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 | |||||||||||||||||
| 2021 | 2022 | 2023 | |||||||||||||||
| Note | 1st Q | 2nd Q | 3rd Q | 4th Q | TOTAL | 1st Q | 2nd Q | 3rd Q | 4th Q | TOTAL | 1st Q | ||||||
| VEHICLE VOLUME STATISTICS (in millions) | |||||||||||||||||
| North American vehicle volumes (including Mexico) | 3.752 | 3.213 | 2.921 | 3.247 | 13.133 | 3.621 | 3.551 | 3.607 | 3.524 | 14.303 | 3.909 | ||||||
| European vehicle volumes: | |||||||||||||||||
| Western Europe | 3.046 | 2.444 | 1.785 | 2.393 | 9.668 | 2.493 | 2.598 | 2.295 | 2.706 | 10.092 | 2.844 | ||||||
| Eastern Europe | 1.870 | 1.671 | 1.212 | 1.650 | 6.403 | 1.509 | 1.411 | 1.310 | 1.494 | 5.724 | 1.426 | ||||||
| Total Europe | 4.916 | 4.115 | 2.997 | 4.043 | 16.071 | 4.002 | 4.009 | 3.605 | 4.200 | 15.816 | 4.270 | ||||||
| Asia volumes | 11.552 | 10.397 | 9.685 | 12.272 | 43.906 | 11.572 | 10.344 | 12.527 | 12.823 | 47.266 | 11.455 | ||||||
| China volumes | 6.036 | 5.705 | 5.453 | 7.388 | 24.582 | 6.388 | 5.484 | 7.237 | 7.342 | 26.451 | 6.077 | ||||||
| Magna Steyr vehicle assembly volumes | 0.040 | 0.030 | 0.023 | 0.033 | 0.126 | 0.025 | 0.031 | 0.025 | 0.027 | 0.108 | 0.034 | ||||||
| AVERAGE FOREIGN EXCHANGE RATES | |||||||||||||||||
| 1 Canadian dollar equals U.S. dollars | 0.790 | 0.814 | 0.794 | 0.794 | 0.798 | 0.790 | 0.783 | 0.765 | 0.737 | 0.769 | 0.740 | ||||||
| 1 Euro equals U.S. dollars | 1.205 | 1.206 | 1.178 | 1.144 | 1.183 | 1.123 | 1.064 | 1.006 | 1.019 | 1.053 | 1.073 | ||||||
| 1 Chinese renminbi equals U.S. dollars | 0.154 | 0.155 | 0.155 | 0.156 | 0.155 | 0.158 | 0.151 | 0.146 | 0.140 | 0.149 | 0.146 | ||||||
| CONSOLIDATED STATEMENTS OF INCOME (LOSS) | |||||||||||||||||
| Sales: | |||||||||||||||||
| Body Exteriors & Structures | 4,025 | 3,647 | 3,185 | 3,620 | 14,477 | 4,077 | 3,947 | 3,976 | 4,004 | 16,004 | 4,439 | ||||||
| Power & Vision | 3,156 | 2,881 | 2,501 | 2,804 | 11,342 | 3,046 | 2,888 | 2,911 | 3,016 | 11,861 | 3,323 | ||||||
| Seating Systems | 1,303 | 1,166 | 1,123 | 1,299 | 4,891 | 1,376 | 1,253 | 1,295 | 1,345 | 5,269 | 1,486 | ||||||
| Complete Vehicles | 1,850 | 1,490 | 1,255 | 1,511 | 6,106 | 1,275 | 1,403 | 1,213 | 1,330 | 5,221 | 1,626 | ||||||
| Corporate & Other | (155) | (150) | (145) | (124) | (574) | (132) | (129) | (127) | (127) | (515) | (201) | ||||||
| Sales | 10,179 | 9,034 | 7,919 | 9,110 | 36,242 | 9,642 | 9,362 | 9,268 | 9,568 | 37,840 | 10,673 | ||||||
| Costs and expenses: | |||||||||||||||||
| Cost of goods sold | 8,662 | 7,728 | 6,885 | 7,822 | 31,097 | 8,400 | 8,259 | 8,126 | 8,403 | 33,188 | 9,416 | ||||||
| Selling, general and administrative | 430 | 419 | 454 | 414 | 1,717 | 386 | 410 | 387 | 477 | 1,660 | 488 | ||||||
| Equity income | (47) | (44) | (34) | (23) | (148) | (20) | (25) | (27) | (17) | (89) | (33) | ||||||
| EBITDA | 1 | 1,134 | 931 | 614 | 897 | 3,576 | 876 | 718 | 782 | 705 | 3,081 | 802 | |||||
| Depreciation and amortization | 364 | 374 | 385 | 389 | 1,512 | 369 | 360 | 341 | 349 | 1,419 | 365 | ||||||
| EBIT | 2 | 770 | 557 | 229 | 508 | 2,064 | 507 | 358 | 441 | 356 | 1,662 | 437 | |||||
