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At 31 December 2013
Annual Report
108th financial year

Table of contents

  • Page 1
    Annual Report At 31 December 2013 108th financial year

  • Page 2
    Annual Report At 31 December 2013

  • Page 3
    All our reports are available at http://2013interactivereports.fiatspa.com Go to the online version of the Fiat Annual Reports to learn more about the Group's financial performance, sustainable development and other corporate information. | | Download our app www.fiatspa.com/mobileapp

  • Page 4
    ... Meeting available on the corporate website (www.fiatspa.com - Investors/Shareholder Corner/Shareholder Meetings) contains complete information and instructions relating to the rights exercisable by shareholders. The Annual Report and Annual Report on Corporate Governance, as well as reports and...

  • Page 5
    ...Shareholders ...18 Key Events in 2013 ...20 Creating Value for Stakeholders ...26 2 Report on Operations Main Risks and Uncertainties to which Fiat S.p.A. and its Subsidiaries are Exposed ...30 Financial Review - Fiat Group ...42 Commercial Performance by Operating Segment ...65 Mass-Market Brands...

  • Page 6
    ... July 2006 ...130 Consolidated Statement of Cash Flows pursuant to Consob Resolution 15519 of 27 July 2006 ...132 Notes to the Consolidated Financial Statements ...133 Appendix I - Fiat Group Companies at 31 December 2013 ...237 Appendix II - Information required under Article 149- duodecies of the...

  • Page 7

  • Page 8
    ... di Montezemolo Gian Maria Gros-Pietro(2)(3) Patience Wheatcroft(1)(3) INDEPENDENT AUDITORS Reconta Ernst & Young S.p.A. (1) (2) (3) Member of the Nominating, Corporate Governance and Sustainability Committee. Member of the Internal Control and Risk Committee. Member of the Compensation Committee.

  • Page 9
    ... brand set an all-time global record of more than 731,000 vehicles sold. That performance demonstrates the significant work that has been done to strengthen this unique brand and we plan to continue that development in the coming years. Second are the signs of improvement for our European business...

  • Page 10
    ... the minority stake in Chrysler, the Board of Directors has decided not to recommend a dividend on Fiat shares for 2013. Overall, a positive performance for the mass-market brands in North America and Asia-Pacific more than compensated for the continuing weakness in the European market and the slow...

  • Page 11
    ... growth. Retail sales in the region, including JVs, were up 73% - significantly outpacing industry growth of around 9% for the year. In China, the Fiat Viaggio continued to gain momentum and it is now the Group's best-selling model in the region. In India, where the distribution network is now...

  • Page 12
    ...environment, as well as the legacy that we intend to leave future generations. A commitment to operating responsibly and promoting a model of sustainable development is part of the tradition and values of the Group that continue to be recognized internationally. For the fifth consecutive year, Fiat...

  • Page 13
    1

  • Page 14
    The Group at a Glance Highlights ...Fiat Group's Activities ...Shareholders ...14 16 18 Key Events in 2013 ...20 Creating Value for Stakeholders ...26 **** This report, and in particular the section "Outlook", contains forward-looking statements. These statements are based on the Group's current ...

  • Page 15
    ... and amortization. For 2011, the calculation assumes conversion of all Fiat S.p.A. preference and savings shares into ordinary shares on January 1st. For prior years, comparable data is not available. Note 12 to the Consolidated Financial Statements provides additional information on the calculation...

  • Page 16
    ... in the Fiat Group 2013 Sustainability Report. (1) (2) (3) (4) Includes Chrysler Group for the full year. Includes all employees participating in the PLM (Performance and Leadership Management) and PBF (Performance & Behavior Feedback) evaluation processes. Data for 2011 has been recalculated...

  • Page 17
    ... and sale of cars and related spare parts under the Chrysler, Jeep, Dodge, Fiat, Alfa Romeo and Abarth brands mostly in China, Japan, Australia, South Korea and India, carried out in the region through both subsidiaries and joint ventures; financial services to the dealer network and end-customers...

  • Page 18
    ...commercial vehicles under the Fiat, Alfa Romeo, Lancia, Abarth and Fiat Professional brand names and sale of the related spare parts in Europe, Russia, the Middle East and Africa, and distribution of Chrysler Group vehicles in the same areas; supply of financial services related to the sale of cars...

  • Page 19
    ... major financial centers that provide the opportunity for direct contact with management. Shareholders can also contact the Company at the following: For holders of Fiat shares: Toll-free number in Italy: 800-804027 E-mail: serviziotitoli@fiatspa.com investor.relations@fiatspa.com For holders of...

  • Page 20
    ... the date of this Report, Fiat had a total of 1,250,739,023 shares outstanding and the following institutions held more than 2% of shares: h g a Number of Shares: 1,250,739,023 The Group at a Glance a. 30.06% Exor S.p.A. b. c. d. e. b c d e 2.64% Baillie Gifford & Co. 2.26% Vanguard International...

  • Page 21
    ...Key Events in 2013 Key Events in 2013 01 Fiat Group Automobiles S.p.A. and Mazda Motor Corporation sign agreement for development of new rear-wheel-drive roadster for the Mazda and Alfa Romeo brands. Both vehicles will be manufactured at the Mazda plant in Hiroshima, Japan. Production of the Alfa...

  • Page 22
    ... 500L and Alfa Romeo presents exclusive Launch Edition of the 4C sport coupé. Jeep gives European premiere of the new Grand Cherokee and Compass, and presents 10th Anniversary special edition of the Wrangler Rubicon. Ferrari presents the new limited edition LaFerrari, for which orders received are...

  • Page 23
    ...and a 5+2 seating configuration in just 4.35 meters. Fiat awarded "Best Green Engine of the Year 2013" for the eco-performing, fun-to-drive natural gas TwinAir Turbo. City Brake Control, the automatic collision avoidance system currently available on the Panda and 500L, receives "Euro NCAP Advanced...

  • Page 24
    ..." brand and Fiat 500 as top city car. 08 Fiat and Itaú Unibanco renew commercial cooperation agreement in Brazil for a further 10 years. In place since 2003, the agreement ensures a strong financial partner to offer Fiat's customers and dealer network a full spectrum of competitive financing...

  • Page 25
    ... Vehicle of Texas" (Ram ProMaster), and "Truck Line of Texas" (Ram Trucks). 11 European Investment Bank, SACE and Fiat sign agreement for â,¬400 million in financing to support R&D programs at five Fiat research centers in Italy for the period 2013-2016. The loan is 50% guaranteed by SACE. Fiat...

  • Page 26
    ... first time ever a vehicle has won two years in a row. 3.0L EcoDiesel V-6 and Fiat 500e battery-electric drive system named among Ward's "10 Best Engines for 2014". Alfa Romeo 4C named winner of the Sportscars/Imported category by readers of Auto Zeitung in Germany and "Car of the Year 2013" by...

  • Page 27
    ... governance model based on transparency and integrity safe and eco-friendly products a full-line product offering affordable and innovative mobility solutions promoting awareness and effective communication with consumers proper management and professional development of employees working conditions...

  • Page 28
    ... 2013 Annual Report addresses issues identified as being of greatest importance to the Group's internal and external stakeholders. Additional information relating to the Group's sustainability commitments is available in the 2013 Sustainability Report and on the corporate website. A Sustainability...

  • Page 29
    2

  • Page 30
    ... ...80 Research, Innovation and Sustainable Mobility ...83 Employees ...91 Industrial Relations and Social Dialogue ...94 Corporate Governance ...103 Transactions between Group Companies and with Related Parties ...110 Subsequent Events and Outlook ...111 Financial Review - Fiat S.p.A...114...

  • Page 31
    ... on profitability. Moreover, the Group tends to operate with negative working capital and the Group generally receives payments from vehicle sales to dealers within a few days of shipment from the assembly plants, whereas there is a lag between the time when parts and materials are received from...

  • Page 32
    ... America and the Asia Pacific region. These markets are all highly competitive in terms of product quality, innovation, pricing, fuel economy, reliability, safety, customer service and financial services offered, and many of the Group's competitors are better capitalized with larger market shares.

  • Page 33
    ... impact on the Group's vehicle pricing, market share, and operating results. In the automotive business, sales to end-customers are cyclical and subject to changes in the general condition of the economy, the readiness of end-customers to buy and their ability to obtain financing, as well as the...

  • Page 34
    ...provide the Group with a number of long-term benefits, including allowing new vehicle platforms and powertrain technologies to be shared across a larger volume, as well as procurement benefits, management services and global distribution opportunities, particularly the extension of brands into new...

  • Page 35
    ... for dealers and retail customers, its lack of a captive finance company could adversely affect its results of operations. (1) The Pension Benefit Guaranty Corporation (PBGC) is an independent agency of the United States government that was created by the Employee Retirement Income Security Act...

  • Page 36
    ...at competitive rates to the Group's dealers and consumers, such dealers and consumers may not have sufficient access to financing to purchase or lease Group's vehicles. As a result, the Group's vehicle sales and market share may suffer, which would adversely affect the Group's financial condition...

  • Page 37
    ...of a drive toward common global systems, the Group is extending the current finance, procurement, and capital project and investment management systems to new areas of operations. As appropriate, the Group continues to modify the design and documentation of internal control processes and procedures...

  • Page 38
    ... of Fiat branded cars in China. The Group has also entered into a joint venture with TATA Motors for the production of C-segment cars, engines and transmissions in India. Maintaining and strengthening its position in these emerging markets is a key component of the Group's global growth strategy...

  • Page 39
    ... metals such as platinum, palladium and rhodium, as well as energy. The prices for these raw materials ï¬,uctuate and at times in recent periods, these commodity prices have increased significantly in response to changing market conditions. The Group seeks to manage this exposure, but it may not be...

  • Page 40
    ...nancial results, including: the Group may not be able to secure additional funds for working capital, capital expenditures, debt service requirements or general corporate purposes; the Group may need to use a portion of its projected future cash ï¬,ow from operations to pay principal and interest on...

  • Page 41
    ...Chrysler is party to a credit agreement for certain senior secured credit facilities and an indenture for two series of secured senior notes. These debt instruments include covenants that restrict Chrysler's ability to make certain distributions or purchase or redeem capital stock, prepay other debt...

  • Page 42
    ...Group's business by limiting its ability to take advantage of financing, mergers and acquisitions, joint ventures or other corporate opportunities. In addition, the senior credit facilities contain, and future indebtedness may contain, other and more restrictive covenants and also prohibit Chrysler...

  • Page 43
    42 Report on Operations Financial Review - Fiat Group Financial Review - Fiat Group Key Performance Indicators Fiat Group monitors its operations through the use of various performance indicators that may not be comparable to other similarly titled indicators of other companies. Group management ...

  • Page 44
    ... prior year in nominal terms, but up 1% at constant exchange rates. For 2013, R&D amortization was â,¬0.3 billion higher. NAFTA reported a trading profit of â,¬2,220 million (â,¬2,443 million for 2012, IAS 19 restated), a 9% decrease in nominal terms (CER -6%), with positive volume and pricing more...

  • Page 45
    ... strategy, particularly for the Alfa Romeo, Maserati and Fiat brands, as well as asset impairments related to Teksid's Cast Iron business. In addition, there was a â,¬56 million write-off of the carrying value of the Equity Recapture Agreement Right following the 1 January 2014 agreement to purchase...

  • Page 46
    ... of the amendment to IAS 19. The impact on trading profit and EBIT for each segment is, where applicable, reported in the notes to the following tables. (1) See "Fiat Group's activities" and Note 34 - "Segment reporting" in the Note to the Consolidated Financial Statements. Report on Operations

  • Page 47
    ... net reduction to pension obligations following amendments to Chrysler's U.S. and Canadian salaried defined benefit pension plans, partly offset by charges related to the June 2013 voluntary safety recall for the 1993-1998 Jeep Grand Cherokee and the 2002-2007 Jeep Liberty, as well as the customer...

  • Page 48
    ... the Jeep brand across the region, the successful return of the Dodge Journey in China, increased focus on development of the Fiat and Alfa Romeo brands in Australia, and the consolidated India sales after the Group took complete control of sales and distribution operations. The positive impact of...

  • Page 49
    ...from equity investments (â,¬145 million in 2013 and â,¬160 million in 2012) with unusual charges ï¬,at at â,¬195 million. For 2013, unusual charges included the write-off of capitalized R&D related to development on new models for Alfa Romeo, which have now been switched to a new platform considered...

