Stellantis NV (STLA) 2014 Q4 法說會逐字稿

Good afternoon, ladies and gentlemen, and welcome to today's Fiat Chrysler Automobiles full-year 2014 results conference call.

For your information, today's conference is being recorded.

At this time, I would like to turn the call over to Joe Veltri, Head of FCA Global Investor Relations.

Mr. Veltri, please go ahead, sir.

Thank you, Anne, and good day to everyone on today's call covering our full-year 2014 results.

The earnings release issued earlier today, together with the presentation material from this call, are available on our Investor Relations website.

As customary, today's call will be hosted by the Group's Chief Executive, Sergio Marchionne; and Mr. Richard Palmer, the Group's Chief Financial Officer.

After their introductory remarks, they will be available for your questions.

Before we begin, let me remind you that any forward-looking statements we might make during today's call are subject to the risks and uncertainties mentioned in the Safe Harbor Statement included on page 2 of today's presentation.

And as always, the call will be governed by this language.

With that, I would like to turn the call over to Mr. Sergio Marchionne.

Thanks, Joe, and good morning.

I think probably the best way to summarize 2014 in terms of the financial results is that they were certainly at the upper end of our own internal expectations.

We managed to get a number of things done in 2014.

Most of this information is contained on page 4 of the presentation, which I would ask Richard not to go through, because it is a painstaking account of all the things that were done in 2014.

But 2014 was a momentous year for us.

It allowed us to put all the pieces in place to create FCA, to have this now seventh-largest carmaker in the world operate as a unified entity in terms of ownership, to be listed in New York and do a variety of other things that have been in our strategic objectives now for a number of years.

A couple of things that I think we need to keep in mind.

One, for the fourth quarter of this year, the EMEA region was at EBIT-level positive.

So, when you look at fourth-quarter performance for the business for the whole of FCA, we have now no regions which are bleeding.

And for those of you who have been in this business long enough to remember our travels from 2007 up till today, and the level of skepticism that was associated with our strategic redirection of our assets, and the redeployment of our manufacturing activities in a particular direction, this is the first indication, the first tangible proof of the fact that this thing can be turned.

And that certainly in 2012 -- in 2015, subject to the startup losses associated with the launch of Alfaro Romeo, that the machine will continue to make progress and that we should see black numbers across all regions.

That's the first issue.

Secondly, even in terms of cash generation for the business overall, we've invested what the machine produced.

So we have done nothing really out of whack.

And we have laid the foundation for the set of objectives in 2015, which are a very clear milestone toward 2016 and the achievement of our 2018 objectives.

I was talking to Richard yesterday about trying to understand the impact that these unusuals have had on our numbers.

And I -- and without trying to redefine GAAP and non-GAAP numbers, I look at them in a pretty simple way.

But if I look at EBIT as it was in 2013, we made slightly north of EUR3 billion, if I take off all the unusual noise.

In 2014, we made EUR4.3 billion.

And so this is what also deals with all the recall matters, which are now plaguing this industry.

But we all know that these things are noise.

They're noise in the sense that if they become structural to the business, they will be passed on to the consumer, and we will see the benefit of the recovery of these costs through pricing and through margin.

But fundamentally, like for like, 2013 to 2014 was a huge step forward.

It was nearly a 50% improvement in operating performance.

Little of that was due to foreign exchange.

And that's notwithstanding the slowdown in Latin America, which has been an area that's caused all of us some concern.

I think you can see from the numbers that we continued to perform positively in Latin America in 2014.

And certainly the expectations, as we open this new plant up in Pernambuco, that the margin recovery story will become visible -- clearly visible -- by the end of 2015.

Great year; I think great performances across the regions.

I don't have to sit here and sing the praises of what has been accomplished with Jeep and RAM.

I think they are self-evident.

But I think we've done a tremendous job of turning this machine around.

I think I'm incredibly pleased at the work that Alfredo and his team have done in EMEA, in terms of bringing back the region to profitability.

And we are just beginning now sort of to lay the groundwork for a more successful in the operation going forward.

I really have nothing else to add, and I'll pass it on to Richard to give you the more granular aspects of 2014 performance.

Richard?

Thank you.

Good morning and good afternoon to everybody.

I'll start on page 5, following advice to leave 4 alone, and go through the highlights of 2014.

So, our worldwide shipments were 4.6 million units, with the Jeep brand achieving over 1 million global shipments for the year.

Our Group net revenues were just north of EUR96 billion, up 12% at constant exchange.

Our EBIT was EUR3.2 billion or EUR3.7 billion adjusted for the unusual items that we had through Q3.

Net profit for the Group was EUR632 million or EUR1 billion adjusted for unusual items.

Net industrial debt closed at EUR7.7 billion, and included the EUR2.3 billion benefit of the Q4 capital transactions.

So, excluding that, we would've closed at EUR10 billion, in line with our guidance of EUR9.8 billion to EUR10.3 billion.

Our total available liquidity for the Group at the end of the year was EUR26.2 billion.

During the year, we accessed the capital markets to repay the Chrysler debt regarding the VEBA Trust.

And we also, as you know, got listed on the New York Stock Exchange on the 13th of October, and issued $2.9 billion of mandatory convertibles and 100 million common shares in December.

And that -- the net impact of those is the EUR2.3 billion impact on our net debt.

From a product standpoint, the key launches for the Group in 2014 included the all-new Jeep Renegade, the brand's first small SUV, and the first vehicle designed in the US and crafted in Italy; and the all-new Chrysler 200 mid-size sedan.

Our guidance for 2015 is indicated on page 5. These figures do not include any impacts from the previously announced capital transactions regarding Ferrari, which will occur in 2015.

So worldwide shipments forecasted 4.8 million to 5 million units; net revenues of about EUR108 billion; EBIT in the EUR4.1 billion to EUR4.5 billion range; net income from EUR1.1 billion to EUR1.2 billion; and net industrial debt basically flat in the EUR7.5 billion to EUR8 billion range.

Moving on to slide 6, as I said, Group shipments were up 6%, with all the regions increasing except LatAm, which declined by 13%.

NAFTA and APAC were up 11% and 35%, respectively, while EMEA was up 5% and Maserati was up 137%.

Group net revenues for the year were up 11%, mainly attributable to the higher shipment number.

And EBIT for the Group was EUR3.2 billion, up 7% from 2013 or 9% at constant exchange, and adjusted for unusual items, was EUR3.7 billion compared to EUR3.5 billion in 2013.

