Exhibit 99.1
FINANCIAL REVIEW OF MAGNA INTERNATIONAL INC. | |||||||||||||||||||||||
(United States dollars in millions, except per share figures) (Unaudited) | |||||||||||||||||||||||
Prepared in accordance with U.S. GAAP | |||||||||||||||||||||||
2019 | 2020 | 2021 | |||||||||||||||||||||
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) | 4.227 | 4.249 | 3.909 | 3.912 | 16.297 | 3.777 | 1.241 | 3.945 | 4.040 | 13.003 | 3.758 | 3.221 | 3.183 | 10.162 | |||||||||
European vehicle volumes: | |||||||||||||||||||||||
Western Europe | 3.719 | 3.614 | 2.999 | 3.285 | 13.617 | 2.905 | 1.171 | 2.613 | 3.407 | 10.096 | 3.049 | 2.513 | 2.036 | 7.598 | |||||||||
Eastern Europe | 2.013 | 2.063 | 1.672 | 1.987 | 7.735 | 1.795 | 0.913 | 1.663 | 1.990 | 6.361 | 1.854 | 1.664 | 1.398 | 4.916 | |||||||||
Total Europe | 5.732 | 5.677 | 4.671 | 5.272 | 21.352 | 4.700 | 2.084 | 4.276 | 5.397 | 16.457 | 4.903 | 4.177 | 3.434 | 12.514 | |||||||||
Asia volumes | 11.851 | 11.109 | 10.986 | 13.050 | 46.996 | 8.282 | 8.445 | 10.890 | 13.791 | 41.408 | 11.476 | 10.357 | 10.070 | 31.903 | |||||||||
China volumes | 6.021 | 5.480 | 5.626 | 7.415 | 24.542 | 3.235 | 5.850 | 6.281 | 8.129 | 23.495 | 6.071 | 5.686 | 5.544 | 17.301 | |||||||||
Magna Steyr vehicle assembly volumes | 0.046 | 0.043 | 0.035 | 0.034 | 0.158 | 0.031 | 0.017 | 0.027 | 0.035 | 0.110 | 0.040 | 0.030 | 0.023 | 0.093 | |||||||||
AVERAGE FOREIGN EXCHANGE RATES | |||||||||||||||||||||||
1 Canadian dollar equals U.S. dollars | 0.752 | 0.748 | 0.757 | 0.758 | 0.754 | 0.745 | 0.722 | 0.751 | 0.767 | 0.746 | 0.790 | 0.814 | 0.794 | 0.799 | |||||||||
1 Euro equals U.S. dollars | 1.135 | 1.124 | 1.112 | 1.107 | 1.119 | 1.102 | 1.101 | 1.170 | 1.192 | 1.141 | 1.205 | 1.206 | 1.178 | 1.196 | |||||||||
1 Chinese renminbi equals U.S. dollars | 0.148 | 0.147 | 0.142 | 0.142 | 0.145 | 0.143 | 0.141 | 0.145 | 0.151 | 0.145 | 0.154 | 0.155 | 0.155 | 0.155 | |||||||||
CONSOLIDATED STATEMENTS OF INCOME (LOSS) | |||||||||||||||||||||||
Sales: | |||||||||||||||||||||||
Body Exteriors & Structures | 4,308 | 4,243 | 3,984 | 3,923 | 16,458 | 3,676 | 1,623 | 3,858 | 4,393 | 13,550 | 4,025 | 3,647 | 3,185 | 10,857 | |||||||||
Power & Vision | 3,083 | 2,808 | 2,696 | 2,725 | 11,312 | 2,523 | 1,298 | 2,722 | 3,179 | 9,722 | 3,156 | 2,881 | 2,501 | 8,538 | |||||||||
Seating Systems | 1,433 | 1,452 | 1,266 | 1,426 | 5,577 | 1,261 | 524 | 1,280 | 1,390 | 4,455 | 1,303 | 1,166 | 1,123 | 3,592 | |||||||||
Complete Vehicles | 1,928 | 1,802 | 1,516 | 1,461 | 6,707 | 1,321 | 933 | 1,402 | 1,759 | 5,415 | 1,850 | 1,490 | 1,255 | 4,595 | |||||||||
Corporate & Other | (161) | (179) | (143) | (140) | (623) | (124) | (85) | (133) | (153) | (495) | (155) | (150) | (145) | (450) | |||||||||
Sales | 10,591 | 10,126 | 9,319 | 9,395 | 39,431 | 8,657 | 4,293 | 9,129 | 10,568 | 32,647 | 10,179 | 9,034 | 7,919 | 27,132 | |||||||||
Costs and expenses: | |||||||||||||||||||||||
Cost of goods sold | 9,164 | 8,710 | 8,063 | 8,085 | 34,022 | 7,567 | 4,206 | 7,681 | 8,753 | 28,207 | 8,662 | 7,728 | 6,885 | 23,275 | |||||||||
Selling, general and administrative | 421 | 453 | 400 | 423 | 1,697 | 381 | 378 | 380 | 448 | 1,587 | 430 | 419 | 454 | 1,303 | |||||||||
Equity income | (35) | (48) | (37) | (58) | (178) | (30) | (25) | (44) | (90) | (189) | (47) | (44) | (34) | (125) | |||||||||
EBITDA | 1 | 1,041 | 1,011 | 893 | 945 | 3,890 | 739 | (266) | 1,112 | 1,457 | 3,042 | 1,134 | 931 | 614 | 2,679 | ||||||||
Depreciation and amortization | 321 | 334 | 335 | 355 | 1,345 | 336 | 334 | 334 | 362 | 1,366 | 364 | 374 | 385 | 1,123 | |||||||||
