View:
Download DOC
Download PDF
Download XLS
6-K FCA NV First Quarter Earnings Shell


 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 6-K
 

REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
OF THE SECURITIES EXCHANGE ACT OF 1934

For the month of May 2016
Commission File No. 001-36675
 
Fiat Chrysler Automobiles N.V.
(Translation of Registrant’s Name Into English)
 
25 St. James' Street
London SW1A 1HA
United Kingdom
Tel. No.: +44 (0) 20 7766 0311
(Address of Principal Executive Offices)
 

(Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.)

Form 20-F x Form 40-F ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule101(b) (1): ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule101(b) (7): ¨

Indicate by check mark whether the registrant by furnishing the information contained in this form is also thereby furnishing
the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes ¨ No x

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): N/A

 





The following exhibits are furnished herewith:

Exhibit 99.1
Fiat Chrysler Automobiles N.V. Interim Report as of and for the three months ended March 31, 2016
Exhibit 99.2
Fiat Chrysler Automobiles N.V. Supplemental information as of and for the three months ended March 31, 2016
Exhibit 99.3
Fiat Chrysler Automobiles N.V. Supplemental information as of and for the three months ended March 31, 2016







SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: May 4, 2016
FIAT CHRYSLER AUTOMOBILES N.V.
 
 
 
 
 
 
 
 
 
By:
/s/ Richard K. Palmer
 
 
Name: Richard K. Palmer
 
 
Title: Chief Financial Officer







Index of Exhibits

Exhibit Number
Description of Exhibit
99.1
Fiat Chrysler Automobiles N.V. Interim Report as of and for the three months ended March 31, 2016
99.2
Fiat Chrysler Automobiles N.V. Supplemental information as of and for the three months ended March 31, 2016
99.3
Fiat Chrysler Automobiles N.V. Supplemental information as of and for the three months ended March 31, 2016



Exhibit 99.1 FCA NV 2016.03.31 Interim Report
Exhibit 99.1


Interim Report
As of and for the three months ended March 31, 2016


TABLE OF CONTENTS
 
Page
 
 
 
 
 
   Highlights 
 
 
 
 
 
 
   Outlook
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


CERTAIN DEFINED TERMS
In this Interim Report, unless otherwise specified, the terms “we,” “our,” “us,” the “Company,” the “Group,” and “FCA” refer to Fiat Chrysler Automobiles N.V., together with its subsidiaries, or any one or more of them, as the context may require.
All references in this Interim Report to “Euro” and “€” refer to the currency introduced at the start of the third stage of European Economic and Monetary Union pursuant to the Treaty on the Functioning of the European Union, as amended. All references to “U.S. Dollars,” “U.S. Dollar,” “U.S.$” and “$” refer to the currency of the United States of America (or “U.S.”).

Forward-Looking Statements
This document, and in particular the section entitled “Outlook,” contains forward-looking statements. These statements may include terms such as “may,” “will,” “expect,” “could,” “should,” “intend,” “estimate,” “anticipate,” “believe,” “remain,” “on track,” “design,” “target,” “objective,” “goal,” “forecast,” “projection,” “outlook,” “prospects,” “plan,” or similar terms. Forward-looking statements are not guarantees of future performance. Rather, they are based on the Group's current expectations and projections about future events and, by their nature, are subject to inherent risks and uncertainties. They relate to events and depend on circumstances that may or may not occur or exist in the future and, as such, undue reliance should not be placed on them. Actual results may differ materially from those expressed in such statements as a result of a variety of factors, including: the Group's ability to reach certain minimum vehicle sales volumes; developments in global financial markets and general economic and other conditions; changes in demand for automotive products, which is highly cyclical; the Group's ability to enrich the product portfolio and offer innovative products; the high level of competition in the automotive industry; the Group's ability to expand certain of the Group's brands internationally; changes in the Group's credit ratings; the Group's ability to realize anticipated benefits from any acquisitions, joint venture arrangements and other strategic alliances; potential shortfalls in the Group's defined benefit pension plans; the Group's ability to provide or arrange for adequate access to financing for the Group's dealers and retail customers; the Group's ability to access funding to execute the Group's business plan and improve the Group's business, financial condition and results of operations; various types of claims, lawsuits and other contingent obligations against the Group; disruptions arising from political, social and economic instability; material operating expenditures in relation to compliance with environmental, health and safety regulations; developments in labor and industrial relations and developments in applicable labor laws; increases in costs; disruptions of supply or shortages of raw materials; exchange rate fluctuations, interest rate changes, credit risk and other market risks; political and civil unrest; earthquakes or other disasters and other risks and uncertainties.
Any forward-looking statements contained in this Interim Report speak only as of the date of this document and the Company does not undertake any obligation to update or revise publicly forward-looking statements. Further information concerning the Group and its businesses, including factors that could materially affect the Company's financial results, is included in the Company's reports and filings with the U.S. Securities and Exchange Commission (“SEC”), the Netherlands Authority for the Financial Markets (stichting Autoriteit Financiële Markten, (the “AFM”), Borsa Italiana S.p.A.and Consob (collectively, the “CONSOB”).


    

3





MANAGEMENT DISCUSSION AND ANALYSIS
Highlights
 
For the three months ended March 31
(€ million, except per share amounts)
2016
 
2015(1)
Net revenues
26,570

 
25,843

EBIT
1,307

 
696

Adjusted EBIT(2)
1,379

 
700

Profit before taxes
795

 
88

Net profit from continuing operations
478

 
27

Net profit
478

 
92

Net profit attributable to:
 
 
 
Owners of the parent
472

 
78

Non-controlling interest
6

 
14

Profit from continuing operations attributable to:
 
 
 
Owners of the parent
472

 
20

Non-controlling interests
6

 
7

Earnings per share(3)
 
 
 
Basic earnings per share
0.312

 
0.052

Diluted earnings per share
0.306

 
0.052

Earnings per share for profit from continuing operations(3)
 
 
 
Basic earnings per share
0.312

 
0.013

Diluted earnings per share
0.306

 
0.013

__________________________
(1) The Group's operating results for the three months ended March 31, 2015 have been re-presented to exclude Ferrari, consistent with Ferrari's classification as a discontinued operation for the year ended December 31, 2015. Ferrari operating results are presented as a single line item within the Interim Condensed Consolidated Income Statement for the three months ended March 31, 2015. The spin-off of Ferrari was completed on January 3, 2016 (refer to Note 2, Scope of Consolidation, in the Interim Condensed Consolidated Financial Statements included elsewhere in this Interim Report).
(2)
Adjusted EBIT is calculated as EBIT excluding gains/(losses) on the disposal of investments, restructuring, impairments, asset write-offs and other unusual income/(expenses) which are considered rare or discrete events that are infrequent in nature. Refer to the section - Results by Segment below for further discussion on Adjusted EBIT for each of our six reportable segments.
(3)
Note 19, Earnings per share, in the Interim Condensed Consolidated Financial Statements included elsewhere in this Interim Report, provides additional information on the calculation of basic and diluted earnings per share.

(€ million)
 
At March 31, 2016
 
At December 31, 2015 (1)
Net Debt
 
(8,035
)
 
(6,548
)
Of which: Net Industrial Debt
 
(6,593
)
 
(5,049
)
Total Equity
 
16,129

 
16,255

Equity attributable to owners of the parent
 
15,954

 
16,092

Number of employees
 
236,143

 
238,162

__________________________
(1) The assets and liabilities of Ferrari were classified as Assets held for distribution and Liabilities held for distribution within the Consolidated Statement of Financial Position at December 31, 2015.



4


Non-GAAP Financial Measures

We monitor our operations through the use of several non-generally accepted accounting principles, or non-GAAP, financial measures: Net Debt, Net Industrial Debt, Adjusted EBIT and certain information provided on a constant exchange rate basis. We believe that these non-GAAP financial measures provide useful and relevant information regarding our operating results and enhance the overall ability to assess our financial performance and financial position. They provide us with comparable measures which facilitate management’s ability to identify operational trends, as well as make decisions regarding future spending, resource allocations and other operational decisions. These and similar measures are widely used in the industry in which we operate, however, these financial measures may not be comparable to other similarly titled measures of other companies and are not intended to be substitutes for measures of financial performance and financial position as prepared in accordance with International Financial Reporting Standards (“IFRS”) issued by the International Accounting Standards Board (“IASB”) and adopted by the European Union.

Net Debt and Net Industrial Debt: Refer to the section —Liquidity and Capital Resources below for further discussion.    

Adjusted EBIT: Refer to the sections —Group Results and —Results by Segment below for further discussion.

Constant Exchange Rate: The discussions within the sections —Group Results and —Results by Segment below include information about our results at constant exchange rates (“CER”), which is calculated by applying the prior-year average exchange rates to current financial data expressed in local currency in which the relevant financial statements are denominated (see Note 1, Basis of Preparation in the Interim Condensed Consolidated Financial Statements included elsewhere in this Interim Report for information on the exchange rates applied). We believe that such results excluding the effect of currency fluctuations year-on-year, provide additional useful information to investors regarding the operating performance and trends in our business on a local currency basis.



5


Group Results
The following is a discussion of the Group's results of operations for the three months ended March 31, 2016 compared to the three months ended March 31, 2015. The discussion of Cost of sales, Selling, general and other costs and Research and development costs includes a presentation of such line items as a percentage of Net revenues to facilitate comparisons between the periods presented.
The Group is no longer presenting the separate line item “Other income/(expenses)” and all amounts previously reported within the “Other income/(expenses)” line item have been reclassified to the line item “Selling, general and other costs” within the Interim Condensed Consolidated Income Statements for the three months ended March 31, 2016 and 2015. This reclassification had no effect on the Group's consolidated results of operations or financial position.
The Group's operating results for the three months ended March 31, 2015 have been re-presented to exclude Ferrari, consistent with Ferrari's classification as a discontinued operation for the year ended December 31, 2015. Ferrari's operating results are presented as a single line item within the Interim Condensed Consolidated Income Statement and the Interim Condensed Consolidated Statement of Comprehensive Income for the three months ended March 31, 2015. The spin-off of Ferrari was completed on January 3, 2016 (refer to Note 2, Scope of Consolidation, in the Interim Condensed Consolidated Financial Statements included elsewhere in this Interim Report).
 
 
For the three months ended March 31
(€ million)
 
2016
 
2015
Net revenues
 
26,570

 
25,843

Cost of sales
 
22,803

 
22,600

Selling, general and other costs
 
1,756

 
1,908

Research and development costs
 
759

 
685

Result from investments
 
62

 
50

Restructuring costs
 
7

 
4

EBIT
 
1,307

 
696

Net financial expenses
 
512

 
608

Profit before taxes
 
795

 
88

Tax expense
 
317

 
61

Net profit from continuing operations
 
478

 
27

Profit from discontinued operations, net of tax
 
—

 
65

Net profit
 
478

 
92

Net profit attributable to:
 
 
 
 
Owners of the parent
 
472

 
78

Non-controlling interests
 
6

 
14


6



Net revenues
 
 
For the three months ended March 31
 
Increase/(decrease)
(€ million, except percentages)
 
2016
 
2015
 
2016 vs. 2015
 
CER
Net revenues
 
26,570


25,843

 
727

2.8
%
 
3.7
%
See —Results by Segment below for a detailed discussion of Net revenues for each of our six reportable segments (NAFTA, LATAM, APAC, EMEA, Maserati and Components).
Cost of sales
 
 
For the three months ended March 31
 
  Increase/(decrease)
(€ million, except percentages) 
 
2016
 
Percentage
of net
revenues  
 
2015
 
Percentage
of net
revenues
 
2016 vs. 2015
 
CER
Cost of sales
 
22,803

 
85.8
%
 
22,600

 
87.5
%
 
203

0.9
%
 
1.8
%
The increase in Cost of sales was primarily related to (i) vehicle mix, partially offset by (ii) lower industrial costs due to lower recall campaign costs and purchasing efficiencies and (iii) foreign currency translation effects mainly attributable to the devaluation of the Brazilian Real.
The increase in Cost of sales was primarily attributable to increases in NAFTA and EMEA, with decreases in LATAM and APAC. The decrease in Cost of sales in APAC was mainly due to the shift to domestic production through the GAC Fiat Chrysler Automobiles Co. Ltd (“GAC”) joint venture in China, which is accounted for using the equity method of accounting.

Selling, general and other costs
 
 
For the three months ended March 31
 
Increase/(decrease)
(€ million, except percentages)    
 
2016
 
Percentage
of net
revenues  
 
2015
 
Percentage
of net
revenues  
 
2016 vs. 2015
 
CER
Selling, general and other costs
 
1,756

 
6.6
%
 
1,908

 
7.4
%
 
(152
)
(8.0
)%
 
(6.2
)%
Selling, general and other costs include advertising, personnel, and other costs. Advertising costs accounted for 46.2 percent and 48.9 percent of total Selling, general and other costs for the three months ended March 31, 2016 and 2015, respectively.    
The decrease in Selling, general and other costs was primarily due to (i) lower direct marketing costs in APAC largely attributable to the shift to domestic production through the GAC joint venture in China, (ii) lower marketing costs in NAFTA and LATAM and (ii) foreign currency translation effects primarily resulting from the devaluation of the Brazilian Real, which was partially offset by the strengthening of the U.S. Dollar against the Euro.

7


Research and development costs
 
 
For the three months ended March 31
 
  Increase/(decrease)
(€ million, except percentages) 
 
2016
 
Percentage
of net
revenues 
 
2015
 
Percentage
of net
revenues
 
2016 vs. 2015
 
CER
Research and development expensed
 
428

 
1.6
%
 
395

 
1.5
%
 
33

8.4
%
 
8.1
%
Amortization of capitalized development costs
 
331

 
1.2
%
 
289

 
1.1
%
 
42

14.5
%
 
16.3
%
Write-down of capitalized development costs
 
—

 
—

 
1

 
n.m.

 
(1
)
n.m.

 
n.m.

