展示99.2
曼宁国际公司。
第三季度报告
2024
MAGNA INTERNATIONAL INC.
管理对经营业绩和财务状况的讨论与分析
除非另有说明，本管理层对经营业绩和财务状况的讨论与分析中的所有金额均以美元计，所有表格金额均以亿美元计，每股数字除外，每股数字以美元计。 当我们使用"我们"，"我们"，"我们"或"Magna"一词时，我们指的是Magna International Inc.及其附属公司和合资实体，除非上下文另有要求。
应当阅读本MD&A与本年度报告中截至2024年9月30日包含的未经审计的中期合并财务基本报表以及截至2023年12月31日包含在我们2023年股东年度报告中的已审计合并财务基本报表和MD&A一并阅读。
本管理层讨论与分析可能包含具有前瞻性的声明。请参阅本管理层讨论与分析中“前瞻性声明”部分，以获取有关我们使用前瞻性声明的更详细讨论。
本管理层讨论与分析已准备截至2024年10月31日。
亮点
比较2024年第三季度和2023年第三季度：
| · | 全球轻型车生产减少4%，主要受到北美和中国的生产降低6%以及欧洲的2%下降的影响。 | |
| · | 总销售额下降了4%，主要反映了全球轻型车生产的减少，某些项目的生产结束以及我们在印度金属成型业务的处置，部分抵消了新项目的推出。 | |
| · | 2024年第三季度，我们确认了19600万美元的其他收入，用于之前推迟的与我们的菲斯克汽车制造协议有关的营收，因为我们制造菲斯克Ocean SUV的协议已终止。 | |
| · | 主要是由于其他(收入)费用增加，稀释后的每股收益增加至1.68美元，而不是1.37美元。 | |
| · | 调整后的稀释每股收益(1)为1.28美元，而不是1.46美元。下降反映了销售额降低，净生产成本提高，股权收入降低，所得税率提高，部分抵消了更高的有利商业项目和运营卓越活动的好处。 | |
| · | 经营活动现金减少了7000万美元，至72700万美元。 |
此外，在2024年第三季度我们支付了13800万美元的分红派息。
经多伦多证券交易所批准，我们的董事会批准了一项新的普通股回购计划["NCIB"]，以购买多达2850万股我们的普通股，约占我们公开流通的普通股的10%。这项NCIB预计将于2024年11月7日左右启动，并将在一年后终止。
概述
我们的业务(2)
曼格纳不仅是全球最大的汽车供应商之一。我们是一家致力于创新的移动科技公司，拥有超过17.5万名全球化、具有创业精神的团队。(3)公司拥有来自28个国家共343个制造业务、107个产品开发、工程和销售中心的员工。凭借65年的经验，我们互连产品的生态系统以及我们完整的车辆专业知识使我们在扩展的运输领域中推动出行方式的发展。有关Magna（纽交所：MGA；tsx：mg）的更多信息，请访问www.magna.com或在社交媒体上关注我们。
1 调整后的稀释每股收益 是一项非GAAP的财务指标。请参阅“非GAAP财务指标使用”部分。
2 制造业操作、产品研发、工程和销售中心包括按权益法核算的特定操作.