  • Page 50
    ... over the prior year (â,¬57 million in 2012), and the full-year trading margin was 10.3%. EBIT totaled â,¬106 million and included a â,¬65 million write-down of capitalized R&D related to development of a new model, which has now been switched to a more technically advanced platform considered more...

  • Page 51
    ... performance in China and in NAFTA, which benefited from the full-year contribution of several new products that were launched during the second half of 2012. For the Electronic Systems business line, revenues were 7% higher primarily due to growth in sales of telematics and body products. For the...

  • Page 52
    ... mainly related to asset impairments for the Cast Iron business unit. Comau Comau posted 2013 revenues of â,¬1,463 million, substantially in line with the prior year. Order intake for the Systems activities totaled â,¬1,454 million, an 18% increase over 2012. At 31 December 2013, the order backlog...

  • Page 53
    .../(payables) & current taxes receivable/(payable) Working capital (a) (b) Inventory is reported net of the value of vehicles sold under buy-back commitments, which includes vehicles still in use by customers and vehicles that have been repurchased and are held for sale. Other current payables...

  • Page 54
    ... financing to the dealer network, that were sold to jointly-controlled financial services companies (FGA Capital Group). At 31 December 2013, consolidated net debt(1) totaled â,¬9,793 million, an increase of â,¬193 million over year-end 2012. For Fiat excluding Chrysler, net debt was â,¬10,008...

  • Page 55
    ... Whether an Arrangement Contains a Lease, in addition to receivables relating to factoring transactions between Chrysler Group companies and Fiat Group Financial Services companies in EMEA. Includes fair value of derivative financial instruments. Debt (bonds, bank loans and other debt) increased by...

  • Page 56
    ... structure in terms of debt to equity and other ratios is considered appropriate. Financial Services includes companies that provide retail and dealer finance, leasing and rental services in support of the mass-market brands and for the luxury brands. Financial Services also includes FGA Capital...

  • Page 57
    ...IAS 19 as amended). For 2013, R&D amortization was â,¬0.3 billion higher mainly due to new product launches in NAFTA. The reduction in losses for EMEA, strong increase for Luxury Brands - including Maserati's trading profit more than triple the 2012 level - as well as the positive contribution from...

  • Page 58
    ... - Luxury Brands (Ferrari) -24 Total 2013 3 13 16 2012 75 15 90 Trading Profit Change -72 -2 -74 The Group offers financial services to support vehicle sales in Europe, Latin America and China directly through its financial services subsidiaries or associates. In other markets, the Group's sales...

  • Page 59
    ... Financial Review - Fiat Group Luxury Brands (Ferrari) Ferrari Financial Services ("FFS") provides car financing to customers in Europe, North America and Japan through its subsidiaries FFS S.p.A. (Italy), FFS AG (Germany, U.K., Switzerland, France, Belgium and Austria), FFS Inc. (U.S. and Canada...

  • Page 60
    ... application of the amendment to IAS 19 - Employee Benefits. Compared with the figures published in the 2012 financial statements, there was a â,¬4,804 million reduction in equity for the Group and for Industrial Activities and a â,¬2 million reduction for Financial Services. Report on Operations

  • Page 61
    ...-controlled financial services companies Other financial assets Other financial liabilities Current securities Cash and cash equivalents Net (debt)/cash (a) (b) Includes current debt payable by FGA Capital to other Fiat Group companies. Includes fair value of derivative financial instruments.

  • Page 62
    ...Includes current debt payable by FGA Capital to other Fiat Group companies. Includes amounts receivable from Chrysler relating to intragroup manufacturing agreements classified as finance leases in accordance with IFRIC 4 - Determining Whether an Arrangement Contains a Lease. Includes fair value of...

  • Page 63
    ...at end of year (*) Figures for 2012 Annual Report have been restated to reflect application of the amendment to IAS 19 - Employee Benefits. Compared with the figures published in the 2012 financial statements, net profit was reduced by â,¬515 million, of which â,¬508 million related to Chrysler and...

  • Page 64
    ...non-current assets and other non-cash items". Includes reversal of gains in the fair value of equity swaps on a basket of Fiat S.p.A. and CNH Industrial N.V. shares of â,¬27 million for 2013 and â,¬31 million for 2012. Cash from vehicles sold under buy-back commitments for the periods reported above...

  • Page 65
    ...nancial receivables from and debt payable to industrial companies), which absorbed â,¬327 million in cash, primarily relating to an increase in the lending portfolio net of loans from treasury companies (included under other changes) and a decrease in current securities. Financing activities, which...

  • Page 66
    ...6% United States Canada Mexico Contract Manufacturing(*) and other Total Passenger Car and Truck Shipments by Brand (units in thousands) 2013 601 745 325 496 63 8 2,238 2012 548 717 347 423 66 14 2,115 Change 10% 4% -6% 17% -5% -43% 6% Jeep Dodge Chrysler Ram Fiat Contract Manufacturing(*) and...

  • Page 67
    ... U.S. dealers at the end of October 2013, and 26,000 have already been sold to consumers in Q4. Dodge, the Group's number one selling brand in the region, posted sales of 596,000 vehicles, up 14% from the prior year mainly driven by the Charger (+19%), Durango (+43%), and Challenger (+19%), as well...

  • Page 68
    ... Strada was up 5% (50% segment share) boosted by the contribution from the refreshed model launched in Q4. The Group shipped 785,000 passenger cars and LCVs in Brazil, representing a 7% decrease compared with 2012, which benefited from a period of higher sales tax incentives. Report on Operations

  • Page 69
    ... first half of 2015 with initial production capacity of 200,000 vehicles per year based on the Small Wide platform which will strengthen the product offering in the mid-size segments of the market. The site will also have an integrated supply park, product engineering center and testing facilities.

  • Page 70
    ...-produced Fiat Viaggio launched in late 2012. Dodge brand sales were up 5 times over the prior year, driven by the re-launch of the Dodge Journey in China in early 2013. (1) Aggregate for key markets where the Group is present (i.e. China, India, Australia, Japan and South Korea). Report on...

  • Page 71
    ... a successful return, quickly becoming the Group's fourth best-selling vehicle in the region and driving the brand's five-fold sales increase for the year. Fiat Viaggio continued to gain momentum in China, becoming the Group's best-selling vehicle in the region. The Fiat brand product line-up was...

  • Page 72
    ...significant declines in Italy and Germany. LCV shipments were in line with the prior year at 203,000 units. Passenger Car Industry Sales (units in thousands) 2013 1,786.4 2,871.7 2,264.9 1,304.4 723.9 287.8 12,308.2 2012 1,890.0 3,001.0 2,043.6 1,403.0 700.6 271.0 12,528.1 Change -5.5% -4.3% 10...

  • Page 73
    ... 30th anniversary limited edition Panda 4x4 Antarctica. The Fiat brand received the "Best Green Engine of the Year 2013" award for the eco-performing natural gas TwinAir Turbo. In October, Alfa Romeo presented refreshed versions of the MiTo and Giulietta, with new engine options, including the...

  • Page 74
    ... the introduction of the right-hand drive F12 Berlinetta, but down in Germany reï¬,ecting planned reductions. In Italy, government austerity measures continued to penalize demand with sales in 2013 accounting for less than 3% of the global total. Performance was very positive in the Middle East...

  • Page 75
    ... FF. The brand also began shipping the new super car, the limited edition LaFerrari, which was premiered at the Geneva Motor Show in March. North America (U.S. and Canada) posted another record year, with sales up 9% over the prior year to 2,230 vehicles. The region remained Ferrari's largest market...

  • Page 76
    ... vehicles shipped and combined order intake for the two new models of 26,000 units. Report on Operations Major events during the year included: the opening of a new, state-of-the-art production facility for the Quattroporte and Ghibli, presentation of a new brand image and communications strategy...

  • Page 77
    ... core business areas. In January, an agreement was signed with a leading car leasing company, LeasePlan, for ï¬,eet maintenance by Magneti Marelli's Checkstar service centers. In September, Magneti Marelli and China South Industries Group Corporation, a manufacturer of automotive parts and systems...

  • Page 78
    ...Fiat/Chrysler and Mazda. Suspension Systems Revenues were â,¬470 million, substantially in line with 2012. Increased sales associated with the Ducato in Brazil and Mexico compensated for contractions across brands for Fiat Group, the business line's principal customer, in Italy and Poland. Research...

  • Page 79
    ... Orders received during the year included interiors, exteriors, fuel systems and pedals for the new B-SUV Jeep to be produced at the Melfi plant starting in 2014. Teksid (Metallurgical Products) During 2013, the global Light Vehicle market registered a 3.1% increase globally. By region, production...

  • Page 80
    ... year attributable primarily to the Body Welding business. By region, 44% of new orders were generated in Europe, 28% in NAFTA, 16% in APAC and 12% in LATAM. By customer, 25% of orders came from Fiat/Chrysler companies and the remaining 75% from other manufacturers. At 31 December 2013, the order...

  • Page 81
    ... segments, regions and central functions that have operational responsibility for issues such as the environment, energy, innovation and human resources, and supports them in identifying key areas for action. It also manages relationships with international sustainability organizations, as well as...

  • Page 82
    ...'s activities. The decisions of many internal and external stakeholders - including customers, suppliers, dealers, employees, public institutions, trade and industry groups, investors and local communities - are affected by the Group's activities just as the Group's activities and results are, to...

  • Page 83
    ... the 2012 Sustainability Report. Materiality diagram Product Importance for external stakeholders Very important Environment Social Vehicle safety Research and innovation Human rights along the value chain Customer satisfaction Business integrity and ethical standards Vehicle quality Health and...

  • Page 84
    ... and safety, and developing new models of mobility. Continuous innovation is essential to development of products that are environmentally and socially sustainable, as well as affordable. Innovating for Sustainable Products and Processes In 2012, the Group launched the Global Innovation Process (GIP...

  • Page 85
    ... entire life cycle. Key elements in that strategy include improving the efficiency of conventional engines, offering a full range of alternative fuel vehicles, developing alternative propulsion and emissions reduction systems, reducing the energy requirements of vehicles, promoting driver behavior...

  • Page 86
    ... evolution of the Dual Clutch systems currently available on the Alfa Romeo MiTo and Giulietta, Dodge Dart and Fiat Viaggio and the Fiat 500L in the U.S. Specific areas of focus included optimization of the mechatronic actuation system and integration with the transmission, as well as refinements...

  • Page 87
    ... Group is also developing alternative propulsion systems. In 2013, the Fiat 500e battery electric vehicle was launched for sale in the U.S. market with an Environmental Protection Agency (EPA) label of 108 highway MPGe(2) and a class-leading 87 miles of combined city/highway driving range. Customers...

  • Page 88
    ..., the largest car-sharing ï¬,eet in Italy with a total of 640 Fiat 500s and 500Ls. Innovative features of the service include online or smartphone app sign-up and management, as well as the ability to instantly select from a pool of available vehicles parked at locations around the city and to...

  • Page 89
    ... nearly every aspect of the business - from design to manufacturing, marketing and human resources. This research is organized around five driving forces: cities, lifestyle, work, health and energy. The findings from this research will enable Fiat-Chrysler to more successfully anticipate evolving...

  • Page 90
    ... 1,000 customer care professionals manage approximately 10 million contacts a year. The services provided range from information, to complaint management and coordination of roadside assistance. Together with dealers, the Customer Contact Centers represent an essential channel of communication with...

  • Page 91
    90 Report on Operations Sustainability Product Quality The Group is committed to offering customers vehicles of the highest quality, in all markets and segments, while addressing the specific requirements of each market and leveraging the opportunities offered by the Fiat/Chrysler integration. ...

  • Page 92
    91 EMPLOYEES The Group's human capital is crucial to its ability to compete as a leader in the global auto sector, as well as creating value that is sustainable over the long term. At 31 December 2013, the Group had a total of 225,587 employees, a 5% increase over year-end 2012 that also reï¬,ects ...

  • Page 93
    ... and ensuring equal opportunity to compete for key positions within the organization have always been an essential part of the Group's commitment toward its employees. The Group uses a structured global leadership and performance management process to identify and develop talent and maintain...

  • Page 94
    ... environment for all employees, at all sites and in every area of activity. That commitment also extends to suppliers, service providers and customers. The Group's strategy for safeguarding and promoting health and safety in the workplace addresses several areas: application of uniform procedures...

