0001171843-20-007731.txt : 20201106 0001171843-20-007731.hdr.sgml : 20201106 20201106125055 ACCESSION NUMBER: 0001171843-20-007731 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20201106 FILED AS OF DATE: 20201106 DATE AS OF CHANGE: 20201106 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MAGNA INTERNATIONAL INC CENTRAL INDEX KEY: 0000749098 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLE PARTS & ACCESSORIES [3714] IRS NUMBER: 000000000 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 6-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-11444 FILM NUMBER: 201293426 BUSINESS ADDRESS: STREET 1: 337 MAGNA DRIVE STREET 2: N/A CITY: AURORA, ONTARIO, CAN STATE: A6 ZIP: L4G 7K1 BUSINESS PHONE: 9057262462 MAIL ADDRESS: STREET 1: 337 MAGNA DRIVE STREET 2: N/A CITY: AURORA, ONTARIO, CAN STATE: A6 ZIP: L4G 7K1 6-K 1 f6k_110620.htm FORM 6-K

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 under the Securities Exchange Act of 1934

 


For the month of November 2020

 

Commission File Number    001-11444

 

 
MAGNA INTERNATIONAL INC.
(Exact Name of Registrant as specified in its Charter)
 
337 Magna Drive, Aurora, Ontario, Canada L4G 7K1
(Address of principal executive office)
 

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
          Form 20-F [ ]         Form 40-F [X]

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): _______

Note:  Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): _______

Note:  Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.
 
 

 

 

SIGNATURES

 

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:   November 6, 2020   MAGNA INTERNATIONAL INC.
    (Registrant)
     
     
     
  By: /s/ "Bassem Shakeel"                              
           Bassem A. Shakeel
           Vice-President and Corporate Secretary

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EXHIBITS

 

 

Exhibit 99Q3 2020 Financial Review

 

 

 

 

 

 

 

 

 

 

 

 

 

 EX-99 2 exh_99.htm EXHIBIT 99

Exhibit 99

 

 

FINANCIAL REVIEW OF MAGNA INTERNATIONAL INC.

(United States dollars in millions, except per share figures) (Unaudited)

Prepared in accordance with U.S. GAAP

 

              2018   2019   2020
          Note   1st Q 2nd Q 3rd Q 4th Q TOTAL 1st Q 2nd Q 3rd Q 4th Q TOTAL   1st Q 2nd Q 3rd Q TOTAL
VEHICLE VOLUME STATISTICS (in millions)                        
North American vehicle volumes (including Mexico)     4.414 4.368 4.048 4.211 17.041   4.250 4.268 3.925 3.916 16.359   3.795 1.242 3.907 8.944
European vehicle volumes:                                    
  Western Europe       3.939 4.005 2.997 3.388 14.329   3.720 3.615 3.000 3.285 13.620   2.890 1.152 2.820 6.862
  Eastern Europe       1.972 2.068 1.694 2.064 7.798   2.015 2.068 1.676 1.992 7.751   1.765 0.911 1.611 4.287
    Total Europe       5.911 6.073 4.691 5.452 22.127   5.735 5.683 4.676 5.277 21.371   4.655 2.063 4.431 11.149
                                             
Asia volumes         12.558 12.325 11.684 12.887 49.454   11.941 11.257 11.049 13.148 47.395   8.224 8.634 10.714 27.572
                                             
China volumes         6.663 6.614 6.094 6.993 26.364   6.025 5.485 5.632 7.428 24.570   3.234 5.840 6.219 15.293
                                             
Magna Steyr vehicle assembly volumes     0.041 0.033 0.034 0.037 0.145   0.046 0.043 0.035 0.034 0.158   0.031 0.017 0.027 0.075
                                             
