Press Release - Magna Announces Fourth Quarter and 2019 Results and Raises Quarterly Cash Dividend per Share by 10%
Fourth Quarter 2019 Highlights
- Cash from operations increased to
$1.70 billion , despite lower sales and earnings - Returned
$365 million to shareholders through share repurchases and dividends - Raised quarterly cash dividend by 10% to
$0.40 per share
Full Year 2019 Highlights
- Record cash from operations of
$3.96 billion , despite lower sales and earnings - Returned approximately
$1.7 billion to shareholders through share repurchases and dividends
Please click , Feb. 21, 2020 (GLOBE NEWSWIRE) --
THREE MONTHS ENDED DECEMBER 31, |
YEAR ENDED DECEMBER 31, |
|||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||
Reported Sales |
$ | 9,395 | $ | 10,137 | $ | 39,431 | $ | 40,827 | ||||
Income from operations before income taxes |
$ | 579 | $ | 607 | $ | 2,223 | $ | 2,951 | ||||
Net income attributable to |
$ | 440 | $ | 456 | $ | 1,765 | $ | 2,296 | ||||
Diluted earnings per share |
$ | 1.43 | $ | 1.37 | $ | 5.59 | $ | 6.61 | ||||
Non-GAAP Financial Measures(1) Adjusted EBIT |
$ | 590 | $ | 730 | $ | 2,545 | $ | 3,107 | ||||
Adjusted diluted earnings per share | $ | 1.41 | $ | 1.63 | $ | 6.05 | $ | 6.71 | ||||
All results are reported in millions of U.S. dollars, except per share figures, which are in U.S. dollars. (1) Adjusted EBIT and Adjusted diluted earnings per share are Non-GAAP financial measures that have no standardized meaning under U.S. GAAP, and as a result may not be comparable to the calculation of similar measures by other companies. A reconciliation of these Non-GAAP financial measures is included in the back of this press release. |
A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/f1231bd3-895d-41a0-80f3-860a209f46ab
A 40-day labour strike at General Motors [“GM”], which began late in September of 2019 and extended into late October, had a negative impact on North American light vehicle production and consequently negatively impacted our sales and profitability for both the third and fourth quarters of 2019.
THREE MONTHS ENDED DECEMBER 31, 2019
Our fourth quarter results were ahead of our expectations for sales and diluted earnings per share.
On a consolidated basis, we posted sales of
Adjusted EBIT of
- lower margins in our Power & Vision segment, mainly associated with higher engineering costs in our ADAS business, substantially associated with three programs that will be utilizing new technologies, the labour strike at
GM and higher net warranty costs, partially offset by the impact of the divestiture of FP&C during 2019 and higher net favourable commercial items; - lower margins in our Body Exteriors & Structures segment, largely due to the labour strike at
GM ; and - lower margins in our Seating segment, mainly associated with foreign exchange losses in the fourth quarter of 2019 compared to gains in the fourth quarter of 2018, launch and operational inefficiencies at a new facility, higher net warranty costs, higher commodity costs, and the labour strike at
GM , partially offset by higher equity income.
These factors were partially offset by higher margins in our Complete Vehicles segment, primarily due to earnings on higher sales of certain vehicles, lower launch costs and operational improvements, as well as higher earnings in our Corporate segment.
Income from operations before income taxes of
Net income attributable to
Diluted earnings per share increased by 4% to
In the fourth quarter of 2019, we generated cash from operations before changes in operating assets and liabilities of
YEAR ENDED DECEMBER 31, 2019
We posted sales of
Income from operations before income taxes was
Net income attributable to
Adjusted EBIT decreased to
Our adjusted diluted earnings per share decreased 10% to
During 2019, we generated cash from operations before changes in operating assets and liabilities of
RETURN OF CAPITAL TO SHAREHOLDERS
During the three months and year ended December 31, 2019, Magna repurchased 4.7 million shares for
Our Board of Directors declared a quarterly dividend of
A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/6162ec64-c88c-4f2e-8c84-3fe7e9113714
2020 OUTLOOK
Our 2020 outlook remains unchanged from the outlook provided in our January 16, 2020 press release. We have not included any adjustment to our outlook related to COVID-19 (coronavirus), as it is difficult to forecast when our customers’ facilities in China will be fully operational, their ability to recover lost production, the risk of supply chain disruptions in the event that Chinese factories are unable to resume normal operations promptly, any adverse impact on the economy in China and/or the possibility that the economies of other regions could be adversely impacted by any further COVID-19-related slowdown in China. For further details, refer to the "2020 Outlook" section later in this press release.
