THE FIAT GROUP IN - Fiat SpA

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Capital expenditures by geographical area Total Capital Expenditures (in millions of euros) 2001 2000 1999 Europe 2,545 2,412 2,020 North America 555 374 109 Mercosur 249 371 463 Other areas 89 79 120 Total Capital expenditures 3,438 3,236 2,712 Operating income by geographical area The following analysis of operating income by geographical area excludes the operating income of the Group’s insurance companies for which operating profit is not an appropriate measurement of results. Total Operating Income (in millions of euros) 2001 2000 1999 Europe 23 873 566 North America 15 (325) 276 Mercosur 176 175 44 Other areas 8 196 (36) Total Industrial activities 222 919 850 Insurance activities 96 (64) (62) Total Operating income 318 855 788 Other segment information Agricultural and Automotive- Other Other Construction Commercial Related Diversified Companies (**) (in millions of euros) Automobiles Equipment Vehicles Activities Insurance Sectors and Elimin. (***) Consolidation 2001 Net sales and revenues: Third parties 24,177 10,762 8,120 5,377 5,369 2,728 1,473 58,006 Intersegment (*) 263 15 530 2,666 92 1,060 (4,626) – Total 24,440 10,777 8,650 8,043 5,461 3,788 (3,153) 58,006 Operating income (549) 209 271 1 68 257 61 318 Depreciation and amortization 1,150 553 410 379 47 165 176 2,880 Capital expenditures 1,331 615 718 429 29 79 237 3,438 Total Assets 33,488 18,228 10,005 11,024 18,326 6,558 3,120 100,749 2000 Net sales and revenues: Third parties 25,015 10,753 8,112 5,581 4,353 1,825 1,916 57,555 Intersegment (*) 346 17 499 3,183 10 20 (4,075) – Total 25,361 10,770 8,611 8,764 4,363 1,845 (2,159) 57,555 Operating income 44 45 489 243 (56) 153 (63) 855 Depreciation and amortization 1,331 562 423 377 30 96 233 3,052 Capital expenditures 1,412 447 656 449 24 53 195 3,236 Total Assets 35,090 18,170 8,809 10,529 14,199 2,933 6,025 95,755 1999 Net sales and revenues: Third parties 23,787 5,232 7,074 4,716 3,922 1,670 1,722 48,123 Intersegment (*) 314 14 313 2,721 – 104 (3,466) – Total 24,101 5,246 7,387 7,437 3,922 1,774 (1,744) 48,123 Operating income (121) 371 311 227 (103) 126 (23) 788 Depreciation and amortization 1,348 117 253 338 28 92 178 2,354 Capital expenditures 1,464 178 359 417 97 50 147 2,712 Total Assets 35,379 10,432 7,797 9,680 12,054 2,673 1,858 79,873 (*) Intersegment net sales and revenues include revenues between consolidated Group companies relating to different Sectors. Intersegment sales are accounted for at transfer prices that are substantially in line with market conditions. (**) The operating income (loss) of “Other Companies” amounts to -33 million euros in 2001, 14 million euros in 2000 and 126 million euros in 1999. (***) The column “Other Companies and Eliminations” also includes the Rolling Stock and Railway Systems Sector which was deconsolidated from the Group financial statements as from August 1, 2000. Consolidated Financial Statements at December 31, 2001 – Notes to the Consolidated Financial Statements 41 41
42 42 Research and development expenses Each year significant expenditures are borne by the Group for research and development programs that generally cover a period of several years and which are charged to income in the year incurred. In 2001 and 2000 direct research and development expenses were, respectively, 1,817 million euros and 1,725 million euros. For some projects, the Group has applied for financing to the Italian government and the European Community under related legislation. Up to the end of 2001, applications for R&D incentives on multiyear projects with estimated expenditures of approximately 1,168 million euros were made to the above authorities for 201 million euros in low-rate loans and 454 million euros in grants, which will also give rise to the receipt of incentives over the next few years. The amounts received during 2001 were 25 million euros in low-rate loans and 31 million euros in grants. Of this amount, a cumulative total of 72 million euros in low-rate loans and 116 million euros in grants had been received by December 31, 2001. The average interest rate on financing received for research and innovation at December 31, 2001 was 2.5% (2.7% for outstanding financing at December 31, 2000). Maintenance costs Maintenance costs charged to income in 2001 and 2000 amounted to 696 million euros and 808 million euros, respectively. Advertising costs Advertising costs charged to income in 2001 and 2000 amounted to 1,185 million euros and 1,147 million euros, respectively. Reconciliation of Stockholders’ Equity and Net Income (Loss) to US GAAP <strong>Fiat</strong> S.p.A. is listed on the New York Stock Exchange through ordinary, preference and savings ADR (American Depositary Receipt) certificates, each representing one share of the respective class of stock; for this reason, <strong>Fiat</strong> is required to file Form 20- F which, among other things, includes a reconciliation of stockholders’ equity and net income to Generally Accepted Accounting Principles in the United States (US GAAP). A summary of the major differences between the