The FINANCIAL — Chrysler Group LLC on January 31 issued its preliminary financial res ults for the fourth quart er (Q4) and total year 2 010.
In Q4 2010, Net Revenues decrea sed 2.3 perc ent to $10,7763 million, as compared to Q3 2010, primarily due to reduce d shipment volumes as the Compan y launched production of 11 new v ehicles. Total year 2 010 Net Revenues wer e $41,946 m illion, in line with full year 2010 gui dance.
Chrysler Group LLC. “ All of these v ehicles bear testimony to Chrysler’s rebirth. Given the pos itive comments we have received to dat e, it can saf ely be said that what Ch rysler delive red last yea r, on both the pro duct and fin ancial front s, surpasse d many expeectations.
“However, o ur job is not yet done. We have a lot of work ahead to fulfill our five-ye ar business plan objectives,” said Marchionne.
Modified Earnings Be fore Interest, Taxes, Depreciation and Amort ization (Mo dified EBIT DA) in Q4 2010 wa s $882 million, or 8.2 p ercent of Ne t Revenues, a $55 milli on decrease from Q3 2 010; total year 2 010 Modifie d EBITDA was $3,461 m illion, or 8.3 percent of Net Revenu es.
Net Interest Expense in Q4 2010 was $329 million, including non-cash interest ac cretion of $57 million. Net Interest Exp ense was $1,228 million for total ye ar 2010, in cluding non-cash interes t accretion of $229 million.
Net Loss in Q4 2010 was $199 million. Total y ear 2010 Ne t Loss was $652 million, according to Chrysler Group.
Cash at De cember 31, 2010 was $ 7.3 billion co mpared to $8.3 billion a t Septembe r 30, 2010. The decrease pr imarily reflected anticip ated unfavorable workin g capital impacts at the end of the year due to reduced production volumes as new veh icles were launched. A n additional $2.3 billion remains available to be drawn under Chrysl er Group’s U .S. Treasury and Canadian and On tario gover nment loan agreem ents, bringing total available liquidity above $9.6 billion.
Free Cash Flow for the year totale d $1.4 billio n, over $2 billion ahead of original guidance.
Gross Indu strial Debt(f) at Decem ber 31, 2010 , was $13.1 billion, an increase of $ 1.1 billion f rom September 30, 2010, pr imarily due to the issuance of promissory notes (totaling ap proximately $1 billion) to an independent Health C are Trust in connection with transfer ring the responsibility fo rcertain CAW retiree he alth care be nefits from t he Compan y to the trust , which was offset by a reduction in Accrued Ex penses and Other Liabilities. Net Industrial Debt(f) increased by $2.0 billion to $5.8 billio n during Q4 2010.
Worldwide vehicle sales of 374,0 00 units for Q4 2010 rep resented a decrease of 7 percent (27,000 units) compared to 401 ,000 units in Q3 2010, due mainly too reduced fl eet volume associated w ith the new model changeovers in Q4. Total year 2010 worldwide sales were 1,516,000 units. U.S. market share for full year 2010 was 9.2 percent, versu s 8.8 percen t in 2009. Canadian market share increased t o 13 percent for full-year 2010 comp ared to 11 percent in 2 009.
Worldwide vehicle shipments in Q4 2010 were 382,000 units, a decr ease of 6 p ercent versu s Q3 2010. U.S. vehicle ship ments total ed 270,000 units compa red to 301,0000 units in the prior qu arter. Total year 2 010 worldwide vehicle shipments w ere 1,602,000 units.
Chrysler Group maintained a U.S. dealer inve ntory level c onsistent with its sales performanc e, increasing from 231,00 0 vehicles a t September 30, 2010, to 236,000 vehicles at December 31, 2010. Days suppl y increased to 63 days from 58 days in Q3 2010 , as the Co mpany prepared for the marketing l aunch of its new and refreshed products.
Significant Events: Fo urth Quart er and Sub sequent to December 31, 2010
On October 29, Mexico’s President Felipe Calderon and other governm ent officials joined Chr ysler Group executives as C hrysler Mexico confirmed its commitment to the region and country with the inauguratio n of its sixth manufacturing plant, the new Saltillo Engine Plant in Coahuila, Mexico. The plant, along with the Tr enton (Mich.) South Eng ine Plant, produces the new and ad vanced Pe ntastar 3.6-liter V-6 engine.
Chrysler Group’s product offensive continued i n the fourth quarter with the launch of 11 new or significantly-refreshed v ehicles. For the full ye ar 2010, Chr ysler Group launched 16 all-new or significantly refreshed vehicles.