REVIEW OF SELECT FOURTH QUARTER 2019 FINANCIAL INFORMATION
Other (Income) Expense, net
For the three months ended December 31, 2019, we recorded Other income, net of
For the three months ended December 31, 2018, we recorded Other expense, net of
For further details, refer to the "Other (Income) Expense, net" section later in this press release.
Segment Analysis
[All amounts in U.S. dollars and all tabular amounts in millions unless otherwise noted]
Body Exteriors & Structures
For the three months | ||||||||
ended December 31, | ||||||||
2019 | 2018 | Change | ||||||
Sales | $ | 3,923 | $ | 4,177 | $ | (254) | -6% | |
Adjusted EBIT | $ | 289 | $ | 356 | $ | (67) | -19% | |
Adjusted EBIT as a percentage of sales (i) | 7.4% | 8.5% | -1.1% | |||||
(i) Adjusted EBIT as a percentage of sales is calculated as Adjusted EBIT divided by Sales. |
Sales for Body Exteriors & Structures decreased 6% or $254 million to $3.92 billion for the fourth quarter of 2019 compared to $4.18 billion in 2018. The decrease in sales was primarily due to declines in light vehicle production in North America, including the impact of the labour strike at
Adjusted EBIT for Body Exteriors & Structures decreased $67 million to $289 million for the fourth quarter of 2019 compared to $356 million for the fourth quarter of 2018. This decline reflects the labour strike at
Adjusted EBIT as a percentage of sales decreased 1.1% to 7.4% for the fourth quarter of 2019 compared to 8.5% for the fourth quarter of 2018.
The decrease in Adjusted EBIT as a percentage of sales was primarily due to the labour strike at
Power & Vision
For the three months | ||||||||
ended December 31, | ||||||||
2019 | 2018 | Change | ||||||
Sales | $ | 2,725 | $ | 2,987 | $ | (262) | -9% | |
Adjusted EBIT | $ | 163 | $ | 254 | $ | (91) | -36% | |
Adjusted EBIT as a percentage of sales | 6.0% | 8.5% | -2.5% |
Sales for Power & Vision decreased 9% or $262 million to $2.73 billion for the fourth quarter of 2019 compared to $2.99 billion for the fourth quarter of 2018. The decrease in sales was primarily due to the divestiture of our FP&C business, declines in light vehicle production in North America, including the impact of the labour strike at
Adjusted EBIT for Power & Vision decreased $91 million to $163 million for the fourth quarter of 2019 compared to $254 million for the fourth quarter of 2018. The decrease was primarily due to higher engineering costs in our ADAS business, substantially associated with three programs that will be utilizing new technologies, the labour strike at
Adjusted EBIT as a percentage of sales decreased 2.5% to 6.0% for the fourth quarter of 2019 compared to 8.5% for the fourth quarter of 2018. The decrease was primarily due to higher engineering costs in our ADAS business, substantially associated with three programs that will be utilizing new technologies, the labour strike at
Seating Systems
For the three months | ||||||||
ended December 31, | ||||||||
2019 | 2018 | Change | ||||||
Sales | $ | 1,426 | $ | 1,435 | $ | (9) | -1% | |
Adjusted EBIT | $ | 79 | $ | 110 | $ | (31) | -28% | |
Adjusted EBIT as a percentage of sales | 5.5% | 7.7% | -2.2% |
Sales for Seating Systems declined 1% or $9 million to $1.43 billion for the fourth quarter of 2019 compared to $1.44 billion for the fourth quarter of 2018. This decrease was primarily due to declines in light vehicle production in North America, including the impact of the labour strike at
Adjusted EBIT for Seating Systems decreased $31 million to $79 million for the fourth quarter of 2019 compared to $110 million for the fourth quarter of 2018. The decrease was primarily due to the labour strike at
Adjusted EBIT as a percentage of sales decreased 2.2% to 5.5% for the fourth quarter of 2019 compared to 7.7% for the fourth quarter of 2018. The decrease was primarily due to foreign exchange losses in the fourth quarter of 2019 compared to gains in the fourth quarter of 2018, launch and operational inefficiencies at a new facility, higher net warranty costs, higher commodity costs, and higher launch costs, and the labour strike at
Complete Vehicles
For the three months | ||||||||
ended December 31, | ||||||||
2019 | 2018 | Change | ||||||
Complete Vehicle Assembly Volumes (thousands of units) | 33.9 | 36.6 | -7% | |||||
Sales | $ | 1,461 | $ | 1,687 | $ | (226 | ) | -13% |
Adjusted EBIT | $ | 44 | $ | 24 | $ | 20 | +83% | |
Adjusted EBIT as a percentage of sales | 3.0% | 1.4% | +1.6% |
Sales for Complete Vehicles decreased 13% or $226 million to $1.46 billion for the fourth quarter of 2019 compared to $1.69 billion for the fourth quarter of 2018, and assembly volumes decreased 7% or 2,700 units. This decrease was primarily due to lower volumes on the Jaguar I-Pace and BMW 5-Series and a
Adjusted EBIT for Complete Vehicles increased $20 million to $44 million in the fourth quarter of 2019, and Adjusted EBIT as a percentage of sales improved to 3.0% in the fourth quarter of 2019 compared to 1.4% in the fourth quarter of 2018. The increase in Adjusted EBIT and Adjusted EBIT as a percentage of sales were primarily due to earnings on higher sales of certain vehicles, reduced launch costs and operational improvements, partially offset by restructuring and downsizing costs incurred in 2019.
