2006 Annual Report - Fiat SpA

More documents

Recommendations

Info

In accordance with IFRS 2, the Group measures the liability arising from cash-settled share-based payment transactions at fair value at each reporting date and at the date of settlement; the changes in the fair value of these liabilities are recognised in the income statement for the period. At December 31, 2006 and 2005, the Group measured the fair value of the liabilities generated by these plans using the binomial method based on the following assumptions: At December 31, 2006 At December 31, 2005 Fiat S.p.A. Fiat S.p.A. GM $1 2/3 share ordinary share GM $1 2/3 share ordinary share Closing price $ 30.72 € 14.425 $ 19.42 € 7.36 Expected volatility (%) 42.67 28.33 77.56 28.39 Expected dividend yield (%) 3.26 – 10.30 0.00 The dividends expected to be paid on the ordinary shares of Fiat S.p.A. and used in the binomial model for 2006 are those referred to in recent statements made by the Group, consistent with the approach taken for the stock options granted by Fiat S.p.A. in 2006. The fair value of the above mentioned rights at December 31, 2006 and at December 31, 2005 amounts to: Fair value at December 31, 2006 Fair value at December 31, 2005 Fiat S.p.A. Fiat S.p.A. (in euros) GM $1 2/3 share ordinary share GM $1 2/3 share ordinary share 2001 Plan 2.33 2.18 3.28 0.23 2002 Plan 3.44 2.64 3.99 0.41 2003 Plan 6.37 6.95 5.37 2.10 2004 Plan 5.22 8.59 4.92 3.15 A loss of 2 million euros from the total change in the fair value of these cash-settled share-based payment plans was recognised by the Group in 2006 income (a loss of 2 million euros in 2005). Treasury Stock Treasury stock consists of 3,773,458 Fiat S.p.A. ordinary shares for an amount of 24 million euros (4,331,708 ordinary shares for an amount of 28 million euros at December 31, 2005). Capital reserve At December 31, 2006, the Capital reserve includes 682 million euros of additional paid-in capital for a total amount of 1,541 million euros consisting of the share premium paid by the subscribers of the capital increase made after the extinguishment of the Mandatory Convertible Facility on September 20, 2005 described at the paragraph Capital stock; 859 million euros are in to Earning reserves. Earning reserves The principal earning reserves are as follows: ■ The legal reserve of Fiat S.p.A. of 447 million euros at December 31, 2006 (447 million euros at December 31, 2005); ■ Retained earnings totalling 262 million euros at December 31, 2006 (retained losses totalling 1,055 million euros at December 31, 2005); 156 Fiat Group Consolidated Financial Statements at December 31, 2006 - Notes ■ The net result before minority interest of 1,065 million euros for the year ended December 31, 2006 (net result of 1,331 million euros for the year ended December 31, 2005); ■ The share based payments reserve of 27 million euros at December 31, 2006 (16 million euros at December 31, 2005). Income (expense) recognised directly in equity This item consists of accumulated other comprehensive income at December 31, 2006; changes for the two years then ended are as follows: Available- Cumulative Income (expense) Cash flow for-sale translation recognised (in millions of euros) hedge reserve reserve differences directly in equity Balances at January 1, 2005 33 75 (75) 33 Gains (losses) recognised directly in the cash flow hedge reserve (16) – – (16) Gains (losses) recognised directly in the available-for-sale reserve – 61 – 61 Gains (losses) on translation differences – – 921 921 (Net profit) loss (44) – – (44) Balances at December 31, 2005 (27) 136 846 955 Gains (losses) recognised directly in the cash flow hedge reserve 109 – – 109 Gains (losses) recognised directly in the available-for-sale reserve – 46 – 46 Gains (losses) on translation differences – – (551) (551) (Net profit) loss (6) (12) (1) (19) Balances at December 31, 2006 76 170 294 540 Minority interest The minority interest in stockholders’ equity of 674 million euros (732 million euros at December 31, 2005) refers mainly to the following companies consolidated on a line-by-line basis: % held by minority stockholders At December 31, 2006 At December 31, 2005 Italian companies: Ferrari S.p.A. 15.0 44.0 Teksid S.p.A. 15.2 15.2 Foreign companies: CNH Global N.V. 10.3 16.1 Fiat Group Consolidated Financial Statements at December 31, 2006 - Notes 157
