Chrysler Group LLC Reports an Operating Profit of $239 Million in the Third Quarter

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AUBURN HILLS, Mich., Nov. 8, 2010 /PRNewswire/ —

  • Net Revenues in Q3 2010 increased to $11.0 billion, up 5.2 percent from $10.5 billion in Q2 2010
  • Operating Profit(a) came in at $239 million, an improvement of $56 million versus Q2 2010
  • Modified EBITDA(a,b) was $937 million (8.5 percent of Net Revenues), an $82 million increase from Q2 2010
  • Net Loss reduced to $84 million in Q3 2010 from $172 million in Q2 2010
  • Cash(c) at September 30, 2010 increased to $8.3 billion, bringing total available liquidity to more than $10.5 billion
  • Market share improved for the fifth consecutive quarter since the Company’s formation to 9.6 percent in the U.S., up from 9.4 percent in Q2 2010 and 8.0 percent in Q3 2009; Canadian market share was consistent with Q2 2010 at 12.8 percent in Q3 2010
  • Full year 2010 guidance is revised upwards based on continued operating performance improvement to:
    • Operating Profit of ~$0.7 billion (from $0.0-0.2 billion)
    • Positive Free Cash Flow of ~$0.5 billion (from negative $1 billion)

 

Chrysler Group LLC today issued its financial results for the third quarter 2010.

In Q3 2010, Net Revenues increased to $11,018 million representing a 5.2 percent improvement over the prior quarter.  Year-to-date Net Revenues, as of September 30, 2010, totaled $31,183 million.

The Company posted an Operating Profit(a) of $239 million in Q3 2010 and $565 million for year-to-date 2010. The Q3 2010 Operating Profit improvement of $56 million, compared to Q2 2010, was driven primarily by improved mix and pricing from the launch of the new Jeep® Grand Cherokee, partially offset by increased industrial costs associated with seasonal plant changeovers.

  
 

CHRYSLER GROUP LLC

     
 

($Mils)

 

Q3
2010

B/(W)
Q2 2010

Jan-Sept
2010

 
 

Net Revenues

 

11,018

540

31,183

 
 

Modified EBITDA (1)

 

937

82

2,579

 
 

Operating Profit (1)

 

239

56

565

 
 

Net Loss

 

(84)

88

(453)

 
 

Cash (2)

 

8,260

419

8,260

 
 

(1)  A reconciliation of U.S. GAAP Net Loss to Operating Profit and Modified

     EBITDA for Q3 2010 and Jan-Sept 2010 is detailed in Table 1 of the

     attachment to the press release.

(2)  Cash includes Cash, Cash Equivalents and Marketable Securities .

 
      

“A year ago, Chrysler Group laid out clear and concise five year financial goals and after three consecutive quarters of better than forecasted results, we are not only living up to our commitments but we are also exceeding our 2010 financial objectives,” said Sergio Marchionne, Chief Executive Officer, Chrysler Group LLC.

“Chrysler’s financial success is dependent upon the vehicles we design, build and sell. In a mere 16 months, the Company is delivering 16 all-new or refreshed products led by the critically acclaimed all-new 2011 Jeep Grand Cherokee and including the Fiat 500, signaling the return of the Fiat brand to the U.S. and Canada. We are committed to ensuring that every new vehicle this company launches has the same high quality and technological advances as the Jeep Grand Cherokee. Our 2010 accomplishments are just the beginning of building Chrysler Group into a vibrant and competitive auto maker,” Marchionne added.

Modified Earnings Before Interest, Taxes, Depreciation and Amortization (Modified EBITDA)(a,b) was $937 million, or 8.5 percent of Net Revenues, an $82 million increase from Q2 2010; year-to-date 2010 Modified EBITDA was $2,579 million.

Net Interest Expense in Q3 2010 was $308 million, including non-cash interest accretion of $58 million. Net Interest Expense was $899 million for the first three quarters of 2010.

Net Loss in Q3 2010 was reduced to $84 million as compared with $172 million in Q2 2010, driven by the increase in Operating Profit.  Net Loss year-to-date 2010 was $453 million.

Cash(c) at the end of Q3 2010 was $8,260 million compared to $7,841 million at the end of Q2 2010, primarily due to the finalization of the Mexican development banks loan for $400 million which was fully drawn during the quarter.  An additional $2.3 billion remains available to be drawn under Chrysler Group’s U.S. Treasury (UST) and Canadian and Ontario government loan agreements, bringing total available liquidity above $10.5 billion.

Gross Industrial Debt(d) at September 30, 2010, increased to $12.0 billion, primarily due to the finalization of the Mexican development banks loan, capitalized interest on the VEBA Trust Note, and additions of other financial obligations. Net Industrial Debt(d) increased to $3.8 billion from $3.4 billion at the end of Q2 2010.

Worldwide vehicle sales were 401,000 units for Q3 2010, a decrease of 1 percent compared to 407,000 units in Q2 2010, with the Jeep and Ram brands posting gains. U.S. market share improved for the fifth consecutive quarter since the Company’s formation to 9.6 percent in Q3 2010 from 9.4 percent in Q2 2010 and 8.0 percent in Q3 2009. In addition, Canadian market share was a strong 12.8 percent although volumes decreased in line with the seasonal Canadian auto industry decrease. Throughout the quarter, the new Jeep Grand Cherokee drove dealership consumer traffic in both the U.S. and Canada.

Worldwide vehicle shipments in Q3 2010 were 407,000 units, a decrease of 6 percent versus Q2 2010. U.S. vehicle shipments totaled 301,000 compared to 305,000 in the prior quarter.

Chrysler Group maintained a U.S. dealer inventory level consistent with its sales performance, increasing from 222,000 vehicles at June 30, 2010, to 231,000 vehicles at September 30, 2010.  Days supply, however, decreased to 58 days (from 60 in Q2 2010), due to the Company’s focus on maintaining disciplined dealer inventory levels consistent with market demand.

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