Chrysler 2003 Annual Report Download - page 25

24 Report on Operations Analysis of the Financial Position and Operating Results
of the Fiat Group and Fiat S.p.A
negative balance resulting from disposals. The figure for 2003
is broken down as follows:
❚Balance of net gains/losses on disposals, totaling a positive
1,747 million euros, composed primarily of the gains from
the disposals of FiatAvio S.p.A. (1,258 million euros net of
transaction costs), the Toro Assicurazioni Group (390 million
euros net of transaction costs), the retail financing activities
of Fiat Auto in Brazil (103 million euros), and the company
IPI (15 million euros). The principal loss is represented by
that incurred upon disposal of Fraikin (-24 million euros),
in addition to the loss of 210 million euros that had been
booked at the end of 2002.
❚Restructuring expenses of 658 million euros; these expenses
are represented by the costs incurred or determined
according to plans for personnel laid off with long-term
unemployment benefits, severance incentives, and writedown
of property, plant and equipment and intangible fixed assets
according to the Relaunch Plan presented at the end of June
2003. Restructuring expenses include expenses and provisions
that refer mainly to Fiat Auto (259 million euros), CNH (142
million euros), Comau (98 million euros) and Magneti Marelli
(50 million euros).
❚A total of -215 million euros in other extraordinary writedowns
of activities, stemming from evolution in the market outlook
of certain businesses, particularly in regard to the depreciation
of property, plant, and equipment at Fiat Auto.
❚A total of -501 million euros in extraordinary provisions to
reserves for future risks and charges, other expenses and
prior period expenses, net of other non-operating income
and prior period income. These include expenses and
provisions connected to the contract for the sale of the
Electronic Systems activities of Magneti Marelli which was
carried out in the past fiscal year, damages stemming from
the flood at the Termoli plant, and residual commitments
connected to investments in the telecommunications field.
❚Prior-period tax liabilities of 26 million euros.
In 2002, the balance of non-operating income and expenses
included restructuring expenses mainly stemming from the
industrial restructuring plan of Fiat Auto and its effects on other
Group Sectors; writedowns of assets carried out on the basis of
changed market outlooks and consequent new business plans,
and extraordinary provisions to reserves for future risks and
charges. Furthermore, certain disposals had caused losses,
such as the sale of the investment in General Motors at market
prices, disposals of the Teksid Aluminum Business Unit, the
Electronic Systems Business Unit of Magneti Marelli, and
adjustment of the book value of the Iveco Fraikin Business
at its presumable disposal value. These losses were partially
offset by the gains stemming mainly from the sales of 34%
of Ferrari, 14% of Italenergia Bis, the AfterMarket activity
of Magneti Marelli, and the investment in Europ Assistance.
Result for the Fiscal Year
The Group’s loss before taxes was 1,298 million euros,
compared with a loss of 4,817 million euros in fiscal 2002;
this result reflected the previously mentioned net improvement
in EBIT.
Net financial expenses totaled 979 million euros in
2003, compared with 862 million euros in 2002. When
the performance of continuing operations alone is considered,
the balance of net financial expenses in 2003 showed an
improvement of 27 million euros with respect to the same
period in 2002. This is mainly attributable to the lower average
indebtedness for the period and reduction in the level of
interest rates in Europe and the United States, which were
partially offset by the greater impact in 2003 of foreign
exchange losses and an increase in bank commissions.
Fiscal 2002 was also favorably influenced by the positive
effects stemming from hedging of interest rate risks.
Net income taxes for the year totaled 650 million euros,
compared with a credit of 554 million euros in 2002. The
income taxes due for fiscal 2003 include: 125 million euros
(141 million euros in 2002) for IRAP, the regional tax on
production activities in Italy; 31 million euros (192 million euros
in 2002) for other current taxes; and deferred tax liabilities of
494 million euros (887 million euros in deferred tax assets in
2002). The income taxes for 2003 include utilization of tax
prepayments previously set aside in view of the realization of
capital gains on the disposal of the Toro Assicurazioni Group
and FiatAvio S.p.A., which were subsequently realized.
The consolidated net loss before minority interest was 1,948
million euros, down sharply from the loss of 4,263 million euros
in 2002.
The Group’s interest in net loss was 1,900 million euros,
compared with a loss of 3,948 million euros in fiscal 2002.
As a result of the Group’s interest in net loss, there was a
net loss per share of 2.412 euros, compared with a net loss
per share of 6.66 euros in 2002.