FCA US LLCFCA US LLC – Q3 2015 preliminary results prepared in accordance with U.S. GAAP (refer to...

FCA US LLC Third Quarter 2015 Results (U.S. GAAP)

November 5, 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

This document conta ins forward-

look ing statements that ref lect

management 's current v iews wi th

respect to future events . The words

“ant ic ipate, ” “assume,” “bel ieve,”

“est imate,” “expect ,” “ intend,” “may,”

“p lan,” “project,” “should” and s im i lar

express ions ident i f y forward- look ing

statements . Such statements are

subject to r isks and uncerta int ies ,

inc luding, but not l im ited to:

successful vehic le launches; industr y

SAAR levels ; economic condit ions,

espec ia l ly in Nor th America, inc luding

unemployment levels and the

avai labi l i t y of af fordably pr iced

f inanc ing for our dealers and

consumers; int roduct ion of competing

products and competi t ive pressures

which may l im it our abi l i t y to reduce

sales incent ives; supply d isrupt ions

result ing f rom disasters and other

events af fect ing our supply chain;

changes in laws, regulat ions and

government pol ic ies; and our

dependence on our parent, F iat

Chrys ler Automobi les N.V. (FCA). I f

any of these or other r isks and

uncerta int ies occur, or i f the

assumptions under lying any of these

statements prove incorrect, then actual

results may be mater ia l ly d if ferent

f rom those expressed or impl ied by

such statements . W e do not intend or

assume any obl igat ion to update any

forward- look ing statement, which

speaks only as of the date on which i t

is made. Fur ther detai ls of potent ia l

r isks that may af fect FCA US LLC

(FCA US) are descr ibed in FCA US

LLC per iodic repor ts f i led wi th the U.S.

Securit ies and Exchange Commission.

Forward-looking statements

1



Net revenues ($B) 20.7

21.8

2014

2015

Q3

Modified

operating

profit ($M)

946

1,271

2014

2015

Q3

Total available

liquidity3

($B)

Net industrial

cash ($B)

Vehicle

shipments (000’s) 700

750

2014

2015

Q3

2.1

3.6

Jun 30 '15

Sep 30 '15

Q3 2015 highlights

Adjusted net

income ($M)

11.7

13.0

1.3

1.3

Jun 30 '15

Sep 30 '15

Cash & Cash Equivalents

13.0

Undrawn committed credit lines

2,095

2,248

YTD

60.1

65.3

YTD

2,517

3,305

YTD

1,716

1,781

YTD

611

743

2014

2015

14.3

Vehicle shipments increased 7% primarily due to the Jeep brand, including the all-new Renegade

Net revenues increased 5% primarily from increased shipments

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.

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 pre-tax charges, $(673)M after-tax, primarily related to:

$(848)M recall campaign reserve adjustment

$(159)M negative impact related to Tianjin (China) port explosion (expected to be recovered through insurance)

Total available liquidity increased $1.3B from June 30, 2015 reflecting the increase in Cash

Net industrial cash increase of $1.5B primarily reflecting positive Free cash flow

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

Q3

2



Modified operating profit walk

Q3 2014 Volume& mix

Net price Industrialcosts

SG&A Other Q3 2015

$ Millions

4.6% of net

revenues

5.8% of net

revenues

• Volume improvement

mainly driven by Jeep brand

products, including the all-

new Renegade

• Net price increase due to

positive pricing actions and

dealer discount reduction

• 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

946

42

(35)

1,271

(207)

385

140

3

325



Cash walk

Jun 30,2015

ModifiedEBITDA

Working capital& other

Capitalexpenditures

Pension /OPEB

Taxes &interest

SpecialDistribution

to Parent

Net principalpmts/FX/other

Sep 30,2015

Change in Cash 1.3

Free Cash Flow 1.5

Note: Numbers may not add due to rounding

11.7 (0.1)

13.0 (0.1)

0.3

(0.5)

2.0

$ Billions

4

(0.3)

(0.2) 1.1 13.0 (0.8) 14.5 5.4 (2.1) (1.3)

Sep 30, 2015

Dec 31, 2014

Free Cash Flow 3.4

(3.7)



Reconciliation of Net industrial cash

Face

value as of

Sep 30, 2015

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

Cash 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)

- Mexican development banks credit facilities

- - - 0.5 0.5

0.5 Other financial liabilities 0.5 0.5 - 0.6 0.1

9.3 Total financial liabilities 9.3 9.6 0.3 12.8 3.4

Net industrial cash 3.6 2.1 1.5 1.8 1.8

Note: Numbers may not add due to rounding

5

$ Billions



Worldwide vehicle sales Q3 2015 versus Q3 2014

268 311

183 164

93 87

153 161

14 14

Q3 2014 Q3 2015

536 573

78 79 18 22 79 63

Q3 2014 Q3 2015

U.S.