3 员工人数包括我们全资或受控实体的超过162,000名员工，以及被纳入权益法核算的运营中的超过13,000名员工。
| 2024 年第三季度报告，Magna International Inc。 | 1 |
行业板块趋势与风险
我们的运营成果主要取决于我们的客户在北美、欧洲和中国的乘用车和轻型卡车生产水平。虽然我们向每家主要的原始设备制造商["OEM"]供应系统和元件，但我们并不为每辆车提供系统和元件，而且我们的价值从一辆车到另一辆车也没有一致性。因此，相对于市场趋势，我们的客户和项目组合，以及我们在特定车辆生产项目上的价值，也是影响我们成果的重要因素。
通常情况下，OEm生产量与车辆销量保持一致，因此受到这些水平变化的影响。除了车辆销售水平外，生产量通常受到一系列因素的影响，包括：劳工停工；自由贸易安排和关税；货币价值的相对关系；大宗商品价格；供应链和制造行业；熟练劳动力的可用性和相对成本；监管框架；以及其他因素。
整体车辆销售水平受消费者信心水平变化的显著影响，这可能受到消费者感知和与工作、住房和股票市场以及其他宏观经济和政治因素相关的一般趋势的影响。通常影响车辆销售水平和生产量的其他因素包括：车辆的购买力；利率和/或信贷可用性；燃料和能源价格；相对货币价值；消费者对新能源车["EVs"]的接受程度是否存在不确定性；政府向消费者提供购买低排放和零排放车辆的补贴；以及其他因素。
尽管前述的经济、政治和其他因素是全球汽车行业运营背景的一部分，但有许多重要的行业趋势正在塑造汽车行业的未来，并为汽车供应商创造机遇和风险。我们继续执行一项业务策略，该策略根植于我们对汽车行业变化速度和方向的最佳评估，包括与车辆电气化、高级驾驶辅助系统、互联性以及未来移动业务模式相关的趋势。我们的短期和中期营运成功，以及通过我们的业务策略创造长期价值的能力，取决于许多风险和不确定性。重要的行业趋势、我们的业务策略以及我们面临的主要风险，都在我们截至2023年12月31日的年度信息表[AIF]和年度报告表40-F[Form 40-F]中讨论，以及后续的申报文件。就2024年9月30日结束的第三季度而言，那些行业趋势和风险因素基本保持不变，除非：
| · | 增加的 贸易保护主义： 到2024年和2025年，我们运营的28个国家中，有19个将举行或已经举行选举。选举结果可能导致政策转变，影响汽车行业，包括对CO2排放、安全标准、软体和数据隐私以及稀土矿等范畴实施关税和贸易壁垒，和/或修改监管方法。贸易保护主义持续增加-例如，美国和欧盟都对进口其市场的中国电动汽车征收了重大关税。作为回应，中国对从这些地区进口的奢侈内燃机车辆征收了相应的关税。在北美，即将于2024年11月的美国总统选举中，两位主要候选人都表明他们打算利用美墨加协定的现有重新谈判程序，为美国争取更好的贸易条件。其中一名候选人的政纲包括对所有美国贸易伙伴征收重大关税的潜在措施，这可能升级为全球贸易/关税战争。虽然现在还太早去判断对玛格纳具体的影响，但贸易和关税战争可能带来风险，如通货膨胀和借贷成本上升、经济增长减缓，以及股市下跌。 |
| · | 菲斯克破产： 于2024年9月17日，奥地利法院批准了Fisker GmbH【“Fisker Austria”】的重整计划，并且于2024年10月16日，美国一家破产法院批准了其母公司Fisker Inc.【“Fisker”】的第11章破产清算计划。尽管牵涉到Fisker和Fisker Austria的破产程序已告结束，Magna仍然面临与其供应商约$5000万有关的合同义务和取消索赔风险，这涉及到Fisker Ocean SUV停产的终止。此外，作为该车辆的承包制造商和各种元件供应商，Magna可能会面临涉及保固、召回和其他第三方产品相关索赔的风险。目前尚无法估计Magna潜在风险的完整程度。然而，如果这些索赔额显著，可能会对Magna的盈利能力产生重大不利影响。 |
| 2 | 2024年第三季度Magna International Inc.报告 |
非GAAP财务指标的使用