AVERAGE FOREIGN EXCHANGE RATES                                    
1 Canadian dollar equals U.S. dollars     0.790 0.775 0.765 0.756 0.771   0.752 0.748 0.757 0.758 0.754   0.745 0.722 0.751 0.739
1 Euro equals U.S. dollars     1.229 1.193 1.163 1.141 1.181   1.135 1.124 1.112 1.107 1.119   1.102 1.101 1.170 1.124
1 Chinese renminbi equals U.S. dollars     0.157 0.157 0.147 0.145 0.151   0.148 0.147 0.142 0.142 0.145   0.143 0.141 0.145 0.143
                                             
CONSOLIDATED STATEMENTS OF INCOME (LOSS)                                    
Sales           10,792      10,280        9,618      10,137 40,827   10,591      10,126        9,319        9,395 39,431   8,657        4,293        9,129 22,079
Costs and expenses:                                      
  Cost of goods sold     9,293        8,795        8,253        8,714 35,055   9,164        8,710        8,063        8,085 34,022   7,567        4,206        7,681 19,454
  Selling, general and administrative      396           434           403           431 1,664   421           453           400           423 1,697   381           378           380 1,139
  Equity income       (87)            (72)            (62)            (56) (277)   (35)            (48)            (37)            (58) (178)   (30)            (25)            (44) (99)
  EBITDA     2   1,190        1,123        1,024        1,048 4,385   1,041        1,011           893           945 3,890   739          (266)        1,112 1,585
  Depreciation and amortization     315           320           325           318 1,278   321           334           335           355 1,345   336           334           334 1,004
  EBIT     3   875           803           699           730 3,107   720           677           558           590 2,545   403          (600)           778 581
  Interest expense, net     21             23             23             26 93   31             14             18             19 82   17             21             26 64
Operating income (loss) 2   854 780 676 704 3,014   689 663 540 571 2,463   386 (621) 752 517
Other expense (income), net 2   3 (39) 2 97 63   (679) 68 859 (8) 240   - 168 316 484
Income (loss) from operations before income taxes               851           819           674           607        2,951          1,368           595          (319)           579        2,223             386          (789)           436             33
Income tax expense (benefit)     182           183           114           140 619   267           145             45           134 591   134          (137)           109 106
Net income (loss)         669           636           560           467 2,332   1,101           450          (364)           445 1,632   252          (652)           327 (73)
(Income) loss attributable to non-controlling interests 2   (9)            (10)              (6)            (11) (36)   5               2           131              (5) 133   9               5             78 92
Net income (loss) attributable to Magna International Inc.     660 626 554 456 2,296   1,106 452 (233) 440 1,765   261 (647) 405 19
                                             
Adjusted net income (loss) attributable to Magna International Inc. 2   663 590 535 542 2,330   531 509 438 433 1,911   261 (511) 585 335
                                             
Diluted earnings (loss) per share:                                    
  Diluted          $      1.83  $      1.77  $      1.62  $      1.37  $      6.61    $      3.39  $      1.42  $     (0.75)  $      1.43  $      5.59    $      0.86  $     (2.17)  $      1.35  $      0.06
  Adjusted Diluted        $      1.84  $      1.67  $      1.56  $      1.63  $      6.71    $      1.63  $      1.59  $      1.41  $      1.41  $      6.05    $      0.86  $     (1.71)  $      1.95  $      1.12
                                             
Weighted average number of Common Shares outstanding                                     
  during the year (in millions):     359.9 354.1 343.0 333.2 347.5   326.3 319.5 310.7 306.3 315.8   302.7 298.4 299.4 300.2
                                             
