2006 Annual Report - Fiat SpA

agreed that the businesses formerly contributed by Fiat and GM would be returned to the owner of each respective business
before the Master Agreement. The termination agreement stated that each JV partner should receive businesses of equal net asset
value. Any difference in the net asset value of the businesses returned to GM and Fiat would have resulted in a balancing payment
from one JV partner to the other. Consequently the liquidation of the JV had no impact on income or net equity. Fiat subsequently
consolidated the net assets it retained, effectively reclassifying the net equity investment in these assets from equity investments
to consolidated assets and liabilities. The profits of Fiat Powertrain from January 1, 2005 until the acquisition date amounted to 21
million euros and this figure is included in the line item Result from investments in the consolidated financial statements of the
Fiat Group.
■ At the end of 2005, the Fiat Group acquired Enel’s share of the joint venture Leasys S.p.A., whose activity is the hire and
management of company car fleets, thereby obtaining 100% control. The financial statements of this company have been
consolidated from December 31, 2005. The loss of Leasys for 2005 included in the line item Result from investments in the
consolidated financial statements of the Fiat Group amounted to 11 million euros. The transaction led to the acquisition
of already recognised goodwill from the acquired entity for an amount of 50 million euros, which was left unaltered in the
consolidated financial statements given the acquiree’s ability to earn a higher rate of return and the fact that the value of this also
stemmed from synergies to be realised after the acquisition as well as from other benefits expected to arise from the operation.
If the acquisition date for these transactions had been January 1, 2005, the revenues and net income for the period would have
increased by 483 million euros and by 17 million euros, respectively.
Disposals
As described in the section Scope of consolidation, the Group disposed of the following businesses in 2006:
■ The procedure for the sale of the subsidiary Atlanet S.p.A. to the British Telecom group was for the most part finalised in the first
quarter of 2006 on receiving the approval of the Italian Guarantor Authority for Competition and the Market; the transaction was
finally concluded with the sale of the Polish and Brazilian business in the second half of the year.
■ Fiat sold its investment in Sestrieres S.p.A. to Via Lattea S.p.A. on June 29, 2006.
■ On August 30, 2006, Teksid S.p.A. sold its holding in Société Bretonne de Fonderie et Mecanique.
■ On August 31, 2006, Fiat sold its holding in Banca Unione di Credito (B.U.C.) to BSI (a company of the Generali Group).
■ The subsidiary Comau Pico sold its Autodie business to Mbtech Stuttgart on November 10, 2006.
■ On December 28, 2006, Fiat Auto and Crédit Agricole finalised the formation of the 50/50 joint venture FAFS.
The book value at the disposal date of the net assets sold is summarised in the following table. Specific disclosure is made for the
B.U.C. disposal and the formation of FAFS given the significance of the amounts involved. In particular, disclosures relating to the
formation of FAFS are separated between those that relate to the business previously controlled by the Fiat Group which was
therefore consolidated on a line-by-line basis, and those that relate to the business of financing the final customer (the retail
business), which was previously headed by the associate Fidis Retail Italia.
192
Fiat Group Consolidated Financial Statements at December 31, 2006 - Notes
Total sales of of which
consolidated
(in millions of euros) subsidiaries B.U.C. FAFS
Non-current assets 1,586 76 1,453
Cash and cash equivalents 653 196 442
Other current assets 5,119 1,005 3,957
Total assets 7,358 1,277 5,852
Debt 6,336 1,074 5,219
Other liabilities 590 34 395
Total liabilities 6,926 1,108 5,614
The consideration received for these sales of consolidated subsidiaries and the related net cash inflows are as follows:
Total sales of of which
consolidated
(in millions of euros) subsidiaries B.U.C. FAFS
Consideration received:
- Consideration due 593 254 277
- Less: Deferred sales proceeds, net (85) – (85)
Total Consideration received 508 254 192
Net cash inflows on disposals:
- Consideration received 508 254 192
- Less: Cash and cash equivalents disposed of (461) (196) (247)
Total Net cash inflows on disposals 47 58 (55)
Reimbursement of loans extended by the Group’s centralised cash management 3,131 – 3,131
Total Net cash inflows generated 3,178 58 3,076
The consideration received for the sales of other investments and the related net cash inflows are as follows:
Total sales of of which
(in millions of euros) other investments FAFS
Total Consideration received 1,157 998
- Less: consideration paid for exercising the call option on FRI and the
subsequent capitalisation (659) (659)
Total Net cash inflows generated 498 339
It is recalled that during 2005 the Group disposed of the following businesses:
■ In the first quarter of 2005, 65% of the investment in the temporary employment agency WorkNet was sold.
■ On June 1, 2005, Iveco sold to Barclays Mercantile Business Finance Ltd a 51% stake in Iveco Finance Holdings Limited, a
company comprising certain financial services companies of Iveco operating in France, Germany, Italy, Switzerland and the United
Kingdom. Since that date the investment in Iveco Finance Holdings Limited is no longer consolidated on a line-by-line basis but is
accounted for using the equity method.
Fiat Group Consolidated Financial Statements at December 31, 2006 - Notes 193