除了按照美国公认的会计原则【"U.S. GAAP"】展示的结果外，本报告还包括调整后的利息和税前盈利【"Adjusted EBIT"】、调整后的EBIt占销售额的百分比、调整后的稀释每股收益和调整后的投资资本报酬率【总称"非美国公认会计原则之财务指标"】。我们认为这些非美国公认会计原则的财务指标提供了额外信息，有助于投资者通过我们管理层所采用的相同财务指标来了解我们的基本表现和趋势。读者应该知道，非美国公认会计原则的财务指标在U.S. GAAP下没有标准化的含义，因此可能无法与其他公司计算类似指标相比较。我们认为，调整后的EBIt、调整后的EBIt占销售额的百分比、调整后的稀释每股收益和调整后的投资资本报酬率提供了对我们的投资者有用的信息，以衡量我们的营运表现，因为它们排除了某些不反映持续营运利润的项目，并方便与之前期间进行比较。任何非美国公认会计原则的财务指标的呈现都不应仅仅孤立地考虑，也不应作为我们根据U.S. GAAP编制的相关财务结果的替代品。非美国公认会计原则的财务指标与最直接可比的U.S. GAAP财务指标一起呈现，并且可以在本MD&A的"非美国公认会计原则财务指标调解"部分找到与最直接可比的U.S. GAAP财务指标的调解。
营业成果报告
平均汇率期货
| 在三个月内 截至9月30日结束， | 对于这九个月
截至9月30日结束， | ||||||||||||||||||
| 2024 | 2023 | 变动 | 2024 | 2023 | 变动 | ||||||||||||||
| 1 加币等于美元 | 0.733 | 0.746 | - | 2 | % | 0.735 | 0.744 | - | 1 | % | |||||||||
| 1 欧元指数等于美元 | 1.099 | 1.088 | + | 1 | % | 1.087 | 1.083 | — | |||||||||||
| 1人民币等于美元 | 0.140 | 0.138 | + | 1 | % | 0.139 | 0.142 | - | 2 | % | |||||||||
前表反映了我们业务中最常用的货币与我们的美元报告货币之间的平均外汇汇率。
那些使用美元之外货币的业务运营结果会使用相应时期的平均汇率转换成美元。在本管理层讨论与分析中，会涉及外国业务的翻译对相关美元金额的影响。
我们的结果也可能受到汇率波动对外币交易（例如以外币计价的原材料购买或销售）的影响。 然而，由于我们采用的套期保值计划，本期的外币交易并未完全受到汇率波动的影响。我们根据情况将外币交易以套期汇率记录。
最后，报告的结果受控制项功能货币以外货币计价的货币项目再评估和／或结算产生的汇率期货收益和损失影响。这些收益和损失记录在销售、一般和管理费用中。
轻型车生产量
我们的营运结果主要取决于下表所反映的地区的轻型车生产：
轻型车辆生产量 (千辆 单位)
| 在截至九月三十日的三个月内 在截至九月三十日结束时 | 在截至九月三十日的九个月内 在截至九月三十日结束时 | |||||||||||||||
| 2024 | 2023 | 变动 | 2024 | 2023 | 变动 | |||||||||||
| 北美 | 3,688 | 3,930 | - | 6 | % | 11,833 | 11,894 | - | 1 | % | ||||||
| 欧洲 | 3,761 | 3,838 | - | 2 | % | 12,488 | 13,093 | - | 5 | % | ||||||
| 中国 | 7,165 | 7,628 | - | 6 | % | 20,812 | 20,371 | + | 2 | % | ||||||
| 其他 | 6,795 | 6,998 | - | 3 | % | 20,032 | 20,697 | - | 3 | % | ||||||
| 全球货币 | 21,409 | 22,394 | - | 4 | % | 65,165 | 66,055 | - | 1 | % | ||||||
| 2024年第三季度Magna International Inc.报告 | 3 |
营运结果 - 截至2024年9月30日三个月
销售
2024年第三季度，销售额较2023年第三季度的106.9亿美元减少4%，降至10.28亿美元，主要原因是：
| · | 全球轻型车生产量下降； | |
| · | 某些项目的生产结束； | |
| · | 于2023年第三季度期间或之后进行的卖出净额减少，对销售额造成5500万美元的负面影响； | |
| · | 完成车辆组装量下降；而 | |
| · | 2023年第三季度后的顾客价格折让净额。 |
这些因素部分被抵销：
| · | 于2023年第三季度期间或其后推出新方案； | |
| · | 顾客价格提升以弥补部分较高的生产投入成本； | |
| · | UAW劳资罢工对2023年第三季度销售额造成负面影响，约$5000万；和 | |