2020 OUTLOOK (2)
Light Vehicle Production (Units) North America Europe |
|
16.3 million 20.8 million |
||
Segment Sales Body Exteriors & Structures Power & Vision Seating Systems Complete Vehicles |
|
|
||
Total Sales |
|
|||
EBIT Margin(3) | 6.7% - 7.0% | |||
Equity Income (included in EBIT) | ||||
Interest Expense | Approximately |
|||
Tax Rate | Approximately 24.5% | |||
Net income attributable to Magna | ||||
Capital Spending | Approximately |
|||
(2) Unchanged from 2020 outlook provided in our January 16, 2020 press release (3) Earnings Before Interest and Taxes ("EBIT") is defined as Net Income attributable to Magna before income attributable to non-controlling interests, income taxes, and interest expense, net. EBIT Margin is the ratio of EBIT to Total Sales. |
In this outlook we have assumed no material unannounced acquisitions or divestitures or other significant transactions. In addition, we have assumed:
- 2020 light vehicle production volumes (as set out above);
- foreign exchange rates for the most common currencies in which we conduct business relative to our U.S. dollar reporting currency were:
1 Canadian dollar equals U.S. dollars 0.751 euro equals U.S. dollars 1.10
These foreign exchange rates are unchanged from our previous 2020 outlook dated January 16, 2020.
In addition, we have not included any adjustment to our outlook related to COVID-19 (coronavirus), as it is difficult to forecast when our customers’ facilities in China will be fully operational, their ability to recover lost production, the risk of supply chain disruptions in the event that Chinese factories are unable to resume normal operations promptly, any adverse impact on the economy in China and/or the possibility that the economies of other regions could be adversely impacted by any further COVID-19-related slowdown in China.
Certain of the forward-looking financial measures above are provided on a Non-GAAP basis. We do not provide a reconciliation of such forward-looking measures to the most directly comparable financial measures calculated and presented in accordance with U.S. GAAP. To do so would be potentially misleading and not practical given the difficulty of projecting items that are not reflective of on-going operations in any future period. The magnitude of these items, however, may be significant.
CONSOLIDATED STATEMENTS OF INCOME
[Unaudited]
[U.S. dollars in millions, except per share figures]
Three months ended | Year ended | ||||||||
December 31, | December 31, | ||||||||
2019 | 2018 | 2019 | 2018 | ||||||
Sales | $ | 9,395 | $ | 10,137 | $ | 39,431 | $ | 40,827 | |
Costs and expenses | |||||||||
Cost of goods sold | 8,085 | 8,714 | 34,022 | 35,055 | |||||
Depreciation and amortization | 355 | 318 | 1,345 | 1,278 | |||||
Selling, general and administrative | 423 | 431 | 1,697 | 1,664 | |||||
Interest expense, net | 19 | 26 | 82 | 93 | |||||
Equity income | (58) | (56) | (178) | (277) | |||||
Other (income) expense, net [i] | (8) | 97 | 240 | 63 | |||||
Income from operations before income taxes | 579 | 607 | 2,223 | 2,951 | |||||
Income taxes | 134 | 140 | 591 | 619 | |||||
Net income | 445 | 467 | 1,632 | 2,332 | |||||
(Income) loss attributable to non-controlling interests | (5) | (11) | 133 | (36) | |||||
Net income attributable to |
$ | 440 | $ | 456 | $ | 1,765 | $ | 2,296 | |
Earnings per Common Share: | |||||||||
Basic | $ | 1.44 | $ | 1.37 | $ | 5.61 | $ | 6.65 | |
Diluted | $ | 1.43 | $ | 1.37 | $ | 5.59 | $ | 6.61 | |
Cash dividends paid per Common Share | $ | 0.365 | $ | 0.33 | $ | 1.46 | $ | 1.32 | |
Weighted average number of Common Shares outstanding during the period [in millions]: | |||||||||
Basic | 305.0 | 331.9 | 314.7 | 345.4 | |||||
Diluted | 306.3 | 333.2 | 315.8 | 347.5 | |||||
[i] See "Other (income) expense, net" information included in this Press Release.
