Exhibit 99.1
	Ferrari N.V.

Interim Report

At and for the three and nine months ended September 30,2018

____________________________________________________________________________________________________

CONTENTS

	Page
BOARD OF DIRECTORS	1
INDEPENDENT AUDITORS	1
CERTAIN DEFINED TERMS	1
INTRODUCTION	2
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Highlights	3
Forward-Looking Statements	5
Non-GAAP Financial Measures	7
Results of Operations	10
Liquidity and Capital Resources	20
Recent Developments	27
Outlook	27
INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AT AND FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2018
Interim Consolidated Income Statement	F-1
Interim Consolidated Statement of Comprehensive Income	F-2
Interim Consolidated Statement of Financial Position	F-3
Interim Consolidated Statement of Cash Flows	F-4
Interim Consolidated Statement of Changes in Equity	F-5
Notes to the Interim Condensed Consolidated Financial Statements	F-6

BOARD OF DIRECTORS

Chairman

John Elkann

Chief Executive Officer

Louis C. Camilleri

Vice Chairman

Piero Ferrari

Directors

Delphine Arnault

Giuseppina Capaldo

Eddy Cue

Sergio Duca

Lapo Elkann

Amedeo Felisa

Maria Patrizia Grieco

Adam Keswick

Elena Zambon

INDEPENDENT AUDITORS

EY S.p.A.

CERTAIN DEFINED TERMS

In this report (the “Interim Report”) , unless otherwise specified, the terms “we,” “our,” “us,” the “Group,” the “Company” and “Ferrari” refer to Ferrari N.V., individually or together with its subsidiaries, as the context may require. References to “FCA” or “FCA Group” refer to Fiat Chrysler Automobiles N.V., together with its subsidiaries as the context may require.

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INTRODUCTION

The Interim Condensed Consolidated Financial Statements at and for the three and nine months ended September 30, 2018 (the “Interim Condensed Consolidated Financial Statements”) included in this Interim Report have been prepared in accordance with International Financial Reporting Standards (“IFRS”) issued by the International Accounting Standards Board (“IASB”) and in accordance with IFRS as endorsed by the European Union, and in particular, in compliance with IAS 34 - Interim Financial Reporting. The accounting principles applied are consistent with those used for the preparation of the annual consolidated financial statements at and for the year ended December 31, 2017 (the “Annual Consolidated Financial Statements”), except as otherwise stated in “New standards and amendments effective from January 1, 2018” in the notes to the Interim Condensed Consolidated Financial Statements.

The Group’s financial information in this Interim Report is presented in Euro except that, in some instances, information is presented in U.S. Dollars. All references in this report to “Euro” and “€” refer to the currency introduced at the start of the third stage of European Economic and Monetary Union pursuant to the Treaty on the Functioning of the European Union, as amended, and all references to “U.S. Dollars,” “U.S. Dollar,” “U.S.$” and “$” refer to the currency of the United States of America (or “United States”).

Certain totals in the tables included in this Interim Report may not add due to rounding.

The financial data in “Results of Operations” is presented in millions of Euro, while the percentages presented are calculated using the underlying figures in thousands of Euro.

This Interim Report is unaudited.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

Highlights

Consolidated Income Statement Data

	For the three months ended September 30,		For the nine months ended September 30,
	2018	2017	2018	2017
	(€ million, except per share data)
Net revenues	838	836	2,575	2,577
EBIT	203	202	631	581
Profit before taxes	197	194	616	556
Net profit	287	141	596	401
Net profit attributable to:
Owners of the parent	287	140	595	400
Non-controlling interests	—	1	1	1
Basic earnings per common share (in Euro) (1)	1.52	0.74	3.15	2.11
Diluted earnings per common share (in Euro) (1)	1.51	0.74	3.14	2.11
Dividend approved per common share (in Euro) (2)	—	—	0.71	—
Distribution approved per common share (in Euro) (3)	—	—	—	0.64

_____________________________

(1) See Note 13 “Earnings per Share” to the Interim Condensed Consolidated Financial Statements for the calculation of basic and diluted earnings per common share.

(2) Following approval of the annual accounts by the shareholders at the Annual General Meeting of the Shareholders on April 13, 2018, a dividend distribution of €0.71 per common share was approved, corresponding to a total distribution of €134 million. The distribution was made from the retained earnings reserve.

(3) Following approval of the annual accounts by the shareholders at the Annual General Meeting of the Shareholders on April 14, 2017, a cash distribution of €0.635 per common share was approved, corresponding to a total distribution of €120 million. The distribution was made from the share premium reserve which is a distributable reserve under Dutch law.

Consolidated Statement of Financial Position Data

	At September 30,	At December 31,
	2018	2017
	(€ million)
Cash and cash equivalents	753	648
Total assets	4,615	4,141
Debt	1,887	1,806
Total equity	1,231	784
Equity attributable to owners of the parent	1,226	779
Non-controlling interests	5	5
Share capital	3	3
Common shares issued (in thousands of shares)	188,646	188,954

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Other Statistical Information

Shipments

(Number of cars and % of total cars)	For the three months ended September 30,						For the nine months ended September 30,
	2018	%		2017	%		2018	%		2017	%
EMEA
UK	178	7.9	%	158	7.7	%	714	10.4	%	666	10.4	%
Germany	218	9.6	%	201	9.8	%	601	8.8	%	560	8.8	%
Italy	115	5.1	%	105	5.1	%	374	5.5	%	343	5.4	%
France	108	4.8	%	81	4.0	%	306	4.5	%	266	4.2	%
Switzerland	95	4.2	%	95	4.6	%	295	4.3	%	281	4.4	%
Middle East (1)	90	4.0	%	78	3.8	%	203	3.0	%	233	3.7	%
Rest of EMEA (2)	201	8.8	%	185	9.1	%	688	10.0	%	589	9.1	%
Total EMEA	1,005	44.4	%	903	44.1	%	3,181	46.5	%	2,938	46.0	%
Americas (3)	770	34.0	%	736	36.0	%	2,189	31.9	%	2,078	32.6	%
China, Hong Kong and Taiwan (on a combined basis)	162	7.2	%	152	7.4	%	522	7.6	%	453	7.1	%
Rest of APAC (4)	325	14.4	%	255	12.5	%	961	14.0	%	912	14.3	%
Total	2,262	100.0	%	2,046	100.0	%	6,853	100.0	%	6,381	100.0	%

_____________________________

(1)    Middle East mainly includes the United Arab Emirates, Saudi Arabia, Bahrain, Lebanon, Qatar, Oman and Kuwait.

(2)     Rest of EMEA includes Africa and the other European markets not separately identified.

(3)    Americas includes the United States of America, Canada, Mexico, the Caribbean and Central and South America.

(4)    Rest of APAC mainly includes Japan, Australia, Singapore, Indonesia, South Korea, Thailand and Malaysia.

Average number of employees for the period

	For the three months ended September 30,		For the nine months ended September 30,
	2018	2017	2018	2017
Average number of employees for the period	3,735	3,375	3,587	3,339

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Forward-Looking Statements

Statements contained in this report, particularly those regarding our possible or assumed future performance are “forward-looking statements” that contain risks and uncertainties. In some cases, words such as “may”, “will”, “expect”, “could”, “should”, “intend”, “estimate”, “anticipate”, “believe”, “remain”, “continue”, “on track”, “successful”, “grow”, “design”, “target”, “objective”, “goal”, “forecast”, “projection”, “outlook”, “prospects”, “plan”, “guidance” and similar expressions are used to identify forward-looking statements. These forward-looking statements reflect the respective current views of Ferrari with respect to future events and involve significant risks and uncertainties that could cause actual results to differ materially from those indicated in the forward-looking statements. These factors include, without limitation:

• our ability to preserve and enhance the value of the Ferrari brand;

• the success of our Formula 1 racing team and the expenses we incur for our Formula 1 activities;

• our ability to keep up with advances in high performance car technology and to make appealing designs for our new models;

• the challenges and costs of integrating hybrid technology more broadly into our car portfolio over time;

• our ability to preserve our relationship with the automobile collector and enthusiast community;

• our low volume strategy;

• the ability of Maserati, our engine customer, to sell its planned volume of cars;

• changes in client preferences and automotive trends;

• changes in the general economic environment, including changes in some of the markets in which we operate, and changes in demand for luxury goods, including high performance luxury cars, which is highly volatile;

• the impact of increasingly stringent fuel economy, emission and safety standards, including the cost of compliance, and any required changes to our products;

• our ability to successfully carry out our growth strategy and, particularly, our ability to grow our presence in emerging market countries;

• our ability to achieve our key financial targets and our financial policy;

• our ability to service and refinance our debt;

• competition in the luxury performance automobile industry;

• reliance upon a number of key members of executive management and employees, and the ability of our current management team to operate and manage effectively;

• the performance of our dealer network on which we depend for sales and services;

• increases in costs, disruptions of supply or shortages of components and raw materials;

• disruptions at our manufacturing facilities in Maranello and Modena;

• our ability to provide or arrange for adequate access to financing for our dealers and clients, and associated risks;

• the performance of our licensees for Ferrari-branded products;

• our ability to protect our intellectual property rights and to avoid infringing on the intellectual property rights of others;

• product recalls, liability claims and product warranties;

• our continued compliance with customs regulations of various jurisdictions;

• labor relations and collective bargaining agreements;

• exchange rate fluctuations, interest rate changes, credit risk and other market risks;

• changes in tax, tariff or fiscal policies and regulatory, political and labor conditions in the jurisdictions in which we operate, including possible future bans of combustion engine cars in cities and the potential advent of self-driving technologies;

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• our ability to ensure that our employees, agents and representatives comply with applicable law and regulations;

• the adequacy of our insurance coverage to protect us against potential losses;

• potential conflicts of interest due to director and officer overlaps with our largest shareholders;

• our ability to maintain the functional and efficient operation of our information technology systems, including our ability to defend from the risk of cyberattacks on our in-vehicle technology; and

• other factors discussed elsewhere in this document.