| Interest expense, net | 23 | 11 | 22 | 22 | 78 | 26 | 20 | 18 | 17 | 81 | 20 | ||||||
| Operating income (loss) | 1 | 747 | 546 | 207 | 486 | 1,986 | 481 | 338 | 423 | 339 | 1,581 | 417 | |||||
| Impairment charges | - | - | - | - | - | - | 376 | - | 12 | 388 | - | ||||||
| Other expense (income) | (58) | 6 | 180 | (90) | 38 | 61 | 50 | 23 | 181 | 315 | 142 | ||||||
| Other expense (income), net | 1 | (58) | 6 | 180 | (90) | 38 | 61 | 426 | 23 | 193 | 703 | 142 | |||||
| Income (loss) from operations before income taxes | 805 | 540 | 27 | 576 | 1,948 | 420 | (88) | 400 | 146 | 878 | 275 | ||||||
| Income tax expense (benefit) | 183 | 104 | 10 | 98 | 395 | 41 | 57 | 104 | 35 | 237 | 58 | ||||||
| Net income (loss) | 622 | 436 | 17 | 478 | 1,553 | 379 | (145) | 296 | 111 | 641 | 217 | ||||||
| (Income) loss attributable to non-controlling interests | 1 | (7) | (12) | (6) | (14) | (39) | (15) | (11) | (7) | (16) | (49) | (8) | |||||
| Net income (loss) attributable to Magna International Inc. | 615 | 424 | 11 | 464 | 1,514 | 364 | (156) | 289 | 95 | 592 | 209 | ||||||
| Adjusted net income (loss) attributable to Magna International Inc. | 1 | 566 | 426 | 170 | 391 | 1,553 | 383 | 243 | 308 | 261 | 1,195 | 319 | |||||
| Diluted earnings (loss) per share: | |||||||||||||||||
| Diluted | $ 2.03 | $ 1.40 | $ 0.04 | $ 1.54 | $ 5.00 | $ 1.22 | $ (0.54) | $ 1.00 | $ 0.33 | $ 2.03 | $ 0.73 | ||||||
| Adjusted Diluted | $ 1.86 | $ 1.40 | $ 0.56 | $ 1.30 | $ 5.13 | $ 1.28 | $ 0.83 | $ 1.07 | $ 0.91 | $ 4.10 | $ 1.11 | ||||||
| Weighted average number of Common Shares outstanding | |||||||||||||||||
| during the year (in millions): | 303.6 | 303.6 | 302.6 | 301.5 | 302.8 | 298.1 | 291.1 | 288.5 | 286.3 | 291.2 | 286.6 | ||||||
| PROFITABILITY RATIOS | |||||||||||||||||
| Selling, general and administrative /Sales | 4.2% | 4.6% | 5.7% | 4.5% | 4.7% | 4.0% | 4.4% | 4.2% | 5.0% | 4.4% | 4.6% | ||||||
| EBITDA /Sales | 11.1% | 10.3% | 7.8% | 9.8% | 9.9% | 9.1% | 7.7% | 8.4% | 7.4% | 8.1% | 7.5% | ||||||
| EBIT /Sales | 7.6% | 6.2% | 2.9% | 5.6% | 5.7% | 5.3% | 3.8% | 4.8% | 3.7% | 4.4% | 4.1% | ||||||
| Operating income(loss) /Sales | 7.3% | 6.0% | 2.6% | 5.3% | 5.5% | 5.0% | 3.6% | 4.6% | 3.5% | 4.2% | 3.9% | ||||||
| Effective tax rate | |||||||||||||||||
| Reported | 22.7% | 19.3% | 37.0% | 17.0% | 20.3% | 9.8% | -64.8% | 26.0% | 24.0% | 27.0% | 21.1% | ||||||
| Excluding Other expense (income), net of taxes | 23.3% | 19.8% | 15.0% | 16.7% | 19.8% | 17.3% | 24.9% | 25.5% | 18.3% | 21.3% | 21.6% | ||||||
| Page 1 of 6 |
| FINANCIAL REVIEW OF MAGNA INTERNATIONAL INC. | |||||||||||||||||
| CONSOLIDATED BALANCE SHEETS | |||||||||||||||||
| (United States dollars in millions) (Unaudited) | |||||||||||||||||
| 2021 | 2022 | 2023 | |||||||||||||||
| 1st Q | 2nd Q | 3rd Q | 4th Q | 1st Q | 2nd Q | 3rd Q | 4th Q | 1st Q | |||||||||
| FUNDS EMPLOYED | |||||||||||||||||
| Current assets: | |||||||||||||||||
| Accounts receivable | 7,176 | 6,531 | 6,082 | 6,307 | 7,006 | 6,764 | 7,082 | 6,791 | 7,959 | ||||||||