  • Page 95
    ...17.5 million in 2011, approximately â,¬16 million in 2012 and â,¬14.6 million in 2013. In addition to safety in the workplace, the Group also has numerous initiatives to promote the health and well-being of employees and their families. At Group level, for example, the "WELL" initiative focuses on...

  • Page 96
    ... sector's first ever multi-year agreement. In 2013, the level of labor unrest at Fiat Group companies in Italy was negligible, both in terms of the number of instances and the number of employees taking part, despite appearances based on the level of public attention given to certain issues...

  • Page 97
    ... address supplier practices in areas such as human rights, the environment, health and safety, ethics, anti-corruption, and employee training and development. In 2013, more than 1,200 suppliers, representing 43% of the value of purchases managed by Group Purchasing for the year, responded...

  • Page 98
    ... and, over the next few years, develop a risk management strategy for areas where water resources are scarce. Another important area of long-term focus for the Group, in collaboration with industry peers and stakeholders, is the respect of human rights and working conditions at all levels in the...

  • Page 99
    ... greenhouse gas emissions in response to increasingly strict regulations. Over time, this has also resulted in significant energy-related cost savings. A total of approximately 2,400 energy-related projects developed during the year as part of WCM contributed to a reduction of approximately 2,000...

  • Page 100
    ... of continuous reductions (-27.1% versus 2010)(1). Lower water consumption at plants worldwide generated total savings of approximately â,¬2.5 million. Water withdrawal Fiat Group worldwide (thousands of m3) Total water withdrawal 2013 24,936 2012 25,874 2011 29,862 Waste Management Fiat Group is...

  • Page 101
    ...or 6,400 GJ reduction in energy consumption over 2012, reducing CO2 emissions by 685 tons and generating cost savings at the same time. Similar initiatives to improve sustainability are planned for dealers outside Italy. In the U.S., for the second consecutive year, Chrysler Group managed the Dealer...

  • Page 102
    ... 2010-2013, these initiatives led to a reduction of more than 26,000 tons in CO2 emissions. New and existing initiatives provided the opportunity for employee involvement and training on issues relating to personal health, the environment (waste management, water consumption, energy savings) and...

  • Page 103
    ... the form of long-term investment based on a detailed plan targeted at development in the local community. Investment is not just monetary, but often also includes employees volunteering time and know-how for initiatives that address community development, education, the environment and basic social...

  • Page 104
    ... system, corporate governance model and corporate structure, establishment of a group-wide Code of Conduct, in addition to definition of policies for the management of personnel and financial resources, and for the procurement of production materials, and marketing and communications services...

  • Page 105
    104 Report on Operations Corporate Governance Subsidiaries headquartered outside Italy generally benefit from those activities. However, Chrysler, which has a board of directors composed of a majority of members not affiliated with Fiat S.p.A., relies directly on capital markets funding for its...

  • Page 106
    ... of minor value. The task of implementing the Procedures and disseminating them to Group companies is assigned to the manager responsible for the Company's financial reporting, who must also ensure coordination with the administrative and accounting procedures required under Article 154-bis...

  • Page 107
    ... in the Annual Report on Corporate Governance. The Board of Directors verified that Joyce Victoria Bigio, René Carron, Gian Maria Gros-Pietro and Patience Wheatcroft satisfied the requirements of independence. Some directors also hold positions at other listed companies or companies of signi...

  • Page 108
    ... introduced by the Corporate Governance Code in 2011. The Internal Control and Risk Management System, based on the model provided by the COSO Report and the principles of the Corporate Governance Code, consists of a set of policies, procedures and organizational structures aimed at identifying...

  • Page 109
    ... belonging to the same network, as well as equity partners, shareholders, directors, members of management and supervisory bodies and employees of the audit firm. With reference to the "Conditions for the listing of shares of companies having control over companies incorporated and regulated under...

  • Page 110
    ... reference to Fiat's average market capitalization for the fourth quarter of 2011. Additional information provided to Shareholders on the candidates and lists presented are available in the Investors section of the Group website (www.fiatspa.com). The Board of Statutory Auditors' current term of of...

  • Page 111
    ...formed part of the normal business activities of companies in the Group. Such transactions are concluded at standard market terms for the nature of goods and/or services offered. Information on transactions with related parties, including specific disclosures required by the Consob Communication of...

  • Page 112
    ... in Chrysler Group LLC, previously held by the VEBA Trust, the Fiat Board of Directors reviewed options for the most appropriate governance and corporate structure. In order to establish a true peer to the major global automotive groups, in both scale and capital market appeal, the Board decided...

  • Page 113
    ... savings, for the period from 2014 to 2016, of approximately USD 134 million.(1) On February 11th, Moody's Investors Service lowered Fiat S.p.A.'s Corporate Family Rating from 'Ba3' to 'B1' and consequently, in accordance with their methodology, ratings on the notes issued by Fiat Finance & Trade...

  • Page 114
    ...also the new Chrysler 200, which will be available in the second quarter of 2014. The year-over-year revenue contribution from APAC is also expected to be higher in 2014, driven by both increased market demand and penetration in the Group's key markets in the region, particularly China and Australia...

  • Page 115
    ... Review - Fiat S.p.A. Financial Review - Fiat S.p.A. The following information is based on the 2013 financial statements prepared in accordance with the International Financial Reporting Standards ("IFRS") issued by the International Accounting Standards Board ("IASB"), as adopted by the European...

  • Page 116
    ... due to the acquisition of a business unit from the subsidiary Fiat Services S.p.A. in early 2013. Other income of â,¬83 million (â,¬77 million in 2012) mainly related to services rendered, including by senior management personnel, to the principal Group companies. The â,¬6 million increase over the...

  • Page 117
    ...000 million loan provided at market terms At 31 December 2012, current financial assets and liabilities also consisted of receivables and payables from/to the subsidiary Fiat Finance S.p.A. relating to the positive fair value of equity swaps on Fiat and Fiat Industrial shares expiring in 2013, as...

  • Page 118
    ... of the loan from Fiat Finance S.p.A., at market rates of interest, which is repayable in 2014. A more detailed analysis of cash ï¬,ows is provided in the notes to Fiat S.p.A.'s statutory financial statements. Reconciliation between Equity and Net Profit of the Parent Company and the Group As...

  • Page 119
    ...Statutory Financial Statements for the year ended 31 December 2013, which report a net loss of â,¬226,697,618. We propose that the loss be allocated to the Retained Profit reserve, bringing the value of the reserve to â,¬1,537,084,936. 27 February 2014 On behalf of the Board of Directors /s/ John...

  • Page 120

  • Page 121
    3

  • Page 122
    ... July 2006 ...130 Consolidated Statement of Cash Flows pursuant to Consob Resolution 15519 of 27 July 2006 ...132 Notes to the Consolidated Financial Statements ...133 Appendix I - Fiat Group Companies at 31 December 2013 ...237 Appendix II - Information required under Article 149- duodecies of the...

  • Page 123
    ... 896 896 Net revenues Cost of sales Selling, general and administrative costs Research and development costs Other income/(expenses) TRADING PROFIT/(LOSS) Result from investments: Share of the profit/(loss) of investees accounted for using the equity method Other income/(expenses) from investments...

  • Page 124
    ... benefit plans for equity accounted entities Related tax impact Total items that will never be reclassified to the Income statement (B1) Items that may be reclassified to the Income statement: Gains/(losses) on cash ï¬,ow hedging instruments Gains/(losses) on available-for-sale financial assets...

  • Page 125
    ... lives Other intangible assets Property, plant and equipment Investments and other financial assets: Investments accounted for using the equity method Other investments and financial assets Leased assets Defined benefit plan assets Deferred tax assets TOTAL NON-CURRENT ASSETS Inventories Trade...

  • Page 126
    ...parent Non-controlling interest Provisions: Employee benefits Other provisions Debt: Asset-backed financing Other debt Other financial liabilities Trade payables Current tax payables Deferred tax liabilities Other current liabilities Liabilities held for sale TOTAL EQUITY AND LIABILITIES (10) (29...

  • Page 127
    ... FINANCING ACTIVITIES: New issuance of bonds Repayment of bonds Issuance of other medium-term borrowings Repayment of other medium-term borrowings Net change in other financial payables and other financial assets/liabilities Increase in share capital Dividends paid Distribution for tax withholding...

  • Page 128
    ...assets benefit plans reserve reserve Total AT 31 DECEMBER 2011 (Reported amounts) IAS 19 revised adoption effect AT 1 JANUARY 2012 Changes in equity for 2012: Capital increase Effect of the conversion of preference and savings shares into ordinary shares Share based payments Dividends distributed...

  • Page 129
    ... Financial Statements at 31 December 2013 Statement of Changes in Consolidated Equity Statement of Changes in Consolidated Equity Remeasurement of defined benefit plans reserve (continued) (â,¬ million) Share Treasury Capital Earnings capital shares reserves reserves Cumulative Cash...

  • Page 130
    ... 896 896 Net revenues Cost of sales Selling, general and administrative costs Research and development costs Other income/(expenses) TRADING PROFIT/(LOSS) Result from investments: Share of the profit/(loss) of investees accounted for using the equity method Other income/(expenses) from investments...

  • Page 131
    ... lives Other intangible assets Property, plant and equipment Investments and other financial assets: Investments accounted for using the equity method Other investments and financial assets Leased assets Defined benefit plan assets Deferred tax assets TOTAL NON-CURRENT ASSETS Inventories Trade...

  • Page 132
    ... benefits Other provisions Debt: Asset-backed financing Other debt Other financial liabilities Trade payables Current tax payables Deferred tax liabilities Other current liabilities Liabilities held for sale TOTAL EQUITY AND LIABILITIES Consolidated Financial Statements at 31 December 2013 211

  • Page 133
    ... sale of: Property, plant and equipment and intangible assets Other investments Net change in receivables from financing activities Change in current securities Other changes TOTAL D) CASH FLOWS FROM/(USED IN) FINANCING ACTIVITIES: Issuance of bonds Repayment of bonds Issuance of other medium-term...

  • Page 134
    ...of the Group core business. Basis of preparation The 2013 consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards (the "IFRS") issued by the International Accounting Standards Board ("IASB") and adopted by the European Union, and with...

  • Page 135
    ... for determination of the transfer price or the timing of the event (e.g., close to year-end) - could give rise to doubts regarding the accuracy/completeness of the information in the financial statements, conï¬,icts of interest, the proper safeguarding of corporate assets or protection of non...

  • Page 136
    ... not control or joint control over the financial and operating policies. Investments in associates are accounted for using the equity method from the date that significant inï¬,uence commences until the date it ceases. When the Group's share of losses of an associate, if any, exceeds the carrying...

  • Page 137
    ... of accounting, in accordance with IFRS 3 - Business combinations. When a business combination is achieved in stages, the Group's previously held equity interest in the acquiree is remeasured at its acquisition-date fair value and any resulting gain or loss is recognized in Income statements under...

  • Page 138
    ... attributed to the development process. Capitalized development costs are amortized on a straight-line basis from the start of production over the expected life cycle of the models (generally 5-6 years) or powertrains developed (generally 10-12 years). All other development costs are expensed...

  • Page 139
    ...nancial assets are measured at fair value. When market prices are not directly available, the fair value of available-for-sale financial assets is measured using appropriate valuation techniques (e.g. discounted cash ï¬,ow analysis based on market information available at the balance sheet date).

  • Page 140
    ... instruments are included in the Income statement for the period. Loans and receivables which are not held by the Group for trading (loans and receivables originating in the course of business), held-to-maturity securities and equity investments whose fair value cannot be determined reliably, are...

  • Page 141
    ... expected future use and realizable value. Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs for sale and distribution. The measurement of production systems construction contracts is based on the...

  • Page 142
    ...of a plan are recognized in the Income statement within Other unusual income and expenses when the settlement occurs. Other long term employee benefits The Group obligations represent the present value of future benefits that employees have earned in return for their service during the current and...

  • Page 143
    ...wages, as well as depreciation, amortization and transportation costs. Cost of sales also includes warranty and product-related costs, estimated at the time of sale to dealer networks or to the end customer. Expenses which are directly attributable to the financial services companies, including the...

  • Page 144
    ... cars and light commercial vehicles and related spare parts under the Fiat and Fiat Professional brand names in South and Central America, excluding Mexico, and from the distribution of Chrysler group brand cars in the same region; in addition, it provides financial services to the dealer network...

