Pirelli – Annual financial report 2008 – Consolidated Financial Statement

Consolidated financial statement

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Consolidated balance sheet (in thousands of euros)
		12/31/2008		12/31/2007
			of which related parties		of which related parties
8	Property, plant and equipment	1,598,046		1,650,485
9	Intangible assets	1,046,108		672,540
10	Investments in associates and joint ventures	515,300		534,194
11	Other financial assets	505,899		958,272
12	Deferred tax assets	72,426		58,524
14	Other receivables	723,004	565,152	672,894	520,827
15	Tax receivables	10,264		12,278
27	Derivative financial instruments	3,161		3,849
	Non-current assets	4,474,208		4,563,036
16	Inventories	921,110		776,474
13	Trade receivables	787,951	77,096	1,098,927	123,668
14	Other receivables	239,956	23,917	241,475	22,072
17	Securities held for trading	115,800		114,039
18	Cash and cash equivalents	253,905		2,057,682
15	Tax receivables	46,246		43,281
27	Derivative financial instruments	94,042		58,326
	Current assets	2,459,010		4,390,204
	Total assets	6,933,218		8,953,240

19.1	Attributable to the equity holders of the company:	2,171,804		2,980,231
	- Share capital	1,554,269		1,555,934
	- Reserves	965,037		1,259,746
	- Income (loss) for the year	(347,502)		164,551
19.2	Attributable to the minority interest:	202,558		823,840
	- Reserves	267,582		664,799
	- Income (loss) for the year	(65,024)		159,041
	Total equity	2,374,362		3,804,071

24	Borrowings from banks and other financial institutions	1,375,747		905,296
26	Other payables	48,472		23,300
22	Provisions for other liabilities and charges	141,191		146,331
12	Deferred tax liabilities	38,372		44,625
23	Employee benefit obligations	366,535		349,142
21	Tax payables	9,706		11,211
27	Derivative financial instruments	2,139		6,782
	Non-current liabilities	1,982,162		1,486,687
24	Borrowings from banks and other financial institutions	695,561	5,209	754,661	2,869
25	Trade payables	1,108,573	23,843	1,323,588	29,148
26	Other payables	482,401	7,699	1,394,673	21,522
22	Provisions for other liabilities and charges	135,650		71,340
21	Tax payables	44,036	1,051	45,707
27	Derivative financial instruments	110,473		72,513
	Current liabilities	2,576,694		3,662,482
	Total equity and liabilities	6,933,218		8,953,240
Related party transactions in respect of the individual line items in the financial statements are presented in Note 44.

Consolidated income statement (in thousands of euros)
		2008		2007
			of which related parties		of which related parties
29	Revenues from sales and services	4,660,175	138,093	6,075,597	195,930
30	Other income	175,928		274,939	72,720
	- of which, nonrecurring events	17,000		2,818
	Change in inventories of work in process, semifinished and finished products	115,372		29,921
	Raw materials and consumables used (net of change in inventories)	(1,832,699)		(3,009,099)
31	Personnel costs	(1,174,851)	(3,097)	(1,095,945)	(14,504)
	- of which, nonrecurring events	(132,352)		5,186
32	Amortization, depreciation and impairments	(218,555)		(213,546)
	- of which, nonrecurring events	(7,100)		-
33	Other expenses	(1,687,569)	(42,862)	(1,703,857)	(88,931)
	- of which, nonrecurring events	(4,764)		-
	Increase in property, plant and equipment from internal work	5,454		5,990
	Operating profit	43,255		364,000
34	Financial income	577,337	34,064	295,289	31,203
	- of which, nonrecurring events	48,691		11,234
35	Financial expenses	(603,452)	(164)	(377,176)	(4,474)
36	Impairment losses on investments	(275,262)		(34,137)
37	Dividends	31,268		34,459	6,600
38	Gains (losses) from changes in fair value of financial assets	(796)		(20,097)
39	Share of earnings (losses) of associates and joint ventures	(175,677)	(175,677)	116,543	116,543
	Income (loss) before income taxes	(403,327)		378,881
40	Income taxes	(72,620)		(123,028)
	Income (loss) from continuing operations	(475,947)		255,853
41	Income (loss) from discontinued operations	63,421	32,646	67,737	67,666
	Income (loss) for the year	(412,526)		323,590
	Attributable to:
	Equity holders of the company	(347,502)		164,549
	Minority interest	(65,024)		159,041

42	Earnings per share (Euros per thousand of shares)
	basic earnings per share
	- continuing operations	(70.65)		22.09
	- discontinued operations	5.74		8.60
		(64.91)		30.69
Related party transactions in respect of the individual line items in the financial statements are presented in Note 44.