Research and development costs
 
759

 
2.9
%
 
685

 
2.7
%
 
74

10.8
%
 
11.4
%
__________________________
n.m. - number is not meaningful
The increase in Research and development expensed during the three months ended March 31, 2016 compared to the corresponding period in 2015 was primarily attributable to NAFTA and EMEA.
The increase in amortization of capitalized development costs during the three months ended March 31, 2016 compared to the corresponding period in 2015 was mainly attributable to NAFTA.
Total expenditures on research and development for the three months ended March 31, 2016 and 2015 were as follows:
 
 
For the three months ended March 31
 
  Increase/(decrease)
(€ million, except percentages) 
 
2016
 
2015
 
2016 vs. 2015
Development costs capitalized
 
561

 
559

 
2

0.4
%
Research and development expensed
 
428

 
395

 
33

8.4
%
Total Research and development expenditures
 
989

 
954

 
35

3.7
%
Development costs capitalized as a percentage of total expenditures on research and development
 
56.7
%
 
58.6
%
 
 
Result from investments
 
 
For the three months ended March 31
 
Increase/(decrease)
(€ million, except percentages)       
 
2016
 
2015
 
2016 vs. 2015
Result from investments
 
62

 
50

 
12

 
24.0
%
    
The increase in Result from investments for the three months ended March 31, 2016 compared to the corresponding period in 2015 was primarily attributable to improved results from the GAC joint venture, which is within APAC.
EBIT
 
 
For the three months ended March 31
 
Increase/(decrease)
(€ million, except percentages)  
 
2016
 
2015
 
2016 vs. 2015
 
CER
EBIT
 
1,307

 
696

 
611

87.8
%
 
86.4
%
The increase in EBIT during the three months ended March 31, 2016 compared to the same period in 2015 was primarily attributable to increases in (i) NAFTA of €575 million, (ii) EMEA of €71 million (iii) LATAM of €58 million and (iv) Components of €14 million, which were partially offset by decreases in (v) APAC of €48 million and (vi) Maserati of €20 million. For the three months ended March 31, 2016, EBIT included net expenses totaling €72 million of items that were excluded from Adjusted EBIT.

8


Adjusted EBIT
 
 
For the three months ended March 31
 
Increase/(decrease)
(€ million, except percentages)  
 
2015
 
2014
 
2015 vs. 2014
 
CER
Adjusted EBIT
 
1,379

 
700

 
679

97.0
%
 
95.7
%
    
Adjusted EBIT is calculated as EBIT excluding: gains/(losses) on the disposal of investments, restructuring, impairments, asset write-offs and other unusual income/(expenses) that are considered rare or discrete events that are infrequent in nature. Refer to —Results by Segment below for a detailed discussion of Adjusted EBIT for each of our six reportable segments (NAFTA, LATAM, APAC, EMEA, Maserati and Components).
The following table is a reconciliation of Adjusted EBIT to EBIT:
 
For the three months ended March 31
(€ million)
2016
 
2015
Adjusted EBIT
1,379

 
700

NAFTA capacity realignment
(51
)
 
—

Venezuela currency devaluation
(19
)
 
—

Restructuring costs
(7
)
 
(4
)
Other
5

 
—

Total adjustments
(72
)
 
(4
)
EBIT
1,307

 
696

Net financial expenses
 
 
For the three months ended March 31
 
Increase/(decrease)
(€ million, except percentages)
 
2016
 
2015
 
2016 vs. 2015
Net financial expenses
 
512

 
608

 
(96
)
 
(15.8
)%
The decrease in Net financial expenses during the three months ended March 31, 2016 compared to the corresponding period in 2015 was primarily due to the reduction in gross debt.
Tax expense
 
 
For the three months ended March 31
 
Increase/(decrease)
(€ million, except percentages)
 
2016
 
2015
 
2016 vs. 2015
Tax expense
 
317

 
61

 
256

 
n.m.
_________________________
n.m. - number is not meaningful
The increase in tax expense during the three months ended March 31, 2016 compared to the corresponding period in 2015 was primarily due to increased profitability in the U.S.


9


Results by Segment
The following is a discussion of Net revenues, Adjusted EBIT and shipments for each of our six reportable segments for the three months ended March 31, 2016 compared to the three months ended March 31, 2015.
(€ million, except shipments which are in thousands of units)
 
Net revenues
 
Adjusted EBIT
 
Shipments
 
For the three months
ended March 31
 
For the three months
ended March 31
 
For the three months
ended March 31
 
2016
 
2015
 
2016
 
2015
 
2016
 
2015
NAFTA
 
17,136

 
16,177

 
1,227

 
601

 
649

 
633

LATAM
 
1,311

 
1,551

 
11

 
(65
)
 
102

 
135

APAC
 
949

 
1,512

 
12

 
65

 
25

 
47

EMEA
 
5,040

 
4,684

 
96

 
25

 
304

 
271

Maserati
 
508

 
523

 
16

 
36

 
6

 
7

Components
 
2,319

 
2,435

 
86

 
68

 
—

 
—

Other activities
 
182

 
197

 
(43
)
 
(9
)
 
—

 
—

Unallocated items & adjustments(1)   
 
(875
)
 
(1,236
)
 
(26
)
 
(21
)
 
—

 
—

Total
 
26,570

 
25,843

 
1,379

 
700

 
1,086

 
1,093

__________________________
(1) Primarily includes intercompany transactions which are eliminated on consolidation.

NAFTA
(€ million, except shipments which are in thousands of units, and percentages)
 
For the three months ended March 31
 
Increase/(decrease)
 
2016
 
2015
 
2016 vs. 2015
 
CER
Shipments
 
649

 
633

 
16

 
2.5
%
 
—

Net revenues
 
17,136

 
16,177

 
959

 
5.9
%
 
4.7
%
Adjusted EBIT
 
1,227

 
601

 
626

 
104.2
%
 
101.4
%
Adjusted EBIT margin
 
7.2
%
 
3.7
%
 
 
The Group's market share(1) in NAFTA of 12.9 percent in the three months ended March 31, 2016 reflected an increase of 50 bps from 12.4 percent in the same period in 2015. The Group continued to be the market leader in Canada.

Shipments
The increase in NAFTA shipments in the three months ended March 31, 2016 compared to the same period in 2015 was primarily attributable to (i) an increase in the U.S. of 19 thousand units (3 percent), partially offset by (ii) a decrease in Canada of one thousand units (-2 percent) and (iii) a decrease in Mexico of two thousand units (-11 percent).
Net revenues
The increase in NAFTA Net revenues in the three months ended March 31, 2016 compared to the same period in 2015 was primarily attributable to (i) €0.6 billion related to increased shipments and positive vehicle mix, mainly driven by Jeep, Ram and minivans offsetting lower Chrysler 200, Dodge Dart and Dodge Journey volumes, partially offset by unfavorable market mix, (ii) improved net pricing of €0.1 billion, which reflects positive gross pricing that was partially offset by higher incentives and the negative foreign exchange transaction effect of the Canadian Dollar and Mexican Peso, as well as (iii) favorable foreign currency translation effects of €0.2 billion.

10


Adjusted EBIT
The increase in NAFTA Adjusted EBIT in the three months ended March 31, 2016 compared to the same period in 2015 was primarily attributable to (i) an increase in volume and favorable vehicle mix effect of €309 million, as described above, (ii) €96 million due to an improvement in net price, as described above, (iii) a decrease in industrial costs of €117 million primarily related to purchasing savings and lower recall campaign costs, partially offset by higher manufacturing and product costs for content enhancements, (iv) a €36 million decrease in selling, general and administrative costs due to reduced advertising costs, and (v) €68 million primarily related to foreign currency exchange effects.
Adjusted EBIT for the three months ended March 31, 2016 excluded total net charges of €49 million, which primarily related to the net incremental costs from the implementation of the Group's plan to realign its existing capacity in NAFTA to better meet market demand for pickup trucks and utility vehicles.
_________________________
(1)
The Group's estimated market share data presented are based on management’s estimates of industry sales data, which use certain data provided by third-party sources, including IHS Global Insight and Ward’s Automotive.
LATAM
(€ million, except shipments which are in thousands of units, and percentages)
 
For the three months ended March 31
 
Increase/(decrease)
 
2016
 
2015
 
2016 vs. 2015
 
CER
Shipments
 
102

 
135

 
(33
)
 
(24.4
)%
 
—

Net revenues
 
1,311

 
1,551

 
(240
)
 
(15.5
)%
 
5.3
%
Adjusted EBIT
 
11

 
(65
)
 
76

 
n.m.

 
n.m.

Adjusted EBIT margin
 
0.8
%
 
(4.2
)%
 
 
The Group's market share(1) in LATAM decreased to 12.7 percent in the three months ended March 31, 2016 from 14.7 percent due to actions taken to protect margins. However, the Group continued to be the market leader in Brazil with a market share of 18.1 percent and with a 180 bps lead over its nearest competitor.
Shipments
The decrease in LATAM shipments in the three months ended March 31, 2016 compared to the same period in 2015 was primarily attributable to (i) 37 thousand fewer units in Brazil, which reflected the poor trading conditions in Brazil due to the continued macroeconomic weakness, partially offset by (ii) an increase of 4 thousand units in Argentina.    
Net revenues
The decrease in LATAM Net revenues in the three months ended March 31, 2016 compared to the same period in 2015 was primarily attributable to (i) a decrease of €0.3 billion driven by lower volume and (ii) €0.3 billion of unfavorable foreign exchange effects from the devaluation of the Brazilian Real, which were partially offset by (iii) a positive vehicle mix effect of €0.4 billion primarily related to the newly launched Jeep Renegade and Fiat Toro.
Adjusted EBIT
The increase in LATAM Adjusted EBIT in the three months ended March 31, 2016 compared to the same period in 2015 was primarily attributable to (i) a favorable mix effect, net of the decrease in volumes, of €10 million, (ii) a decrease in industrial costs of €22 million which reflected efficiencies, that were partially offset by higher costs from new product launches and input cost inflation and (iii) a €34 million decrease in selling, general and administrative costs driven by lower marketing costs.
    
    



11


Adjusted EBIT for the three months ended March 31, 2016 excluded total charges of €24 million, which primarily related to the adoption of the new floating exchange rate and the related re-measurement of the Group's net monetary assets in Venezuela as described in more detail in Note 17 of the Interim Condensed Consolidated Financial Statements included elsewhere in this Interim Report.

Venezuela

During the three months ended March 31, 2016, we continued to control and consolidate our Venezuelan operations. We continue to assess conditions in Venezuela, and if in the future we conclude that we no longer maintain control over our operations in Venezuela, we may incur a pre-tax charge of approximately €150 million using the current exchange rate of 272.91 VEF to U.S. Dollar.  In addition, it is possible that in the future our Venezuelan operations may require additional financial support in 2016, however no determination has been made as to the nature or amount of any necessary support. 

_________________________
n.m. - number is not meaningful
(1) The Group's estimated market share data presented are based on management’s estimates of industry sales data, which use certain data provided by third-party sources, including IHS Global Insight, National Organization of Automotive Vehicles Distribution and Association of Automotive Producers.
APAC
(€ million, except shipments which are in thousands of units, and percentages)
 
For the three months ended March 31
 
Increase/(decrease)
 
2016
 
2015
 
2016 vs. 2015
 
CER
Shipments
 
25

 
47

 
(22
)
 
(46.8
)%
 
—

Net revenues
 
949

 
1,512

 
(563
)
 
(37.2
)%
 
(36.2
)%
Adjusted EBIT
 
12

 
65

 
(53
)
 
(81.5
)%
 
(81.7
)%
Adjusted EBIT margin
 
1.3
%
 
4.3
%
 
 
The production of the Jeep Renegade started in 2016 in the Guangzhou plant of our GAC joint venture. This represents the second locally produced Jeep sport utility vehicle (“SUV”) in China. As a result of the increased local production by the GAC joint venture, the Group is importing fewer vehicles into China. As the GAC joint venture is accounted for using the equity method of accounting, the results of the joint venture are recognized in the line item Results from investments in the Consolidated Income Statement, rather than being consolidated on a line by line basis. This shift to localized production in China has the effect of decreasing Net revenues and other lines of the Consolidated Income Statement due to fewer shipments through our consolidated operations in China. As this trend continues, the results from the GAC joint venture, which are included in EBIT and Adjusted EBIT become increasingly important to understanding our results from operations in APAC.

Sales (which reflect retail deliveries), including vehicles produced by the China joint venture, were 53 thousand in the three months ended March 31, 2016, down from 59 thousand units in the same period in 2015, primarily as a result of lower volumes in Australia; however, Jeep sales increased 17 percent due to the early success of the locally produced Jeep Cherokee in China.

Shipments
The decrease in APAC shipments in the three months ended March 31, 2016 compared to the same period in 2015 was primarily attributable to the reduction in Jeep shipments of 56 percent due to the transition to local production in China, as described above.
Net revenues
The decrease in APAC Net revenues in the three months ended March 31, 2016 compared to the same period in 2015 was primarily due to lower shipments as a result of (i) the transition to Jeep local production in China, as described above, and (ii) lower volumes in Australia due to price increases used to offset the negative foreign exchange effect of the Australian Dollar.    

12


Adjusted EBIT     
The decrease in APAC Adjusted EBIT in the three months ended March 31, 2016 compared to the same period in 2015 was primarily attributable to (i) a total decrease of €120 million related to lower volumes, as described above, and unfavorable vehicle mix from shipment of vehicles affected by the August 2015 Port of Tianjin (China) explosions, which were partially offset by (ii) a €50 million reduction in selling, general and administrative costs mainly related to lower direct marketing costs as a result of the shift to domestic production through our GAC joint venture and (iii) the improvement in results from the GAC joint venture in China driven by the local production and commercialization of the Jeep Cherokee.
EMEA
(€ million, except shipments which are in thousands of units, and percentages)
 
For the three months ended March 31
 
Increase/(decrease)
 
2016
 
2015
 
2016 vs. 2015
 
CER
Shipments
 
304

 
271

 
33

 
12.2
%
 
—

Net revenues
 
5,040

 
4,684

 
356

 
7.6
%
 
8.3
%
Adjusted EBIT
 
96

 
25

 
71

 
n.m.

 
n.m.