  • Page 145
    ... Financial Statements at 31 December 2013 Notes The Luxury Brands (Ferrari and Maserati) grouping earns its revenues from the production and sale of luxury sport cars under the Ferrari and Maserati brands, from managing the Ferrari racing team and from providing financial services offered...

  • Page 146
    ... reï¬,ects the current market assessment of the time value of money for the period being considered and the risks specific to the EMEA region. The WACC was calculated by referring among others to the yield curve of 10 years European government bonds and to Fiat cost of debt. The recoverable amount...

  • Page 147
    ...health care cost increases and the likelihood of potential future events estimated by using demographic assumptions such as mortality rates, dismissal and retirement rates. In particular, the discount rates selected are based on high quality corporate bonds in the relevant market. The return on plan...

  • Page 148
    ... are generally brand, model and region specific for a defined period of time, which may be extended. The Group recognizes the estimated cost of these incentive programs at the time of sale. The estimated cost represents the incentive programs offered to dealers and retail customers, as well as the...

  • Page 149
    ...of managing plan assets should be deducted from the return on plan assets (through Other comprehensive income/losses) and all other administrative costs relating to assets should be recognized in the Income statements in the year they occur. Under the previous version of IAS 19, the Group recognized...

  • Page 150
    ... 623 896 896 44 (â,¬ million) Effects on Income statement Cost of sales Selling, general and administrative costs Research and development costs Other income/(expenses) Trading profit/(loss) EBIT Financial income/(expenses) Income taxes Profit/(loss) from continuing operations Profit/(loss) for...

  • Page 151
    ... report. Amendments to IAS 1 - Presentation of Financial Statements (as part of the Annual Improvements to IFRS's - 2009-2011 Cycle) On 17 May 2012, the IASB issued a number of amendments to IFRSs ("Annual Improvements to IFRS's - 2009-2011 Cycle"). The amendments that are relevant to the Group...

  • Page 152
    ... retrospectively. The European Union endorsed these standards by postponing their effective date to 1 January 2014, allowing early adoption from 1 January 2013. The Group will apply the new standards from 1 January 2014. In particular: IFRS 10 - Consolidated Financial Statements will replace SIC-12...

  • Page 153
    152 Consolidated Financial Statements at 31 December 2013 Notes In addition, the European Union had not yet completed its endorsement process for these standards and amendments at the date of this Annual report: On 12 November 2009, the IASB issued IFRS 9 - Financial Instruments. The new standard...

  • Page 154
    ... assets Current assets TOTAL ASSETS Debt Other liabilities The combined balances of the Group's share in the principal Income statement items of jointly controlled entities accounted for using the equity method are as follows: Net revenues Trading profit/(loss) EBIT Profit/(loss) before taxes Pro...

  • Page 155
    ...Fiat Group acquired control of the VM Motori group in accordance with IAS 27 - Consolidated and Separate Financial Statements. The company, which was previously consolidated by using the equity method, was consolidated on a line-by-line basis from that date. On the same date, General Motors, holding...

  • Page 156
    ... warranty and product-related costs, estimated at the time of sale to dealer networks or to the end customer. Cost of sales also includes â,¬190 million (â,¬158 million in 2012) of interest cost and other financial expenses from financial services companies. Consolidated Financial Statements...

  • Page 157
    ...marketing support in the form of trade and auto shows, events, and sponsorships. General and administrative costs amount to â,¬2,420 million in 2013 (â,¬2,396 million in 2012) and mainly consist of administration expenses which are not attributable to sales, manufacturing or research and development...

  • Page 158
    ...value of the Equity Recapture Agreement Right considering the agreement closed on 21 January 2014 to purchase the remaining minority equity stake in Chrysler from the VEBA Trust (as described in the Subsequent events note). Other unusual charges also includes for 2013 a â,¬115 million charge related...

  • Page 159
    ... out details of the Group's financial income and expenses, including the amounts reported in the Income statement within the Financial income/(expenses) line item, as well as interest income from customers and other financial income of financial services companies, recognized under Net revenues...

  • Page 160
    ... related to Chrysler of â,¬1,500 million. In 2013, the Regional Italian Income Tax IRAP recognized within current taxes amounts to â,¬54 million (â,¬60 million in 2012) and IRAP recognized within deferred tax costs amounts to â,¬12 million (â,¬20 million in 2012). Consolidated Financial Statements...

  • Page 161
    ... and tax losses arising in the year. In 2013 Other differences include unrecoverable withholding tax of â,¬84 million (â,¬95 million in 2012). The Group recognizes in its Statement of Financial Position within Deferred tax asset, the amount of Deferred tax assets less the Deferred tax liabilities...

  • Page 162
    ... for doubtful accounts Other Total Deferred tax liabilities arising on: Accelerated depreciation Capitalization of development costs Brands and other intangibles Provision for employee benefits Other Total Deferred tax asset arising on tax loss carry-forward Unrecognized deferred tax assets Total...

  • Page 163
    162 Consolidated Financial Statements at 31 December 2013 Notes The decision to recognize Deferred tax assets is taken for each company in the Group by assessing critically whether the conditions exist for the future recoverability of such assets by taking into account the basis of most recent ...

  • Page 164
    163 11. Other information by nature In 2013, personnel costs amounted to â,¬9,352 million (â,¬9,110 million in 2012), these amounts comprise costs that were capitalized mainly in connection to the product development activities. In 2013, Fiat Group had an average number of employees of 220,194 (205...

  • Page 165
    ... region and comprise the Chrysler, Jeep, Dodge, Ram and Mopar brands. These rights are protected legally through registration with government agencies and through the continuous use in commerce. As these rights have no legal, contractual, competitive or economic term that limits their useful lives...

  • Page 166
    ... the best estimate of expected conditions regarding market trends and segment, brand and model share for the NAFTA operating segment in the countries in which it operates (United States, Canada and Mexico) over the period considered. Consolidated Financial Statements at 31 December 2013 In...

  • Page 167
    ... the Capital Asset Pricing Model ("CAPM") technique in which the risk free rate has been calculated by referring to the yield curve of long-term U.S. government bonds and the beta coefficient and the debt/equity ratio have been extrapolated by analyzing a group of comparable companies operating...

  • Page 168
    ...intangible assets were as follows: At 31 December 2012 5,227 4,637 9,864 2,100 625 12...Development costs externally acquired Development costs internally generated Total Development...2,100 625 12,589 Consolidated Financial Statements at 31 December 2013 At 31 December 2011 Changes in the scope of ...

  • Page 169
    168 Consolidated Financial Statements at 31 December 2013 Notes Changes in accumulated amortization and impairment losses were as follow: At 31 December 2012 Amortization 2,436 2,516 4,952 875 425 6,252 479 408 887 213 46 1,146 Changes in the scope of Divestitures consolidation (1) (286) (287) (...

  • Page 170
    ... in 2012), consisting primarily of material costs and personnel related expenses relating to engineering, design and development focused on content enhancement of existing vehicles, new models and powertrain programs in NAFTA and EMEA region. In 2013, to reï¬,ect the new product strategy the Group...

  • Page 171
    170 Consolidated Financial Statements at 31 December 2013 Notes 15. Property, plant and equipment Changes in the gross carrying amount of Property, plant and equipment were as follows: At 31 December 2012 716 6,397 19 6,416 34,078 382 34,460 1,908 3,273 46,773 Change in the scope of Translation ...

  • Page 172
    ...Translation 2012 ...buildings Owned plant, machinery and equipment Plant, machinery and equipment leased under finance leases Total Plant, machinery and equipment Other tangible assets Advances and tangible assets in progress Accumulated depreciation and impairment Consolidated Financial Statements...

  • Page 173
    172 Consolidated Financial Statements at 31 December 2013 Notes Changes in the net carrying amount of Property, plant and equipment were as follows: At 31 Change in At 31 December Impairment the scope of Translation Other December 2012 Additions Depreciation losses Divestitures consolidation ...

  • Page 174
    ... on the results, net assets and total of Property, plant and equipment reported in the Statement of financial position. Additions of â,¬5,110 million in 2013 are primarily related to the car mass-market operations in NAFTA and EMEA region, as well as, to the ongoing construction of the new LATAM...

  • Page 175
    ... Investments Non-current financial receivables Other securities and other financial assets Total Investments and other financial assets Changes in Investments in 2013 are set out below: At 31 December Revaluations/ 2012 (Write-downs) 1,507 295 56 1,858 87 (5) 82 Purchases/ Change in capital the...

  • Page 176
    ... shares) with a â,¬94 million cash investment. In order to account for this investment, reference was made to the company's most recent published financial statements, being the "Interim Management Statements at 30 September 2013". At 31 December 2013, the stock market price of equity investments...

  • Page 177
    ... ($75 million) relating to the amount paid for the contractual rights arising from the Equity Recapture Agreement and the VEBA Call Option. Considering the agreement with the VEBA Trust to purchase the remaining minority equity stake in Chrysler, which closed on 21 January 2014, the equivalent...

  • Page 178
    ...ve years 25 64 34 123 (â,¬ million) Total 2,406 3,671 291 1,860 8,228 Total 2,702 3,727 236 1,776 8,441 Trade receivables Receivables from financing activities Current tax receivables Other current receivables Total Current receivables Consolidated Financial Statements at 31 December 2013 236

  • Page 179
    ...mainly relate to the business of financial services companies fully consolidated by the Group (primarily dealer and retail financing). (â,¬ million) At 31 December 2013 2,286 970 297 118 3,671 At 31 December 2012 2,108 1,115 331 173 3,727 Dealer financing Retail financing Finance leases Other...

  • Page 180
    ...by sales of vehicles and are generally managed under dealer network financing programs as a component of the portfolio of the financial services companies. These receivables are interest bearing, with the exception of an initial limited, non-interest bearing period. The contractual terms governing...

  • Page 181
    ...million (â,¬2,179 million at 31 December 2012), mainly due from the sales network, transferred to jointly controlled financial services companies (FGA Capital). 19. Current securities Current securities consist of short-term or marketable securities which represent temporary investments, but which...

  • Page 182
    ...201 million at 31 December 2012 to â,¬137 million at 31 December 2013) is mostly due to ï¬,uctuations in exchange rates, in interest rates and in commodity prices during the year, and to the equity swaps on Fiat S.p.A. and CNH Industrial N.V. ordinary shares, expired in 2013. As this item consists...

  • Page 183
    ... statement mainly relate to currency risk management and, to a lesser extent, to hedges regarding commodity price risk management and the cash ï¬,ows that are exposed to an interest rate risk. The policy of the Group for managing currency risk normally requires that future cash ï¬,ows from trading...

  • Page 184
    ... December 2012) relates to Chrysler, and consists of: (â,¬ million) At 31 December 2013 9,923 9,516 19,439 At 31 December 2012 7,568 10,089 17,657 Cash at banks(*) Money market securities Total Cash and cash equivalents (*) Includes bank deposits which may be used exclusively by Group companies...

  • Page 185
    ... a company in Brazil now consolidated on line-by-line basis. 23. Equity Consolidated shareholders' equity at 31 December 2013 increased by â,¬4,215 million from 31 December 2012, mainly due to an increase of â,¬2,908 million in the remeasurement of defined benefit plans reserve net of related tax...

  • Page 186
    ...December 2012), with a par value of â,¬3.58 each. The capital increase from the previous year is due to the issue of 285,000 new shares in relation to the exercise of stock options. The following table provides a reconciliation between the number of Fiat S.p.A. shares outstanding at 31 December 2011...

  • Page 187
    ... a dividend payment on Fiat shares, given the company's desire to maintain a balanced level of liquidity following the acquisition of the minority stake in Chrysler on 21 January 2014. The objectives identified by the Group for managing capital are to create value for shareholders as a whole...

  • Page 188
    ... provides for the purchase of a maximum number of shares not to exceed the legally established percentage of share capital or an aggregate value of â,¬1.2 billion, inclusive of the â,¬259 million in Fiat shares already held. As announced, the buy-back program is currently on hold and Fiat has no...

  • Page 189
    ...as follows: (â,¬ million) 2013 2,678 (9) 2,669 2012 (1,843) 1 (1,842) Items that will never be reclassified to the Income statement: Gains/(losses) on remeasurement of defined benefit plans Shares of gains/(losses) on remeasurement of defined benefit plans for equity accounted entities Total...

  • Page 190
    ...the year and transfers from (to) non-controlling interest 24. Share-based compensation The following share-based compensation plans relating to managers of Group companies and the Chief Executive Officer of Fiat S.p.A. were in place. Consolidated Financial Statements at 31 December 2013 Chrysler...

