Chrysler Group Reports Second-Quarter 2014 Net Income of $619 Million

AUBURN HILLS, Mich., Aug. 6, 2014 /PRNewswire/ --

• Chrysler Group reported net income of $619 million in the second quarter of 2014, up 22 percent from a year ago
• Net revenue for the second quarter was $20.5 billion, up 14 percent from a year ago
• Modified Operating Profit^(b) grew 22 percent to $985 million for the quarter, from $808 million a year earlier
• Free Cash Flow^(e) for the second quarter was $1 billion, compared with $91 million a year ago
• Cash^(d) as of June 30, 2014, was $13.3 billion
• Net Industrial Cash^(f) at the end of the quarter was $331 million, an improvement from Net Industrial Debt^(f) of $551 million at March 31, 2014, and Net Industrial Debt of $656 million at June 30, 2013
• Worldwide vehicle shipments were 727,000 for the quarter, up 10 percent from 660,000 a year ago
• Worldwide vehicle sales for the quarter were 723,000, up 12 percent from a year ago
• U.S. market share was 12.1 percent for the quarter, up from 11.4 percent a year ago; market share in Canada was 15.3 percent for the quarter, up from 15.1 percent a year ago
• Full-year 2014 guidance is confirmed

Chrysler Group LLC today reported preliminary financial results for the second quarter and first half of 2014, including net income of $619 million for the quarter, up 22 percent from $507 million in the year-ago quarter.

Adjusted Net Income^(a) for the first half of 2014 was $1.1 billion, up from $696 million in the first half of 2013. The Adjusted Net Income of $1.1 billion excludes the unfavorable effects of infrequent items recorded in the first quarter of 2014, related to the Company's prepayment of a note held by the UAW Retiree Medical Benefits Trust (VEBA Trust Note) and a charge for commitments associated with the January memorandum of understanding signed with the UAW. Including the infrequent items, net loss for the first half of the year was $71 million.

Net revenue for the second quarter was $20.5 billion, up 14 percent from $18 billion a year ago. Net revenue for the first half of the year was $39.4 billion, compared with $33.4 billion a year ago. Increased shipments of vehicles such as the Ram pickup and the all-new Jeep Cherokee drove the year-over-year improvements.

Modified Operating Profit was $985 million in the second quarter, or 4.8 percent of net revenue, up from $808 million reported in the prior-year period. The 22 percent increase was mainly the result of higher shipment volumes, improved mix, and pricing to recover vehicle content enhancements, partially offset by increased incentive spending on legacy products, industrial and advertising costs and adverse foreign exchange effects. Modified Operating Profit for the first half of 2014 was $1.6 billion, or 4 percent of net revenue, up from $1.2 billion in the first half of 2013.

Modified EBITDA^(c) was $1.7 billion for the quarter, or 8.3 percent of net revenue, up 14 percent from $1.5 billion a year earlier. Modified EBITDA for the first half of the year was $3 billion, up from $2.5 billion in the prior year.

Cash as of June 30, 2014, was $13.3 billion, up from $12.4 billion as of March 31, 2014, and $11.9 billion on June 30, 2013. Total available liquidity as of June 30, 2014, was $14.6 billion, including $1.3 billion available under an undrawn committed revolving credit facility. Free Cash Flow for the second quarter and first half of 2014 was $1 billion and $1.9 billion, respectively.

Financial liabilities at June 30, 2014, totaled $13 billion compared with $12.9 billion as of March 31, 2014, and $12.5 billion as of June 30, 2013. The increase from a year ago was primarily due to the refinancing of the VEBA Trust Note in the first quarter of 2014. Net Industrial Cash was $331 million at the end of the second quarter, an improvement from Net Industrial Debt of $551 million at March 31, 2014, and Net Industrial Debt of $656 million at June 30, 2013. Interest expense for the quarter was $209 million, compared with $265 million in the prior-year period. Interest expense for the first half of the year was $434 million, compared with $528 million in the first half of 2013.

Worldwide vehicle shipments were 727,000 for the quarter, including 16,000 contract manufactured vehicles, an increase of 10 percent from a year earlier, when the Company shipped 660,000 vehicles, including 18,000 contract manufactured vehicles. For the first half of 2014, worldwide shipments were 1.4 million, up 13 percent versus the first half of 2013.

Worldwide vehicle sales were 723,000 for the second quarter, up 12 percent from 643,000 sold in the second quarter of 2013, driven largely by a 16 percent increase in the Company's U.S. retail sales. Worldwide vehicle sales were 1.3 million for the first half of the year, up from 1.2 million in the prior year, while Chrysler Group was the sales market leader in Canada for the first half of the year. U.S. fleet sales as a percentage of total U.S. sales were 21 percent in the second quarter this year, down from 22 percent a year ago.

Chrysler Group's U.S. market share was 12.1 percent for the quarter, up from 11.4 percent a year ago; market share in Canada was 15.3 percent, up from 15.1 percent in the year-ago period.

U.S. dealers' days' supply of inventory at the end of June 2014 was 72 days, compared with 71 days at the end of March 2014, and 68 days at the end of June 2013.

Vehicle sales outside North America increased 19 percent from the second quarter of 2013, to 89,000, including 13,000 vehicles manufactured by Chrysler Group and sold by Fiat S.p.A.