26. Provisions for employee benefits Group companies provide post-employment benefits for their employees, either directly or by contributing to independently administered funds. The way these benefits are provided varies according to the legal, fiscal and economic conditions of each country in which the Group operates, the benefits generally being based on the employees’ remuneration and years of service. The obligations relate both to active employees and to retirees. Group companies provide post-employment benefits under defined contribution and/or defined benefit plans. In the case of defined contribution plans, the company pays contributions to publicly or privately administered pension insurance plans on a mandatory, contractual or voluntary basis. Once the contributions have been paid, the company has no further payment obligations. Liabilities for contributions accrued but not paid are included in the item Other payables (see Note 30). The entity recognise the contribution cost when the employee has rendered his service and includes this cost by destination in Cost of Sales, Selling, General and Administrative costs and Research and development costs. In 2006, these expenses totalled 1,161 million euros (1,080 million euros in 2005). Defined benefit plans may be unfunded, or they may be wholly or partly funded by contributions by an entity, and sometimes by its employees, into an entity, or fund, that is legally separate from the employer and from which the employee benefits are paid. In the case of funded and unfunded post employment benefits, included in the item Post-employment benefits, the Group obligation is determined on an actuarial basis, using the Projected Unit Credit Method and is offset against the fair value of plan assets, if any. Where the fair value of plan assets exceed the post-employment benefits obligation, and the group has a right of reimbursement or a right to reduce future contributions, the surplus amount is recognised in accordance with IAS 19 as an asset. As discussed in the paragraph Significant accounting policies, actuarial gains and losses are accounted for from January 1, 2004 using the corridor approach. Finally, the Group grants certain other long-term benefits to its employees; these benefits include those generally paid when the employee attains a specific seniority or in the case of disability. In this case the measurement of the obligation reflects the probability that payment will be required and the length of time for which payment is expected to be made. The amount of this obligation is calculated on an actuarial basis using the Projected Unit Credit Method. The corridor approach is not used for actuarial gains and losses arising from this obligation. The item Other provisions for employees consists of the best estimate at the balance sheet date of short-term employee benefits payable (such as bonuses for example) by the Group within twelve months after the end of the period in which the employees render the related. 158 Fiat Group Consolidated Financial Statements at December 31, 2006 - Notes Provisions for employee benefits at December 31, 2006 and 2005 are as follows: (in millions of euros) At December 31, 2006 At December 31, 2005 Post-employment benefits: - Employee severance indemnity 1,270 1,283 - Pension Plans 795 903 - Health care plans 986 1,102 - Other 259 294 Total post-employment benefits 3,310 3,582 Other provisions for employees 266 216 Other long-term employee benefits 185 152 Total provision for employee benefits 3,761 3,950 Defined benefit plan assets 11 – Total Defined benefits plan assets 11 – In 2006, changes in Other provisions for employees and in Other long-term employee benefits are as follows: Change in the scope of At December consolidation and At December (in millions of euros) 31, 2005 Provision Utilisation other changes 31, 2006 Other provisions for employees 216 209 (129) (30) 266 Other long-term employee benefits 152 21 (14) 26 185 Total 368 230 (143) (4) 451 In 2005, changes in Other provisions for employees and in Other long-term employee benefits were as follows: Change in the scope of At December consolidation and At December (in millions of euros) 31, 2004 Provision Utilisation other changes 31, 2005 Other provisions for employees 100 136 (28) 8 216 Other long-term employee benefits 140 18 (13) 7 152 Total 240 154 (41) 15 368 Post-employment benefits and Other long-term employee benefits are calculated on the basis of the following actuarial assumptions: At December 31, 2006 At December 31, 2005 In % Italy USA UK Other Italy USA UK Other Discount rate 3.98 5.80 5.00 4-5 3.53 5.50 4.75 1-5.25 Future salary increase 3.65 n/a 3.50 1.5-3.5 2.58 n/a 3.50 2.25-3.5 Inflation rate 2.00 n/a 3.00 2.00 2.00 n/a 2.75 2.00 Increase in healthcare costs n/a 5-10 n/a n/a n/a 5-10 n/a n/a Expected return on plan assets n/a 8.25 7.25 n/a n/a 8.25 6.88 n/a Fiat Group Consolidated Financial Statements at December 31, 2006 - Notes 159