Adjusted EBIT margin
 
1.9
%
 
0.5
%
 
 
In the three months ended March 31, 2016, the Group's market share(1) in the European Union for passenger cars increased 50 bps to 6.7 percent from 6.2 percent in the same period in 2015, while the Group's market share for light commercial vehicles (“LCVs”) decreased by 10 bps to 10.9 percent in the three months ended March 31, 2016 from 11.0 percent in the same period in 2015.
Shipments
The increase in EMEA shipments in the three months ended March 31, 2016 compared to the same period in 2015 was primarily attributable to (i) a 13 percent increase in passenger car shipments to 240 thousand units and (ii) an 8 percent increase in shipments of LCVs to 64 thousand units.
Net revenues
The increase in EMEA Net revenues in the three months ended March 31, 2016 compared to the same period in 2015 was mainly attributable to (i) an increase in volume and favorable vehicle mix, driven by the Jeep Renegade, Fiat 500X and the Fiat Tipo, which were partially offset by (ii) unfavorable net pricing related to higher incentives in the European Union, as noted above.
Adjusted EBIT
The increase in EMEA Adjusted EBIT in the three months ended March 31, 2016 compared to the same period in 2015 was primarily attributable to (i) a total positive effect of €73 million related to higher volumes and favorable vehicle mix, as described above, (ii) a decrease in industrial costs of €27 million that reflected manufacturing and purchasing efficiencies, which were partially offset by an increase in research and development costs and (iii) unfavorable net pricing of €24 million related to higher incentives in the European Union, as described above.
__________________________
n.m. - number is not meaningful
(1)
The Group's estimated market share data is presented based on the European Automobile Manufacturers Association (ACEA) Registration Databases and national Registration Offices databases.

13


Maserati
(€ million, except shipments which are in units, and percentages)
 
For the three months ended March 31
 
Increase/(decrease)
 
2016
 
2015
 
2016 vs. 2015
 
CER
Shipments
 
6,295

 
7,306

 
(1,011
)
 
(13.8
)%
 
—

Net revenues
 
508

 
523

 
(15
)
 
(2.9
)%
 
(2.7
)%
Adjusted EBIT
 
16

 
36

 
(20
)
 
(55.6
)%
 
(53.5
)%
Adjusted EBIT margin
 
3.1
%
 
6.9
%
 
 
Shipments
The decrease in Maserati shipments in the three months ended March 31, 2016 compared to the same period in 2015 was primarily attributable to lower shipments of (i) 16 percent in North America and (ii) 8 percent in Europe, which were partially offset by (iii) a 36 percent increase in China.
Net revenues
The decrease in Maserati Net revenues in the three months ended March 31, 2016 compared to the same period in 2015 was primarily due to lower shipments, that was partially offset by positive mix and foreign exchange effects.
Adjusted EBIT
The decrease in Maserati Adjusted EBIT in the three months ended March 31, 2016 compared to the same period in 2015 was primarily due to lower volumes.
Components
 
 
For the three months ended March 31
 
Increase/(decrease)
(€ million, except percentages) 
 
2016
 
2015
 
2016 vs. 2015
 
CER
Net revenues
 
2,319

 
2,435

 
(116
)
 
(4.8
)%
 
(0.4
)%
Adjusted EBIT
 
86

 
68

 
18

 
26.5
 %
 
25.2
 %
Adjusted EBIT margin
 
3.7
%
 
2.8
%
 
 

Magneti Marelli order intake was €653 million for the three months ended March 31, 2016, which reflected an increase of 17 percent compared to the same period in 2015, with non-captive at 53 percent. Comau order backlog was €972 million for the three months ended March 31, 2016, which was in line with December 31, 2015, although lower than at March 31, 2015.

Net revenues
The decrease in Net revenues in the three months ended March 31, 2016 compared to the same period in 2015 reflected volume declines in Comau and Teksid, which were partially offset by higher volumes in Magneti Marelli.
    
Adjusted EBIT
The increase in Adjusted EBIT in the three months ended March 31, 2016 compared to the same period in 2015 was primarily driven by favorable mix, which more than offset higher industrial costs.


14



Liquidity and Capital Resources

Available Liquidity
Available liquidity at March 31, 2016, which was in line with the available liquidity at December 31, 2015, primarily reflects (i) the U.S.$2.0 billion (€1.8 billion) of cash used for the voluntary prepayments of principal of the tranche B term loans of FCA US due in 2017 and 2018 (refer to the —Capital Market and Other Financing Transactions section below), (ii) cash absorption from operations, net of investing activities, of €1.0 billion, (iii) negative foreign exchange translation effects of €0.5 billion, (iv) the availability in March 2016 of the second €2.5 billion tranche (expiring in 2020) of the €5.0 billion syndicated revolving credit facility entered into by FCA in June 2015 (“RCF”) and (v) the issuance of new notes under the Global Medium Term Note (“GMTN”) Programme for a total principal amount of €1.25 billion (refer to the —Capital Market and Other Financing Transactions section below). Our available liquidity is subject to intra-month and seasonal fluctuations resulting from business and collection-payment cycles as well as to changes in foreign exchange conversion rates. Refer to the —Cash Flows section below for additional information regarding the change in cash and cash equivalents.

The following table summarizes our total available liquidity:
(€ million)
 
At March 31, 2016
 
At December 31, 2015
Cash, cash equivalents and current securities (1)
 
18,422

 
21,144

Undrawn committed credit lines (2)
 
5,874

 
3,413

Available liquidity (3)
 
24,296

 
24,557

_____________________________
(1)
Current securities are comprised of short term or marketable securities which represent temporary investments that do not satisfy all the requirements to be classified as cash equivalents as they may not be readily convertible to cash, or they are subject to significant risk of change in value (even if they are short-term in nature or marketable).
(2)
Excludes the undrawn €0.2 billion medium/long-term dedicated credit lines available to fund scheduled investments as of March 31, 2016 (€0.3 billion was undrawn at December 31, 2015) and also excludes the undisbursed €0.4 billion on the non-revolving loan agreement (the “Mexico Bank Loan”) of FCA Mexico, S.A. de C.V. (“FCA Mexico”) as of March 31, 2016 (€0.4 billion was also undrawn at December 31, 2015), which can be drawn subject to meeting the preconditions for additional disbursements.
(3)
The majority of our liquidity is available to our treasury operations in Europe, U.S. and Brazil; however, liquidity is also available to certain subsidiaries which operate in other areas. Cash held in such countries may be subject to restrictions on transfer depending on the foreign jurisdictions in which these subsidiaries operate. Based on our review of such transfer restrictions in the countries in which we operate and maintain material cash balances, we do not believe such transfer restrictions have an adverse effect on the Group’s ability to meet its liquidity requirements at the dates represented above.
Our liquidity is principally denominated in U.S. Dollar and in Euro, with the remainder being distributed in various countries and denominated in the relevant local currencies. Out of the total €18.4 billion of cash, cash equivalents and current securities available at March 31, 2016 (€21.1 billion at December 31, 2015), €11.0 billion, or 59.8 percent were denominated in U.S. Dollar (€12.6 billion, or 59.7 percent, at December 31, 2015) and €4.0 billion, or 21.7 percent, were denominated in Euro (€3.4 billion, or 16.1 percent, at December 31, 2015).
Capital Market and Other Financing Transactions
FCA US Tranche B Term Loans
On March 15, 2016, FCA US entered into amendments to the credit agreements that govern its tranche B term loan maturing on May 24, 2017 (“Tranche B Term Loan due 2017”) and its tranche B term loan maturing on December 31, 2018 (“Tranche B Term Loan due 2018”), (collectively, the “Tranche B Term Loans”), to, among other items, eliminate covenants restricting the provision of guarantees and payment of dividends by FCA US for the benefit of the rest of the Group, to enable a unified financing platform and to provide free flow of capital within the Group. In conjunction with these amendments, FCA US made a U.S.$2.0 billion (€1.8 billion) voluntary prepayment of principal at par with cash on hand, of which U.S.$1,288 million (€1,159 million) was applied to the Tranche B Term Loan due 2017 and U.S.$712 million (€641 million) was applied to the Tranche B Term Loan due 2018. FCA US also paid outstanding accrued interest related to the portion of principal prepaid of the Tranche B Term Loans and related transaction fees.

15


The prepayments of principal were accounted for as debt extinguishments, and as a result, we recorded a non-cash charge of €10 million within Net financial expenses for the three months ended March 31, 2016 which consisted of the write-off of the remaining unamortized debt issuance costs.
Revolving Credit Facilities
In conjunction with the amendments to the Tranche B Term Loans, the second €2.5 billion tranche (expiring in 2020) of the €5.0 billion RCF was made available to the Group in March 2016.     
GMTN Programme
On March 30, 2016, FCA issued 3.75 percent notes at par with a total principal amount of €1.25 billion due in March 2024. The notes are listed on the Irish Stock Exchange.
Cash Flows
The following table summarizes the cash flows from operating, investing and financing activities for the three months ended March 31, 2016 and 2015. Refer to our Interim Condensed Consolidated Statement of Cash Flows for the three months ended March 31, 2016 and 2015 included elsewhere in this Interim Report for additional detail.
 
For the three months ended March 31
(€ million)
2016
 
2015 (1)
Cash and cash equivalents at beginning of the period
20,662

 
22,840

Cash flows from operating activities - continuing operations
770

 
932

Cash flows from operating activities - discontinued operations
—

 
26

Cash flows used in investing activities - continuing operations
(1,737
)
 
(1,672
)
Cash flows used in investing activities - discontinued operations
—

 
(116
)
Cash flows used in financing activities - continuing operations
(1,186
)
 
(1,762
)
Cash flows from financing activities - discontinued operations
—

 
18

Translation exchange differences
(546
)
 
1,403

Total change in cash and cash equivalents
(2,699
)
 
(1,171
)
Cash and cash equivalents at end of the period
17,963

 
21,669

_________________________
(1)
The Group's cash flows for the three months ended March 31, 2015 have been re-presented to exclude Ferrari, consistent with Ferrari's classification as a discontinued operation for the year ended December 31, 2015. Ferrari cash flows are presented as a single line item within the Interim Condensed Consolidated Statement of Cash Flows for the three months ended March 31, 2015.

Operating Activities

For the three months ended March 31, 2016, cash flows from operating activities were primarily the result of (i) net profit of €478 million adjusted to add back €1,417 million for depreciation and amortization expense and (ii) €106 million dividends received from jointly-controlled entities, which were partially offset by (iii) the negative effect of the change in working capital of €1,213 million primarily driven by (a) an increase of €205 million in inventories and an increase of €573 million in trade receivables, both in line with production and sales volumes for the period and (b) €477 million decrease in trade payables, mainly related to plant downtime for product change-overs and reduced sedan volumes in NAFTA.

For the three months ended March 31, 2015, cash flows from operating activities were primarily the result of (i) net profit of €27 million adjusted to add back €1,337 million for depreciation and amortization expense, (ii) a net increase of €380 million in provisions, mainly related to net adjustments to warranties for NAFTA and higher accrued sales incentives, primarily due to an increase in dealer stock levels to support increased sales volumes in NAFTA and (iii) €112 million of dividends received from jointly-controlled entities, which were partially offset by (v) the negative effect of change in working capital of €1,031 million primarily driven by (a) €1,285 million increase in inventories, in line with the trend in production and sales volumes for the period, (b) €173 million increase in trade receivables, (c) €647 million increase in net other current assets and liabilities, which were partially offset by (d) €1,074 million increase of trade payables, mainly related to increased production in EMEA and NAFTA as a result of increased consumer demand for our vehicles.

16


Investing Activities
For the three months ended March 31, 2016, cash used in investing activities was primarily the result of €1,821 million of capital expenditures, including €561 million of capitalized development costs primarily related to the operations in NAFTA and EMEA.
For the three months ended March 31, 2015, cash used in investing activities was primarily the result of (i) €1,999 million of capital expenditures, including €559 million of capitalized development costs, to support investments in existing and future products mainly related to the operations in NAFTA and EMEA and the completion of the new plant at Pernambuco, Brazil and (ii) €116 million of cash flows used by discontinued operations, which were partially offset by (iii) a €398 million net decrease in receivables from financing activities primarily related to the decreased lending portfolio of the financial services activities of the Group.
Financing Activities
For the three months ended March 31, 2016, cash used in financing activities was primarily the result of (i) the voluntary prepayment of principal on the FCA US Tranche B Term Loans of U.S.$2.0 billion (€1.8 billion), which was partially offset by (ii) proceeds from the issuance of notes under the GMTN Programme for a total principal amount of €1,250 million.
For the three months ended March 31, 2015, cash used in financing activities was primarily the result of (i) the repayment at maturity of a note issued under the GMTN Programme for a total principal amount of €1,500 million and (ii) the payment of medium-term borrowings for a total of €1,138 million, which included the repayment at maturity of the European Investment Bank (“EIB”) loan of €250 million and the repayment of our Mexican development banks credit facilities of €414 million as part of FCA Mexico's refinancing transaction in March 2015, that were partially offset by (iii) proceeds from new medium-term borrowings for a total of €953 million, which included the initial disbursement received of approximately €500 million (at date of transaction) under the FCA Mexico Bank Loan as part of FCA Mexico's refinancing transaction completed in March 2015, and other financing transactions, primarily in Brazil.

Net Debt
The following table summarizes our Net Debt at March 31, 2016 and December 31, 2015 and provides a reconciliation of this non-GAAP measure to Debt, the most directly comparable measure included in our Consolidated Statement of Financial Position.
Due to different sources of cash flows used for the repayment of the financial debt between industrial activities and financial services (by cash from operations for industrial activities and by collection of financial receivables for financial services) and the different business structure and leverage implications, we provide a separate analysis of Net Debt between industrial activities and financial services.
    