CONSOLIDATED BALANCE SHEETS
[Unaudited]
[U.S. dollars in millions]
As at | As at | |||||
December 31, | December 31, | |||||
2019 | 2018 | |||||
ASSETS | ||||||
Current assets | ||||||
Cash and cash equivalents | $ | 1,276 | $ | 684 | ||
Accounts receivable | 5,927 | 6,548 | ||||
Inventories | 3,304 | 3,403 | ||||
Prepaid expenses and other | 238 | 193 | ||||
Income taxes receivable | — | 57 | ||||
Assets held for sale | — | 949 | ||||
10,745 | 11,834 | |||||
Investments | 1,210 | 2,189 | ||||
Fixed assets, net | 8,260 | 8,095 | ||||
Operating lease right-of-use assets | 1,811 | — | ||||
Intangible assets, net | 484 | 560 | ||||
1,976 | 1,979 | |||||
Deferred tax assets | 308 | 300 | ||||
Other assets | 996 | 988 | ||||
$ | 25,790 | $ | 25,945 | |||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||
Current liabilities | ||||||
Short-term borrowings | $ | — | $ | 1,098 | ||
Accounts payable | 5,628 | 6,094 | ||||
Accrued salaries and wages | 753 | 769 | ||||
Other accrued liabilities | 1,800 | 1,734 | ||||
Income taxes payable | 17 | — | ||||
Long‑term debt due within one year | 106 | 201 | ||||
Current portion of operating lease liabilities | 225 | — | ||||
Liabilities held for sale | — | 408 | ||||
8,529 | 10,304 | |||||
Long‑term debt | 3,062 | 3,084 | ||||
Operating lease liabilities | 1,601 | — | ||||
Long-term employee benefit liabilities | 677 | 597 | ||||
Other long‑term liabilities | 371 | 400 | ||||
Deferred tax liabilities | 419 | 401 | ||||
14,659 | 14,786 | |||||
Shareholders' equity | ||||||
Capital stock | ||||||
Common Shares | ||||||
[issued: 303,250,415; December 31, 2018 – 327,339,095] | 3,198 | 3,380 | ||||
Contributed surplus | 127 | 120 | ||||
Retained earnings | 8,596 | 8,376 | ||||
Accumulated other comprehensive loss | (1,090 | ) | (1,175 | ) | ||
10,831 | 10,701 | |||||
Non-controlling interests | 300 | 458 | ||||
11,131 | 11,159 | |||||
$ | 25,790 | $ | 25,945 | |||
CONSOLIDATED STATEMENTS OF CASH FLOWS
[Unaudited]
[U.S. dollars in millions]
Three months ended | Year ended | ||||||||||||
December 31, | December 31, | ||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||
Cash provided from (used for): | |||||||||||||
OPERATING ACTIVITIES | |||||||||||||
Net income | $ | 445 | $ | 467 | $ | 1,632 | $ | 2,332 | |||||
Items not involving current cash flows | 509 | 534 | 1,976 | 1,539 | |||||||||
954 | 1,001 | 3,608 | 3,871 | ||||||||||
Changes in operating assets and liabilities | 742 | 597 | 352 | (153 | ) | ||||||||
Cash provided from operating activities | 1,696 | 1,598 | 3,960 | 3,718 | |||||||||
INVESTING ACTIVITIES | |||||||||||||
Fixed asset additions | (513 | ) | (647 | ) | (1,441 | ) | (1,650 | ) | |||||
Proceeds from sale of (investment in) Lyft, Inc. | 221 | — | 231 | (220 | ) | ||||||||
Increase in investments, other assets and intangible assets | (122 | ) | (150 | ) | (394 | ) | (481 | ) | |||||
Proceeds from dispositions | 16 | 70 | 185 | 223 | |||||||||
Acquisitions | 5 | (152 | ) | (147 | ) | (148 | ) | ||||||
Proceeds on sale of business | — | — | 1,132 | — | |||||||||
Cash used for investing activities | (393 | ) | (879 | ) | (434 | ) | (2,276 | ) | |||||
FINANCING ACTIVITIES | |||||||||||||
Issues of debt | 11 | 23 | 47 | 172 | |||||||||
(Decrease) increase in short-term borrowings | (436 | ) | (177 | ) | (1,124 | ) | 866 | ||||||
Repayments of debt | (10 | ) | (130 | ) | (149 | ) | (171 | ) | |||||
Issue of Common Shares on exercise of stock options | 11 | 3 | 44 | 50 | |||||||||
Shares repurchased for tax withholdings on vesting of equity awards | (4 | ) | (10 | ) | (9 | ) | (16 | ) | |||||
Repurchase of Common Shares | (254 | ) | (479 | ) | (1,289 | ) | (1,831 | ) | |||||
