in the First Half of 2004 99th Fiscal Year - FIAT SpA

and the disposal of securities held as current assets (539 million
euros) generated cash that was partially used for:
❚ investments in fixed assets totaling 739 million euros
(771 million euros in the first half of 2003, which included 33
million euros related to FiatAvio), including 180 million euros
connected with long-term leasing activities (183 million
euros in the first half of 2003); and
❚ investments in intangible fixed assets for 79 million euros
and equity investments for 176 million euros.
Financing activities absorbed a small portion of cash (56 million
euros). Reimbursement of financing (2,005 million euros) was
almost totally set off by new loans (893 million euros), which
include the issue of a bond by CNH Inc. with a par value of
500 million dollars, and the net increase in short-term financial
payables of 1,051 million euros.
Personnel
At June 30, 2004, the Group had 160,708 employees,
approximately 1,500 less than the 162,237 employees at
December 31, 2003. The decrease stemmed from the net
difference between an increase of approximately 800 employees
due to changes in the scope of consolidation, which comprises
the inclusion by Magneti Marelli of the employees of the
Electronic Systems operations and the separation of employees
upon sale of Fiat Engineering and the transfer of Comau Service
activities to associated companies, and an effective reduction by
approximately 2,300 persons, mainly at Fiat Auto, CNH, Iveco,
and the Services Sector.
Operating Performance and Financial Position by Activity
Segment
The following analyses of the consolidated statement of
operations and balance sheet show separately consolidated
15 Operating Performance and Financial Position of the Fiat Group and Fiat S.p.A.
in the First Half of 2004
data of the Group’s Industrial and Financial Activities (which
include the retail financing, leasing, and rental companies of
Fiat Auto, CNH and Iveco).
To ensure uniform comparisons with the 2003 figures, reference
is made only to continuing operations: data referring to
discontinuing operations were excluded also in accordance with
the provisions of Article 39, Section 3 of Legislative Decree no.
127/91, in consideration of the significant changes caused to the
composition of the Group by the disposals carried out in 2003.
Principles of Analysis
The classification between Industrial and Financial Activities
was realized by defining specific sub-consolidated financial
statements according to the normal business performed by
each Group company.
The equity investments held by companies belonging to an
activity segment in companies included in another segment
were valued according to the equity method.
To avoid distorting the operating result of normal operations
to be represented here, the effect of this valuation on the
statement of operations is illustrated under the item “Result
of intersegment equity investments.”
The holding companies (Fiat S.p.A., IHF-Internazionale Holding
Fiat S.A., Fiat Partecipazioni S.p.A., Fiat Netherlands Holding
N.V.) were classified under Industrial Activities.
The sub-consolidated financial statements of the Industrial
Activities also include companies that operate centralized cash
management activities, i.e. that raise financial resources on the
market and finance Group companies, without providing
financial services to others.
The transactions relating to the sale of receivables executed
at market conditions between the industrial and financial
companies of the Group are posted as financial receivables
and payables in the balance sheet of Financial Activities. For the
At 6.30.2003 At 6.30.2004 At 12.31.2003
Number of employees
Change
47,479 Automobiles (Fiat Auto) 45,799 44,563 1,236
27,855 Agricultural and Construction Equipment (CNH) 26,453 26,825 (372)
32,772 Commercial Vehicles (Iveco) 30,836 31,511 (675)
2,883 Ferrari – Maserati 3,124 2,968 156
20,634 Components (Magneti Marelli) 22,545 19,879 2,666
18,082 Production Systems (Comau) 13,758 17,375 (3,617)
7,728 Metallurgical Products (Teksid) 7,919 7,556 363
4,950 Aviation (FiatAvio) – – –
7,150 Services (Business Solutions) 6,338 7,113 (775)
906 Publishing and Communications (Itedi) 862 874 (12)
3,702 Miscellanea and Eliminations 3,074 3,573 (499)
174,141 Total for the Group 160,708 162,237 (1,529)