The division between industrial activities and financial services represents a sub-consolidation based on the core business activities (industrial or financial services) of each Group company. The sub-consolidation for industrial activities also includes companies that perform centralized treasury activities, such as raising funding in the market and financing Group companies, but do not however, provide financing to third parties. Financial services includes companies that provide retail and dealer financing, leasing and rental services in support of the mass-market vehicle brands in certain geographical segments and for the Maserati luxury brand.
    
At March 31, 2016, in conjunction with the amendments to the credit agreements that govern the Tranche B Term Loans of FCA US, FCA US's cash management activities are no longer managed separately from the rest of the Group. As a result, the Group no longer provides the analysis of Net Industrial Debt split between FCA US and the remainder of the Group.

17


 
At March 31, 2016
 
At December 31, 2015
(€ million)
Industrial
Activities
 
Financial
Services
 
Consolidated
 
Industrial
Activities
 
Financial
Services
 
Consolidated
Third parties debt (principal)
(25,364
)
 
(1,120
)
 
(26,484
)
 
(26,555
)
 
(1,105
)
 
(27,660
)
Capital market(1)
(14,491
)
 
(283
)
 
(14,774
)
 
(13,382
)
 
(264
)
 
(13,646
)
Bank debt
(9,258
)
 
(644
)
 
(9,902
)
 
(11,602
)
 
(653
)
 
(12,255
)
Other debt(2)   
(1,615
)
 
(193
)
 
(1,808
)
 
(1,571
)
 
(188
)
 
(1,759
)
Accrued interest and other adjustments(3)
(71
)
 
—

 
(71
)
 
(127
)
 
1

 
(126
)
Debt with third parties
(25,435
)
 
(1,120
)
 
(26,555
)
 
(26,682
)
 
(1,104
)
 
(27,786
)
Intercompany financial receivables/(payables), net(4)
494

 
(494
)
 
—

 
529

 
(568
)
 
(39
)
Current financial receivables from jointly-controlled financial services companies(5)   
35

 
—

 
35

 
16

 
—

 
16

Debt, net of intercompany and current financial receivables from jointly-controlled financial services companies
(24,906
)
 
(1,614
)
 
(26,520
)
 
(26,137
)
 
(1,672
)
 
(27,809
)
Other financial assets/(liabilities), net(6)   
64

 
(1
)
 
63

 
103

 
14

 
117

Current securities
432

 
27

 
459

 
457

 
25

 
482

Cash and cash equivalents
17,817

 
146

 
17,963

 
20,528

 
134

 
20,662

Net debt
(6,593
)
 
(1,442
)
 
(8,035
)
 
(5,049
)
 
(1,499
)
 
(6,548
)
 
__________________________
(1)
Includes notes (€14,198 million at March 31, 2016 and €13,078 million at December 31, 2015), the financial liability component of the mandatory convertible securities (€199 million at March 31, 2016 and €209 million at December 31, 2015) and other securities (€377 million at March 31, 2016 and €359 million at December 31, 2015) issued in financial markets, mainly from LATAM financial services companies.
(2)
Includes Canadian HCT notes (€363 million at March 31, 2016 and €354 million at December 31, 2015), asset backed financing, (i.e. sales of receivables for which de-recognition is not allowed under IFRS) (€207 million at March 31, 2016 and €206 million at December 31, 2015), arrangements accounted for as a lease under IFRIC 4 -Determining whether an arrangement contains a lease, and other financial payables.
(3)
Includes adjustments for fair value accounting on debt (€37 million at March 31, 2016 and €43 million at December 31, 2015) and (accrued)/deferred interest and other amortizing cost adjustments (€34 million at March 31, 2016 and €83 million at December 31, 2015).
(4)
Net amount between Industrial Activities financial receivables due from Financial Services (€571 million at March 31, 2016 and €664 million at December 31, 2015) and Industrial Activities financial payables due to Financial Services (€77 million at March 31, 2016 and €96 million at December 31, 2015). At December 31, 2015, amount also includes financial receivables due from discontinued operations (€98 million) and financial payables due to discontinued operations (€137 million).
(5)
Financial receivables due from FCA Bank.
(6)
Fair value of derivative financial instruments (net positive €23 million at March 31, 2016 and net positive €77 million at December 31, 2015) and collateral deposits (€40 million at March 31, 2016 and December 31, 2015).
Change in Net Industrial Debt
Net Industrial Debt is management’s primary measure for analyzing our financial leverage and capital structure and is one of the key targets used to measure our performance.
Net Industrial Debt at March 31, 2016 increased by €1.5 billion from €5,049 million at December 31, 2015. The increase in Net Industrial Debt was primarily driven by (i) cash flows from industrial operating activities of €0.8 billion, which represents the majority of the consolidated cash flows from operating activities (see the section —Cash Flows above for an explanation of the drivers in consolidated cash flows from operating activities), (ii) investments in industrial activities of €1.8 billion representing investments in property, plant and equipment and intangible assets and (iii) negative translation exchange effects of €0.3 billion.

18



Recent Developments

On April 14 and 15, 2016, a series of earthquakes occurred near Kumamoto, Japan.  We are currently working with our suppliers to assess the potential effect of these earthquakes on our supply chain.


Outlook
The Group confirms full-year guidance for 2016:
(€ million)
 
2016 Guidance
Net revenues
 
> €110 billion
Adjusted EBIT
 
 > €5.0 billion
Adjusted net profit
 
> €1.9 billion
Net industrial debt
 
< €5.0 billion
•
NAFTA and EMEA continue trend of improving margin performance
•
LATAM returns to modest profitability with Pernambuco reaching full model production in second half of 2016
•
APAC profitability improving in second half of 2016 as Jeep manufacturing localization in China completed
•
Maserati performance improving in second half of 2016 following Levante launch
•
Capital expenditures in line with 2015
•
Net industrial debt confirmed with first quarter of 2016 working capital seasonality expected to substantially reverse in second quarter of 2016


19



INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND NOTES AS OF AND FOR THE THREE MONTHS ENDED MARCH 31, 2016

20


FIAT CHRYSLER AUTOMOBILES N.V.
INTERIM CONDENSED CONSOLIDATED INCOME STATEMENT
(UNAUDITED)
 
 
 
For the three months
ended March 31
 
Note
 
2016
 
2015
 
 
 
(€ million)
Net revenues
3
 
26,570

 
25,843

Cost of sales
 
 
22,803

 
22,600

Selling, general and other costs
 
 
1,756

 
1,908

Research and development costs
 
 
759

 
685

Result from investments
 
 
62

 
50

Restructuring costs
 
 
7

 
4

EBIT
 
 
1,307

 
696

Net financial expenses
4
 
512

 
608

Profit before taxes
 
 
795

 
88

Tax expense
5
 
317

 
61

Net profit from continuing operations
 
 
478


27

Profit from discontinued operations, net of tax
 
 
—


65

Net profit
 
 
478

 
92

Net profit attributable to:
 
 
 
 
 
Owners of the parent
 
 
472

 
78

Non-controlling interests
 
 
6

 
14

 
 
 
 
 
 
Profit from continuing operations attributable to:
 
 
 
 
 
Owners of the parent
 
 
472

 
20

Non-controlling interests
 
 
6

 
7

 
 
 
 
 
 
Earnings per share:
19
 
 
 
 
Basic earnings per share (in €)
 
 
0.312

 
0.052

Diluted earnings per share (in €)
 
 
0.306

 
0.052

 
 
 
 
 
 
Earnings per share for profit from continuing operations:
 
 
 
 
 
Basic earnings per share (in €)
 
 
0.312

 
0.013

Diluted earnings per share (in €)
 
 
0.306

 
0.013







The accompanying notes are an integral part of the Interim Condensed Consolidated Financial Statements.

21


FIAT CHRYSLER AUTOMOBILES N.V.
INTERIM CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME/(LOSS)
(UNAUDITED) 
 
 
 
For the three months
ended March 31
 
Note
 
2016
 
2015
 
 
 
(€ million)
Net profit (A)
 
 
478

 
92

 
 
 
 
 
 
Items that will not be reclassified to the Consolidated Income Statement in subsequent periods:
18
 
 
 
 
Gains/(losses) on re-measurement of defined benefit plans
 
 
2


(67
)
Related tax effect
 
 
(2
)
 
16

Total items that will not be reclassified to the Consolidated Income Statement in subsequent periods (B1)
 
 
—

 
(51
)
 
 
 
 
 
 
Items that may be reclassified to the Consolidated Income Statement in subsequent periods:
18
 
 
 
 
(Losses)/gains on cash flow hedging instruments
 
 
(118
)

131

(Losses)/gains on available-for-sale financial assets
 
 
(15
)

15

Foreign exchange translation (losses)/gains
 
 
(531
)

1,408

Share of Other comprehensive income/(loss) for equity method investees
 
 
(34
)

46

Related tax effect
 
 
64

 
(52
)
Items relating to discontinued operations, net of tax
 
 
—

 
(69
)
Total items that may be reclassified to the Consolidated Income Statement in subsequent periods (B2)
 
 
(634
)
 
1,479

 
 
 
 
 
 
Total Other comprehensive income/(loss), net of tax (B1)+(B2)=(B)
 
 
(634
)

1,428

 
 
 
 
 
 
Total Comprehensive income/(loss) (A)+(B)
 
 
(156
)
 
1,520

 
 
 
 
 
 
Total Comprehensive income/(loss) attributable to:   
 
 
 
 
 
Owners of the parent
 
 
(159
)
 
1,505

Non-controlling interests
 
 
3

 
15

 
 
 
(156
)
 
1,520

Total Comprehensive income/(loss) attributable to owners of the parent:
 
 
 
 
 
Continuing operations
 
 
(159
)
 
1,512

Discontinued operations
 
 
—

 
(7
)
 
 
 
(159
)
 
1,505





The accompanying notes are an integral part of the Interim Condensed Consolidated Financial Statements.

22


FIAT CHRYSLER AUTOMOBILES N.V.
INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
 (UNAUDITED) 
 
Note
 
At March 31, 2016
 
At December 31, 2015
 
 
 
(€ million)
Assets
 
 
 
 
 
Intangible assets:
6
 
24,214

 
24,736

Goodwill and intangible assets with indefinite useful lives
 
 
14,150

 
14,790

Other intangible assets
 
 
10,064

 
9,946

Property, plant and equipment
7
 
27,226

 
27,454

Investments and other financial assets
 
 
2,167

 
2,242

Deferred tax assets
5
 
3,430

 
3,343

Other assets
 
 
196

 
176

Total Non-current assets   
 
 
57,233

 
57,951

Inventories
8
 
11,383


11,351

Assets sold with a buy-back commitment
 
 
1,873

 
1,881

Trade receivables
 
 
3,177

 
2,668

Receivables from financing activities
9
 
1,929

 
2,006

Current tax receivables
 
 
519

 
405

Other current assets
9
 
3,160


3,078

Current financial assets
 
 
1,203

 
1,383

Cash and cash equivalents
 
 
17,963

 
20,662

Assets held for sale
 
 
4

 
5

Assets held for distribution
 
 
—

 
3,650

Total Current assets   
 
 
41,211


47,089

Total Assets
 
 
98,444

 
105,040

Equity and liabilities
 
 
 
 
 
Equity:
18
 
16,129

 
16,255

Equity attributable to owners of the parent
 
 
15,954

 
16,092

Non-controlling interests
 
 
175

 
163

Provisions
11
 
23,180


23,856

Deferred tax liabilities
5
 
182


156

Debt
12
 
26,555


27,786

Other financial liabilities
 
 
636

 
736

Other current liabilities
13
 
10,659


10,930

Current tax payables
 
 
371

 
272

Trade payables
 
 
20,732


21,465

Liabilities held for distribution
 
 
—

 
3,584

Total Equity and liabilities
 
 
98,444

 
105,040





The accompanying notes are an integral part of the Interim Condensed Consolidated Financial Statements.

23


FIAT CHRYSLER AUTOMOBILES N.V.
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
 
 
 
For the three months ended March 31
 
 
 
2016
 
2015
 
 
 
(€ million)
Cash and cash equivalents at beginning of the period
 
 
20,662

 
22,840

Cash flows from operating activities:
 
 


 


Net profit from continuing operations
 
 
478

 
27

Amortization and depreciation
 
 
1,417

 
1,337

Dividends received
 
 
106

 
112

Change in provisions
 
 
30

 
380

Change in deferred taxes
 
 
(3
)
 
111

Change in working capital
 
 
(1,213
)
 
(1,031
)
Other changes
 
 
(45
)
 
(4
)
Cash flows from operating activities - discontinued operations
 
 
—

 
26

Total
 
 
770

 
958

Cash flows used in investing activities:
 
 
 
 
 
Investments in property, plant and equipment and intangible assets
 
 
(1,821
)
 
(1,999
)
Investments in joint ventures, associates and unconsolidated subsidiaries
 
 
(21
)
 
(75
)
Proceeds from disposal of other investments
 
 
40

 
—

Net change in receivables from financing activities
 
 
40

 
398

Other changes
 
 
25

 
4

Cash flows used in investing activities - discontinued operations
 
 
—

 
(116
)
Total
 
 
(1,737
)
 
(1,788
)
Cash flows used in financing activities:
 
 
 
 
 
Issuance of notes
 
 
1,250

 
—

Repayment of notes
 
 
—

 
(1,500
)
Issuance of other medium-term borrowings
 
 
158

 
953

Repayment of other medium-term borrowings
 
 
(2,109
)
 
(1,138
)
Net change in other financial payables and other financial assets/liabilities
 
 
(337
)
 
(82
)
Other changes
 
 
(148
)
 
5

Cash flows from financing activities - discontinued operations
 
 
—

 
18

Total
 
 
(1,186
)
 
(1,744
)
Translation exchange differences
 
 
(546
)
 
1,403

Total change in Cash and cash equivalents
 
 
(2,699
)
 
(1,171
)
Cash and cash equivalents at end of the period
 
 
17,963

 
21,669





The accompanying notes are an integral part of the Interim Condensed Consolidated Financial Statements.