We expressly disclaim and do not assume any liability in connection with any inaccuracies in any of the forward-looking statements in this document or in connection with any use by any third party of such forward-looking statements. Actual results could differ materially from those anticipated in such forward-looking statements. We do not undertake an obligation to update or revise publicly any forward-looking statements.

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Non-GAAP Financial Measures

We monitor and evaluate our operating and financial performance using several non-GAAP financial measures including: EBITDA, Adjusted EBITDA, Adjusted EBIT, Adjusted Net Profit, Adjusted Basic and Diluted Earnings per Common Share, Net Debt, Net Industrial Debt, Free Cash Flow and Free Cash Flow from Industrial Activities, as well as a number of financial metrics measured on a constant currency basis. We believe that these non-GAAP financial measures provide useful and relevant information regarding our performance and our ability to assess our financial performance and financial position. They also provide us with comparable measures that facilitate management’s ability to identify operational trends, as well as make decisions regarding future spending, resource allocations and other operational decisions. While similar measures are widely used in the industry in which we operate, the financial measures we use may not be comparable to other similarly titled measures used by other companies nor are they intended to be substitutes for measures of financial performance or financial position as prepared in accordance with IFRS.

EBITDA and Adjusted EBITDA

EBITDA is defined as net profit before income tax expense, net financial expenses and depreciation and amortization. Adjusted EBITDA is defined as EBITDA as adjusted for income and costs, which are significant in nature, but expected to occur infrequently. The following table sets forth the calculation of EBITDA and Adjusted EBITDA for the three and nine months ended September 30, 2018 and 2017, and provides a reconciliation of these non-GAAP measures to net profit. EBITDA is presented by management to aid investors in their analysis of the performance of the Group and to assist investors in the comparison of the Group’s performance with that of other companies. Adjusted EBITDA is presented to demonstrate how the underlying business has performed prior to the impact of the adjusted items, which may obscure underlying performance and impair comparability of results between periods.

	For the three months ended September 30,			For the nine months ended September 30,
	2018		2017	2018		2017
	(€ million)
Net profit	287		141	596		401
Income tax (benefit)/expense	(90	)	53	20		155
Net financial expenses	6		8	15		25
Amortization and depreciation	75		64	210		197
EBITDA	278		266	841		778
Release of charges related to Takata airbag inflator recalls	—		—	(1	)	—
Adjusted EBITDA	278		266	840		778

Adjusted EBIT

Adjusted EBIT represents EBIT as adjusted for income and costs, which are significant in nature, but expected to occur infrequently. We provide such information in order to present how the underlying business has performed prior to the impact of such items, which may obscure underlying performance and impair comparability of results between the periods. The following table sets forth the calculation of Adjusted EBIT for the three and nine months ended September 30, 2018 and 2017.

	For the three months ended September 30,		For the nine months ended September 30,
	2018	2017	2018		2017
	(€ million)
EBIT	203	202	631		581
Release of charges related to Takata airbag inflator recalls	—	—	(1	)	—
Adjusted EBIT	203	202	630		581

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Adjusted Net Profit

Adjusted Net Profit represents net profit as adjusted for income and costs (net of tax effect), which are significant in nature, but expected to occur infrequently. We provide such information in order to present how the underlying business has performed prior to the impact of such items, which may obscure underlying performance and impair comparability of results between the periods. The following table sets forth the calculation of Adjusted Net Profit for the three and nine months ended September 30, 2018 and 2017.

	For the three months ended September 30,			For the nine months ended September 30,
	2018		2017	2018		2017
	(€ million)			(€ million)
Net profit	287		141	596		401
Release of charges related to Takata airbag inflator recalls (net of tax effect)	—		—	(1	)	—
Patent box benefit for the period 2015-2017	(141	)	—	(141	)	—
Adjusted Net Profit	146		141	454		401

Adjusted Basic and Diluted Earnings per Common Share

Adjusted Basic and Diluted Earnings per Common Share represents earnings per share, as adjusted for income and costs (net of tax effect), which are significant in nature, but expected to occur infrequently. We provide such information in order to present how the underlying business has performed prior to the impact of such items, which may obscure underlying performance and impair comparability of results between the periods. The following table sets forth the calculation of Adjusted Basic and Diluted Earnings per Common Share for the three and nine months ended September 30, 2018 and 2017.

		For the three months ended September 30,			For the nine months ended September 30,
		2018		2017	2018		2017
Net profit attributable to owners of the Company	€ million	287		140	595		400
Release of charges related to Takata airbag inflator recalls (net of tax effect)	€ million	—		—	(1	)	—
Patent box benefit for the period 2015-2017	€ million	(141	)	—	(141	)	—
Adjusted net profit attributable to owners of the Company	€ million	146		140	453		400
Weighted average number of common shares	thousand	188,646		188,954	188,712		188,951
Adjusted basic earnings per common share	€	0.78		0.74	2.40		2.11
Weighted average number of common shares for diluted earnings per common share	thousand	189,434		189,759	189,500		189,759
Adjusted diluted earnings per common share (1)	€	0.77		0.74	2.39		2.11

(1) For the three and nine months ended September 30, 2018 the weighted average number of shares for diluted earnings per share was increased to take into consideration the theoretical effect of the potential common shares that would be issued for the equity incentive plan.

For the three and nine months ended September 30, 2017 the weighted average number of shares for diluted earnings per share was increased to take into consideration the theoretical effect of (i) the potential common shares that would be issued for the equity incentive plan and (ii) the potential common shares that would be issued for the Non-Executive Directors’ compensation agreement.

Net Debt and Net Industrial Debt

Net Industrial Debt is the primary measure used by us to analyze our financial leverage and capital structure, and is one of the key indicators, together with Net Debt, we use to measure our financial position. These measures are presented by

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management to aid investors in their analysis of the Group’s financial position and financial performance and to compare the Group’s financial position and financial performance with that of other companies. Net Industrial Debt is defined as total debt less cash and cash equivalents (Net Debt), further adjusted to exclude the funded portion of the self-liquidating financial receivables portfolio, which is the portion of our receivables from financing activities that we fund with external debt or intercompany loans.

The following table sets forth a reconciliation of Net Debt and Net Industrial Debt at September 30,2018 and December 31,2017.

	At September 30,		At December 31,
	2018		2017
	(€ million)
Cash and cash equivalents	753		648
Debt	(1,887	)	(1,806	)
Net Debt	(1,134	)	(1,158	)
Funded portion of the self-liquidating financial receivables portfolio	762		685
Net Industrial Debt	(372	)	(473	)

Free Cash Flow and Free Cash Flow from Industrial Activities

Free Cash Flow and Free Cash Flow from Industrial Activities are two of our primary key performance indicators to measure the Group’s performance. These measures are presented by management to aid investors in their analysis of the Group’s financial performance and to compare the Group's financial performance with that of other companies. Free Cash Flow is defined as cash flows from operating activities less cash flows used in investing activities. Free Cash Flow from Industrial Activities is defined as Free Cash Flow adjusted for the change in the self-liquidating financial receivables portfolio, which is the change in our receivables from financing activities. The following table sets forth our Free Cash Flow and Free Cash Flow from Industrial Activities for the nine months ended September 30, 2018 and 2017.

	For the nine months ended September 30,
	2018		2017
	(€ million)
Cash flows from operating activities	619		507
Cash flows used in investing activities	(403	)	(239	)
Free Cash Flow	216		268
Change in the self-liquidating financial receivables portfolio	71		47
Free Cash Flow from Industrial Activities	287		315

Cash flows used in investing activities for the nine months ended September 30, 2017 are net of €8 million proceeds from exercising the Delta Topco option.