| · | 外币对美元汇率的净强化，增加了报告的美元销售额$3300万。 |
营业成本
| 在三个月内 | ||||||||||||
| 截至9月30日的 | ||||||||||||
| 2024 | 2023 | 变动 | ||||||||||
| 物料 | $ | 6,157 | $ | 6,512 | $ | (355 | ) | |||||
| 直接人工 | 757 | 745 | 12 | |||||||||
| 营业费用 | 1,914 | 2,007 | (93 | ) | ||||||||
| 营业成本 | $ | 8,828 | $ | 9,264 | $ | (436 | ) | |||||
营业成本在2024年第三季减少了43600万美元，至88.3亿美元，较2023年第三季的92.6亿美元低，主要原因是：
| · | 较低的生产销售相关之材料、直接人工和间接费用； | |
| · | 我们完整车辆部门因销售减少而降低的材料、直接人工和间接成本，该部门与我们整体平均水平相比具有较高的材料含量； | |
| · | 在2024年第三季和2023年第三季的商业项目，对年度基础产生了净利影响； | |
| · | 操作卓越和成本措施的影响；和 | |
| · | 在2023年第三季或随后的剔除项目中，减值了营业成本。 |
这些因素部分被抵销：
| · | 生产投入成本增加，扣除顾客应付的部分，包括劳动力和某些商品成本； | |
| · | 2023年第三季度UAW劳工罢工对业绩的负面影响； | |
| · | 外币对美元汇率走强，导致报告的美元商品销货成本增加了2700万美元；和 | |
| · | 产品保固成本增加了1400万美元。 |
折旧
折旧在2024年第三季增加2600万至38400万美元，相比于2023年第三季的35800万美元主要是由于投资新的和现有设施以支持2023年第三季后推出的计划增加，部分抵销了某些计划生产结束。
| 4 | 2024年第三季度Magna International Inc.报告 |
取得之无形资产摊销
收购的无形资产摊销在2024年第三季度减少 400万美元，降至2800万美元，相较于2023年第三季度的3200万美元。
销售、总务及行政 ["SG&A"]
2024年第三季度，与2023年第三季度的49100万相比，SG&A费用下降了400万至487 百万美元，主要原因是：
| · | 下修法律费用，包括2023年第三季度由于收购Veoneer AS和融资活动而产生的成本；以及 | |
| · | 下修对某些应收帐款和其他余额的提拨。 |
这些因素部分被抵销：
| · | 在2024年第三季度，相对于2023年第三季度，与重新衡量以非本功能货币计值的净递延税款资产有关的更高外汇亏损不利影响为负900万美元； | |
| · | 2024年第三季度净交易外汇收益较2023年第三季度减少；以及 | |
| · | 在新设施发生的更高预营运成本。 |
利息费用，净额
2024年第三季，我们记录到利率期货支出为5400万美元，较2023年第三季的4900万美元增加了500万美元，主要是由于更高的短期借款利息支出，以及在2024年第一季和第二季发行的债券利率高于在2024年第二季和2013年第四季偿还的债券。这些因素部分被由于利率较高，现金和投资所赚取的较高利息收入所抵销。
股息收入
对比2023年第三季的4000万美元，2024年第三季的股本收益下降了2700万至1300万美元，主要是由于第三季商业项目的减少收益导致的，这在年度基础上对2024年和2023年第三季产生了不利影响，以及产品组合不利和由于部分股权计入的实体销售额下降导致的收入减少。这些因素部分抵消了较低的推出成本。
其他（收入）费用，净额
| 在三个月内 | ||||||||
| 截至9月30日的 | ||||||||
| 2024 | 2023 | |||||||
| 与菲斯克相关的影响 (1) | $ | (189 | ) | $ | — | |||
| 投资 (2) | 1 | (19 | ) | |||||
| 重组活动 (3) | — | (1 | ) | |||||
| 俄罗斯业务 (4) | — | 16 | ||||||
| $ | (188 | ) | $ | (4 | ) | |||
| (1) | 与菲斯克相关的影响 |
