Chrysler 2014 Annual Report Download - page 178

176 2014 | ANNUAL REPORT
Consolidated
Financial Statements
Notes to the Consolidated
Financial Statements
CHANGES IN THE SCOPE OF CONSOLIDATION
The following significant changes in the scope of consolidation occurred in 2014, 2013 and 2012:
2014
There were no significant changes in the scope of consolidation in 2014
2013
In October 2013, FCA acquired from General Motors the 50.0 percent residual interest of VM Motori Group.
In November 2013, the investment in the Brazilian company, CMP Componentes e Modulos Plasticos Industria e
Commercio Ltda, which was previously classified as held for sale on acquisition, was consolidated on a line-by-line
basis as a result of changes in the plans for its sale.
In December 31, 2013, the assets and liabilities related to a subsidiary consolidated by the Components segment
(Fonderie du Poitou Fonte S.A.S.) were reclassified as Asset and liabilities held for sale (Note 22); the subsidiary was
subsequently disposed of in May 2014.
2012
In April 2012, as a result of changes in the Fiat India Automobiles Limited (“FIAL”) shareholding agreements, this entity
was classified as a Joint operation and its share of assets, liabilities, revenues and expenses were recognized in the
Consolidated financial statements; the investment was no longer accounted for under equity method accounting.
In July 2012, FCA entered into an agreement with PSA Peugeot Citroën providing for the transfer of its interest in the joint
venture Sevelnord Société Anonyme at a symbolic value. In accordance with IFRS 5, from June 2012 the investment in
Sevelnord Société Anonyme was reclassified within assets held for sale and was measured at fair value, resulting in an
unusual loss of €91 million. The joint venture was subsequently disposed of in the fourth quarter of 2012.
ACQUISITION OF THE REMAINING OWNERSHIP INTEREST IN FCA US
As of December 31, 2013, FCA held a 58.5 percent ownership interest in FCA US and the VEBA Trust held the
remaining 41.5 percent. On January 1, 2014, FCA ‘s 100.0 percent owned subsidiary FCA North America Holdings LLC,
(“FCA NA”), formerly known as Fiat North America LLC, and the VEBA Trust announced that they had entered into an
agreement (“the Equity Purchase Agreement”) under which FCA NA agreed to acquire the VEBA Trust’s 41.5 percent
interest in FCA US, which included an approximately 10 percent interest in FCA US subject to previously exercised
options that were subject to ongoing litigation, for cash consideration of U.S.$3,650 million (€2,691 million) as follows:
a special distribution of U.S.$1,900 million (€1,404 million) paid by FCA US to its members, which served to fund a
portion of the transaction, wherein FCA NA directed its portion of the special distribution to the VEBA Trust as part
of the purchase consideration; and
an additional cash payment by FCA NA to the VEBA Trust of U.S.$1,750 million (€1.3 billion).
The previously exercised options for the approximately 10 percent interest in FCA US that were settled in connection
with the Equity Purchase Agreement had an estimated fair value at the transaction date of U.S.$302 million (€223
million). These options were historically carried at cost, which was zero, in accordance with the guidance in
paragraphs AG80 and AG81 of IAS 39 - Financial Instruments: Recognition and Measurement as the options were on
shares that did not have a quoted market price in an active market and as the interpretation of the formula required to
calculate the exercise price on the options was disputed and was subject to ongoing litigation. Upon consummation
of the transactions contemplated by the Equity Purchase Agreement, the fair value of the underlying equity and the
estimated exercise price of the options, at that point, became reliably estimable. As such, on the transaction date, the
options were remeasured to their fair value of U.S.$302 million (€223 million at the transaction date), which resulted
in a corresponding non-taxable gain in Other unusual income/(expenses). The Group has classified this item in Other
unusual income/(expenses) because it relates to options held in relation to the acquisition of a non-controlling interest
and is expected to occur infrequently.