Chrysler 2002 Annual Report Download - page 39

37 Report on Operations
Transactions among Group companies, whether they are
made to support vertical manufacturing integration or to
provide services, are carried out at terms that, considering
the quality of the goods or services involved, are competitive
with those available in the marketplace.
The specific mission of a Group Sector is to provide services
to other members of the Group through companies which,
because of their specialized nature, are able to achieve
continuous improvements in quality and economies of scale.
Within this framework, the main transactions between
the Parent Company, Fiat S.p.A., and its subsidiaries
and associated companies are summarized below:
❚Licensing of the right to use the Fiat trademark, for a
consideration based on a percentage of sales, to Fiat Auto
S.p.A. (0.5%), Iveco S.p.A. (0.2%) and FiatAvio S.p.A. (0.5%).
❚Services provided by Fiat management personnel to
Fiat Auto S.p.A., Iveco S.p.A., Teksid S.p.A., Magneti Marelli
Holding S.p.A., Toro Assicurazioni S.p.A., and other Group
companies.
❚Grant of suretyships and guarantees in connection with the
issuance of debentures (FiatSava S.p.A.), commercial paper
and billets de trésorerie (Fiat France S.A. and Fiat Polska
Sp.zo.o.), bonds and lines of credit (Fiat Finance and Trade
Ltd, Fiat Finance Luxemburg S.A., Fiat Auto Financial Services
Limited, and New Holland Credit Company LLC); and to
secure bank loans (Fiat Auto S.p.A., Teksid S.p.A., Sicind
S.p.A., Fiat Automoveis S.A., Iveco Fiat Brasil Ltda, Fabbrica
Motori Automobilistici S.r.l., Banco CNH Capital Brazil S.A.,
Case LLC, Sevelnord S.A., and other Group companies),
payment obligations under building rental contracts (Ingest
Facility S.p.A., Fiat Auto S.p.A., Isvor Fiat S.p.A., Editrice La
Stampa S.p.A., Fiat Automobil Verter GmbH, International
Metropolitan Automotive Promotion - France - S.A., Fiat
Motor Sales Ltd. and other Group companies), and payment
obligations under financial leases (Fraikin Locomation S.A.,
Fraikin Locatime S.A. and Locamion S.A.).
❚Rental of buildings to Ingest Facility S.p.A. and Fiat I&CS S.r.l.
❚Deposit of liquid funds with Fiat Ge.Va. S.p.A.
❚Purchase of support and consulting services provided by Fiat
Gesco S.p.A. (taxation and administration), Fiat Ge.Va. S.p.A.
(financial services) and Fiat International S.p.A. (international
relations).
❚Purchase of inspection and internal auditing services from
Fiat Revi S.c.r.l.
❚Purchase of information technology services provided by
Global Value S.p.A.
❚Purchase of external relations services provided by Fiat I&CS
S.r.l.
❚Purchase of support and consulting services outside Italy
provided by Fiat USA Inc., Fiat United Kingdom Ltd., Fiat
Iberica S.A., and Fiat do Brasil S.A.
❚Purchase of office space, personal and real property
maintenance services provided by Ingest Facility S.p.A.,
and other general services provided by Fiat Servizi per
l’Industria S.c.p.a.
❚Purchase of personnel training services provided by Isvor
Fiat S.p.A.
❚Purchase of insurance services provided by Augusta
Assicurazioni S.p.A.
❚Purchase of automobiles from Fiat Auto S.p.A.
Transactions with related parties that must be mentioned, even
though the amounts involved are not significant, is a consulting
contract with Jack Welch LLC for an annual amount of 1 million
U.S. dollars and legal professional services for 2.4 million euros
performed by Franzo Grande Stevens.
Details about the transactions with the greatest financial impact
are provided in the analysis of the individual items in the Notes
to the Financial Statements.
All the transactions involving intra-Group deliveries of goods
and services that are part of the regular operations of the
companies involved are discussed in other sections of this
Report (Note 21 – Other Information).
During 2002, Fiat S.p.A. subscribed to capital increases
executed at Sicind S.p.A., Fiat Netherlands Holding N.V., and
Magneti Marelli Holding S.p.A. The interest held in Magneti
Marelli Holding S.p.A. was acquired in December from Fiat
Netherlands Holding N.V.
Based on the information received from the various Group
companies, there were no atypical or unusual transactions
during the year. Extraordinary transactions among Group
companies or with related parties that occurred during the
year are reviewed below:
❚In June 2002, CNH Global N.V. executed a capital
increase of 375 million shares, of which 50 million shares
were offered to the public at the price of US$4 per share,
and the remaining 325 million were subscribed by Fiat Group
companies through conversion into capital of financial
receivables owed them by CNH Global N.V.
In July 2002, the option for subscription of an additional
3.5 million shares was exercised.
In consequence of this capital increase, Fiat S.p.A. now owns,
through its subsidiary Fiat Netherlands Holding N.V., 85.2%
of CNH Global N.V. shares.
❚As part of the corporate restructuring program, Fiat
Netherlands Holding N.V. sold its interest in Magneti
Marelli Suspension Holding S.p.A. to Sici S.p.A., its interests
in Magneti Marelli Powertrain S.p.A., Magneti Marelli
Transactions among Group Companies
and with Related Parties