菲斯克在2024年向美国申请破产保护第11章，并在奥地利寻求类似保护。相关联，我们在当年记录了与我们的Fisker相关资产的减值费用，以及在2024年第一季度的重组费用。在此破产程序中，我们于2024年第三季度终止了我们对Fisker Ocean SUV的制造协议，因此我们承认了先前延迟收入中的19600万美元，该收入与我们的Fisker认股权有关。
菲斯克相关资产的减损
2024年第一季度，我们对与菲斯克相关的资产，包括生产应收款、库存、固定资产和其他资本支出进行了26100万美元的减损处理[税后为20500万美元]。与菲斯克计划相关的购买义务和供应商结算相关，我们在2024年第二季度另外记录了1900万美元的费用[税后1500万美元]，并在2024年第三季度记录了700万美元的费用[税后500万美元]。截至2024年9月30日的九个月，我们与菲斯克有关的资产减损费用总计28700万美元[税后22500万美元]。
| 2024年第三季度Magna International Inc.报告 | 5 |
以下表格概括了截至2024年9月30日的九个月中各部门的净资产减值：
| 身体 | ||||||||||||||||||||
| 外观与 | 动力与 | 座椅 | 总费用 | |||||||||||||||||
| 结构 | 愿景 | 系统 | 车辆 | 总计 | ||||||||||||||||
| 应收帐款 | $ | 3 | $ | 4 | $ | 2 | $ | 14 | $ | 23 | ||||||||||
| 存货 | 5 | 53 | 8 | 2 | 68 | |||||||||||||||
| 其他资产，净额 | — | 54 | — | 90 | 144 | |||||||||||||||
| 固定资产，扣除累计折旧和摊销 | 1 | 49 | 5 | 3 | 58 | |||||||||||||||
| 其他应计负债 | (5 | ) | 1 | 6 | (10 | ) | (8 | ) | ||||||||||||
| 营运租赁权使用资产 | 1 | — | 1 | — | 2 | |||||||||||||||
| $ | 5 | $ | 161 | $ | 22 | $ | 99 | $ | 287 | |||||||||||
我们仍然面临与菲斯克Ocean SUV生产终止相关的约定义务和来自供应商约5000万美元的取消索赔风险。
菲斯克warrants的减损及相关透过收入的认列
菲斯克向我们发行了约1950万股的认股权证，用于与我们在菲斯克关于共享平台、工程和菲斯克Ocean SUV制造业协议中的订定。这些认股权证于2021年和2022年根据特定里程碑条件累积，并在每季度进行市值核算。
在2024年第一季度，我们记录了一笔3300万美元【税后2500万美元】对这些认股权的减值费用，使认股权的价值减至零。
当认股权证发行并与授予条款实现时，我们将相应金额记录为其他应计负债和其他长期负债中的透过营业收入抵销的金额。随著履约义务的完成，部分这些透过营业收入的透过收入得以确认为收入。在2024年第三季度，制造菲斯克威风SUV的协议被终止，我们将先前透过延迟收入中剩余的1亿9600万美元收入确认为收入。相关的破产保护法阻止了我们早期终止协议和相应透过延迟收入的确认。
| (2) | 投资 |
| 在三个月内 | ||||||||
| 截至9月30日的 | ||||||||
| 2024 | 2023 | |||||||
| 重新评估公共和股权投资 | $ | 8 | $ | (1 | ) | |||
| 重新评估上市公司warrants | (7 | ) | (18 | ) | ||||
| 其他（收益）费用，净 | 1 | (19 | ) | |||||
| 截至2024年6月30日及2023年同期六个月，其他综合损益中累积额变动组成为： | 2 | 5 | ||||||
| 归属于Magna的净亏损（收益） | $ | 3 | $ | (14 | ) | |||
| (3) | 重组活动 |
2023年第三季，我们记录了总值700万美元的重组费用[税后500万美元]，以及由于我们Power & Vision部门的重组活动而出售一幢大楼而获得了800万美元[税后700万美元]的收益。
| (4) | 在俄罗斯的运营 |
在2023年第三季，我们完成了所有在俄罗斯的投资转让，导致损失1600万美元【经税后为1600万美元】，包括2300万美元的净现金流出。