Full-Year 2014 Guidance

The targets for the full year 2014 are confirmed as follows:

• Worldwide vehicle shipments of ~2.9 million (up from ~2.8 million)
• Net revenue of >$80 billion
• Modified Operating Profit of $3.7-$4.0 billion
• Adjusted Net Income of $2.3-$2.5 billion
• Free Cash Flow of $0.5-$1.0 billion

Product News

• The company launched the all-new Chrysler 200 sedan during the quarter at the Sterling Heights (Mich.) Assembly Plant; the Chrysler 200 is the third Chrysler Group vehicle derived from the "Compact U.S. Wide" architecture co-developed with Fiat
• J.D. Power named the 2014 Chrysler Town & Country its "Highest-Ranked Minivan" and named the 2014 Dodge Challenger "Highest-Ranked Midsize Sport Car" in its 2014 U.S. Initial Quality Study
• Edmunds.com awarded the Jeep Wrangler, Dodge Challenger and Ram ProMaster its "2014 Best Retained Value Award" in the Compact SUV, Midsize/Large Coupe and Commercial Van categories, respectively
• The Northwest Automotive Press Association designated the 2014 Jeep Grand Cherokee "Winner of the Premium Standard Utility" class, and named the 2014 Jeep Cherokee "2014 Northwest Outdoor Activity Vehicle of the Year" and "Winner of the Compact Utility" class

Additional Information

Chrysler Group's preliminary second-quarter 2014 financial results will be presented during an analyst and investor conference call at 11:00 a.m. Eastern Daylight Time on Aug. 6, 2014, on a stand-alone basis prepared in accordance with U.S. GAAP, and will be available at www.chryslergroupllc.com. A recording of the call will be posted on the same Chrysler Group website approximately 90 minutes after the conclusion of the call. Chrysler Group's parent, Fiat S.p.A., presented its preliminary second-quarter 2014 financial results on July 30, 2014. Fiat S.p.A. included certain preliminary Chrysler Group financial results prepared in accordance with IFRS in its earnings release on a consolidated basis, which is available on the Investor Relations tab of the Fiat S.p.A. website, http://www.fiatspa.com/en-US/investor_relations/investors/Pages/investors.aspx. 

Chrysler Group intends to publish financial statements for the quarter ended June 30, 2014, prepared in accordance with U.S. GAAP, in August 2014, when it files its Quarterly Report on Form 10-Q with the U.S. Securities and Exchange Commission (SEC).

Non-U.S. GAAP Financial Measures and Other Items

Forward-Looking Statements

This document contains forward-looking statements that reflect management's current views with respect to future events. The words "anticipate," "assume," "believe," "estimate," "expect," "intend," "may," "plan," "project," "should" and similar expressions identify forward-looking statements. Such statements are subject to risks and uncertainties, including, but not limited to: successful vehicle launches; industry SAAR levels; economic conditions, especially in North America, including unemployment levels and the availability of affordably priced financing for our dealers and consumers; introduction of competing products and competitive pressures which may limit our ability to reduce sales incentives; supply disruptions resulting from natural disasters and other events impacting our supply chain; and our dependence on our parent, Fiat S.p.A. In addition, any projections or targets on future performance are based on the assumption that the Company maintains its status as a partnership for U.S. federal and state income tax purposes and do not consider the impact of a potential conversion of the Company into a corporate tax paying entity. If any of these or other risks and uncertainties occur, or if the assumptions underlying any of these statements prove incorrect, then actual results may be materially different from those expressed or implied by such statements. We do not intend or assume any obligation to update any forward-looking statement, which speaks only as of the date on which it is made. Further details of potential risks that may affect Chrysler Group are described in Chrysler Group LLC's periodic reports filed with the SEC.

About Chrysler Group LLC 

Chrysler Group LLC, formed in 2009 to establish a global strategic alliance with Fiat S.p.A., designs, engineers, manufactures, distributes and sells vehicles under the Chrysler, Jeep, Dodge, Ram and FIAT brands, and the SRT performance vehicle designation. The Company also distributes the Alfa Romeo 4C and Mopar products. With the resources, technology and worldwide distribution network required to compete on a global scale, the alliance builds on Chrysler Group's culture of innovation, first established by Walter P. Chrysler in 1925, and Fiat's complementary technology that dates back to its founding in 1899. Chrysler Group became a wholly owned subsidiary of Fiat on Jan. 21, 2014.

Headquartered in Auburn Hills, Mich., Chrysler Group's product lineup features some of the world's most recognizable vehicles, including the Chrysler 300 and Town & Country, Jeep Wrangler and Grand Cherokee, Dodge Challenger and Viper SRT, Ram 1500 and Fiat 500. Fiat contributes world-class technology, platforms and powertrains for small- and medium-size cars, allowing Chrysler Group to offer an expanded product line including environmentally friendly vehicles.

Attachment

These financial results are presented on a preliminary basis and will be superseded by the financial results included in Chrysler Group's Quarterly Report on Form 10-Q for the quarter ended June 30, 2014, to be filed with the SEC.

Table 1: Reconciliation of Net Income (Loss) to Adjusted Net Income, Modified Operating Profit and Modified EBITDA

Table 2: Reconciliation of Net Cash Provided By (Used In) Operating and Investing Activities to Free Cash Flow

Table 3: Reconciliation of Cash to Net Industrial Cash (Debt)

SOURCE Chrysler Group LLC

WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM?

440k+
Newsrooms &
Influencers

9k+
Digital Media
Outlets

270k+
Journalists
Opted In

GET STARTED