Statement of Financial Position

At December 31, 2014 and 2013

Note20142013
(€ million)
ASSETS
Property, plant and equipment (7) 29 30
Equity investments (8) 22,227 12,695
Other financial assets (9) 1,329 14
Total Fixed Assets 23,585 12,739
Trade receivables (10) 14 7
Other current receivables (11) 326 191
Cash and cash equivalents (12) 11 1
Total current assets 351 199
TOTAL ASSETS 23,936 12,938
EQUITY AND LIABILITIES
Equity (13)
Share capital 17 4,477
Capital reserve 3,742
Legal reserves 10,556 6,081
Retained profit/(loss) (1,458) (3,136)
Profit/(loss) for the year 568 904
Total equity 13,425 8,326
Provisions for employee benefits and other provisions (14) 27 143
Non-current debt (15) 197 414
Other non-current liabilities (16) 15 16
Deferred tax liabilities (6) 8 12
Total non-current liabilities 247 585
Provisions for employee benefits and other current provisions (17) 2 11
Trade payables (18) 19 19
Current debt (19) 9,714 3,780
Other financial liabilities (9) 135
Other debt (20) 394 217
Total current liabilities 10,264 4,027
TOTAL EQUITY AND LIABILITIES 23,936 12,938

The accompanying notes are an integral part of the Company Financial Statements.

6. Income taxes

Income taxes were a gain of €9 million in the current year (gain of €15 million in 2013) and relate to compensation receivable for tax losses carried forward contributed to the Italian tax consolidation scheme.

The Company reported losses for tax purposes as the result from investments resulting from the adoption of the equity method is tax neutral.

Deferred tax liabilities refer to the impact of Italian local tax on certain temporary differences.

7. Property, plant and equipment

At December 31, 2014, the gross carrying amount of property, plant and equipment was €68 million (€65 million as at December 31, 2013) and accumulated depreciation was €39 million (€36 million as at December 31, 2013), of which €24 million (€25 million as at December 31, 2013) was for land and buildings which mainly consists of the Company’s property at Via Nizza 250, Turin.

No buildings were subject to liens, pledged as collateral or restricted in use.

Depreciation of property, plant and equipment is recognized in the income statement under other operating costs.  

8. Equity investments

At December 31, 2014, Equity investments in subsidiaries and associates totaled €22,103 million and Other equity investments totaled €124 million.

At December 31,
20142013Change
(€ million)
Investments in subsidiaries and associates 22,103 12,397 9,706
Other equity investments 124 298 (174)
Total equity investments 22,227 12,695 9,532

Equity investments in subsidiaries and associates were subject to the following changes during the year:

2014
(€ million)
Balance at beginning of year 12,397
Acquisition of minorities 1,325
Net contributions made to subsidiaries 6,537
Result from investments 1,124
Cumulative translation adjustments and other OCI movements 738
Other (18)
Balance at end of year 22,103

Acquisition of minorities is primarily due to the transaction by which Chrysler became fully owned by the Group. Net contributions made to subsidiaries refer almost entirely to the following intercompany transactions:

  • acquisition of 100% of Fiat Chrysler Automobiles North America Holdings LLC from FCA Italy S.p.A for a consideration of €7,250 million;
  • acquisition of Magneti Marelli Inc., Comau Inc. and Alfa Romeo USA Inc. for an aggregate of €725 million;
  • sale of Fiat Partecipazioni S.p.A.to FCA Italy S.p.A. for an amount of €1,450 million.

At December 31, 2014, other equity investments include the investment in CNH Industrial N.V. for €107 million (€282 million at December 31, 2013), the investment in Fin. Priv. S.r.l. for €14 million (€14 million at December 31, 2013) and the investment in Assicurazioni Generali S.p.A. for €3 million (€3 million at December 31, 2013). At December 31, 2014, the investment in CNHI consisted of 15,948,275 common shares for an amount of €107 million. During 2014, 18,059,375 CNHI shares of the investment balance existing at December 31, 2013 were sold following the exercise of stock options.