PROFITABILITY RATIOS                                    
  Selling, general and administrative /Sales     3.7% 4.2% 4.2% 4.3% 4.1%   4.0% 4.5% 4.3% 4.5% 4.3%   4.4% 8.8% 4.2% 5.2%
  EBITDA /Sales       11.0% 10.9% 10.6% 10.3% 10.7%   9.8% 10.0% 9.6% 10.1% 9.9%   8.5% -6.2% 12.2% 7.2%
  EBIT /Sales         8.1% 7.8% 7.3% 7.2% 7.6%   6.8% 6.7% 6.0% 6.3% 6.5%   4.7% -14.0% 8.5% 2.6%
  Operating income(loss) /Sales     7.9% 7.6% 7.0% 6.9% 7.4%   6.5% 6.5% 5.8% 6.1% 6.2%   4.5% -14.5% 8.2% 2.3%
  Effective tax rate                                      
    Reported       21.4% 22.3% 16.9% 23.1% 21.0%   19.5% 24.4% -14.1% 23.1% 26.6%   34.7% 17.4% 25.0% 321.2%
    Excluding Other expense (income), net of taxes     21.3% 23.1% 20.0% 21.4% 21.5%   23.7% 23.5% 19.6% 23.3% 22.7%   34.7% 16.9% 22.6% 38.5%

 

 Page 1 of 6 

 

FINANCIAL REVIEW OF MAGNA INTERNATIONAL INC.

CONSOLIDATED BALANCE SHEETS

(United States dollars in millions) (Unaudited)

 

              2018     2019     2020
              1st Q 2nd Q 3rd Q 4th Q     1st Q 2nd Q 3rd Q 4th Q     1st Q 2nd Q 3rd Q
ASSETS                 [Note 1]                
Current assets:                                      
  Accounts receivable     8,073        7,656        7,160        6,548     7,446        7,204        7,068        5,927     5,684        5,253        6,618
  Inventories         3,564        3,600        3,580        3,403     3,501        3,521        3,457        3,304     3,531        3,503        3,509
  Prepaid expenses and other     250           201           237           250     275           278           211           238     234           303           265
                   11,887      11,457      10,977      10,201          11,222      11,003      10,736        9,469            9,449        9,059      10,392
Current liabilities:                                      
  Accounts payable and other accruals     9,855        9,048        8,847        8,597     9,347        9,048        8,757        8,198     8,381        6,992        8,905
Working capital          2,032        2,409        2,130        1,604     1,875        1,955        1,979        1,271     1,068        2,067        1,487
Investments                2,132        2,320        2,337        2,189            2,408        2,334        1,430        1,210            1,336        1,336        1,143
Fixed assets, net                8,204        8,026        7,743        8,095            7,958        8,109        7,943        8,260            7,948        7,860        7,898
Goodwill, other assets and intangible assets     3,837        3,684        3,467        3,527     3,487        3,593        3,461        3,456     3,340        3,362        3,423
Operating lease right-of-use assets                   -                 -                 -                 -              1,716        1,744        1,702        1,811            1,788        1,777        1,787
                   16,205      16,439      15,677      15,415          17,444      17,735      16,515      16,008          15,480      16,402      15,738
Net assets held for sale                    -                 -             568           541                   -                 -                 -                 -                     -                 -                 -  
Funds employed              16,205      16,439      16,245      15,956          17,444      17,735      16,515      16,008          15,480      16,402      15,738
FINANCING                                      
Straight debt:                                      
  Cash and cash equivalents     (769)          (626)          (884)          (684)     (925)          (563)          (769)       (1,276)     (1,146)          (533)       (1,498)
  Short-term borrowings     262        1,123        1,291        1,098     335           199           436                -     -           188                -
  Long-term debt due within one year     114           120           231           201     122           112           104           106     93           150             98
  Long-term debt       3,220        3,115        3,112        3,084     3,062        3,071        3,021        3,062     3,021        3,771        3,832
  Current portion of operating lease liabilities     -                -                -                -     176           214           218           225     218           221           226
  Operating lease liabilities     -                -                -                -            1,566        1,544        1,527        1,601            1,586        1,577        1,582
                     2,827        3,732        3,750        3,699            4,336        4,577        4,537        3,718            3,772        5,374        4,240
Long-term employee benefit liabilities     691           659           592           597     598           606           584           677     659           675           696
Other long-term liabilities     340           314           291           400     396           404           388           371     420           390           305
Deferred tax liabilities, net     54             86           107           101     167           196           133           111     87             10             87
                     1,085        1,059           990        1,098            1,161        1,206        1,105        1,159            1,166        1,075        1,088
Shareholders' equity       12,293      11,648      11,505      11,159     11,947      11,952      10,873      11,131     10,542        9,953      10,410
                   16,205      16,439      16,245      15,956          17,444      17,735      16,515      16,008          15,480      16,402      15,738
                                           
