Chrysler 2013 Annual Report Download - page 226

225
Consolidated
Financial Statements
at 31 December 2013
Sevel
As part of the Sevel cooperation agreement with PSA, the Fiat group is party to a call agreement with PSA whereby, from 1 July 2017 to 30
September 2017, Fiat will have the right to acquire the residual interest in Sevel S.p.A. held by PSA, with effect from 31 December 2017.
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 2013, the total future minimum lease payments under non-cancellable lease contracts are as
follows:
At 31 December 2013 At 31 December 2012
(€ million)
due within
one year
due between
one and five
years
due beyond
five years Total
due within
one year
due between
one and five
years
due beyond
five years Total
Future minimum lease payments
under operating lease agreements 133 350 227 710 147 347 222 716
During 2013, the Group has recorded costs for lease payments of €199 million (€184 million in 2012).
Contingent liabilities
As a global group with a diverse business portfolio, the Group is exposed to numerous legal risks, particularly in the areas of product liability,
competition and antitrust law, environmental risks and tax matters, dealer and supplier relationships and intellectual property rights. The
outcome of any proceedings cannot be predicted with certainty. These proceedings seek recovery for damage to property, personal injuries
and in some cases include a claim for exemplary or punitive damage. It is therefore possible that legal judgments could give rise to expenses
that are not covered, or not fully covered, by insurers’ compensation payments and could affect the Group’s financial position and results.
At 31 December 2013, contingent liabilities estimated by the Group for which no provisions have been recognized since an outflow of resources
is not considered to be probable and for which a reliable estimate can be made amount to approximately €100 million (approximately €100
million at 31 December 2012). Furthermore, contingent assets and expected reimbursement in connection with these contingent liabilities for
approximately €12 million (€16 million at 31 December 2012) have been estimated but not recognized.
Instead, when it is probable that an outflow of resources embodying economic benefits will be required to settle obligations and this amount
can be reliably estimated, the Group recognizes specific provisions for this purpose (see Note 26).
Furthermore, in connection with significant asset divestitures carried out in prior years, the Group 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 refer
principally to potential liabilities arising from possible breaches of representations and warranties provided in the contracts and, in certain
instances, environmental or tax matters, generally for a limited period of time. At 31 December 2013, potential obligations with respect to these
indemnities were approximately €240 million (approximately €430 million at 31 December 2012). Against these obligations, at 31 December
2013 provisions of €62 million (€62 million 31 December 2012) have been made which are classified as Other provisions. The Group has
provided certain other indemnifications that do not limit potential payment; it is not possible to estimate a maximum amount of potential future
payments that could result from claims made under these indemnities.