Page 1 and 2:
Annual Report Consolidated and Stat
Page 3 and 4:
But it does move. Galileo Galilei
Page 5 and 6:
Letter from the Chairman and the Ch
Page 7 and 8:
The Fiat Group The Fiat Group perfo
Page 9 and 10:
Stockholders Financial communicatio
Page 11 and 12:
in 2003, and now the Panda Hydrogen
Page 13 and 14:
The meeting with the EWC Selected C
Page 15 and 16:
Revenues by Business Area (in milli
Page 17 and 18:
The breakdown of trading profit by
Page 19 and 20:
Investment income was 156 million e
Page 21 and 22:
If working capital is restated to i
Page 23 and 24:
Financial Services Revenues (in mil
Page 25 and 26:
Statement of Changes in Net Industr
Page 27 and 28:
strategic consistency, economic fea
Page 29 and 30: The Board of Directors, at its meet
Page 31 and 32: There can be no motion without some
Page 33 and 34: Fiat Auto - Fiat, Alfa Romeo, Lanci
Page 35 and 36: Maserati Operating Performance In 2
Page 37 and 38: Trucks and Commercial Vehicles Ivec
Page 39 and 40: Fiat Powertrain Technologies Operat
Page 41 and 42: Metallurgical Products - Teksid Pro
Page 43 and 44: Motion for Approval of the Financia
Page 45 and 46: Consolidated Income Statement (*) (
Page 47 and 48: Statement of Changes in Stockholder
Page 49 and 50: partially from the market: the rema
Page 51 and 52: Measurement Investments in unconsol
Page 53 and 54: charges for risk provisions and wri
Page 55 and 56: Union market for the Fiat Auto and
Page 57 and 58: Composition and principal changes I
Page 59 and 60: Net financial expenses in 2006 (exc
Page 61 and 62: Year of expiry Total at December Be
Page 63 and 64: The net carrying amount of Intangib
Page 65 and 66: 14. Property, plant and equipment I
Page 67 and 68: In 2005 Changes in accumulated depr
Page 69 and 70: esulting in a reduction of 1,213 mi
Page 71 and 72: Receivables from financing activiti
Page 73 and 74: (the residual debt of the Exchangea
Page 75 and 76: The reconciliation of the number of
Page 77 and 78: A summary of outstanding stock opti
Page 79: Under the CNH EIP, performance-base
Page 83 and 84: Changes in the present value of Pos
Page 85 and 86: ■ Commercial risks - This provisi
Page 87 and 88: 31, 2006 (872 million euros at Dece
Page 89 and 90: Fidis Retail Italia (FRI) All the r
Page 91 and 92: Other and Magneti Business elimina-
Page 93 and 94: Credit risk The maximum credit risk
Page 95 and 96: The increase over the prior year re
Page 97 and 98: ■ Current trade receivables of 78
Page 99 and 100: The book value at the disposal date
Page 101 and 102: 198 Appendix The Companies of the F
Page 103 and 104: Subsidiaries consolidated on a line
Page 111 and 112: % of Group % of consoli- Interest %
Page 113 and 114: Subsidiaries accounted for using th
Page 119 and 120: 234 Financial Review of Fiat S.p.A.
Page 121 and 122: (*) (*) Income Statement Balance Sh
Page 123 and 124: Income Statement pursuant to Consob
Page 125 and 126: When an impairment loss on assets s
Page 127 and 128: Provisions The company recognises p
Page 129 and 130: 4. Other operating income Other ope
Page 131 and 132:
Net income from derivative financia
Page 133 and 134:
12. Property, plant and equipment T
Page 135 and 136:
15. Other non-current assets At Dec
Page 137 and 138:
Regarding changes in 2005, the Mand
Page 139 and 140:
A summary of outstanding stock opti
Page 141 and 142:
The amounts recognised in the Incom
Page 143 and 144:
The item Payables to Group companie
Page 145 and 146:
These relate to: ■ guarantees of
Page 147 and 148:
Counterparty Other Current Other No
Page 149 and 150:
32. Significant non-recurring trans
Page 151 and 152:
Fees paid to Members of the Board o
Page 153 and 154:
Financial statement format Fiat S.p
Page 155 and 156:
Deferred tax assets Reclassificatio
Page 157 and 158:
Reconciliation of net profit (loss)
Page 159 and 160:
B. Employee benefits The employees
Page 161 and 162:
Auditors’ Reports Auditors’ Rep
Page 163 and 164:
Reports of the Board of Statutory A
Page 165 and 166:
that numerous transactions involvin
Page 167 and 168:
Motion for Approval of the Financia
Page 169 and 170:
Motion to amend Articles 9, 11, 12,
Page 171 and 172:
Stockholders Meeting and will be ef
Page 173 and 174:
Graphic design Atelier Roger Pfund,
show all

2006 Annual Report - Fiat SpA

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?