Chrysler 2014 Annual Report Download - page 249

2014 | ANNUAL REPORT 247
Other commitments and important contractual rights
The Group has commitments and rights deriving from outstanding agreements which are summarized below.
Sevel S.p.A.
As part of the Sevel cooperation agreement with Peugeot-Citroen SA (“PSA”), the Group is party to a call agreement
with PSA whereby, from July 1, 2017 to September 30, 2017, the Group will have the right to acquire the residual
interest in the Joint operation Sevel with effect from December 31, 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 December 31, 2014, the total future minimum lease
payments under non-cancellable lease contracts are as follows:
At December 31, 2014
Due within
one year
Due
between
one and
three years
Due
between
three and
five years
Due
beyond
five years Total
(€ million)
Future minimum lease payments under operating lease agreements 161 263 173 218 815
During 2014, the Group recognized lease payments expenses of €195 million (€199 million in 2013).
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 December 31, 2014, 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 contingent liabilities for which a reliable estimate
can be made amount to approximately €100 million at December 31, 2014 and 2013. Furthermore, contingent assets
and expected reimbursement in connection with these contingent liabilities for approximately €10 million (€12 million
at December 31, 2013) have been estimated but not recognized. The Group will recognize the related amounts when
it is probable that an outflow of resources embodying economic benefits will be required to settle obligations and the
amounts can be reliably estimated.
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 December 31, 2014, potential obligations with respect to these indemnities
were approximately €240 million at December 31, 2014 and 2013. At December 31, 2014 provisions of €58
million (€62 million December 31, 2013) have been made related to these obligations which are classified as Other
provisions. The Group has provided certain other indemnifications that do not limit potential payment and as such, it
was not possible to estimate the maximum amount of potential future payments that could result from claims made
under these indemnities.