At 31 December 2013, investments totaled €13,060,065 thousand and underwent the following changes during the year:
|(€ thousand)||31 December 2012||Increases||Decreases||Reclassification and other changes||Impairment (losses)/reversals and Fair value adjustments||31 December 2013|
|Investments in subsidiaries||11,373,215||1,738,058||(318)||-||(466,400)||12,644,555|
|Investments in associates||96,519||94,392||-||-||(74,000)||116,911|
|Investments in other companies||295,281||682||(2,565)||-||5,201||298,599|
Investments in subsidiaries and changes during the year were as follows:
|(€ thousand)||% interest||31 December 2012||Increases||(Decreases)||Reclassification and other changes||Impairment (losses)/reversals||31 December 2013|
|Fiat Group Automobiles S.p.A.||100||6,314,081||1,650,000||424,890||8,388,971|
|Magneti Marelli S.p.A.||100||611,854||611,854|
|Teksid Aluminum S.r.l.||100||31,192||18,000||(17,100)||32,092|
|Fiat Gestione Partecipazioni S.p.A. (now Fiat Partecipazioni S.p.A.)||100||1,867,983||992||(465,300)||1,403,675|
|Fiat Partecipazioni S.p.A.
(now FGA Real Estate Services S.p.A.)
|Fiat Finance S.p.A.||100||222,263||222,263|
|Fiat Finance and Trade Ltd S.A.||40||115,500||115,500|
|Editrice La Stampa S.p.A.||100||57,424||70,000||127,424|
|Total investments in subsidiaries||11,373,215||1,738,058||-||(466,400)||12,644,555|
Significant changes to investments in subsidiaries during the year were as follows:
n capital contributions to certain subsidiaries to strengthen their capital structure in view of operating results, including €1,650 million to Fiat Group Automobiles S.p.A., €70 million to Editrice La Stampa S.p.A. and €18 million to Teksid Aluminum S.r.l.
n the following transactions, which formed part of the continuing rationalization of the real estate services activities and assets:
- demerger of activities and assets from Fiat Partecipazioni S.p.A. and transfer to Fiat Gestione Partecipazioni S.p.A. (subsequently renamed Fiat Partecipazioni S.p.A.)
- transfer of the shareholding in Fiat Partecipazioni S.p.A. post demerger (subsequently renamed FGA Real Estate Services S.p.A.) to Fiat Group Automobiles S.p.A. as a contribution to capital
Fiat Partecipazioni’s real estate management and services activities, in addition to assets held on behalf of Fiat S.p.A. and the Group in general, were demerged, while the activities and assets relating to the automobiles business remained within Fiat Partecipazioni post demerger (now FGA Real Estate Services S.p.A.). As the transactions involved companies under the direct control of Fiat S.p.A., recognition was based on existing book values. Accordingly, the increase of approximately €1 million in the investment in Fiat Gestione Partecipazioni S.p.A. following the demerger and the increase of approximately €425 million in the investment in Fiat Group Automobiles S.p.A. following the contribution to capital, correspond to the respective pro rata portion of the book value of the investment in Fiat Partecipazioni S.p.A., based on the relative value of the assets and liabilities demerged in relation to the value of equity as reported in the Fiat Partecipazioni S.p.A. financial statements prepared for the purposes of the estimate of value of the capital contribution. As described in Note 2, on the basis of that value, a €16 million impairment reversal was recognized on the investment in Fiat Partecipazioni S.p.A.
Following the reorganization, Fiat Partecipazioni S.p.A. was renamed FGA Real Estate Services S.p.A. and Fiat Gestione Partecipazioni S.p.A. was renamed Fiat Partecipazioni S.p.A.
Impairment (losses)/reversals includes impairment losses and reversals arising from application of the cost method, as described in Note 2 above.
With regard to Fiat Group Automobiles S.p.A., the estimates and assumptions used in measuring the investment for the purposes of the financial statements (see “Use of Estimates”) provided reasonable support for the carrying amount recognized at 31 December 2012, increased to reflect the capital contributions and book value of the investment in Fiat Partecipazioni S.p.A. (now FGA Real Estate Services S.p.A.) transferred in 2013, as described above. The current carrying amount (€8,389 million at 31 December 2013) reflects impairment losses of €2,966 million, recognized prior to 2005 and again in 2009, that could potentially be reversed in future periods.
With regard to the investment in Editrice La Stampa (carrying value of €127 million), whose 2013 results reflected difficult trading conditions in its industry sector and restructuring charges for the subsidiary Publikompass, an assessment of recoverable value was based on the company’s medium-term business plan and the nature of specific assets, in particular the newspaper La Stampa, as well as its position in the publishing sector in Italy. Based on the assumptions and estimates made, the carrying amount of the investment at 31 December 2013 was deemed recoverable.
For the remaining significant shareholdings – in particular, Magneti Marelli S.p.A. and Ferrari S.p.A. (recognized at historic cost) – no indications of impairment were identified. This also takes into consideration the carrying amounts of equity recognized in the consolidated statement of financial position, for which the recoverability of assets has already been adequately assessed.
