annual report - FIAT SpA

Following is a breakdown of financial expense:
(€ thousand) 2010 2009
Financial expense to Group companies:
Interest expense to Fiat Finance S.p.A. current account - 598
Interest expense to Fiat Finance S.p.A. loans 224,955 124,590
Commissions and other charges payable to Fiat Netherlands Holding N.V. 5,808 6,255
Commissions and other charges payable to Fiat Finance S.p.A. 79 7
Commissions and other charges payable to Fidis S.p.A. 1,642 91
Interest and financial expense to other Group companies 119 266
Total financial expense to Group companies 232,603 131,807
Financial expense to third parties:
Interest expense and charges for the sale of receivables 847 8,778
Financial expense for employee benefits 517 1,084
Other third party interest and financial expense 863 3,204
Total financial expense to third parties 2,227 13,066
Total financial expense 234,830 144,873
Net income from derivative financial instruments of €110,585 thousand (net income of €116,992 thousand for 2009)
was essentially attributable to the gain arising from the change in fair value of the two equity swaps (which expire in
2011, following extension of the two contracts during the year) entered into as hedges against Fiat shares rising above
the exercise price of the stock options granted to the Chief Executive Officer in 2004 and 2006 (see Note 19). At 31
December 2010, the equity swaps had a notional value, based on the contractual strike price, of €203,941 thousand.
Although these equity swaps were entered into for hedging purposes, they do not qualify for hedge accounting under
IFRS and accordingly are classified as held for trading. Following the Demerger, those equity swaps will based on the
stock market performance of a basket consisting of the shares in Fiat S.p.A. and in Fiat Industrial S.p.A.
8. Income taxes
A breakdown of taxes recognized in the income statement is provided below:
(€ thousand)
Current taxes:
2010 2009
IRES (39,619) -
IRAP - -
Total current taxes
Deferred taxes for the period:
(39,619) -
IRAP 7,000 (5,858)
Total deferred taxes for the period 7,000 (5,858)
Taxes relating to prior periods (1,159) 11,973
Total income taxes (33,778) 6,115
Current IRES tax for 2010 represents a €39,619 thousand income and relates to compensation receivable by Fiat
S.p.A. for tax loss carryforwards contributed to the domestic tax consolidation scheme.
Deferred IRAP relates to profit recognized on contract work in progress with T.A.V. S.p.A. (now Rete Ferroviaria
Italiana S.p.A.)., for which there is a timing difference between taxation and accounting recognition.
Taxes relating to prior periods represents income of €1,159 thousand related to the prior year's domestic tax
consolidation. For 2009, taxes relating to prior periods of €11,973 thousand consisted almost entirely of IRAP paid
during the year in relation to the prior year's income.
Fiat S.p.A. – Statutory Financial Statements at 31 December 2010 276