We'll look at more details on shipments revenues and EBIT by region on the following slides.

Net profit was EUR632 million in 2014 versus EUR2 billion last year, which included a one-off positive deferred tax impact of EUR1.5 billion.

Adjusted for unusual items in both periods, 2014 net profit was EUR955 million versus EUR943 million in 2013.

Net industrial debt was EUR7.7 billion at year-end.

As I mentioned before, excluding the effect of the capital transactions in Q4, our net industrial debt increased by EUR0.3 billion compared to last year.

CapEx came in at EUR8.1 billion and was basically covered by cash flow from operations.

CapEx was in line with our guidance of between EUR7.5 billion and EUR8.5 billion for the year.

Total available liquidity was EUR26.2 billion at December 31 -- EUR3.5 billion higher than last year, primarily reflecting the EUR3 billion of cash proceeds from the capital transactions in December 2014, positive translation effect of EUR1.3 billion, and the EUR2.7 billion outflow for the acquisitions of minority interest in Chrysler in January.

Turning to page 7, you can see the year-over-year changes in EBIT for the various areas of the Group.

I'll provide more details of these in their respective sections of the presentation.

However, it's worth to mention here that EBIT includes a negative unusual net charge for EUR0.4 billion in 2014 compared to a EUR0.5 billion charge in 2013.

In 2014, unusual items included nearly EUR500 million charge for the UAW MAU entered into by Chrysler on January 2014, and nearly EUR100 million negative impact for the devaluation of the Venezuelan Bolivar, and a [EUR223 million] non-cash, nontaxable gain, which resulted from the fair value measurement of the options representing 10% of the Chrysler and equity when Fiat bought the 41.5% from the VEBA Trust in January 2014.

EBIT adjusted for these unusual items increased by EUR130 million, and was driven by strong improvements in EMEA, APAC, Ferrari, Maserati, and Components, more than offsetting the drop in LatAm.

The NAFTA decline of EUR643 million was mainly related to the EUR500 million charge in connection with the UAW Memorandum of Understanding.

Adjusted for unusual items, EBIT for 2014 in NAFTA was substantially in line with the prior year.

On slide 8, you can see the evolution of net industrial debt during 2014.

Net industrial debt at December 31 was EUR7 billion.

However, if we consider the purchase of the VEBA minority stake in January, the pro forma net industrial debt at the beginning of the year was EUR9.7 billion.

Cash flow from operating activities before CapEx was positive by EUR8 billion comprised of industrial EBITDA of EUR8.4 billion, positive contributions from both working capital and provisions on the back of higher volumes.

This was offset by net financial charges and current tax expenses for EUR2.4 billion combined.

The cash flows from operating activities nearly covered the EUR8.1 billion in capital expenditures for the year.

Net industrial debt at December 31, before the various capital transactions we executed in December, was EUR10 billion and was in line with our guidance.

After taking into account the mandatory convertible securities and net stock issued, actual net industrial debt was EUR7.7 billion.

Moving to slide 9, we start to look at the performance by region.

Starting with NAFTA, the industry remained strong in 2014, with the US and Canada both up 6%.

Group sales were up 15%, outpacing the industry in both markets.

Group sales in the US were up 16% to 2.1 million units versus 1.8 million in the prior year.

The Jeep brand posted its best sales ever, up 41% from prior-year to 692,000 vehicles, with all Jeep models increasing sales.

The Ram brand sold 469,000 units, up 28%, marking its best year since 2005, and achieving the highest level of pickup truck sales in more than a decade.

The Fiat brand posted its best annual sales since the brand was reintroduced into the United States, with 46,000 units, up 7%.

Market share for the year increased 100 basis points, the highest share growth for any OEM in the United States, driven by an 18% increase in retail sales, while our fleet mix of the total sales in the United States dropped to 21% compared to 22% in the prior year.

Dealer inventory ended the year at 72 days of supply versus 79 days at the end of 2013.

In Canada, vehicle sales were up 12% to 290,000 vehicles, the highest annual sales in the Company's history.

FCA was the Canadian market leader in the fourth quarter.

And for the year, market share reached 15.4%, up 80 basis points versus prior-year.

In Q4, we presented be refreshed Dodge Charger with nearly every exterior panel re-sculpted, as well as the refreshed Chrysler 200 with new interior and exterior design elements.

Moving to page 10, NAFTA shipments were up 11% year-over-year to 2.5 million units, due primarily to increases in Jeep Cherokee, RAM pickups, and minivans.

US shipments were up 13%.

Canada was up 10%, and Mexico was down 6%.

Net revenues increased 15% year-over-year in parallel with the higher volumes.

Looking at the EBIT walk, volume and mix improved by EUR1.1 billion, primarily due to the higher shipments.

And net price improved by $400 million, due to positive pricing actions, partially offset by higher incentives on certain vehicles, and negative FX transaction impacts of the Canadian dollar and Mexican peso.

Industrial costs reflect higher base material costs for vehicle content enhancements, and increased warranty and recall costs of about EUR650 million for the year, partially offset by purchasing savings.

The negative impacts in investments, FX and other is primarily due to the one-off charge in connection with the UAW MOU entered into in January 2014.

Net of unusual items, EBIT for NAFTA in 2014 was substantially in line with the prior year.

EBIT margin adjusted for unusuals for 2014 was 4.1% compared to 4.8% in 2013.

The main driver of this reduced margin was the increased warranty income paying costs, which weighed on margins by over 100 basis points.

Moving to slide 11, the LatAm region.

In 2014, the LatAm industry was down 13%, reflecting weaker trading conditions compared to the record 2013 levels.

More specifically, the Brazilian market was down 7%, while Argentina was down 29%, due to import restrictions and additional taxes on high-end segments.

Group sales were down 103,000 units or 11%, despite market share in the region being up 30 basis points versus prior-year.

The Group continued its market leadership in Brazil, with a gap over its nearest competitor increasing to 350 basis points, despite total share declining by 30 basis points.

Palio was the country's biggest selling model in 2014, ending 27 years of Volkswagen Gol leadership.

Strada continued its strong performance, achieving segment-leading share of 56%, marking the 15th consecutive year as segment leader.

In Argentina, share increased by 140 basis points in the year, with combined AV segment share at 17%, supported by the strong performance of the new Palio.

Stock levels in the region remained in line with the previous year.

The Strada Hard-Working Special Series model was launched in October, which includes unique body graphics, new wheels and tires, as well as interior enhancements.

Turning to page 12, shipments in LatAm were down 13%, with Brazil down 10% versus 2013, due to the market weakness, and Argentina down 22%.

