Chrysler 1999 Annual Report Download - page 32

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31
Report on Operations – Analysis of the Financial Position and Operating Results of the Fiat Group and Fiat S.p.A.
Statement of operations
The statement of operations for the fiscal year shows net
income of 396 million euros, compared with 408 million euros
in 1998.
The following table contains a breakdown of net income:
(in millions of euros) 1999 1998
Investment income 608 530
Writedowns (210) –
Net financial income 15 47
Cost of personnel and services, less revenues (15) 25
Extraordinary income (expense) 81 (51)
Income taxes (83) (143)
Net income 396 408
Investment income amounted to 608 million euros. It
consists of dividends, including the respective tax credits,
paid by subsidiaries and affiliated companies (530 million
euros in 1998).
A breakdown of the dividends earned in 1999 and 1998 is
provided in the Notes of Fiat S.p.A. Financial Statements.
The main component of writedowns was the charge of 209
million euros against the carrying value of Fiat Auto S.p.A.,
which, as mentioned above, was taken to reflect a
corresponding change in the net worth of this company.
Net financial income totaled 15 million euros, compared with
47 million euros in 1998. The decrease of 32 million euros
from 1998 is due to the worsening of the net financial position
as a result of the cash outlays for the new investments
discussed above.
The cost of personnel and services, less revenues, totaled
15 million euros (net revenues of 25 million euros in 1998).
In particular, cost of personnel and services came to 174
million euros, or 20 million euros less than the 194 million
euros reported in 1998. The Company’s headcount averaged
245 employees, (including 26 seconded to the Group’s
principal companies) compared with 256 in 1998 (including 25
seconded employees). Revenues totaled 159 million euros,
down from 219 million euros in the previous fiscal year. They
include royalties for the license to use the Fiat trademark,
computed as a percentage of the sales of the individual Group
companies, and fees for services rendered by management
personnel. They also reflect the already mentioned gain
realized on the sale of buildings (42 million euros).
The main components of extraordinary income were the
gains realized on the disposal of 30% of IN.TE.SA. S.p.A.
(32 million euros) and of a 0.46% interest in Banco Central
Hispano Americano S.A. (41 million euros).
The net extraordinary expense shown for 1998 reflects the
special bonus paid to Chairman Cesare Romiti, in accordance
with a resolution approved by the Board of Directors on
January 30, 1998.
Income taxes totaled 83 million euros, compared with 143
million euros in 1998. They include corporate income taxes
of 69 million euros.
Taking into account tax credits on dividends, which are
reflected in investment income (124 million euros in 1999),
income tax receivables totaled 41 million euros (compared
with net taxes payable of 25 million euros in 1998).