Contributions to subsidiaries by non-controlling interests | — | — | 4 | 4 | |||||||||
Dividends paid to non-controlling interests | (9 | ) | (39 | ) | (22 | ) | (69 | ) | |||||
Dividends paid | (111 | ) | (106 | ) | (449 | ) | (448 | ) | |||||
Cash used for financing activities | (802 | ) | (915 | ) | (2,947 | ) | (1,443 | ) | |||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash equivalents | 10 | (5 | ) | 11 | (36 | ) | |||||||
Net increase (decrease) in cash, cash equivalents and Restricted cash equivalents during the period | 511 | (201 | ) | 590 | (37 | ) | |||||||
Cash, cash equivalents and restricted cash equivalents,beginning of period | 881 | 1,003 | 802 | 839 | |||||||||
Cash, cash equivalents and restricted cash equivalents, end of period | $ | 1,392 | $ | 802 | $ | 1,392 | $ | 802 | |||||
SUPPLEMENTAL DATA |
[Unaudited] |
[All amounts in U.S. dollars and all tabular amounts in millions unless otherwise noted] |
OTHER (INCOME) EXPENSE, NET
During the three months ended December 31, 2019 and 2018, the Company recorded other (income) expense, net items as follows:
Three months ended | Year ended | ||||||||||||
December 31, | December 31, | ||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||
Impairment of assets [a] | $ | — | $ | 74 | $ | 727 | $ | 74 | |||||
Restructuring [b] | 3 | 23 | 31 | 45 | |||||||||
Net (gains) losses on investments [c] | (11 | ) | — | 6 | (56 | ) | |||||||
Gain on sale of Business [d] | — | — | (524 | ) | — | ||||||||
Other (income) expense, net | $ | (8 | ) | $ | 97 | $ | 240 | $ | 63 |
[a] | Impairment of assets During 2019, the Company concluded that indicators of impairment were present within the Power & Vision segment related to its equity-accounted investments in For the year ended December 31, 2019, the Company recorded asset impairment charges of During 2018, the Company concluded that indicators of impairment were present related to its investment in GFT and undertook an impairment analysis to determine the fair value of the investment. Based on the difference between the fair value and the carrying value of the investment in GFT, the Company recorded an other-than-temporary impairment charge of For the year ended December 31, 2018, the Company also recorded fixed asset impairment charges of |
[b] | Restructuring For the year ended December 31, 2019, the Company recorded net restructuring charges of For the year ended December 31, 2018, the Company recorded net restructuring charges of |
SUPPLEMENTAL DATA |
[Unaudited] |
[All amounts in U.S. dollars and all tabular amounts in millions unless otherwise noted] |
OTHER (INCOME) EXPENSE, NET (CONTINUED)
[c] | Net losses (gains) on investments For the year ended December 31, 2019, recorded net losses of During 2019, the Company sold 5.4 million shares of its publicly traded equity securities in Lyft for proceeds of For the year ended December 31, 2018, the Company recorded an unrealized gain of |
[d] | Sale of business During 2019, the Company recorded a gain on the sale of the FP&C business of |
SEGMENTED INFORMATION
Magna is a global automotive supplier which has complete vehicle engineering and contract manufacturing expertise, as well as product capabilities which include body, chassis, exterior, seating, powertrain, active driver assistance, electronics, mirrors & lighting, mechatronics and roof systems. Magna also has electronic and software capabilities across many of these areas.
The Company is organized under four operating segments: Body Exteriors & Structures, Power & Vision, Seating Systems and Complete Vehicles. These segments have been determined on the basis of technological opportunities, product similarities, and market and operating factors, and are also the Company's reportable segments.
