Chrysler 2006 Annual Report Download - page 21

If working capital is restated to include the items reclassified
under Assets and Liabilities held for sale, the decrease would
total 678 million euros.
The increase in net inventories recorded in 2006 (+420 million
euros, or 457 million euros if inventories recognised among
Assets held for sale were included) is mainly attributable to
higher levels of activity at Fiat Auto.
Trade receivables decreased by 25 million euros. If trade
receivables recognised among Assets held for sale are
included, the balance would increase by 56 million euros.
At December 31, 2006, trade receivables, other receivables,
and receivables from financing activities falling due after that
date and sold without recourse, and therefore eliminated from
the balance sheet in compliance with IAS 39 derecognition
requirements, totalled 5,697 million euros (2,463 million euros
at December 31, 2005). This amount includes receivables,
mainly from the sales network, sold to jointly-controlled
financial services companies (FAFS) for 3,400 million euros
and associated financial services companies (Iveco Financial
Services, controlled by Barclays) for 661 million euros (710
Report on Operations Financial Review of the Group 39Report on Operations Financial Review of the Group38
The net financial position of the Fiat Group is presented in
Note 28 to the Consolidated Financial Statements according to
Consob’s requirements. Reconciliation of net financial position
and net debt is also provided in said Note.
Asset-backed financing decreased by 2,385 million euros in
2006 mainly as a result of the deconsolidation of the Fiat Auto
financial services companies transferred to the joint venture
with Crédit Agricole (approximately 2 billion euros) and
foreign currency translation differences (750 million euros)
connected to the appreciation of euro against the USD.
Excluding these changes, asset-backed financing would have
increased by approximately 0.4 billion euros.
In 2006, other debt was lower by 3,188 million euros. Net of
debt reclassified among liabilities held for sale for 33 million
euros, the decrease is mainly attributable to the
deconsolidation of B.U.C. – Banca Unione di Credito, whose
sale was finalised at the end of August, leading to a reduction
of approximately 1.1 billion euros, in addition to the repayment
of bonds at maturity for approximately 2.4 billion euros, the
net reduction in bank loans and other debt for approximately
1.8 billion euros, and foreign exchange translation differences
totalling approximately 300 million euros. Conversely, it
should be noted that during the first six months of 2006, the
Group completed a number of bond issuances that enabled it
to refinance approximately 2.4 billion euros in debt, and in
particular:
■6.625% Senior Notes with a face value of 1 billion euros
maturing on February 15, 2013, issued by Fiat Finance & Trade
Ltd. and guaranteed by Fiat S.p.A., and placed on February
10 at a price of 100%;
■the 500 million dollar Case New Holland Inc. bond issue
(equal to 380 million euros) with a 7.125% yield and maturing
on March 1, 2014. Guaranty is provided by CNH Global N.V.
and the placement was completed on March 3;
■a 1 billion euro bond issue with a 5.625% yield and due on
November 15, 2011. The offering closed on May 12 at a price
of 99.565. The notes, issued by Fiat Finance and Trade Ltd. as
part of the 15 billion euro Global Medium Term Notes program,
are guaranteed by Fiat S.p.A.
million euros at December 31, 2005). The increase recorded
during 2006 is due to the deconsolidation of the financial
services companies of Fiat Auto conveyed in
the above mentioned joint venture with Crédit Agricole.
The increase in inventories and trade receivables (+513 million
euros if items recognised among Assets held for sales were
included) was more than offset by the increase in trade
payables,which grew by 826 million euros in 2006
(approximately 1 million euros if trade payables recognised
among liabilities held for sale were included) mainly due to
higher levels of activity at Fiat Auto and Iveco as well as the
rise in the liability balance of the item Other
receivables/(Payables), accruals and deferrals (158 million
euros, or 192 million euros if items recognised among
Assets/Liabilities held for sale were included) which is mainly
attributable to the collection of receivables from tax authorities.
At December 31, 2006 consolidated net debt (including net
debt reclassified to Assets/Liabilities held for sale) amounted
to 11,836 million euros, 6,687 million euros less than the
18,523 million euros at December 31, 2005.
(in millions of euros) At 12.31.2006 At 12.31.2005
Debt (20,188) (25,761)
-Asset-backed financing (a) (8,344) (10,729)
-Other debt (a) (11,844) (15,032)
Debt included among liabilities held for sale (33) –
Other financial liabilities (b) (105) (189)
Other financial assets (b) 382 454
Current financial receivables from jointly controlled financial services entities (c) 143 –
Current securities 224 556
Cash and cash equivalents 7,736 6,417
Cash and cash equivalents included among assets held for sale 5–
Net debt (11,836) (18,523)
- Industrial Activities (1,773) (3,219)
-Financial Services (10,063) (15,304)
(a) The amounts of “Other debt” and “Asset-backed financing” at December 31, 2005 differ from those published in the Consolidated Financial Statements at December 31, 2005 due to the
reclassification described in the Notes to the Consolidated Financial Statements.
(b) This item includes the asset and liability fair values of derivative financial instruments.
(c) This item includes current financial receivables from the new joint venture Fiat Auto Financial Services.
The cash position (cash, cash equivalents and current
securities, including those reclassified to Assets held for sale
for 5 million euros), which totalled 7,965 million euros at
December 31, 2006, increased by 992 million euros compared
to 6,973 million euros at the beginning of the year. In addition
to the resources generated by operations (net of investments),
the increase reflects the benefit of approximately 3 billion
euros deriving from conclusion of the agreement between Fiat
Auto and Crédit Agricole, which were partially offset by flows
used to reduce gross debt over the course of the year.
At December 31, 2006, “Cash and cash equivalents” included
627 million euros (706 million euros at December 31, 2005)
specifically allocated to service the debt for securitisation
structures, mainly recognised among “Asset-backed
financing.”