24


FIAT CHRYSLER AUTOMOBILES N.V.
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(UNAUDITED)
 
Attributable to owners of the parent 
 
 
 
 
 
Share capital
 
Other reserves
 
Cash flow hedge reserve
 
Currency translation differences
 
Available-for-sale financial assets
 
Remeasure-ment of defined benefit plans
 
Cumulative share of OCI of equity method investees
 
Non-controlling interests
 
Total
 
(€ million)
At December 31, 2014
17

 
13,754

 
(69
)
 
1,424

 
(37
)
 
(1,578
)
 
(86
)
 
313

 
13,738

Net profit
—

 
78

 
—

 
—

 
—

 
—

 
—

 
14

 
92

Other comprehensive income/(loss)
—

 
—

 
(6
)
 
1,425

 
14

 
(51
)
 
45

 
1

 
1,428

Other changes
—

 
(37
)
 
—

 
—

 
—

 
—

 
—

 
14

 
(23
)
At March 31, 2015
17

 
13,795

 
(75
)
 
2,849

 
(23
)
 
(1,629
)
 
(41
)
 
342

 
15,235


 
Attributable to owners of the parent 
 
 
 
 
 
Share capital
 
Other reserves
 
Cash flow hedge reserve
 
Currency translation differences
 
Available-for-sale financial assets
 
Remeasure-ment of defined benefit plans
 
Cumulative share of OCI of equity method investees
 
Non-controlling interests
 
Total
 
(€ million)
December 31, 2015
17

 
14,871

 
70

 
2,363

 
(26
)
 
(1,098
)
 
(105
)
 
163

 
16,255

Share-based payments
—

 
24

 
—

 
—

 
—

 
—

 
—

 
—

 
24

Net profit
—

 
472

 
—

 
—

 
—

 
—

 
—

 
6

 
478

Other comprehensive income/(loss)
—

 
—

 
(53
)
 
(530
)
 
(15
)
 
—

 
(33
)
 
(3
)
 
(634
)
Other changes (1)
—

 
(22
)
 
49

 
(36
)
 
—

 
6

 
—

 
9

 
6

At March 31, 2016
17

 
15,345

 
66

 
1,797

 
(41
)
 
(1,092
)
 
(138
)
 
175

 
16,129

__________________________
(1) Amounts primarily relate to the reclassification of reserves for Ferrari as a result of Ferrari's classification as a discontinued operation for the year ended December 31, 2015 and the completion of the spin-off of Ferrari N.V. on January 3, 2016.











The accompanying notes are an integral part of the Interim Condensed Consolidated Financial Statements.

25



FIAT CHRYSLER AUTOMOBILES N.V.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) 

1. Basis of preparation
Authorization of Interim Condensed Consolidated Financial Statements and compliance with International Financial Reporting Standards
The accompanying interim condensed consolidated financial statements together with the notes thereto (the “Interim Condensed Consolidated Financial Statements”) were authorized for issuance on May 4, 2016 and have been prepared in accordance with International Financial Reporting Standards (“IFRS”) issued by the International Accounting Standards Board (“IASB”) and adopted by the European Union(1). The designation “IFRS” also includes International Accounting Standards (“IAS”), as well as all interpretations of the IFRS Interpretations Committee (“IFRIC”).
The Interim Condensed Consolidated Financial Statements, which have been prepared in accordance with IAS 34 – Interim Financial Reporting, do not include all of the information and notes required for complete financial statements and should be read in conjunction with the audited annual consolidated financial statements as of and for the year ended December 31, 2015 included within the 2015 Annual Report (the “FCA Consolidated Financial Statements at December 31, 2015”). The accounting policies are consistent with those used at December 31, 2015, except as described in the section —New standards and amendments effective from January 1, 2016 below.
Basis of preparation
The preparation of the Interim Condensed Consolidated Financial Statements requires management to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets, liabilities and disclosure of contingent liabilities. If in the future such estimates and assumptions, which are based on management’s best judgment at the date of these Interim Condensed Consolidated Financial Statements, deviate from the actual circumstances, the original estimates and assumptions will be modified as appropriate in the period in which the circumstances change. The Interim Condensed Consolidated Financial Statements include all adjustments considered necessary by management to fairly state the Group's results of operations, financial position and cash flows. For a description of the significant estimates, judgments and assumptions of the Group, refer to the section —Use of estimates in the FCA Consolidated Financial Statements at December 31, 2015.
The Group's results for the three months ended March 31, 2015 have been re-presented to exclude Ferrari, consistent with Ferrari's classification as a discontinued operation for the year ended December 31, 2015. Ferrari's operating results and cash flows were excluded from the Group's continuing operations and are presented as single line items within the Interim Condensed Consolidated Income Statement, Interim Condensed Consolidated Statement of Comprehensive Income and the Interim Condensed Consolidated Statement of Cash Flows for the three months ended March 31, 2015 (Note 2 - Scope of Consolidation).
Certain prior year amounts in the Interim Condensed Consolidated Financial Statements have been reclassified to conform to the current year presentation. Specifically, the Group is no longer presenting the separate line item Other income/(expenses) and all amounts previously reported within the Other income/(expenses) line item have been reclassified into Selling, general and other costs within the Interim Condensed Consolidated Income Statements for the three months ended March 31, 2016 and 2015. This reclassification had no effect on the Group's consolidated results of operations or financial position.
All references to “Euro” and “€” refer to the currency introduced at the start of the third stage of European Economic and Monetary Union pursuant to the Treaty on the Functioning of the European Union, as amended. All references to “U.S. Dollars,” “U.S. Dollar,” “U.S.$” and “$” refer to the currency of the United States of America (or “U.S.”).
__________________________
(1) There is no effect on these Interim Condensed Consolidated Financial Statements resulting from differences between IFRS as issued by the IASB and IFRS as adopted by the European Union.

26



New standards and amendments effective from January 1, 2016
The following new standards and amendments, which were effective from January 1, 2016, were adopted by the Group. The adoption of these amendments had no effect on the Interim Condensed Consolidated Financial Statements.
•
Amendments to IFRS 11 – Joint arrangements: Accounting for acquisitions of interests in joint operations which clarify the accounting for acquisitions of an interest in a joint operation that constitutes a business.
•
Amendments to IAS 16 – Property, Plant and Equipment and to IAS 38 – Intangible Assets, which clarify that the use of revenue-based methods to calculate the depreciation of an asset is not appropriate because revenue generated by an activity that includes the use of an asset generally reflects factors other than the consumption of the economic benefits embodied in the asset. In addition, the amendments clarify that revenue is generally presumed to be an inappropriate basis for measuring the consumption of the economic benefits embodied in an intangible asset.
•
Annual Improvements to IFRSs 2012-2014 cycle, a series of amendments to IFRSs in response to issues raised mainly on IFRS 5 – Non-current assets held for sale and discontinued operations related to the changes of method of disposal of an asset (or disposal group), on IFRS 7 – Financial Instruments: Disclosures related to clarification when servicing contracts are deemed to constitute continuing involvement for disclosure purposes, on IAS 19 – Employee Benefits related to discount rate determination and on IAS 34 – Interim Reporting related to paragraph 16A and the clarification of the meaning of disclosure of information “elsewhere in the interim financial report”.
•
Amendments to IAS 1 – Presentation of Financial Statements, which were a part of the IASB's initiative to improve presentation and disclosure in financial reports. The amendments make clear that materiality applies to the whole of financial statements and that the inclusion of immaterial information can inhibit the usefulness of financial disclosures. Furthermore, the amendments clarify that companies should use professional judgment in determining where and in what order information is presented in the financial disclosures.
New standards and amendments not yet effective
Reference should be made to the section – New Standards and Amendments Not Yet Effective within the FCA Consolidated Financial Statements at December 31, 2015 for a detailed description of new standards not yet effective as of March 31, 2016.
In April 2016, the IASB issued amendments to IFRS 15 – Revenue from Contracts with Customers which do not change the underlying principles of the standard, but clarify how those principles should be applied. The amendments clarify how to identify a performance obligation in a contract, determine whether a company is a principal or an agent, determine whether the revenue from granting a license should be recognized at a point in time or over time and provide two additional reliefs to reduce cost and complexity. The amendments are effective from January 1, 2018, which is the same effective date as IFRS 15.


27


Exchange rates
The principal exchange rates used to translate other currencies into Euro were as follows:
 
For the three months ended March 31, 2016
 
At March 31, 2016
 
For the three months ended March 31, 2015
 
At March 31, 2015
U.S. Dollar
1.102
 
1.139
 
1.126
 
1.076
Brazilian Real
4.301
 
4.117
 
3.224
 
3.496
Chinese Renminbi
7.211
 
7.351
 
7.023
 
6.671
Canadian Dollar
1.514
 
1.474
 
1.396
 
1.374
Mexican Peso
19.895
 
19.590
 
16.827
 
16.512
Polish Zloty
4.364
 
4.258
 
4.193
 
4.085
Argentine Peso
15.916
 
16.713
 
9.780
 
9.477
Pound Sterling
0.771
 
0.792
 
0.743
 
0.727
Swiss Franc
1.096
 
1.093
 
1.072
 
1.046

2. Scope of consolidation
Ferrari N.V. Spin-off
The spin-off of Ferrari N.V. from the Group was completed on January 3, 2016. The assets and liabilities of the Ferrari segment were distributed to holders of FCA shares and mandatory convertible securities. Since Exor S.p.A., which controls and consolidates FCA, will continue to control and consolidate Ferrari N.V., the spin-off of Ferrari N.V. was accounted for at book value without any gain or loss on the distribution. FCA shareholders received one common share of Ferrari N.V. for every ten common shares of FCA and holders of the mandatory convertible securities were entitled to receive 0.77369 common shares of Ferrari N.V. for each mandatory convertible security of U.S.$100 notional amount held of record on January 5, 2016. In addition, FCA shareholders participating in the FCA loyalty voting structure received one special voting share of Ferrari N.V. for every ten special voting shares of FCA held of record on January 5, 2016. On January 13, 2016, holders of FCA shares also received a cash payment of €0.01, less any required applicable withholding tax, for each share held of record as of January 5, 2016.

As described in Note 1, Basis of Preparation, the Interim Condensed Consolidated Income Statement for the three months ended March 31, 2015 was re-presented to exclude Ferrari's operating results from the Group's continuing operations and to present Ferrari's operating results as a single line item within discontinued operations. The following table summarizes the major line items for discontinued operations for the three months ended March 31, 2015.

 
For the three months
ended March 31, 2015
 
(€ million)
Net revenues
553

Expenses
457

EBIT
96

Net financial income
2

Profit before taxes from discontinued operations
98

Tax expense
33

Profit from discontinued operations, net of tax
65



28


The amounts presented in the table above are not representative of the income statement of Ferrari on a stand-alone basis, as these amounts are net of intercompany transactions. Revenues and expenses arising from intercompany transactions were eliminated, except for those revenues and expenses that continue after the spin-off. However, no profit or loss was recognized for intercompany transactions within the Interim Condensed Consolidated Income Statement for the three months ended March 31, 2015.

3. Net revenues
Net revenues were as follows:
 
For the three months ended March 31
 
2016
 
2015
 
(€ million)
Revenues from:
 
 
 
Sales of goods
25,714

 
24,992

Services provided
557

 
373

Contract revenues
191

 
336

Interest income of financial services activities
35

 
65

Lease installments from assets sold with a buy-back commitment
73

 
77

Total Net revenues
26,570

 
25,843

4. Net financial expenses
The following table summarizes the Group’s financial income and expenses included within the Net financial expenses line item:
 
For the three months ended March 31
 
2016
 
2015
 
(€ million)
Financial income
50

 
58
 
 
 
 
Financial expenses:
 
 
 
Interest expense and other financial expenses
395

 
489
Write-downs of financial assets
13

 
20
Losses on disposal of securities
—

 
4
Net interest expense on employee benefits provisions
85

 
97
Total
493

 
610
 
 
 
 
Net expenses from derivative financial instruments and exchange rate differences
69

 
56
 
 
 
 
Total Financial expenses and Net expenses from derivative financial instruments and exchange rate differences
562

 
666
 
 
 
 
Net financial expenses
512

 
608
    

29


5. Tax expense
Tax expense was as follows:
 
For the three months ended March 31
 
2016
 
2015
 
(€ million)
Current tax expense
315

 
48

Deferred tax expense
2

 
16

Taxes relating to prior periods
—

 
(3
)
Total Tax expense
317

 
61

The increase in Tax expense in the three months ended March 31, 2016 compared to the three months ended March 31, 2015 was primarily due to increased profitability in the U.S.
For the three months ended March 31, 2016, the Group’s effective tax rate was 40 percent. The difference between the statutory tax rate in the U.K., the tax jurisdiction in which FCA is resident, of 20 percent and the effective tax rate is primarily due to income in jurisdictions with higher statutory tax rates than the U.K., and losses in jurisdictions in which a tax benefit is not recorded on tax losses. By comparison, the effective tax rate for the three months ended March 31, 2015 was 69 percent. The decrease in the rate from the prior year is due to the increase in Profit before taxes in the U.S., which reduces the relative impact of losses in jurisdictions in which a tax benefit is not recorded on tax losses.

6. Intangible assets
The change in Goodwill and Other intangible assets with indefinite useful lives was attributable to foreign exchange translation effects. During the three months ended March 31, 2016, the Group capitalized development costs of €561 million.

7. Property, plant and equipment
Additions of €1,066 million for the three months ended March 31, 2016 mainly related to the mass-market vehicle operations.