Constant Currency Information

The “Results of Operations” discussion below includes information about our net revenues on a constant currency basis, which eliminates the effects of foreign currency translation from our subsidiaries with functional currencies other than Euro, as well as the effects of foreign currency transaction impact and foreign currency hedging. We use this information to assess how the underlying revenues changed independent of fluctuations in foreign currency exchange rates and hedging. We calculate constant currency by (i) applying the prior-period average foreign currency exchange rates to translate current period revenues expressed in local functional currency other than the Euro of foreign subsidiaries, (ii) applying the prior-period average foreign currency exchange rates to current period revenues originated in a currency other than the functional currency of the applicable entity, and (iii) eliminating the variances of any foreign currency hedging (see Note 5 “Other Information” to the Interim Condensed Consolidated Financial Statements, included in this Interim Report, for information on the foreign currency exchange rates applied). Although we do not believe that these measures are a substitute for GAAP measures, we do believe

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that revenues excluding the impact of currency fluctuations year-on-year and the impacts of hedging, provide additional useful information to investors regarding the operating performance on a local currency basis.

Results of Operations

Three months ended September 30, 2018 compared to three months ended September 30, 2017

The following is a discussion of the results of operations for the three months ended September 30,2018 compared to the three months ended September 30,2017. The discussion of certain line items includes a presentation of such line items as a percentage of net revenues for the respective periods presented, to facilitate period-to-period comparisons.

	For the three months ended September 30,
	2018		Percentage of net revenues		2017	Percentage of net revenues
	(€ million, except percentages)
Net revenues	838		100.0	%	836	100.0	%
Cost of sales	402		47.9	%	396	47.4	%
Selling, general and administrative costs	87		10.4	%	91	10.8	%
Research and development costs	143		17.1	%	147	17.6	%
Other expenses, net	4		0.5	%	1	0.1	%
Result from investments	1		0.1	%	1	0.1	%
EBIT	203		24.2	%	202	24.2	%
Net financial expenses	6		0.7	%	8	1.0	%
Profit before taxes	197		23.5	%	194	23.2	%
Income tax (benefit)/expense	(90	)	(10.8	)%	53	6.4	%
Net profit	287		34.3	%	141	16.8	%

Net revenues

	For the three months ended September 30,						Increase/(Decrease)
	2018	Percentage of net revenues		2017	Percentage of net revenues		2018 vs. 2017
	(€ million, except percentages)
Cars and spare parts (1)	616	73.5	%	605	72.4	%	11		1.9	%
Engines (2)	70	8.4	%	88	10.5	%	(18	)	(19.9	)%
Sponsorship, commercial and brand (3)	128	15.2	%	124	14.8	%	4		3.4	%
Other (4)	24	2.9	%	19	2.3	%	5		21.8	%
Total net revenues	838	100.0	%	836	100.0	%	2		0.3	%

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(1) Includes the net revenues generated from shipments of our cars, including any personalization revenue generated on these cars and sales of spare parts.

(2) Includes the net revenues generated from the sale of engines to Maserati for use in their cars, and the revenues generated from the rental of engines to other Formula 1 racing teams.

(3) Includes the net revenues earned by our Formula 1 racing team through sponsorship agreements and our share of the Formula 1 World Championship commercial revenues and net revenues generated through the Ferrari brand, including merchandising, licensing and royalty income.

(4) Primarily includes interest income generated by financial services activities and net revenues from the management of the Mugello racetrack.

Net revenues for the three months ended September 30,2018 were €838 million, an increase of €2 million, or 0.3 percent (an increase of 2.2percent on a constant currency basis), from €836 millionfor the three months ended September 30,2017.

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The increase in net revenues was attributable to the combination of (i) an €11 million increase in cars and spare parts net revenues, (ii) a €5 million increase in other net revenues, and (iii) a €4 million increase in sponsorship, commercial and brand net revenues, partially offset by (iv) an €18 million decrease in engines net revenues.

Cars and spare parts

Net revenues generated from cars and spare parts were €616 millionfor the three months ended September 30,2018, an increase of €11 million, or 1.9 percent, from €605 millionfor the three months ended September 30,2017. The increase was attributable to a €26million increase in net revenues from range and special series cars and spare parts, partially offset by a €15 million decrease in net revenues from hypercars and limited edition cars.

The €26million increase in net revenues from range and special series cars and spare parts was principally attributable to an increase in shipments, as well as positive mix driven by V12 models and pricing increases. Shipments of V12 range and special series models increased by approximately 12.8percent, primarily attributable to shipments of the 812 Superfast, which commenced in the third quarter of 2017, partially offset by a decrease in shipments of the F12tdf, which finished its limited series run in 2017, and the phase-out of the F12berlinetta in 2017. Shipments of V8 range and special series models increased by approximately 11.4 percent, mainly due to the Ferrari Portofino, partially offset by the phase-out of the California T.

The €26million increase in net revenues from range and special series cars and spare parts was composed of (i) an €18million increase in Americas, and (ii) a €16million increase in Rest of APAC, partially offset by (iii) a €5million decrease in EMEA, and (iv) a €3million decrease in China, Hong Kong and Taiwan (on a combined basis).

(i) The €18million increase in Americas net revenues was primarily attributable to positive volume and mix, as well as positive foreign currency translation impact. The positive volume and mix was driven by the 812 Superfast and the Ferrari Portofino as well as the 488 and GTC4Lusso families, partially offset by the phase-outs of the California T, the F12berlinetta, and the F12tdf.

(ii) The €16million increase in Rest of APAC net revenues was attributable to an increase in net revenues in Australia, Japan and other Rest of APAC, and primarily driven by positive volume and mix, as well as greater contribution from our personalization programs. Positive volume and mix was driven by the 812 Superfast and the Ferrari Portofino, partially offset by the phase-out of the California T.

(iii) The €5million decrease in EMEA net revenues was primarily attributable to negative mix, driven by the performance of V8 models, and in particular, deliveries of the Ferrari Portofino, partially offset by positive volume impact. Positive volume impact was driven by double digit growth in shipments in France, the Middle East, the UK and Italy as well as single-digit growth in Rest of EMEA and Germany and was primarily attributable to the Ferrari Portofino and the 812 Superfast, partially offset by the phase-outs of the California T, the F12berlinetta and the F12tdf.

(iv) The €3million decrease in China, Hong Kong and Taiwan (on a combined basis) net revenues was primarily attributableto our personalization programs, partially offset by positive volume and mix. The increase in shipments was mainly driven by the Ferrari Portofino and the 812 Superfast, partially offset by the phase-out of the California T.

The decrease in net revenues from hypercars and limited edition cars was attributable to a decrease in shipments of the LaFerrari Aperta, which is finishing its limited series run, partially offset by deliveries of the strictly limited edition Ferrari J50.

Engines

Net revenues generated from engines were €70 millionfor the three months ended September 30,2018, a decrease of €18 million, or 19.9 percent, from €88 millionfor the three months ended September 30,2017. The €18 million decrease was mainly attributable to a decrease in net revenues generated from the sale of engines to Maserati, driven by a decrease in the number of engines shipped in the third quarter of 2018 compared to the third quarter of 2017.

Sponsorship, commercial and brand

Net revenues generated from sponsorship, commercial agreements and brand management activities were €128 millionfor the three months ended September 30,2018, an increase of €4 million, or 3.4 percent, from €124 millionfor the three months ended September 30,2017. The increase was primarily attributable to a higher 2017 championship ranking compared to 2016 and sponsorship revenues, partially offset by brand related activities.

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Other

Othernet revenues were €24 millionfor the three months ended September 30,2018, an increase of €5 million, or 21.8 percent, from €19 millionfor the three months ended September 30,2017, primarily due to financial services.

Cost of sales

	For the three months ended September 30,						Increase/(Decrease)
	2018	Percentage of net revenues		2017	Percentage of net revenues		2018 vs. 2017
	(€ million, except percentages)
Cost of sales	402	47.9	%	396	47.4	%	6	1.3	%

Cost of sales for the three months ended September 30,2018 was €402 million, an increase of €6 million, or 1.3 percent, from €396 millionfor the three months ended September 30,2017. As a percentage of net revenues, cost of sales was 47.9 percent for the three months ended September 30,2018 compared to 47.4 percent for the three months ended September 30, 2017.

The increase in cost of sales was primarily attributable to (i) an increase in costs of €28million driven by an increase in volumes and mix, amortization and depreciation, partially offset by (ii) a decrease of €22million driven by lower costs for supporting activities, including lower engine volumes.