Net revenues were down 13%.

And EBIT declined to EUR177 million with a negative impact from volume and mix, as shipments, which were down 123,000 units were only partially offset by better mix.

Positive pricing actions in Brazil and Argentina were more than offset by increased industrial costs, reflecting higher input costs inflation and FX on imported materials, as well as higher SGA, primarily related to start-up costs at Pernambuco.

Moving to slide 13, in APAC, the industry rose by 8%, driven by growth in China, South Korea, India, and Japan, partially offset by a slight decline in Australia.

Group sales were 267,000 vehicles, up 34%, outperforming the industry in each major market.

In fact, sales in China, South Korea, Australia and India all grew by more than 25%, with Japan achieving sales growth of 11%.

Jeep sales were up 42% year-over-year, driven by Grand Cherokee and Cherokee, and represented half of this Group sales in the region.

Fiat brand sales were up 35%, driven by Viaggio and Optimo, while Dodge brand sales rose by 42% on the back of the Journey.

The Group gained share in all major markets, most notably in Australia, with a 90 basis points improvement.

In Q4, Fiat launched the Avventura, a small crossover with rugged good looks and a high level of utility that will compete in India's fastest-growing car segment.

Turning to slide 14, APAC continued its strong performance, as shipments were up 35%, with the Jeep, Fiat, and Dodge brands all increasing by more than 20%.

Net revenues were up 34%, driven by higher shipments and improved mix.

EBIT for the year reached a record level of EUR537 million, primarily on the back of the volume improvements.

Net price deterioration primarily reflects higher incentives in response to the increasingly competitive trading environment, particularly in China, and some negative FX impacts on Australian sales.

Industrial costs related to R&D and VIC-FIX manufacturing, along with SG&A, increased to support volume growth in the region.

For the EMEA region, slide 15, the passenger car industry for EU28+

EFTA registered its first year of growth since 2007, with demand up 5% to 13 million vehicles.

Most major markets experienced growth, with Germany up 3%, UK up 9%, Italy up 4%, and Spain up 18%.

France was flat year-over-year.

For the Group, passenger car sales rose 1% to 886,000 units, of which 760,000 were sold in the EU.

Group share was down slightly by 20 basis points in the EU, driven by 100 basis point share loss in Italy, due principally to the run-out of certain models.

However, share was stable in the EU, ex-Italy, at 3.3%.

In Europe, Fiat continued its market leadership with the 500 family in the A and L-0 segments.

During Q4, the all-new Jeep renegade, which recently received a five-star Euro NCAP safety rating, was launched in 13 additional European countries.

In December, the Renegade was the top-selling small SUV in Italy, and also ranked in the top 10 of all SUVs sold in the country.

The light commercial vehicle industry in Europe was up 10% to 1.7 million units, driven by a recovery in all major markets.

Pria professional sales were up 6% for the year, with higher sales in all major markets except France.

The new Ducato ranked top in its segment with a 21% share, with more than 110,000 units sold.

Group LTV share in the EU was down slightly 10 basis points compared to last year.

Looking at EMEA's financial performance for the year on slide 16, shipments were up 5% to just over 1 million units, with passenger cars and LCV shipments up 4% and 8%, respectively.

These higher shipments, along with favorable mix from LTVs, the Fiat 500 family, and the Jeep brand, result in the 4% increase in net revenues during the year.

EBIT adjusted for unusual items improved by EUR198 million, driven by higher volumes, better mix and lower industrial costs, which benefited from improved manufacturing and purchasing efficiencies, partially offset by startup costs in Melfi.

The impact from pricing was negative in the region, driven by continued competitive pressure in the passenger car segments.

SG&A increased, primarily due to Jeep advertising to support brand growth, including the commercial launch of the all new Renegade.

The improvement in EBIT also reflects the unusual charge in 2013 to write-off previously capitalized R&D related to a new model development for Alfa Romeo products, which was switched to a new platform considered more appropriate for the brand.

It is important to note that EMEA did return to profitability in Q4, which was earlier than forecasted, achieving a positive EBIT of EUR32 million or EUR28 million adjusted for unusual items.

Moving to Ferrari on slide 17, shipments were 7,255 vehicles for the year, with 12-cylinder models up 7% and 8-cylinder models up 3%.

The US remained the number one market for the brand, with shipments up 6%.

Asia was up 17%, while shipments to the main European markets were flat.

Net revenues were up 18%, due to higher volumes and better mix, mainly thanks to LaFerrari.

EBIT was up 7% and 11% for EBIT adjusted for unusual items.

In Q4, the Ferrari FXXK concept was introduced.

This will be Ferrari's first hybrid vehicle.

Turning to slide 18, Maserati had an extraordinary year, with shipments up 137% to over 36,000 units on the back of continued strong performance for the Quattroporte and Ghibli.

Maserati shipments in North America, Greater China, and Europe were more than double the level for those markets in 2013.

Net revenues were up 67%, driven by the increased shipments, with EBIT up 159%, reflecting a 10% margin.

EBIT adjusted for unusual items increased 61%.

During 2014, Maserati celebrated the 100-year anniversary of the brand, which included the introduction of various Centennial Edition models.

On slide 19, the Components businesses posted combined revenues of EUR8.6 billion, representing a 7% increase versus last year, and a combined EBIT of EUR260 million versus EUR146 million last year.

For Magneti Marelli, net revenues were up 9%, with growth in North America, China, and Europe offsetting reduction in Brazil.

EBIT adjusted for unusual items, which excludes unusual charges of EUR20 million in 2014, increased by EUR56 million, thanks to volume growth and cost-containment actions and efficiencies.

Order intake was at EUR2.4 billion, of which 40% related to captive business.

The Lighting business was up 16%, and the Electronic division was up 15%, while Powertrain was flat.

Teksid revenues were down 7%, and EBIT loss was reduced to EUR4 million.

Looking at Camaro, net revenues were up 6%, mainly attributable to the body welding business, with EBIT up 28% to EUR60 million.

Slide 20 provides an update on our industrial and product activities.

Our plant in Melfi, Italy has been revamped with an investment of approximately EUR1 billion for the production of the all-new Jeep Renegade, which started in Q4 2014, and the Fiat 500X, which started in January 2015.

Both of these vehicles will be sold in more than 100 markets globally.

This is now one of the most advanced cars and big plants in the world.

And thanks to the strong initial performance of Renegade and the 500X, we've announced the hiring of 1,500 new workers in the first half of 2015, in addition to the current 5,400 employees.

