Chrysler 1999 Annual Report Download - page 31

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FINANCIAL POSITION AND OPERATING RESULTS OF
FIAT S.P.A.
Balance sheet
The balance sheet of Fiat S.p.A. is summarized below:
(in millions of euros) 12/31/99 12/31/98
Fixed assets 7,050 5,999
Working capital (1) (104)
Total net invested capital 7,049 5,895
Stockholders’ equity 6,804 6,767
Net financial position (245) 872
Fixed assets consist mainly of investments in the Group’s
principal companies. The total value at December 31, 1999
was 6,967 million euros, for a net increase of 1,114 million
euros since the end of 1998.
The principal new equity investments added in 1999 include
the recapitalization of New Holland Holdings N.V. in the
amount of US$1.4 billion, which Fiat S.p.A. carried out
together with Fiat Ge.Va. S.p.A. to fund the acquisition of
Case Corporation by New Holland N.V. (now called CNH
Global N.V.), and the purchase of Pico Holdings Co., the
leading U.S. maker of bodywork production systems. Fiat
S.p.A. invested a total of 726 million euros in these
transactions.
In addition, the Company successfully completed two tender
offers that enabled it to buy 71% of the preference and 80%
of the savings shares of Toro Assicurazioni S.p.A. (Group-level
ownership increased to 75% of the entire capital stock) and
virtually all Comau S.p.A. shares outstanding, for a total outlay
of 616 million euros. Fiat S.p.A. now owns 96% of Comau.
Disposals include the sale of the interests held in IN.TE.SA.
S.p.A. (30%) and Banco Central Hispano Americano S.A.
(0.46%), which generated proceeds of 93 million euros and a
gross capital gain of 73 million euros. In addition, the carrying
value of Fiat Auto S.p.A. was written down by 209 million
euros, to reflect a corresponding decrease in the value of
its net worth, as allowed under Articles 59 and 61 of the
applicable law (TUIR) and by the provisions of Article 2426,
last Section, of the Italian Civil Code.
If this charge had not been taken, the carrying value of
the Company’s equity investments and the value of its
stockholders’ equity would have amounted to 7,176 million
euros and 6,935 million euros, respectively. In addition,
income taxes payable would have been higher by 77 million
euros and net income would have increased by 131 million
euros.
During 1999, consistently with the decision to transfer to a
single real estate company (Ingest S.p.A.) all Group buildings
that are not used for operating purposes, Fiat S.p.A. disposed
of most of its real estate assets. In addition, it sold to Toro
Assicurazioni S.p.A. an office building located at 60 Via
Mazzini. The total proceeds generated by these transactions
amounted to 129 million euros, for a net capital gain of 42
million euros. The sales prices were determined on the basis
of reports provided by an independent appraiser. Fiat S.p.A.
still owns its Lingotto headquarters and other historically
significant buildings.
Working capital includes receivables from and payables to
Tax Authorities, employees, Group companies and others.
The increase of 103 million euros compared with December
31, 1998 is due mainly to higher amounts receivable from tax
authorities (for 1999 corporate income tax overpayments) and
from Group companies (chiefly Toro Assicurazioni S.p.A. and
Ingest S.p.A. in connection with the sale of real estate assets).
At December 31, 1999, stockholders’ equity totaled 6,804
million euros, or 37 million euros more than at the end of
1998. The increase is the net effect of the year’s net income
of 396 million euros, less the appropriation of the 1998 net
income (359 million euros) as approved by the Stockholders’
Meeting of June 23, 1999.
At the end of 1999, the net financial position showed
indebtedness of 245 million euros, compared with net liquidity
of 872 million euros at the end of 1998. The substantial new
equity investments discussed above account for most of this
change.
An analysis of financial flows is provided at the end of the
Notes of Fiat S.p.A. Financial Statements.