THE FIAT GROUP IN - Fiat SpA

Reserve for pensions and similar obligations
The reserve includes provisions for pensions and similar obligations determined on an actuarial basis, where applicable, and
payable to employees and former employees according to contractual agreements or by law. The net decrease is due to the net
reduction in the number of employees of the Group during the course of the year, also on account of the spin-off of the
businesses to Global Value Services and the joint ventures with General Motors.
Income tax reserves
The Deferred income tax reserve at December 31, 2001 includes deferred tax liabilities, net of deferred tax assets, which have
been offset where possible by the individual companies. The Deferred income tax reserve, net of Deferred tax assets recorded
under Other receivables from others, is composed as follows:
(in millions of euros) At 12/31/2001 At 12/31/2000 Change
Deferred income tax reserve 1,438 1,042 396
Deferred tax assets (3,033) (2,049) (984)
Total (1,595) (1,007) (588)
The net change of -588 million euros from December 31, 2000 is mainly due to the effect of recording deferred tax assets to
account for the benefits deriving from tax losses which are reasonably certain of being recovered.
The Deferred income tax reserve, net of Deferred tax assets recorded under Other receivables from others, can be analyzed as follows:
(in millions of euros) At 12/31/2001 At 12/31/2000
Deferred tax liabilities for:
Accelerated depreciation 631 704
Deferred tax on gains 176 220
Capital investment grants 6 4
Other 705 821
Total Deferred tax liabilities 1,518 1,749
Deferred tax assets for:
Reserves for risks and taxed charges (1,117) (1,325)
Inventories (123) (207)
Taxed allowance for doubtful accounts (273) (208)
Pension funds (244) (243)
Other (511) (531)
Total Deferred tax assets (2,268) (2,514)
Theoretical tax benefit connected to tax loss carryforwards (2,938) (1,812)
Adjustments for assets whose recoverability is uncertain (mainly tax loss carryforwards) 2,093 1,570
Total Deferred income tax reserve, net of Deferred tax assets (1,595) (1,007)
As disclosed in the Accounting Principles, in recording deferred tax assets, each company in the Group critically evaluated whether the
conditions existed for the future recoverability of such assets on the basis of updated strategic plans, accompanied by the related tax
plans. For this reason, the total theoretical future tax benefits deriving from net temporary timing differences (2,268 million euros) and
the tax loss carryforwards (2,938 million euros) have prudently not been recorded for a total of 2,093 million euros.
In particular, the Deferred tax reserve includes 1,346 million euros (734 million euros at December 31, 2000) of tax benefits
connected to tax loss carryforwards. Moreover, a further tax benefit connected to tax loss carryforwards has not been recorded
in the financial statements for 1,592 million euros (1,078 million euros at December 31, 2000).
Deferred taxes have not been provided on the undistributed earnings of subsidiaries since no transactions are expected to be
entered into that would warrant their taxation.
Deferred taxes have not been provided on temporary timing differences of 143 million euros (158 million euros at December 31,
2000) relating to reserves and provisions in abeyance of taxes, since they are not expected to be used in a manner which would
warrant their taxation.
Consolidated Financial Statements at December 31, 2001 – Notes to the Consolidated Financial Statements 27
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