Consolidated statement of recognized income and expenses (in thousands of euros)
		2008	2007
A	Income (loss) for the year	(412,526)	323,590
	Differences on translation transferred to the income statement, previously recognized in equity	-a	(70,455) a
	(Gains) losses on cash flow hedges transferred to the income statement, previously recognized in equity	1,848 a	(48,653) a
	(Gains) losses transferred to the income statement on available-for-sale financial assets, previously recognized in equity	1,995 a	1,019 a
	(Gains) losses transferred to the income statement, previously recognized in equity	3,843 a	(118,089) a
	Differences on translation of foreign currency financial statements	(136,630)a	7,679 a
	Changes in fair value on available-for-sale financial assets	(136,408)a	(96,535) a
	Net actuarial gains (losses) on employee benefits	(85,058)a	2,589 a
	Changes in fair value on derivatives designated as cash flow hedges	(59,863)a	(5,535) a
	Reversal of reserve for reclassification of investments from available-for-sale financial assets to associates	15,419a	-a
	Tax effect	11,281a	(2,856) a
B	Income (expenses) recognized directly in equity	(387,416)	(212,747)
A+B	Total income (expenses) recognized in equity	(799,942)	110,843
	Attributable to:
	- Equity holders of the company	(703,993)	(54,739)
	- Minority interest	(95,949)	165,582
a Referring to the sale of Olimpia S.p.A.

Consolidated statement of cash flows (in thousands of euros)
		2008		2007
			of which related parties		of which related parties
	Income (loss) from continuing operations before taxes	(403,327)		378,881
	Income (loss) from discontinued operations	63,421		67,737
	Amortization, depreciation / impairment (losses) reversals of intangible assets and property, plant and equipment	221,535		218,678
	Gain from discontinued operations	(72,543)		(41,417)
	Reversal financial income and expenses	30,170		41,618
	Reversal loss of value of partecipations	275,262		34,137
	Reversal dividends	(31,268)		(34,459)
	Reversal Gains (losses) from changes in fair value of financial assets	679		20,179
	Share of earnings (losses) of associates and joint ventures (net of dividends received)	204,745		45,845
	Income taxes	(72,620)		(123,028)
	Change in inventories	(144,636)		25,302
	Change in trade receivables/payables	95,961		(85,366)
	Change in other receivables/payables	(79,065)		105,217
	Change in employee benefit obligations and other provisions	(28,650)		(108,987)
	Other changes	16,016		10,045
A	Net cash flows provided by (used for) operating activities	75,680		554,382
	Investments in property, plant and equipment	(310,724)		(286,709)
	Disposals of property, plant and equipment	33,800		14,911
	Investments in intangible assets	(25,783)		(17,037)
	Disposals of intangible assets	94,533		4,764
	Acquisitions of investments in associates and joint ventures	(171,220)		(262,727)
	Disposals of investments in associates and joint ventures	30,841		3,354,789
	Acquisition of Speed S.p.A.	(434,361)		-
	Net cash flow from discontinued operations	69,600		38,075
	Acquisitions of other financial assets	(96,052)		(155,906)
	Disposal of other financial assets	32,285		16,849
	Dividends received	31,268		34,459
	Net investment in business combinations	(1,338)		(385,933)
B	Net cash flows provided by (used for) investing activities	(747,151)		2,355,535
	Change in share capital and share premium reserve	13,400		7,499
	Other changes in equity	-		(54,289)
	Change in financial payables	(408,747)	(218,922)	(1,287,705)
	Change in financial receivables	(65,625)		(51,509)
	Change in financial payables/receivables for acquisitions	(401,100)		395,302
	Financial income/expenses (net of gains on avail.-for-sale fin. assets )	(53,606)		(96,911)
	Dividends paid	(167,889)	(22,746)	(74,400)
C	Net cash flows provided by (used for) financing activities	(1,083,567)		(1,162,013)

D	Total cash flows provided by (used for) during the year (A+B+C)	(1,755,038)		1,747,904

E	Cash and cash equivalents, at beginning of the year	2,010,475		259,389
F	Exchange differences on translation of cash and cash equivalents	(28,360)		3,182
G	Cash and cash equivalents, at end of the year (D+E+F)	227,077		2,010,475
(°)	Of which:
	- cash	253,205		2,057,682
	- bank overdrafts	(26,828)		(47,207)
The consolidated statement of cash flows shows transactions with related parties only in the event they cannot be directly inferred from the other statements. Related party transactions in respect of the individual line items in the financial statements are presented in Note 44