30


8. Inventories
 
At March 31, 2016
 
At December 31, 2015
 
( € million)
Raw materials, supplies and finished goods
11,260

 
11,190

Gross amount due from customers for contract work
123


161

Total Inventories
11,383

 
11,351

The amount due from customers for contract work relates to the design and production of industrial automation systems and related products for the automotive sector is summarized as follows:
 
At March 31, 2016
 
At December 31, 2015
 
( € million)
Aggregate amount of costs incurred and recognized profits (less recognized losses) to date
1,738

 
2,097

Less: Progress billings
(1,847
)
 
(2,163
)
Construction contracts, net of advances on contract work
(109
)
 
(66
)
Gross amount due from customers for contract work as an asset
123

 
161

Less: Gross amount due to customers for contract work as a liability included in Other current liabilities (Note 13)
(232
)

(227
)
Construction contracts, net of advances on contract work
(109
)
 
(66
)

9. Receivables from financing activities and Other current assets
Receivables from financing activities included the following:
 
At March 31, 2016
 
At December 31, 2015
 
( € million)
Dealer financing
1,602

 
1,650

Retail financing
207

 
238

Finance leases
7

 
8

Other
113

 
110

Total Receivables from financing activities
1,929

 
2,006

Other current assets included the following:
 
At March 31, 2016
 
At December 31, 2015
 
( € million)
Other current receivables
2,377

 
2,386

Accrued income and prepaid expenses
783

 
692

Other current assets
3,160

 
3,078



31


Transfer of assets
At March 31, 2016, the Group had receivables that have not yet come due, which were transferred without recourse and were derecognized in accordance with the requirements of IAS 39, Financial Instruments: Recognition and Measurement, amounting to €5,001 million (€4,950 million at December 31, 2015). The transfers related to trade receivables and other receivables for €4,222 million (€4,165 million at December 31, 2015) and financial receivables for €779 million (€785 million at December 31, 2015). These amounts included receivables of €3,161 million (€3,022 million at December 31, 2015), mainly due from the sales network, transferred to jointly controlled financial services companies (e.g. FCA Bank).
10. Share-based compensation
The documents governing FCA's long term incentive plans contain anti-dilution provisions which provide for an adjustment to the number of awards granted under the plans in order to preserve, or alternatively, prevent the enlargement of the benefits intended to be made available to the recipients of the awards should an event occur that impacts our capital structure. As such, as a result of the spin-off of Ferrari N.V., on January 26, 2016, a conversion factor of 1.5440 was approved by FCA's Compensation Committee and applied to outstanding Performance Share Units (“PSU awards”) and Restricted Share Units (“RSU awards”) as an equitable adjustment to make equity award holders whole for the resulting diminution in value of an FCA share. For the awards that will vest based on the Group's achievement of the targets for net income (“PSU NI awards”), the Compensation Committee also approved an adjustment to the net income targets for the years 2016-2018 to account for the net income of Ferrari in order to preserve the economic benefit intended to be provided to each participant. As a result of these adjustments, there is no change to the total cost of these awards to be amortized over the remaining vesting period.

None of the outstanding PSU and RSU awards were forfeited and none had vested at March 31, 2016. The total number of PSU and RSU awards outstanding were 22,717,024 and 8,023,472, respectively, at March 31, 2016.

Total expense for the PSU and RSU awards of €24 million was recorded for the three months ended March 31, 2016.
    


32


11. Provisions
 
At March 31, 2016
 
At December 31, 2015
 
(€ million)
Employee benefits provisions:
 
 
 
Pension plans
5,176

 
5,310

Health care and life insurance plans
2,367

 
2,459

Other post-employment benefits
946

 
969

Other provisions for employees and liabilities for share-based payments
1,166

 
1,326

Total Employee benefits provisions
9,655

 
10,064

 
 
 
 
Other provisions:
 
 
 
Product warranty and recall campaigns
6,350

 
6,471

Sales incentives
5,014

 
5,196

Legal proceedings and disputes
492

 
500

Commercial risks
399

 
321

Other risks
1,270

 
1,304

Total Other provisions
13,525

 
13,792

Total Provisions
23,180

 
23,856

Provisions for employee benefits include provisions for both pension plans and health care, legal, severance indemnity and other post-employment benefits (“OPEB”). Pension and OPEB costs included in the Interim Condensed Consolidated Income Statement were as follows:
 
For the three months ended March 31
 
2016
 
2015
 
Pension
 
OPEB
 
Pension
 
OPEB
 
(€ million)
Current service cost
40

 
11

 
55

 
9

Interest expense
288

 
29

 
332

 
29

Interest (income)
(234
)
 
—

 
(254
)
 
—

Other administrative costs
28

 
—

 
20

 
—

Total
122

 
40

 
153

 
38


12. Debt
 
At March 31, 2016
 
At December 31, 2015
 
(€ million)
Notes
14,541

 
13,441

Borrowings from banks
9,574

 
11,962

Payables represented by securities
953

 
925

Asset-backed financing
207

 
206

Other debt
1,280

 
1,252

Total Debt
26,555

 
27,786

Global Medium Term Note (“GMTN”) Programme
On March 30, 2016, FCA issued 3.75 percent notes at par with a total principal amount of €1,250 million due in March 2024. The notes are listed on the Irish Stock Exchange.
Borrowings from banks
FCA US Tranche B Term Loans
On March 15, 2016, FCA US entered into amendments to the credit agreements that govern its tranche B term loan maturing on May 24, 2017 (“Tranche B Term Loan due 2017”) and its tranche B term loan maturing on December 31, 2018 (“Tranche B Term Loan due 2018”), (collectively, the “Tranche B Term Loans”), to, among other items, eliminate covenants restricting the provision of guarantees and payment of dividends by FCA US for the benefit of the rest of the Group, to enable a unified financing platform and to provide free flow of capital within the Group.
In conjunction with these amendments, FCA US made a U.S.$2.0 billion (€1.8 billion) voluntary prepayment of principal at par with cash on hand, of which U.S.$1,288 million (€1,159 million) was applied to the Tranche B Term Loan due 2017 and U.S.$712 million (€641 million) was applied to the Tranche B Term Loan due 2018. Accrued interest related to the portion of principal prepaid of the Tranche B Term Loans and related transaction fees were also paid.
The prepayments of principal were accounted for as debt extinguishments, and as a result, we recorded a non-cash charge of €10 million within Net financial expenses for the three months ended March 31, 2016 which consisted of the write-off of the remaining unamortized debt issuance costs. The amendments to the remaining principal balance were analyzed on a lender-by-lender basis and accounted for as debt modifications in accordance with IAS 39 - Financial Instruments: Recognition and Measurement. As such, the debt issuance costs for each of the amendments were capitalized and will be amortized over the respective remaining terms of the Tranche B Term Loans.
For each of the Tranche B Term Loans, FCA US prepaid the scheduled quarterly principal payments, with the remaining balance applied to the principal balance due at maturity. Accordingly, FCA US is now scheduled to pay the remaining outstanding principal balances at the respective maturity dates. Periodic interest payments, however, continue to be required.    

33


At March 31, 2016, €1,590 million, including accrued interest, was outstanding under the Tranche B Term Loan due 2017 (€2,863 million at December 31, 2015) and €874 million, including accrued interest, was outstanding under the Tranche B Term Loan due 2018 (€1,574 million at December 31, 2015).
Revolving Credit Facilities
In conjunction with the amendments to the credit agreements that govern the Tranche B Term Loans, the second €2.5 billion tranche (expiring in 2020) of the total €5.0 billion syndicated revolving credit facility entered into by FCA in June 2015 (“RCF”) was made available to the Group in March 2016.     
At March 31, 2016, undrawn committed credit lines totaling €5.9 billion included the €5.0 billion RCF and approximately €0.9 billion of other revolving credit facilities. At December 31, 2015, undrawn committed credit lines included the first tranche of €2.5 billion of the RCF and approximately €0.9 billion of other revolving credit facilities.

13. Other current liabilities
Other current liabilities consisted of the following:
 
At March 31, 2016
 
At December 31, 2015
 
(€ million)
Advances on buy-back agreements
2,447

 
2,492

Indirect tax payables
1,344

 
1,305

Accrued expenses and deferred income
3,215

 
3,178

Payables to personnel
888

 
972

Social security payables
313

 
333

Amounts due to customers for contract work
232

 
227

Other
2,220

 
2,423

Total Other current liabilities
10,659

 
10,930

On January 21, 2016, the third installment of U.S.$175 million (€161 million) was paid on the obligation arising from the memorandum of understanding entered into by FCA US with the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America, included within Other current liabilities.

14. Fair value measurement
Assets and liabilities that are measured at fair value on a recurring basis
The following table shows the fair value hierarchy, based on observable and unobservable inputs, for financial assets and liabilities that are measured at fair value on a recurring basis at March 31, 2016 and at December 31, 2015:

34


 
At March 31, 2016
 
At December 31, 2015
 
Level 1
 
Level 2
 
Level 3
 
Total
 
Level 1
 
Level 2
 
Level 3
 
Total
 
(€ million)
Assets at fair value available-for-sale:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Investments at fair value with changes directly in Other comprehensive income
169

 
19

 
—

 
188

 
184

 
19

 
—

 
203

Other non-current securities
40

 
—

 
12

 
52

 
31

 
—

 
12

 
43

Current securities available-for-sale
257

 
3

 
—

 
260

 
264

 
5

 
—

 
269

Financial assets at fair value held-for-trading:
 
 
 
 
 
 
 
 


 


 


 


Current investments
45

 
—

 
—

 
45

 
48

 
—

 
—

 
48

Current securities held for trading
199

 
—

 
—

 
199

 
213

 
—

 
—

 
213

Other financial assets
40

 
654

 
5

 
699

 
40

 
813

 
—

 
853

Cash and cash equivalents
16,501

 
1,462

 
—

 
17,963

 
18,097

 
2,565

 
—

 
20,662

Total Assets
17,251

 
2,138

 
17

 
19,406

 
18,877

 
3,402

 
12

 
22,291

Other financial liabilities
—

 
613

 
23

 
636

 
—

 
701

 
35

 
736

Total Liabilities
—

 
613

 
23

 
636

 
—

 
701

 
35

 
736

During the three months ended March 31, 2016, there were no transfers between levels in the fair value hierarchy.
    

35


The fair value of Other financial assets and liabilities, which mainly include derivatives financial instruments, is measured by taking into consideration market parameters at the balance sheet date and using valuation techniques widely accepted in the financial business environment as described below:
•
the fair value of forward contracts and currency swaps is determined by taking the prevailing exchange rates and interest rates at the balance sheet date;
•
the fair value of interest rate swaps and forward rate agreements is determined by taking the prevailing interest rates at the balance sheet date and using the discounted expected cash flow method;
•
the fair value of combined interest rate and currency swaps is determined using the exchange and interest rates prevailing at the balance sheet date and the discounted expected cash flow method;
•
the fair value of swaps and options hedging commodity price risk is determined by using suitable valuation techniques and taking market parameters at the balance sheet date (in particular, underlying prices, interest rates and volatility rates).
The par value of Cash and cash equivalents, which include cash at banks, units in money market funds and other money market securities primarily comprised of commercial paper, bankers’ acceptances and certificate of deposits that are readily convertible to cash with original maturities of three months or less at the date of purchase, usually approximates fair value due to the short maturity of these instruments. The fair value of money market funds is also based on available market quotations. Where appropriate, the fair value of cash equivalents is determined with discounted expected cash flow techniques using observable market yields (classified in Level 2 of the fair value hierarchy).
The following is a reconciliation for the changes in items measured at fair value and classified in Level 3:
 
For the three months ended March 31
 
2016
 
2015
 
Other non-current securities
 
Other financial assets/(liabilities)
 
Other non-current securities
 
Other financial assets/(liabilities)
 
(€ million)
At January 1,
12

 
(35
)
 
22

 
(4
)
(Losses) recognized in Consolidated Income Statement
—

 
(7
)
 
(2
)
 
—

Gains/(losses) recognized in Other comprehensive income/(loss)
—

 
11

 
3

 
(15
)
Issues/Settlements
—

 
13

 
—

 
—

At March 31,
12

 
(18
)
 
23

 
(19
)
The losses included in the Interim Condensed Consolidated Income Statement for the three months ended March 31, 2016 were recognized within Cost of sales. The gains recognized in Other comprehensive income/(loss) for the three months ended March 31, 2016 have been included in Cash flow hedge reserve.

Assets and liabilities not measured at fair value on a recurring basis
For financial instruments represented by short-term receivables and payables, for which the present value of future cash flows does not differ significantly from carrying value, we assume that the carrying value is a reasonable approximation of fair value. Specifically, the carrying amounts of Current receivables and Other current assets and of Trade payables and Other current liabilities approximate their fair value.

36


The following table summarizes the carrying amount and fair value for financial assets and liabilities that are not measured at fair value on a recurring basis:
 
 
 
At March 31, 2016
 
At December 31, 2015
 
  Note
 
Carrying
amount
 
Fair
Value
 
Carrying
amount
 
Fair
Value
 
 
 
(€ million)
Dealer financing
 
 
1,602

 
1,602

 
1,650

 
1,649

Retail financing
 
 
207

 
188

 
238

 
232

Finance lease
 
 
7

 
7

 
8

 
8

Other receivables from financing activities
 
 
113

 
113

 
110

 
110

Receivables from financing activities
9
 
1,929

 
1,910

 
2,006

 
1,999

Asset-backed financing
 
 
207

 
207

 
206

 
206

Notes
 
 
14,541

 
15,356

 
13,441

 
14,120

Other debt
 
 
11,807

 
11,812

 
14,139

 
14,074

Debt
12
 
26,555

 
27,375

 
27,786

 
28,400

The fair value of Receivables from financing activities, which are classified in Level 3 of the fair value hierarchy, have been estimated with discounted cash flows models. The most significant inputs used for this measurement are market discount rates that reflect conditions applied in various reference markets on receivables with similar characteristics, adjusted in order to take into account the credit risk of the counterparties.
Notes that are traded in active markets for which close or last trade pricing is available are classified in Level 1 of the fair value hierarchy. Notes for which such prices are not available, are valued at the last available price or based on quotes received from independent pricing services or from dealers who trade in such securities and are classified in Level 2 of the fair value hierarchy. At March 31, 2016, €15,350 million and €6 million of Notes were classified in Level 1 and Level 2, respectively.
The fair value of Other debt classified in Level 2 of the fair value hierarchy has been estimated using discounted cash flow models. The main inputs used are year-end market interest rates, adjusted for market expectations of the Group’s non-performance risk implied in quoted prices of traded securities issued by the Group and existing credit derivatives on Group liabilities. The fair value of the debt that requires significant adjustments using unobservable inputs is classified in Level 3. At March 31, 2016, €9,802 million and €2,010 million of Other Debt was classified in Level 2 and Level 3, respectively.