EBIT | 2 | 720 | 677 | 558 | 590 | 2,545 | 403 | (600) | 778 | 1,095 | 1,676 | 770 | 557 | 229 | 1,556 | ||||||||
Interest expense, net | 31 | 14 | 18 | 19 | 82 | 17 | 21 | 26 | 22 | 86 | 23 | 11 | 22 | 56 | |||||||||
Operating income (loss) | 1 | 689 | 663 | 540 | 571 | 2,463 | 386 | (621) | 752 | 1,073 | 1,590 | 747 | 546 | 207 | 1,500 | ||||||||
Other expense (income), net | 1 | (679) | 68 | 859 | (8) | 240 | - | 168 | 316 | 100 | 584 | (58) | 6 | 180 | 128 | ||||||||
Income (loss) from operations before income taxes | 1,368 | 595 | (319) | 579 | 2,223 | 386 | (789) | 436 | 973 | 1,006 | 805 | 540 | 27 | 1,372 | |||||||||
Income tax expense (benefit) | 267 | 145 | 45 | 134 | 591 | 134 | (137) | 109 | 223 | 329 | 183 | 104 | 10 | 297 | |||||||||
Net income (loss) | 1,101 | 450 | (364) | 445 | 1,632 | 252 | (652) | 327 | 750 | 677 | 622 | 436 | 17 | 1,075 | |||||||||
(Income) loss attributable to non-controlling interests | 1 | 5 | 2 | 131 | (5) | 133 | 9 | 5 | 78 | (12) | 80 | (7) | (12) | (6) | (25) | ||||||||
Net income (loss) attributable to Magna International Inc. | 1,106 | 452 | (233) | 440 | 1,765 | 261 | (647) | 405 | 738 | 757 | 615 | 424 | 11 | 1,050 | |||||||||
Adjusted net income (loss) attributable to Magna International Inc. | 1 | 531 | 509 | 438 | 433 | 1,911 | 261 | (511) | 585 | 851 | 1,186 | 566 | 426 | 170 | 1,162 | ||||||||
Diluted earnings (loss) per share: | |||||||||||||||||||||||
Diluted | $ 3.39 | $ 1.42 | $ | (0.75) | $ 1.43 | $ 5.59 | $ 0.86 | $ (2.17) | $ 1.35 | $ 2.45 | $ 2.52 | $ 2.03 | $ 1.40 | $ 0.04 | $ 3.46 | ||||||||
Adjusted Diluted | $ 1.63 | $ 1.59 | $ | 1.41 | $ 1.41 | $ 6.05 | $ 0.86 | $ (1.71) | $ 1.95 | $ 2.83 | $ 3.95 | $ 1.86 | $ 1.40 | $ 0.56 | $ 3.83 | ||||||||
Weighted average number of Common Shares outstanding | |||||||||||||||||||||||
during the year (in millions): | 326.3 | 319.5 | 310.7 | 306.3 | 315.8 | 302.7 | 298.4 | 299.4 | 300.9 | 300.4 | 303.6 | 303.6 | 302.6 | 303.2 | |||||||||
PROFITABILITY RATIOS | |||||||||||||||||||||||
Cost of goods sold / Total sales | 86.5% | 86.0% | 86.5% | 86.1% | 86.3% | 87.4% | 98.0% | 84.1% | 82.8% | 86.4% | 85.1% | 85.5% | 86.9% | 85.8% | |||||||||
Gross margin (before depreciation) / Total sales | 13.5% | 14.0% | 13.5% | 13.9% | 13.7% | 12.6% | 2.0% | 15.9% | 17.2% | 13.6% | 14.9% | 14.5% | 13.1% | 14.2% | |||||||||
Selling, general and administrative /Sales | 4.0% | 4.5% | 4.3% | 4.5% | 4.3% | 4.4% | 8.8% | 4.2% | 4.2% | 4.9% | 4.2% | 4.6% | 5.7% | 4.8% | |||||||||
EBITDA /Sales | 9.8% | 10.0% | 9.6% | 10.1% | 9.9% | 8.5% | -6.2% | 12.2% | 13.8% | 9.3% | 11.1% | 10.3% | 7.8% | 9.9% | |||||||||
EBIT /Sales | 6.8% | 6.7% | 6.0% | 6.3% | 6.5% | 4.7% | -14.0% | 8.5% | 10.4% | 5.1% | 7.6% | 6.2% | 2.9% | 5.7% | |||||||||
Operating income(loss) /Sales | 6.5% | 6.5% | 5.8% | 6.1% | 6.2% | 4.5% | -14.5% | 8.2% | 10.2% | 4.9% | 7.3% | 6.0% | 2.6% | 5.5% | |||||||||
Effective tax rate | |||||||||||||||||||||||
Reported | 19.5% | 24.4% | -14.1% | 23.1% | 26.6% | 34.7% | 17.4% | 25.0% | 22.9% | 32.7% | 22.7% | 19.3% | 37.0% | 21.6% | |||||||||
Excluding Other expense (income), net of taxes | 23.7% | 23.5% | 19.6% | 23.3% | 22.7% | 34.7% | 16.9% | 22.6% | 19.6% | 25.7% | 23.3% | 19.8% | 15.0% | 20.9% |
Q3 2021 Financial Review of Magna International Inc. | Page 1 of 6 |
FINANCIAL REVIEW OF MAGNA INTERNATIONAL INC. | ||||||||||||||||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||||||||||||||||
(United States dollars in millions) (Unaudited) | ||||||||||||||||||||||
2019 | 2020 | 2021 | ||||||||||||||||||||