  • Page 191
    ...an eight year stock option plan, which granted certain managers of the Group and the Chief Executive Officer of Fiat S.p.A. the right to purchase a specific number of Fiat S.p.A. ordinary shares at a fixed price of â,¬13.37 each. More specifically, the 10,000,000 options granted to employees and...

  • Page 192
    ... of the terms of the stock option plans outstanding at 31 December 2013 is as follows: Options outstanding at 31 December 2013 1,240,000 1,240,000 Rights granted to managers Options Average remaining outstanding at contractual life 31 December 2012 (years) 1,576,875 1,576,875 0.8 Rights granted to...

  • Page 193
    ... Chrysler Group LLC Restricted Stock Unit Plan ("RSU Plan"), the Amended and Restated Chrysler Group LLC Directors' Restricted Stock Unit Plan ("Directors' RSU Plan"), the Chrysler Group LLC Deferred Phantom Share Plan ("DPS Plan") and the Chrysler Group LLC 2012 Long-Term Incentive Plan ("2012 LTIP...

  • Page 194
    ... April 2012, the Compensation Committee amended and restated the Chrysler Group LLC 2009 Directors' Restricted Stock Unit Plan to allow grants having a one year vesting term to be granted on an annual basis. Director RSUs are granted to Chrysler non-employee members of our Board of Directors. Prior...

  • Page 195
    ... the end of the year 1,508,785 (1,190,054) 318,731 Phantom Shares 4,944,476 (3,435,691) 1,508,785 The expense recognized in connection with this plan in 2013 and 2012 approximated â,¬2 million and â,¬2 million, respectively. 2012 Long-Term Incentive Plan of Chrysler Group LLC In February 2012, the...

  • Page 196
    ...the year 8,419,684 587,091 (589,264) 8,417,511 2013 Weighted average Fair value at the grant date (â,¬) 5.78 7.15 5.77 5.64 LTIP PSUs 8,450,275 (30,591) 8,419,684 2012 Weighted average Fair value at the grant date (â,¬) 5.91 5.78 5.73 The expense recognized in connection with these plans in 2013...

  • Page 197
    ...fits, Health care and life insurance plans, and Other post-employment benefits. Moreover, Group companies provide post-employment benefits, such as pension or health care benefits, to its employees under defined contribution plans. In this case, the Group pays contributions to public or private...

  • Page 198
    197 Pension benefits Group companies in the United States, Canada and Mexico sponsor both non-contributory and contributory defined benefit pension plans. The non-contributory pension plans cover certain hourly and salaried employees. Benefits are based on a fixed rate for each year of service...

  • Page 199
    ...Consolidated Financial Statements at 31 December 2013 Notes The following summarizes the changes in the pension plans: Fair value of plan assets (20,049) (768) 42 14 Asset ceiling 2013 Liability (asset) 6,924 292 258 42 (162) Fair value of plan assets (20,005) (942) 44 Asset ceiling 2012 Liability...

  • Page 200
    ... long duration U.S. Treasury and global government bonds, as well as U.S. developed international and emerging market companies' debt securities diversified by sector, geography and through a wide range of market capitalization. Private equity funds include those in limited partnerships that invest...

  • Page 201
    ... used in place of physical securities when it is more cost effective and/or efficient to do so. Plan assets do not include shares of Fiat S.p.A. or properties occupied by Group companies. Sources of potential risk in the pension plan assets measurements relate to market risk, interest rate risk and...

  • Page 202
    ... and Canada by Chrysler Group companies. Upon retirement from the Company, these employees may become eligible for continuation of certain benefits. Benefits and eligibility rules may be modified periodically. These plans are unfunded. The expected benefit payments for unfunded health care and...

  • Page 203
    ...Canada 4.7 2.7 3.6 Discount rate Salary growth Weighted average ultimate healthcare cost trend rate The discount rates used for the measurement of these obligations are based on yields of high-quality (AA-rated) fixed income securities for which the timing and amounts of payments match the timing...

  • Page 204
    ... for benefits as jubilee and long term disability granted to certain employees by the Group. This item also comprised Liabilities for share-based payments amounting to â,¬123 million at 31 December 2013 (â,¬125 million at 31 December 2012). Consolidated Financial Statements at 31 December...

  • Page 205
    ... lifetime warranty costs of each vehicle and each model year of that vehicle line, as well as historical claims experience for vehicles. The Group establishes provisions for product warranty obligations when the related sale is recognized. Warranty provisions also include management's best estimate...

  • Page 206
    ... Group's dealer networks, primarily on the basis of a specific cumulative level of sales transactions during a certain period. The provision also includes sales cash incentives provided to retail customers. Legal proceedings and other disputes, this provision represents management's best estimate...

  • Page 207
    ... 27,889 Asset-backed financing Bonds Borrowings from banks Payables represented by securities Other Total Other debt Total Debt At 31 December 2013, Debt includes â,¬9,458 million (â,¬10,312 million at 31 December 2012) of Chrysler debt due to third parties. Debt increased by â,¬2,013 million at...

  • Page 208
    ...31 December 2013, debt secured by assets of Chrysler amounts to â,¬5,180 million (â,¬5,530 million at 31 December 2012), and includes â,¬4,448 million (â,¬4,665 million at 31 December 2012) relating to the Secured Senior Notes and the Senior Secured Credit Facility (the "Tranche B Term Loan" and the...

  • Page 209
    ... Financial Statements at 31 December 2013 Notes Bonds The bond issues outstanding at 31 December 2013 are as follows: Face value of outstanding bonds (in million) 900 1,250 1,500 425 1,000 1,000 400 850 1,000 450 1,250 600 1,250 7 Currency GLOBAL MEDIUM TERM NOTES: Fiat Finance and Trade...

  • Page 210
    ... on 15 February 2013 of the bond issued by Fiat Finance and Trade Ltd. S.A. having a nominal value of â,¬1 billion, bearing fixed interest at 6.625%, all the bonds issued by the Fiat Group excluding Chrysler are currently governed by the terms and conditions of the Global Medium Term Note Programme...

  • Page 211
    ... Term Loan. Medium/long term committed credit lines (expiring after twelve months) currently available to the treasury companies of Fiat Group excluding Chrysler amount to approximately â,¬3.2 billion at 31 December 2013, of which â,¬2.1 billion related to the 3-year syndicated revolving credit line...

  • Page 212
    ... Bank for a total of â,¬1.1 billion, in order to fund the Group's investments and research and development costs. In addition, the above syndicated credit facility, currently contemplates limits to the capability to extend guarantees or loans to Chrysler. At 31 December 2013, Chrysler has secured...

  • Page 213
    ... years five years Total 90 (20) 70 246 (57) 189 215 (15) 200 551 (92) 459 (â,¬ million) Minimum future lease payments Interest expense Present value of minimum lease payments At 31 December 2013, the Fiat Group excluding Chrysler had outstanding financial lease agreements for certain Property...

  • Page 214
    ...203 7,781 Advances on buy-back agreements Indirect tax payables Accrued expenses and deferred income Payables to personnel Social security payables Amounts due to customers for contract work (Note 17) Other Total Other current liabilities An analysis of Other current liabilities (excluding Accrued...

  • Page 215
    ...in relation to separately-priced extended warranties and service contracts offered by Chrysler. These revenues will be recognized in the Income statement over the contract period in proportion to the costs expected to be incurred based on historical information. In addition, at 31 December 2013, the...

  • Page 216
    ... rates); the fair value of equity swaps is determined using market prices at the balance sheet date. The par value of Cash and cash equivalents usually approximates fair value due to the short maturity of these instruments, which consist primarily of bank current accounts and time deposits, certi...

  • Page 217
    ... this measurement are market discount rates, that reï¬,ect conditions applied in various reference markets on receivables with similar characteristics, adjusted in order to take into account the credit risk of the counterparties. Bonds are listed in active markets, their fair value was measured with...

  • Page 218
    ... and payables; in particular, these transactions relate to: the sale of motor vehicles to the jointly-controlled entities Tofas-Turk Otomobil Fabrikasi A.S. and FGA Capital group; Consolidated Financial Statements at 31 December 2013 the sale of engines, other components and production systems to...

  • Page 219
    ...jointly-controlled entities To-dis S.r.l. Arab American Vehicles Company S.A.E. Other Total associates CNH Industrial group Poltrona Frau group Directors, Statutory Auditors and Key Management Other Total other related parties and CNH Industrial group Total unconsolidated subsidiaries Total of which...

  • Page 220
    ... Other Total jointly-controlled entities Arab American Vehicles Company S.A.E. Other Total associates CNH Industrial group Poltrona Frau group Directors, Statutory Auditors and Key Management Other Total other related parties and CNH Industrial group Total unconsolidated subsidiaries Total of which...

  • Page 221
    ...0.8% FGA Capital group Società Europea Veicoli Leggeri-Sevel S.p.A. Other Total jointly-controlled entities Global Engine Alliance LLC Other Total associates Total CNH Industrial group Total unconsolidated subsidiaries Total of which related parties Total Effect on Total (%) Guarantees pledged in...

  • Page 222
    ...by the sale of vehicles under buy-back commitments, net of the amounts included in Profit/(loss) for the year, are included under operating activities in a single line item which includes changes in working capital arising from these transactions. For 2013, Other non-cash items (positive for â,¬522...

  • Page 223
    ... of new and used vehicles at Chrysler's dealerships, financing for commercial and ï¬,eet customers, and ancillary services. In addition, SCUSA work with dealers to offer them construction loans, real estate loans, working capital loans and revolving lines of credit. Under the new financing...

  • Page 224
    ... February 2013, the Canadian automotive finance business of Ally was acquired by the Royal Bank of Canada ("RBC"). Dealers with financing through Ally were offered new lending agreements with RBC, as the Ally-financing arrangements did not transfer with the sale. As such, Chrysler Group no longer...

  • Page 225
    ... and a payment from FNA for the remainder of $1,750 million in cash purchase consideration to the VEBA Trust. At the date of publication of this Annual report, therefore, Fiat holds a 100% interest in Chrysler and all rights (VEBA Trust Call Option and Equity Recapture Agreement) previously existing...

  • Page 226
    .... 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...

  • Page 227
    ... assets are not included in the data reviewed by the Chief Executive Officer, consequently, as permitted by IFRS 8, the related information is not provided. Details of the Income statement by segments in 2013 and 2012 are as follows: Car Mass-Market brands (â,¬ million) NAFTA 45,777 LATAM 9,973...

  • Page 228
    ... 17,800 Luxury Brands Components 2,898 8,030 Unallocated Other items & activities adjustments 979 (3,461) Fiat Group 83,957 of which: Fiat Group excluding Chrysler 35,566 2012 Revenues Revenues from transactions with regions and other operating segments Revenues from external customers Trading...

  • Page 229
    ... current financial receivables from FGA Capital. Relates to intragroup manufacturing agreements reclassified as finance leases in accordance with IFRIC 4, in addition to receivables relating to factoring transactions between Chrysler Group companies and Fiat Group financial services companies...

  • Page 230
    ... the Group's trade receivables and receivables from financing activities is concentrated in the European Union and Latin America markets for Fiat excluding Chrysler and in the North American market for Chrysler. In order to test for impairment, significant receivables from corporate customers and...

  • Page 231
    ... sales network made by Group financial service companies and on vehicles assigned under finance and operating lease agreements. Receivables for financing activities amounting to â,¬3,671 million at 31 December 2013 contain balances totaling â,¬21 million (â,¬7 million at 31 December 2012), which...

  • Page 232
    .... The operating cash ï¬,ows, main funding operations and liquidity of the Fiat Group excluding Chrysler are centrally managed in the Group's treasury companies with the aim of ensuring effective and efficient management of the Group's funds. These companies obtain funds on the financial markets by...

  • Page 233
    ... which the Group is exposed are the following: USD/CAD, relating to sales in Canadian Dollars made by Chrysler in Canada; EUR/USD, relating to sales in US Dollars made by Italian companies (in particular, companies belonging to the Luxury Brands operating segment) and to sales and purchases in Euro...

  • Page 234
    ... rate financial instruments used by the Group consist principally of part of the portfolio of the financial services companies (basically customer financing and financial leases) and part of debt (including subsidized loans and bonds). The potential loss in fair value of fixed rate financial...

  • Page 235
    234 Consolidated Financial Statements at 31 December 2013 Notes Floating rate financial instruments consist principally of cash and cash equivalents, loans provided by the financial services companies to the sales network and part of debt. The effect of the sale of receivables is also ...