In Pernambuco, Brazil, we have built an all new state-of-the-art greenfield facility with an adjacent supplier park, where production of the Jeep Renegade will start this quarter.

The plant has capacity to produce more than 250,000 vehicles a year and is capable of building three different models.

In Windsor, Canada, where we currently build the Chrysler Town and Country and Dodge Grand Caravan, production will be suspended from February for three months to retool for the next-generation minivan to be launched in the first quarter of 2016 on an all-new architecture.

Modifications will also allow the plant to concurrently build a hybrid electric minivan and potential derivative products, as well as the current minivan.

As far as new upcoming products, we just revealed at the Detroit Auto Show the new Alfa Romeo 4C Spider for the US market, which will arrive at dealerships in the summer of 2015.

This continues the rollout of the Alfa Romeo brand to North America after the 4C Coupe launch in 2014.

We can now move to slide 21 to review our expectations for full-year 2015 market demand in each region.

For NAFTA, we assume the industry to be stable at approximately 20 million units, with the US slightly up to approximately 17 million units, and Canada more or less flat at the record levels of 2014.

The LatAm industry is expected to decline slightly to about 5.1 million units, reflecting economic uncertainties in the region.

In Brazil, we expect the market to be 3.2 million units from the 3.3 million units in 2014, due to the GDP slowdown and fully IPI tax increase in January 2015, while the industry in Argentina is expected to decline 8%.

In APAC, continued growth is forecasted, where the industry is projected to be up 6%, driven by increases in China, India, and Australia, partially offset by contraction in Japan and South Korea.

For the EMEA region, passenger cars in Europe are expected to continue to grow slightly, while the LCV market is expected to be stable versus 2014.

Finally, on slide 22, we show our target for 2015.

These figures do not include any impacts from the previously announced capital transactions regarding Ferrari.

Worldwide shipments between 4.8 million to 5 million units; net revenues to -- of EUR108 billion -- that includes about a EUR5 billion impact for FX translation, mainly related to the US dollar; EBIT in the EUR4.1 billion to EUR4.5 billion range, which includes also a positive impact of translation, offset by negative transaction on some currencies, for a net impact of about EUR200 million; net profit between EUR1 billion to EUR1.2 billion; and net industrial debt in the EUR7.5 billion to EUR8 billion range.

Thank you, Richard.

Anne, I think we'll turn the call over to you to begin the Q&A session, please.

Adam Jonas, Morgan Stanley.

First question, on foreign exchange.

Can you give us an idea of what your -- what FX rate you are assuming for 2015 with your forecasts?

And the second, just to follow on that, can you tell us what your open position is to the US dollar at the Group level?

And could you hopefully distinguish how much of the open position is within the North American operations, and within the Ferrari and Maserati?

And maybe you could add on a hedging strategy, if there's anything you'd like to share, for expectations.

Thanks.

So, the rate for the dollar we are assuming is $1.20, Adam, to the euro.

And on the reais, we are assuming 3 -- just a second; I'll get you that number and get back to you on the reais.

The impact of the US dollar between -- on the mass-market side is basically zero on transactional, because we have imports coming in from Europe into the US, and going also in the other direction, which basically offset in 2015.

Obviously, that number is going to change going forward, as we increase production in Italy for Alfa Romeo and Maserati.

But at the moment, the position is basically offsetting.

If we go -- if we look at translation, we have a positive impact of about EUR400 million for the dollar.

But that -- well, that is basically offset in large part by negative transaction impacts of the Canadian dollar against the US dollar for the units we sell into Canada out of the US, and also for negative transaction exposure we have on Mexico and Australian dollar.

So, overall, the net impact is about EUR200 million positive between translation and transaction.

And we also have obviously a positive impact on Ferrari and Maserati, but those are relatively small in 2015 because we have hedges in place for the vast majority of the exposure we have.

The rate we are using for the euro to the Brazilian reais is BRL3.42.

Thank you.

Can I just ask one follow-on on the North American operations?

You are posting a 4% operating margin -- or EBIT margin in the fourth quarter, relatively a clean quarter.

Under IFRS, I know you are not disclosing the capitalized R&D benefits at this point, but one could assume that under US GAAP, your margin would be maybe 100 or 200 basis points less.

Just in comparison to players like maybe GM and Ford, your US competitors doing possibly two or three times as high on profitability -- I'm not asking you to comment on GM and Ford's business so much as maybe to explain to investors on this call what is it -- how do you explain these types of gaps as a very low-single digit margin at such a heady time when you're making such great commercial progress?

I know you've alluded to some of these things, the warranty costs and the content, but are we missing something else you'd like to highlight?

Thank you.

So, yes, one piece obviously that's impacting heavily is the warranty costs for the year; as we mentioned before, it's about [$650 million] on NAFTA, which is 120 basis points of margin.

Beyond that, we are still spending a lot of money on both R&D and the CapEx to drive the product renewal in NAFTA.

Those -- year-over-year, the difference between GAAP and IFRS is diminishing significantly because the amortization is coming up.

So it's about $750 million this year compared to $1 billion last year.

And that's coming down to about $0.5 billion in 2015 of net adjustment from IFRS -- from US GAAP to IFRS.

Is that global?

Or is that just NAFTA?

It's global but it's basically -- it's mostly NAFTA.

Thank you.

And obviously, we need to continue to work on the operating leverage.

But, as we mentioned before, we are still working through a number of industrial issues in the plants as we get operations into more stable -- into a more stable footprint going forward.

So, I think we are looking into 2015 optimistic to start improving margins in NAFTA, as I think the cost base we have in place now is pretty stable and doesn't need to have the type of interventions we've had over the last five years.

Thanks very much.

Charles Winston, Redburn.

Thanks for taking my questions.

Just a couple for me.

On Chrysler, in the past, you've disclosed that the Chrysler EBIT under IFRS, I think, is about [EUR3.15 billion] or thereabouts in 2013.

Given the decline in the benefit from the capitalization issue you just referred to, would it be fair to say that the Chrysler results under IFRS is above or below where it was in 2013?

I mean, ideally, I'd like to ask you exactly what it was under IFRS, but I doubt you can perhaps give us that.

If you could, it would be great.

If not, was it above or below where it was last year?

The second question was just on the industrial costs in NAFTA.

We talked about [EUR650 million] of the warrants and recall costs.

Would it be fair to say that the rest of the [EUR1.5 billion] was predominantly content?