| Inventories | 3,645 | 3,999 | 4,150 | 3,969 | 4,258 | 4,064 | 4,108 | 4,180 | 4,421 | ||||||||
| Prepaid expenses and other | 290 | 294 | 247 | 278 | 310 | 262 | 269 | 320 | 367 | ||||||||
| 11,111 | 10,824 | 10,479 | 10,554 | 11,574 | 11,090 | 11,459 | 11,291 | 12,747 | |||||||||
| Current liabilities: | |||||||||||||||||
| Accounts payable | 6,787 | 6,248 | 5,914 | 6,465 | 6,845 | 6,443 | 6,624 | 6,999 | 7,731 | ||||||||
| Accrued salaries and wages | 897 | 912 | 893 | 851 | 879 | 766 | 810 | 850 | 822 | ||||||||
| Other accrued liabilities | 2,298 | 2,186 | 2,070 | 2,156 | 2,123 | 2,096 | 1,986 | 2,118 | 2,526 | ||||||||
| Income taxes payable (receivable) | 109 | 123 | 125 | 200 | 190 | 136 | 97 | 93 | 9 | ||||||||
| 10,091 | 9,469 | 9,002 | 9,672 | 10,037 | 9,441 | 9,517 | 10,060 | 11,088 | |||||||||
| Working capital | 1,020 | 1,355 | 1,477 | 882 | 1,537 | 1,649 | 1,942 | 1,231 | 1,659 | ||||||||
| Investments | 960 | 1,124 | 1,455 | 1,593 | 1,487 | 1,375 | 1,323 | 1,429 | 1,390 | ||||||||
| Fixed assets, net | 8,305 | 8,297 | 8,166 | 8,293 | 8,090 | 7,723 | 7,470 | 8,173 | 8,304 | ||||||||
| Goodwill, other assets and intangible assets | 3,614 | 3,632 | 3,530 | 3,577 | 3,544 | 3,353 | 3,280 | 3,576 | 3,640 | ||||||||
| Operating lease right-of-use assets | 1,869 | 1,854 | 1,731 | 1,700 | 1,667 | 1,587 | 1,545 | 1,595 | 1,638 | ||||||||
| Funds employed | 15,768 | 16,262 | 16,359 | 16,045 | 16,325 | 15,687 | 15,560 | 16,004 | 16,631 | ||||||||
| FINANCING | |||||||||||||||||
| Straight debt: | |||||||||||||||||
| Cash and cash equivalents | (3,464) | (3,426) | (2,748) | (2,948) | (1,996) | (1,664) | (1,102) | (1,234) | (2,429) | ||||||||
| Short-term borrowings | - | - | - | - | - | - | - | 8 | 4 | ||||||||
| Long-term debt due within one year | 137 | 117 | 101 | 455 | 127 | 105 | 95 | 654 | 668 | ||||||||
| Long-term debt | 3,935 | 3,941 | 3,908 | 3,538 | 3,501 | 3,408 | 3,325 | 2,847 | 4,500 | ||||||||
| Current portion of operating lease liabilities | 244 | 278 | 269 | 274 | 276 | 270 | 266 | 276 | 285 | ||||||||
| Operating lease liabilities | 1,613 | 1,563 | 1,438 | 1,406 | 1,369 | 1,294 | 1,254 | 1,288 | 1,318 | ||||||||
| 2,465 | 2,473 | 2,968 | 2,725 | 3,277 | 3,413 | 3,838 | 3,839 | 4,346 | |||||||||
| Long-term employee benefit liabilities | 733 | 743 | 716 | 700 | 686 | 651 | 617 | 548 | 563 | ||||||||
| Other long-term liabilities | 414 | 482 | 466 | 376 | 374 | 390 | 397 | 461 | 451 | ||||||||
| Deferred tax liabilities, net | 104 | 124 | 40 | 19 | (51) | (111) | (138) | (179) | (218) | ||||||||
| 1,251 | 1,349 | 1,222 | 1,095 | 1,009 | 930 | 876 | 830 | 796 | |||||||||
| Shareholders' equity | 12,052 | 12,440 | 12,169 | 12,225 | 12,039 | 11,344 | 10,846 | 11,335 | 11,489 | ||||||||
| 15,768 | 16,262 | 16,359 | 16,045 | 16,325 | 15,687 | 15,560 | 16,004 | 16,631 | |||||||||
| ASSET UTILIZATION RATIOS | |||||||||||||||||
| Days in accounts receivable | 63.4 | 65.1 | 69.1 | 62.3 | 65.4 | 65.0 | 68.8 | 63.9 | 67.1 | ||||||||
| Days in accounts payable | 70.5 | 72.8 | 77.3 | 74.4 | 73.3 | 70.2 | 73.4 | 75.0 | 73.9 | ||||||||
