The Fiat Group in 1999 - Report on Operations - Fiat SpA

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FINANCIAL POSITION AND OPERATING RESULTS OF
FIAT S.P.A.
Balance sheet
<strong>The</strong> balance sheet of <strong>Fiat</strong> S.p.A. is summarized below:
(<strong>in</strong> millions of euros) 12/31/99 12/31/98
Fixed assets 7,050 5,999
Work<strong>in</strong>g capital (1) (104)
Total net <strong>in</strong>vested capital 7,049 5,895
Stockholders’ equity 6,804 6,767
Net f<strong>in</strong>ancial position (245) 872
Fixed assets consist ma<strong>in</strong>ly of <strong>in</strong>vestments <strong>in</strong> the <strong>Group</strong>’s
pr<strong>in</strong>cipal companies. <strong>The</strong> total value at December 31, <strong>1999</strong>
was 6,967 million euros, for a net <strong>in</strong>crease of 1,114 million
euros s<strong>in</strong>ce the end of 1998.
<strong>The</strong> pr<strong>in</strong>cipal new equity <strong>in</strong>vestments added <strong>in</strong> <strong>1999</strong> <strong>in</strong>clude
the recapitalization of New Holland Hold<strong>in</strong>gs N.V. <strong>in</strong> the
amount of US$1.4 billion, which <strong>Fiat</strong> S.p.A. carried out
together with <strong>Fiat</strong> Ge.Va. S.p.A. to fund the acquisition of
Case Corporation by New Holland N.V. (now called CNH
Global N.V.), and the purchase of Pico Hold<strong>in</strong>gs Co., the
lead<strong>in</strong>g U.S. maker of bodywork production systems. <strong>Fiat</strong>
S.p.A. <strong>in</strong>vested a total of 726 million euros <strong>in</strong> these
transactions.
In addition, the Company successfully completed two tender
offers that enabled it to buy 71% of the preference and 80%
of the sav<strong>in</strong>gs shares of Toro Assicurazioni S.p.A. (<strong>Group</strong>-level
ownership <strong>in</strong>creased to 75% of the entire capital stock) and
virtually all Comau S.p.A. shares outstand<strong>in</strong>g, for a total outlay
of 616 million euros. <strong>Fiat</strong> S.p.A. now owns 96% of Comau.
Disposals <strong>in</strong>clude the sale of the <strong>in</strong>terests held <strong>in</strong> IN.TE.SA.
S.p.A. (30%) and Banco Central Hispano Americano S.A.
(0.46%), which generated proceeds of 93 million euros and a
gross capital ga<strong>in</strong> of 73 million euros. In addition, the carry<strong>in</strong>g
value of <strong>Fiat</strong> Auto S.p.A. was written down by 209 million
euros, to reflect a correspond<strong>in</strong>g decrease <strong>in</strong> the value of
its net worth, as allowed under Articles 59 and 61 of the
applicable law (TUIR) and by the provisions of Article 2426,
last Section, of the Italian Civil Code.
If this charge had not been taken, the carry<strong>in</strong>g value of
the Company’s equity <strong>in</strong>vestments and the value of its
stockholders’ equity would have amounted to 7,176 million
euros and 6,935 million euros, respectively. In addition,
<strong>in</strong>come taxes payable would have been higher by 77 million
euros and net <strong>in</strong>come would have <strong>in</strong>creased by 131 million
euros.
Dur<strong>in</strong>g <strong>1999</strong>, consistently with the decision to transfer to a
s<strong>in</strong>gle real estate company (Ingest S.p.A.) all <strong>Group</strong> build<strong>in</strong>gs
that are not used for operat<strong>in</strong>g purposes, <strong>Fiat</strong> S.p.A. disposed
of most of its real estate assets. In addition, it sold to Toro
Assicurazioni S.p.A. an office build<strong>in</strong>g located at 60 Via
Mazz<strong>in</strong>i. <strong>The</strong> total proceeds generated by these transactions
amounted to 129 million euros, for a net capital ga<strong>in</strong> of 42
million euros. <strong>The</strong> sales prices were determ<strong>in</strong>ed on the basis
of reports provided by an <strong>in</strong>dependent appraiser. <strong>Fiat</strong> S.p.A.
still owns its L<strong>in</strong>gotto headquarters and other historically
significant build<strong>in</strong>gs.
Work<strong>in</strong>g capital <strong>in</strong>cludes receivables from and payables to
Tax Authorities, employees, <strong>Group</strong> companies and others.
<strong>The</strong> <strong>in</strong>crease of 103 million euros compared with December
31, 1998 is due ma<strong>in</strong>ly to higher amounts receivable from tax
authorities (for <strong>1999</strong> corporate <strong>in</strong>come tax overpayments) and
from <strong>Group</strong> companies (chiefly Toro Assicurazioni S.p.A. and
Ingest S.p.A. <strong>in</strong> connection with the sale of real estate assets).
At December 31, <strong>1999</strong>, stockholders’ equity totaled 6,804
million euros, or 37 million euros more than at the end of
1998. <strong>The</strong> <strong>in</strong>crease is the net effect of the year’s net <strong>in</strong>come
of 396 million euros, less the appropriation of the 1998 net
<strong>in</strong>come (359 million euros) as approved by the Stockholders’
Meet<strong>in</strong>g of June 23, <strong>1999</strong>.
At the end of <strong>1999</strong>, the net f<strong>in</strong>ancial position showed
<strong>in</strong>debtedness of 245 million euros, compared with net liquidity
of 872 million euros at the end of 1998. <strong>The</strong> substantial new
equity <strong>in</strong>vestments discussed above account for most of this
change.
An analysis of f<strong>in</strong>ancial flows is provided at the end of the
Notes of <strong>Fiat</strong> S.p.A. F<strong>in</strong>ancial Statements.