Chrysler 2006 Annual Report Download - page 20

Financial Services with Crédit Agricole resulted in receipts of
approximately 3 billion euros, including Other changes, which
totalled 3,078 million euros.
Proceeds from the sale of non-current assets totalled 1,591
million euros and referred for approximately 940 million euros
to the proceeds (net of liquidity held by the financial services
companies that were transferred to the joint venture) realised
upon the sales of the investments transferred to the joint
venture with Crédit Agricole, to which proceeds deriving from
the sale of vehicles as part of long-term renting activities (290
million euros) must be added; the remainder referred to the
sale of B.U.C. – Banca Unione di Credito (net of the liquidity it
held), Atlanet S.p.A. and Sestrieres S.p.A., and of the interests
held in Machen Iveco Holding SA (which held a shareholding
of about 51% in Ashok Leyland Ltd), Immobiliare Novoli S.p.A.,
IPI S.p.A., and other minor sales.
Cash flows used in financing activities totalled 1,731 million
euros. Cash collection from bonds issuances made during the
first six months of the year (2 billion euros in notes issued by
Fiat Finance and Trade S.A. and USD 500 million in notes
issued by Case New Holland Inc.) was more than offset by the
repayment of bonds (for approximately 2.4 billion euros), the
reduction of approximately 1.8 billion euros in bank loans and
other financial payables.
Report on Operations Financial Review of the Group 37Report on Operations Financial Review of the Group36
Balance Sheet of the Group
at December 31, 2006
At December 31, 2006, total assets amounted to 58,303 million
euros, a 4,151 million euro decrease with respect to 62,454
million euros at December 31, 2005.
At December 31, 2006, Total Assets included assets reclassified
under “Assets held for sale” for 332 million euros mainly
related to the Metallurgical Products Sector (sale of Meridian
Technologies), the Services Sector (sale of Ingest Facility) and
Fiat Auto, for activities destined to be conveyed to the joint
venture with Tata Motors in India.
In 2006, non-current assets decreased by 1,288 million euros.
Net of the negative impact of changes in the translation rates
for dollar denominated items (approximately 570 million
euros), the decrease is mainly due to:
■the decrease in Leased assets, due to the deconsolidation
of the financial services companies controlled by Fiat Auto
and sold within the framework of the establishment of FAFS;
■the decrease in Property, plant, and equipment. This was
caused principally by the negative balance of investments,
depreciation, disposals (mainly vehicles sold by Iveco with
buy-back commitments), to which must be added the
deconsolidation of the activities of B.U.C. – Banca Unione
di Credito (sold at the end of August 2006) and the
reclassification under Assets held for sale of assets held
by the Companies/Sectors mentioned above.
These changes were partially offset by the increase in
intangible assets due to goodwill (776 million euros) recognised
upon the acquisition by Fiat S.p.A. of part of the recently issued
shares of Ferrari S.p.A. in the second quarter of 2006,
representing 0.44% of the capital stock of the company, as
well as exercise in the third quarter of 2006 of the call option
on 28.6% of Ferrari shares. Following these two transactions,
Fiat’s stake in Ferrari S.p.A. rose from 56% to 85%.
At December 31, 2006, receivables from financing activities
totalled 11,743 million euros, reflecting a decrease of 4.2 billion
euros from December 31, 2005. Net of the negative foreign
exchange impact of approximately 0.9 billion euros, the sale
of Fiat Auto’s financial services companies that are part of the
above-mentioned transaction with Crédit Agricole (3.4 billion
euros) and the sale of B.U.C. (0.9 billion euros), receivables
from financing activities showed an increase of 0.9 billion
euros.
The increase in financing extended to the dealer network and
to the end customers of CNH which occurred in particular in
the first six months of 2006, was only partially offset by the
collection of financial receivables from associated companies,
sold companies (Atlanet S.p.A.), and financial receivables from
others.
Working capital,net of the items connected with the sale
of vehicles with buy-back commitments, is negative by 838
million euros, 589 million euros less than at December 31,
2005, when working capital was negative by 249 million euros.
(in millions of euros) At 12.31.2006 At 12.31.2005 Change
Inventories (1) 7,553 7,133 420
Trade receivables 4,944 4,969 -25
Trade payables (12,603) (11,777) -826
Other receivables/ (payables), accruals and deferrals (2) (732) (574) -158
Working capital (838) (249) -589
(1) Inventories are shown net of the value of vehicles sold with buy-back commitments by Fiat Auto.
(2) Other payables included in the balance of Other receivables/ (payables), accruals and deferrals exclude amounts due to customers corresponding to the buy-back price due upon expiration
of the related contracts and the amount of the fees paid in advance by customers for vehicles sold with buy-back commitments, which is equal to the difference at the date of signing the
contract between the sales price and the buy-back price and which is allocated over the term of the entire agreement.