| Inventory turnover - cost of sales | 9.5 | 7.7 | 6.6 | 7.9 | 7.9 | 8.1 | 7.9 | 8.0 | 8.5 | ||||||||
| Working capital turnover | 39.9 | 26.7 | 21.4 | 41.3 | 25.1 | 22.7 | 19.1 | 31.1 | 25.7 | ||||||||
| Total asset turnover | 2.6 | 2.2 | 1.9 | 2.3 | 2.4 | 2.4 | 2.4 | 2.4 | 2.6 | ||||||||
| CAPITAL STRUCTURE | |||||||||||||||||
| Straight debt | 15.6% | 15.2% | 18.1% | 17.0% | 20.1% | 21.8% | 24.7% | 24.0% | 26.1% | ||||||||
| Long-term employee benefit liabilities, other long-term | |||||||||||||||||
| liabilities & deferred tax liabilities, net | 7.9% | 8.3% | 7.5% | 6.8% | 6.2% | 5.9% | 5.6% | 5.2% | 4.8% | ||||||||
| Shareholders' equity | 76.4% | 76.5% | 74.4% | 76.2% | 73.7% | 72.3% | 69.7% | 70.8% | 69.1% | ||||||||
| 100.0% | 100.0% | 100.0% | 100.0% | 100.0% | 100.0% | 100.0% | 100.0% | 100.0% | |||||||||
| Debt to total capitalization | 33.0% | 32.2% | 32.0% | 31.7% | 30.5% | 30.9% | 31.3% | 30.9% | 37.1% | ||||||||
| ANNUALIZED RETURNS | |||||||||||||||||
| Return on equity (Net income attributable to Magna | |||||||||||||||||
| International Inc. / Average shareholders' equity) | 20.7% | 13.8% | 0.4% | 15.2% | 12.0% | -5.3% | 10.4% | 3.4% | 7.3% | ||||||||
| Adjusted Return on equity (Adjusted Net income attributable | |||||||||||||||||
| to Magna International Inc. / Average shareholders' equity) | 19.0% | 13.9% | 5.5% | 12.8% | 12.6% | 8.3% | 11.1% | 9.4% | 11.2% | ||||||||
| Return on Invested Capital (Annualized after-tax operating | |||||||||||||||||
| profits / invested capital) | 16.3% | 11.1% | 0.9% | 12.2% | 9.9% | -3.2% | 7.9% | 3.2% | 5.7% | ||||||||
| Adjusted Return on Invested Capital (Adjusted Annualized after-tax | |||||||||||||||||
| operating profits / invested capital) | 15.1% | 11.2% | 4.8% | 10.4% | 10.4% | 6.7% | 8.4% | 7.4% | 8.4% | ||||||||
| Page 2 of 6 |
| FINANCIAL REVIEW OF MAGNA INTERNATIONAL INC. | |||||||||||||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||||||||||
| (United States dollars in millions) (Unaudited) | |||||||||||||||||||
| 2021 | 2022 | 2023 | |||||||||||||||||
| 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 | |||||||
| Operating activities | |||||||||||||||||||
| Net income (loss) | 622 | 436 | 17 | 478 | 1,553 | 379 | (145) | 296 | 127 | 657 | 217 | ||||||||
| Items not involving current cash flows | (i) | 349 | 341 | 515 | 371 | 1,576 | 370 | 705 | 295 | 406 | 1,776 | 351 | |||||||
| (i) | 971 | 777 | 532 | 849 | 3,129 | 749 | 560 | 591 | 533 | 2,433 | 568 | ||||||||
| Changes in operating assets and liabilities | (i) | (310) | (249) | (132) | 502 | (189) | (569) | (139) | (353) | 723 | (338) | (341) | |||||||
| Cash provided from operating activities | 661 | 528 | 400 | 1,351 | 2,940 | 180 | 421 | 238 | 1,256 | 2,095 | 227 | ||||||||
| Investment activities | |||||||||||||||||||
| Fixed asset additions | (212) | (277) | (334) | (549) | (1,372) | (238) | (329) | (364) | (750) | (1,681) | (424) | ||||||||
| Increase in equity method investment | - | - | (454) | (63) | (517) | - | - | - | - | - | - | ||||||||
