Chrysler Update Citi 2012 North American Credit Conference Richard Palmer November 15, 2012
Forward-Looking Statement This document contains forward- to reduce sales incentives; supply looking statements that reflect disruptions resulting from natural management's current views with disasters and other events impacting respect to future events. The words our supply chain; and our ability to “anticipate,” “assume,” “believe,” realize benefits from our industrial “estimate,” “expect,” “intend,” alliance with Fiat, particularly in light “may,” “plan,” “project,” “should” of the economic crisis currently and similar expressions identify affecting several European countries. forward-looking statements. Such If any of these or other risks and statements are subject to risks and uncertainties occur, or if the uncertainties, including, but not assumptions underlying any of these limited to: the effective statements prove incorrect, then implementation of the Chrysler actual results may be materially Group LLC 2010 – 2014 Business Plan different from those expressed or outlined on November 4, 2009, implied by such statements. We do including successful vehicle launches; not intend or assume any obligation industry SAAR levels; continued to update any forward-looking economic weakness, especially in statement, which speaks only as of North America, including continued the date on which it is made. Further high unemployment levels and details of potential risks that may limited availability of affordably affect Chrysler Group are described priced financing for our dealers and in Chrysler Group’s Annual Report on consumers; introduction of Form 10-K, and its subsequent competing products and competitive periodic reports filed with the U.S. pressures which may limit our ability Securities and Exchange Commission. 1
Agenda Chrysler Group Financial Results Product Update Fiat Group Alliance Fiat Group Business Plan Update - EMEA 2
Q3 YTD 2012 Financial Highlights Chrysler Group (U.S. GAAP) 1,290 Net Revenue ($Bils) Net Income ($Mils) • Net income increased $1,332 • Growth primarily driven by 48.6 versus the prior year loss of $42 increased volumes and positive 39.9 pricing, partially offset by 509 • YTD 2012 net income increased unfavorable mix +22% 153% versus the prior year’s Adjusted Net Income of $509 • Worldwide shipments up 22% to (which excludes a loss on 1,796k units (1,809k shipments (42) extinguishment of debt of $551 in adjusted for GDP units) Q3 YTD ‘11 Q3 YTD ‘12 Q3 YTD ‘11 Q3 YTD ‘12 Q2 2011) Modified Operating Profit ($Mils) Cash ($Bils) 11.9 2.2 • Modified Operating Profit • Free Cash Flow of $2.5 in first nine 9.6 9.5 increased 50% versus prior year months of 2012 1.5 • Improved performance primarily • Total liquidity was $13.2, including 4.5% of attributable to increased $1.3 available under a revolving Revenue 3.7% of shipments and positive pricing, credit facility Revenue partially offset by unfavorable mix, increased ER&D and advertising Q3 YTD ‘11 Q3 YTD ‘12 Sept 30, ‘11 Dec 31, ‘11 Sept 30, ‘12 costs and content enhancement costs on new vehicles 4.1 2.9 Modified EBITDA ($Mils) 2.9 Net Industrial Debt ($Bils) 3.6 • An increase of 15% versus prior • Net Industrial Debt decreased to $0.7 primarily due to positive free year primarily driven by higher 8.5% of 9.0% of Revenue 0.7 volumes and positive pricing cash flow for the first nine months Revenue of 2012 • Margin reduced due to unfavorable mix, increased ER&D Q3 YTD ‘11 Q3 YTD ‘12 Sept 30, ‘11 Dec 31, ‘11 Sept 30, ‘12 and advertising costs and content enhancement costs on new vehicles 3
Key Financial Metric Trends – Steady Improvement Chrysler Group (U.S. GAAP) 16.8 16.4 15.5 15.1 13.7 13.1 13.1 11.0 10.8 10.5 Net Revenue 9.7 ($Bils) 755 740 706 (4.5%) (4.5%) (4.6%) 508 507 483 477 (3.7%) (3.4%) (3.7%) (3.6%) Modified Op Profit 239 198 183 473 (% of Net Revenue) (2.2%) 436 143 (1.8%) (1.7%) 381 ($Mils) (1.5%) 225 212 181 116 Adjusted Net (84) Income (Loss) 1 (172) (197) (199) ($Mils) Q1 '10 Q2 '10 Q3 '10 Q4 '10 Q1 '11 Q2 '11 Q3 '11 Q4 '11 Q1 '12 Q2 '12 Q3'12 Worldwide Shipments (000’s) 380 433 407 382 485 514 469 543 607 630 559 1. Excludes loss on extinguishment of debt of $551 million in Q2 2011 4