  • Page 236
    ... to affect the taxes payable by Group companies in the jurisdictions where their activities are carried out. On 7 February, Chrysler Group closed its offering of secured senior debt securities, raising approximately $3.0 billion in net proceeds; and senior secured term loan facilities, raising...

  • Page 237
    236 Consolidated Financial Statements at 31 December 2013 Notes In connection with the term loan facilities, Chrysler Group borrowed (1) an additional $250 million of term loans under its existing senior secured credit facilities maturing 24 May 2017, under which Chrysler Group borrows at 2.75% ...

  • Page 238
    Consolidated Financial Statements at 31 December 2013 237 Appendix I Fiat Group Companies at 31 December 2013 In accordance with Article 126 of Consob Regulation 11971 of 14 May 1999, as subsequently amended, a complete list of Group companies and significant investments at 31 December 2013 is ...

  • Page 239
    ... consolidated on a line-by-line basis Business Auto: Car Mass-Market brands NAFTA 0847574 B.C. Unlimited Liability Company Auburn Hills Mezzanine LLC Auburn Hills Owner LLC Autodie LLC CG MID LLC Chrysler Canada Cash Services Inc. Chrysler Canada Inc. Chrysler de Mexico S.A. de C.V. Vancouver...

  • Page 240
    ...377,922,033 MXN 58.54 CPK Interior Products Inc. Extended Vehicle Protection LLC Global Engine Manufacturing Alliance LLC New CarCo Acquisition Canada Ltd. New CarCo Acquisition Holdings Canada Ltd. Windsor Wilmington Wilmington Toronto Canada U.S.A. U.S.A. Canada 1,000 2,000,000 300,000 1,000...

  • Page 241
    ... capital Currency Interest held by Chrysler Australia Pty. Ltd. Chrysler Group (China) Sales Co. Ltd. Chrysler India Automotive Private Limited Chrysler Japan Co., Ltd. Chrysler Korea, Ltd. Chrysler South East Asia Pte. Ltd. Fiat Automotive Finance Co. Ltd. FIAT GROUP AUTOMOBILES INDIA Private...

  • Page 242
    ...LLC Chrysler Netherlands Holding Cooperatie U.A. Chrysler Group LLC Chrysler Group LLC Chrysler Group Minority LLC Chrysler Group LLC Chrysler Group LLC Chrysler Group LLC CG EU NSC LIMITED Fiat Group Automobiles S.p.A. Fiat Group Automobiles S.p.A. Fiat Center Italia S.p.A. FGA Real Estate Services...

  • Page 243
    ... Consolidated Financial Statements at 31 December 2013 Appendix I Fiat Group Companies Subsidiaries consolidated on a line-by-line basis (continued) % of Group consolidation % interest held % of voting rights Name Registered Office Country Share capital Currency Interest held by Fiat Group...

  • Page 244
    ....00 Fiat Group Automobiles S.p.A. Fiat Powertrain Technologies SpA 100.000 100.000 Business Auto: Luxury and Performance Brands Ferrari S.p.A. 410 Park Display Inc. Ferrari Australasia Pty Limited Ferrari Central / East Europe GmbH FERRARI FAR EAST PTE LTD Ferrari Financial Services AG Ferrari...

  • Page 245
    244 Consolidated Financial Statements at 31 December 2013 Appendix I Fiat Group Companies Subsidiaries consolidated on a line-by-line basis (continued) % of Group consolidation % interest held % of voting rights Name Registered Office Country Share capital Currency Interest held by ...

  • Page 246
    ...Share capital Currency Interest held by Hefei Magneti Marelli Exhaust Systems Co.Ltd. Industrial Yorka de Mexico S.A. de C.V. Industrial Yorka de Tepotzotlan S.A. de C.V. Industrias Magneti Marelli Mexico S.A. de C.V. Magneti Marelli (China) Co. Ltd. Magneti Marelli After Market Parts and Services...

  • Page 247
    ... India Private Limited Magneti Marelli Powertrain Slovakia s.r.o. Magneti Marelli Powertrain U.S.A. LLC Magneti Marelli Promatcor Sistemi Sospensioni Mexicana S.R.L. de C.V. Magneti Marelli Repuestos S.A. Argentan Wilmington Auburn Hills Sosnowiec Haryana Bratislava Sanford Mexico City Buenos Aires...

  • Page 248
    ... Holding S.p.A. Plastic Components and Modules Automotive S.p.A. Automotive Lighting LLC Automotive Lighting Rear Lamps Mexico S. de r.l. de C.V. Magneti Marelli S.p.A. Fiat Partecipazioni S.p.A. 100.000 99.900 0.100 100.000 100.000 100.000 100.000 100.000 99.990 Consolidated Financial Statements...

  • Page 249
    248 Consolidated Financial Statements at 31 December 2013 Appendix I Fiat Group Companies Subsidiaries consolidated on a line-by-line basis (continued) % of Group consolidation % interest held % of voting rights Name Registered Office Country Share capital Currency Interest held by Comau ...

  • Page 250
    ... a line-by-line basis (continued) % of Group consolidation % interest held % of voting rights Name Registered Office Country Share capital Currency Interest held by Fiat do Brasil S.A. Fiat Financas Brasil Ltda Fiat Finance and Trade Ltd S.A. Fiat Finance Canada Ltd. Fiat Finance et Services...

  • Page 251
    250 Consolidated Financial Statements at 31 December 2013 Appendix I Fiat Group Companies Subsidiaries consolidated on a line-by-line basis (continued) % of Group consolidation % interest held % of voting rights Name Registered Office Country Share capital Currency Interest held by Sadi ...

  • Page 252
    ...entities accounted for using the equity method Business Auto: Car Mass-Market brands APAC Fiat India Automobiles Limited GAC FIAT Automobiles Co. Ltd. Ranjangaon Changsha India 24,451,596,600 People's Rep. of China 2,400,000,000 EMEA INR CNY 50.00 50.00 Fiat Group Automobiles S.p.A. Fiat Group...

  • Page 253
    ...People's Rep. of China 385,363,500 CNY 42.40 Teksid S.p.A. 50.000 Subsidiaries accounted for using the equity method Business Auto: Car Mass-Market brands NAFTA Alhambra Chrysler Jeep Dodge, Inc. Bessemer Chrysler Jeep Dodge, Inc. CG EC1 LLC CG EC2 LLC Downriver Dodge, Inc. Gwinnett Automotive...

  • Page 254
    ... 1 100 USD USD 58.54 58.54 Chrysler Mexico Investment Holdings Cooperatie U.A. Chrysler Group LLC 100.000 100.000 Consolidated Financial Statements at 31 December 2013 AC Austro Car Handelsgesellschaft m.b.h. & Co. OHG Alfa Romeo Inc. Chrysler Jeep Ticaret A.S. Fabbrica Italia Mirafiori...

  • Page 255
    ... Financial Statements at 31 December 2013 Appendix I Fiat Group Companies Subsidiaries valued at cost (continued) % of Group consolidation % interest held % of voting rights Name Registered Office Country Share capital Currency Interest held by CHRYSLER GROUP DUTCH OPERATING LLC Chrysler...

  • Page 256
    ...: Holding companies and Other companies Fiat Common Investment Fund Limited Fiat Danismanlik Ve Temsilcilik Limited Sirketi Fiat Investimenti S.p.A. Fiat Investments S.p.A. Fiat Oriente S.A.E. in liquidation Fiat Partecipazioni India Private Limited Fiat Services Support Mexico S.A. de C.V. Fiat...

  • Page 257
    ...Associated companies accounted for using the equity method Business Auto: Car Mass-Market brands NAFTA Global Engine Alliance LLC Wilmington United States Council for Automotive Research LLC Southfield U.S.A. U.S.A. 1,500,000 100 APAC USD USD 19.51 19.51 Chrysler Group LLC Chrysler Group LLC...

  • Page 258
    257 Name Registered Office Country Share capital Currency % of Group consolidation Interest held by % interest held % of voting rights Associated companies valued at cost Business Auto: Car Mass-Market brands EMEA Consorzio per la Reindustrializzazione Area di Arese S.r.l. in liquidation ...

  • Page 259
    258 Consolidated Financial Statements at 31 December 2013 Appendix I Fiat Group Companies Associated companies valued at cost (continued) % of Group consolidation % interest held % of voting rights Name Registered Office Country Share capital Currency Interest held by FMA-Consultoria e ...

  • Page 260
    ... connected with bond issues and acquisition of remaining equity interest in Chrysler Group LLC from the VEBA Trust. Analysis of various accounting activities, analysis of system of Internal Control over Financial Reporting, review activities relating to available liquidity of Group as requested...

  • Page 261
    ... financial conditions, results of operations and cash ï¬,ows of the Company and its consolidated subsidiaries as of 31 December 2013 and for the year then ended 3.2 the report on operations includes a reliable operating and financial review of the Company and of the Group as well as a description...

  • Page 262

  • Page 263
    4

  • Page 264
    Fiat S.p.A. Statutory Financial Statements at 31 December 2013 Income Statement ...264 Statement of Comprehensive Income ...265 Statement of Financial Position ...266 Statement of Cash Flows ...267 Statements of Changes in Equity ...268 Income Statement pursuant to Consob Resolution 15519 of 27 July...

  • Page 265
    ...retrospectively) from 1 January 2013, comparative figures for 2012 have been restated as required by IAS 1. That restatement resulted in a â,¬47,902 reduction in reported loss for the year attributable to lower personnel costs. Further information is provided in "Accounting standards and amendments...

  • Page 266
    ...Statutory Financial Statements at 31 December 2013 265 Statement of Comprehensive Income (â,¬ thousand) 2013 (226,698) 2012(***) (152,302) PROFIT/(LOSS) (A) Items that will not be reclassified to Income Statement: - Gains/(losses) on remeasurement of defined benefit plans - Related tax Total...

  • Page 267
    ... and other non-current provisions Non-current debt Other non-current liabilities Deferred tax liabilities Total non-current liabilities Current liabilities Provisions for employee benefits and other current provisions Trade payables Current debt Other debt Total current liabilities TOTAL EQUITY AND...

  • Page 268
    ...of stock option plans and other non-cash items Impairment losses/(reversals) on investments Fair value adjustment to equity swaps on Fiat and Fiat Industrial shares Losses/(gains) on disposals Change in provisions for employee benefits and other provisions Change in deferred taxes Change in working...

  • Page 269
    ...profit/ equity (loss) Stock option reserve Profit/ (loss) for the year (â,¬ thousand) Amount at 31 December 2011 (as reported) Effect of IAS 19 amendments Amount at 1 January 2012 Vesting of rights under 2009 stock grant plan for CEO and allocation of 4,000,000 Fiat S.p.A. ordinary shares to bene...

  • Page 270
    ... 2013 Allocation of prior year loss: to retained profit/(loss) Effect of exercise of stock options under the November 2006 stock option plan Purchase of own shares relating to payment of fractions of shares resulting from conversion of preference and savings shares Valuation of stock option/ stock...

  • Page 271
    ...Fiat S.p.A. Statutory Financial Statements at 31 December 2013 Income Statement pursuant to Consob Resolution 15519 of 27 July 2006 Income Statement pursuant to Consob Resolution 15519 of 27 July 2006 of which related...costs Financial income/(expense) PROFIT/(LOSS) BEFORE TAXES Income taxes PROFIT/(...

  • Page 272
    ... and other non-current provisions Non-current debt Other non-current liabilities Deferred tax liabilities TOTAL NON-CURRENT LIABILITIES Current liabilities Provisions for employee benefits and other current provisions Trade payables Current debt Other debt Total current liabilities TOTAL EQUITY AND...

  • Page 273
    ...of stock option plans and other non-cash items Impairment losses/(reversals) on investments Fair value adjustment to equity swaps on Fiat and Fiat Industrial shares Losses/(gains) on disposals Change in provisions for employee benefits and other provisions Change in deferred taxes Change in working...

  • Page 274
    ... also used to prepare the separate financial statements of the Parent Company, Fiat S.p.A., for the first time for the year ended 31 December 2006. The information required by IFRS 1 - First-time Adoption of International Financial Reporting Standards relating to the effects of the transition to...

  • Page 275
    ...financial services companies within the Group, on the basis of their individual requirements. The distribution of financial services activities within the Group has no impact on the presentation of financial liabilities for Fiat S.p.A. However, for the Consolidated Statement of Financial Position...