The Company's chief operating decision maker uses Adjusted Earnings before Interest and Income Taxes ["Adjusted EBIT"] as the measure of segment profit or loss, since management believes Adjusted EBIT is the most appropriate measure of operational profitability or loss for its reporting segments. Adjusted EBIT is calculated by taking net income and adding back income taxes, interest expense, net, and other (income) expense, net.
Certain amounts in the prior period comparatives have been restated to reflect the transfer of assets between the Company’s segments to better reflect utilization of these assets and more accurately measure their operational profitability.
SUPPLEMENTAL DATA |
[Unaudited] |
[All amounts in U.S. dollars and all tabular amounts in millions unless otherwise noted] |
SEGMENTED INFORMATION (CONTINUED)
The following tables show segment information for the Company's reporting segments and a reconciliation of Adjusted EBIT to the Company's consolidated income from operations before income taxes:
Three months ended December 31, 2019 | ||||||||||||||||||
Depreciation | Equity | Fixed | ||||||||||||||||
Total | External | Adjusted | and | (income) | asset | |||||||||||||
sales | sales | EBIT [ii] | amortization | loss | additions | |||||||||||||
Body Exteriors & Structures | $ | 3,923 | $ | 3,849 | $ | 289 | $ | 180 | $ | (1 | ) | $ | 263 | |||||
Power & Vision | 2,725 | 2,678 | 163 | 128 | (55 | ) | 203 | |||||||||||
Seating Systems | 1,426 | 1,420 | 79 | 18 | (5 | ) | 31 | |||||||||||
Complete Vehicles | 1,461 | 1,444 | 44 | 24 | (1 | ) | 15 | |||||||||||
Corporate & Other [i] | (140 | ) | 4 | 15 | 5 | 4 | 1 | |||||||||||
Total Reportable Segments | $ | 9,395 | $ | 9,395 | $ | 590 | $ | 355 | $ | (58 | ) | $ | 513 | |||||
Three months ended December 31, 2018 | ||||||||||||||||||
Depreciation | Equity | Fixed | ||||||||||||||||
Total | External | Adjusted | and | (income) | asset | |||||||||||||
sales | sales | EBIT [ii] | amortization | loss | additions | |||||||||||||
Body Exteriors & Structures | $ | 4,177 | $ | 4,095 | $ | 356 | $ | 177 | $ | (3 | ) | $ | 280 | |||||
Power & Vision | 2,987 | 2,931 | 254 | 102 | (58 | ) | 293 | |||||||||||
Seating Systems | 1,435 | 1,433 | 110 | 15 | 4 | 35 | ||||||||||||
Complete Vehicles | 1,687 | 1,677 | 24 | 19 | — | 37 | ||||||||||||
Corporate & Other [i] | (149 | ) | 1 | (14 | ) | 5 | 1 | 2 | ||||||||||
Total Reportable Segments | $ | 10,137 | $ | 10,137 | $ | 730 | $ | 318 | $ | (56 | ) | $ | 647 | |||||
Year ended December 31, 2019 | ||||||||||||||||||
Depreciation | Equity | Fixed | ||||||||||||||||
Total | External | Adjusted | and | (income) | asset | |||||||||||||
sales | sales | EBIT [ii] | amortization | loss | additions | |||||||||||||
Body Exteriors & Structures | $ | 16,458 | $ | 16,110 | $ | 1,299 | $ | 710 | $ | (3 | ) | $ | 713 | |||||
Power & Vision | 11,312 | 11,103 | 747 | 464 | (174 | ) | 577 | |||||||||||
Seating Systems | 5,577 | 5,548 | 312 | 66 | (4 | ) | 76 | |||||||||||
Complete Vehicles | 6,707 | 6,661 | 144 | 84 | (1 | ) | 69 | |||||||||||
Corporate & Other [i] | (623 | ) | 9 | 43 | 21 | 4 | 6 | |||||||||||
Total Reportable Segments | $ | 39,431 | $ | 39,431 | $ | 2,545 | $ | 1,345 | $ | (178 | ) | $ | 1,441 | |||||
Year ended December 31, 2018 | ||||||||||||||||||
Depreciation | Fixed | |||||||||||||||||
Total | External | Adjusted | and | Equity | asset | |||||||||||||
sales | sales | EBIT [ii] | amortization | income | additions | |||||||||||||
Body Exteriors & Structures | $ | 17,527 | $ | 17,220 | $ | 1,413 | $ | 701 | $ | (12 | ) | $ | 730 | |||||
Power & Vision | 12,321 | 12,086 | 1,171 | 435 | (261 | ) | 655 | |||||||||||
Seating Systems | 5,548 | 5,546 | 426 | 57 | (3 | ) | 78 | |||||||||||
Complete Vehicles | 6,018 | 5,968 | 68 | 65 | — | 170 | ||||||||||||
Corporate & Other [i] | (587 | ) | 7 | 29 | 20 | (1 | ) | 17 | ||||||||||
Total Reportable Segments | $ | 40,827 | $ | 40,827 | $ | 3,107 | $ | 1,278 | $ | (277 | ) | $ | 1,650 |
[i] Included in Corporate and Other Adjusted EBIT are intercompany fees charged to the automotive segments.
