Chrysler 2014 Annual Report Download - page 247

2014 | ANNUAL REPORT 245
the repayment on maturity of notes issued under the GMTN Program in 2006, for a total principal amount of €1
billion; proceeds from new medium-term borrowings for a total of €3,188 million, which mainly include (a) medium
term borrowings in Brazil, (b) €400 million loan granted by the European Investment Bank in order to fund the
Group’s investments and research and development costs in Europe and (c) €595 million (U.S.$790 million) related
to the amendments and re-pricings in 2013 of the U.S.$3.0 billion tranche B term loan which matures May 24, 2017
and the Revolving Credit Facility.
repayment of medium-term borrowings on their maturity for a total of €2,258 million including the €595 million
(U.S.$790 million) relating to the amendments and re-pricings of the Senior Credit Facilities; and
a positive net contribution of €677 million from the net change in other financial payables and other financial assets/
liabilities.
Interest of €2,054 million in 2014 (€1,832 million in 2013 and €1,951 million in 2012) was paid and interest of €441
million (€398 million in 2013 and €647 million in 2012) was received in 2014. Amounts indicated are inclusive of
interest rate differentials paid or received on interest rate derivatives.
33. Guarantees granted, commitments and contingent liabilities
Guarantees granted
At December 31, 2014, the Group had pledged guarantees on the debt or commitments of third parties totaling €27
million (€31 million at December 31, 2013), as well as guarantees of €12 million on related party debt (€15 million at
December 31, 2013).
SCUSA Private-Label Financing Agreement
In February 2013, FCA US had entered into a private-label financing agreement with Santander Consumer USA Inc.
(“SCUSA”), an affiliate of Banco Santander (the “SCUSA Agreement”). The new financing arrangement launched
on May 1, 2013. Under the SCUSA Agreement, SCUSA provides a wide range of wholesale and retail financing
services to FCA US’s dealers and consumers in accordance with its usual and customary lending standards, under
the Chrysler Capital brand name. The financing services include credit lines to finance dealers’ acquisition of vehicles
and other products that FCA US sells or distributes, retail loans and leases to finance consumer acquisitions of new
and used vehicles at independent dealerships, financing for commercial and fleet customers, and ancillary services. In
addition, SCUSA will work with dealers to offer them construction loans, real estate loans, working capital loans and
revolving lines of credit.
The SCUSA Agreement has a ten-year term from February 2013, subject to early termination in certain circumstances,
including the failure by a party to comply with certain of its ongoing obligations under the SCUSA Agreement. In
accordance with the terms of the agreement, SCUSA provided an upfront, nonrefundable payment of €109 million
(U.S.$150 million) in May 2013, which was recognized as deferred revenue and is amortized over ten years. As of
December 31, 2014, €103 million (U.S. $125 million) remained in deferred revenue.
From time to time, FCA US works with certain lenders to subsidize interest rates or cash payments at the inception
of a financing arrangement to incentivize customers to purchase its vehicles, a practice known as “subvention.” FCA
US has provided SCUSA with limited exclusivity rights to participate in specified minimum percentages of certain of its
retail financing rate subvention programs. SCUSA has committed to certain revenue sharing arrangements, as well as
to consider future revenue sharing opportunities. SCUSA bears the risk of loss on loans contemplated by the SCUSA
Agreement. The parties share in any residual gains and losses in respect of consumer leases, subject to specific
provisions in the SCUSA Agreement, including limitations on FCA US participation in gains and losses.