Or is there other bits and pieces in there which would be more material?

And just say quickly a third point.

The $4 billion raised on the capital issue converted to EUR2.4 billion when we look at the cash walk, I'm guessing there's something here to do with the treatment of the convertible, partly is equity and partly is debt.

I was wondering if you could help us out in understanding that/ Thank you.

Okay, I'll start with the last one.

The $3.9 billion obviously converted into euros gets you down to about [EUR3 billion] at the rate of the time.

And then we have two impacts to get to the net proceeds.

One being the fact that we had to -- we were issuing 100 million shares, but about half -- 54 million of those shares were actually repurchased as we went through the merger process.

So that is improving on net proceeds.

And the accounting for the mandatory convertible basically, the coupon on the mandatory convertible is accounted for as debt.

And so about $450 million has gone into the net debt as debt.

So the net impact on reduction in net debt is the [$2.3 billion] as a result.

Got it.

Thanks.

Sorry, the Chrysler contribution to earnings is higher.

I don't really want to get into how much higher.

It's -- clearly, we're looking at this as one company going forward, so the regions need to be looked at as such.

Sorry, do you have another question, Charles?

Or did I miss one?

Yes.

So, I just need the breakdown in the industrial costs in NAFTA, if [EUR650 million] was the warranty and recall issue, would it be fair to say the bulk of the rest is content?

Or perhaps you could give a little bit more detail on how the rest of that fleshes out.

Thank you.

Yes, the bulk of it is content.

And obviously, that number going forward is going to come down significantly, because we've now basically had full-year impact of a lot of the launches that came in -- end of 2013 and beginning of 2014.

Clear.

Thanks a lot.

Richard Hilgert, Morningstar.

Thanks for taking my questions.

Richard, you just mentioned -- my first question was going to be on the industrial costs at NAFTA.

You just mentioned now the bulk of the remainder past the EUR650 million is the content.

But then you also referenced launches.

So I'm curious -- at some point, we anniversary the new content that's coming in.

And I take it that this new content is because of older models that didn't have anything to do with launches.

So I was wondering if you could kind of clarify when we anniversary all of the large amount of content that hits that industrial cost line and what part is launches?

Well, we basically anniversary all of the launches at this stage.

So going into 2015, that number is going to be significantly lower.

The big launch coming up, which could have a similar impact on industrial costs, would be the revamp of the minivan, which will be launched at the beginning of 2016.

But obviously the 200 is now basically at nearly its full first year of volumes.

The interventions that we made on the diesels on Grand Cherokee and light-duty have also come through.

So at this stage, really everything is anniversaried.

And so I don't expect to have any big impacts in 2015 vis-a-vis industrial costs like we did in 2014.

Okay.

But when I think of content, I'm --

I should qualify that.

That's NAFTA.

Because obviously we have launches in other regions which will have an impact.

Okay.

When I think of other content, though, Richard, I'm talking -- I'm thinking of additional features or options that get put into a vehicle under a certain pricing scheme.

And you, year-over-year, have that added cost of putting that content in.

And the reason why you are putting that content in is because that vehicle or that model might be getting a bit long in the tooth, and you're trying to incentivize more sales of that vehicle.

Is that what you mean by added content?

Because you seem to be including launches when you are talking about content too.

Well, yes, I'm including when we launch a new -- an all-new nameplate.

So we launched a new 200.

The new 200 has more content than the prior 200, and so that is impacting our cost of the product, which is going through that line.

And as you said, when you come up to the anniversary, then that impact will no longer be in the variance analysis.

But it is for the first year.

Okay.

Okay.

I understand the difference.

The other couple of questions I had deal with Pernambuco and Windsor.

For Pernambuco, it's launching here in the first quarter.

The capacity at the plant is up to 250,000 units, and it can do up to three differentiated models, if I remember correctly?

At what point do you get to normalized run rate?

And at what point do you get to having those three additional models, and having the additional tooling put in, to get to the eventual capacity levels?

Q3 of 2016.

For just the current tooling or for --?

No.

All three, all tooled.

Third-quarter 2016?

Q3 2016.

Yes.

Okay, thank you.

And then on Windsor, is Windsor going to be -- you are converting over the tooling for the next model lineup for the minivan.

Does that wind up being lower capacity in Windsor, since you were talking about --

No.

-- removing the Dodge version?

No.

Capacity is maintained.

Okay, so -- okay.

And then finally, on Melfi, you're going to be hiring in additional workers in the first half.

So then we can assume that third-quarter 2015, we get to a normalized run rate?

Or do you expect additional volume at Melfi too, later on?

Q3 should be run rate.

Okay, great.

Thank you.

Great.

Max Warburton, Bernstein.

I've got a couple of financial questions, please.

And then I'm wondering if I could ask a question or two on Ferrari.

I don't know if this is a good time to do that.

Just on the financials, the 2015 guidance I think is sort of broadly where most of us are with the operating line.

But it seems a bit light at the EPS line.

Richard, could you talk us through what the factors behind that are, particularly on interest charges?

I mean, we are looking at this quite material balance sheet improvement from the capital raise.

But I went back to your slides from the Capital Markets event in Detroit in May -- and obviously that was pre-all the details -- and you suggested the interest costs would remain at about EUR2 billion until 2016.

What is interest cost assumption now for 2015 and 2016?

And is that really why we are seeing this EPS forecast?

And then, the second question on the balance sheets.

Slide 29 of the pack has some detail on factored receivables, which seem to have gone up about EUR1 billion from last year.

Can you just remind us, does that get knocked off industrial net debt?

And where do we see it?

Is it coming out of the cash flow statement?

Is -- am I right to understand that there's been a EUR1 billion contribution from that during the year?

Thanks.

Yes, the fact that receivables is a Financial Services activity is not in the net industrial debt walk.

The increase -- so, in terms of EPS, year-over-year, we have an increase in the impact of deferred taxes charges going through the income statement.

In 2014, we had some recognition of deferred tax assets as we went through some (multiple speakers) -- so those positive impacts aren't being repeated in 2015 in the guidance.

And in terms of interest charges, we are about [EUR150 million] above the [EUR2 billion] number at the moment.

Obviously -- we had all the positive impacts of the capital raise that you said.

We are holding that on the balance sheet at present.

We obviously need to go after the restructuring of the Chrysler balance sheet through this year.

And as we go through that, we'll see how the interest charge could be managed.

But at the moment, it's not included.

Okay.

I mean on that subject, I remember you and Sergio were having a, I think, a discussion about it back in May, and you were talking about interest charges coming down to EUR1 billion.