9. Other financial assets

At December 31, 2014, Other financial assets amounted to €1,329 million, as represented below:

At December 31,
20142013Change
(€ million)
Other financial assets 1,313 1,313
Fees receivable for guarantees given 16 14 2
Total other financial assets 1,329 14 1,315

Other financial assets is represented by the USD 1.5 billion loan extended in January 2014 and expiring in September 2016, to Fiat Chrysler Automobiles North America Holdings LLC (previously named Fiat North America LLC) to fund partially the acquisition of 41.5% of FCA US. The amount of €1,313 million includes principal of €1,236 million and accrued interest of €77 million, both translated into euro at the year end exchange rate of 1.2141. The loan is hedged into euro by a currency swap with Fiat Chrysler Finance Europe S.A. resulting in a €135 million intercompany payable at December 31, 2014 reported under other financial liabilities.

10. Trade receivables

At December 31, 2014, trade receivables totaled €14 million (of which €7 million from Group companies) a net increase of €7 million over year-end 2013.

The carrying amount of trade receivables is deemed to approximate their fair value.

All trade receivables are due within one year and there are no overdue balances. 

11. Other current receivables

At December 31, 2014, other current receivables amounted to €326 million, a net increase of €135 million compared to December 31, 2013, and consisted of the following:

At December 31,
20142013Change
(€ million)
Receivable from Group companies for consolidated Italian corporate tax 141 119 22
VAT receivables 136 22 114
Italian corporate tax receivables 38 42 (4)
Other 11 8 3
Total other current receivables 326 191 135

Receivables from Group companies for consolidated Italian corporate tax relate to tax calculated on the taxable income contributed by Italian subsidiaries participating in the domestic tax consolidation program.

VAT receivables essentially relate to VAT credits for Italian subsidiaries participating in the VAT tax consolidation.

Italian corporate tax receivables include credits transferred to FCA. by Italian subsidiaries participating in the domestic tax consolidation program in 2014 and prior years.

12. Cash and cash equivalents

At December 31, 2014, Cash and cash equivalents totaled €11 million (€1 million as at December 31, 2013) and are almost entirely represented by amounts held in Euro. The carrying amount of cash and cash equivalents is deemed to be in line with their fair value.

Credit risk associated with cash and cash equivalents is considered limited as the counterparties are leading national and international banks.

13. Equity

Changes in shareholders’ equity during 2014 were as follows:

(€ million)Share CapitalCapital ReservesLegal Reserves: Cumulative translation adjustment reserve /OCILegal Reserves:OtherRetainedprofit/ (loss)Profit/ (loss) for the yearTotal equity
At December 31, 2013 4,477 (618) 6,699 (3,136) 904 8,326
Allocation of prior year result 904 (904)
Capital increase 2 989 991
Merger (4,269) 4,269
Mandatory convertible 1,910 1,910
Exit Rights (193) (224) (417)
Share-based payment 35 (31) 4
Purchase of shares in subsidiaries from non-controlling interests (308) 880 753 1,325
Net profit for the year 568 568
Current period change in OCI, net of taxes 666 52 718
Legal Reserve (1,327) 1,327
At December 31, 2014 17 3,742 (260) 10,816 (1,458) 568 13,425

Shareholders’ equity increased by €5,099 million in 2014 primarily due to: the issuance of mandatory convertible securities (see notes to the consolidated financial statements) resulting in an increase of €1,910 million, the placement of 100 million common shares and the exercise of stock options resulting in an aggregate increase of €991 million, the positive impact of €1,325 million from the acquisition of the remaining 41.5% of FCA US, the increase in OCI (mainly driven by cumulative exchange differences on translating foreign operations of €782 million) and profit for the year of €568 million, net of the €417 million reduction for the reimbursement to Fiat shareholders who exercised the cash exit rights upon the Merger.

Share capital

At December 31, 2014, fully paid-up share capital of FCA amounted to €17 million (€4,477 million of Fiat at December 31, 2013) and consisted of 1,284,919,505 common shares and of 408,941,767 special voting shares, all with a par value of €0.01 each (1,250,687,773 ordinary shares with a par value of €3.58 each of Fiat at December 31, 2013).

On December 12, 2014, FCA issued 65,000,000 new common shares and sold 35,000,000 of treasury shares for aggregate net proceeds of $1,065 million (€849 million) comprised of gross proceeds of $1,100 million (€877 million) less $35 million (€28 million) of transaction costs.