Canada

Mexico

Int’l

By market By brand

711 737

+37

+1

+4

(16)

2015 B/(W) 2014

+43

(6)

+8

-

(19)

+4%

711 737

6

Vehicles (000s)

2015 B/(W) 2014



U.S. & Canada vehicle sales Q3 2015 versus Q3 2014

Industry volume (000’s)

FCA US performance

Sales Market share Key messages (period-over-period)

+7% 12.4%

(up 10 bps)

+1%

14.9% (flat)

4,350 4,620

Q3 2014 Q3 2015

526 534

Q3 2014 Q3 2015

* Company calculation; retail sales versus industry retail sales

Note: Graphs not to scale

• 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%)

7



U.S. fleet mix, dealer inventory & days supply

347 358

369

427 419 408

387

509 526

510 500

538

579 578 591

59

67 65

73 66 68

62

79

71 72 71 72 73 78 76

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

31%

27%

24% 22%

28%

22%

18%

22%

23%

21%

18%

24% 23%

20%

18%

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

Percentage of total U.S. sales Vehicles (000s)

Dealer inventory

Days supply

2014

U.S. fleet mix U.S dealer inventory & days supply

8

2015 2012 2013 2014 2015 2012 2013

Appendix



Worldwide vehicle shipments Q3 2015 versus Q3 2014

10

Vehicles (000s)

261 310

171

187

109 87

134 143 14

18 11

5

Q3 2014 Q3 2015

524 586

70

76 17

23 78

60 11

5

Q3 2014 Q3 2015

U.S.

Canada

Mexico Int’l

By market By brand

700 750

+62

+6

+6 (18)

+49

(22)

+9

+4

+16

+7%

Contract Mfg (6) Contract Mfg

700 750 (6)

Note: Military and Puerto Rico / Caribbean shipments classified as U.S. in Q3 2015 (3k) versus Int’l in Q3 2014 (3k)

2015 B/(W) 2014

2015 B/(W) 2014



Guaranteed depreciation program (GDP) adjusted shipments

Vehicles (000s)

Q3 2015 Q3 2014 Q3 2015

B/(W) Q3 2014

9 months YTD 2015

9 months YTD 2014

YTD 2015 B/(W)

YTD 2014

Worldwide shipments 750 700 50 2,248 2,095 153

Guaranteed depreciation program (GDP)

Subtract: Shipments during period (5) (15) 10 (64) (89) 25

Add: Returns/auctions during period 17 13 4 73 47 26

Net shipments 12 (2) 14 9 (42) 51

GDP adjusted worldwide shipments 762 698 64 2,257 2,053 204

11



Reconciliation of worldwide vehicle sales to shipments

Vehicles (000s)

Q3 2015 Q3 2014 9 months YTD 2015

9 months YTD 2014

Worldwide sales 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)

Contract manufacturing & other 3 7 39 51

Worldwide shipments 750 700 2,248 2,095

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

Net income 70 611 (541) 3,249 540 2,709

Tax status change - - - (2,279) - (2,279)

Change in estimate for future recall campaign costs 848 - 848 848 - 848

Tianjin (China) port explosion 159 - 159 159 - 159

NHTSA consent order - - - 90 - 90

(Gain) loss on extinguishment of debt, net (18) - (18) 63 504 (441)

Charge for MOU with the UAW - - - - 672 (672)

Other 33 - 33 33 - 33

Tax effect of adjustments (349) - (349) (382) - (382)

Adjusted net income 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)

Restructuring & other (income) expense, net 18 1 17 29 9 20

Modified operating profit 1,271 946 325 3,305 2,517 788

Depreciation and amortization expense 2 708 720 (12) 2,130 2,128 2

Modified EBITDA 1,979 1,666 313 5,435 4,645 790

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

13



Reconciliation of Free cash flow

$ 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

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

Free cash flow 1,535 412 1,123 3,432 2,300 1,132

14



Pension disclosure

$ Millions

NET PERIODIC PENSION (INCOME) COST

Q3 2015 Q3 2014 9 months YTD 2015

9 months YTD 2014

Service cost 53 57 158 168

Interest cost net of expected return (119) (76) (335) (201)

Recognition of net actuarial losses 18 15 80 58

Amortization of prior service cost 4 2 14 10

Total net periodic pension (income) cost (44) (2) (83) 35

PENSION FUND CONTRIBUTIONS 30 236 63 269

WEIGHTED AVERAGE ASSUMPTIONS 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%

15



OPEB disclosure

$ Millions

NET PERIODIC BENEFIT COST

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

BENEFITS PAID 42 42 128 131

WEIGHTED AVERAGE ASSUMPTIONS 2014 2013

Benefit obligations at December 31: Discount rate – ongoing benefits

4.11%

4.87%

Periodic Costs: Discount rate – ongoing benefits

4.87%

4.07%

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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

17



Contacts

Investor Relations

Joe Veltri phone: 248-576-9257 email: [email protected]

Erin Banyas phone: 248-512-3224 email: [email protected]

Tim Krause phone: 248-512-2923 email: [email protected]

Alois Monger phone: 248-512-1549 email: [email protected]

Communications

Gualberto Ranieri phone: 248-512-2226 email: [email protected]

Websites

www.fcagroup.com www.fcausllc.com

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