| Increase in investments, other assets and intangible assets | (104) | (93) | (101) | (105) | (403) | (64) | (80) | (125) | (186) | (455) | (101) | ||||||||
| Disposal of facilities | 1 (e) | - | - | (41) | - | (41) | 6 | - | - | - | 6 | (25) | |||||||
| Increase in public and private equity investments | (3) | (17) | (3) | (45) | (68) | (2) | (2) | (25) | - | (29) | - | ||||||||
| Settlement of long-term receivable from non-consolidated joint venture | 50 | - | - | - | 50 | - | - | - | - | - | - | ||||||||
| Proceeds from disposition | 19 | 20 | 10 | 32 | 81 | 23 | 40 | 41 | 20 | 124 | 19 | ||||||||
| Business combinations | 39 | (21) | - | (31) | (13) | - | - | - | (3) | (3) | - | ||||||||
| Cash used for investment activities | (211) | (388) | (923) | (761) | (2,283) | (275) | (371) | (473) | (919) | (2,038) | (531) | ||||||||
| Financing activities | |||||||||||||||||||
| Net issues (repayments) of debt | (126) | (33) | (13) | 5 | (167) | (328) | (31) | (10) | (22) | (391) | 1,636 | ||||||||
| Common Shares issued on exercise of stock options | 83 | 50 | 3 | 10 | 146 | 4 | - | 1 | 3 | 8 | 6 | ||||||||
| Repurchase of Common Shares | (162) | (99) | (5) | (251) | (517) | (383) | (212) | (180) | (5) | (780) | (9) | ||||||||
| Tax withholdings on vesting of equity awards | (12) | - | - | (1) | (13) | (14) | (1) | - | - | (15) | (9) | ||||||||
| Contributions to subsidiaries by non-controlling interests | - | - | - | 8 | 8 | - | 5 | - | - | 5 | - | ||||||||
| Dividends paid to non-controlling interests | - | (8) | (2) | (39) | (49) | - | (12) | (10) | (24) | (46) | (7) | ||||||||
| Dividends paid | (130) | (127) | (130) | (127) | (514) | (133) | (130) | (125) | (126) | (514) | (132) | ||||||||
| Cash provided from (used for) financing activities | (347) | (217) | (147) | (395) | (1,106) | (854) | (381) | (324) | (174) | (1,733) | 1,485 | ||||||||
| Effect of exchange rate changes on cash, cash equivalents | |||||||||||||||||||
| and restricted cash equivalents | (13) | 39 | (8) | 5 | 23 | (3) | (1) | (3) | (31) | (38) | 14 | ||||||||
| Net increase (decrease) in cash, cash equivalents | |||||||||||||||||||
| and restricted cash equivalents during the period | 90 | (38) | (678) | 200 | (426) | (952) | (332) | (562) | 132 | (1,714) | 1,195 | ||||||||
| Cash, cash equivalents and restricted cash equivalents, | |||||||||||||||||||
| beginning of period | 3,374 | 3,464 | 3,426 | 2,748 | 3,374 | 2,948 | 1,996 | 1,664 | 1,102 | 2,948 | 1,234 | ||||||||
| Cash, cash equivalents and restricted cash equivalents, | |||||||||||||||||||
| end of period | 3,464 | 3,426 | 2,748 | 2,948 | 2,948 | 1,996 | 1,664 | 1,102 | 1,234 | 1,234 | 2,429 | ||||||||
| (i) Certain amounts in prior periods have been reclassified to conform with current period presentation. | |||||||||||||||||||
| 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, 2022. | |||||||||||||||||||
| 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: | |||||||||||||||||||
| 2021 | 2022 | 2023 | |||||||||||||||||
| 1st Q | 2nd Q | 3rd Q | 4th Q | TOTAL | 1st Q | 2nd Q | 3rd Q | 4th Q | TOTAL | 1st Q | |||||||||