Selling, general and administrative costs

	For the three months ended September 30,						Increase/(Decrease)
	2018	Percentage of net revenues		2017	Percentage of net revenues		2018 vs. 2017
	(€ million, except percentages)
Selling, general and administrative costs	87	10.4	%	91	10.8	%	(4	)	(4.1	)%

Selling, general and administrative costs for the three months ended September 30,2018 were €87 million, a decrease of €4 million, or 4.1 percent, from €91 millionfor the three months ended September 30,2017. As a percentage of net revenues, selling, general and administrative costs were 10.4 percentfor the three months ended September 30,2018 compared to 10.8 percentfor the three months ended September 30,2017.

The decrease in selling, general and administrative costs was primarily attributable to the effect of costs incurred in 2017 related to initiatives for Ferrari’s 70th anniversary.

Research and development costs

	For the three months ended September 30,						Increase/(Decrease)
	2018	Percentage of net revenues		2017	Percentage of net revenues		2018 vs. 2017
	(€ million, except percentages)
Research and development costs expensed during the period	113	13.5	%	124	14.8	%	(11	)	(9.0	)%
Amortization of capitalized development costs	30	3.6	%	23	2.8	%	7		31.9	%
Research and development costs	143	17.1	%	147	17.6	%	(4	)	(2.5	)%

Research and development costs for the three months ended September 30,2018 were €143 million, a decrease of €4 million, or 2.5 percent, from €147 millionfor the three months ended September 30,2017. As a percentage of net revenues,

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research and development costs were 17.1 percentfor the three months ended September 30,2018 compared to 17.6 percentfor the three months ended September 30,2017.

The decrease in research and development costs during the period of €4 million was mainly driven by lower research and development costs for Formula 1 activities.

Other expenses, net

	For the three months ended September 30,		Increase/(Decrease)
	2018	2017	2018 vs. 2017
	(€ million, except percentages)
Other expenses, net	4	1	3	n.m.

Other expenses, net for the three months ended September 30,2018 included other expenses of €5million, mainly related to provisions, indirect taxes and other miscellaneous expenses partially offset by other income of €1million, mainly related to rental income and other miscellaneous income.    

Other expenses, net for the three months ended September 30,2017 included other expenses of €2 million, mainly related to indirect taxes, partially offset by other income of €1 million, mainly related to rental income and gains on disposal of property, plant and equipment.

EBIT

	For the three months ended September 30,						Increase/(Decrease)
	2018	Percentage of net revenues		2017	Percentage of net revenues		2018 vs. 2017
	(€ million, except percentages)
EBIT	203	24.2	%	202	24.2	%	1	0.4	%

EBIT for the three months ended September 30,2018 was €203 million, an increase of €1 million, or 0.4 percent, from €202 millionfor the three months ended September 30,2017.

The increase in EBIT was primarily attributable to (i) positive volume impact of €23million, (ii) a decrease in selling, general and administrative costs of €4million, (iii) a decrease in research and development costs of €4million, and (iv) €1million of positive contribution from other supporting activities, partially offset by (v) negative net foreign currency exchange impact, including foreign currency hedging instruments, of €19million, and (vi) negative product mix and pricing impact of €12million.

The positive volume impact of €23million was attributable to an increase in shipments, driven by the Ferari Portofino and the 812 Superfast. The negative product mix and pricing impact of €12million was primarily attributable to the performance of V8 models and lower sales of the LaFerrari Aperta, which is finishing its limited series run, partially offset by pricing increases and deliveries of the strictly limited edition Ferrari J50.

Net financial expenses

	For the three months ended September 30,		Increase/(Decrease)
	2018	2017	2018 vs. 2017
	(€ million, except percentages)
Net financial expenses	6	8	(2	)	(22.4	)%

Net financial expenses for the three months ended September 30,2018 were €6 million compared to €8 millionfor the three months ended September 30,2017.

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The decrease in net financial expenses was primarily attributable to a decrease in interest expenses, mainly driven by lower interest on bank borrowings due to the full repayment of the Term Loan in November 2017, partially offset by higher interest on bonds due to a new bond issued in November 2017.

Income tax (benefit)/expense

	For the three months ended September 30,			Increase/(Decrease)
	2018		2017	2018 vs. 2017
	(€ million, except percentages)
Income tax (benefit)/expense	(90	)	53	(143	)	n.m.

Income tax benefit for the three months ended September 30, 2018 was €90 million compared to income tax expense of €53 million for the three months ended September 30, 2017. The income tax benefit for the three months ended September 30, 2018 was primarily attributable to the positive impact from the application of the Patent Box tax regime (as described below), including €141 million of the Patent Box benefit related to the years 2015 to 2017, of which €139 million was from direct and €2 million was from indirect use of copyrights, patents, trademarks, designs and know-how.

In September 2018, the Group signed an agreement with the Italian Revenue Agency in relation to the Patent Box tax regime, which provides a tax benefit for companies that generate income through the use, both direct and indirect, of copyrights, patents, trademarks, designs and know-how. See Note 12 “Income Tax (Benefit)/Expense” to the Interim Condensed Consolidated Financial Statements for additional details.

The income tax benefit for the three months ended September 30, 2018 was €90 million, representing a change of €143 million compared to the income tax expense of €53 million for the three months ended September 30, 2017, mainly attributable to the positive impact of the Patent Box benefit relating to the years 2015 to 2017 as well as the positive impact of the Patent Box related to the 2018 fiscal year.

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Nine months ended September 30, 2018 compared to nine months ended September 30, 2017

The following is a discussion of the results of operations for the nine months ended September 30, 2018 compared to the nine months ended September 30, 2017. The discussion of certain line items includes a presentation of such line items as a percentage of net revenues for the respective periods presented, to facilitate period-to-period comparisons.

	For the nine months ended September 30,
	2018	Percentage of net revenues		2017	Percentage of net revenues
	(€ million, except percentages)
Net revenues	2,575	100.0	%	2,577	100.0	%
Cost of sales	1,224	47.6	%	1,252	48.7	%
Selling, general and administrative costs	240	9.3	%	255	9.9	%
Research and development costs	482	18.7	%	482	18.7	%
Other expenses, net	—	—	%	9	0.3	%
Result from investments	2	0.1	%	2	0.1	%
EBIT	631	24.5	%	581	22.6	%
Net financial expenses	15	0.6	%	25	1.0	%
Profit before taxes	616	23.9	%	556	21.6	%
Income tax expense	20	0.7	%	155	6.0	%
Net profit	596	23.2	%	401	15.6	%

Net revenues

	For the nine months ended September 30,						Increase/(Decrease)
	2018	Percentage of net revenues		2017	Percentage of net revenues		2018 vs. 2017
	(€ million, except percentages)
Cars and spare parts(1)	1,898	73.7	%	1,855	72.0	%	43		2.3	%
Engines(2)	227	8.8	%	292	11.3	%	(65	)	(22.3	)%
Sponsorship, commercial and brand(3)	380	14.7	%	370	14.4	%	10		2.6	%
Other(4)	70	2.8	%	60	2.3	%	10		17.5	%
Total net revenues	2,575	100.0	%	2,577	100.0	%	(2	)	(0.1	)%

_________________________________

(1) Includes the net revenues generated from shipments of our cars, including any personalization revenue generated on these cars and sales of spare parts.

(2) Includes the net revenues generated from the sale of engines to Maserati for use in their cars and the revenues generated from the rental of engines to other Formula 1 racing teams.

(3) Includes the net revenues earned by our Formula 1 racing team through sponsorship agreements and our share of the Formula 1 World Championship commercial revenues and net revenues generated through the Ferrari brand, including merchandising, licensing and royalty income.

(4) Primarily includes interest income generated by financial services activities and net revenues from the management of the Mugello racetrack.

Net revenues for the nine months ended September 30, 2018 were €2,575 million, a decrease of €2 million, or 0.1 percent (an increase of 3.7percent on a constant currency basis), from €2,577 million for the nine months ended September 30, 2017.

The decrease in net revenues was attributable to (i) a €65 million decrease in engines net revenues, partially offset by the combination of (ii) a €43 million increase in cars and spare parts net revenues, (iii) a €10 million increase in sponsorship, commercial and brand net revenues, and (iv) a €10 million increase in other net revenues.

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Cars and spare parts

Net revenues generated from cars and spare parts were €1,898 million for the nine months ended September 30, 2018, an increase of €43 million, or 2.3 percent, from €1,855 million for the nine months ended September 30, 2017, including the negative impact of foreign currency. The increase was attributable to a €78million increase in net revenues from range and special series cars and spare parts, partially offset by a €35million decrease in net revenues from hypercars and limited edition cars.

The €78million increase in net revenues from range and special series cars and spare parts was principally attributable to an increase in shipments, as well as positive mix driven by V12 models and pricing increases, partially offset by negative foreign currency exchange impact. Shipments of V12 range and special series models increased by 22.7percent, primarily attributable to shipments of the 812 Superfast, which commenced in the third quarter of 2017, partially offset by a decrease in shipments of the F12tdf which finished its limited series run in 2017, and the phase-out of the F12berlinetta in 2017. Shipments of V8 range and special series models increased by 4.1 percent, mainly due to the Ferrari Portofino and an increase in shipments of the 488 family and the GTC4Lusso T, partially offset by the phase-out of the California T.

