Chrysler 2002 Annual Report Download - page 33

31 Report on Operations Analysis of the Financial Position and Operating Results
of the Fiat Group and Fiat S.p.A.
ANALYSIS OF THE FINANCIAL POSITION AND OPERATING
RESULTS OF FIAT S.P.A.
Statement of Operations
The net loss of the Parent Company for the fiscal year was
2,053 million euros, compared with net income of 379 million
euros in fiscal 2001.
The following table contains a breakdown of this result:
(in millions of euros) 2002 2001
Investment income 278 713
Adjustments (2,866)(4)
Net financial expenses (26)(37)
Cost of personnel and services, less revenues (126)(95)
Net extraordinary income (expenses) 632 (1)
Income taxes 55 (197)
Net result (2,053)379
Net investment income totaled 278 million euros.
It consists of dividends, including the respective tax credits,
paid by subsidiaries and associated companies.
The decrease with respect to 2001 is mainly attributable to
the extraordinary dividend paid during the previous fiscal
year by Soparind S.p.A. (formerly Fiat Ferroviaria S.p.A.).
A breakdown of the dividends received in 2002 and 2001 is
provided in the Notes to the Financial Statements of Fiat S.p.A.
The adjustments of 2,866 million euros made in 2002 largely
reflect writedowns in the book value of the following subsidiaries:
Fiat Partecipazioni S.p.A. as a result of the negative performance
of the Automobile Sector (1,189 million euros), Fiat Netherlands
Holding N.V. due to losses by its Magneti Marelli and CNH
subsidiaries (732 million euros), Comau B.V. (350 million euros),
Sicind S.p.A. (291 million euros), and Iveco N.V. (280 million euros).
Net financial expenses totaled 26 million euros, or 11 million
euros less than the 37 million euros reported in 2001.
The cost of personnel and services,less revenues, totaled
126 million euros (95 million euros in 2001). In particular,
the cost of personnel and services totaled 221 million euros,
compared with 191 million euros in 2001. The 30 million
euro increase stems mainly from higher costs for services.
The average number of employees was 210 (including 16
seconded to the principal companies of the Group), compared
with 216 employees in 2001 (including 17 seconded employees).
Revenues totaled 95 million euros, in line with the previous
fiscal year. They included royalties from the right 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.
Net extraordinary income totaled 632 million euros,
represented principally by the gain realized on the sale
of 34% of Ferrari shares to Mediobanca (630 million euros).
Net tax receivables totaled 55 million euros, compared with
197 million euros in net tax payables for 2001.
Taking into account tax credits on dividends, which are reflected
in “Investment income” (100 million euros in 2002), net tax
receivables totaled 155 million euros (48 million euros in 2001).
Balance Sheet
The following table illustrates highlights of the Balance Sheet:
(in millions of euros) 12/31/2002 12/31/2001
Fixed assets 8,144 7,757
Working capital (169)(150)
Net invested capital 7,975 7,607
Stockholders’ equity 5,934 7,169
Net borrowings 2,041 438
Fixed assets consist mainly of investments in the Group’s
principal companies. The total value at December 31, 2002
was 8,050 million euros, for a net increase of 344 million euros
since the end of 2001.
The principal increases involved the subscription of capital
increases at Sicind S.p.A. (1,400 million euros) and Fiat
Netherlands Holding N.V. for its 74% interest (1,017 million
euros), as well as acquisition by the latter company of 100%
of Magneti Marelli Holding S.p.A. (803 million euros).
The decreases mainly stem from a total of 2,846 million euros
in writedowns of the subsidiaries Fiat Partecipazioni S.p.A.,
Fiat Netherlands Holding N.V., Comau B.V., Sicind S.p.A.
and Iveco N.V. and the sale of 34% of Ferrari S.p.A. to
Mediobanca S.p.A., for a cash-in of 775 million euros.
Working capital includes payables to Tax Authorities, suppliers,
and employees of 189 million euros, net of receivables, and
2,330,420 ordinary treasury shares for 20 million euros. The
decrease of 19 million euros compared with December 31, 2001
is due mainly to a temporary increase in trade payables.
Stockholders’ equity totaled 5,934 million euros at December
31, 2002, for a decrease of 1,235 million euros since the end of
2001. The changes stem from the capital increase resolved by
the Board of Directors on December 10, 2001 (1,020 million
euros), the net loss for the year (2,053 million euros), and
distribution of dividends (202 million euros).
Net borrowings at the end of 2002 totaled 2,041 million euros,
against 438 million euros in the previous year. It includes the
three-year Convertible Facility of 3 billion euros granted by a
pool of banks organized by Capitalia, IntesaBCI, Sanpaolo IMI,
and Unicredito Italiano. The net increase in borrowings stems
mainly from the previously described investments in equity
holdings, which were partially offset by the amounts collected
for the capital increase.
An analysis of financial flows is provided at the end of the Notes
to the Financial Statements of Fiat S.p.A.