But it wasn't really clear when that would be.

I mean, is that sort of the final year of the five-year plan that, as analysts, we should think about it being quite back-end- loaded when the -- when interest cost comes down?

I think it's going to start coming down significantly as we get through the middle of 2017.

Because we need to get through 2016 and hold our net debt number basically flat.

And then we start to generate significant cash flow.

And I think we can reduce the level of liquidity we are holding down to the EUR15 billion number, which we indicated on May the 6th.

So that's not going to come in 2016.

What we are looking at obviously for 2016 is the first Chrysler bond, the 8% bond, which the core protection comes off at the end of May of this year.

We will be looking at basically repaying that early and starting to restructure the balance sheet.

But all of that's not going to get done until the middle of 2016, as the second bond core protection comes due.

We'll be seeing -- we'll be looking at how we can maybe anticipate that event; but at the moment, it's the back-end of 2016 when the balance sheet starts to get cleaner, and therefore, the interest charge comes down.

Okay.

Very clear.

Can I ask a couple of quick questions on Ferrari in this forum?

I think a number of us are trying to get to grips with it, trying to understand it, really for later this year.

Am I correct that the business can't sell more than 10,000 cars globally and still be compliant with its sort of special delegation under US emissions rules?

Or am I missing something?

You are missing something.

And we'll leave it at that.

Okay.

Will you be able to talk about that at some point?

Yes.

Whenever I take Ferrari on the road, you'll be the first guy to know.

Okay.

And then the other one.

I don't know if now is the time for it.

Sergio, you said something on the Q3 call, where you said, I think, making cars is kind of incidental, which left me scratching my head.

Because it looks from the outside that most of the revenues are from making cars.

What am I missing on the merchandising business, if that's what you were alluding to?

I mean, I can't figure out how it makes more than EUR100 million, EUR150 million of revenue.

Yes.

No, those are (multiple speakers) --

Is that a sensible figure or not?

Yes, but you and I are talking about two different things.

This is not a merchandising exercise.

If I wanted to merchandise, then I would be merchandising Fiat T-shirts and running shoes.

I mean, this is not what we're doing here.

Ferrari is capable of being a fully fledged luxury brand, and as such, it would occupy a space in the luxury goods sector, which is -- which shares its name with Ferrari and maintains the same level of attachment to exclusivity, which has characterized the business of -- it's a GT business going forward.

So I think it's a different proposition.

I think it's not a question of running Ferrari stores, selling baby shoes to people.

I think we are beyond that stage.

I think the intention here is to develop a business that is fully fledged on its own merits, that can be compared to other luxury goods-makers outside of carmaking.

But they utilize Ferrari as the basis of the brand.

But what does that mean exactly?

That means (multiple speakers) --

I mean, does that mean you are going to -- you're saying you can make the same returns by making cars?

That means that if you work really hard, one day, you'll be able to buy a non-car produced Ferrari luxury good.

We'll leave it at that, and we'll talk when we take it on the road.

Otherwise, we are just going to spend the whole day here talking about Ferrari.

Got it, okay.

Thanks, anyway.

John Murphy, Bank of America Merrill Lynch.

I apologize -- the first question I have is just a follow-up on Ferrari.

If we think about the benefits to the balance sheet of a 10% IPO, is -- could they potentially be even greater if you did a 20% IPO?

And I'm just trying to understand as you go through this process, and you think about bolstering the balance sheet at the old FCAU, would there be an opportunity to maybe do more and bolster the balance sheet further?

No.

And look, I think we've had this discussion with the Board.

I think we feel comfortable at 10% floatation with the distribution of the remainder 80% is the right mix.

We have also gone on the road, and in fact, we told people who have also bought into our converts into our shares, that that was the intended plan.

And I don't think we feel comfortable at all moving the numbers.

I don't know -- and I doubt if there's more cash coming into the house, if there's more cash coming into the house.

But I'm not sure that it's from a capital market standpoint, it's the right thing to do.

I feel comfortable that 10 IPO'ed, 80 distributed is the right mix.

And I think life goes on.

I think the objective is to try and get this done in 2015.

That's what keeps us up nights now.

But there's no limitations on what you could do?

I mean, this is purely the mix that you think is best?

Technically, there is no limit.

Okay.

Second question, we've got the UAW negotiations that are coming up in the spring for the contract that expires at the end of August, and you've been given some sort of favoritism in the contract relative to GM and Ford, particularly around the entry-level workers (multiple speakers) --

I'm sorry, I'm sorry, I'm sorry.

Before I get really excited, the favoritism is --?

Well, there is one unique point -- okay, yes, I agree.

But on the entry-level, you have about 40% of your workers are entry-level workers with GM and Ford, are around 20% at their cap.

So you have a higher cap on entry-level workers.

I'm just curious if you think that (multiple speakers) --

I do because we are the fastest-growing North American brand and we've had to hire people to get volumes up.

So the question is, though, can you hold onto that 40%?

Because GM and Ford are capped around 20%.

So I'm just curious if you think you can hold onto that mix.

Well, look.

I think the discussion is much more complex.

Because -- and I said this at the Auto Show in Detroit and I'm willing to repeat it to you now -- I do not think that it is a stable environment to promote an environment within our plants, when you've got two-tier wages and you've got people doing fundamentally the same type of work with a two-tier wage structure.

That needs to go away.

And I've said what I think ought to happen.

I think we need to grandfather the 1's, and I think we need to work on the 2's, and we need to open up to them the possibility of effectively, through a variable pay scale, make as much as a 1 makes, but knowing fully well, on the down cycle, they will not be able to benefit from the same type of wage structure.

It's a complicated structure.

And we need -- and whether you and I are discussing this, John, is not helpful because I need to have a conversation with Dennis Williams and his people at UAW.

I've been trying to do that now for five years, right?

But we need to have that conversation and have it with them relatively quickly.

I think that the right answer is in that direction.

It's not a question of whether you've got 20 or 40 Tier 1's or 2's.

Tier 1's -- it's a Tier 1, Tier 2 structure.

It does not view one class as being grandfathered, is by definition unstable.

Okay, that's very helpful.

And then just one last question on the US pension, I was wondering if you could give us the marks on the liability or the PBO and the assets at the end of 2014 versus what they were at the end of 2013, so we could just understand the funding status there?

So, the number IFRS on FCAU's books as the deficit is increased by about EUR1 billion, the net deficit, most of that is translation impact on dollar to euro year-over-year.