15. Related party transactions
The related parties of the Group are entities and individuals capable of exercising control, joint control or significant influence over the Group and its subsidiaries. Refer to Note 26, Related party transactions, in the FCA Consolidated Financial Statements at December 31, 2015 for a description of the Group's transactions with the Group's unconsolidated subsidiaries, joint ventures, associates and other related parties.
From January 3, 2016, which was the date of the spin-off of Ferrari N.V. from the Group, transactions carried out with Ferrari N.V. are related party transactions and primarily relate to (i) the purchase of engines, engine components and car bodies for Maserati vehicles, (ii) the sale of automotive lighting and automotive components and (iii) transactions related to the display of FCA logos on Formula 1 cars.

37


The amounts of the transactions with related parties recognized were as follows:
 
For the three months ended March 31
 
2016
 
2015
 
Net
revenues 
 
Cost of
sales
 
Selling,
general 
and other
costs
 
Financial
income/
(expenses)
 
Net
revenues
 
Cost of
sales 
 
Selling,
general
and other costs 
 
Financial
income/
(expenses) 
 
(€ million)
Joint arrangements and associates
1,051

 
565

 
5

 
(6
)
 
853

 
397

 
3

 
(6
)
CNHI
130

 
101

 
—

 
—

 
139

 
117

 
—

 
—

Ferrari
15

 
32

 
—

 
(7
)
 
n/a

 
n/a

 
n/a

 
n/a



Non-financial assets and liabilities from related party transactions were as follows:
 
At March 31, 2016
 
At December 31, 2015
 
Trade
receivables
 
Trade
payables
 
Other
current
assets
 
Other
current
liabilities
 
Trade
receivables
 
Trade
payables
 
Other
current
assets
 
Other
current
liabilities
 
(€ million)
Joint arrangements and associates
402

 
472

 
48

 
223

 
323

 
404

 
4

 
204

CNHI
54

 
91

 
4

 
3

 
48

 
76

 
26

 
6

Ferrari
14

 
32

 
156(1)

 
4

 
n/a

 
n/a

 
n/a

 
n/a

__________________________
(1)
Primarily related to income taxes owed by Ferrari as a result of including Ferrari' s taxable income in the Group's Italian consolidated tax return in 2015.
Financial assets and liabilities originating from related party transactions were as follows:
 
At March 31, 2016
 
At December 31, 2015
 
Current
receivables
from
financing
activities
 
Asset-
backed
financing
 
Other debt
 
Current
receivables
from
financing
activities
 
Asset-
backed
    financing 
 
Other debt
 
(€ million)
Joint arrangements and associates
81

 
115

 
66

 
97

 
133

 
53


16. Guarantees granted, commitments and contingent liabilities
Litigation
Refer to Note 28, Guarantees granted, commitments and contingent liabilities, in the FCA Consolidated Financial Statements at December 31, 2015 for information on the Group's pending litigation proceedings. There have been no material new litigation or developments with respect to existing litigation during the three months ended March 31, 2016.



38


17. Venezuela currency regulations and devaluation
On March 10, 2016, the Venezuelan government modified its foreign currency exchange systems with the enactment of Exchange Agreement No. 35, which included the devaluation of its official exchange rate. Venezuela’s official exchange rate, CENCOEX, was replaced with DIPRO, which is only available for purchases and sales of essential items, such as food and medicine. In addition, the official exchange rate was also devalued from 6.3 VEF to 10 VEF per U.S Dollar and the exchange rate determined by an auction process conducted by Venezuela’s Supplementary Foreign Currency Administration System, or SICAD, was terminated. The Marginal Currency System, or the SIMADI rate, was replaced with the “floating” Sistema de Divisa Complementaria, or the DICOM exchange rate, which is available for all transactions not subject to the DIPRO exchange rate. Unlike the former SICAD system, the government, the state-owned oil enterprise PDVSA and foreign investors can inject funds into the new system. At March 31, 2016, the DICOM exchange rate was 272.91 VEF to U.S. Dollar.
At March 31, 2016, the DICOM exchange rate was expected to be used to complete the majority of FCA Venezuela's transactions to exchange VEF for U.S. Dollars. As a result, total re-measurement charges, including the devaluation and the write-down of SICAD receivables, of €19 million were recorded within Cost of sales in the three months ended March 31, 2016.

18. Equity
Share capital
At March 31, 2016, share capital of FCA amounted to €17 million (€17 million at December 31, 2015) and consisted of 1,288,993,908 common shares and 408,941,767 special voting shares, all with a par value of €0.01 each (1,288,956,011 common shares and 408,941,767 special voting shares, all with a par value of €0.01 each at December 31, 2015).
Mandatory Convertible Securities

Pursuant to the terms of the prospectus for the aggregate notional amount of U.S.$2,875 million (€2,293 million) of mandatory convertible securities (the “Mandatory Convertible Securities”), the Mandatory Convertible Securities will automatically convert on December 15, 2016 (the “Mandatory Conversion Date”) into a number of common shares equal to the conversion rate calculated based on the share price relative to the applicable market value (“AMV”), as defined in the prospectus of the Mandatory Convertible Securities. Effective January, 15, 2016, as a consequence of the spin-off of Ferrari N.V. to the holders of the Mandatory Convertible Securities, certain economic provisions of the Mandatory Convertible Securities were adjusted as follows:

•
Initial Price was adjusted from U.S.$11.00 to U.S.$7.1244;
•
Threshold Appreciation Price was adjusted from U.S.$12.9250 to U.S.$8.3712;
•
Stated Amount was adjusted from U.S.$100.00 to U.S.$64.7675; and
•
The common share prices included within the definition of “Early Conversion Rate” applicable to a “fundamental change” (as defined in the prospectus of the Mandatory Convertible Securities) were also adjusted.
The relevant fraction used to affect the adjustments noted above was calculated using the average of the daily Volume Weighted Average Price (“VWAP”) from January 5, 2016 to January 15, 2016 for both FCA common shares and Ferrari N.V. common shares. There was no effect to the Interim Condensed Consolidated Financial Statements as of and for the three months ended March 31, 2016.


39


Other comprehensive income/(loss)

Other comprehensive income/(loss) was as follows:
 
For the three months ended March 31
 
2016
 
2015
 
(€ million)
Items that will not be reclassified to the Consolidated Income Statement in subsequent periods:
 
 
 
Gains/(losses) on re-measurement of defined benefit plans
2


(67
)
Total items that will not be reclassified to the Consolidated Income Statement (B1)
2

 
(67
)
 
 
 
 
Items that may be reclassified to the Consolidated Income Statement in subsequent periods:
 
 
 
Losses on cash flow hedging instruments arising during the period
(25
)
 
(65
)
(Losses)/gains on cash flow hedging instruments reclassified to the Consolidated Income Statement
(93
)
 
196

(Losses)/gains on cash flow hedging instruments
(118
)
 
131

(Losses)/gains on available-for-sale financial assets
(15
)
 
15

Foreign exchange translation (losses)/gains
(531
)
 
1,408

Share of Other comprehensive income/(loss) for equity method investees arising during the period
(32
)
 
43

Share of Other comprehensive income/(loss) for equity method investees reclassified to the Consolidated Income Statement
(2
)
 
3

Total Share of Other comprehensive income/(loss) for equity method investees
(34
)
 
46

Items relating to discontinued operations
—

 
(112
)
Total items that may be reclassified to the Consolidated Income Statement (B2)
(698
)
 
1,488

Total Other comprehensive income/(loss) (B1)+(B2)
(696
)
 
1,421

Tax effect
62

 
(36
)
Tax effect - discontinued operations
—

 
43

Total Other comprehensive income/(loss), net of tax
(634
)
 
1,428


40


    
The tax effect relating to Other comprehensive income was as follows:
 
For the three months ended March 31
 
2016
 
2015
 
Pre-tax
balance
 
Tax (expense) / benefit
 
Net balance
 
Pre-tax
balance
 
Tax (expense) / benefit
 
Net balance
 
(€ million)
Gains/(losses) on
remeasurement of defined
benefit plans
2

 
(2
)
 
—

 
(67
)
 
16

 
(51
)
(Losses)/gains on cash flow
hedging instruments
(118
)
 
64

 
(54
)
 
131

 
(52
)
 
79

(Losses)/gains on available-
for-sale financial assets
(15
)
 
—

 
(15
)
 
15

 
—

 
15

Foreign exchange translation (losses)/gains
(531
)
 
—

 
(531
)
 
1,408

 
—

 
1,408

Share of Other comprehensive income/(loss) for equity method investees
(34
)
 
—

 
(34
)
 
46

 
—

 
46

Items relating to discontinued operations
—

 
—

 
—

 
(112
)
 
43

 
(69
)
Total Other comprehensive
income/(loss)
(696
)

62


(634
)
 
1,421

 
7

 
1,428


19. Earnings per share     
Basic earnings per share
The basic earnings per share for the three months ended March 31, 2016 and 2015 was determined by dividing the Net profit attributable to the equity holders of the parent by the weighted average number of shares outstanding during the periods. In addition, for the three months ended March 31, 2016 and 2015, the weighted average number of shares outstanding included the minimum number of ordinary shares to be converted as a result of the issuance of the Mandatory Convertible Securities.
The following tables summarize the amounts used to calculate the basic earnings per share:
 
 
 
For the three months ended March 31
 
 
 
2016
 
2015
Net profit attributable to owners of the parent
€
million
472


78

Weighted average number of shares outstanding
 
thousand
1,511,426

 
1,508,310

Basic earnings per share
 
€
0.312

 
0.052

 
 
 
For the three months ended March 31
 
 
 
2016
 
2015
Net profit from continuing operations attributable to owners of the parent
€
million
472


20

Weighted average number of shares outstanding
 
thousand
1,511,426

 
1,508,310

Basic earnings per share from continuing operations
 
€
0.312

 
0.013


41


Diluted earnings per share
In order to calculate the diluted earnings per share for the three months ended March 31, 2016, the weighted average number of shares outstanding has been increased to take into consideration the theoretical effect of the potential common shares that would be issued for the outstanding and unvested PSU and RSU awards at March 31, 2016 (Note 10, Share-based compensation) as determined using the treasury stock method. In addition, the weighted average number of shares outstanding has been increased to take into consideration the theoretical effect of the potential common shares that would be issued for the Mandatory Convertible Securities based on FCA's share price and pursuant to the terms of the prospectus of the Mandatory Convertible Securities (Note 18, Equity).
The Mandatory Convertible Securities did not dilute the basic earnings per share, there were no outstanding share based payment plans and there were no other instruments that diluted the earnings per share for the three months ended March 31, 2015.
There were no instruments excluded from the calculation of diluted earnings per share because of an anti-dilutive effect for the three months ended March 31, 2016 and 2015.
The following tables summarize the amounts used to calculate the diluted earnings per share:
 
 
 
For the three months ended March 31
 
 
 
2016
 
2015
Net profit attributable to owners of the parent
€
million
472

 
78

Weighted average number of shares outstanding
 
thousand
1,511,426

 
1,508,310

Number of shares deployable for share-based compensation
 
thousand
6,563

 
—

Number of shares deployable for Mandatory Convertible Securities
 
thousand
22,462

 
—

Weighted average number of shares outstanding for diluted earnings per share
 
thousand
1,540,451

 
1,508,310

Diluted earnings per share
 
€
0.306

 
0.052

 
 
 
For the three months ended March 31
 
 
 
2016
 
2015
Net profit from continuing operations attributable to owners of the parent
€
million
472

 
20

Weighted average number of shares outstanding for diluted earnings per share
 
thousand
1,540,451

 
1,508,310

Diluted earnings per share from continuing operations
 
€
0.306

 
0.013


20. Segment reporting
The Group’s activities are carried out through six reportable segments: four regional mass-market vehicle segments (NAFTA, LATAM, APAC and EMEA); Maserati, our global luxury brand segment; and a global Components segment. These reportable segments reflect the operating segments of the Group that are regularly reviewed by the Chief Executive Officer, who is the “chief operating decision maker,” for making strategic decisions, allocating resources and assessing performance, and that exceed the quantitative threshold provided in IFRS 8 - Operating Segments, or whose information is considered useful for the users of the financial statements.
The Group’s four regional mass-market vehicle reportable segments deal with the design, engineering, development, manufacturing, distribution and sale of passenger cars, light commercial vehicles and related parts and services in specific geographic areas: NAFTA (U.S., Canada, Mexico and Caribbean islands), LATAM (South and Central America), APAC (Asia and Pacific countries) and EMEA (Europe, Middle East and Africa).