| Restructuring and impairments | [a] | 15 | 44 | 24 | 18 | 101 | - | 376 | 14 | 34 | 424 | 118 | |||||||
| Net losses (gains) on investments | [b] | (33) | (38) | 81 | (8) | 2 | 61 | 50 | 9 | 101 | 221 | 24 | |||||||
| Sale of business | [c] | - | - | 75 | - | 75 | - | - | - | 58 | 58 | - | |||||||
| Merger Agreement Termination Fee | [d] | - | - | - | (100) | (100) | - | - | - | - | - | - | |||||||
| Gain on business combinations | [e] | (40) | - | - | - | (40) | - | - | - | - | - | - | |||||||
| (58) | 6 | 180 | (90) | 38 | 61 | 426 | 23 | 193 | 703 | 142 | |||||||||
| [a] | Restructuring and impairments | ||||||||||||||||||
| Impairments related to operations in Russia: | |||||||||||||||||||
| The Company’s operations in Russia remain substantially idled. In accordance with U.S. GAAP, during the second quarter of 2022, as a result of the expected lack of future cashflows and the continuing uncertainties connected with the Russian economy, the Company recorded a $376 million impairment charge related to its investment in Russia. This included net asset impairments of $173 million and a $203 million reserve against the related foreign currency translation losses that are included in accumulated other comprehensive loss. The net asset impairments consisted of $163 million and $10 million in our Body Exteriors & Structures segment and our Seating segment, respectively. | |||||||||||||||||||
| Restructuring related to right-sizing of business: | |||||||||||||||||||
| During the first quarter of 2023, the Company initiated restructuring plans to right-size its business in an effort to optimize its footprint. These restructuring plans include plant closures and workforce reductions in the amount of $118 million. Of the total charges, $105 million was recorded in its Power & Vision segment, and $13 million in its Body Exteriors & Structures segment. | |||||||||||||||||||
| Other Restructuring: | 2021 | 2022 | 2023 | ||||||||||||||||
| 1st Q | 2nd Q | 3rd Q | 4th Q | TOTAL | 1st Q | 2nd Q | 3rd Q | 4th Q | TOTAL | 1st Q | |||||||||
| Power & Vision | 15 | 44 | 4 | 4 | 67 | - | - | - | 22 | 22 | - | ||||||||
| Body Exteriors & Structures | - | - | 8 | - | 8 | - | - | - | - | - | - | ||||||||
| Seating Systems | - | - | - | 14 | 14 | - | - | - | - | - | - | ||||||||
| 15 | ��44 | 12 | 18 | 89 | - | - | - | 22 | 22 | - | |||||||||
| Other Impairments: | 2021 | 2022 | 2023 | ||||||||||||||||
| 1st Q | 2nd Q | 3rd Q | 4th Q | TOTAL | 1st Q | 2nd Q | 3rd Q | 4th Q | TOTAL | 1st Q | |||||||||
| Body Exteriors & Structures | - | - | 8 | - | 8 | - | - | 10 | 12 | 22 | - | ||||||||
| Power & Vision | - | - | - | - | - | - | - | 4 | - | 4 | - | ||||||||
| Seating Systems | - | - | 4 | - | 4 | - | - | - | - | - | - | ||||||||
| - | - | 12 | - | 12 | - | - | 14 | 12 | 26 | - | |||||||||
| [b] | Net losses (gains) on investments | ||||||||||||||||||
| The Company revalues its public and private equity investments and certain public company warrants every quarter. The gains and losses related to this revaluation, as well as gain and losses on disposition, are recorded in Corporate. | |||||||||||||||||||
