Nov 5, 2015 - Modified EBITDA (defined below) for the three and nine months ended September 30, 2015, and ... email: gua
FCA US LLC Third Quarter 2015 Results (U.S. GAAP)
November 5, 2015
Forward-looking statements
T his
doc um ent
look i ng
c o nta ins
s t atem ents
m anagem ent's
f or ward -
that
c ur r e nt
ref l ec t
v i e ws
wi t h
res u lt in g even ts c hanges
f rom af f ec ting in
r es pec t to f utur e e v ents . T he wor ds
gove rnm ent
“ ant ic ip ate, ”
dependenc e
“ as s u m e,”
“be l i e ve, ”
d is as ters o ur
la ws ,
s upp l y
othe r c ha in;
regu lat i ons
po l ic ie s ; on
and
ou r
and par ent,
and ou r F ia t
“ es t im ate,” “ ex pec t ,” “ intend ,” “m a y,”
Chr ys l er Autom ob i les N. V. ( F CA ) . If
“ p lan, ” “ p r oj ec t,” “ s ho uld ” and s im i lar
an y
ex pr es s ions
ident if y
unc erta i nt ies
s tatem ents .
Suc h
s ubj ec t
to
inc lu d ing,
f or war d - look ing s tatem ents
r is k s
an d
bu t
no t
of
thes e
or
o ther
oc c u r,
r is k s
or
if
and the
a re
as s um ptions u nder l yi ng an y of thes e
unc e rta in t ies ,
s tatem ents pro ve inc or rec t, th en ac tua l
l im it ed
to :
res u lts
may
be
m at er ia l l y
d if f erent
s uc c es s f ul veh ic l e la unc hes ; in dus tr y
f rom thos e ex pres s e d or im pl ied b y
SA AR
c ond it i ons ,
s uc h s tatem ents . W e do not i ntend o r
es pec ia l l y in Nor th A m eric a, inc l ud in g
as s um e an y ob l i gat io n to updat e an y
unem plo ym en t
f or ward - look i ng
le ve ls ;
ava i l ab i l it y
ec on o m ic le ve ls
af fordab l y
the
s ta tem ent,
wh ic h
pr ic e d
s peak s onl y as of the date on wh ic h it
an d
is m ade. Fur ther d et ai ls of p otent i a l
c ons um er s ; int r oduc t i on of c om petin g
r is k s that m a y af f ec t F CA US LL C
pr oduc ts
pres s u res
(F CA U S) are des c r i bed in FC A US
wh ic h m a y l im it ou r abi l i t y to r educ e
LLC per io d ic r epor ts f i led wi th the U. S .
s ales
Sec urities and Ex c hange Com m ission .
f inanc ing
of
an d
f or and
our
dea lers
c om pe ti t i ve
inc e nt i ves ;
s u ppl y
d is rupt io ns
FCA US LLC – Q3 2015 preliminary results prepared in accordance with U.S. GAAP (refer to Appendix for definitions of non-U.S. GAAP financial measures)
November 5, 2015
1
Q3 2015 highlights Vehicle shipments (000’s)
Q3
YTD
2015
750
2014
700
2,248 2,095
Vehicle shipments increased 7% primarily due to the Jeep brand, including the all-new Renegade
Adjusted net income ($M)
Q3
YTD
2015
743
2014
1,781 1,716
611
Adjusted net income increase reflects higher MOP partially offset by increased taxes due to tax status change in Q1 2015 Q3 2015 Net income was $70M, which includes $(1,022)M of net pretax charges, $(673)M after-tax, primarily related to:
YTD
Q3
Net revenues ($B)
2015
21.8
2014
20.7
65.3 60.1
$(848)M recall campaign reserve adjustment $(159)M negative impact related to Tianjin (China) port explosion (expected to be recovered through insurance)
Net revenues increased 5% primarily from increased shipments Net industrial cash ($B)
Modified operating profit ($M)
Q3
YTD
2015 2014
1,271 946
3,305
3.6
Sep 30 '15 Jun 30 '15
2.1
Net industrial cash increase of $1.5B primarily reflecting positive Free cash flow
2,517
Modified operating profit (MOP) increased 34% Margin of 5.8% in Q3 2015 vs. 4.6% in Q3 2014 The FCA US MOP margin of 5.8% differs from the FCA N.V. reported NAFTA Adjusted EBIT margin of 6.7% under IFRS (~6.5% under US GAAP) primarily due to adjustments from IFRS to US GAAP1 along with inclusion of international operations and other adjustments.