In dollars, I think it's about a $300 million increase in the liability.

Okay, do you have the PBO and the asset base for that?

I just want to understand the sizes.

I don't have them now, John.

I'll give them to you after the call.

Obviously, I have them but I haven't got them to hand at the moment.

Okay, thank you.

Thank you very much.

Alberto Villa, Intermonte.

I just have a couple of questions.

The first one is on the slide 28.

When you say that the shipment outlook is pretty stable for the Ferrari, Maserati brands to 40,000 units, I was wondering if that implies Maserati being flat or am I missing something there?

And the second one is on the CapEx for 2015.

Should we expect a significant increase compared to 2014 due to Alfa Romeo?

And if you can, give us an idea of a regional CapEx forecast for 2015.

And finally, a final question on Ferrari.

Are you confirming that the timing of the IPO by first half 2015?

And I was wondering what the time lag would be between the IPO and then the spinoff to Fiat FCA shareholders of the remaining Ferrari stake?

Let me deal with the last issue.

I'd like to get everything done within 2015, IPO and spin.

And I think if we cannot make each one of this year, it's purely for a regulatory reason.

So we may spill over into Q3, but fundamentally, that's what we're looking at.

And Richard will confirm to you that the Ferrari, Maserati volumes for 2015 are flat on 2014.

Basically.

Yes.

And the CapEx guidance is EUR8.5 billion to EUR9.5 billion, the increase year-over-year being principally driven by the investments for Alfa Romeo.

Okay, thank you.

Thomas Besson, Kepler Cheuvreux.

Thomas Besson.

A few questions, please.

Sorry if I come back once more to slide 10 and your NAFTA operations.

Would you mind telling us what you had in terms of equivalent warranty and recall costs in 2013, and what you assume it's going to be in 2015?

And tell us whether you think you're going to take that adjustment from here?

Or whether you think it's part of your ongoing business from here?

Thank you.

Well, the impact year-over-year 2013 didn't have anything particularly significant apart from the recall campaign for Jeep, which we classified in the unusual.

So if you look at EBIT ex-unusuals, the EUR650 million is an increase over 2013, and basically rates most of the extraordinary recalls we have beyond what we would normally expect to get in a stable environment.

So, going forward, to be frank, we are watching this very closely and we'll see how we perform in the first half of 2015.

Okay.

May I ask what was the difference between the 2013 Jeep recall that you decided to classify as unusual and the different recall that affected you in 2014?

Why were they not classified as unusual?

Well, basically, the Jeep recall related to an issue that we've been dealing with for some time.

It was an old item we just considered unusual, given that we hadn't (multiple speakers) --

If I could just give you a hand, the Jeep issue was one that was a multiyear evaluation by some people that went back to the 1990s, and it had to do with vehicles and architectures that were no longer available within the fold.

They do not represent what I consider to be standard.

So, the production issue was in SCA, and it was really related to the past.

It had nothing to do with current operations.

So, that's why it was singled out.

Okay, clear.

My I ask you one follow-up question on your introduction, Mr. Marchionne, please?

If I understood correctly, you said that 2014 marked a 50% improvement in your operating performance on what you consider to be comparable figures.

Did I understand you correctly?

Because, I mean, slide 26 --

If I take out all the noise from the numbers that were reported -- and we could spend a lot of time talking about what is capitalized, what is not capitalized, what is one-off, what isn't -- if I take out all that crap for the P&L, I went from EUR3 billion to about EUR4.3 billion.

Okay, can you explain me how you move from EUR3.5 billion and EUR3.7 billion to EUR3 billion and EUR4.3 billion?

I mean, are those numbers I've mentioned being available on page 26 of your presentation.

Okay, the recall costs that are built into and -- sorry, I'm just doing this out loud.

Richard is looking for his numbers.

He will be with you in a second.

Yes.

So the EBIT ex-unusuals went from EUR3.5 billion to EUR4.3 billion.

The EBIT before unusuals is EUR3 billion.

So the correct comparison -- and this is my mistake -- would be to compare ex-unusuals of EUR3.5 billion to EUR4.3 billion, being -- and the difference between EUR3.65 billion and EUR4.3 billion is the EUR650 million of the recall campaign delta.

Okay, thank you.

I have one last quick question for you, please.

Could you please share with us the currency split between your net debt and gross cash?

So as we try and anticipate the currency impact in 2015.

Sorry, could you repeat the question?

Sure.

You mentioned in the press release today that there has been a EUR1.3 billion positive currency impact on your cash.

Could you give us at the start of 2015 the currency split roughly between euro and dollar?

Yes.

All of that impact is basically dollar and about half our cash is dollar, and the rest is principally euro and real.

Great, thank you very much.

Philippe Houchois, UBS.

Three questions on my side.

The first one is, am I right in assuming what you are telling us in terms of transaction benefit and currency -- Canadian dollar, US dollar is based on an average 2014 rate and doesn't necessarily take into account that the Canadian dollar has weakened quite a lot in the past two months against US dollars.

In other words, there is a bit of upside risk to your NAFTA numbers on the basis of that weaker Canadian dollar.

That's my first question.

Second one is, it seems to me that (multiple speakers)

The answer is yes.

Is yes.

So we've got a bit of upside there.

Good, thanks.

The other one is -- in Brazil, it seems, from a market standpoint, the production has come down much more than sales.

So at market level, we have very, very low inventory.

Could you confirm that's the case, and that from that standpoint, your run rate and production is -- even if we have a down market this year again, the risk to production is less severe than it was in 2014?

Yes.

Yes, thank you.

And then the last one on Ferrari, I've looked at the IFRS Group accounts for Ferrari we've been getting online for 2013 in those accounts.

And I think those can be matched with your FCA numbers.

There is a EUR3.1 billion total balance sheet, EUR1.5 billion of book equity and for ARI, disclose EUR1.35 billion of net liquidity, which I can rework in some adjustments.

What would those numbers be for 2014, please?

I don't know whether Richard knows.

Do you know it?

No.

I don't have those numbers for you yet, Philippe.

So we'll give you them going forward.

We will release the numbers for Ferrari --.

At least maybe the net liquidity, just to get a sense of kind of retained and liquidity of this business in the course of 2014?

It's slightly higher than the number you quoted for 2013.

All right.

Okay.

All right.

I'll wait for those numbers then.

Thank you very much.

Jose Asumendi, JPMorgan.

Thank you for your attention.

The first one on pricing and the impact on the bridge.