1st Q | 2nd Q | 3rd Q | 4th Q | 1st Q | 2nd Q | 3rd Q | 4th Q | 1st Q | 2nd Q | 3rd Q | ||||||||||||
FUNDS EMPLOYED | [Note 1] | |||||||||||||||||||||
Current assets: | ||||||||||||||||||||||
Accounts receivable | 7,446 | 7,204 | 7,068 | 5,927 | 5,684 | 5,253 | 6,618 | 6,394 | 7,176 | 6,531 | 6,082 | |||||||||||
Inventories | 3,501 | 3,521 | 3,457 | 3,304 | 3,531 | 3,503 | 3,509 | 3,444 | 3,645 | 3,999 | 4,150 | |||||||||||
Prepaid expenses and other | 222 | 244 | 189 | 238 | 234 | 216 | 196 | 260 | 290 | 294 | 247 | |||||||||||
11,169 | 10,969 | 10,714 | 9,469 | 9,449 | 8,972 | 10,323 | 10,098 | 11,111 | 10,824 | 10,479 | ||||||||||||
Current liabilities: | ||||||||||||||||||||||
Accounts payable | 6,484 | 6,272 | 5,966 | 5,628 | 5,635 | 4,243 | 5,808 | 6,266 | 6,787 | 6,248 | 5,914 | |||||||||||
Accrued salaries and wages | 860 | 757 | 797 | 753 | 807 | 691 | 851 | 815 | 897 | 912 | 893 | |||||||||||
Other accrued liabilities | 2,003 | 2,019 | 1,994 | 1,800 | 1,921 | 2,058 | 2,246 | 2,254 | 2,298 | 2,186 | 2,070 | |||||||||||
Income taxes payable (receivable) | (53) | (34) | (22) | 17 | 18 | (87) | (69) | 38 | 109 | 123 | 125 | |||||||||||
9,294 | 9,014 | 8,735 | 8,198 | 8,381 | 6,905 | 8,836 | 9,373 | 10,091 | 9,469 | 9,002 | ||||||||||||
Working capital | 1,875 | 1,955 | 1,979 | 1,271 | 1,068 | 2,067 | 1,487 | 725 | 1,020 | 1,355 | 1,477 | |||||||||||
Investments | 2,408 | 2,334 | 1,430 | 1,210 | 1,336 | 1,336 | 1,143 | 947 | 960 | 1,124 | 1,455 | |||||||||||
Fixed assets, net | 7,958 | 8,109 | 7,943 | 8,260 | 7,948 | 7,860 | 7,898 | 8,475 | 8,305 | 8,297 | 8,166 | |||||||||||
Goodwill, other assets and intangible assets | 3,487 | 3,593 | 3,461 | 3,456 | 3,340 | 3,362 | 3,423 | 3,539 | 3,614 | 3,632 | 3,530 | |||||||||||
Operating lease right-of-use assets | 1,716 | 1,744 | 1,702 | 1,811 | 1,788 | 1,777 | 1,787 | 1,906 | 1,869 | 1,854 | 1,731 | |||||||||||
Funds employed | 17,444 | 17,735 | 16,515 | 16,008 | 15,480 | 16,402 | 15,738 | 15,592 | 15,768 | 16,262 | 16,359 | |||||||||||
FINANCING | ||||||||||||||||||||||
Straight debt: | ||||||||||||||||||||||
Cash and cash equivalents | (925) | (563) | (769) | (1,276) | (1,146) | (533) | (1,498) | (3,268) | (3,464) | (3,426) | (2,748) | |||||||||||
Short-term borrowings | 335 | 199 | 436 | - | - | 188 | - | - | - | - | - | |||||||||||
Long-term debt due within one year | 122 | 112 | 104 | 106 | 93 | 150 | 98 | 129 | 137 | 117 | 101 | |||||||||||
Long-term debt | 3,062 | 3,071 | 3,021 | 3,062 | 3,021 | 3,771 | 3,832 | 3,973 | 3,935 | 3,941 | 3,908 | |||||||||||
Current portion of operating lease liabilities | 176 | 214 | 218 | 225 | 218 | 221 | 226 | 241 | 244 | 278 | 269 | |||||||||||
Operating lease liabilities | 1,566 | 1,544 | 1,527 | 1,601 | 1,586 | 1,577 | 1,582 | 1,656 | 1,613 | 1,563 | 1,438 | |||||||||||
4,336 | 4,577 | 4,537 | 3,718 | 3,772 | 5,374 | 4,240 | 2,731 | 2,465 | 2,473 | 2,968 | ||||||||||||
Long-term employee benefit liabilities | 598 | 606 | 584 | 677 | 659 | 675 | 696 | 729 | 733 | 743 | 716 | |||||||||||
Other long-term liabilities | 396 | 404 | 388 | 371 | 420 | 390 | 305 | 332 | 414 | 482 | 466 | |||||||||||
Deferred tax liabilities, net | 167 | 196 | 133 | 111 | 87 | 10 | 87 | 80 | 104 | 124 | 40 | |||||||||||
1,161 | 1,206 | 1,105 | 1,159 | 1,166 | 1,075 | 1,088 | 1,141 | 1,251 | 1,349 | 1,222 | ||||||||||||
Shareholders' equity | 11,947 | 11,952 | 10,873 | 11,131 | 10,542 | 9,953 | 10,410 | 11,720 | 12,052 | 12,440 | 12,169 | |||||||||||
17,444 | 17,735 | 16,515 | 16,008 | 15,480 | 16,402 | 15,738 | 15,592 | 15,768 | 16,262 | 16,359 | ||||||||||||
ASSET UTILIZATION RATIOS | ||||||||||||||||||||||