| 6 | 2024年第三季度Magna International Inc.报告 |
收益税前营运
2024年第三季度税前营业收入为70000万美元，较2023年第三季度的53800万美元有所增加。这1600万美元的增加乃源于上述各项变化：
| 三个月 | ||||||||||||
| 截至九月三十日 | ||||||||||||
| 2024 | 2023 | 变更 | ||||||||||
| 销售 | $ | 10,280 | $ | 10,688 | $ | (408 | ) | |||||
| 成本和开支 | ||||||||||||
| 出售商品成本 | 8,828 | 9,264 | (436 | ) | ||||||||
| 折旧 | 384 | 358 | 26 | |||||||||
| 已获取的无形资产摊销 | 28 | 32 | (4 | ) | ||||||||
| 销售、一般及行政 | 487 | 491 | (4 | ) | ||||||||
| 利息费用净额 | 54 | 49 | 5 | |||||||||
| 股权收入 | (13 | ) | (40 | ) | 27 | |||||||
| 其他（收入）费用，净值 | (188 | ) | (4 | ) | (184 | ) | ||||||
| 所得税前营业所得收入 | $ | 700 | $ | 538 | $ | 162 | ||||||
所得税
| 截至九月三十日为止的三个月 | ||||||||||||||||
| 2024 | 2023 | |||||||||||||||
| 依报告收入扣税 | $ | 192 | 27.4 | % | $ | 121 | 22.5 | % | ||||||||
| 对其他(收益)费用、净值及已取得之无形资产摊销的税效应 | (45 | ) | (0.2 | ) | 3 | (0.6 | ) | |||||||||
| $ | 147 | 27.2 | % | $ | 124 | 21.9 | % | |||||||||
在除去其他收益/费用（不包括税务影响）的净额和取得之无形资产摊销之后，我们2024年第三季的有效所得税率上升至27.2%，相较于2023年第三季的21.9%，主要是因为为美国通用会计准则目的所确认的不利汇率调整和收入组合变更。
归属于非控制性权益的收入
非控股权益应占溢利在2024年第三季度为2400万美元，较2023年第三季度的2300万美元增加了100万美元，这是因为中国的非全资企业的净利润提高。
归属于magna international inc的净利润。
2024年第三季度，对Magna International Inc.归属的净利润为4,8400万美元，较2023年第三季度的3,9400万美元有所增加。这9,000万美元的增长是由于营运收入增加了16,200万美元，部分抵消了所得税增加的7,100万美元以及对非控制权益的所得增加了100万美元。
| 2024年第三季度Magna International Inc.报告 | 7 |
每股盈利
 |
| 在三个月内 | ||||||||||||
| 截至9月30日的 | ||||||||||||
| 2024 | 2023 | 变动 | ||||||||||
| 每股普通股盈利 | ||||||||||||
| 基础 | $ | 1.68 | $ | 1.37 | + | 23 | % | |||||
| 稀释 | $ | 1.68 | $ | 1.37 | + | 23 | % | |||||
| 普通股权重平均流通股数（百万） | ||||||||||||
| 基础 | 287.3 | 286.3 | — | |||||||||
| 稀释 | 287.3 | 286.8 | — | |||||||||
| 调整后稀释每股收益 | $ | 1.28 | $ | 1.46 | - | 12 | % | |||||
2024年第三季每股稀释盈利为1.68美元，较2023年第三季的1.37美元增加了0.31美元，这是因为净利润归属于如上所述的magna international inc。
其他（收入）支出，净额及取得之无形资产摊提费用，均经过税后处理，正面影响2024年第三季稀释每股收益0.40美元，分别在2013年第三季及2014年第三季对稀释每股收益产生负面影响0.09美元。自"非GAAP财务指标协调"部分调和后，认为2024年第三季调整后的稀释每股收益为1.28美元，较2013年第三季的1.46美元降低了0.18美元。
