Chrysler 2012 Annual Report Download - page 194

193
Consolidated
Financial Statements
at 31 December 2012
Legal proceedings and other disputes - this provision represents management’s best estimate of the liability to be recognised by the Group with regard
to:
Legal proceedings arising in the ordinary course of business with dealers, customers, suppliers or regulators (such as contractual or patent disputes).
Legal proceedings involving claims with active and former employees.
Legal proceedings involving different tax authorities.
None of these provisions is individually significant. Each Group company recognises a provision for legal proceedings when it is deemed probable
that the proceedings will result in an outflow of resources. 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 legal counsel and other experts, the experience of the Group and others in similar situations and the
Group’s intentions with regard to further action in each proceeding. Fiat’s consolidated provision combines these individual provisions established by
each of the Group’s companies.
Commercial risks - this provision includes the amount of obligations arising in connection with the sale of products and services such as maintenance
contracts. An accrual is recorded when the expected costs to complete the services under these contracts exceed the revenues expected to be realised.
Environmental risks – this provision represents management’s best estimate of the Group’s probable environmental obligations. Amounts included in the
estimate comprise direct costs to be incurred by the Fiat Group in connection with environmental obligations associated with current or formerly owned
facilities and sites. This provision also includes costs related to claims on environmental matters.
Indemnities - the provision for indemnities relates to contractual indemnities provided by the Group in connection with divestitures. These liabilities
primarily arise from indemnities relating to contingent liabilities in existence at the time of the sale, as well as those covering any possible breach of the
representations and warranties provided in the contract and, in certain instances, environmental or tax matters. These provisions were determined
estimating the amount of the expected outflow of resources, taking into consideration the relevant level of probability of occurrence.
Other reserves for risk and charges – this provision includes, among others, the estimated product liability costs arising from personal injuries alleged to
be the result of product defects. The valuation of the reserve is actuarially determined on an annual basis based on, among other factors, the number of
vehicles sold and product liability claims incurred.
28. Debt
Breakdown of debt by category and by maturity is as follows:
At 31 December 2012 At 31 December 2011
(€ million)
due within
one year
due between
one and
five years
due beyond
five years Total
due within
one year
due between
one and
five years
due beyond
five years Total
Asset-backed financing 436 13 - 449 688 19 3 710
Bonds 1,389 8,295 3,032 12,716 1,954 5,650 4,080 11,684
Borrowings from banks 2,489 5,084 566 8,139 2,042 2,705 2,836 7,583
Payables represented by securities 516 1,220 3,137 4,873 420 1,077 3,460 4,957
Other 981 352 379 1,712 969 453 416 1,838
Total Other debt 5,375 14,951 7,114 27,440 5,385 9,885 10,792 26,062
Total Debt 5,811 14,964 7,114 27,889 6,073 9,904 10,795 26,772
Debt increased by €1,117 million at 31 December 2012. At 31 December 2012, Debt includes €10,312 million (€10,537 million at 31 December 2011) of
Chrysler debt.