The €78million increase in net revenues from range and special series cars and spare parts was due to (i) a €35million increase in EMEA, (ii) a €15 million increase in Americas, (iii) a €14million increase in China, Hong Kong and Taiwan (on a combined basis), and (iv) a €14million increase in Rest of APAC.

(i) The €35million increase in EMEA net revenues was primarily attributable to an increase in shipments and positive mix, as well as greater contribution from our personalization programs and pricing increases. The increase in shipments was driven by double digit growth in shipments in Rest of EMEA, France and Italy as well as single-digit growth in Switzerland, the UK and Germany, and primarily related to the Ferrari Portofino and the 812 Superfast, as well as the 488 family, partially offset by the phase-out of the California T and a reallocation of shipments triggered by tough market conditions in the Middle East; however the Middle East experienced double-digit growth in shipments in the second and third quarters.

(ii) The €15million increase in Americas net revenues was primarily attributable to positive volume and mix, driven by the 812 Superfast, the 488 and GTC4Lusso families, and the Ferrari Portofino, as well as our personalization programs, partially offset by negative foreign currency translation impact.

(iii) The €14million increase in China, Hong Kong and Taiwan (on a combined basis) net revenues was primarily attributable to an increase in shipments and positive mix, partially offset by negative foreign currency translation impact. The increase in shipments was driven by the 812 Superfast, the GTC4Lusso family and the Ferrari Portofino, partially offset by the phase-out of the California T.

(iv) The €14million increase in Rest of APAC net revenues was primarily attributable to an increase in net revenues in Australia and Japan, partially offset by a decrease in net revenues in other Rest of APAC driven by a decrease in shipments. The increase in shipments in Japan and Australia was primarily due to the 812 Superfast and the 488 family, partially offset by the phase-out of the California T. Net revenues in Japan and Australia were negatively effected by foreign currency translation impact.

The decrease in net revenues from hypercars and limited edition cars was attributable to a decrease in shipments of the LaFerrari Aperta, which is finishing its limited series run, partially offset by the first deliveries of the strictly limited edition Ferrari J50.

Engines

Net revenues generated from engines were €227 million for the nine months ended September 30, 2018, a decrease of €65 million, or 22.3 percent, from €292 million for the nine months ended September 30, 2017. The decrease of €65 million was mainly attributable to a decrease in net revenues generated from the sale of engines to Maserati, driven by a decrease in the number of engines shipped in the first nine months of 2018 compared to the first nine months of 2017.

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Sponsorship, commercial and brand

Net revenues generated from sponsorship, commercial agreements and brand management activities were €380 million for the nine months ended September 30, 2018, an increase of €10 million, or 2.6 percent, from €370 million for the nine months ended September 30, 2017. The increase was primarily attributable to sponsorship and a higher 2017 championship ranking compared to 2016, partially offset by brand related activities and negative foreign currency exchange impact.

Other

Other net revenues were €70 million for the nine months ended September 30, 2018, an increase of €10 million, or 17.5 percent, from €60 million for the nine months ended September 30, 2017, primarily due to financial services.

Cost of sales

	For the nine months ended September 30,						Increase/(Decrease)
	2018	Percentage of net revenues		2017	Percentage of net revenues		2018 vs. 2017
	(€ million, except percentages)
Cost of sales	1,224	47.6	%	1,252	48.7	%	(28	)	(2.3	)%

Cost of sales for the nine months ended September 30, 2018 was €1,224 million, a decrease of €28 million, or 2.3 percent, from €1,252 million for the nine months ended September 30, 2017. As a percentage of net revenues, cost of sales was 47.6 percent for the nine months ended September 30, 2018 compared to 48.7 percent for the nine months ended September 30, 2017.

The decrease in cost of sales was primarily attributable to (i) a decrease of €79million driven by lower costs for supporting activities, including lower engine volumes, as well as lower accruals for warranty provisions, partially offset by (ii) an increase in costs of €51million driven by an increase in volumes and mix, amortization and depreciation.

Selling, general and administrative costs

	For the nine months ended September 30,						Increase/(Decrease)
	2018	Percentage of net revenues		2017	Percentage of net revenues		2018 vs. 2017
	(€ million, except percentages)
Selling, general and administrative costs	240	9.3	%	255	9.9	%	(15	)	(5.7	)%

Selling, general and administrative costs for the nine months ended September 30, 2018 were €240 million, a decrease of €15 million, or 5.7 percent, from €255 million for the nine months ended September 30, 2017. As a percentage of net revenues, selling, general and administrative costs were 9.3 percent for the nine months ended September 30, 2018 compared to 9.9 percent for the nine months ended September 30, 2017.

The decrease in selling, general and administrative costs was primarily attributable to the effect of costs incurred in 2017 related to initiatives for Ferrari’s 70th anniversary.

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Research and development costs

	For the nine months ended September 30,						Increase/(Decrease)
	2018	Percentage of net revenues		2017	Percentage of net revenues		2018 vs. 2017
	(€ million, except percentages)
Research and development costs expensed during the period	397	15.4	%	404	15.7	%	(7	)	(1.6	)%
Amortization of capitalized development costs	85	3.3	%	78	3.0	%	7		8.5	%
Research and development costs	482	18.7	%	482	18.7	%	—		—	%

Research and development costs for the nine months ended September 30, 2018 and the nine months ended September 30, 2017 were €482 million. As a percentage of net revenues, research and development costs were 18.7 percent for the nine months ended September 30, 2018 and the nine months ended September 30, 2017.

Higher research and development costs to support product range and components innovation for hybrid technology, were substantially offset by lower research and development costs for Formula 1 activities.

Other expenses, net

	For the nine months ended September 30,		Increase/(Decrease)
	2018	2017	2018 vs. 2017
	(€ million, except percentages)
Other expenses, net	—	9	(9	)	n.m.

Other expenses, net for the nine months ended September 30, 2018 included other income of €13million, mainly due to a pronouncement on a prior year's legal dispute, and to a lesser extent rental income and miscellaneous income, offset by other expenses of €13million, mainly related to indirect taxes, accruals for provisions and other miscellaneous expenses.

Other expenses, net for the nine months ended September 30, 2017 included other expenses of €15 million, mainly related to provisions, indirect taxes and miscellaneous expenses, partially offset by other income of €6 million, mainly related to rental income, gains on disposal of property, plant and equipment and miscellaneous income.

EBIT

	For the nine months ended September 30,						Increase/(Decrease)
	2018	Percentage of net revenues		2017	Percentage of net revenues		2018 vs. 2017
	(€ million, except percentages)
EBIT	631	24.5	%	581	22.6	%	50	8.6	%

EBIT for the nine months ended September 30, 2018 was €631 million, an increase of €50 million, or 8.6 percent, from €581 million for the nine months ended September 30, 2017.

The increase in EBIT was primarily attributable to (i) positive volume impact of €59million, (ii) a decrease in selling, general and administrative costs of €15million, (iii) positive product mix and pricing impact of €11million, and (iv) €54 million of positive contribution from other supporting activities, partially offset by (v) negative foreign currency exchange impact, including foreign currency hedging instruments, of €89million.

The positive volume impact of €59million was attributable to an increase in total shipments, driven by the Ferrari Portofino, the 812 Superfast and the 488 and GTC4Lusso families, partially offset by the phase-outs of the California T and the F12berlinetta, as well as the F12tdf which finished its limited series run in 2017. The positive product mix and pricing impact

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of €11million was primarily attributable to the performance of V12 models and pricing increases as well as deliveries of the strictly limited edition Ferrari J50, partially offset by lower sales of the LaFerrari Aperta which is finishing its limited series run.

Net financial expenses

	For the nine months ended September 30,		Increase/(Decrease)
	2018	2017	2018 vs. 2017
	(€ million, except percentages)
Net financial expenses	15	25	(10	)	(39.5	)%

Net financial expenses for the nine months ended September 30, 2018 were €15 million compared to €25 million for the nine months ended September 30, 2017.

The decrease in net financial expenses was primarily attributable to (i) a decrease in net foreign exchange losses, and (ii) a decrease in interest expenses, mainly driven by lower interest on bank borrowings due to the full repayment of the Term Loan in November 2017, partially offset by higher interest on bonds due to a new bond issued in November 2017. For the nine months ended September 30, 2017, net financial expenses included financial income in relation to the Delta Topco option.

Income tax expense

	For the nine months ended September 30,		Increase/(Decrease)
	2018	2017	2018 vs. 2017
	(€ million, except percentages)
Income tax expense	20	155	(135	)	n.m.

