Chrysler 2005 Annual Report Download - page 29

28 Reporton Operations Financial Review of the Group
01 Report on Operations
Trading profit of Business Solutions was 35 million euros in 2005, a 6 million euro decrease over 2004, which primarily reflected
the contraction in the Sector’s activities and changes in the scope of consolidation.
In 2005 Itedi recorded a trading profit of 16 million euros, compared with 11 million euros in 2004. The improvement stemmed
from industrial, distribution and marketing efficiencies.
In 2005, trading loss of Holding companies,Other companies and Eliminations increased by 76 million euros, from a trading loss of 154
million euros in 2004 to a loss of 230 million euros in 2005, mainly due to a reduction in revenues related to the “High Speed Railway”
(TAV) project and the changing mix of services provided to the Group’s other Sectors.
Operating result
Operating result was positive by2,215 million euros in 2005, compared with a loss of 585 million euros in 2004. The 2,800 million euro
increase reflects the improvement in trading profit (+950 million euros), higher gains on sales of equity investments, which increased by 755
million euros, the increase of 1,055 million euros in other unusual income (expenses) and lower restructuring costs for 40 million euros.
Net gains on sales of equity investments, totalling 905 million euros, include the gain of 878 million euros from the sale of the investment in
Italenergia Bis to Electricité De France and the gain of 23 million euros realised upon sale of PalazzoGrassi S.p.A. In 2004, this item amounted
to 150 million euros, mainly consisting of the gain on the sale of Fiat Engineering S.p.A. (81 million euros), the Midas activities (31 million
euros), and Edison shares and warrants (32 million euros).
Restructuring costs totalled 502 million in 2005 and were distributed as follows amongst the principal Sectors:
Fiat Auto: 162 million euros for the rightsizing of the central business governance structures of the Sector and of certain companies outside
Italy, as well as the restructuring of the Fiat-GM Powertrain activities (a joint-venture that was unwound in May);
Iveco: 103 million euros, mainly for the reorganisation of the entire Sector, particularly staff structures;
CNH: 87 million euros, attributable to the ongoing reorganisation of activities and the restructuring process underway at certain production
plants.
Comau, Magneti Marelli, and Business Solutions reported restructuring costs of 46, 33, and 22 million euros, respectively.
In 2004, restructuring costs totalling 542 million euros regarded mainlyFiat Auto (355 million euros), CNH (68 million euros), Magneti Marelli
(48 million euros) and Iveco (24 million euros).
Other unusual income (expenses)was positive by 812 million euros and included the following: a gain from the termination of the Master
Agreement with General Motors of 1,134 million euros (net of accessory costs); a gain of 117 million euros realised upon the final sale of
the real estate that had been securitised in 1998; expenses of 187 million euros related to the reorganisation and rationalisation of both Group
suppliers(started in 2004) and Fiat Auto dealers; Fiat Auto expenses of 141 million euros associated with platform rationalisation and
production relocation, 71 million euros in expenses for the indemnity recognised to Global Value for the unwinding of the joint-venture with
IBM; indemnities relating to prior year business disposals, totalling 30 million euros and other minor items.
In 2004 this item reflected unusual expenses of 243 million euros, principally in connection with the process of reorganising and rationalising
relationships with Group suppliers.