Cash and Gross / Net Industrial Debt Trends Chrysler Group (U.S. GAAP; $ Mils) Addition of Canada Refinancing of Gov’t Health Care Notes debt plus equity proceeds from Fiat GROSS Addition of Mexico INDUSTRIAL Development Banks DEBT Loan 13,254 13,120 12,533 12,592 12,507 12,640 NET 12,287 12,322 12,026 INDUSTRIAL 432 693 1,336 11,192 11,226 DEBT 3,377 11,947 12,075 2,112 2,932 2,868 11,256 5,773 CASH 3,766 10,175 3,825 9,877 3,385 9,601 9,454 8,260 7,841 7,367 7,347 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Note – Financial results based on U.S. GAAP – see Non-U.S. GAAP Financial Information and Other Items 5
2012 Chrysler Group Cash Walk December 31, 2011 to September 30, 2012 (U.S. GAAP; $ Bils) Change in Cash $2.3 Free Cash Flow $2.5 2.8 • Free Cash Flow driven 4.1 by strong operating 11.9 performance and (3.1) (0.4) working capital effects, (1.0) (0.2) partially offset by capital 9.6 expenditures and VEBA interest payment Dec 31, Modified Working Capital Capital Pension / Taxes & Net Principal Sept 30, 2011 EBITDA & Other Expenditures OPEB Interest Payments & FX 2012 Note: Numbersmay not add due to rounding 6
Chrysler Group Financial Liabilities Maturity Schedule Treasury functions separate from Fiat (U.S. GAAP; $ Bils) • Chrysler Group and Fiat continue to separately manage their own financial Gross matters, including treasury services Annual Maturities Industrial Debt No guarantee, support or similar obligations in relation to other’s financing obligations; no 12.6 obligation or commitment to provide funding to the other 10.7 Financial segregation also supported by legally binding obligations Chrysler’s May 2011 credit agreement limits financial support to Fiat (inter alia cumulative limit on dividend payments of $500mn payable only if specified minimum liquidity is met) Fiat’s 3-year RCF also limits financial support to Chrysler (including limits on guarantees and loans) Chrysler’s financing agreements and its LLC Operating Agreement contain additional 0.4 0.5 0.5 0.4 restrictions limiting related-party transactions, 0.1 including approval process for material commercial or financial transactions between the 2012 2013 2014 2015 2016 2017+ Sept 30, ‘12 companies (Carrying Value) • These restrictions apply, while these Face Value instruments are in place, regardless of the 13.4 0.1 0.4 0.5 0.5 0.5 11.4 percentage of Fiat’s ownership in Chrysler Note: Excluding accrued and accreted interest 7
Chrysler Group Sales Performance (U.S. /Canada) YTD Q3 2012 Vehicles (000s) Q UARTERLY M ARKET S HARE S ALES G ROWTH (U.S. & C ANADA ) (%) +253 (+21%) 15.0 14.9 14.7 14.5 14.5 14.3 13.7 12.9 +36 1,445 12.9 12.8 47 +40 (+18%) 12.6 +22 (+18%) 11.6 +27 (+119) +33 11.3 Other +48 (+29%) (+131%) (+75%) 1,192 11.4 11.3 11.2 11.2 10.8 10.6 Ram Fiat Pickup Chrysler 8.6 9.6 Jeep 500 T&C / Chrysler 9.4 9.2 Chrysler 300 Grand Dodge 9.1 8.8 Cherokee Caravan 200 8.5 8.1 8.0 CG I NDUSTRY S ALES S ALES Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 +24% +15% 2009 2010 2011 2012 FY share FY share FY share YTD share 11.0% 13.0% 14.3% +6% +7% 14.6% 8.8% 9.2% 10.5% 11.2% Q3’ 11 Q3’ 12 8
Chrysler Group U.S. Sales by Vehicle Segment More competitive entries in the car segments YTD Q3 2011 YTD Q3 2012 (Total U.S. Sales = 1,009,000) (Total U.S. Sales = 1,251,000) Total Car = 25.6% Total Car = 30.2% Small & Mid-Size Small & Mid-Size Pickups & Vans Pickups & Vans Cars Cars Large & Large & 14.0% 17.1% 16.8% 18.7% Specialty Cars Specialty Cars 11.6% 13.4% 31.9% 19.9% 35.8% 20.8% Minivan & Minivan & SUV SUV Crossovers Crossovers Chrysler Group’s car mix increased from 26% to 30% due to the continuing process of introducing more competitive car offerings 9
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