annual report - FIAT SpA

a limit on Fiat’s ownership at 49.9% prior to full repayment of the U.S. Treasury and Canadian government loans. Fiat
may exercise these two call options from January 2013 to June 2016. The Incremental Equity Call Option may not be
exercised until the Chrysler aggregate principal of the two loans falls below approximately $4 billion. Fiat may exercise
the Alternative Call Option or the Incremental Equity Call Option prior to 1 January 2013 if the loans granted by the
U.S. Treasury and the Government of Canada have been repaid and any other related commitment terminated. Fiat
also holds two secondary call options to purchase a portion of the membership interest held by the VEBA Trust, and
the entirety of the membership interest held by the U.S. Treasury at exercise prices determined in a manner
consistent with those described below.
The consideration to be paid for the exercise of these options is determined on the basis of a defined market-based
EBITDA multiple (average multiple of reference automakers, not to exceed the then Fiat multiple), applied to Chrysler
reported “Modified EBITDA” for the most recent four quarters, less Net Industrial Debt. In the event that at the time of
exercise Chrysler is a listed company, such consideration will be based on a volume-weighted average price per
share of Chrysler common stock. The Incremental Equity Call Option is recognised in the Consolidated statement of
financial position on a fair value basis at zero, as the exercise price is not fixed but rather will be based on market
values of underlying assets at exercise.
Iveco Finance Holdings Limited
Since 2005, Financial Services activities for Iveco in Western Europe have been managed by Iveco Finance Holdings
Limited (IFHL), the joint venture with Barclays Group in which Iveco holds a 49% stake and Barclays a 51% stake.
This joint venture provides support for the sector’s European sales activities through dealer and end customer
financing in France, Germany, Italy and the United Kingdom, and Barclays provides funding up to a maximum of €3.5
billion. The agreements relating to this joint venture contain provisions that are standard for such contracts in relation
to management of the company, covenants and default clauses. Under the agreements signed in 2010, the parties
stipulated that the joint venture would terminate on 31 May 2012. As is usual for contracts of this type, on that date
Iveco will acquire from Barclays Group, and Barclays Group will sell, the interest it holds in that joint venture for a
consideration based on the book value of equity. In addition, Iveco is responsible for ensuring repayment of any
funding provided to the joint venture by Barclays which is outstanding at that date (which could take place through
replacement funding from one or more new lenders or other mechanism). Iveco is evaluating strategic options in
relation to this joint venture, including the potential selection of new partners.
Sales of receivables
The Group has discounted receivables and bills without recourse having due dates after 31 December 2010 and
classified as Continuing Operations amounting to €3,524 million, which refer to trade receivables and other
receivables for €2,761 million and receivables from financing for €763 million. These amounts include receivables,
mainly from the sales network, sold to jointly-controlled financial services companies (FGA Capital) for €2,376 million.
With respect to Discontinued Operations, the Group has discounted receivables and bills without recourse having due
dates after 31 December 2010 amounting to €1,100 million, of which trade receivables and other receivables for
€882 million and receivables from financing for €218 million. These amounts include receivables, mainly from the
sales network, sold to associated financial service companies (Iveco Finance Holdings Limited, controlled by
Barclays) for €390 million.
At 31 December 2009, the Fiat Group had discounted receivables and bills without recourse having due dates after
that date for a total of € 4,611 million. Of this, €3,679 million related to trade receivables and other receivables and
€932 million related to receivables from financing. These amounts included receivables, mainly from the sales
network, sold to jointly-controlled financial services companies (FGA Capital) for €2,530 million and receivables,
mainly from the sales network, sold to associated financial service companies (Iveco Finance Holdings, controlled by
Barclays) for €440 million.
Fiat Group Consolidated Financial Statements at 31 December 2010 196