Upon the completion of the Merger, which took the form of a reverse merger, resulted in FCA being the surviving entity, all Fiat ordinary shares outstanding as of the Merger date (1,167,181,255 ordinary shares) were canceled and exchanged. FCA allotted one new FCA common share (each having a nominal value of €0.01) for each Fiat ordinary share (each having a nominal value of €3.58). The original investment of FCA in Fiat which consisted of 35,000,000 common shares was not canceled resulting in 35,000,000 treasury shares in FCA. On December 12, 2014, FCA completed the placement of these treasury shares on the market.

The following table provides the detail for the number of Fiat ordinary shares outstanding at December 31, 2013 and the number of FCA common shares outstanding at December 31, 2014:

Fiat S.p.A.FCA
At December 31, 2013Share- based payments and exercise of stock optionsExit RightsCancellation of treasury shares upon the MergerAt the date of the MergerFCA share capital at the MergerIssuance of FCA Common shares and sale of treasury sharesExercise of Stock OptionsAt December 31, 2014
Shares issued 1,250,688 320 (53,916) (29,911) 1,167,181 35,000 65,000 17,738 1,284,919
Less: treasury shares (34,578) 4,667 29,911 (35,000) 35,000
Shares issued and outstanding 1,216,110 4,987 (53,916) 1,167,181 100,000 17,738 1,284,919

On October 29, 2014, the Board of Directors of FCA resolved to authorize the issuance of up to a maximum of 90,000,000 common shares under the framework equity incentive plan which had been adopted before the closing of the Merger. No grants have occurred under such framework equity incentive plan and any issuance of shares thereunder in the period from 2014 to 2018 will be subject to the satisfaction of certain performance/retention requirements. Any issuances to directors will be subject to shareholders approval.

Capital reserves

At December 31, 2014, capital reserves amounting to €3,742 million consisted mainly of the effects of the Merger resulting in a different par value of FCA common shares (€0.01 each) as compared to Fiat S.p.A. ordinary shares (€3.58 each) where the consequent difference between the share capital before and after the Merger was recognized to increase the capital reserves.

Legal reserve

At December 31, 2014, legal reserve amounted to €10,816 million (€6,699 million at December 31, 2013) and mainly refers to development costs capitalized by subsidiaries and their earnings subject to certain restrictions to distributions to the parent company. Legal reserve also refers to unrealized currencies translation gain and losses and other OCI components for a net negative amount of €260 million. The legal reserve includes the reserve for the equity component of the Mandatory Convertible Securities of €1,910 million at December 31, 2014.

Pursuant to Dutch law, limitations exist relating to the distribution of shareholders’ equity up to at least the total amount of the legal reserve. By their nature, unrealized losses relating to OCI components reduce shareholders’ equity and thereby distributable amounts.

Share-based compensation

In connection with the Merger, FCA assumed the obligation of the former Fiat Stock option plans and Stock Grant plans. On the effective date of the Merger, the unvested equity rewards under the former Fiat plans became convertible for common shares of FCA on a one-for-one basis. (See notes to the Consolidated Financial Statements for details on the stock option and stock grant plans).

14. Provisions for employee benefits and other provisions

At December 31, 2014, provisions for employee benefits and other provisions totaled €27 million, a €116 million decrease over year-end 2013, relating primarily to the exercise of stock options granted in previous years. At 31 December 2014, provisions consisted primarily of post-employment benefits accruing to employees, former employees and Directors under supplemental company or individual agreements. Those plans are unfunded.

15. Non-current debt

At December 31, 2014, non-current debt totaled €197 million, representing a decrease of €217 million over December 31, 2013, and consisted of the following:

At December 31,
20142013Change
(€ million)
Intercompany financial payable 181 400 219
Financial guarantees 16 14 (2)
Total Non-current debt 197 414 217

Intercompany financial payable relate to the euro-denominated loans due December 30, 2017, entered into with Magneti Marelli S.p.A. (€162 million), Comau S.p.A. (€19 million) and FCA Italy S.p.A. (€0.2 million) following the acquisition of certain subsidiaries based in the US on December 30, 2014.

Financial guarantees represent the fair value of the liabilities assumed in relation to guarantees issued. Following an assessment of potential risks requiring recognition of contingent liabilities and given that those liabilities essentially related to guarantees provided on loans to Group companies, the present value of fees receivable is considered the best estimate of the fair value of those guarantees.