Days in accounts receivable | 63.3 | 64.0 | 68.3 | 56.8 | 59.1 | 110.1 | 65.2 | 54.5 | 63.4 | 65.1 | 69.1 | |||||||||||
Days in accounts payable | 63.7 | 64.8 | 66.6 | 62.6 | 67.0 | 90.8 | 68.1 | 64.4 | 70.5 | 72.8 | 77.3 | |||||||||||
Inventory turnover - cost of sales | 10.5 | 9.9 | 9.3 | 9.8 | 8.6 | 4.8 | 8.8 | 10.2 | 9.5 | 7.7 | 6.6 | |||||||||||
Working capital turnover | 22.6 | 20.7 | 18.8 | 29.6 | 32.4 | 8.3 | 24.6 | 58.3 | 39.9 | 26.7 | 21.4 | |||||||||||
Total asset turnover | 2.4 | 2.3 | 2.3 | 2.3 | 2.2 | 1.0 | 2.3 | 2.7 | 2.6 | 2.2 | 1.9 | |||||||||||
CAPITAL STRUCTURE | ||||||||||||||||||||||
Straight debt | 24.9% | 25.8% | 27.5% | 23.2% | 24.4% | 32.8% | 26.9% | 17.5% | 15.6% | 15.2% | 18.1% | |||||||||||
Long-term employee benefit liabilities, other long-term | ||||||||||||||||||||||
liabilities & deferred tax liabilities, net | 6.6% | 6.8% | 6.7% | 7.2% | 7.5% | 6.6% | 6.9% | 7.3% | 7.9% | 8.3% | 7.5% | |||||||||||
Shareholders' equity | 68.5% | 67.4% | 65.8% | 69.5% | 68.1% | 60.7% | 66.1% | 75.2% | 76.4% | 76.5% | 74.4% | |||||||||||
100.0% | 100.0% | 100.0% | 100.0% | 100.1% | 100.0% | 100.0% | 100.0% | 100.0% | 100.0% | 100.0% | ||||||||||||
Debt to total capitalization | 30.6% | 30.1% | 32.8% | 31.0% | 31.8% | 37.2% | 35.5% | 33.9% | 33.0% | 32.2% | 32.0% | |||||||||||
ANNUALIZED RETURNS | ||||||||||||||||||||||
Return on assets (EBIT/assets employed) | 16.5% | 15.3% | 13.5% | 14.7% | 10.4% | -14.6% | 19.8% | 28.1% | 19.5% | 13.7% | 5.6% | |||||||||||
Return on equity (Net income attributable to Magna | ||||||||||||||||||||||
International Inc. / Average shareholders' equity) | 38.3% | 15.1% | -8.2% | 16.0% | 9.6% | -25.3% | 15.9% | 26.7% | 20.7% | 13.8% | 0.4% | |||||||||||
Adjusted Return on equity (Adjusted Net income attributable | ||||||||||||||||||||||
to Magna International Inc. / Average shareholders' equity) | 18.4% | 17.0% | 15.4% | 15.7% | 9.6% | -19.9% | 23.0% | 30.8% | 19.0% | 13.9% | 5.5% | |||||||||||
Q3 2021 Financial Review of Magna International Inc. | Page 2 of 6 |
FINANCIAL REVIEW OF MAGNA INTERNATIONAL INC. | ||||||||||||||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||||||||||||
(United States dollars in millions) (Unaudited) | ||||||||||||||||||||||
2019 | 2020 | 2021 | ||||||||||||||||||||
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) | 1,101 | 450 | (364) | 445 | 1,632 | 252 | (652) | 327 | 750 | 677 | 622 | 436 | 17 | 1,075 | ||||||||
Items not involving current cash flows | (i) | (235) | 431 | 1,188 | 486 | 1,870 | 344 | 335 | 749 | 548 | 1,976 | 349 | 341 | 515 | 1,205 | |||||||
(i) | 866 | 881 | 824 | 931 | 3,502 | 596 | (317) | 1,076 | 1,298 | 2,653 | 971 | 777 | 532 | 2,280 | ||||||||
Changes in operating assets and liabilities | (i) | (272) | 39 | (74) | 765 | 458 | 43 | (915) | 536 | 961 | 625 | (310) | (249) | (132) | (691) | |||||||
Cash provided from (used for) operating activities | 594 | 920 | 750 | 1,696 | 3,960 | 639 | (1,232) | 1,612 | 2,259 | 3,278 | 661 | 528 | 400 | 1,589 | ||||||||
Investment activities | ||||||||||||||||||||||
Fixed asset additions | (251) | (328) | (349) | (513) | (1,441) | (203) | (169) | (213) | (560) | (1,145) | (212) | (277) | (334) | (823) | ||||||||
Increase in equity method investment | - | - | - | - | - | - | - | - | - | - | - | - | (454) | (454) | ||||||||
Increase in investments, other assets and intangible assets | (77) | (102) | (83) | (122) | (384) | (93) | (72) | (68) | (98) | (331) | (104) | (93) | (101) | (298) | ||||||||
Funding provided on sale of business | 1 (e) | - | - | - | - | - | - | - | - | - | - | - | - | (41) | (41) | |||||||