| 8 | 2024年第三季度Magna International Inc.报告 |
非依据通用会计准则的绩效指标 2024年9月30日结束的三个月
销售额调整后息税前利润占比
下表显示2024年第三季相较于2023年第三季，Magna各部门销售额和调整后EBIt的变化，以及每个部门变化对Magna调整后EBIt销售额的影响百分比。
| 调整后的息税前利润 | |||||||||||
| 调整后的 | 作为百分比 | ||||||||||
| 销售额 | 息税前净收益 | 销售额的 | |||||||||
| 2023年第三季 | $ | 10,688 | $ | 615 | 5.8 | % | |||||
| 与以下增加（减少）相关： | |||||||||||
| 车身外部和结构 | (316 | ) | (85 | ) | - | 0.6 | % | ||||
| 动力与视觉 | 92 | 58 | + | 0.5 | % | ||||||
| 座椅系统 | (150 | ) | (19 | ) | - | 0.1 | % | ||||
| 完整车辆 | (26 | ) | 32 | + | 0.3 | % | |||||
| 公司及其他 | (8 | ) | (7 | ) | - | 0.1 | % | ||||
| 2024年第三季度 | $ | 10,280 | $ | 594 | 5.8 | % | |||||
调整后的EBIt占销售额的百分比分别为2024年和2023年第三季度的5.8%。增加调整后的EBIt占销售额百分比的因素包括：
| · | 在2024年第三季和2023年第三季的商业项目，对年度基础产生了净利影响； | |
| · | 生产力和效率的提升，包括在某些表现不佳设施降低成本； 和 | |
| · | 在2023年第三季度UAW劳工罢工带来的负面影响。 |
这些因素被以下因素抵销：
| · | 销售下降导致收入减少； | |
| · | 生产投入成本增加，扣除顾客应付的部分，包括劳动力和某些商品成本； | |
| · | 股权收益减少； | |
| · | 扩大净保固成本； | |
| · | 制造量下降导致收入减少； | |
| · | 供应链溢价，部分原因是供应商破产； | |
| · | 新设施的预营运成本增加；并 | |
| · | 发布成本增加。 |
| 2024年第三季度Magna International Inc.报告 | 9 |
投资资本调整后收益率
调整后资本投资回报率于2024年第三季度下降至9.0%，相比于2023年第三季度的10.3%，这是因为调整后税后营运利润减少以及平均投资资本增加。
平均投入资本于2024年第三季增加了59600万美元，达到192.4亿美元，相较于2023年第三季的186.4亿美元，主要原因如下:
| · | 固定资产平均投资超过固定资产折旧支出的平均值; | |
| · | 2023年第三季度期间或之后的收购, 减除出售; 以及 | |
| · | 外币对美元的净增值。 |
这些因素部分被抵销：
| · | 资产和负债的平均营运降低； | |
| · | 2024年前九个月涉及菲斯克的减损和重组；和 | |
| · | 公共和私人股权公司以及公共公司warrants的投资减少。 |
| 10 | 2024年第三季度Magna International Inc.报告 |
分析部门
我们是一家全球汽车供应商，具有完整的车辆工程和承包制造专业知识，以及产品能力包括车身、底盘、外观、座椅、动力传动系统、主动驾驶辅助、电子、机电一体化、镜子、照明和车顶系统。我们在许多领域也拥有电子和软件能力。
我们的报告分部包括：车身外观与结构；动力与视觉；座椅系统；以及完整车辆。
| 三个月 截至九月三十日 | ||||||||||||||||||||||||
| 销售 | 调整后利润 | |||||||||||||||||||||||
| 2024 | 2023 | 变更 | 2024 | 2023 | 变更 | |||||||||||||||||||
| 车身外观及结构 | $ | 4,038 | $ | 4,354 | $ | (316 | ) | $ | 273 | $ | 358 | $ | (85 | ) | ||||||||||