Income tax expense for the nine months ended September 30, 2018 was €20 million, a decrease of €135 million, or 87.3 percent, from €155 million for the nine months ended September 30, 2017. The decrease in income tax expense was primarily attributable to the positive impact from the application of the Patent Box tax regime (as described below), including €141 million of the Patent Box benefit related to the years 2015 to 2017, of which €139 million was from direct and €2 million was from indirect use of copyrights, patents, trademarks, designs and know-how.

In September 2018, the Group signed an agreement with the Italian Revenue Agency in relation to the Patent Box tax regime, which provides a tax benefit for companies that generate income through the use, both direct and indirect, of copyrights, patents, trademarks, designs and know-how. See Note 12 “Income Tax (Benefit)/Expense” to the Interim Condensed Consolidated Financial Statements for additional details.

The effective tax rate (net of IRAP) was 0.3 percent for the nine months ended September 30, 2018 compared to 24.4 percent for the nine months ended September 30, 2017, mainly attributable to the positive impact of the Patent Box benefit relating to the years 2015 to 2017 as well as the positive impact of the Patent Box related to the 2018 fiscal year.

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Liquidity and Capital Resources

Liquidity Overview

We require liquidity in order to meet our obligations and fund our business. Short-term liquidity is required to purchase raw materials, parts and components for car production, and to fund selling, administrative, research and development, and other expenses. In addition to our general working capital and operational needs, we expect to use cash for capital expenditures to support our existing and future products. We make capital investments mainly in Italy, for initiatives to introduce new products, enhance manufacturing efficiency, improve capacity, and for maintenance and environmental compliance. Our capital expenditure in 2018 is primarily expected to support continuous product range renewal and research and development expenditure to transition our product portfolio to hybrid technology. We plan to fund our capital expenditure primarily with cash generated from our operating activities.

Our business and results of operations depend on our ability to achieve certain minimum car shipment volumes. We have significant fixed costs and therefore, changes in our car shipment volumes can have a significant effect on profitability and liquidity. We centrally manage our operating cash management, liquidity and cash flow requirements with the objective of ensuring efficient and effective management of our funds. We believe that our cash generation together with our current liquidity will be sufficient to meet our obligations and fund our business and capital expenditures.

See the “Net Debt and Net Industrial Debt” section below for further details relating to the Group’s liquidity.    

Cyclical Nature of Our Cash Flows

Our working capital is subject to month to month fluctuations due to, among others, production volumes, funding of our financial services portfolio, timing of tax payments and capital expenditure. In particular, our inventory levels typically increase in the periods leading up to launches of new models, during the phase-out of existing models and at the end of the second quarter when our inventory levels are generally higher to support the summer plant shutdown.

The payment of taxes also affects our working capital. We typically pay our taxes in two advances. In 2017, we paid the remaining balance of 2016 taxes as well as the first advance in relation to 2017 taxes in the second quarter, and we paid the second advance in relation to 2017 taxes in the fourth quarter. In the second quarter of 2018, we paid the remaining balance of 2017 taxes as well as the first advance in relation to 2018 taxes. As a result of signing an agreement in September 2018 with the Italian Revenue Agency in relation to the Patent Box tax regime, we do not expect to pay the second advance in relation to 2018 taxes in the fourth quarter of 2018. See Note 12 “Income Tax (Benefit)/Expense” to the Interim Condensed Consolidated Financial Statements for additional details related to the Patent Box.

Our capital expenditure requirements are, among others, influenced by the timing of the launch of new models and, in particular, our development costs peak in periods when we develop a significant number of new models to renew or refresh our product range. Going forward, our capital expenditure will also be influenced by research and development expenditure to support product range expansion. We have been significantly increasing capital expenditure in 2018 and we expect our capital expenditure will continue to increase in 2019 to further our investment in hybrid technology and fuel future growth. Capital expenditure is also influenced by the timing of research and development costs for our Formula 1 activities, for which expenditure is generally higher in the first and last quarters of the year.

We generally receive payment for cars between 30 and 40 days after the car is shipped (except when we provide dealer financing or sell invoices to a factor) while we generally pay most suppliers between 60and 90days after we receive the raw materials or components. Additionally, we also receive advance payments from our customers, mainly for our hypercars and limited edition cars. We maintain sufficient inventory of raw materials and components to ensure continuity of our production lines but delivery of most raw materials and components takes place monthly or more frequently in order to minimize inventories. The manufacture of one of our cars typically takes between 30and 45days, depending on the level of automation of the relevant production line, and the car is generally shipped to our dealers three to six days following the completion of production, although to ensure prompt deliveries in certain regions we may warehouse cars in local markets for longer periods of time. As a result, we tend to receive payment for cars shipped before we are required to make payment for the raw material and components used in manufacturing the cars.

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Cash Flows

The following table summarizes the cash flows from/(used in) operating, investing and financing activities for the nine months ended September 30, 2018 and 2017. For additional details of our cash flows, see our Interim Condensed Consolidated Financial Statements included elsewhere in this Interim Report.

	For the nine months ended September 30,
	2018		2017
	(€ million)
Cash and cash equivalents at beginning of the period	648		458
Cash flows from operating activities	619		507
Cash flows used in investing activities	(403	)	(239	)
Cash flows used in financing activities	(110	)	(99	)
Translation exchange differences	(1	)	(8	)
Total change in cash and cash equivalents	105		161
Cash and cash equivalents at end of the period	753		619

Operating Activities - Nine Months Ended September 30, 2018

Our cash flows from operating activities for the nine months ended September 30, 2018 were €619 million, primarily the result of:

(i) profit before taxes of €616 million adjusted for €210 million for depreciation and amortization expense, €26 million related to other net non-cash expenses, result from investments and net gains on disposals of property, plant and equipment, €15 million related to net finance costs and €6 million in provisions recognized.

These cash inflows were partially offset by:

(ii) €71 million related to cash absorbed from receivables from financing activities, primarily attributable to an increase in the financial receivables portfolio;

(iii) €59 million relating to cash absorbed by the change in other operating assets and liabilities, primarily attributable to the release of advances on the LaFerrari Aperta and the payment of employee bonuses;

(iv) €25 million related to cash absorbed from the net change in inventories, trade receivables and trade payables, driven by (i) cash absorbed by trade payables of €63 million mainly due to seasonality and the scheduled summer shutdown, partially offset by (ii) cash generated from trade receivables of €33 million and (iii) cash generated from inventories of €5 million;

(v) €10 million of net finance costs paid; and

(vi) €89 million of income taxes paid.

Operating Activities - Nine Months Ended September 30, 2017

Our cash flows from operating activities for the nine months ended September 30, 2017 were €507 million, primarily the result of:

(i) profit before taxes of €556 million adjusted for €197 million for depreciation and amortization expense, €30 million related to other net non-cash expenses, result from investments and net gains on disposals of property, plant and equipment, €25 million related to net finance costs and €21 million in provision accruals, partially offset by

(ii) €96 million related to cash absorbed from net working capital, driven by cash absorbed from inventories of €55 million in line with projected volume growth, and cash absorbed from trade payables of €41 million due to seasonality and the scheduled summer shutdown;

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(iii) €47 million related to cash absorbed from receivables from financing activities;

(iv) €40 million relating to cash absorbed by the change in other operating assets and liabilities, primarily attributable to the release of advances on the LaFerrari Aperta and prepaid expenses, partially offset by the increase in genuine maintenance;

(v) €28 million of net finance costs paid; and

(vi) €111 million of income taxes paid.

Investing Activities - Nine Months Ended September 30, 2018

Our cash flows used in investing activities for the nine months ended September 30, 2018 were €403 million and were comprised of (i) €180 million of additions to property, plant and equipment, primarily related to plant and machinery for new models and (ii) €223 million of additions to intangible assets, mainly related to externally acquired and internally generated development costs. For a detailed analysis of additions to property, plant and equipment and intangible assets see “Capital Expenditures.”

Investing Activities - Nine Months Ended September 30, 2017

Our cash flows used in investing activities for the nine months ended September 30, 2017 were €239 million and were comprised of (i) €122 million of additions to property, plant and equipment, primarily related to the plant and machinery for new models and assets under construction; and (ii) €128 million of additions to intangible assets, mainly related to externally acquired and internally generated development costs, partially offset by (iii) €8 million of proceeds from exercising the Delta Topco option and (iv) €3 million of proceeds from disposal of property, plant and equipment. For a detailed analysis of additions to property, plant and equipment and intangible assets see “Capital Expenditures.”

Financing Activities - Nine Months Ended September 30, 2018

For the nine months ended September 30, 2018, net cash used in financing activities was €110 million, primarily the result of:

(i) €133 million dividends paid to owners of the parent;

(ii) €30 million paid to repurchase common shares under the Company’s share buyback program;

(iii) €12 million related to the net change in other debt;

(iv) €2 million related to the net change in other bank borrowings; and

(v) €2 million of dividends paid to non-controlling interests;

partially offset by:

(vi) €69 million of proceeds net of repayments related to our revolving securitization programs in the U.S..