A breakdown of investments in associates and changes during the year is as follows:
|(€ thousand)||%||31 December 2012||Increases||Decreases||Impairment (losses)/reversals||31 December 2013|
|RCS MediaGroup S.p.A.||16||96,519||94,392||-||(74,000)||116,911|
|Total investments in associates||96,519||94,392||-||(74,000)||116,911|
The €94 million increase for the year reflects the subscription to RCS MediaGroup S.p.A.’s capital increase to support its 2013-2015 development plan. As already announced, in addition to subscribing to its pro rata share of the capital increase, Fiat S.p.A. also purchased additional rights (in part from other participants in the existing shareholder agreement). Following exercise of the rights held, Fiat S.p.A.’s interest in RCS went from 10.09%, as reported at 31 December 2012, to 16.41% (or 10.50% to 20.55% for ordinary shares only).
At year end, the carrying amount of the investment in RCS MediaGroup S.p.A. was written down by €74 million. Additional information on the impairment is provided in Note 2.
Investments in other companies and changes during the year were as follows:
|(€ thousand)||% interest||31 December 2012||Increases||Decreases||Fair value adjustments||31 December 2013|
|CNH Industrial N.V.||2.52 (*)||282,453||682||-2,565||1,183||281,753|
|Fin. Priv. S.r.l.||14.28||10,249||-||-||3,387||13,636|
|Assicurazioni Generali S.p.A.||0.01||2,579||-||-||631||3,210|
|Total investments in other companies||295,281||682||-2,565||5,201||298,599|
3.72% of voting rights.
With regard to the investment in Fiat Industrial (now CNH Industrial), following the demerger on 1 January 2011, Fiat S.p.A. received Fiat Industrial S.p.A. ordinary shares, without consideration, equivalent to the number of own shares held at the date of the demerger. In accordance with IAS 39 and related interpretations, those shares have been recognized at fair value since initial recognition. On 29 September 2013, Fiat Industrial S.p.A. and CNH Global N.V. were both merged into CNH Industrial N.V. At closing, CNH Industrial issued new common shares to Fiat Industrial and CNH Global shareholders on the basis of the exchange ratios established in the merger agreement. For Fiat Industrial shareholders, the exchange ratio was one CNH Industrial common share for every Fiat Industrial share held.
At 31 December 2013, the Company held 34,007,650 CNH Industrial common shares, representing 2.52% of common shares outstanding, having a total value of €281.8 million (at 31 December 2012, 34,216,027 Fiat Industrial ordinary shares, or 2.80% of share capital, having a total value of €282.5 million). Of those shares, 18,160,000 (valued at €150.5 million) were allocated to servicing the stock option and stock grant plans and recognized at fair value through profit or loss, while the remaining 15,847,650 shares (valued at €131.3 million) were classified as available-for-sale and recognized at fair value directly in equity. Recognition at fair value, which corresponds to the market price of the shares held at the balance sheet date, resulted in a €1.2 million increase in the value of the investment during the year, of which €0.8 million was recognized through profit and loss and entirely offset by an equivalent increase in the related liability (see Note 19, provisions for stock option and stock grant plans) and €0.4 million directly in equity (see Note 18). At 31 December 2013, the holding in CNH Industrial also included the 33,955,402 special voting shares allotted at the time of the merger of Fiat Industrial into CNH Industrial described above. Those shares cannot be directly or indirectly sold, assigned or transferred, restricted, pledged, or used as collateral or other form of guarantee. Including the special voting shares, the Company holds 3.72% of total voting rights in CNH Industrial.
Finally, other changes in the investment in CNH Industrial during 2013 included a €0.7 million increase following the purchase of 76,623 common shares following the exercise by some shareholders of withdrawal rights on Fiat Industrial shares in relation to the above merger. The €2.6 million decrease related to shares sold during 2013 following exercise of 285,000 options under the November 2006 stock option plan for managers.
The investments in Fin. Priv. S.r.l. and Assicurazioni Generali S.p.A., which are classified as non-current financial assets and not held for trading, have been recognized at fair value. For Assicurazioni Generali S.p.A., a listed company, fair value corresponds to the market price of the shares held at the balance sheet date. For Fin. Priv. S.r.l., a holding company whose assets are principally listed securities, fair value was based on the market price of the investments in its portfolio. This resulted in a €4.0 million increase in the investments in Fin. Priv. S.r.l. and Assicurazioni Generali S.p.A. for 2013, with a corresponding adjustment to equity (see Note 18).
There were no investments in other companies in relation to whose obligations Fiat S.p.A. had unlimited liability (Article 2361.2 of the Civil Code).
A full list of investments with the additional disclosures required by Consob Communication DEM/6064293 of 28 July 2006 is attached.
At 31 December 2013 and 2012, no investments held by the Company had been pledged as security for financial or contingent liabilities.
During 2012, changes in investments were as follows:
|(€ thousand)||31 December 2011||Increases||Decreases||Reclassification and other changes||Impairment (losses)/reversals and Fair Value adjustments||31 December 2012|
|Investments in subsidiaries||11,725,979||574,848||-||-||(927,612)||11,373,215|
|Investments in associates||131,785||-||-||-||(35,266)||96,519|
|Investments in other companies||265,155||4||(26,500)||-||56,622||295,281|