  • Page 276
    ...receivables, other current receivables, cash and cash equivalents Non-current liabilities: non-current debt, other non-current liabilities Current liabilities: trade payables, current debt (including asset-backed financing), other debt Fiat S.p.A. Statutory Financial Statements at 31 December 2013

  • Page 277
    ...and other money market securities that are readily convertible into cash and for which the risk of changes in value is insignificant. Non-current debt includes liabilities related to financial guarantees. Financial guarantees are contracts where the Company undertakes to make specific payments to...

  • Page 278
    ... recognized in equity is immediately transferred to the income statement If hedge accounting cannot be applied, the gains or losses from the fair value measurement of derivative financial instruments are recognized immediately in the income statement. Fiat S.p.A. Statutory Financial Statements at...

  • Page 279
    278 Fiat S.p.A. Statutory Financial Statements at 31 December 2013 Notes Inventory Inventory consists of contract work in progress related, in particular, to long-term construction contracts between Fiat S.p.A. and Treno Alta Velocità - T.A.V. S.p.A. (merged into Rete Ferroviaria Italiana S.p.A....

  • Page 280
    ... fair value at the end of each reporting period until settled. Any subsequent changes in fair value are recognized in profit or loss. The compensation component from stock option plans based on Fiat S.p.A. shares relating to employees of other Group companies is recognized as a capital contribution...

  • Page 281
    ... for a minimum three-year period. Under the program, Fiat S.p.A. is the consolidating company and calculates a single taxable base for the group of companies taking part, enabling benefits from offsetting taxable income and tax losses in a combined tax return. Each company participating in the...

  • Page 282
    ...Fiat S.p.A. Statutory Financial Statements at 31 December 2013 The normalized cash ï¬,ow used in the terminal value ("TV") calculation was based on a weighted average of the expected contribution from each geographic market, which takes the cyclicality and maturity of the auto business into account...

  • Page 283
    282 Fiat S.p.A. Statutory Financial Statements at 31 December 2013 Notes Accounting standards and amendments adopted from 1 January 2013 The following standards and amendments were adopted by the Company from 1 January 2013. Amendments to IAS 19 - Employee Benefits IFRS 13 - Fair Value ...

  • Page 284
    ...) As reported Restated Effect on Statement of Cash Flows B) CASH FROM/(USED IN) OPERATING ACTIVITIES DURING THE YEAR: - Profit/(loss) - Change in provisions for employee benefits and other provisions (152,350) 1,547 48 (48) (152,302) 1,499 Fiat S.p.A. Statutory Financial Statements at 31...

  • Page 285
    ...a number of amendments to IFRSs ("Annual Improvements to IFRSs - 2009-2011 Cycle"). The amendment to IAS 1 - Presentation of Financial Statements is applicable to the Company from 2013. The amendment clarifies how comparative information is to be presented when an entity changes accounting policies...

  • Page 286
    ... on or after 1 January 2014. Early adoption is permitted. On 12 December 2013, the IASB issued the Annual Improvements to IFRSs 2010-2012 Cycle and Annual Improvements to IFRSs 2011-2013 Cycle. Fiat S.p.A. Statutory Financial Statements at 31 December 2013 Risk Management The risks to which...

  • Page 287
    ...(â,¬ thousand) 2013 500,000 23,227 5,257 7,697 536,181 140 536,321 2012 1,000,000 24,025 6,330 1,030,355 140 1,030,495 Dividends from Group companies and related parties: - Fiat Gestione Partecipazioni S.p.A. (now Fiat Partecipazioni S.p.A.) - Fiat Finance S.p.A. - Teksid S.p.A. - Fiat Industrial...

  • Page 288
    ... well as share price performance from the capital increase through year end. At the beginning of December 2013, the company presented the first phase of implementation of the above Development Plan to the financial community, indicating that results up to that moment had been in line with the Plan...

  • Page 289
    ...fit plans Other personnel costs Total Personnel costs The average number of employees increased to 236 from 219 in 2012. Headcount increased by 13 following the acquisition from Fiat Services S.p.A., on 1 January 2013, of the unit that provides corporate services to Fiat S.p.A. and Group companies...

  • Page 290
    ...well as IT systems, public relations, payroll, security, real estate and internal audit services (see Note 29). Costs for services rendered by third parties principally included legal, administrative, financial and IT services. For 2013, compensation for the directors and statutory auditors of Fiat...

  • Page 291
    ... 2012 1,990 251,310 5,598 1,760 115 260,773 567 298 742 1,607 262,380 Financial expense to Group companies and other related parties: - Interest expense on current account with Fiat Finance S.p.A. - Interest expense on loans from Fiat Finance S.p.A. - Commissions and other charges payable to Fiat...

  • Page 292
    ... taxes reported in the financial statements is as follows: (â,¬ thousand) 2013 (66,343) 9,562 2,884 39,347 (14,550) (14,550) 2012 (50,436) (3,577) (15,168) 12 38,116 (31,053) (31,053) Theoretical income taxes Tax effect of permanent differences Taxes relating to prior periods Other current taxes...

  • Page 293
    ... of the conditions for their future realization, using updated plans and related tax aspects. As a consequence, the total theoretical future tax benefit arising from deductible temporary differences (â,¬48,631 thousand at 31 December 2013 and â,¬28,935 thousand at 31 December 2012) and tax loss...

  • Page 294
    ... paid in excess of fair value to acquire, at year-end 2011, the business units that provide internal audit and financial advisory services to Fiat S.p.A. and Group companies, as well as the corporate services business acquired at the beginning of 2013, which also provides services to Fiat...

  • Page 295
    294 Fiat S.p.A. Statutory Financial Statements at 31 December 2013 Notes In 2012, changes in intangible assets were as follows: (â,¬ thousand) 31 December 2011 1,330 1,330 Increases - Amortization - (Decreases) and Other changes - 31 December 2012 1,330 1,330 Goodwill - Gross carrying ...

  • Page 296
    ... includes land valued at â,¬610 thousand (unchanged over the prior year), while buildings mainly consists of the Company's headquarters at Via Nizza 250, Turin. Plant and equipment primarily related to general fixtures and fittings for buildings. Other tangible assets comprised cars, office...

  • Page 297
    ...Fiat S.p.A. Statutory Financial Statements at 31 December 2013 Notes During 2012, changes in Property, plant and equipment were as follows: (â,¬ thousand) 31 December 2011 47,526 (19,610) 27,916 Increases - Depreciation (1,410) (1,410) (Decreases) and Other changes (12) (12) 31 December 2012...

  • Page 298
    ... Fiat Group ...Fiat Partecipazioni S.p.A. (now FGA Real Estate Services S.p.A.) - Gross carrying amount - Accumulated impairment losses Fiat Finance S.p.A. - Gross carrying amount - Accumulated impairment losses Fiat Finance and Trade...Fiat S.p.A. Statutory Financial Statements at 31 December 2013

  • Page 299
    ...ficult trading conditions in its industry sector and restructuring charges for the subsidiary Publikompass, an assessment of recoverable value was based on the company's medium-term business plan and the nature of specific assets, in particular the newspaper La Stampa, as well as its position in...

  • Page 300
    ...to support its 2013-2015 development plan. As already announced, in addition to subscribing to its pro rata share of the capital increase, Fiat S.p.A. also purchased additional rights (in part from other participants in the existing shareholder agreement). Following exercise of the rights held, Fiat...

  • Page 301
    ... Debt securities Total other financial assets Fees receivable for guarantees given represent the present value of fees to be received in future years for guarantees issued by the Company (mainly relating to loans of Group companies). Debt securities consist of listed Italian government securities...

  • Page 302
    ...Ferroviaria Italiana S.p.A. for work completed on high-speed sections of rail line. Those receivables match the amounts payable to the CAV.E.T. and CAV.TO.MI. consortia for contract work completed (see Note 23). Trade receivables due from Group companies and other related parties include adjustments...

  • Page 303
    ... in the share price above the exercise price of the stock options granted to the Chief Executive Officer in 2004. The fair value of those equity swaps was based on market quotations at the balance sheet date. As described in Note 7, those contracts were closed in December 2013. 16. Other current...

  • Page 304
    ... a par value of â,¬3.58 per share. Compared with year-end 2012, there was a â,¬1,020 thousand increase resulting from the issuance of 285,000 new shares following the exercise of 285,000 options under the November 2006 stock option plan for managers. Fiat S.p.A. Statutory Financial Statements at 31...

  • Page 305
    ... Fiat S.p.A. Less: Own shares Total Fiat S.p.A. shares outstanding As described in Note 18 to the 2012 financial statements, following approval of a mandatory conversion by shareholders on 4 April 2012, all of the Company's outstanding preference shares (103,292,310) and savings shares (79,912,800...

  • Page 306
    ...in Chrysler Group LLC, the Board of Directors has recommended that no dividend be paid for 2013. Fiat's stated objectives for capital management are to create value for shareholders, to guarantee continuity of the business and to support the development of the Group. Accordingly, the Company intends...

  • Page 307
    ...from the stock option reserve, which represented the fair value of options exercised or expiring during the year in relation to the portion of the November 2006 stock option plan for managers serviced by Fiat S.p.A. shares Gains/(losses) recognized directly in equity At 31 December 2013, the reserve...

  • Page 308
    ... 4,406 5,590 5,590 Stock option reserve At 31 December 2013, the stock option reserve totaled â,¬62,631 thousand, a net increase of â,¬9,069 thousand over 31 December 2012. The change primarily related to existing stock option and stock grant plans serviced by Fiat S.p.A. shares. Other reserves At...

  • Page 309
    ...by shareholders on 5 April 2007) an eight-year stock option plan, which granted the Chief Executive Officer of Fiat S.p.A. and certain Group managers the right to purchase a specified number of Fiat S.p.A. ordinary shares at a fixed price of â,¬13.37 per share. The options granted to managers (10...

  • Page 310
    ...Stock Option November 2006 Managers 3 November 2014 13.37 10,000,000 (*) Upon approval of the prior year's consolidated financial statements and subject to continuation of the professional relationship. With specific reference to the options granted under the November 2006 Stock Option Plan...

  • Page 311
    ... intends to service the plan through treasury shares, with no new shares being issued. The Company has the right to substitute shares vested under the Plan, in whole or in part, with a cash payment based on the official price published by Borsa Italiana on the vesting date. At 31 December 2013, the...

  • Page 312
    ...of year 7,000,000 2,333,333 4,666,667 2013 Average fair value at grant date (â,¬) 4.205 4.205 4.205 No. of Fiat S.p.A. shares 7,000,000 7,000,000 2012 Average fair value at grant date (â,¬) 4.205 4.205 In 2013, a nominal cost of â,¬6 million was recognized in relation to this plan. Availability for...

  • Page 313
    ... December 2013 17,832 1,041 123,216 652 142,741 Defined benefit liability Other long-term employee benefits Provisions for stock option and stock grant plans Other non-current provisions Total provisions for employee benefits and other non-current provisions The Company provides employees post...

  • Page 314
    ... common shares to service a portion of the Company's stock option and stock grant plans. Fiat S.p.A. Statutory Financial Statements at 31 December 2013 Changes in provisions for stock option and stock grant plans for the year were as follows: (â,¬ thousand) 31 December 2012 124,947 Fair value...

  • Page 315
    ...December 2013 400,000 13,953 413,953 31 December 2012 1,400,000 12,035 1,412,035 Change (1,000,000) 1,918 (998,082) Debt payable to Group companies Financial guarantees Total non-current debt Debt payable to Group companies related to euro-denominated loans received from Fiat Finance S.p.A. with...

  • Page 316
    ... represent the present value of future benefits (see Note 19) payable to a former CEO and management personnel that have left the Company. A breakdown of other non-current liabilities by due date is as follows: (â,¬ thousand) 31 December 2013 1,126 4,916 10,036 16,078 31 December 2012 1,087 4,748...

  • Page 317
    ... by Fiat Finance S.p.A., on behalf of Fiat S.p.A., to hedge the liability associated with stock options granted to the CEO in 2006. The fair value of those equity swaps was based on the market prices at the balance sheet date. As described in Note 7, those contracts were closed in December 2013...

  • Page 318
    ... related parties - Total debt payable to Group companies and other related parties - Social security payables - Current amounts payable to employees, directors and statutory auditors - Dividends payable - Other Total other debt Taxes payable: - VAT payable - Taxes withheld on payments to employees...

