annual report - FIAT SpA

FINANCIAL REVIEW – FIAT GROUP
INTRODUCTION
Demerger of activities to Fiat Industrial
During 2010, the Group initiated and completed a strategic project to separate the Agricultural and Construction
Equipment (CNH sector) and Trucks and Commercial Vehicles (Iveco sector) activities, as well as the “Industrial &
Marine” business line of FPT Powertrain Technologies (FPT Industrial sector), from the Automobile and Automobilerelated
Components and Production Systems activities, which include the sectors Fiat Group Automobiles, Maserati,
Ferrari, Magneti Marelli, Teksid, Comau and the “Passenger & Commercial Vehicles” business line of FPT Powertrain
Technologies (Fiat Powertrain sector).
The separation of those businesses, in the form of their demerger from Fiat S.p.A. and transfer to Fiat Industrial S.p.A.
(the "Demerger” – a Scissione Parziale Proporzionale pursuant to Article 2506-bis of the Italian Civil Code), resulted in
the creation of the Fiat Industrial Group (consisting of CNH, Iveco and FPT Industrial) on 1 January 2011. From the
same date, Fiat Group post Demerger is comprised of Fiat Group Automobiles, Maserati, Ferrari, Fiat Powertrain,
Magneti Marelli, Teksid and Comau. On 3 January 2011, Fiat Industrial S.p.A.’s shares began trading on the Mercato
Telematico Azionario managed by Borsa Italiana S.p.A.
A description of the principal phases leading up to completion of the Demerger is provided in the Notes to the
Consolidated Financial Statements.
As the transaction took effect on 1 January 2011, the consolidated financial statements for the year ended 31
December 2010 relate to Fiat Group pre Demerger (hereinafter the Fiat Group). Moreover, in accordance with IFRS 5 –
Non-current Assets Held for Sale and Discontinued Operations, as the Demerger became highly probable in December
(when the above authorizations were obtained), all businesses to be transferred to the new Fiat Industrial Group are
classified and presented as Discontinued Operations in these consolidated financial statements. That presentation has
resulted in the following:
� For both 2010 and 2009 (the latter presented for comparative purposes), all revenues and costs relating to
Discontinued Operations are reported in the Income Statement as Profit/(Loss) from Discontinued Operations.
� All current and non-current assets relating to Discontinued Operations at December 2010 have been reclassified
in the Statement of Financial Position as Assets Held for Sale and Discontinued Operations.
� All liabilities (excluding equity) relating to Discontinued Operations at December 2010 have been reclassified in
the Statement of Financial Position as Liabilities Held for Sale and Discontinued Operations.
� For both 2010 and 2009 (the latter presented for comparative purposes), all cash flows arising from
Discontinued Operations have been presented in the Statement of Cash Flows as separate line items under
cash flows from operating, investing and financing activities.
In other words, the Fiat Group consolidated financial statements are based on the full consolidation of subsidiaries that
are to remain within the scope of operations of Fiat Group post Demerger (i.e., Continuing Operations) and those that
will be transferred to Fiat Industrial Group (i.e., Discontinued Operations), with separate presentation for each group of
activities.
For additional detail of items presented under Discontinued Operations in the Consolidated Statements of Income,
Financial Position and Cash Flows, please refer to the section Asset and liabilities held for sale and Discontinued
Operations.
Additionally, as the Demerger is considered a “business combination involving entities or businesses under common
control”, it is outside the scope of application of IFRS 3 and IFRIC 17. Accordingly, in the 2011 consolidated financial
statements for Fiat S.p.A. post Demerger and Fiat Industrial S.p.A., the opening position for items in the statement of
financial position will be equivalent to the carrying amounts reported in the consolidated financial statements of Fiat
Group prior to the Demerger.
Report on Operations Financial Review – Fiat Group
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