Increase in public and private equity investments | (5) | (5) | - | - | (10) | (100) | (2) | (12) | (18) | (132) | (3) | (17) | (3) | (23) | ||||||||
Settlement of long-term receivable from non-consolidated joint venture | - | - | - | - | - | - | - | - | - | - | 50 | - | - | 50 | ||||||||
Proceeds from disposition | 86 | 26 | 57 | 16 | 185 | 23 | 11 | 14 | 69 | 117 | 19 | 20 | 10 | 49 | ||||||||
Business combinations | - | (152) | - | 5 | (147) | (7) | - | - | 98 | 91 | 39 | (21) | - | 18 | ||||||||
Proceeds from sale of (Investment in) Lyft, Inc. | - | - | 10 | 221 | 231 | - | - | - | - | - | - | - | - | - | ||||||||
Sale of Fluid Pressure & Controls Business ["FP&C"] | 1,129 | - | 3 | - | 1,132 | - | - | - | - | - | - | - | - | - | ||||||||
Cash (used for) provided from investment activities | 882 | (561) | (362) | (393) | (434) | (380) | (232) | (279) | (509) | (1,400) | (211) | (388) | (923) | (1,522) | ||||||||
Financing activities | ||||||||||||||||||||||
Net issues (repayments) of debt | (855) | (187) | 251 | (435) | (1,226) | (6) | 962 | (246) | (27) | 683 | (126) | (33) | (13) | (172) | ||||||||
Common Shares issued on exercise of stock options | 8 | 6 | 19 | 11 | 44 | 1 | 1 | 15 | 64 | 81 | 83 | 50 | 3 | 136 | ||||||||
Repurchase of Common Shares | (284) | (409) | (342) | (254) | (1,289) | (201) | - | (2) | - | (203) | (162) | (99) | (5) | (266) | ||||||||
Tax withholdings on vesting of equity awards | (3) | (2) | - | (4) | (9) | (10) | - | - | (3) | (13) | (12) | - | - | (12) | ||||||||
Contributions to subsidiaries by non-controlling interests | 2 | - | 2 | - | 4 | - | - | - | 18 | 18 | - | - | - | - | ||||||||
Dividends paid to non-controlling interests | - | (13) | - | (9) | (22) | (3) | (3) | - | (12) | (18) | - | (8) | (2) | (10) | ||||||||
Dividends paid | (119) | (110) | (109) | (111) | (449) | (121) | (116) | (115) | (115) | (467) | (130) | (127) | (130) | (387) | ||||||||
Cash provided from (used for) financing activities | (1,251) | (715) | (179) | (802) | (2,947) | (340) | 844 | (348) | (75) | 81 | (347) | (217) | (147) | (711) | ||||||||
Effect of exchange rate changes on cash, cash equivalents | ||||||||||||||||||||||
and restricted cash equivalents | 14 | (4) | (9) | 10 | 11 | (52) | 9 | (15) | 81 | 23 | (13) | 39 | (8) | 18 | ||||||||
Net increase (decrease) in cash, cash equivalents | ||||||||||||||||||||||
and restricted cash equivalents during the period | 239 | (360) | 200 | 511 | 590 | (133) | (611) | 970 | 1,756 | 1,982 | 90 | (38) | (678) | (626) | ||||||||
Cash, cash equivalents and restricted cash equivalents, | ||||||||||||||||||||||
beginning of period | 3 | 802 | 1,041 | 681 | 881 | 802 | 1,392 | 1,259 | 648 | 1,618 | 1,392 | 3,374 | 3,464 | 3,426 | 3,374 | |||||||
Cash, cash equivalents and restricted cash equivalents, | ||||||||||||||||||||||
end of period | 1,041 | 681 | 881 | 1,392 | 1,392 | 1,259 | 648 | 1,618 | 3,374 | 3,374 | 3,464 | 3,426 | 2,748 | 2,748 | ||||||||
(i) Certain amounts in prior periods have been reclassified to conform with current period presentation. | ||||||||||||||||||||||
Q3 2021 Financial Review of Magna International Inc. | 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, 2020. | ||||||||||||||||||||||
Note 1: | 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: | ||||||||||||||||||||||
2019 | 2020 | 2021 | ||||||||||||||||||||
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 | |||||||||
Impairments and loss on sale of equity-accounted investments | [a] | - | - | 700 | - | 700 | - | - | 337 | 10 | 347 | - | - | - | - | |||||||
