Chrysler 2015 Annual Report Download - page 170

170 2015 | ANNUAL REPORT
Consolidated
Financial Statements
Notes to the Consolidated
Financial Statements
5. Other income/(expenses)
For the year ended December31, 2015, Other income/(expenses) amounted to €152 million and included income
from royalties and licenses as well as €104 million of income related to legal settlements to which we were the
plaintiff. This was partially offset by a total charge of €81 million resulting from a consent order (the “Consent Order”)
entered into by FCA US with the U.S. Department of Transportation’s National Highway Traffic Safety Administration
(“NHTSA”) on July 24, 2015. The Consent Order resolved the issues raised by NHTSA with respect to FCA US’s
execution of 23 recall campaigns in NHTSA’s Special Order issued to FCA US on May 22, 2015 and further addressed
at a NHTSA public hearing held on July 2, 2015. Pursuant to the Consent Order, FCA US made a U.S.$70 million
(€63 million) cash payment to NHTSA in September 2015 and will spend U.S.$20 million (€18 million) on industry and
consumer outreach activities and incentives to enhance certain recall and service campaign completion rates. An
additional U.S.$15 million (€14 million) payment will be payable by FCA US if it fails to comply with certain terms of the
Consent Order.
FCA US also agreed under the Consent Order to offer, as an alternative remedy, to repurchase vehicles subject to
three recall campaigns that had not already been remedied as of the date of the Consent Order at a price equal to
the original purchase price less a reasonable allowance for depreciation plus ten percent. In addition, FCA US offered
consumer incentives to encourage owners of vehicles subject to the structural reinforcement campaign to participate
in the campaign. All premiums paid to repurchase vehicles in the three recall campaigns and customer incentives
will be applied as credits to the U.S.$20 million (€18 million) that FCA US has agreed to spend on industry outreach
amounts under the Consent Order.Although such amounts may exceed U.S.$20 million (€18 million), FCA US does
not expect the net cost of providing these additional alternatives will be material to its financial position, liquidity or
results of operations. FCA US began its buyback program on October 1, 2015. The Consent Order will remain in place
for three years subject to NHTSA’s right to extend for an additional year in the event of FCA US’s noncompliance with
the Consent Order.
As a result of the Group’s heightened scrutiny of its regulatory reporting obligations growing out of the Consent Order,
the Group identified deficiencies in FCA US’s Transportation Recall Enhancement, Accountability, and Documentation
(TREAD) reporting. Following admission of these deficiencies to NHTSA, an amendment to the Consent Order was
issued in December 2015 whereby a penalty of U.S.$70 million (€63 million) was imposed by NHTSA. The penalty,
which was recorded within Other income/(expenses), was paid on January 6, 2016.
There were no other amounts within Other income/(expenses) that were individually material for the year ended
December 31, 2015.
For the year ended December31, 2014, Other income/(expenses) primarily included the €495 million expense
recognized in connection with the execution of the MOU with the UAW entered into by FCA US in January 2014,
that was partially offset by the non-taxable gain of €223 million on the remeasurement to fair value of the previously
exercised options on approximately 10 percent of FCA US’s membership interest in connection with the acquisition
of the remaining interest in FCA US previously not owned as described in the section — Changes in Scope of
Consolidation - Acquisition of the remaining ownership interest in FCA US above. There were no other items that were
individually material.
For the year ended December31, 2013, Other income/(expenses) included €56 million related to the write-off of the
book value of the right associated with the acquisition of the remaining interest in FCA US previously not owned. This
charge was offset by other items that were not individually material.