| [c] | Sale of business | ||||||||||||||||||
| During the fourth quarter of 2022, the Company entered into an agreement to sell a European Power & Vision operation in early 2023. Under the terms of the arrangement, the Company is contractually obligated to provide the buyer with up to $42 million of funding, resulting in a loss of $58 million recognized in 2022. During the first quarter of 2023, the Company completed the sale of this operation which resulted in a net cash outflow of $25 million. 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, resulting in a loss on disposal of $75 million. | |||||||||||||||||||
| [d] | Merger Agreement Termination Fee | ||||||||||||||||||
| In the fourth quarter of 2021, Veoneer, Inc. (“Veoneer”) terminated its merger agreement with Magna. In connection with the termination of the merger agreement, Veoneer paid the Company a termination fee which, net of the Company’s associated transaction costs, amounted to $100 million. | |||||||||||||||||||
| [e] | 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. | |||||||||||||||||||
| Page 4 of 6 |
| The following table reconciles Net income (loss) attributable to Magna International Inc. to Adjusted net income (loss) attributable to Magna International Inc.: | |||||||||||||||||||
| 2021 | 2022 | 2023 | |||||||||||||||||
| 1st Q | 2nd Q | 3rd Q | 4th Q | TOTAL | 1st Q | 2nd Q | 3rd Q | 4th Q | TOTAL | 1st Q | |||||||||
| Net income (loss) attributable to Magna International Inc. | 615 | 424 | 11 | 464 | 1,514 | 364 | (156) | 289 | 95 | 592 | 209 | ||||||||
| Exclude: | |||||||||||||||||||
| Restructuring and impairments | 15 | 31 | 20 | 17 | 83 | - | 361 | 12 | 34 | 407 | 92 | ||||||||
| Net (gains) losses on investments | (24) | (29) | 64 | (2) | 9 | 48 | 38 | 7 | 75 | 168 | 18 | ||||||||
| Net (gains) losses on the sale of business | - | - | 75 | - | 75 | - | - | - | 57 | 57 | - | ||||||||
| Adjustments to Deferred Tax Valuation Allowance | [i] | - | - | - | (13) | (13) | (29) | - | - | - | (29) | - | |||||||
| Merger Agreement Termination Fee | - | - | - | (75) | (75) | - | - | - | - | - | - | ||||||||
| Gain on business combinations | (40) | - | - | - | (40) | - | - | - | - | - | - | ||||||||
| Adjusted net income attributable to Magna International Inc. | 566 | 426 | 170 | 391 | 1,553 | 383 | 243 | 308 | 261 | 1,195 | 319 | ||||||||
| Diluted earnings (loss) per share | $ 2.03 | $ 1.40 | $ 0.04 | $ 1.54 | $ 5.00 | $ 1.22 | $ (0.54) | $ 1.00 | $ 0.33 | $ 2.03 | $ 0.73 | ||||||||
| Exclude: | |||||||||||||||||||
| Restructuring and impairments | 0.05 | 0.10 | 0.06 | 0.06 | 0.27 | - | 1.24 | 0.04 | 0.12 | 1.40 | 0.31 | ||||||||
| Net (gains) losses on investments | (0.08) | (0.10) | 0.21 | (0.01) | 0.03 | 0.16 | 0.13 | 0.03 | 0.26 | 0.58 | 0.07 | ||||||||
| Net (gains) losses on the sale of business | - | - | 0.25 | - | 0.25 | - | - | - | 0.20 | 0.19 | - | ||||||||
| Adjustments to Deferred Tax Valuation Allowance | [i] | - | - | - | (0.04) | (0.04) | (0.10) | - | - | - | (0.10) | - | |||||||