Total available liquidity3 ($B)
13.0
Sep 30 '15
11.7
Jun 30 '15 Cash & Cash Equivalents
1.3
1.3
14.3
13.0
Undrawn committed credit lines
Total available liquidity increased $1.3B from June 30, 2015 reflecting the increase in Cash
1 Differences primarily relate to the capitalization of certain R&D costs under IFRS versus being expensed under US GAAP – refer to FCA N.V.’s Q3 2015 earnings release under the Investors tab of the FCA website for the definition of Adjusted EBIT (under IFRS) 2 Excludes undisbursed $0.4B on the Mexico Bank Loan, which can be drawn subject to meeting certain preconditions Note: Graphs not to scale FCA US LLC – Q3 2015 preliminary results prepared in accordance with U.S. GAAP (refer to Appendix for definitions of non-U.S. GAAP financial measures)
November 5, 2015
2
Modified operating profit walk $ Millions
325 140 385
42
1,271 (35)
(207)
• Volume improvement mainly driven by Jeep brand products, including the allnew Renegade • Net price increase due to positive pricing actions and dealer discount reduction
946
5.8% of net revenues
4.6% of net revenues
• Industrial costs increase reflects higher recall accrual rates and higher product costs for vehicle content enhancements, partially offset by purchasing efficiencies • Other reflects FX translation
Q3 2014
Volume & mix
Net price
Industrial costs
SG&A
FCA US LLC – Q3 2015 preliminary results prepared in accordance with U.S. GAAP (refer to Appendix for definitions of non-U.S. GAAP financial measures)
Other
Q3 2015
November 5, 2015
3
Cash walk $ Billions
Change in Cash 1.3 Free Cash Flow 1.5
2.0
0.3
13.0
(0.5)
(0.1)
(0.1)
Pension / OPEB
Taxes & interest
11.7
Jun 30, 2015
Modified EBITDA
Working capital Capital & other expenditures
Special Distribution to Parent
Net principal pmts/FX/other
Free Cash Flow 3.4
Dec 31, 2014
14.5
(0.3)
5.4
1.1
(2.1)
Sep 30, 2015 Sep 30, 2015
(0.2)
(0.8)
(1.3)
(3.7)
13.0
Note: Numbers may not add due to rounding
FCA US LLC – Q3 2015 preliminary results prepared in accordance with U.S. GAAP (refer to Appendix for definitions of non-U.S. GAAP financial measures)
November 5, 2015
4
Reconciliation of Net industrial cash $ Billions
Face value as of Sep 30, 2015
Cash
Carrying value as of Sep 30, 2015
Carrying value as of Jun 30, 2015
Sep 30, 2015 B/(W) Jun 30, 2015
Carrying value as of Dec 31, 2014
Sep 30, 2015 B/(W) Dec 31, 2014
13.0
11.7
1.3
14.5
(1.6)
3.1
Term loan B – Due 2017
3.1
3.1
-
3.1
-
1.7
Term loan B – Due 2018
1.7
1.7
-
1.7
-
-
Secured senior notes – due 2019
-
-
-
2.9
2.9
3.1
Secured senior notes – due 2021
3.2
3.2
-
3.2
-
0.4
Canadian health care trust notes
0.4
0.6
0.2
0.8
0.4
0.5
Mexico bank loan – due 2022
0.5
0.5
-
-
(0.5)
-
-
-
0.5
0.5
0.5
0.5
-
0.6
0.1
9.3
9.6
0.3
12.8
3.4
3.6
2.1
1.5
1.8
1.8
0.5
9.3
Mexican development banks credit facilities Other financial liabilities
Total financial liabilities Net industrial cash
Note: Numbers may not add due to rounding
FCA US LLC – Q3 2015 preliminary results prepared in accordance with U.S. GAAP (refer to Appendix for definitions of non-U.S. GAAP financial measures)
November 5, 2015
5
Worldwide vehicle sales Q3 2015 versus Q3 2014 Vehicles (000s)
By market 2015 B/(W) 2014
+4%
711 79 18
78
By brand 2015 B/(W) 2014
737 63 22
79
(16) Int’l +4 Mexico +1 Canada
711 14
Q3 2014
573
-
14
153
161
+8
93
87
(6)
164
(19)
268
311
+43
Q3 2014
Q3 2015
183 536
737
+37 U.S.
