Chrysler 2014 Annual Report Download - page 62

60 2014 | ANNUAL REPORT
Operating Results
Research and development costs
For the Years Ended December 31, Increase/(decrease)
(€ million, except
percentages) 2014
Percentage
of net
revenues 2013
Percentage
of net
revenues 2012
Percentage
of net
revenues 2014 vs. 2013 2013 vs. 2012
Research and
development
costs expensed
during the year 1,398 1.5% 1,325 1.5% 1,180 1.4% 73 5.5% 145 12.3%
Amortization of
capitalized
development
costs 1,057 1.1% 887 1.0% 621 0.7% 170 19.2% 266 42.8%
Write-down of
costs previously
capitalized 82 0.1% 24 0.0% 57 0.1% 58 241.7% (33) (57.9)%
Research and
development
costs 2,537 2.6% 2,236 2.6% 1,858 2.2% 301 13.5% 378 20.3%
We conduct research and development for new vehicles and technology to improve the performance, safety,
fuel efficiency, reliability, consumer perception and environmental impact (i.e. reduced emissions) of our vehicles.
Research and development costs consist primarily of material costs and personnel related expenses that support the
development of new and existing vehicles with powertrain technologies.
2014 compared to 2013
Research and development costs for the year ended December 31, 2014 were €2,537 million, an increase of
€301 million, or 13.5 percent, from €2,236 million for the year ended December 31, 2013. As a percentage of net
revenues, research and development costs were 2.6 percent both for years ended December 31, 2014 and 2013.
The increase in research and development costs was attributable to the combined effects of (i) an increase in the
amortization of previously capitalized development costs of €170 million, (ii) an increase in research and development
costs expensed during the period of €73 million and (iii) an increase in write-down of costs previously capitalized of
€58 million.
Research and development costs capitalized as a percentage of total expenditures on research and development
were 61.9 percent for the year ended December 31, 2014, as compared to 60.6 percent for the year ended
December 31, 2013. Expenditures on research and development amounted to €3,665 million for the year ended
December 31, 2014, an increase of 8.9 percent, from €3,367 million, for the year ended December 31, 2013,
resulting in a 5.5 percent increase in research and development costs expensed.
The increase in amortization of capitalized development costs was attributable to the launch of new products, and in
particular related to the NAFTA segment, driven by the all-new 2014 Jeep Cherokee, which began shipping to dealers
in late October 2013, and the all-new 2015 Chrysler 200, which was launched in the first quarter of 2014, and began
arriving in dealerships in May 2014.