Chrysler 2007 Annual Report Download - page 44

Report on Operations Financial Review of the Group 43
Industrial Activities and Financial Services
Activities: performance in 2007
The following analyses of the consolidated income statement,
balance sheet and statement of cash flows present separately the
consolidated data of the Group’s Industrial Activities and Financial
Services activities. The latter include the retail financing, leasing
and rental companies of CNH - Case New Holland, Iveco and Fiat
Group Automobiles. Starting from the end of 2006, Fiat Group
Automobiles no longer consolidates on a line by line basis the
activities that were transferred to the joint venture Fiat Group
Automobiles Financial Services (FAFS), established at the end of
December 2006 with Crédit Agricole, which is accounted for using
the equity method. Starting from the end of 2006, financial
services activities are performed by Ferrari as well.
Certain of the Iveco financial services companies also carry out
their business through trading activities: in order to better identify
the contribution made by Financial Services activities to the
Group’s performance, trading activity has been excluded from
their revenues and cost of sales starting January 1, 2007. As a
result, figures for 2006 have been reclassified accordingly, leading
to a reduction in revenues and cost of sales of the Financial
Services activities by the same amount, with no impact on the
trading profit of these activities, on the income statement of
Industrial Activities and on that of the Group as a whole.
Principles of analysis
The separation between Industrial Activities and Financial
Services is made by preparing specific subconsolidated
financial statements on the basis of the normal business
performed by each Group company.
The investments held by companies belonging to one activity
segment in companies included in another segment are
accounted for using the equity method.
To avoid a misleading presentation of net result, the effect of
this accounting is classified in the income statement item
Result from intersegment investments.
The Holding companies (Fiat S.p.A., FGI – Fiat Group
International SA – the new name of IHF-Internazionale Holding
Fiat S.A., Fiat Partecipazioni S.p.A., Fiat Netherlands Holding
N.V.) are classified under Industrial Activities.
The subconsolidated financial statements of Industrial
Activities also include companies that operate centralised cash
management activities, i.e. those which raise financial
resources on the market and provide funding to Group
companies, without providing financial services support to
third parties.