Q3 2015
FCA US LLC – Q3 2015 preliminary results prepared in accordance with U.S. GAAP (refer to Appendix for definitions of non-U.S. GAAP financial measures)
November 5, 2015
6
U.S. & Canada vehicle sales Q3 2015 versus Q3 2014
FCA US performance
Industry volume (000’s)
4,350
Sales
4,620
+7%
Q3 2014
Q3 2015
526
534
+1%
Q3 2014
Market share
12.4% (up 10 bps)
14.9% (flat)
Key messages (period-over-period) • Retail sales increased 6% • Retail of retail market share* at 11.9%, down 10 bps from the prior year • Fleet mix at 18%, flat with the prior year • Key performers included: • • • • •
Jeep Renegade +22K vehicles (new) Chrysler 200 sedan +11k vehicles (+38%) Jeep Compass +5k vehicles (+36%) Dodge Journey +5k vehicles (+19%) Jeep Cherokee +8k vehicles (+17%)
• Market leader for 9 months YTD 2015 • Retail sales increased 3% • Key performers included: • Jeep Cherokee +4k vehicles (+59%) • Ram 1500 pickup +3k vehicles (+19%)
Q3 2015
* Company calculation; retail sales versus industry retail sales Note: Graphs not to scale
FCA US LLC – Q3 2015 preliminary results prepared in accordance with U.S. GAAP (refer to Appendix for definitions of non-U.S. GAAP financial measures)
November 5, 2015
7
U.S. fleet mix, dealer inventory & days supply
U.S. fleet mix
U.S dealer inventory & days supply
Percentage of total U.S. sales
Vehicles (000s)
Dealer inventory 31% 27%
509 24% 22%
591
579 578
28%
22% 21% 18%
538 510 500
24% 23%
23%
22%
526
427 419 408
20% 18%
18%
369 347 358
67 59
79
73 65
387
66
68
71
72
71
72
73
78
76
62
Days supply
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2012
2013
2014
2015
FCA US LLC – Q3 2015 preliminary results prepared in accordance with U.S. GAAP (refer to Appendix for definitions of non-U.S. GAAP financial measures)
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2012
2013
2014
November 5, 2015
2015
8
Appendix
Worldwide vehicle shipments Q3 2015 versus Q3 2014 Vehicles (000s)
By market 2015 B/(W) 2014
+7%
700 11
78 17
By brand
750 5
60 23
76
(6) (18) +6 +6
2015 B/(W) 2014
Contract Mfg Int’l Mexico Canada
700 11 14
750 5 18
(6) +4
143
+9
87
(22)
187
+16
310
+49
Contract Mfg
134
70 109 171 524
586
+62 U.S.