ASSET UTILIZATION RATIOS                                  
  Days in accounts receivable     67.3 67.0 67.0 58.1     63.3 64.0 68.3 56.8     59.1 110.1 65.2
  Days in accounts payable     95.4 92.6 96.5 88.8     91.8 93.5 97.7 91.3     99.7 149.6 104.3
  Inventory turnover - cost of sales     10.4 9.8 9.2 10.2     10.5 9.9 9.3 9.8     8.6 4.8 8.8
  Working capital turnover      21.2 17.1 18.1 25.3     22.6 20.7 18.8 29.6     32.4 8.3 24.6
  Total asset turnover      2.7 2.5 2.5 2.6     2.4 2.3 2.3 2.3     2.2 1.0 2.3
                                           
CAPITAL STRUCTURE                                    
  Straight debt         17.4% 22.7% 23.1% 23.2%     24.9% 25.8% 27.5% 23.2%     24.4% 32.8% 26.9%
  Long-term employee benefit liabilities, other long-term                                  
    liabilities & deferred tax liabilities, net     6.6% 6.4% 6.1% 6.9%     6.6% 6.8% 6.7% 7.2%     7.5% 6.6% 6.9%
  Shareholders' equity      75.9% 70.9% 70.8% 69.9%     68.5% 67.4% 65.8% 69.5%     68.1% 60.7% 66.1%
              100.0% 100.0% 100.0% 100.0%     100.0% 100.0% 100.0% 100.0%     100.0% 100.0% 100.0%
                                           
  Debt to total capitalization      22.6% 27.2% 28.7% 28.2%     30.6% 30.1% 32.8% 31.0%     31.8% 37.2% 35.5%
                                           
  Adjusted Debt to Adjusted EBITDA 2   1.18x 1.32x 1.37x 1.32x     1.18x 1.18x 1.26x 1.23x     1.30x 2.30x 2.07x
ANNUALIZED RETURNS                                  
  Return on assets (EBIT/assets employed)     21.6% 19.5% 17.8% 18.9%     16.5% 15.3% 13.5% 14.7%     10.4% -14.6% 19.8%
  Return on equity (Net income attributable to Magna                                  
    International Inc. / Average shareholders' equity)     22.0% 20.9% 19.1% 16.1%     38.3% 15.1% -8.2% 16.0%     9.6% -25.3% 15.9%
  Adjusted Return on equity (Adjusted Net income attributable                                  
     to Magna International Inc. / Average shareholders' equity)     22.1% 19.7% 18.5% 19.1%     18.4% 17.0% 15.4% 15.7%     9.6% -19.9% 23.0%

 

 Page 2 of 6 

 

FINANCIAL REVIEW OF MAGNA INTERNATIONAL INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(United States dollars in millions) (Unaudited)

 

              2018   2019   2020
Cash provided from (used for): Note   1st Q 2nd Q 3rd Q 4th Q TOTAL   1st Q 2nd Q 3rd Q 4th Q TOTAL   1st Q 2nd Q 3rd Q TOTAL
                             
Operating activities                                      
  Net income (loss)                 669           636           560           467        2,332          1,101           450          (364)           445        1,632             252          (652)           327            (73)
  Items not involving current cash flows               363           303           339           534        1,539            (213)           470        1,210           509        1,976             363           354           767        1,484
                     1,032           939           899        1,001        3,871             888           920           846           954        3,608             615          (298)        1,094        1,411
  Changes in operating assets and liabilities              (455)          (472)           177           597          (153)            (294)               -              (96)           742           352               24          (934)           518          (392)
                                             
