Chrysler 2004 Annual Report Download - page 138

FIAT GROUP
02
136
Research and development expenses
Each year significant expenditures are borne by the Group for research and development programs that generally cover a period of
several years and which are charged to income in the year incurred.
In 2004 and 2003 direct research and development expenses were 1,810 million euros and 1,747 million euros, respectively. For the
most important projects, the Group has applied for financing to the Italian government and the European Community under related
legislation.
At the end of 2004, there were multiyear research and innovation projects that are being examined or for which incentives are being
paid, by the above authorities, which show estimated expenditures in the relative applications amounting to approximately 997
million euros (an amount which also comprises projects on which the balance of the incentives was received in the same year). The
Group filed/received low-rate loans for 226 million euros and grants for 436 million euros in respect of these projects which could also
give rise to receipts for incentives in future years. The amounts received during 2004, referring to the aforementioned expenditures,
totaled 22 million euros in low-rate loans and 52 million euros in grants, for a cumulative total at December 31, 2004 of 42 million
euros in low-rate loans and 157 million euros in grants.
The average interest rate on financing received for research and innovation at December 31, 2004 was 2.08% (2.27% for outstanding
financing at December 31, 2003).
Maintenance costs
Maintenance costs charged to income in 2004 and 2003 amounted to 370 million euros and 435 million euros, respectively.
Advertising costs
Advertising costs charged to income in 2004 and 2003 amounted to 898 million euros and 921 million euros, respectively.
22 Statement of cash flows
The Statement of cash flows is included, and commented on, in the Report on Operations Financial Review of the Fiat Group
and Fiat S.p.A.
A reconciliation between cash and the Group net financial position is also reported in the Report on Operations – Financial Review
of the Fiat Group and Fiat S.p.A.
23 Translation of foreign financial statements
The principal exchange rates used in 2004 and 2003 to translate the foreign currency financial statements into euros were:
Average At Average At
2004 12/31/2004 2003 12/31/2003
U.S. dollar 1.244 1.362 1.131 1.263
British sterling 0.679 0.705 0.692 0.705
Swiss franc 1.544 1.543 1.521 1.558
Polish zloty 4.526 4.084 4.398 4.717
Brazilian real 3.635 3.615 3.474 3.649
Argentine peso 3.664 4.045 3.335 3.713