[ii] For a definition and reconciliation of Adjusted EBIT, refer to our Non-GAAP financial measures reconciliation included in the “Supplemental Data” section of this Press Release.
SUPPLEMENTAL DATA
[Unaudited]
[All amounts in U.S. dollars and all tabular amounts in millions unless otherwise noted]
SEGMENTED INFORMATION (CONTINUED)
The following table shows
December 31, | December 31, | ||||
2019 | 2018 | ||||
Body Exteriors & Structures | $ | 458 | $ | 459 | |
Power & Vision | 1,238 | 1,260 | |||
Seating Systems | 169 | 147 | |||
Complete Vehicles | 111 | 113 | |||
Total Reportable Segments | $ | 1,976 | $ | 1,979 |
The following table shows Net Assets for the Company's reporting segments:
December 31, | December 31, | ||||
2019 | 2018 | ||||
Body Exteriors & Structures | $ | 7,906 | $ | 7,142 | |
Power & Vision [i] | 5,626 | 6,703 | |||
Seating Systems | 1,219 | 815 | |||
Complete Vehicles | 735 | 605 | |||
Corporate & Other | 468 | 563 | |||
Total Reportable Segments | $ | $ | 15,828 |
[i] Balance as at December 31, 2018 includes
The following table reconciles Total Assets to Net Assets:
December 31, | December 31, | ||||||
2019 | 2018 | ||||||
Total Assets | $ | 25,790 | $ | 25,945 | |||
Deduct assets not included in segment net assets: | |||||||
Cash and cash equivalents | (1,276 | ) | (684 | ) | |||
Deferred tax assets | (308 | ) | (300 | ) | |||
Long-term receivables from joint venture partners | (71 | ) | (71 | ) | |||
Income taxes receivable | — | (57 | ) | ||||
Deduct liabilities included in segment net assets: | |||||||
Accounts payable | (5,628 | ) | (6,094 | ) | |||
Accrued salaries and wages | (753 | ) | (769 | ) | |||
Other accrued liabilities | (1,800 | ) | (1,734 | ) | |||
Liabilities held for sale | — | (408 | ) | ||||
Segment Net Assets | $ | 15,954 | $ | 15,828 |
SUPPLEMENTAL DATA
[Unaudited]
[All amounts in U.S. dollars and all tabular amounts in millions unless otherwise noted]
Non-GAAP Financial Measures
In addition to the financial results reported in accordance with U.S. GAAP, this press release contains references to the Non-GAAP financial measures reconciled below. We believe the Non-GAAP financial measures used in this press release are useful to both management and investors in their analysis of the Company’s financial position and results of operations. In particular, management believes that Adjusted EBIT and Adjusted diluted earnings per share, are useful measures in assessing the Company’s financial performance by excluding certain items that are not indicative of the Company's core operating performance. Management also believes that these measures are useful to both management and investors in their analysis of the Company's results of operations, as they provide improved comparability between fiscal periods. The presentation of Non-GAAP financial measures should not be considered in isolation, or as a substitute for the Company’s related financial results prepared in accordance with U.S. GAAP.