Financing Activities - Nine Months Ended September 30, 2017

For the nine months ended September 30, 2017, net cash used in financing activities was €99 million, primarily the result of:

(i) €120 million cash distribution of reserves;

(ii) €100 million repayment of the Term Loan;

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(iii) €11 million related to the net change in other debt; and

(iv) €1 million of dividends paid to non-controlling interests;

partially offset by

(v) €126 million of proceeds net of repayments related to our revolving securitization programs in the U.S., and

(vi) €7 million related to the net change in other bank borrowings.

Capital Expenditures

Capital expenditures are defined as cash outflows that result in additions to property, plant and equipment and intangible assets. Capital expenditures for the nine months ended September 30, 2018 were €403 million and €250 million for the nine months ended September 30, 2017.

The following table sets forth a breakdown of capital expenditures by category for each of the nine months ended September 30, 2018 and 2017:

	For the nine months ended September 30,
	2018	2017
	(€ million)
Intangible assets
Externally acquired and internally generated development costs	216	119
Patents, concessions and licenses	6	7
Other intangible assets	1	2
Total intangible assets	223	128
Property, plant and equipment
Industrial buildings	12	3
Plant, machinery and equipment	50	52
Other assets	5	6
Advances and assets under construction	113	61
Total property, plant and equipment	180	122
Total capital expenditures	403	250

Intangible assets

Our capital expenditures in intangible assets were €223 million and €128 million for the nine months ended September 30, 2018 and 2017, respectively, the most significant component of which related to externally acquired and internally generated development costs. In particular, we make such investments to support the development of our current and future product offering. The capitalized development costs primarily include materials costs and personnel expenses relating to engineering, design and development focused on content enhancement of existing cars and new models. We constantly invest in product development to ensure we can quickly and efficiently respond to market demand and/or technological breakthroughs and in order to maintain our position at the top of the luxury performance sports cars market.

The increase in externally acquired and internally generated development costs reflects the gradual introduction of hybrid technology in both our sports and GT cars. We believe hybrid technology will be key to providing continuing performance upgrades to our sports car customers, and will also help us capture the preferences of the urban, affluent purchasers of GT cars whom we are increasingly targeting.

For the nine months ended September 30, 2018 we invested €216 million in externally acquired and internally generated development costs, of which €163million related to the development of models to be launched in future years, €45 million related to components and €8 million related to the development of models in our current product portfolio.

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For the nine months ended September 30, 2017 we invested €119 million in externally acquired and internally generated development costs, of which €77 million related to the development of models to be launched in future years and €42 million primarily related to the development of range and special series cars and components.

Property, plant and equipment

Our capital expenditures in property, plant and equipment were €180 million and €122 million for the nine months ended September 30, 2018 and 2017, respectively. Our most significant investments generally relate to plant, machinery and equipment for our car production and engine assembly lines, as well as advances and assets under construction related to investments in industrial tools used for the production of cars.

Investments in plant, machinery and equipment amounted to €50 million and €52 million for the nine months ended September 30, 2018 and 2017, respectively. For the nine months ended September 30, 2018 investments in plant, machinery and equipment of €50 million were composed of €25 million principally related to industrial tools needed for the production of cars, €17 million related to investments in car production lines, €6 million related to our personalization programs, and €2 million related to engine assembly lines. For the nine months ended September 30, 2017 investments in plant, machinery and equipment of €52 million were composed of €40 million related to investments in industrial tooling needed for the production of cars, €9 million related to our personalization programs, and €3 million related to engine assembly lines.

Advances and assets under construction, which amounted to €113 million and €61 million for the nine months ended September 30, 2018 and 2017 respectively, primarily related to investments in industrial tools needed for the production of new models. The increase in capital expenditures in advances and assets under construction reflects our focus on the hybridization and broadening of our product range and supporting future launches.

Net Debt and Net Industrial Debt

Net Industrial Debt is the primary measure used by us to analyze our financial leverage and capital structure, and is one of the key indicators, together with Net Debt, we use to measure our financial position. These measures are presented by management to aid investors in their analysis of the Group’s financial position and financial performance and to compare the Group’s financial position and financial performance with that of other companies. Net Industrial Debt is defined as total debt less cash and cash equivalents (Net Debt), further adjusted to exclude the funded portion of the self-liquidating financial receivables portfolio, which is the portion of our receivables from financing activities that we fund with external debt or intercompany loans.

The following table sets forth a reconciliation of Net Debt and Net Industrial Debt at September 30,2018 and December 31,2017.

	At September 30,		At December 31,
	2018		2017
	(€ million)
Cash and cash equivalents	753		648
Total liquidity	753		648
Bonds	(1,195	)	(1,194	)
Securitizations	(649	)	(556	)
Borrowings from banks	(37	)	(38	)
Other debt	(6	)	(18	)
Total debt	(1,887	)	(1,806	)
Net Debt	(1,134	)	(1,158	)
Funded portion of the self-liquidating financial receivables portfolio	762		685
Net Industrial Debt	(372	)	(473	)

For further details on total debt, see Note 23 “Debt” to the Interim Condensed Consolidated Financial Statements included elsewhere in this document.

24

Cash and cash equivalents

Cash and cash equivalents amounted to €753 millionat September 30,2018 compared to €648 millionat December 31,2017. The increase in cash and cash equivalents was primarily driven by Free Cash Flow from Industrial Activities and proceeds from our securitization programs, partially offset by dividends paid to owners of the parent and non-controlling interests and consideration paid to repurchase common shares under the share buyback program. See “Free Cash Flow and Free Cash Flow from Industrial Activities” and “Cash Flows” for further details.

Approximately 70percent of our cash and cash equivalents were denominated in Euro at September 30, 2018 (approximately 67 percent at December 31, 2017). Our cash and cash equivalents denominated in currencies other than the Euro are available mostly to Ferrari S.p.A. and certain subsidiaries which operate in areas other than Europe. Cash held in such countries may be subject to transfer restrictions depending on the jurisdictions in which these subsidiaries operate. In particular, cash held in China (including in foreign currencies), which amounted to €90million at September 30, 2018 (€66 million at December 31, 2017), is subject to certain repatriation restrictions and may only be repatriated as dividends. Based on our review, we do not currently believe that such transfer restrictions have an adverse impact on our ability to meet our liquidity requirements.

The following table sets forth an analysis of the currencies in which our cash and cash equivalents were denominated at the dates presented.

	At September 30,	At December 31,
	2018	2017
	(€ million)
Euro	529	435
U.S. Dollar	87	88
Chinese Yuan	85	62
Japanese Yen	27	26
Other currencies	25	37
Total	753	648

Cash collected from the settlement of receivables or lines of credit pledged as collateral is subject to certain restrictions regarding its use and is primarily applied to repay principal and interest of the related funding. Such cash amounted to €36 million at September 30, 2018 (€28 million at December 31, 2017).

Total available liquidity

Total available liquidity (defined as cash and cash equivalents plus undrawn committed credit lines) at September 30,2018 was €1,253 million (€1,148 millionat December 31,2017).

The following table summarizes our total available liquidity:

	At September 30,	At December 31,
	2018	2017
	(€ million)
Cash and cash equivalents	753	648
Undrawn committed credit lines	500	500
Total available liquidity	1,253	1,148

The undrawn committed credit lines relates to a revolving credit facility. See “The Facility” in Note 23 “Debt” in the Interim Condensed Consolidated Financial Statements included elsewhere in this document.

25

Free Cash Flow and Free Cash Flow from Industrial Activities

Free Cash Flow and Free Cash Flow from Industrial Activities are two of our primary key performance indicators to measure the Group’s performance. These measures are presented by management to aid investors in their analysis of the Group’s financial performance and to compare the Group’s financial performance with that of other companies. Free Cash Flow is defined as cash flows from operating activities less cash flows used in investing activities. Free Cash Flow from Industrial Activities is defined as Free Cash Flow adjusted for the change in the self-liquidating financial receivables portfolio, which is the change in our receivables from financing activities. The following table sets forth our Free Cash Flow and Free Cash Flow from Industrial Activities for the nine months ended September 30,2018 and 2017.

	For the nine months ended September 30,
	2018		2017
	(€ million)
Cash flows from operating activities	619		507
Cash flows used in investing activities (*)	(403	)	(239	)
Free Cash Flow	216		268
Change in the self-liquidating financial receivables portfolio	71		47
Free Cash Flow from Industrial Activities	287		315

_____________________________

(*) Cash flows used in investing activities for the nine months ended September 30, 2017 are net of €8 million of proceeds from exercising the Delta Topco option. The Group exercised the Delta Topco option as a result of the sale in January 2017 of Delta Topco (a company belonging to the Formula 1 Group) to Liberty Media Corporation, following which the Group subsequently received a combination of cash, Liberty Media Corporation shares and Liberty Media Corporation exchangeable notes.