Cash provided from (used for) operating activities               577           467        1,076        1,598        3,718             594           920           750        1,696        3,960             639       (1,232)        1,612        1,019
                                                   
Investment activities                                            
  Fixed asset additions               (243)          (379)          (381)          (647)       (1,650)            (251)          (328)          (349)          (513)       (1,441)            (203)          (169)          (213)          (585)
  Increase in investments, other assets and intangible assets              (109)          (103)          (114)          (150)          (476)              (77)          (102)            (83)          (122)          (384)              (93)            (72)            (68)          (233)
  Proceeds from disposition                 29             48             76             70           223               86             26             57             16           185               23             11             14             48
  Proceeds from sale of (Investment in) Lyft, Inc.                   -            (200)            (20)               -            (220)                 -                 -               10           221           231                 -                 -                 -                 -  
  Increase in private equity investments                  (5)               -                 -                 -                (5)                (5)              (5)               -                 -              (10)            (100)              (2)            (12)          (114)
  Acquisitions                       -                 4               -            (152)          (148)                 -            (152)               -                 5          (147)                (7)               -                 -                (7)
  Sale of Fluid Pressure & Controls Business ["FP&C"]                   -                 -                 -                 -                 -            1,129               -                 3               -          1,132                 -                 -                 -                 -  
                                                   
Cash (used for) provided from investment activities              (328)          (630)          (439)          (879)       (2,276)             882          (561)          (362)          (393)          (434)            (380)          (232)          (279)          (891)
                                                   
Financing activities                                            
  Net issues (repayments) of debt                   3           886           262          (284)           867            (855)          (187)           251          (435)       (1,226)                (6)           962          (246)           710
  Common Shares issued on exercise of stock options                   5             41               1               3             50                 8               6             19             11             44                 1               1             15             17
  Repurchase of Common Shares              (103)          (729)          (520)          (479)       (1,831)            (284)          (409)          (342)          (254)       (1,289)            (201)               -                (2)          (203)
  Shares repurchased for tax withholdings on vesting of equity awards               -                (2)              (4)            (10)            (16)                (3)              (2)               -                (4)              (9)              (10)               -                 -              (10)
  Contributions to subsidiaries by non-controlling interests                   -                 4               -                 -                 4                 2               -                 2               -                 4                 -                 -                 -                 -  
  Dividends paid to non-controlling interests                   -              (30)               -              (39)            (69)                 -              (13)               -                (9)            (22)                (3)              (3)               -                (6)
  Dividends paid                (118)          (115)          (109)          (106)          (448)            (119)          (110)          (109)          (111)          (449)            (121)          (116)          (115)          (352)
                                                   
Cash provided from (used for) financing activities              (213)             55          (370)          (915)       (1,443)         (1,251)          (715)          (179)          (802)       (2,947)            (340)           844          (348)           156
Effect of exchange rate changes on cash, cash equivalents                                          
  and restricted cash equivalents                 10            (31)            (10)              (5)            (36)               14              (4)              (9)             10             11              (52)               9            (15)            (58)
Net increase (decrease) in cash, cash equivalents                                    
  and restricted cash equivalents during the period                 46          (139)           257          (201)            (37)             239          (360)           200           511           590            (133)          (611)           970           226
Cash, cash equivalents and restricted cash equivalents,                                    
  beginning of period 4             839           885           746        1,003           839             802        1,041           681           881           802          1,392        1,259           648        1,392
Cash, cash equivalents and restricted cash equivalents,                                          
  end of period                 885           746        1,003           802           802          1,041           681           881        1,392        1,392          1,259           648        1,618        1,618

 

 Page 3 of 6 

 

FINANCIAL REVIEW OF MAGNA INTERNATIONAL INC.