principles adopted by the Group and US GAAP is provided below. A complete version of this note is contained in Form 20-F, which is available at the company’s head office. Revaluation of property, plant and equipment – Some companies of the Group have in the past revalued certain items of tangible fixed assets in compliance with specific laws. US accounting principles do not allow this type of revaluation and require that such assets be reinstated to their original values and depreciation be adjusted accordingly. Goodwill – Up to December 31, 1993, goodwill (arising from an excess of the purchase price of a company over the current value of the underlying net equity) was shown as a deduction from stockholders’ equity under Italian GAAP. Also, under Italian accounting principles, goodwill is amortized over a period of not more than 20 years, taking into account its expected period of recovery. Under US GAAP, goodwill is recorded as an intangible asset, and through to December 31, 2001, goodwill had to be amortized to income over a period not in excess of 40 years. However, in June 2001, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 142, “Goodwill and Other Intangible Assets” (SFAS No. 142) which states that for goodwill acquired after June 30, 2001, no amortization is to be recorded from the acquisition date. It also requires that effective January 1, 2002, no amortization should be recorded on goodwill. Goodwill is to be tested for impairment at least annually. Treasury stock – US accounting principles state that treasury stock must be shown as a deduction from stockholders’ equity rather than be recorded in fixed assets. Moreover, US GAAP state that the effects of any writedowns and/or gains/losses on treasury stock must be directly recorded in stockholders’ equity. Restructuring costs – In the US, setting up reserves for restructuring costs is only possible when certain requisites are met as established by a specific regulation (EITF 94-3); the reserves and related provisions set aside according to Italian accounting principles but which do not meet such conditions are reversed.
Page 1 and 2: THE FIAT GROUP IN 2001 Consolidated
Page 3 and 4: Financial Highlights of the Fiat Gr
Page 5 and 6: 2 2 Consolidated Balance Sheet ❚
Page 11 and 12: 8 8 Consolidated Statement of Opera
Page 13 and 14: 10 10 the subsidiaries operating in
Page 15 and 16: 12 12 the exchange rate in effect a
Page 17 and 18: 14 14 the Government or the EU are
Page 19 and 20: 16 16 In particular, with respect t
Page 21 and 22: 18 18 Unconsolidated subsidiaries a
Page 23 and 24: 20 20 Receivables At 12/31/2001 At
Page 25 and 26: 22 22 5 Receivables An analysis of
Page 27 and 28: 24 24 Financial receivables amount
Page 29 and 30: 26 26 Retained earnings and Other r
Page 31 and 32: 28 28 Other reserves Restructuring
Page 33 and 34: 30 30 Less From 5% From 7.5% From 1
Page 35 and 36: 32 32 Commitments (in millions of e
Page 37 and 38: 34 34 15 Value of production Revenu
Page 39 and 40: 36 36 Other operating costs (in mil
Page 41 and 42: 38 38 The balance of Interest incom
Page 43: 40 40 20 Income taxes Income taxes
Page 47 and 48: 44 44 Reconciliation of Net Income
Page 49 and 50: 46 46 23 Translation of foreign fin
Page 51 and 52: 48 48 Balance Sheet ❚ ASSETS Dece
Page 53 and 54: 50 50 Balance Sheet ❚ MEMORANDUM
Page 55 and 56: 52 52 Statement of Operations ADJUS
Page 57 and 58: 54 54 Receivables and payables deno
Page 59 and 60: 56 56 Depreciation taken in 2001 wa
Page 61 and 62: 58 58 Decreases include: (in thousa
Page 63 and 64: 60 60 The latter advance was paid p
Page 65 and 66: 62 62 8 Accrued income and prepaid
Page 67 and 68: 64 64 The table below shows the cha
Page 69 and 70: 66 66 12 Payables Borrowings from b
Page 71 and 72: 68 68 14 Memorandum accounts Unsecu
Page 73 and 74: 70 70 16 Costs of production Raw ma
Page 75 and 76: 72 72 This item amounted to 1,278 t
Page 77 and 78: 74 74 ANALYSIS OF FIXED ASSETS AND
Page 79 and 80: 76 76 Art. 10, Law No. 72 of March
Page 81 and 82: 78 78 List of investments (continue
Page 83 and 84: 80 80 List of investments (continue
Page 85 and 86: 82 82 Treasury stock at December 31
Page 87 and 88: 84 84 Analysis of cash flow (in tho
Page 89 and 90: 86 86 Stock options granted to Dire
Page 91 and 92: 88 88 The Companies of the Fiat Gro
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92 92 Subsidiaries consolidated on
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108 108 Subsidiaries valued by the
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110 110 Subsidiaries valued at cost
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118 118 Associated companies valued
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120 120 Associated companies valued
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124 124 Report of the Independent A
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126 126 Report of the Board of Stat
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The Fiat Group in 2001 Balance Shee
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THE FIAT GROUP IN - Fiat SpA

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