42


Adjusted Earnings Before Interest and Taxes (“Adjusted EBIT”) is the measure used by the chief operating decision maker to assess performance, allocate resources to the Group's operating segments and to view operating trends, perform analytical comparisons and benchmark performance between periods and among the segments. Adjusted EBIT is calculated as EBIT excluding: gains/(losses) on the disposal of investments, restructuring, impairments, asset write-offs and other unusual income/(expenses) that are considered rare or discrete events that are infrequent in nature. See below for a reconciliation of Adjusted EBIT to EBIT, which is the most directly comparable measure included in our Consolidated Income Statement. Operating assets are not included in the data reviewed by the chief operating decision maker, and as a result and as permitted by IFRS 8 - Operating Segments, the related information is not provided.
The following tables summarize selected financial information by segment for the three months ended March 31, 2016 and 2015:
 
 
Mass-Market Vehicles
 
 
 
 
 
 
 
 
 
 
Three months ended March 31, 2016
 
NAFTA
 
LATAM
 
APAC
 
EMEA
 
Maserati
 
Components
 
Other activities
 
Unallocated items & adjustments
 
FCA
 
 
(€ million)
Revenues
 
17,136

 
1,311

 
949

 
5,040

 
508

 
2,319

 
182

 
(875
)
 
26,570

Revenues from transactions with other segments
 
(5
)
 
(17
)
 
(6
)
 
(40
)
 
(2
)
 
(712
)
 
(93
)
 
875

 
—

Revenues from external customers
 
17,131

 
1,294

 
943

 
5,000

 
506

 
1,607

 
89

 
—

 
26,570

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted EBIT
 
1,227

 
11

 
12

 
96

 
16

 
86

 
(43
)
 
(26
)
 
1,379

NAFTA capacity realignment
 
(51
)
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
(51
)
Venezuela currency devaluation
 
—

 
(19
)
 
—

 
—

 
—

 
—

 
—

 
—

 
(19
)
Restructuring (costs)/reversal
 
2

 
(5
)
 
—

 
—

 
—

 
(4
)
 
—

 
—

 
(7
)
Other
 
—

 
—

 
5

 
—

 
—

 
—

 
—

 
—

 
5

EBIT
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,307



 
 
Mass-Market Vehicles
 
 
 
 
 
 
 
 
 
 
Three Months Ended March 31, 2015
 
NAFTA
 
LATAM
 
APAC
 
EMEA
 
Maserati
 
Components
 
Other activities
 
Unallocated items & adjustments
 
FCA
 
 
(€ million)
Revenues
 
16,177

 
1,551

 
1,512

 
4,684

 
523

 
2,435

 
197

 
(1,236
)
 
25,843

Revenues from transactions with other segments
 
(205
)
 
(39
)
 
(4
)
 
(119
)
 
—

 
(761
)
 
(108
)
 
1,236

 
—

Revenues from external customers
 
15,972

 
1,512

 
1,508

 
4,565

 
523

 
1,674

 
89

 
—

 
25,843

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted EBIT
 
601

 
(65
)
 
65

 
25

 
36

 
68

 
(9
)
 
(21
)
 
700

Restructuring (costs)/reversal
 
2

 
(6
)
 
—

 
—

 
—

 
—

 
—

 
—

 
(4
)
EBIT
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
696



21. Subsequent events
On April 15, 2016, the shareholders of FCA approved the distribution of the Group's 16.7 percent ownership interest in RCS MediaGroup S.p.A. (“RCS”) to holders of its common shares. The distribution of RCS ordinary shares took effect on May 1, 2016. Holders of FCA common shares were entitled to 0.067746 ordinary shares of RCS for each common share of FCA held of record.

43

Exhibit 99.2 Additional Information Financial Data by Activity


Exhibit 99.2
Income Statement by activity
Unaudited
 
 
For the three months ended
March 31, 2016
 
 
For the three months ended
March 31, 2015
 
(€ million)
 
Group
 
Industrial activities
 
Financial services
 
Group
 
Industrial activities
 
Financial services
Net revenues
 
26,570

 
26,527

 
65

 
25,843

 
25,772

 
97

Cost of sales
 
22,803

 
22,775

 
50

 
22,600

 
22,557

 
69

Selling, general and other costs
 
1,756

 
1,747

 
9

 
1,908

 
1,900

 
8

Research and development costs
 
759

 
759

 
—

 
685

 
685

 
—

Result from investments
 
62

 
28

 
34

 
50

 
19

 
31

Restructuring costs
 
7

 
7

 
—

 
4

 
4

 
—

EBIT
 
1,307

 
1,267

 
40

 
696

 
645

 
51

Net financial expenses
 
(512
)
 
(512
)
 
—

 
(608
)
 
(608
)
 
—

Profit before taxes
 
795

 
755

 
40

 
88

 
37

 
51

Tax expense
 
317

 
316

 
1

 
61

 
57

 
4

Net profit/(loss) from continuing operations
 
478

 
439

 
39

 
27

 
(20
)
 
47

Result from intersegment investments
 
—

 
39

 
—

 
—

 
51

 
—

Profit from discontinued operations, net of tax
 
—

 
—

 
—

 
65

 
61

 
4

Net profit
 
478

 
478

 
39

 
92

 
92

 
51

 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted EBIT
 
1,379

 
1,339

 
40

 
700

 
649

 
51

Adjusted EBIT - discontinued operations
 
—

 
—

 
—

 
100

 
94

 
6

Total Adjusted EBIT
 
1,379

 
1,339

 
40

 
800

 
743

 
57






Statement of Financial Position by activity
Unaudited
 
 
At March 31, 2016
 
 
At December 31, 2015
 
(€ million)
 
Group
 
Industrial activities
 
Financial services
 
Group
 
Industrial activities
 
Financial services
Intangible assets:
 
24,214

 
24,212

 
2

 
24,736

 
24,733

 
3

Goodwill and intangible assets with indefinite useful lives
 
14,150

 
14,150

 
—

 
14,790

 
14,790

 
—

Other intangible assets
 
10,064

 
10,062

 
2

 
9,946

 
9,943

 
3

Property, plant and equipment
 
27,226

 
27,223

 
3

 
27,454

 
27,452

 
2

Investments and other financial assets
 
2,167

 
2,530

 
965

 
2,242

 
2,621

 
1,009

Deferred tax assets
 
3,430

 
3,377

 
53

 
3,343

 
3,292

 
51

Other assets
 
196

 
196

 
—

 
176

 
176

 
—

Total Non-current assets
 
57,233

 
57,538

 
1,023

 
57,951

 
58,274

 
1,065

Inventories
 
11,383

 
11,383

 
—

 
11,351

 
11,351

 
—

Assets sold with a buy-back commitment
 
1,873

 
1,873

 
—

 
1,881

 
1,881

 
—

Trade receivables
 
3,177

 
3,177

 
18

 
2,668

 
2,669

 
17

Receivables from financing activities
 
1,929

 
680

 
1,897

 
2,006

 
769

 
1,998

Current tax receivables
 
519

 
522

 
5

 
405

 
400

 
5

Other current assets
 
3,160

 
3,141

 
20

 
3,078

 
3,059

 
20

Current financial assets
 
1,203

 
1,171

 
32

 
1,383

 
1,342

 
42

Cash and cash equivalents
 
17,963

 
17,817

 
146

 
20,662

 
20,528

 
134

Assets held for sale
 
4

 
4

 
—

 
5

 
5

 
—

Assets held for distribution
 
—

 
—

 
—

 
3,650

 
3,365

 
1,258

Total Current assets
 
41,211

 
39,768

 
2,118

 
47,089

 
45,369

 
3,474

Total Assets
 
98,444

 
97,306

 
3,141

 
105,040

 
103,643

 
4,539

Equity and Liabilities
 
 
 
 
 
 
 
 
 
 
 
 
Equity
 
16,129

 
16,129

 
1,328

 
16,255

 
16,255

 
1,462

Provisions
 
23,180

 
23,171

 
9

 
23,856

 
23,846

 
10

Deferred tax liabilities
 
182

 
182

 
—

 
156

 
156

 
—

Debt
 
26,555

 
25,512

 
1,691

 
27,786

 
26,834

 
1,768

Other financial liabilities
 
636

 
630

 
6

 
736

 
736

 
3

Other current liabilities
 
10,659

 
10,578

 
89

 
10,930

 
10,838

 
96

Current tax payables
 
371

 
363

 
16

 
272

 
266

 
14

Trade payables
 
20,732

 
20,741

 
2

 
21,465

 
21,472

 
3

Liabilities held for distribution
 
—

 
—

 
—

 
3,584

 
3,240

 
1,183

Total Equity and liabilities
 
98,444

 
97,306

 
3,141

 
105,040

 
103,643

 
4,539





Statement of Cash Flows by activity
Unaudited


 
For the three months ended
March 31, 2016
 
 
For the three months ended
March 31, 2015
 
(€ million)
 
Group
 
Industrial activities
 
Financial services
 
Group
 
Industrial activities
 
Financial services
Cash and cash equivalents at the beginning of the period
 
20,662

 
20,528

 
134

 
22,840

 
22,627

 
213

Cash flows from operating activities:
 
 
 
 
 
 
 
 
 
 
 
 
Net profit from continuing operations
 
478

 
478

 
39

 
27

 
27

 
47

Amortization and depreciation
 
1,417

 
1,417

 
—

 
1,337

 
1,337

 
—

Dividends received
 
106

 
124

 
—

 
112

 
123

 
—

Change in provisions
 
30

 
31

 
(1
)
 
380

 
380

 
—

Change in deferred taxes
 
(3
)
 
(1
)
 
(2
)
 
111

 
111

 
—

Change in working capital
 
(1,213
)
 
(1,211
)
 
(2
)
 
(1,031
)
 
(1,020
)
 
(11
)
Other changes
 
(45
)
 
(59
)
 
(25
)
 
(4
)
 
(34
)
 
(17
)
Cash flows from operating activities - discontinued operations(1)
 
—

 
—

 
—

 
26

 
22

 
4

Total
 
770

 
779

 
9

 
958

 
946

 
23

Cash flows from/used in investing activities:
 
 
 
 
 
 
 
 
 
 
 
 
Investments in property, plant and equipment and intangible assets
 
(1,821
)
 
(1,820
)
 
(1
)
 
(1,999
)
 
(1,999
)
 
—

Investments in joint ventures, associates and unconsolidated subsidiaries
 
(21
)
 
(21
)
 
—

 
(75
)
 
(75
)
 
—

Net change in receivables from financing activities
 
40

 
(58
)
 
98

 
398

 
1

 
397

Other changes
 
65

 
138

 
(73
)
 
4

 
(125
)
 
129

Cash flows used in investing activities - discontinued operations
 
—

 
—

 
—

 
(116
)
 
(78
)
 
(38
)
Total
 
(1,737
)
 
(1,761
)
 
24

 
(1,788
)
 
(2,276
)
 
488

 
(1) Amortization and depreciation - discontinued operations
 
—

 
—

 
—

 
60

 
60

 
—







 
For the three months ended
March 31, 2016
 
 
For the three months ended
March 31, 2015
 
(€ million)
 
Group
 
Industrial activities
 
Financial services
 
Group
 
Industrial activities
 
Financial services
Cash flows from/used in financing activities:
 
 
 
 
 
 
 
 
 
 
 
 
Net change in financial payables and other financial assets/liabilities
 
(1,038
)
 
(1,035
)
 
(3
)
 
(1,767
)
 
(1,408
)
 
(359
)
Other changes
 
(148
)
 
(148
)
 
(18
)
 
5

 
5

 
(11
)
Cash flows from financing activities - discontinued operations
 
—

 
—

 
—

 
18

 
11

 
7

Total
 
(1,186
)
 
(1,183
)
 
(21
)
 
(1,744
)
 
(1,392
)
 
(363
)
Translation exchange differences
 
(546
)
 
(546
)
 
—

 
1,403

 
1,415

 
(12
)
Total change in Cash and cash equivalents
 
(2,699
)
 
(2,711
)
 
12

 
(1,171
)
 
(1,307
)
 
136

Cash and cash equivalents at the end of the period
 
17,963

 
17,817

 
146

 
21,669

 
21,320

 
349





a2016q1additionalinforma
Q1 2016 Additional Information: Debt 1 Note: Numbers may not add due to rounding FCA Group Net debt breakdown (€/B) – Unaudited Dec. 31, ’15** Mar. 31, ’16 Cons. Ind. Fin. Cons. Ind. Fin. 27.8 26.1 1.7 Gross Debt* 26.5 24.9 1.6 (0.1) (0.1) (0.0) Derivatives M-to-M, Net (0.1) (0.1) 0.0 (21.1) (21.0) (0.2) Cash & Mktable Securities (18.4) (18.2) (0.2) 6.5 5.0 1.5 Net Debt 8.0 6.6 1.4 *Net of intercompany receivables/payables **Excluding Ferrari Exhibit 99.3

 
Q1 2016 Additional Information: Debt 2 *Excluding Ferrari Note: Numbers may not add due to rounding Outstanding Dec. 31, ’15* Outstanding Mar. 31, ’16 27.5 Cash Maturities 26.3 12.3 Bank Debt 9.9 13.6 Capital Market 14.8 1.6 Other Debt 1.6 0.2 Asset-backed financing 0.2 0.0 ABS / Securitization 0.0 0.0 Warehouse Facilities 0.0 0.2 Sale of Receivables 0.2 0.1 Accruals & Other Adjustments 0.0 27.8 Gross Debt 26.5 (21.1) Cash & Mktable Securities (18.4) (0.1) Derivatives (Assets)/Liabilities (0.1) 6.5 Net Debt 8.0 3.4 Undrawn Committed Revolving Facilities 5.9 FCA Group Gross debt breakdown(€/B) – Unaudited

 
Q1 2016 Additional Information: Debt 3 Outstanding March 31 ‘16 FCA Group 9M 2016 2017 2018 2019 2020 Beyond 9.9 Bank Debt 3.0 2.8 2.5 0.5 0.4 0.9 14.8 Capital Market 2.8 2.4 1.9 1.5 1.3 4.9 1.6 Other Debt 0.5 0.2 0.2 0.2 0.1 0.4 26.3 Total Cash Maturities 6.3 5.3 4.5 2.2 1.8 6.2 18.4 Cash & Mktable Securities 5.9 Undrawn Committed Revolving Facilities 24.3 Total Available Liquidity 5.0 Sale of Receivables (IFRS de-recognition compliant) 3.2 of which receivables sold to financial services JVs (FCA Bank) FCA Group Debt maturity schedule (€/B) – Unaudited Note: Numbers may not add due to rounding; total cash maturities excluding accruals