  • Page 319
    ... the customer - Florence-Bologna line - Novara-Milan line Contract work in progress is measured on the basis of the stage of completion in relation to the sales price, which in this case is the consideration contractually agreed for the activities directly carried out by Fiat S.p.A. Contract costs...

  • Page 320
    ... of the work by the customer and expiry of the subsequent two-year period for the technical and functional warranties issued, unless other specific conditions have been agreed. Fiat S.p.A. Statutory Financial Statements at 31 December 2013 At 31 December 2013, bank guarantees and sureties...

  • Page 321
    ...) and to release the bank guarantees were still in progress, from an accounting perspective the project remained open at that date. Taxes payable and other debt The principal items were as follows: At 31 December 2013, debt payable to Group companies and other related parties for consolidated VAT...

  • Page 322
    ... 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...

  • Page 323
    ... 2013, Fiat S.p.A.'s maximum nominal credit exposure consisted of the carrying amounts of financial assets and the par value of guarantees issues (as discussed in Note 26). Amounts receivable at the balance sheet date are essentially due from Group companies and related parties, from the tax...

  • Page 324
    ...the Group's centralized treasury management system. current debt consists mainly of overdrafts on current accounts held with Fiat Finance S.p.A. and loans from Fiat Finance S.p.A., as well as liabilities related to advances on the sale of receivables to banks (see Note 24) non-current debt primarily...

  • Page 325
    ... in other companies (available for sale) recognized at fair value directly in equity or through profit and loss Total assets Total liabilities (11) 284,963 284,963 - 13,636 13,636 - - 298,599 298,599 - In 2013, there were no transfers between levels in the fair value hierarchy. In relation to...

  • Page 326
    ... Fiat Automoveis S.A. - FIASA Fiat Finance S.p.A. Fiat Finance and Trade Ltd. S.A. Fiat Finance North America Inc. Fiat France Fiat North America LLC Fiat Services S.p.A. Fiat Services Polska Sp. z o.o. Fiat Finance et Services S.A. Fiat Group Marketing & Corporate Comm. S.p.A. Fiat Group Purchasing...

  • Page 327
    ... Fiat Service S.p.A. Fiat I.T.E.M. S.p.A. Fiat Partecipazioni S.p.A. Fiat (China) Business Co. Ltd Fiat North America LLC Leasys S.p.A. Magneti Marelli S.p.A. Sirio S.c.p.A. Other Group companies IRES tax consolidation VAT consolidation Financial guarantees Total Group companies Other related...

  • Page 328
    ...minor companies) lease of property or office space (to Fiat Finance S.p.A., Fiat Group Marketing & Corporate Communication S.p.A., Fiat Partecipazioni S.p.A., Fiat I.T.E.M. S.p.A. and other minor companies) and the recovery of directors' fees and expenses Fiat S.p.A. Statutory Financial Statements...

  • Page 329
    ... authorities for Group company VAT credits management of current accounts, obtaining short-term and long-term loans and management of derivative financial instruments (Fiat Finance S.p.A.) purchases of administrative and tax consultancy services and related IT systems (Fiat Services S.p.A. and Fiat...

  • Page 330
    ... Financial Statements at 31 December 2013 32. Subsequent Events On January 1st, 2014, Fiat S.p.A. announced an agreement with the VEBA Trust, under which its wholly-owned subsidiary, Fiat North America LLC ("FNA"), would acquire all of the VEBA Trust's equity membership interests in Chrysler Group...

  • Page 331
    ... S.p.A. Statutory Financial Statements at 31 December 2013 Notes On January 10th, Standard & Poor's Ratings Services: raised its ratings on Chrysler Group LLC, including the corporate credit rating, to 'BB-' from 'B+'. The outlook is stable. confirmed its rating on Fiat S.p.A.'s long-term debt at...

  • Page 332
    331 List of equity investments with additional information required by Consob (Communication DEM/6064293 of 28 July 2006) Subsidiaries Share Capital(*) (â,¬) 770,000,000 Result for the latest financial year(*)(â,¬) (1,352,333,589) Equity(*) (â,¬) 922,349,161 % owned by Fiat S.p.A. 100.00 Number of...

  • Page 333
    332 Fiat S.p.A. Statutory Financial Statements at 31 December 2013 Notes List of equity investments (continued) Subsidiaries Share Capital(*) (â,¬) 224,440,000 224,440,000 251,494,000 251,494,000 Result for the latest financial year(*) (â,¬) 24,449,968 10,514,076 1,216,507 1,145,705 Equity(*) ...

  • Page 334
    ... - Milan At 31.12.12 subscription to capital increase (including additional rights purchased) impairment At 31.12.13 Total associate companies (*) Based on figures reported in separate financial statements at 31 December 2011 and 2012. Fiat S.p.A. Statutory Financial Statements at 31 December 2013

  • Page 335
    ...ce CNH Industrial N.V. - Amsterdam (The Netherlands) (formerly Fiat Industrial S.p.A. - Turin) At 31.12.12 sale of Fiat Industrial S.p.A. (now CNH Industrial N.V.) ordinary shares following exercise of stock options under the November 2006 plan for managers purchase fair value adjustment At 31.12.13...

  • Page 336
    ... Reporting (ICFR). Analysis of accounting treatment for investment transactions, analysis of system of Internal Control over Financial Reporting, review activities relating to available liquidity of Group as requested by Consob. Fiat S.p.A. Statutory Financial Statements at 31 December 2013

  • Page 337
    ... 31 December 2013: a) have been prepared in accordance with International Financial Reporting Standards, as endorsed by the European Union through Regulation (EC) 1606/2002 of the European Parliament and Council, dated 19 July 2002; b) correspond to the amounts shown in the Company's accounts, books...

  • Page 338

  • Page 339
    5

  • Page 340
    Auditors' Reports and Motions for AGM Reports of the Independent Auditors ...340 Reports of the Board of Statutory Auditors ...344 Motions for AGM ...349

  • Page 341
    ... changes in equity and the related explanatory notes. The preparation of these financial statements in compliance with International Financial Reporting Standards as adopted by the European Union and with art. 9 of Legislative Decree n. 38/2005 is the responsibility of Fiat S.p.A.'s management. Our...

  • Page 342
    ...paragraph 2), letter b) in the Annual Report on Corporate Governance, are consistent with the consolidated financial statements of the Fiat Group as of December 31, 2013. Turin, March 4, 2014 RECONTA ERNST & YOUNG S.P.A. Signed by Felice Persico (Partner) This report has been translated into the...

  • Page 343
    ... changes in equity and the related explanatory notes. The preparation of these financial statements in compliance with International Financial Reporting Standards as adopted by the European Union and with art. 9 of Legislative Decree n. 38/2005 is the responsibility of Fiat S.p.A.'s management. Our...

  • Page 344
    ...on Corporate Governance, are consistent with the financial statements of Fiat S.p.A. as of December 31, 2013. Turin, March 4, 2014 RECONTA ERNST & YOUNG S.P.A. Signed by Felice Persico (Partner) This report has been translated into the English language solely for the convenience of international...

  • Page 345
    ...b) in the Annual Report on Corporate Governance, are consistent with the consolidated financial statements of the Fiat Group as of December 31, 2013." In application of Article 41 (3) of Legislative Decree 127/1991, the Board of Statutory Auditors did not review that information or the consolidated...

  • Page 346
    ... in relation to the size of the Company and we had extensive access to information, including meetings with heads of various central functions and representatives of the Independent Auditors, enabling us to confirm the application of management best practice. A group-wide internal control system...

  • Page 347
    ... the Notes to the Financial Statements the Board of Directors reports that there were numerous transactions involving the sale of goods and services between the Company and other Group companies and related parties, and confirms that they took place at standard market terms for the nature of goods...

  • Page 348
    ... Listed Companies issued in December 2011, with modifications that take into account the specific characteristics of the Group." The above is discussed in detail in the Annual Report on Corporate Governance (February 2014) prepared by the Board of Directors, which is available for your review...

  • Page 349
    ...nd nothing that would prevent approval of the statutory financial statements for the year ended 31 December 2013 or the motions put forward by the Board of Directors. Turin, 4 March 2014 The Statutory Auditors Ignazio Carbone Lionello Jona Celesia Piero Locatelli /s/ Ignazio Carbone /s/ Lionello...

  • Page 350
    ...Statutory Financial Statements for the year ended 31 December 2013, which report a net loss of â,¬226,697,618. We propose that the loss be allocated to the Retained Profit reserve, bringing the value of the reserve to â,¬1,537,084,936. 27 February 2014 On behalf of the Board of Directors /s/ John...

  • Page 351
    ... Compensation Board of Directors Board of Statutory Auditors CEO Chief Human Resources Officer Company Compensation Committee Compensation Policy Compensation Report Corporate Governance Code EU Recommendations Executive Directors Executives with Strategic Responsibilities Financial Act Group

  • Page 352
    ...which supports the CEO of the Company. The Group Executive Council is responsible for reviewing the operating performance of the businesses, setting performance targets, making key strategic and investment decisions for the Group and sharing best practice, including the development and deployment of...

  • Page 353
    ... reï¬,ect current best practice in corporate governance. On 24 July 2007, as part of the continuous review of the system of corporate governance and to better align itself with best international practice as well as the recommendations of the Corporate Governance Code, the Board passed a resolution...

  • Page 354
    ... to the Board of Directors the proposal of an equity incentive plan (LTI). During 2012, the Committee was advised by the Company's management on a benchmark analysis, carried out on a European basis and taking into particular consideration the forty most traded companies on the Milan Stock Exchange...

  • Page 355
    ... in key positions toward the achievement of Company and Group performance targets, maintaining the interests of management continuously aligned to those of shareholders. D.2 Principles The principles and criteria applied in setting compensation for executive members of the Board of Directors, and...

  • Page 356
    ... with EU Recommendations and article 6 of the Corporate Governance Code, non-Executive Directors are not eligible for any form of compensation tied to the achievement of financial targets or participation in any share-based compensation scheme of the Company. As per Group policy, which reï¬,ected...

  • Page 357
    ... the Company granted to the CEO and certain Executives with Strategic Responsibilities stock options in accordance with the terms of certain share-based incentive plans approved between 2004 and 2012, which in certain cases allow shares to be purchased at a predetermined price (stock options) and...

  • Page 358
    ...an integrated Fiat-Chrysler long term incentive program applicable also to employees of Chrysler Group LLC and its subsidiaries, which would replace the LTI Plan (the LTI Plan is not applicable to the employees of Chrysler Group and its subsidiaries). At the appropriate time, the Company will submit...

  • Page 359
    ... shareholders, available on the Company's website: www.fiatspa.com. I. Consistency with the long-term interests of the Company and the Risk Management Policy The long-term interests of the Company and the risk management policy of the Group are integral part of the Group's Internal Control System...

  • Page 360
    ... Responsibilities whose professional relation with the Group is not governed by such collective bargaining agreement are covered by Group defined nondiscretionary severance programs. Furthermore, the Company may enter into non-competition agreements with its members of the Board of Directors...

  • Page 361
    ... Fiat-Chrysler long term incentive program applicable also to employees of Chrysler Group LLC and its subsidiaries, which would replace the LTI Plan (the LTI Plan is not applicable to the employees of Chrysler Group and its subsidiaries). At 27 February 2014, the Company held 34,577,882 own shares...

  • Page 362
    ... time limits or restraints and using procedures that best suit the interests of the Company, as permitted by law (including the transfer of rights related to the shares, such as, for example, stock lending). Own shares may be used to service existing incentive plans - as well as any additional plans...

  • Page 363
    362 Contacts Head Office Via Nizza, 250 - 10126 Turin (Italy) Tel. +39 011 00.61111 website: www.fiatspa.com Sustainability Tel. +39 011 00.63908 email: [email protected] Investor Relations Tel. +39 011 00.62709 Fax +39 011 00.63796 email: [email protected] Press Office Tel....

  • Page 364

  • Page 365
    ... is printed on eco-responsible CyclusPrint, a 100% recycled paper produced by Arjowiggins Graphic. The internal pages are printed on 100...kg of CO2 961 km travel in the average European car 13,517 liters of water 1,246 kWh of energy 1,056 kg of wood Graphic design and editorial coordination...

  • Page 366
    Fiat S.p.A. Registered Office: 250 Via Nizza, Turin, ITALY Share Capital: â,¬4,477,645,702.34 Turin Companies Register/ Tax Code: 00469580013