The following table reconciles Net income to Adjusted EBIT:
Three months ended | Year ended | |||||||||
December 31, | December 31, | |||||||||
2019 | 2018 | 2019 | 2018 | |||||||
Net income | $ | 445 | $ | 467 | $ | 1,632 | $ | 2,332 | ||
Add: | ||||||||||
Interest expense, net | 19 | 26 | 82 | 93 | ||||||
Other (income) expense, net | (8 | ) | 97 | 240 | 63 | |||||
Income taxes | 134 | 140 | 591 | 619 | ||||||
Adjusted EBIT | $ | 590 | $ | 730 | $ | 2,545 | $ | 3,107 |
The following table reconciles Net income attributable to
Three months ended | Year ended | |||||||||||
December 31, | December 31, | |||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||
Net income attributable to |
$ | 440 | $ | 456 | $ | 1,765 | $ | 2,296 | ||||
Add: | ||||||||||||
Other (income) expense, net | (8 | ) | 97 | 240 | 63 | |||||||
Tax effect on Other (income) expense, net | 1 | (5 | ) | 33 | (2 | ) | ||||||
Loss attributable to non-controlling interests related to Other (income) expense, net | — | — | (127 | ) | — | |||||||
Other Tax Items | — | (6 | ) | — | (27 | ) | ||||||
Adjusted net income attributable to |
$ | 433 | $ | 542 | $ | 1,911 | $ | 2,330 | ||||
Diluted weighted average number of Common Shares outstanding during the period (millions): |
306.3 | 333.2 | 315.8 | 347.5 | ||||||||
Adjusted diluted earnings per share | $ | 1.41 | $ | 1.63 | $ | 6.05 | $ | 6.71 |
This press release together with our Management's Discussion and Analysis of Results of Operations and Financial Position and our Interim Financial Statements are available in the Investor Relations section of our website at www.magna.com/company/investors and filed electronically through the System for Electronic Document Analysis and Retrieval (SEDAR) which can be accessed at www.sedar.com as well as on the
We will hold a conference call for interested analysts and shareholders to discuss our fourth quarter and year ended December 31, 2019 results on Friday, February 21, 2020 at 7:00 a.m. EST. The conference call will be chaired by Don Walker, Chief Executive Officer. The number to use for this call from North America is 1-888-223-4959. International callers should use 1-303-223-4361. Please call in at least 10 minutes prior to the call start time. We will also webcast the conference call at www.magna.com. The slide presentation accompanying the conference call as well as our financial review summary will be available on our website Friday prior to the call.
TAGS
Quarterly earnings, financial results
INVESTOR CONTACT
Louis Tonelli, Vice-President, Investor Relations
louis.tonelli@magna.com │ 905.726.7035
MEDIA CONTACT
Tracy Fuerst, Vice-President,
tracy.fuerst@magna.com │ 248.631.5396
OUR BUSINESS (4)
We are a mobility technology company. We have over 165,000 entrepreneurial-minded employees, 346 manufacturing operations and 94 product development, engineering and sales centres in 27 countries. We have complete vehicle engineering and contract manufacturing expertise, as well as product capabilities that include body, chassis, exteriors, seating, powertrain, active driver assistance, electronics, mechatronics, mirrors, lighting and roof systems. Our common shares trade on the
(4) Manufacturing operations, product development, engineering and sales centres and employee figures generally include equity-accounted operations.
FORWARD-LOOKING STATEMENTS
Certain statements in this press release constitute "forward-looking information" or "forward-looking statements" (collectively, "forward-looking statements"). Any such forward-looking statements are intended to provide information about management's current expectations and plans and may not be appropriate for other purposes. Forward-looking statements may include financial and other projections, as well as statements regarding our future plans, strategic objectives or economic performance, or the assumptions underlying any of the foregoing, and other statements that are not recitations of historical fact. We use words such as "may", "would", "could", "should", "will", "likely", "expect", "anticipate", "believe", "intend", "plan", "aim", "forecast", "outlook", "project", "estimate", "target" and similar expressions suggesting future outcomes or events to identify forward-looking statements. Forward-looking statements in this press release include, but are not limited to, statements relating to our 2020 Outlook; and future returns of capital to our shareholders, including through dividends and share repurchases.
Forward-looking statements are based on information currently available to us, and are based on assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate in the circumstances. While we believe we have a reasonable basis for making any such forward-looking statements, they are not a guarantee of future performance or outcomes. Whether actual results and developments conform to our expectations and predictions is subject to a number of risks, assumptions and uncertainties, many of which are beyond our control, and the effects of which can be difficult to predict, including, without limitation:
Risks Related to the Automotive Industry
Customer and Supplier Related Risks
Manufacturing Operational Risks
IT Security/Cybersecurity Risk
Pricing Risks
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Warranty / Recall Risks
Acquisition Risks
Other Business Risks
Legal, Regulatory and Other Risks
|
In evaluating forward-looking statements or forward-looking information, we caution readers not to place undue reliance on any forward-looking statement, and readers should specifically consider the various factors which could cause actual events or results to differ materially from those indicated by such forward-looking statements, including the risks, assumptions and uncertainties above which are discussed in greater detail in this document under the section titled "Industry Trends and Risks" and set out in our Annual Information Form filed with securities commissions in Canada and our annual report on Form 40-F filed with the
Source: Magna International Inc.