Restructuring and impairments | [b] | 14 | 7 | 34 | 3 | 58 | - | 168 | - | 101 | 269 | 15 | 44 | 24 | 83 | |||||||
Net (gains) losses on investments | [c] | (177) | 67 | 127 | (11) | 6 | - | - | (21) | (11) | (32) | (33) | (38) | 81 | 10 | |||||||
Gain on business combinations | [d] | - | - | - | - | - | - | - | - | - | - | (40) | - | - | (40) | |||||||
Net (gains) losses on the sale of business | [e] | (516) | (6) | (2) | - | (524) | - | - | - | - | - | - | - | 75 | 75 | |||||||
(679) | 68 | 859 | (8) | 240 | - | 168 | 316 | 100 | 584 | (58) | 6 | 180 | 128 | |||||||||
[a] | Impairments and loss on sale of equity-accounted investments | |||||||||||||||||||||
In the fourth quarter of 2020, the Company recorded a $10 million loss in Power & Vision on the sale of its 50% interest in Dongfeng Getrag Transmission Co. Ltd. In Power & Vision, during the third quarters of 2020 and 2019, the Company recorded impairment charges of $337 million and $700 million, respectively on equity accounted investments. | ||||||||||||||||||||||
[b] | Restructuring and impairments | |||||||||||||||||||||
COVID-19 Restructuring and Impairments: | ||||||||||||||||||||||
In response to the impact that COVID-19 was expected to have on vehicle production volumes over the short to medium term, the Company initiated and/or accelerated the timing of restructuring plans to right-size its business. These restructuring actions included plant closures and workforce reductions. As a result, in the second quarter of 2020, the Company recorded COVID-19 related restructuring and impairment charges of $115 million in Power & Vision, $37 million in Body Exteriors & Structures, and $16 million in Seating, respectively. | ||||||||||||||||||||||
Impairments: | ||||||||||||||||||||||
The Company recorded impairments in the fourth quarter of 2020 in the amount of $57 million in Body Exteriors & Structures as well as the second quarter of 2019 in the amount of $27 million in Power & Vision. | ||||||||||||||||||||||
Brazil Closures: | ||||||||||||||||||||||
In the fourth quarter of 2020, in connection with the announced plant closures by Ford Motor Co. in Brazil, the Company made the decision to accelerate the closure and/or restructuring of two facilities in Brazil that supply these plants by recording restructuring and impairments in the amount of $8 million in Body Exteriors & Structures, and $15 million in Seating, respectively. | ||||||||||||||||||||||
India Closures: | ||||||||||||||||||||||
In the third quarter of 2021,the Company recorded restructuring and impairment charges of $8 million in our Body Exteriors & Structures segment, and $4 million in our Seating Systems segment, primarily related to Ford Motor Company's recently announced plan to exit India. | ||||||||||||||||||||||
Other Restructuring: | 2019 | 2020 | 2021 | |||||||||||||||||||
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 | - | - | - | - | - | - | - | - | - | - | 15 | 44 | 4 | 63 | ||||||||
Body Exteriors & Structures | 14 | 7 | 7 | 3 | 31 | - | - | - | 21 | 21 | - | - | 8 | 8 | ||||||||
14 | 7 | 7 | 3 | 31 | - | - | - | 21 | 21 | 15 | 44 | 12 | 71 | |||||||||
Q3 2021 Financial Review of Magna International Inc. | Page 4 of 6 |
[c] | Net (gains) losses on investments | |||||||||||||||||||||