Can you talk a bit about the dynamics in LatAm and APAC, and the impressive momentum in LatAm, slightly worrying in APAC?

So what is the momentum going to 2015?

Should we expect the same increase in prices in Latin America in 2015?

The second element are industrial costs North America.

Sorry to come back to this, but did you reflect the cost of the Takata airbag recall at year-end?

Or is this coming in 2015?

And can you give us some sense of these industrial costs going to 2015?

Are they likely to be less of a headwind versus 2014?

That would be my assumption at least.

The final one to Mr. Marchionne.

On the quality front, can you talk a bit about the changes you've done on the management front, on the quality front, how you are?

You have the right structure now to deliver, to improve, at least to avoid what we had last year in 2015.

Thank you.

Sorry.

Before I answer the question, what did we have last year that I missed?

You had a few recalls on (multiple speakers) --

I see.

Yes, yes.

Okay.

Well, look.

I think I've been public on this recall issue.

The recall matter is something which is a reflection of a changing paradigm for the auto sector.

I think we have made changes.

We are all adjusting our internal structures to deal with this new state of affairs.

It is my expectation that these costs will come down as we progress through a reconstitution of the management process of these -- of what's going on here.

We had what I consider to be a pretty robust system in place.

We have strengthened it further.

We've carved it out from the rest of operations.

We have set a very, very senior technical person to head up these activities.

So I think we're making progress, and making sure that at least not only are we dealing with what's on our plate, but that we are actually becoming much more proactive in identifying potential exposures going forward.

So, as we do this, I think these numbers will stabilize and we'll see a steady-state.

On the question about Takata, I think Richard will tell you that I think it has been booked.

Yes, we booked the Takata item in Q4.

In 2015, as I said before, we expect the industrial cost headwind to be significantly less than it was in 2014, because of the fact that all these launches with extra content have had a 12-month cycle now.

So year-over-year, they are in the numbers.

A pricing in LatAm, I think, we expect to continue to try and price as much as we can for cost inflation in the marketplace, as we did relatively successfully in 2014.

You know, I think pricing will improve throughout 2015 in LatAm.

I mean, we have zero optionality.

I think the more problematic issue is in APAC, because I think APAC, as you've seen now -- especially out of China, you've seen some adjustments that are being made by the competition in the region.

I think we need to be very watchful that we adjust properly to changing market conditions.

We are obviously studying it very carefully.

And I think it's embedded in the number that we forecast for APAC for 2015, at least some level of skepticism of the level of profitability out of the region.

I just -- since I've got you on the phone, let me try and deal with one issue, which I think Richard tried to stab, which is a question of NAFTA profitability.

We get it.

I mean, I made the last call -- when we were on the last call for the third quarter, we did tell you that we would start benchmarking Q1 2015 numbers out of NAFTA, because we have really run out of runway now in terms of trying to explain why we have a structural difference between us and the competition.

So, I would just ask you to bear with us as we finish up 2014 and just move it on.

We've got to move it on.

I hear all the stories.

They are wonderful stories.

They question if there is content, to why are we not being paid for it?

So, we'll come back to you.

Give us the time at the end of Q1.

Okay.

My one follow-up, on the EMEA pricing, it's been -- so, of course this pricing in EMEA I think finally showed up in the fourth quarter.

What are the signals?

What are you seeing in the European car market?

And obviously, with Jeep, it's definitely going to be boosting 2015.

Yes, but I'm not opening any bottles of champagne.

I think we have seen some improved pricing conditions.

The question is, how long will it last?

Certainly I'm encouraged by the direction that the business has taken.

And not only am I encouraged, but I am confident that we will be in the black for the whole year.

It's a bigger question, it seems to me, as to -- look, strangely enough for a guy who has been as negative on EMEA as I've been now for the last four or five years, I'm actually turning positive.

I think there is upside from where we are.

I think, if we don't really screw it up badly just in terms of management of the member states, I'm quite confident that 2015 is going to be a significant year of recovery.

And it won't take much to let that happen, because we've been at the bottom of the pile now for so long that even the slightest uptick in volumes is going to be taken as an indication of life.

So, just bear with us.

I think 2015 will be all right.

Okay.

Very good.

Thanks very much.

Stephen Reitman, Societe Generale.

A question first of all on Maserati and the margin development in the fourth quarter.

It was (multiple speakers)

It was mixed.

Mixed.

More Ghibli than QPs.

Right.

Okay.

Thank you.

Secondly, on the -- on Renegade, I know you don't normally like giving volume targets and such, but are we talking about a significant number -- I believe you were talking about quite a significant number of Renegades being destined for the United States or for the NAFTA market in 2015?

Define significant for me.

Well, I guess something up to about 100,000?

That may be at the very, very high end of expectations.

Right.

Okay.

And with that in mind, can you talk a little bit about the capacity that you have in the system in (multiple speakers) --

300.

In North America, in terms of particularly as it relates to Ram and to Jeep?

We are tapped out on both cases, in both the case of Ram and Jeep, with the exception of capacity on the Compass and the Patriot, which has got some leeway.

Everything else is pushed out.

So, even so, they are not very immediate obvious steps to increase output year-on-year in 2015 on those product lines?

We have a number of initiatives that are intended to do two things.

One is, debottlenecking existing installations across the Jeep and Ram brands, and also look at ways in which we can increase capacity out of the system by introducing additional shifts.

These things will be looked at piecemeal.

I think we've got a number of studies that are underway.

Hopefully, we'll have clarity and numbers coming out of those plants within the first half of this year.

And can you comment a little bit about the pricing of what you're seeing in terms of average pricing on the light-duty in the wake of the lower fuel prices?

Are people opting out?

No.

I think pricing has held with the exception of a couple of stupid days in December, which I didn't understand if it was snowfall or otherwise.

But I think pricing has held.

So we have not seen significant shifts in pricing or on demand of the product because of the change in fuel prices.

As a matter of fact, our demand for the RAM diesel continues unfettered.

I mean we have not seen a drop in demand, notwithstanding the fact that gas is below $2.00 a gallon now.

Thank you.

You're welcome.

That will conclude the question-and-answer session.

I would now like to turn the call back over to Joe Veltri for closing remarks.

Thank you, Anne.

And we'd like to thank everyone for joining the call today.

My team and I will be available to follow-up with any further questions you have.

And please note that very soon, we will be publishing the plan dates for the reporting of our quarterly results for 2015.

Thank you and have a pleasant day.

That will conclude today's conference call.

Thank you for your participation, ladies and gentlemen.

You may now disconnect.