261
Q3 2014
Q3 2015
Q3 2014
Q3 2015
Note: Military and Puerto Rico / Caribbean shipments classified as U.S. in Q3 2015 (3k) versus Int’l in Q3 2014 (3k)
FCA US LLC – Q3 2015 preliminary results prepared in accordance with U.S. GAAP (refer to Appendix for definitions of non-U.S. GAAP financial measures)
November 5, 2015
10
Guaranteed depreciation program (GDP) adjusted shipments
Vehicles (000s)
Q3 2015
Q3 2014
Q3 2015 B/(W) Q3 2014
750
700
50
2,248
2,095
153
Subtract: Shipments during period
(5)
(15)
10
(64)
(89)
25
Add: Returns/auctions during period
17
13
4
73
47
26
12
(2)
14
9
(42)
51
762
698
64
2,257
2,053
204
Worldwide shipments
9 months YTD 2015
9 months YTD 2014
YTD 2015 B/(W) YTD 2014
Guaranteed depreciation program (GDP)
Net shipments
GDP adjusted worldwide shipments
FCA US LLC – Q3 2015 preliminary results prepared in accordance with U.S. GAAP (refer to Appendix for definitions of non-U.S. GAAP financial measures)
November 5, 2015
11
Reconciliation of worldwide vehicle sales to shipments
Vehicles (000s) Q3 2015
Q3 2014
9 months YTD 2015
9 months YTD 2014
737
711
2,160
2,055
Increase (decrease) in U.S. dealer inventory
13
(10)
53
(9)
Decrease in Canada dealer inventory
(3)
(8)
(4)
(2)
3
7
39
51
750
700
2,248
2,095
Worldwide sales
Contract manufacturing & other
Worldwide shipments
FCA US LLC – Q3 2015 preliminary results prepared in accordance with U.S. GAAP (refer to Appendix for definitions of non-U.S. GAAP financial measures)
November 5, 2015
12
Reconciliation of Adjusted net income, Modified operating profit and Modified EBITDA $ Millions Q3 2015
Q3 2014
Q3 2015 B/(W) Q3 2014
9 months YTD 2015
9 months YTD 2014
YTD 2015 B/(W) YTD 2014
70
611
(541)
3,249
540
2,709
-
-
-
(2,279)
-
(2,279)
Change in estimate for future recall campaign costs
848
-
848
848
-
848
Tianjin (China) port explosion
159
-
159
159
-
159
-
-
-
90
-
90
(18)
-
(18)
63
504
(441)
-
-
-
-
672
(672)
33
-
33
33
-
33
(349)
-
(349)
(382)
-
(382)
743
611
132
1,781
1,716
65
Income tax expense
455
162
293
1,193
213
980
Net interest expense
122
192
(70)
447
597
(150)
Net pension, OPEB and other employee benefit costs (gains) other than service costs 1
(67)
(20)
(47)
(145)
(18)
(127)
18
1
17
29
9
20
1,271
946
325
3,305
2,517
788
708
720
(12)
2,130
2,128
2
1,979
1,666
313
5,435
4,645
790
Net income Tax status change
NHTSA consent order (Gain) loss on extinguishment of debt, net Charge for MOU with the UAW Other Tax effect of adjustments
Adjusted net income
Restructuring & other (income) expense, net
Modified operating profit Depreciation and amortization expense 2
Modified EBITDA
1 Includes interest cost, expected return on plan assets and amortization of unrecognized losses 2 Excludes depreciation and amortization expense for vehicles held for lease FCA US LLC – Q3 2015 preliminary results prepared in accordance with U.S. GAAP (refer to Appendix for definitions of non-U.S. GAAP financial measures)
November 5, 2015
13
Reconciliation of Free cash flow
Q3 2015
Q3 2014
Q3 2015 B/(W) Q3 2014
Net cash provided by operating activities
2,069
1,292
777
5,592
4,842
750
Net cash used in investing activities
(534)
(880)
346
(2,160)
(2,542)
382
1,535
412
1,123
3,432
2,300
1,132
$ Millions
Free cash flow
FCA US LLC – Q3 2015 preliminary results prepared in accordance with U.S. GAAP (refer to Appendix for definitions of non-U.S. GAAP financial measures)
9 months YTD 2015
9 months YTD 2014
YTD 2015 B/(W) YTD 2014
November 5, 2015
14
Pension disclosure
$ Millions Q3 2015
Q3 2014
9 months YTD 2015
9 months YTD 2014
53
57
158
168
(119)
(76)
(335)
(201)
Recognition of net actuarial losses
18
15
80
58
Amortization of prior service cost
4
2
14
10
(44)
(2)
(83)
35
30
236
63
269
2014
2013
Benefit obligations at December 31: Discount rate – ongoing benefits
4.03%
4.69%
Periodic costs: Discount rate – ongoing benefits Expected return on plan assets
4.69% 6.80%
3.98% 7.41%
NET PERIODIC PENSION (INCOME) COST Service cost Interest cost net of expected return
Total net periodic pension (income) cost PENSION FUND CONTRIBUTIONS
WEIGHTED AVERAGE ASSUMPTIONS