16. Other non-current liabilities

At December 31, 2014, other non-current liabilities totaled €15 million, representing a net decrease of €1 million over December 31, 2013.

At December 31,
20142013Change
(€ million)
Other non-current liabilities 15 16 (1)
Total Other non-current liabilities 15 16 (1)

Other non-current liabilities relate to non-current post-employment benefits, being the present value of future benefits payable to a former CEO and management personnel that have left the Company.

17. Provisions for employee benefits and other current provisions

This item reflects the best estimate for variable components of compensation:

At December 31,
20142013Change
(€ million)
Provisions for employee bonuses and similar provisions 2 11 (9)
Provisions for employee bonuses and similar provisions 2 11 (9)

18. Trade payables

At December 31, 2014, trade payables totaled €19 million, in line with December 31, 2013, and consisted of the following:

At December 31,
20142013Change
(€ million)
Trade payables to third parties 14 13 1
Intercompany trade payables 5 6 (1)
Total trade payables 19 19

Trade payables are due within one year and their carrying amount at the reporting date is deemed to approximate their fair value.

19. Current debt

At December 31, 2014, current debt totaled €9,714 million, a €5,934 million increase over December 31, 2013 and related to:

At December 31,
20142013Change
(€ million)
Intercompany debt:
- Current account with Fiat Chrysler Finance S.p.A. 6,662 739 5,923
- Short term loans from Fiat Chrysler Finance Europe S.A. 2,682 2,682
- Short term loans from Fiat Chrysler Finance S.p.A. 3,000 (3,000)
- Other intercompany loans 17 (17)
Total intercompany debt 9,344 3,756 5,588
Third party debt:
- Mandatory Convertible Securities liability component 346 346
- Advances on factored receivables 24 24
Total third party debt 370 24 346
Total current debt 9,714 3,780 5,934

Current account with Fiat Chrysler Finance S.p.A. represents the overdraft as part of the Group’s centralized treasury management.

Loans from Fiat Chrysler Finance Europe S.A. consists of euro-denominated financing due within 12 months.

As described in more detail in the notes to the consolidated financial statements, FCA issued aggregate notional amount of U.S.$2,875 million (€2,293 million) of mandatory convertible securities on December 16, 2014. The obligation to pay coupons as required by the mandatory convertible securities meets the definition of a financial liability as it is a contractual obligation to deliver cash to another entity. The fair value amount determined for the liability component at issuance of the mandatory convertible securities was U.S.$419 million (€335 million) calculated as the present value of the coupon payments due less allocated transaction costs of U.S.$9 million (€7 million) that are accounted for as a debt discount. Subsequent to issuance, the financial liability for the coupon payments is accounted for at amortized cost. At December 31, 2014 the financial liability component was U.S.$420 million (€346 million).

Advances on factored receivables relate to advances on income tax receivables in Italy totaling €25 million.

Current intercompany debt of €9,344 million is denominated in euros and the carrying amount is deemed to be in line with fair value.

20. Other debt

At December 31, 2014, Other debt totaled €394 million, a net increase of €177 million over December 31, 2013, and included the following:

At December 31,
20142013Change
(€ million)
Intercompany other debt:
- Consolidated Italian corporate tax 124 107 17
- Consolidated VAT 222 92 130
- Other 27 27
Total intercompany other debt 373 199 174
Other debt and taxes payable:
- Taxes payable 5 (5)
- Accrued expenses 9 2 7
- Other payables 12 11 1
Total Other debt and taxes payable 21 18 3
Total current debt 394 217 177

At December 31, 2014, intercompany debt for consolidated VAT of €222 million consisted of VAT credits of Italian subsidiaries transferred to FCA as part of the consolidated VAT regime.

Intercompany debt for consolidated Italian corporate tax of €124 million (€107 million at December 31, 2013) consisted of compensation payable for tax losses and Italian corporate tax credits contributed by Italian subsidiaries participating in the domestic tax consolidation program for 2014 in relation to which the Italian branch of FCA is the consolidating entity.

Other debt and taxes payable are all due within one year and their carrying amount is deemed to approximate their fair value.