In Corporate, during the first, second, and third quarters of 2021, the Company recorded gains and losses related to the revaluation of its public and private equity investments and certain public company warrants. In Corporate, during the third and fourth quarters of 2020, the Company recorded gains related to the revaluation of its private equity investments. In addition, the Company recorded a non-cash impairment charge of $2 million on its private equity investment in Corporate. In Corporate, during the first, second, third and fourth quarters of 2019, the Company recorded gains and losses related substantially to the revaluation of its investment in Lyft, Inc. | ||||||||||||||||||||||
[d] | Gain on business combinations | |||||||||||||||||||||
In Seating Systems, during the first quarter of 2021, the Company recognized a $22 million gain on the on the change in basis of accounting for its previously held equity method investments. In Power & Vision, substantially all of the assets of the Company's European joint venture with Ford Motor Company, Getrag Ford Transmission GmbH, were distributed to either Ford or the Company, which resulted in the Company recording a gain of $18 million. | ||||||||||||||||||||||
[e] | Net (gains) losses on the sale of business | |||||||||||||||||||||
During the third quarter of 2021, the Company sold three Body Exteriors & Structures operations in Germany. Under the terms of the arrangement, the Company provided the buyer with $41 million of funding, subject to working capital adjustments, resulting in a loss on disposal of $75 million [$75 million after tax]. In Power & Vision, during the first quarter of 2019, the Company recorded a gain on the sale of its 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. | ||||||||||||||||||||||
The following table reconciles Net (loss) income attributable to Magna International Inc. to Adjusted net income attributable to Magna International Inc.: | ||||||||||||||||||||||
2019 | 2020 | 2021 | ||||||||||||||||||||
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. | 1,106 | 452 | (233) | 440 | 1,765 | 261 | (647) | 405 | 738 | 757 | 615 | 424 | 11 | 1,050 | ||||||||
Exclude: | ||||||||||||||||||||||
Impairments and loss on sale of equity-accounted investments | [i] | - | - | 537 | - | 537 | - | - | 200 | 19 | 219 | - | - | - | - | |||||||
Restructuring and impairments | 14 | 7 | 27 | 3 | 51 | - | 136 | - | 101 | 237 | 15 | 31 | 20 | 66 | ||||||||
Net (gains) losses on investments | (151) | 57 | 109 | (10) | 5 | - | - | (20) | (7) | (27) | (24) | (29) | 64 | 11 | ||||||||
Gain on business combinations | - | - | - | - | - | - | - | - | - | - | (40) | - | - | (40) | ||||||||
Net (gains) losses on the sale of business | (438) | (7) | (2) | - | (447) | - | - | - | - | - | - | - | 75 | 75 | ||||||||
Adjusted net income (loss) attributable to Magna International Inc. | 531 | 509 | 438 | 433 | 1,911 | 261 | (511) | 585 | 851 | 1,186 | 566 | 426 | 170 | 1,162 | ||||||||
Diluted earnings (loss) per share | $ 3.39 | $ 1.42 | $ (0.75) | $ 1.43 | $ 5.59 | $ 0.86 | $ (2.17) | $ 1.35 | $ 2.45 | $ 2.52 | $ 2.03 | 1.40 | 0.04 | $ 3.46 | ||||||||
Exclude: | ||||||||||||||||||||||
Impairments and loss on sale of equity-accounted investments | [i] | - | - | 1.74 | - | 1.70 | - | - | 0.67 | 0.06 | 0.73 | - | - | - | - | |||||||
Restructuring and impairments | 0.04 | 0.02 | 0.08 | 0.01 | 0.16 | - | 0.46 | - | 0.34 | 0.79 | 0.05 | 0.10 | 0.06 | 0.21 | ||||||||
Net (gains) losses on investments | (0.46) | 0.17 | 0.35 | (0.03) | 0.02 | - | - | (0.07) | (0.02) | (0.09) | (0.08) | (0.10) | 0.21 | 0.04 | ||||||||
Gain on business combinations | - | - | - | - | - | - | - | - | - | - | (0.14) | - | - | (0.13) | ||||||||
Net (gains) losses on the sale of business | (1.34) | (0.02) | (0.01) | - | (1.42) | - | - | - | - | - | - | - | 0.25 | 0.25 | ||||||||
