Chrysler 2004 Annual Report Download - page 188

FIAT S.P.A.
03
186
At December 31, 2004, the ratings assigned to the Group by the major rating agencies are the following:
Short-term Medium-term
Moody’s Investors Service (*) Not Prime Ba3
Standard & Poor’s Rating Services (*) B BB-
Fitch Ratings B BB-
(*) For purposes of the Mandatory Convertible facility, the most important rating agencies are Standard & Poor’s and Moody’s.
The ratings of the Group represented in the table refer to the “non-investment grade” category. The Banks did not exercise their
consequent right to demand early repayment of the facility and to proceed with the conversion of the debt into capital for an amount
up to 2 billion euros.
Advances
Advances totaled 7,336,406 thousand euros and consisted of advances received from Treno Alta Velocità - T.A.V. S.p.A. for the
High-Speed Railway Project, as previously described at Note 4, Inventories. They refer mainly to work completion and contractual
advances. The Florence-Bologna line accounted for 3,203,920 thousand euros, the Turin-Novara line for 3,639,264 thousand euros
and the Novara-Milan line for 493,222 thousand euros. Work completed as at December 31, 2004 amounted to 2,949,350 thousand
euros, 3,494,780 thousand euros and 230,757 thousand euros, respectively.
The 1,965,374 thousand euro increase since December 31, 2003 is due to 330,118 thousand euros in advances received for work
completed on the Florence-Bologna line, 1,142,034 thousand euros in advances received for work completed on the Turin-Novara
line, contractual advances (262,465 thousand euros) and advances for work completion on the Novara-Milan line (230,757 thousand
euros).
T.A.V. S.p.A. has been provided with bank suretyships to secure these advances and proper execution of work for a total of 1,971,807
thousand euros, as described more exhaustively in Notes 4 and 14.
Trade payables
Trade payables stem from services received (consulting, publications, etc.) and amounts due to CAV.E.T. and CAV.TO.MI. for progress
payments due for work completed in the fourth quarter of 2004 and paid in the first quarter of 2005. They totaled 501,655 thousand
euros at December 31, 2004, a net increase of 102,170 thousand euros compared with December 31, 2003, mainly due to the
consideration owed to the CAV.TO.MI. Consortium for the new Novara-Milan line for which works have started.
Payables to subsidiaries
These stood at 222,730 thousand euros at December 31, 2004, showing a net decrease of 180,089 thousand euros from a year earlier.
A breakdown of this item is as follows:
(in thousands of euros) 12/31/04 12/31/03 Change
Financial payables 101,746 383,334 (281,588)
Trade payables 10,683 15,635 (4,952)
Payables for consolidated IRES 71,816 – 71,816
Other payables 38,485 3,850 34,635
Total payables to subsidiaries 222,730 402,819 (180,089)
Financial payables at December 31, 2004 include amounts payable to subsidiaries for their VAT credits, which they transferred to Fiat
S.p.A. under the consolidated VAT filing system.
Trade payables reflect the purchase of administrative and general services.
The payables for consolidated IRES refer to the payables to the Italian subsidiaries for IRES calculated on the portion of the tax losses
contributed by these companies as part of the national tax consolidation and offset during the year with taxable income contributed
by others, as well as advances and other IRES transferred to Fiat S.p.A. by the companies participating in this program.
The other payables include 30,017 thousand euros for price equalizations owed to Fiat Partecipazioni S.p.A. for the purchase
of investments in Comau S.p.A., Teksid S.p.A., and Business Solutions S.p.A.