in the First Half of 2003 98th Fiscal Year - FIAT SpA

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Other securities at June 30, 2003 include securities held by the same company to fund insurance policy liabilities and accruals as well. The decrease of -6,279 million euros compared to December 31, 2002 was largely due to deconsolidation of the Toro Assicurazioni Group. Treasury stock consists of 2,598,241 Fiat ordinary shares held by Fiat S.p.A. and Fiat Ge.Va. S.p.A. with a total par value of 18 million euros, net of writedowns recorded during the first half totaling 4 million euros. Financial receivables at June 30, 2003 totaled 16,597 million euros (18,411 million euros at December 31, 2002) and consist of: loans granted to customers and dealers by the financial services companies for 11,129 million euros (15,615 million euros at December 2002); the financial receivable of 2,378 million euros connected with the sale of the Toro Assicurazioni Group (which was collected on July 30, 2003); and other financial receivables of 3,090 million euros (2,796 million euros at December 31, 2002) refer mainly to receivables from joint ventures and from companies engaged in the real estate business and in the spare parts distribution business. The decrease of - 4,486 million euros since December 31, 2002 in loans granted by the financial services companies consists of -3,733 million euros from deconsolidation of the retail financing activity in Brazil and the activities of Fidis Retail Italia S.p.A., -231 million euros for the performance of currencies, and -522 million euros from lower volumes of activity. The 294-million-euro increase in the other financial receivables refers mainly to the higher levels of disbursed financing. Receivables due beyond five years amounted to 252 million euros at June 30, 2003 (935 million euros at December 31, 2002). The decrease of -683 million euros is largely accounted for by the deconsolidation of Fidis Retail Italia S.p.A. 7 Accrued income and prepaid expenses 41 Fiat Group Consolidated Financial Statements and Notes at June 30, 2003 (in millions of euros) At 6/30/2003 At 12/31/2002 Commercial accrued income and prepaid expenses 493 579 Financial accrued income and prepaid expenses 375 661 Total Accrued income and prepaid expenses 868 1,240 Financial accrued income and prepaid expenses mainly includes day-to-day interest earned on securities and swap contracts. The 286 million euro decrease with respect to December 31, 2002 includes -188 million euros due to the deconsolidation of the Toro Assicurazioni Group and Fidis Retail Italia S.p.A. 8 Stockholders’ equity Statement of changes in the Group’s consolidated stockholders’ equity Retained earnings, other reserves, Treasury net income and Additional stock cumulative Capital paid-in Legal valuation translation (in millions of euros) stock capital reserve reserve adjustments Total Balance at December 31, 2002 3,082 2,327 659 253 1,320 7,641 Change in treasury stock – – – (235) 235 – Fiat S.p.A. fiscal 2002 loss covered by recourse to additional paid-in capital – (2,053) – – 2,053 – Foreign exchange translation adjustments and other differences – – – – (292) (292) Net Income (Loss) – – – – (708) (708) Balance at June 30, 2003 3,082 274 659 18 2,608 6,641 The Group’s consolidated stockholders’ equity decreased by 1,000 million euros from December 31, 2002. This change reflects the decrease of -708 million euros deriving from the net loss for the period, negative foreign exchange differences from conversion of the financial statements of subsidiaries denominated in currencies other than the euro, and other minor changes totaling -292 million euros.
The capital stock fully paid in at June 30, 2003 is 3,082 million euros, equal to 616,425,600 shares. It is composed of the following: ❚ 433,220,490 ordinary shares ❚ 103,292,310 preference shares ❚ 79,912,800 savings shares all with a par value of 5 euros each. It should be noted that the Stockholders’ Meeting of September 12, 2002 authorized the Board of Directors, by September 11, 2007, to increase the capital stock, in a single transaction, or repeatedly, up to a maximum of 8 billion euros, and to issue bonds or convertible bonds up to the same amount, but without exceeding in any one transaction the limits set forth by law. With reference to the Mandatory Convertible facility, described in Note 10 hereunder, the same Stockholders’ Meeting established that the Directors, by virtue of the aforesaid mandate and the particular conditions and terms established therein, must resolve, in the event the facility is not repaid at an earlier date, the capital stock increase and reserve it, in accordance with paragraph 7 of Article 2441 of the Italian Civil Code, for the banks identified in the aforementioned resolution, with