORT Annual Report on Corporate Governance February 2013 http://www.fiatspa.com/en-us SUSTAINABILITY REPORT FIAT CORPORATE HUB 2012 Sustainability Report Economic, Environmental and Social Responsibility Apple Store ...

  • Page 340
    ....com/ fiatspa Fiat on Social Networks For Fiat Group, new media is not only an information source that is monitored 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...

  • Page 341
    340 Contacts Head Office Via Nizza, 250 - 10126 Turin (Italy) Tel. +39 011 00.61111 website: www.fiatspa.com Investor Relations Tel. +39 011 00.62709 Fax +39 011 00.63796 email: [email protected] Sustainability Tel. +39 011 00.63908 email: [email protected] Press Office Tel. +...

  • Page 342
    This document is printed on eco-responsible Revive Pure Silk paper (150 gsm for internal pages and 300 gsm for cover)... a non-recycled paper, the environmental impact was reduced by: 971 kg of landfill 105 kg of CO2 1,052 km travel in the average European car 25,353 liters of water 2,387 kWh of ...

  • Page 343
    ... lands, such as Burgundy and Tuscany, and consider myself a citizen of the world, enriched by the many cultures I have had the opportunity to experience during my life. For Fiat Group's 2012 annual publications, I explored the concept of ï¬,ags as a universal symbol of culture and a representation...

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    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 2013

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    Fiat S.p.A. Registered Office: 250 Via Nizza, Turin, ITALY Share Capital: â,¬4,476,441,927.34 Turin Companies Register/ Tax Code: 00469580013