Chrysler 2006 Annual Report Download - page 57

Fiat Group Consolidated Financial Statements at December 31, 2006 -Notes 111
5. Other income (expenses)
This item consists of income arising from trading operations which is not attributable to the sale of goods and services
(such as royalties and other income from licences and know-how), net of miscellaneous operating costs which cannot be allocated
to specific functional areas, such as post-employment benefits for retired former employees (health care service costs), indirect
taxes and duties, and accruals for various provisions.
The detail of Other income (expenses) is as follows:
(in millions of euros) 2006 2005
Other income
Gains on disposal of Property, plant and equipment 95 166
Amortisation of deferred government investment grants 68 64
Government revenue grants 38 58
Royalties and other income from licences and know-how 20 55
Rental income 42 40
Recovery of expenses and compensation for damages 64 145
Release of excess provisions 130 177
Prior period income 272 294
Other income 256 362
Total Other income 985 1,361
Other expenses
Indirect taxes 112 106
Losses on disposal of Property, plant and equipment 32 35
Impairment of assets 729
Post-employment benefits for retired former employees 563
Charges for other provisions 282 533
Prior period expenses 184 186
Other expenses 258 452
Total Other expenses 880 1,404
Other income (expenses) 105 (43)
In 2005, the item Release of excess provisions included an amount arising in the Agricultural and Construction Equipment Sector
from a structural reduction in period welfare costs in North America, resulting in the release to income of 83 million euros
previously provided. The Sector released to income a further 25 million euros in 2006 for the same reason.
6. Gains (losses) on the disposal of investments
This item, amounting to 607 million euros 2006, includes the gains realised upon the creation of the FAFS joint-venture (463 million
euros) as well as the gains on the sale of Banca Unione Credito - B.U.C. (80 million euros), Immobiliare Novoli S.p.A. (39 million
euros), Machen Iveco Holding Sa, which held about 51% shareholding in Ashok Leyland Ltd (23 million euros), Atlanet S.p.A. (22
million euros) and the residual interest in IPI S.p.A. (9 million euros). The item also includes an amount of 29 million euros for the
expected loss (mainly allocated to the goodwill impairment loss, as described in Note 13) on the disposal of Meridian Technologies
Inc.; this sale is today still subject to the closing of the financing to the purchaser from financial institutions.
Composition and principal changes
Income Statement
1. Net revenues
Net revenues can be analysed as follows:
(in millions of euros) 2006 2005
Revenues from:
- Sales of goods 46,105 41,013
- Rendering of services 2,827 2,346
- Contract revenues 917 1,285
-Rents on operating leases 519 397
-Rents on assets sold with a buy-back commitment 311 323
- Interest income from customers and other financial income of financial services companies 1,077 1,088
-Other 76 92
Total Net revenues 51,832 46,544
2. Cost of sales
Cost of sales comprises the following:
(in millions of euros) 2006 2005
Cost of sales attributable to the industrial business 42,991 38,898
Interest cost and other financial charges from financial services companies 897 726
Total Cost of sales 43,888 39,624
3. Selling, general and administrative costs
Selling costs amount to 2,627 million euros in 2006 (2,533 million euros in 2005) and comprise mainly marketing, advertising
and sales personnel costs.
General and administrative costs amount to 2,070 million euros in 2006 (1,980 million euros in 2005) and comprise mainly
expenses for administration which are not attributable to sales, production and research and development functions.
4. Research and development costs
In 2006, Research and development costs of 1,401 million euros (1,364 million euros in 2005) comprise all research and
development costs not recognised as assets amounting to 785 million euros (902 million euros in 2005) and the amortisation
of capitalised development costs of 616 million euros (462 million euros in 2005). During the period the Group incurred new
expenditure for capitalised development costs of 813 million euros (656 million euros in 2005).
Fiat Group Consolidated Financial Statements at December 31, 2006 -Notes 110