The all-new Jeep® Gran d Cherokee was name d “2011 Urban Truck of the Year” b y Decisive M edia; Four Wheeler magazin e editors selected the ve hicle as “Fo ur Wheeler of the Year ” and The Detroit News name d it “Truck o f the Year.” Additionally , AutoWeek magazine honored the Jeep Gran d Cherokee w ith the “Best of the Bes t/Truck Award” and the vehicle was a finalist for “North Ame rica Truck of the Year” at th e North Ame rican International Auto Show (NAIAS) in Detr oit, along wit h the 2011 Dodg e Durango.
Four Wheeler magazin e also chose the iconic J eep Wrangler Rubicon the “Best 4 X4 of the De cade.”
Seven Chrysler Group vehicles — the new Chrysler 300, C hrysler 200 , Dodge Ch arger, Dodg e Avenger, D odge Journe y, Jeep Gra nd Cheroke e and Jeep Patriot — w ere named Top Safety Picks for 2011 by the Insurance Institute f or Highway Safety (IIH S). The IIHS annually recognizes ve hicles that do the best job of protecting pe ople in front , side, rollo ver and rear crashes based on a “g ood” rating in a series of tests conducted by the Institute. The 20 11 Dodge AAvenger and Dodge Journey were selected as Top Safety Picks for the third straight yea r and the Je ep Patriot f or the secon d year in a row.
Ram also re ceived man y honors in Q4 2010. In December, Ram’s heavy-duty trucks earned t he 2010 Motorist Choice Award for the Active Lifestyle c ategory fro m IntelliChoice and Auto Pacific, and the Ram Heavy Duty earned a 2010 Ve hicle Satisf action Awar d in the Hea vy Duty Pickup category. Off-Road Adve ntures maga zine selecte d Ram as M anufacturer of the Year and Autom obile magazine named the Ram 1500 t o its annual list of All-St ars for the s econd cons ecutive year. The Ram 1500 remains the most awar ded Ram ever.
As the new year began Chrysler Group annou nced that th e Chrysler T own & Cou ntry minivan was the top-selling minivan in the U.S. f or 2010, an d, for the ten th straight y ear, Polk g ave the Town & Country the “Automotiv e Loyalty Aw ard” in the Minivan Category. Polk also selected the Dodg e Challenger for a loyalty award in th e Sports Car category.
Production of the Fiat 500 began at the Toluca, Mexico As sembly Plant, in Q4 2010, marking the brand’s retu rn to U.S. and Canada after a 27 y ear absence. The Comp any has ap pointed the f irst 130 of an event ual 165 Fiat dealers in t he U.S. and appointed 6 4 dealers in Canada. T hose appointed are in the process of prepar ing their ne w facilities f or the arrival of the Fiat 500, and will open throu ghout the first thre e quarters o f this year. The 2012 M Y Fiat 500 was reveale d at the Los Angeles a nd Montreal Int ernational A uto Shows.
On Novemb er 23, employees at Chrysler Grou p’s Indiana Transmission Plant II in Kokomo, Ind., welcomed P resident Ob ama and Vice Presiden t Biden to celebrate rec ent and pla nned invest ments in the Compa ny’s Kokomo facilities, r esulting in th e retention of more tha n 3,500 jobs . The Comp any confirmed it will invest $ 843 million in its Indiana Transmiss ion Plants a nd Kokomo Casting Pl ant to accommod ate producti on of a new advanced front-wheel drive automatic transmission for future Chrysler vehicles.
Chrysler Group and ZF Friedrichsh afen of Ger many-based ZF Group a re partnerin g on both th e 9-speed front -wheel drive and 8-speed rear-whee l drive trans missions. Z F is making its designs and technology available to the Compa ny.
Chrysler Group welcomed 2011 with an extensive showcas e of its full, reinvigorate d product li neup from the Chrysler, Jeep, Dodge, Ra m and Mopar brands at the North American I nternational Auto Show in Detroit. The Co mpany also featured the new Fiat 5500. The au to show mar ked the wor ld premiere of the all-new 2011 Chrysler 300 sed an and intro duction of th e new, rede signed 201 1 Jeep Compass. T he Compan y also kicke d off the Jeep brand’s 7 0th anniversary in 2011 , marking t he occasion with the introduction of dis tinctive, unique 70th An niversary Edition models for each v ehicle in its lineup.
On January 10, Chrysle r Group ann ounced that Fiat's own ership intere st in the Company incr eased from 20 percent to 25 percent upon the Company’s achiev ement of the first of three Class B Events outlined in its June 10, 2009 Operating Agreem ent. This Ev ent related to the certification and s tart of commercial production of the Fully Integrated Robotized E ngine (FIRE) at the Com pany’s Dundee, Mich., facility. The engi ne will be fir st used in the Fiat 500.
2011 Guida nce
The targets for 2011 ar e as follows:
• Net Revenues of >$55 billion
• Modified Operating Profit of >$2.0 billio n
Modified EBITDA of >$4.8 b illion
• Net Income of $0.2 – $0.5 billion
• Positive Free C ash Flow of >$1.0 billion
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