Chrysler 2004 Annual Report Download - page 36

Systems), and positive foreign exchange differences of
approximately 46 million euros.
“Leased assets” decreased by 86 million euros, mainly in
consequence of disinvestments during the period (303 million
euros), which were only partially offset by the positive balance
of 221 million euros between investments and depreciation.
Aggregate investments in fixed assets totaled 2,112 million
euros in 2004 (2,011 million euros in 2003), including those
in long-term leases, which increased by 50 million euros, from
358 million euros in 2003 to 408 million euros in 2004.
Depreciation of property, plant and equipment totaled 1,693
million euros in 2004 (1,750 million euros in 2003 ), including
187 million euros for leased assets (219 million euros in 2003).
At December 31, 2004, accumulated depreciation and
writedowns of fixed assets totaled 18,364 million euros,
corresponding to approximately 66% of gross fixed assets,
compared with approximately 64% at December 31, 2003.
Financial Fixed Assets
Financial fixed assets totaled 3,779 million euros, compared
with 3,950 million euros at December 31, 2003. The decrease
of 171 million euros is largely attributable to the dividends
paid by BUC – Banca Unione di Credito (184 million euros),
accounted for using the equity method, and only partially
offset by the positive balance of revaluations and writedowns.
Financial Assets not held as Fixed Assets
Financial assets not held as fixed assets totaled 117 million
euros, substantially the same as at December 31, 2003.
Net Deferred Tax Assets
Net deferred tax assets (deferred tax assets net of deferred
income tax reserves) totaled 1,964 million euros at December
31, 2004, compared with of 1,668 million euros at December 31,
2003. The increase that occurred during the fiscal year is
attributable to the posting of net deferred tax assets (written
down in previous years as the conditions for recording them
were not met) totaling 296 million euros, of which 277 million
euros for Fiat S.p.A., the recovery of which became reasonably
certain in consequence of the settlement received in February
2005 upon cancellation of the Master Agreement with General
Motors.
Working Capital
The Group’s working capital increased by 604 million euros to a
negative 1,530 million euros, up from the negative 2,134 million
euros reported at the end of 2003.
The following table illustrates the composition of working
capital at the end of 2003 and 2004.
(in millions of euros) At 12.31.2004 At 12.31.2003 Change
Net inventories (1) 5,972 6,484 (512)
Trade receivables 4,777 4,553 224
Trade payables (11,955) (12,588) 633
Other receivables/(payables) (1) (324) (583) 259
Working capital (1,530) (2,134) 604
(1) The amounts at December 31, 2003 include the effect of the adjustment for a total of
428 million euros, which is described in the footnote of the Balance Sheet.
An analysis of the changes affecting the main components
of working capital is provided below.
Net inventories (raw materials, finished products, and work
in progress), net of advances received for contract work in
progress, totaled 5,972 million euros, against 6,484 million euros
at December 31, 2003. The decrease is largely attributable to
Fiat Auto, which reduced its stock of new and used vehicles by
over 20% during the year, and the impact of the change in the
euro/dollar exchange rate on CNH inventories.
Trade receivables totaled 4,777 million euros, up by 224 million
euros from the 4,553 million euros at December 31, 2003. The
increase is mainly attributable to Iveco and Ferrari-Maserati,
which increased their levels of activity and revenues by 10%
and 20%, respectively, in 2004.
Trade payables totaled 11,955 million euros, down by 633
million euros with respect to the 12,588 million euros at
December 31, 2003. The decrease is largely attributable to Fiat
Auto, which had increased its production levels during the last
quarter of 2003 upon the introduction of new models, levels that
stabilized during 2004.
The negative balance of other receivables/(payables),
which also includes trade accruals and deferrals, improved from
-583 million euros at December 31, 2003 to -324 million euros.
The decrease of 259 million euros is mainly attributable to the
requirements generated by payment in 2004 of payables to
employees leaving the Group at the end of 2003 (especially
Fiat Auto), the increase at CNH of deposits securing disposals
of trade receivables, which were only partially offset by lower
receivables from Tax Authorities (mainly for VAT).
Reserves
Reserves (“Reserves for risks and charges” plus the “Reserves
for employee severance indemnities”) totaled 6,471 million
euros and were substantially in line (-10 million euros) with the
value at the beginning of the fiscal year, when they totaled 6,481
million euros.
At December 31, 2004, the reserves mainly included: income tax
reserves for 77 million euros (98 million euros in 2003), warranty
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