Chrysler 2002 Annual Report Download - page 25

23 Report on Operations Analysis of the Financial Position and Operating Results
of the Fiat Group and Fiat S.p.A.
Property, Plant and Equipment
Property, plant and equipment totaled 12,106 million euros
(13,887 million euros at the end of 2001). The decrease (-1,781
million euros) principally reflects the effect of changes in both
exchange rates and the scope of consolidation (sale of Magneti
Marelli’s Electronic Systems activities and Teksid’s Aluminum
Business Unit), disposal of real estate and writedowns during
the fiscal year.
In 2002, overall investments in fixed assets totaled 2,771 million
euros (3,438 million euros in 2001), including 844 million euros
(1,124 million euros in 2001) for investments in long-term
leases.
Depreciation of property, plant, and equipment totaled 2,019
million euros (2,287 million euros in 2001).
At the end of December 2002, accumulated depreciation and
writedowns totaled 18,223 million euros, corresponding to 60%
of gross fixed assets, compared with approximately 57% at the
end of 2001.
Financial Fixed Assets
Financial fixed assets totaled 6,638 million euros, compared
with 10,190 million euros at the end of 2001, reflecting a
significant 3,552 million euro decrease that was mainly due to
the divestiture of investments (General Motors, a 14% interest
in Italenergia Bis, and other minor investments), as well as the
effect of net losses posted at certain companies carried at
equity and losses in value for companies valued at cost.
Financial Assets not Held as Fixed Assets
Financial assets not held as fixed assets totaled 6,094 million
euros, which represents an increase of 474 million euros from
the 5,620 million euros reported at the end of 2001 as a result
of higher investments made by the insurance companies to
cover their policy liabilities and accruals, net of writedowns
taken to mark to market securities.
Net Deferred Tax Assets
Net deferred tax assets totaled 2,263 million euros,
up from 1,595 million euros at the end of 2001. This net
increase is largely due to the recording of deferred tax
assets to account for tax losses whose recovery is considered
reasonably certain.
Stockholders’ Equity
Consolidated stockholders’ equity totaled 8,679 million
euros (13,607 million euros at the end of 2001). The decrease
reflects the net loss, payment of dividends for fiscal 2001,
and the reduction resulting from changes in exchange rates (in
consequence of devaluation of the Brazilian real and appreciation
Net financial expenses totaled 862 million euros in 2002,
showing an improvement from the 1,025 million euros in 2001,
mainly due to lower interest rates on the principal capital
markets, which were partially offset by higher corporate spread.
The net income tax effect for the year was a credit of 554
million euros, up from a liability of 294 million euros in 2001.
The income taxes due for fiscal 2002 include: 141 million
euros (156 million euros in 2001) for IRAP, the regional tax
on production activities in Italy; 192 million euros (652 million
euros in 2001) for other current taxes; and 887 million euros in
deferred tax assets (against a positive 514 million euros in 2001).
The potential future benefits resulting from the loss for the fiscal
year were not accrued unless there was a reasonable certainty
that they would be recovered. Nevertheless, total deferred tax
assets completely offset tax liability recorded in the period.
The consolidated net loss before minority interest was 4,263
million euros, compared with a loss of 791 million euros in 2001.
The Group’s interest in net loss was 3,948 million euros (loss
of 445 million euros in 2001).
As a result of the Group’s interest in net loss, there was a net
loss per share of 6.66 euros, compared with a net loss of 0.841
euros per share in 2001.
Balance sheet
The financial position shows items on both the assets and
liabilities side. Nevertheless, the following pages provide the
information necessary for correlation with the principal items
of the schemes used in previous years, such as working capital
and net invested capital.
As illustrated in the Notes to the Consolidated Financial
Statements, the investments managed by the insurance
companies on behalf of insured policyholders who bear the
relative risk and that have a balancing entry substantially for the
same amount in the insurance policy liabilities and accruals are
posted at a specific item. In previous years, these investments
were classified according to their nature and thus posted at
various items under fixed assets, which were correspondingly
reclassified without however impacting net invested capital
and the net financial position.
For a more complete analysis of those items, please see
the Notes to the Consolidated Financial Statements.
Intangible Fixed Assets
Intangible fixed assets (start-up and expansion costs, goodwill,
construction in progress and others) amount to 5,200 million
euros, 1,335 million euros less than the 6,535 million euros
reported at the end of 2001, mainly on account of the reduction
in value of goodwill due to changes in foreign exchange rates
and writedowns.