(United States dollars in millions, except per share figures) (Unaudited) 

 

    This Analyst should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2019.  
                                         
Note 1:  LEASES ADOPTION  
    On January 1, 2019, the Company adopted ASC 842, Leases using the modified retrospective transition approach, without restatement of comparative periods' financial information. The adoption requires the Company to recognize most leases on their balance sheets as lease liabilities with corresponding right-of-use assets.  
                                               
Note 2: NON-GAAP MEASURES    
    The Company presents Operating income, EBIT (Earnings before interest and taxes) and EBITDA (Earnings before interest, taxes and depreciation and amortization) before Other expense (income),net.  The Company also presents Adjusted Net Income (Net Income before Other expense (income),net , net of tax and excluding significant income tax valuation allowance adjustments), Adjusted Diluted Earnings per Share, Adjusted EBIT and Adjusted EBIT as a percentage of sales, Return on Invested Capital and Return on Equity. The Company calculates Adjusted Debt as total debt adjusted to include pension and lease liabilities and Adjusted EBITDA as earnings before, interest, net, taxes, depreciation and amortization adjusted to add back interest income, certain pension costs and operating lease expense. The Company presents these financial figures because such measures are widely used by analysts and investors in evaluating the operating performance of the Company.  However, such measures do not have any standardized meaning under U.S. generally accepted accounting principles and may not be comparable to the calculation of similar measures by other companies.

Other expense (income), net consists of:		  
                                               
              2018   2019   2020  
              1st Q 2nd Q 3rd Q 4th Q TOTAL   1st Q 2nd Q 3rd Q 4th Q TOTAL   1st Q 2nd Q 3rd Q TOTAL  
                                               
                                               
    Impairment charges [a]   - - - 74 74   - - 727 - 727   - 19 337 356  
    Restructuring charges [b]   3 17 2 23 45   14 7 7 3 31   - 149 - 149  
    Net (gains) losses on investments [c]   - (56) - - (56)   (177) 67 127 (11) 6   - - (21) (21)  
    Gain on the sale of business [d]   - - - - -   (516) (6) (2) - (524)   - - - -  
                                               
              3            (39)               2             97             63   (679)             68           859              (8)           240   -           168           316           484  
                                               
  [a] Impairment charges  
     
    In Power & Vision, during the third quarter of 2020, the Company recorded impairment charge of $337 million on investment.

During the second quarter of 2020, the Company recorded asset impairment charges of $8 million in Body Exteriors & Structures and $11 million in Power & Vision.

In Power & Vision, during the third quarter of 2019, the Company recorded $700 million impairment on its equity accounted investment.  Additionally, the Company recorded asset impairment charges of $27 million in the Company's Power & Vision segment.

During the fourth quarter of 2018, the Company recorded $14 million of impairment charges for fixed assets in Body Exteriors & Structures, and the Company recorded a $60 million impairment charge on its equity accounted investment in Power & Vision.
     
  [b] Restructuring charges  
              2018   2019   2020  
              1st Q 2nd Q 3rd Q 4th Q TOTAL   1st Q 2nd Q 3rd Q 4th Q TOTAL   1st Q 2nd Q 3rd Q TOTAL  
                                               
    Power & Vision                   3             12               2               3             20                  -                -                -                -                -                  -           104                -           104  
    Body Exteriors & Structures                    -               5                -             20             25               14               7               7               3             31                  -             29                -             29  
    Seating Systems     - - - - -   - - - - -   - 16 - 16  
              3             17               2             23             45   14               7               7               3 31   -           149                -           149  
                                               
  [c] Net (gains) losses on investments  
     
    In Corporate, during the third quarter of 2020, the Company remeasured its private equity investments at fair value resulting in a $21 million gain.  

In Corporate, during the first, second, third and fourth quarters of 2019, the Company recorded gains of $177 million, net losses of $67 million, net losses of $127 million, and net gains of $11 million respectively, substantially related to the revaluation of its investment in Lyft, Inc.

In Corporate, during the second quarter of 2018, the Company remeasured its private equity investments at fair value resulting in a $56 million gain, of which $46 million related to its investment in Lyft, Inc. 
     
