Chrysler 2012 Annual Report Download - page 298

297
Fiat S.p.A. - Statutory
Financial Statements
at 31 December 2012
€647.1 million for VAT receivables related to the VAT consolidation, pursuant to the Ministerial Decree of 13 December 1979 (as subsequently amended)
In addition:
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 €1,950 million facility for Fiat Finance S.p.A. and other Group companies. At 31 December 2012 (as also
at 31 December 2011), this facility remained undrawn
in 2005, in relation to the advance received by Fiat Partecipazioni S.p.A. on the consideration for the sale of the aviation business, Fiat S.p.A. is jointly
and severally liable with Fiat Partecipazioni S.p.A. to the purchaser, Avio Holding S.p.A., should Fiat Partecipazioni S.p.A. fail to honor (following either
an arbitration award or an out-of-court settlement) undertakings provided in relation to the sale and purchase agreement signed in 2003. Similarly, in
connection with sale of a controlling interest in its rail business, Fiat S.p.A. provided guarantees to the purchaser, Alstom N.V., for any failure of the seller
(now Fiat Partecipazioni S.p.A.) to meet its contractual obligations
Commitments
In implementation of the resolution of the Board of Directors dated 18 February 2011 – and as part of the framework of the Partnership and Cooperation
Agreement signed on 28 March 2011 by Politecnico di Torino, Fiat S.p.A., University of Windsor (Canada) and Chrysler for an International Masters in
Automotive Engineering – Fiat S.p.A. and Politecnico di Torino renewed their cooperation agreement relating to courses in Automotive Engineering. The
agreement covers a period of four academic years, from 1 October 2010 to 30 September 2014, under which Fiat S.p.A. will contribute €1.85 million per
academic year (for a total of €7.4 million) up to 20% of which may be through contributions-in-kind (purchase of goods and services from third parties,
provision of services or availability of assets, etc.). At 31 December 2012, the residual financial commitment was €3.2 million.
Teksid
Fiat S.p.A. is subject to a put option held by Renault (with reference to the original 33.5% investment in Teksid, now 15.2%).
In particular, Renault has the right to sell its interest in Teksid to Fiat in the event of:
a breach in application of the protocol agreement and admission to receivership or other administrative proceeding
Renault’s investment in Teksid falling below 15% or Teksid deciding to make a significant strategic investment outside the foundry sector
control of Fiat being acquired by another automaker
The exercise price of the option is established as follows:
for the original 6.5% of the share capital of Teksid, the initial investment price 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
Contingent liabilities
In connection with significant asset divestitures carried out in prior years, Fiat S.p.A. directly or indirectly through its subsidiaries provided indemnities
to purchasers with the maximum amount of potential liability under these contracts generally capped at a percentage of the purchase price. These
liabilities primarily relate to liabilities potentially arising from a breach of representations and warranties under these contracts and, in certain instances,
environmental or tax matters, generally for a limited period of time. At 31 December 2012, potential obligations relating to these indemnities were
approximately €368 million (approximately €360 million at 31 December 2011), net of provisions set aside by individual companies. Certain other
indemnities have been provided that do not limit potential payment and, as such, it is not possible to estimate the maximum potential future payments
that could result from claims made under these indemnities.
Certain claims for damages are still pending against Fiat S.p.A. Given this fact and the specific conditions of the related proceedings, the possible outcome
of this situation cannot be reasonably estimated and, therefore, the likelihood of any costs to be borne by the Company cannot be determined.