subscription and payment of the newly issued ordinary shares to be carried out exclusively by compensating the Banks’ receivables for principal up to a maximum total of 3 billion euros, and subsequently a rights offering to stockholders. The issue price of these shares will be equal to the average of 14.4409 euros and the average value of stock market quotations during the preceding months. Furthermore, on June 26, 2003 the Board of Directors passed a resolution pursuant to the aforesaid mandate for a capital increase that was concluded in August for an aggregate par value of approximately 1,836 million euros, upon subscription of the 367,197,108 ordinary shares reserved for the rights offering, in the ratio of three new ordinary shares at the price of 5 euros each for every five shares owned, regardless of the class of stock. 9 Reserves for risks and charges (in millions of euros) At 6/30/2003 At 12/31/2002 Change Income tax reserves: 42 Fiat Group Consolidated Financial Statements and Notes at June 30, 2003 Current income tax reserve 108 199 (91) Deferred income tax reserve 981 1,236 (255) Total Income tax reserves 1,089 1,435 (346) Warranty reserve 828 841 (13) Various liabilities and risk reserves and Reserve for pensions 4,435 4,745 (310) Insurance policy liabilities and accruals 94 9,605 (9,511) Insurance policy liabilities and accruals where the investment risk is borne by policyholders, and those related to pension plan management – 7,000 (7,000) Total Reserves for risks and charges 6,446 23,626 (17,180) The decrease of Reserves for risks and charges of 17,180 million euros is mainly due to the decrease of insurance policy liabilities and accruals and of Insurance policy liabilities and accruals where the investment risk is borne by policyholders, and those related to pension plans (16,511 million euros), upon sale of the Toro Assicurazioni Group. The decrease in the Other liabilities and risk reserves and Reserve for pensions of -310 million euros is due to the Change in the scope of consolidation for -89 million euros, negative Foreign exchange effects for -111 million euros, and changes for -110 million euros. The Deferred income tax reserve at June 30, 2003 includes deferred tax liabilities, net of deferred tax assets, that have been offset where possible by the individual companies. The net balance of the Deferred income tax reserve and Deferred tax assets posted under other receivables is broken down as follows: (in millions of euros) At 6/30/2003 At 12/31/2002 Change Deferred income tax reserve 981 1,236 (255) Deferred tax assets (3,063) (3,499) 436 Total (2,082) (2,263) 181 The net change with respect to December 31, 2002 shows net assets that are lower by 181 million euros. This change derives from use of previously allocated deferred tax assets and new provisions for 81 million euros, the foreign exchange effect for 42 million
Page 1 and 2: Report of the Board of Directors on
Page 3 and 4: 2 Financial Highlights of the Fiat
Page 5 and 6: KEY DEVELOPMENTS Despite the weakne
Page 7 and 8: INTRODUCTION In order to facilitate
Page 9 and 10: posted in the first half of 2002, m
Page 11 and 12: EBIT (Earnings Before Interest and
Page 13 and 14: Reserves At June 30, 2003, the rese
Page 15 and 16: statement of operations is illustra
Page 17 and 18: Toro Assicurazioni (35 million euro
Page 19 and 20: In July 2003, Fiat S.p.A. and Avio
Page 21 and 22: leading operator of call centers. T
Page 23 and 24: During the first half of 2003, the
Page 25 and 26: The key development in the first ha
Page 27 and 28: The general economic slowdown conti
Page 29 and 30: The difficulties encountered in the
Page 31 and 32: Based on preliminary estimates, sal
Page 34 and 35: Fiat Group — Consolidated Financi
Page 36 and 37: (in millions of euros) 35 Fiat Grou
Page 38 and 39: ACCOUNTING PRINCIPLES AND METHODS T
Page 40 and 41: December 31, 2002), Naveco Ltd. 113
Page 44 and 45: euros, change in the scope of conso
Page 46 and 47: The decrease of 13,592 million euro
Page 48 and 49: Other financial income (in millions
Page 50: 18 Income taxes for the period Inco
Page 53 and 54: (in millions of euros) 52 Fiat S.p.
Page 56 and 57: 55 Annex
Page 58 and 59: Subsidiaries consolidated on a line
Page 74 and 75: Subsidiaries valued by the equity m
Page 76 and 77: Subsidiaries valued at cost ❚ Aut
Page 78 and 79: Subsidiaries valued at cost (contin
Page 80 and 81: Subsidiaries valued at cost (contin
Page 82 and 83: Associated companies valued by the
Page 84 and 85: Associated companies valued at cost
Page 86 and 87: Other companies valued at cost ❚
Page 88 and 89: Significant investments sold effect
Page 90: Report of the Board of Directors on

in the First Half of 2003 98th Fiscal Year - FIAT SpA

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