| Merger Agreement Termination Fee | - | - | - | (0.25) | (0.25) | - | - | - | - | - | - | ||||||||
| Gain on business combinations | (0.14) | - | - | - | (0.13) | - | - | - | - | - | - | ||||||||
| Adjusted diluted earnings per share | $ 1.86 | $ 1.40 | $ 0.56 | $ 1.30 | $ 5.13 | $ 1.28 | $ 0.83 | $ 1.07 | $ 0.91 | $ 4.10 | $ 1.11 | ||||||||
| [i] Adjustments to Deferred Tax Valuation Allowance | |||||||||||||||||||
| In the fourth quarter of 2021 and first quarter of 2022, the Company recorded adjustments to the valuation allowance against its deferred tax assets in certain European countries and North America. The net effect of these adjustments was a reduction in income tax expense of $13 million and $29 million, respectively. | |||||||||||||||||||
| Page 5 of 6 |
| Note 2: | SEGMENTED INFORMATION | ||||||||||||||||
| 2021 | 2022 | 2023 | |||||||||||||||
| 1st Q | 2nd Q | 3rd Q | 4th Q | TOTAL | 1st Q | 2nd Q | 3rd Q | 4th Q | TOTAL | 1st Q | |||||||
| Body Exteriors & Structures | |||||||||||||||||
| Sales | 4,025 | 3,647 | 3,185 | 3,620 | 14,477 | 4,077 | 3,947 | 3,976 | 4,004 | 16,004 | 4,439 | ||||||
| Adjusted EBIT | 327 | 227 | 98 | 168 | 820 | 229 | 191 | 225 | 198 | 843 | 270 | ||||||
| Adjusted EBIT as a percentage of sales | 8.1% | 6.2% | 3.1% | 4.6% | 5.7% | 5.6% | 4.8% | 5.7% | 4.9% | 5.3% | 6.1% | ||||||
| Power & Vision | |||||||||||||||||
| Sales | 3,156 | 2,881 | 2,501 | 2,804 | 11,342 | 3,046 | 2,888 | 2,911 | 3,016 | 11,861 | 3,323 | ||||||
| Adjusted EBIT | 297 | 203 | 67 | 171 | 738 | 154 | 91 | 117 | 109 | 471 | 84 | ||||||
| Adjusted EBIT as a percentage of sales | 9.4% | 7.0% | 2.7% | 6.1% | 6.5% | 5.1% | 3.2% | 4.0% | 3.6% | 4.0% | 2.5% | ||||||
| Seating Systems | |||||||||||||||||
| Sales | 1,303 | 1,166 | 1,123 | 1,299 | 4,891 | 1,376 | 1,253 | 1,295 | 1,345 | 5,269 | 1,486 | ||||||
| Adjusted EBIT | 55 | 26 | 22 | 49 | 152 | 49 | 2 | 35 | 13 | 99 | 36 | ||||||
| Adjusted EBIT as a percentage of sales | 4.2% | 2.2% | 2.0% | 3.8% | 3.1% | 3.6% | 0.2% | 2.7% | 1.0% | 1.9% | 2.4% | ||||||
| Complete Vehicles | |||||||||||||||||
| Sales | 1,850 | 1,490 | 1,255 | 1,511 | 6,106 | 1,275 | 1,403 | 1,213 | 1,330 | 5,221 | 1,626 | ||||||
| Adjusted EBIT | 80 | 79 | 30 | 98 | 287 | 50 | 63 | 65 | 57 | 235 | 52 | ||||||
| Adjusted EBIT as a percentage of sales | 4.3% | 5.3% | 2.4% | 6.5% | 4.7% | 3.9% | 4.5% | 5.4% | 4.3% | 4.5% | 3.2% | ||||||
| Corporate and other | |||||||||||||||||
| Intercompany fees | (155) | (150) | (145) | (124) | (574) | (132) | (129) | (127) | (127) | (515) | (201) | ||||||
| Adjusted EBIT | 11 | 22 | 12 | 22 | 67 | 25 | 11 | (1) | (21) | 14 | (5) | ||||||
| Total | |||||||||||||||||
| Sales | 10,179 | 9,034 | 7,919 | 9,110 | 36,242 | 9,642 | 9,362 | 9,268 | 9,568 | 37,840 | 10,673 | ||||||
| Adjusted EBIT | 770 | 557 | 229 | 508 | 2,064 | 507 | 358 | 441 | 356 | 1,662 | 437 | ||||||
| Adjusted EBIT as a percentage of sales | 7.6% | 6.2% | 2.9% | 5.6% | 5.7% | 5.3% | 3.8% | 4.8% | 3.7% | 4.4% | 4.1% | ||||||
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