Adjusted diluted earnings (loss) per share | $ 1.63 | $ 1.59 | $ 1.41 | $ 1.41 | $ 6.05 | $ 0.86 | $ (1.71) | $ 1.95 | $ 2.83 | $ 3.95 | $ 1.86 | $ 1.40 | $ 0.56 | $ 3.83 | ||||||||
[i] 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. | ||||||||||||||||||||||
Q3 2021 Financial Review of Magna International Inc. | Page 5 of 6 |
Note 2: | SEGMENTED INFORMATION | |||||||||||||||||||||
2019 | 2020 | 2021 | ||||||||||||||||||||
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 | ||||||||||||||||||||||
Sales | 4,308 | 4,243 | 3,984 | 3,923 | 16,458 | 3,676 | 1,623 | 3,858 | 4,393 | 13,550 | 4,025 | 3,647 | 3,185 | 10,857 | ||||||||
Adjusted EBIT | 363 | 341 | 306 | 289 | 1,299 | 199 | (315) | 390 | 543 | 817 | 327 | 227 | 98 | 652 | ||||||||
Adjusted EBIT as a percentage of sales | 8.4% | 8.0% | 7.7% | 7.4% | 7.9% | 5.4% | -19.4% | 10.1% | 12.4% | 6.0% | 8.1% | 6.2% | 3.1% | 6.0% | ||||||||
Power & Vision | ||||||||||||||||||||||
Sales | 3,083 | 2,808 | 2,696 | 2,725 | 11,312 | 2,523 | 1,298 | 2,722 | 3,179 | 9,722 | 3,156 | 2,881 | 2,501 | 8,538 | ||||||||
Adjusted EBIT | 216 | 201 | 167 | 163 | 747 | 135 | (226) | 227 | 359 | 495 | 297 | 203 | 67 | 567 | ||||||||
Adjusted EBIT as a percentage of sales | 7.0% | 7.2% | 6.2% | 6.0% | 6.6% | 5.4% | -17.4% | 8.3% | 11.3% | 5.1% | 9.4% | 7.0% | 2.7% | 6.6% | ||||||||
Seating Systems | ||||||||||||||||||||||
Sales | 1,433 | 1,452 | 1,266 | 1,426 | 5,577 | 1,261 | 524 | 1,280 | 1,390 | 4,455 | 1,303 | 1,166 | 1,123 | 3,592 | ||||||||
Adjusted EBIT | 94 | 83 | 56 | 79 | 312 | 40 | (84) | 66 | 85 | 107 | 55 | 26 | 22 | 103 | ||||||||
Adjusted EBIT as a percentage of sales | 6.6% | 5.7% | 4.4% | 5.5% | 5.6% | 3.2% | -16.0% | 5.2% | 6.1% | 2.4% | 4.2% | 2.2% | 2.0% | 2.9% | ||||||||
Complete Vehicles | ||||||||||||||||||||||
Sales | 1,928 | 1,802 | 1,516 | 1,461 | 6,707 | 1,321 | 933 | 1,402 | 1,759 | 5,415 | 1,850 | 1,490 | 1,255 | 4,595 | ||||||||
Adjusted EBIT | 28 | 43 | 29 | 44 | 144 | 50 | 44 | 70 | 110 | 274 | 80 | 79 | 30 | 189 | ||||||||
Adjusted EBIT as a percentage of sales | 1.5% | 2.4% | 1.9% | 3.0% | 2.1% | 3.8% | 4.7% | 5.0% | 6.3% | 5.1% | 4.3% | 5.3% | 2.4% | 4.1% | ||||||||
Corporate and other | ||||||||||||||||||||||
Intercompany fees | (161) | (179) | (143) | (140) | (623) | (124) | (85) | (133) | (153) | (495) | (155) | (150) | (145) | (450) | ||||||||
Adjusted EBIT | 19 | 9 | 0 | 15 | 43 | (21) | (19) | 25 | (2) | (17) | 11 | 22 | 12 | 45 | ||||||||
Total | ||||||||||||||||||||||
Sales | 10,591 | 10,126 | 9,319 | 9,395 | 39,431 | 8,657 | 4,293 | 9,129 | 10,568 | 32,647 | 10,179 | 9,034 | 7,919 | 27,132 | ||||||||
Adjusted EBIT | 720 | 677 | 558 | 590 | 2,545 | 403 | (600) | 778 | 1,095 | 1,676 | 770 | 557 | 229 | 1,556 | ||||||||
Adjusted EBIT as a percentage of sales | 6.8% | 6.7% | 6.0% | 6.3% | 6.5% | 4.7% | -14.0% | 8.5% | 10.4% | 5.1% | 7.6% | 6.2% | 2.9% | 5.7% | ||||||||
Note 3: | 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: | ||||||||||||||||||||||
2019 | 2020 | 2021 | ||||||||||||||||||||
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 | (925) | (563) | (769) | (1,276) | (1,146) | (533) | (1,498) | (3,268) | (3,464) | (3,426) | (2,748) | |||||||||||
Restricted cash equivalents included in prepaid expenses | (116) | (118) | (112) | (116) | (113) | (115) | (120) | (106) | - | - | - | |||||||||||
Total cash, cash equivalents and restricted cash equivalents | (1,041) | (681) | (881) | (1,392) | (1,259) | (648) | (1,618) | (3,374) | (3,464) | (3,426) | (2,748) |
Q3 2021 Financial Review of Magna International Inc. | Page 6 of 6 |