Chrysler 2011 Annual Report Download - page 124

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Report on Operations
Specifically:
Personnel and operating costs were €115 million (€145 million in 2010), a decrease of €30 million over the prior year, primarily attributable to an €8
million reduction in personnel costs resulting from the transfer of personnel to Fiat Industrial S.p.A. (following the demerger) or other Group companies,
as well as a €22 million reduction in the cost of services (which in 2010 included non-recurring expenses associated with the demerger). For 2011, the
Company had an average of 104 employees (144 for 2010).
Other income of €45 million (€62 million for 2010) related principally to services rendered, including by senior managers, to other Group companies and
changes in contract work in progress (contracts between Fiat S.p.A. and Rete Ferroviaria Italiana S.p.A., formerly Treno Alta Velocità – T.A.V. S.p.A.),
which are calculated on a percentage completion basis. The €17 million decrease over 2010 was primarily due to lower revenues from services rendered
to Group companies, resulting from the reduced size of the Group post-demerger, as well as completion of contract work for T.A.V. S.p.A.
Net financial expense totaled €435 million, which included €327 million in financial charges, relating primarily to interest expense on debt, as well as a
€108 million loss in the mark-to-market value of two stock-option related equity swaps on Fiat and Fiat Industrial shares. For 2010, net financial expense
totaled €93 million, which included €204 million in financial charges that were partially offset by a €111 million gain in the mark-to-market of the above
equity swaps. The €342 million increase in net financial expense over 2010 was attributable to the swing in value of the equity swaps (€219 million), as well
as costs associated with a higher average level of indebtedness and maintaining a higher level of liquidity (€123 million).
For income taxes, the Company recognized a €44 million credit for the year (€34 million in 2010), which was primarily attributable to compensation
received for tax losses contributed by Fiat S.p.A. to the national tax consolidation for the Group’s Italian companies.
Statement of Financial Position
The principal components of the statement of financial position were as follows:
(€ million) 31.12.2011 31.12.2010
Non-current assets 12,169 11,599
- of which: Investments 12,123 11,423
Shareholdings to be demerged -4,977
Working capital (253) (101)
NET CAPITAL INVESTED 11,916 16,475
EQUITY 9,053 12,704
NET DEBT 2,863 3,771
Non-current assets consisted almost entirely of controlling interests in the principal Group companies.
The €700 million increase in the value of investments over 31 December 2010, was mainly due to €347 million of Fiat Industrial S.p.A. shares attributed to
Fiat S.p.A. (related to own shares held by Fiat S.p.A. at the demerger date), as well as a €220 million increase associated with the recapitalization of certain
subsidiaries and the net impairment reversals described previously.
Shareholdings to be demerged at 31 December 2010, totaling €4,977 million, represented the carrying amount of shareholdings in Fiat Netherlands
Holding N.V., Iveco S.p.A., FPT Industrial S.p.A. and Fiat Industrial Finance S.p.A. that were transferred to Fiat Industrial S.p.A. on 1 January 2011 pursuant
to the demerger.