Chrysler Group Reports Third Quarter 2011 Net Income of $212 Million

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tAUBURN HILLS, Mich., Oct. 27, 2011 /PRNewswire/ — Chrysler Group LLC today reported preliminary net income of $212 million for the third quarter, compared with a net loss of $84 million a year ago, as the Company continues to increase sales and benefit from its alliance with Fiat S.p.A.

tIn the third quarter of 2011, net revenue was $13.1 billion, a 19 percent increase from the third quarter of 2010, driven by increased demand for Chrysler Group's 16 all-new or significantly refreshed cars and trucks.

tThe Company reported a Modified Operating Profit of $483 million for the quarter, or 3.7 percent of net revenue, up from $239 million, or 2.2 percent of net revenue, in 2010. Modified Operating Profit benefited from increased sales volume and improved pricing and mix, partially offset by increased advertising and industrial costs.

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t"In the third quarter, Chrysler Group achieved increased sales and positive financial results, totally in line with the plan we laid out in November 2009.  And in October, together with the United Auto Workers, we crafted a solid four-year contract that will support us in our growth plans and significantly reward our employees for their contribution to the revival of Chrysler," said Sergio Marchionne, Chairman and Chief Executive Officer, Chrysler Group LLC.  "This house continues to be fully focused on financial performance and making outstanding cars and trucks by fully leveraging its alliance with Fiat." 

tModified EBITDA(c) was $1.1 billion in the third quarter, or 8.6 percent of net revenue, reflecting a $182 million improvement from a year ago. 

tInterest expense for the quarter totaled $282 million, including non-cash interest accretion of $29 million. This compares with $316 million of interest expense, including non-cash interest accretion of $58 million, in the third quarter of 2010.

tCash as of September 30, 2011, was $9.5 billion compared with $10.2 billion as of June 30, 2011.  In addition, $1.3 billion is available under a revolving credit facility, bringing total available liquidity to $10.8 billion. As anticipated, Free Cash Flow(e) for the third quarter totaled a negative $699 million reflecting seasonal working capital fluctuations and increased capital expenditures.

tGross Industrial Debt(f) at September 30, 2011, totaled $12.3 billion, consistent with the $12.3 billion at June 30, 2011. Net Industrial Debt(f) increased to $2.9 billion at the end of the quarter from $2.1 billion at June 30, 2011, primarily due to the lower cash level.

tWorldwide vehicle sales were 496,000 in the third quarter, up 24 percent from 401,000 vehicles in the third quarter of 2010. The improvement reflects greater consumer awareness and consideration of our new products. This contributed to an increase in Chrysler Group's U.S. market share to 11.4 percent for the quarter, up from 9.6 percent a year ago. Canadian market share rose to 14.5 percent for the quarter, up from 12.8 percent a year ago.

tWorldwide vehicle shipments in the third quarter of 2011 were 469,000, an increase of 15 percent compared with worldwide vehicle shipments of 407,000 vehicles a year ago. 

t2011 Guidance

tThe targets for 2011 are revised as follows:

t    * Net revenue of >$55 billion
t    * Modified operating profit of >$2.0 billion
t    * Modified EBITDA of >$4.8 billion
t    * Adjusted net income of ~$0.6 billion* (revised from $0.2 – $0.5 billion*)
t    * Free cash flow of >$1.2 billion (revised from >$1.0 billion)

t* Excludes the loss on the extinguishment of debt of $551 million in the second quarter

tSignificant Corporate Events

tJuly 21: Fiat S.p.A. acquired beneficial ownership of the membership interests in Chrysler Group held by the U.S. Treasury and the Canadian Government. Fiat also acquired the U.S. Treasury's rights under the Equity Recapture Agreement between the U.S. Treasury and the VEBA Trust.

tAugust 23: Chrysler Group announced an investment of $72 million at the Toledo Machining Plant.

tSeptember 6: As majority owner, Fiat designated two new independent directors to the Chrysler Group Board of Directors, John B. Lanaway and Leo W. Houle, to replace two government-appointed directors. The Chrysler Group Board of Directors elected Sergio Marchionne as Chairman and Ronald L. Thompson as Lead Director.

tOctober 18: Chrysler Group announced an investment of $165 million to add a new body shop at the Sterling Heights Assembly Plant, bringing total new investment in Chrysler Group plants to nearly $3.5 billion since June 2009.

tOctober 18: Chrysler Group released its first Sustainability Report for the year 2010, achieving Global Reporting Initiative (GRI) Application Level A, the most advanced reporting level.  GRI is the most widely used reporting framework for performance on environmental, social and other corporate citizenship issues.

tOctober 26: The United Automobile, Aerospace and Agriculture Implement Workers of America ("UAW") ratified a new national four-year labor agreement with Chrysler Group.

tProduct and Corporate News

t    * AutoPacific named Chrysler Brand the "2011 Most Ideal Popular Brand;" 2011 Chrysler Town & Country the "Most Ideal Minivan;" 2011 Jeep Grand Cherokee the "Most Ideal Mid-Size SUV" and 2011 Dodge Challenger the "Most Ideal Sporty Car."
t    * The Texas Auto Writers Association voted the Jeep Grand Cherokee "SUV of Texas."  In addition, the Jeep Wrangler Unlimited won top honors for Mid-size SUV, the Jeep Grand Cherokee Overland Summit won the Luxury SUV category and the Dodge Durango won the Full-size SUV category.
t    * The Street's "Top 5 Most American Cars in 2011" includes three Chrysler Group vehicles: the Chrysler 200, Dodge Grand Caravan and Dodge Avenger.
t    * The 2011 Chrysler 300 was named the 2011 Esquire Car Awards "Domestic Car of the Year."
t    * The 2011 Dodge Durango and 2012 Fiat 500 each were named a "Top Safety Pick for 2011" by the Insurance Institute for Highway Safety.
t    * PickupTrucks.com named the Ram 1500 "Best $30,000 Pickup" in their first-ever value shootout which pitted a Ram 1500 Quad Cab HEMI® against similarly priced entries from competitors.
t    * The Chrysler 300 SRT8 and Fiat 500 were named candidates for the "2012 North American Car of the Year" awarded by an independent panel of jurors each year at the North American International Auto Show in Detroit.
t    * HispanicBusiness magazine named Chrysler Group to its Diversity Elite 60, a list of the top U.S. organizations to promote and model diversity in the workplace and community.

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