Chrysler 2005 Annual Report Download - page 205

204 Financial Review of Fiat S.p.A.
03 Fiat S.p.A.
FIN AN CIAL REVIEW O F FIAT S.P.A.
The following tables, described and commented on below, have been prepared from the company’s statutory financial statements at D ecember
31, 2005, to which reference should be made. Pursuant to the provisions of the Italian civil code, the statutory financial statements at December
31, 2005 have been prepared on the basis of the requirements set forth in Italian Legislative D ecree no. 127 of April 9, 1991, as amended. Starting
from fiscal 2006, Fiat S.p.A. will prepare its statutory financial statements in accordance with International Financial Reporting Standards (IFRS).
O perating Performance
The income statement of the Parent Company showed net income of 223 million euros for the year ended December 31, 2005, against a loss
of 949 million euros for the year ended December 31, 2004.
An analysis of this result is provided in the following table:
(in millions of euros) 2005 2004
Adjustments to financial assets (429) (1,641)
Investment income 8683
N et financial expenses (56) (137)
Cost of personnel and services net of revenues (142) (119)
N et extraordinary income (expenses) 1,121 (13)
Income taxes (279) 278
N et income/(loss) 223 (949)
Adjustments to financial assets, resulting in costs of 429 million euros, mainly reflected the operating performance of subsidiaries during the
fiscal year. In particular, they refer to the write-down in the equity investments held in Fiat Partecipazioni S.p.A. (811 million euros, due to the
loss at Fiat Auto),Teksid S.p.A. (53 million euros), Comau S.p.A. (42 million euros) and Business Solutions S.p.A. (52 million euros), net of
revaluations for the restoration of the carrying value of the equity investment in Fiat N etherlands Holding N .V. (376 million euros, due to the
positive performance of the CN H and Iveco subsidiaries), Magneti Marelli Holding S.p.A. (144 million euros) and other minor companies.
During 2004, these adjustments resulted in costs of 1,641 million euros, mainly as a result of the write-down of the investment in Fiat
Partecipazioni S.p.A. (1,624 million euros), which had been impacted by the negative performance of the Automobiles Sector.
Investment income totalled 8 million euros and consisted of dividends paid by subsidiaries. In 2004 this item also included income of 606
million euros that had its origin in the partial capital repayment by the IHF – Internazionale Holding Fiat S.A. subsidiary.
N et financial expenses totalled 56 million euros, a decrease from the 137 million euros incurred in 2004, due to lower interest expenses as a
result of the extinguishment of the Mandatory Convertible Facility and to the increased interest income earned as a result of the higher level
of financial assets.
Cost of personnel and services net of revenues amounted to 142 million euros with respect to 119 million euros in 2004.