FCA US LLC – Q3 2015 preliminary results prepared in accordance with U.S. GAAP (refer to Appendix for definitions of non-U.S. GAAP financial measures)
November 5, 2015
15
OPEB disclosure
$ Millions Q3 2015
Q3 2014
9 months YTD 2015
9 months YTD 2014
Service cost
6
6
19
21
Interest cost
27
32
82
100
Recognition of net actuarial losses
5
6
20
17
Amortization of prior service credit
-
-
1
-
Total net periodic benefit cost
38
44
122
138
42
42
128
131
2014
2013
4.11%
4.87%
4.87%
4.07%
NET PERIODIC BENEFIT COST
BENEFITS PAID
WEIGHTED AVERAGE ASSUMPTIONS Benefit obligations at December 31: Discount rate – ongoing benefits Periodic Costs: Discount rate – ongoing benefits
FCA US LLC – Q3 2015 preliminary results prepared in accordance with U.S. GAAP (refer to Appendix for definitions of non-U.S. GAAP financial measures)
November 5, 2015
16
Non-U.S. GAAP financial measures The following non-U.S. GAAP financial measures definitions apply when the presentation is referring to Adjusted net income, Modified operating profit, Modified EBITDA, Cash, Free cash flow and Net industrial cash
(a) Adjusted net income is defined as net income, including income attributable to non-controlling interests, excluding the impact of items that are considered infrequent. The reconciliation of Adjusted net income, Modified operating profit (defined below) and Modified EBITDA (defined below) for the three and nine months ended September 30, 2015, and 2014, is detailed on slide 13 (b) Modified operating profit is computed starting with net income, including income attributable to non-controlling interests, and then adjusting the amount to (i) add back income tax expense and exclude income tax benefits, (ii) add back net interest expense, (iii) add back (exclude) all pension, other postretirement benefit (OPEB) and other employee benefit costs (gains) other than service costs, (iv) add back restructuring expense and exclude restructuring income, (v) add back other financial expense, (vi) add back losses and exclude gains due to cumulative change in accounting principles, (vii) exclude non-controlling interests and (viii) add back certain other costs, charges and expenses, which include the impact of infrequent items factored into the calculation of Adjusted net income. The reconciliation of Adjusted net income, Modified operating profit and Modified EBITDA (defined below) for the three and nine months ended September 30, 2015, and 2014,is detailed on slide 13 (c) Modified EBITDA is computed starting with net income adjusted to Modified operating profit as described above, and then adding back depreciation and amortization expense (excluding depreciation and amortization expense for vehicles held for lease). The reconciliation of Adjusted net income (loss), Modified operating profit and Modified EBITDA for the three and nine months ended September 30, 2015, and 2014, is detailed on slide 13 (d) Cash is defined as cash and cash equivalents (e) Free cash flow is defined as cash flows from operating and investing activities, excluding any debt-related investing activities. A reconciliation of Free cash flow for the three and nine months ended September 30, 2015 and 2014, is detailed on slide 14 (f) Net industrial cash is defined as Cash less total financial liabilities. A reconciliation of Net industrial cash at September 30, 2015, June 30, 2015, and December 31, 2014, is detailed on slide 5
FCA US LLC – Q3 2015 preliminary results prepared in accordance with U.S. GAAP (refer to Appendix for definitions of non-U.S. GAAP financial measures)
November 5, 2015
17
Contacts
Investor Relations Joe Veltri
phone: email:
248-576-9257
[email protected]
Erin Banyas
phone: email:
248-512-3224
[email protected]
Tim Krause
phone: email:
248-512-2923
[email protected]
Alois Monger
phone: email:
248-512-1549
[email protected]
phone: email:
248-512-2226
[email protected]
Communications Gualberto Ranieri
Websites www.fcagroup.com www.fcausllc.com
FCA US LLC – Q3 2015 preliminary results prepared in accordance with U.S. GAAP (refer to Appendix for definitions of non-U.S. GAAP financial measures)
November 5, 2015
18