  [d] Gain on the sale of business  
       
    In Power & Vision, during the first quarter of 2019, the Company recorded a gain on the sale of its Fluid Pressure & Controls ["FP&C"] business of $516 million. In the second and third quarters of 2019, the Company recorded an increase in the gain on sale of $6 million and $2 million, respectively, as a result of finalizing the proceeds relating to working capital.   

 

 Page 4 of 6 

 

 

    The following table reconciles Net (loss) income attributable to Magna International Inc. to Adjusted net income attributable to Magna International Inc.:
              2018   2019   2020
              1st Q 2nd Q 3rd Q 4th Q TOTAL   1st Q 2nd Q 3rd Q 4th Q TOTAL   1st Q 2nd Q 3rd Q TOTAL
                             
                                             
    Net income (loss) attributable to Magna International Inc.   660           626           554           456        2,296   1,106           452          (233)           440        1,765   261          (647)           405             19
      Exclude:                                     
        Impairment charges [f]     -                -                - 71             71   -                -           557 -           557   -             17           200           217
        Restructuring charges     3 17 2 21             43   14 7 7 3             31   - 119 -           119
        Net (gains) losses on investments     - (53) - -            (53)   (151) 57 109 (10)               5   - - (20)            (20)
        Gain on the sale of business     - - - -                -   (438) (7) (2) -          (447)   - - -                -
        US tax reform     - - - 11             11   - - - -                -   - - -                -
        Reassessment of deferred tax balances - FP&C [g]   - - (21) -            (21)   - - - -                -   - - -                -
        Adjustment to tax valuation allowance in India    - - - (17)            (17)   - - - -                -   - - -                -
                                      -                    -
    Adjusted net income (loss) attributable to Magna International Inc. 663           590           535           542        2,330   531           509           438           433        1,911   261          (511)           585           335
                                             
                                             
    Diluted earnings (loss) per share      $      1.83  $      1.77  $      1.62  $      1.37  $      6.61    $      3.39  $      1.42  $     (0.75)  $      1.43  $      5.59    $      0.86         (2.17)          1.35  $      0.06
      Exclude:                                    
        Impairment charges [f]     -               -                 -            0.22 0.21   -               -            1.80               -   1.76   -          0.06          0.67 0.73
        Restructuring charges     0.01          0.05               -            0.06 0.12   0.04          0.02          0.02          0.01 0.10   -          0.40               -   0.40
        Net (gains) losses on investments     -         (0.15)               -                 -   (0.15)   (0.46)          0.17          0.35         (0.03) 0.02   -               -           (0.07) (0.07)
        Gain on the sale of business     -               -                 -                 -   -   (1.34)         (0.02)         (0.01)               -   (1.42)   -               -                 -   -
        US tax reform     -               -                 -            0.03 0.03   -               -                 -                 -   -   -               -                 -   -
        Reassessment of deferred tax balances - FP&C [g]   -               -           (0.06)               -   (0.06)   -               -                 -                 -   -   -               -                 -   -
        Adjustment to tax valuation allowance in India     -               -                 -           (0.05) (0.05)   -               -                 -                 -   -   -               -                 -   -
                                             
    Adjusted diluted earnings (loss) per share       $      1.84  $      1.67  $      1.56  $      1.63  $      6.71    $      1.63  $      1.59  $      1.41  $      1.41  $      6.05    $      0.86  $     (1.71)  $      1.95  $      1.12
                                         
  [f] Impairment charges
     
    Impairment charges relating to the Company's equity accounted investment for 2019 and 2020, include $127 million and $ 75 million, respectively, attributable to non-controlling interest.
     
  [g] Reassessment of deferred tax balances - FP&C  
     
    Reassessment of deferred tax balances relating to timing differences that reversed on closing of the sale of the global FP&C business.