Free Cash Flow for the nine months ended September 30,2018 was €216 million, a decrease of €52million compared to €268 million for the nine months ended September 30, 2017. For an explanation of the drivers in Free Cash Flow see “Cash Flows” above.

Free Cash Flow from Industrial Activities for the nine months ended September 30, 2018 was €287 million, a decrease of €27 million compared to €315 million for the nine months ended September 30, 2017. The decrease in Free Cash Flow from Industrial Activities was primarily attributable to an increase in capital expenditures, partially offset by an increase in Adjusted EBITDA, a positive change in working capital and a decrease in income taxes paid primarily due to an increase in the cap for eligible research and development costs.

26

Recent Developments

On September 18, 2018, we outlined the plans and initiatives to achieve our key financial targets and our financial policy to 2022, including the following:

• Continued focus on the strategic pillars of our product offering: sports range, GT range, special series, and the new pillar of our offering, the Icona, which will always be strictly limited;

• Significant investments in capital expenditure to expand and broaden our product portfolio, which will include the introduction of several new model launches between 2019 and 2022 and the integration of hybrid powertrains into a significant percentage of models by 2022;

• Drive profitability through pricing and mix, as well as volumes, allowing us to achieve increasing margins;

• Significant industrial free cash flow generation and continual shareholder remuneration through a combination of both dividends and share buybacks.

Outlook

2018 Updated Guidance

• Shipments > 9,000 including hypercars

• Net revenues > €3.4 billion

• Adjusted EBITDA ≥ €1.1 billion

• Net Industrial Debt < €350 million, including dividends already distributed to the holders of common shares and excluding any share repurchase

• Capital Expenditures ~ €650 million

27

FERRARI N.V.

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AT AND FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2018

CONTENTS

	Page
Interim Consolidated Income Statement	F-1
Interim Consolidated Statement of Comprehensive Income	F-2
Interim Consolidated Statement of Financial Position	F-3
Interim Consolidated Statement of Cash Flows	F-4
Interim Consolidated Statement of Changes in Equity	F-5
Notes to the Interim Condensed Consolidated Financial Statements	F-6

FERRARI N.V.

INTERIM CONSOLIDATED INCOME STATEMENT

for the three and nine months ended September 30,2018 and 2017

(Unaudited)

		For the three months ended September 30,			For the nine months ended September 30,
	Note	2018		2017	2018		2017
		(€ thousand)
Net revenues	6	838,180		835,915	2,574,836		2,576,957
Cost of sales	7	400,994		395,710	1,223,202		1,251,626
Selling, general and administrative costs	8	86,874		90,585	240,265		254,795
Research and development costs	9	143,634		147,339	482,435		482,286
Other expenses/(income), net	10	4,160		588	(421	)	8,864
Result from investments		604		596	1,950		1,809
EBIT		203,122		202,289	631,305		581,195
Net financial expenses	11	6,286		8,097	15,075		24,910
Profit before taxes		196,836		194,192	616,230		556,285
Income tax (benefit)/expense	12	(91,001	)	53,650	19,719		155,760
Net profit		287,837		140,542	596,511		400,525
Net profit attributable to:
Owners of the parent		286,922		140,146	594,827		399,750
Non-controlling interests		915		396	1,684		775
Basic earnings per common share (in €)	13	1.52		0.74	3.15		2.11
Diluted earnings per common share (in €)	13	1.51		0.74	3.14		2.11

The accompanying notes are an integral part of the Interim Condensed Consolidated Financial Statements.

F-1

FERRARI N.V.

INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

for the three and nine months ended September 30, 2018 and 2017

(Unaudited)

		For the three months ended September 30,				For the nine months ended September 30,
	Note	2018		2017		2018		2017
		(€ thousand)
Net profit		287,837		140,542		596,511		400,525
Items that may be reclassified to the consolidated income statement in subsequent periods:
Gains/(Losses) on cash flow hedging instruments	20	1,698		(4,290	)	(11,146	)	43,381
Exchange differences on translating foreign operations	20	281		(4,923	)	4,213		(15,572	)
Related tax impact	20	(473	)	1,197		3,110		(12,103	)
Total items that may be reclassified to the consolidated income statement in subsequent periods		1,506		(8,016	)	(3,823	)	15,706
Total other comprehensive income/(loss), net of tax	20	1,506		(8,016	)	(3,823	)	15,706
Total comprehensive income		289,343		132,526		592,688		416,231
Total comprehensive income attributable to:
Owners of the parent		288,566		132,198		591,112		415,795
Non-controlling interests		777		328		1,576		436

The accompanying notes are an integral part of the Interim Condensed Consolidated Financial Statements.

F-2

FERRARI N.V.

INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION

at September 30, 2018 and at December 31, 2017

(Unaudited)

	Note	At September 30, 2018	At December 31, 2017
		(€ thousand)
Assets
Goodwill		785,182	785,182
Intangible assets	14	567,938	440,456
Property, plant and equipment	15	776,784	710,260
Investments and other financial assets	16	32,451	30,038
Deferred tax assets		59,520	94,091
Total non-current assets		2,221,875	2,060,027
Inventories	17	384,438	393,765
Trade receivables	18	207,225	239,410
Receivables from financing activities	18	829,937	732,947
Current tax receivables	18	130,864	6,125
Other current assets	18	73,920	45,441
Current financial assets	19	13,137	15,683
Cash and cash equivalents		753,362	647,706
Total current assets		2,392,883	2,081,077
Total assets		4,614,758	4,141,104
Equity and liabilities
Equity attributable to owners of the parent		1,226,048	778,678
Non-controlling interests		4,794	5,258
Total equity	20	1,230,842	783,936
Employee benefits		83,409	84,159
Provisions	22	182,239	197,392
Deferred tax liabilities		9,820	10,977
Debt	23	1,887,553	1,806,181
Other liabilities	24	621,148	620,350
Other financial liabilities	19	8,358	1,444
Trade payables	25	546,858	607,505
Current tax payables		44,531	29,160
Total equity and liabilities		4,614,758	4,141,104

The accompanying notes are an integral part of the Interim Condensed Consolidated Financial Statements.

F-3

FERRARI N.V.

INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS

for the nine months ended September 30,2018 and 2017

(Unaudited)

	For the nine months ended September 30,
	2018		2017
	(€ thousand)
Cash and cash equivalents at beginning of the period	647,706		457,784
Cash flows from operating activities:
Profit before taxes	616,230		556,285
Amortization and depreciation	210,142		196,900
Provision accruals	6,662		21,901
Result from investments	(1,950	)	(1,809	)
Net finance costs	15,075		24,910
Other non-cash expenses, net	28,261		34,469
Net gains on disposal of property, plant and equipment and intangible assets	(138	)	(2,379	)
Change in inventories	5,200		(54,917	)
Change in trade receivables	32,670		(417	)
Change in trade payables	(62,769	)	(40,895	)
Change in receivables from financing activities	(71,748	)	(47,116	)
Change in other operating assets and liabilities	(59,161	)	(40,364	)
Finance income received	1,725		3,652
Finance costs paid	(11,916	)	(31,937	)
Income tax paid	(89,109	)	(110,548	)
Total	619,174		507,735
Cash flows used in investing activities:
Investments in property, plant and equipment	(180,196	)	(122,040	)
Investments in intangible assets	(223,280	)	(127,850	)
Proceeds from the sale of property, plant and equipment and intangible assets	654		2,425
Proceeds from exercising the Delta Topco option	—		8,307
Total	(402,822	)	(239,158	)
Cash flows used in financing activities:
Proceeds from securitizations net of repayments	69,321		126,066
Net change in bank borrowings	(2,009	)	6,617
Repayment of Term Loan	—		(99,670	)
Net change in other debt	(12,171	)	(10,873	)
Dividends paid to owners of the parent	(133,095	)	—
Dividends paid to non-controlling interest	(2,040	)	(1,218	)
Cash distribution of reserves	—		(119,985	)
Share buyback	(30,131	)	—
Total	(110,125	)	(99,063	)
Translation exchange differences	(571	)	(8,424	)
Total change in cash and cash equivalents	105,656		161,090
Cash and cash equivalents at end of the period	753,362		618,874

The accompanying notes are an integral part of the Interim Condensed Consolidated Financial Statements.

F-4

FERRARI N.V.

INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

for the nine months ended September 30,2018 and 2017

(Unaudited)

	Share capital	Retained earnings and other reserves	Cash flow hedge reserve		Currency translation differences	Remeasurement of defined benefit plans		Equity attributable to owners of the parent	Non-controlling interests	Total
	(€ thousand)
At December 31, 2016	2,504	302,336	(18,780	)	46,823	(7,888	)	324,995	4,810	329,805
Net profit	—	399,750	—