 

 Page 5 of 6 

 

 

Note 3: SEGMENTED INFORMATION    
     
              2018   2019   2020  
              1st Q 2nd Q 3rd Q 4th Q TOTAL   1st Q 2nd Q 3rd Q 4th Q TOTAL   1st Q 2nd Q 3rd Q TOTAL  
    Body Exteriors & Structures Group                      
      Sales     4,619 4,551 4,180 4,177 17,527   4,308 4,243 3,984 3,923 16,458   3,676 1,623 3,858 9,157  
      Adjusted EBIT     343 388 326 356 1,413   363 341 306 289 1,299   199 (315) 390 274  
      Adjusted EBIT as a percentage of sales     7.4% 8.5% 7.8% 8.5% 8.1%   8.4% 8.0% 7.7% 7.4% 7.9%   5.4% -19.4% 10.1% 3.0%  
                                               
    Power & Vision                                      
      Sales     3,190 3,197 2,947 2,987 12,321   3,083 2,808 2,696 2,725 11,312   2,523 1,298 2,722 6,543  
      Adjusted EBIT     359 299 259 254 1,171   216 201 167 163 747   135 (226) 227 136  
      Adjusted EBIT as a percentage of sales     11.3% 9.4% 8.8% 8.5% 9.5%   7.0% 7.2% 6.2% 6.0% 6.6%   5.4% -17.4% 8.3% 2.1%  
                                               
    Seating Systems                                      
      Sales     1,470 1,424 1,219 1,435 5,548   1,433 1,452 1,266 1,426 5,577   1,261 524 1,280 3,065  
      Adjusted EBIT     130 117 69 110 426   94 83 56 79 312   40 (84) 66 22  
      Adjusted EBIT as a percentage of sales     8.8% 8.2% 5.7% 7.7% 7.7%   6.6% 5.7% 4.4% 5.5% 5.6%   3.2% -16.0% 5.2% 0.7%  
                                               
    Complete Vehicles                                      
      Sales     1,660 1,280 1,391 1,687 6,018   1,928 1,802 1,516 1,461 6,707   1,321 933 1,402 3,656  
      Adjusted EBIT     19 1 24 24 68   28 43 29 44 144   50 44 70 164  
      Adjusted EBIT as a percentage of sales     1.1% 0.1% 1.7% 1.4% 1.1%   1.5% 2.4% 1.9% 3.0% 2.1%   3.8% 4.7% 5.0% 4.5%  
                                               
    Corporate and other                                      
      Intercompany fees     (147) (172) (119) (149) (587)   (161) (179) (143) (140) (623)   (124) (85) (133) (342)  
      Adjusted EBIT     24 (2) 21 (14) 29   19 9 0 15 43   (21) (19) 25 (15)  
                                               
    Total                                          
      Sales     10,792 10,280 9,618 10,137 40,827   10,591 10,126 9,319 9,395 39,431   8,657 4,293 9,129 22,079  
      Adjusted EBIT     875 803 699 730 3,107   720 677 558 590 2,545   403 (600) 778 581  
      Adjusted EBIT as a percentage of sales     8.1% 7.8% 7.3% 7.2% 7.6%   6.8% 6.7% 6.0% 6.3% 6.5%   4.7% -14.0% 8.5% 2.6%  
                                               
Note 4: CASH, CASH EQUIVALENTS AND RESTRICTED CASH EQUIVALENTS  
                                               
    A reconciliation of Cash and cash equivalents and Restricted cash equivalents (included in prepaid expenses) to Total cash, cash equivalents and restricted cash equivalents is as follows:
                                               
              2018     2019     2020    
              1st Q 2nd Q 3rd Q 4th Q     1st Q 2nd Q 3rd Q 4th Q     1st Q 2nd Q 3rd Q    
                                               
    Cash and cash equivalents     (769) (626) (884) (684)     (925) (563) (769) (1,276)     (1,146) (533) (1,498)    
    Restricted cash equivalents included in prepaid expenses              (116)          (120)          (119)          (118)     (116) (118) (112) (116)     (113) (115) (120)    
    Total cash, cash equivalents and restricted cash equivalents   (885) (746) (1,003) (802)     (1,041) (681) (881) (1,392)     (1,259) (648) (1,618)    

 

 

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