| 力量与愿景 | 3,837 | 3,745 | 92 | 279 | 221 | 58 | ||||||||||||||||||
| 座椅系统 | 1,379 | 1,529 | (150 | ) | 51 | 70 | (19 | ) | ||||||||||||||||
| 完整车辆 | 1,159 | 1,185 | (26 | ) | 27 | (5 | ) | 32 | ||||||||||||||||
| 企业及其他 | (133 | ) | (125 | ) | (8 | ) | (36 | ) | (29 | ) | (7 | ) | ||||||||||||
| 可报告区段总计 | $ | 10,280 | $ | 10,688 | $ | (408 | ) | $ | 594 | $ | 615 | $ | (21 | ) | ||||||||||
外观和结构
| 在三个月内 | ||||||||||||||||
| 截至9月30日的 | ||||||||||||||||
| 2024 | 2023 | 变动 | ||||||||||||||
| 销售额 | $ | 4,038 | $ | 4,354 | $ | (316 | ) | - | 7 | % | ||||||
| 调整后的息税前利润 | $ | 273 | $ | 358 | $ | (85 | ) | - | 24 | % | ||||||
| 调整后的EBIt占销售额的百分比 | 6.8 | % | 8.2 | % | - | 1.4 | % | |||||||||
销售 - 车身外部与结构
2024年第三季度和2023年第三季度相比，销售额下降了7%，从43.5亿下降到40.4亿主要原因是：
| · | 某些节目的制作结束，包括： |
| · | 道奇 充电器; | |
| · | 雪佛兰 Bolt EV; 而 | |
| · | 福特 边缘; |
| · | 某些节目的生产量有所下降； | |
| · | 在2023年第三季度期间或随后进行出售，导致销售额减少6100万美元； 和 | |
| · | 2023年第三季度后的顾客价格折让净额。 |
这些因素部分被抵销：
| · | 自2023年第三季度期间或其后开展的项目包括： |
| · | 雪佛兰 鸣叫和刀锋EV; | |
| · | 沃尔沃 EX90; and | |
| · | 宝马 X2; |
| · | UAW劳工罢工带来了负面影响，使2023年第三季销售额大约下降了3500万美元； | |
| · | 通过提高价格来弥补某些生产原材料成本增加；并且 | |
| · | 2024年和2023年第三季的商业项目对年度基准条件有净利影响。 |
| 2024年第三季度Magna International Inc.报告 | 11 |
 |
调整后的EBIT和调整后的EBIT占销售额百分比 – 车身外部和结构
调整后的EBIt在2024年第三季度下降了8500万美元，至2亿7300万美元，相较于2023年第三季度的3亿5800万美元，调整后的EBIt占销售额的比例下降至6.8%，而非8.2%。这些下降主要是由于：
| · | 销售下降导致收入减少； | |
| · | 生产投入成本增加，扣除顾客应付的部分，包括劳动力和某些商品成本； | |
| · | 供应链溢价，部分原因是供应商破产；以及 | |
| · | 在新设施发生的更高预营运成本。 |
这些因素部分被抵销：
| · | 2023年第三季度UAW劳工罢工对业绩的负面影响； | |
| · | 生产力和效率的提升，包括在某些表现不佳设施降低成本； 和 | |
| · | 2024年第三季和2023年商业项目对年度基础具有净有利影响。 |
POWER＆VISION
| 在三个月内 | ||||||||||||||||
| 截至9月30日的 | ||||||||||||||||
| 2024 | 2023 | 变动 | ||||||||||||||
| 销售额 | $ | 3,837 | $ | 3,745 | $ | 92 | + | 2 | % | |||||||
| 调整后的息税前利润 | $ | 279 | $ | 221 | $ | 58 | + | 26 | % | |||||||
| 调整后的EBIt占销售额的百分比 | 7.3 | % | 5.9 | % | + | 1.4 | % | |||||||||
销售 - 力量与愿景
2024年第三季度，销售增长2%，或增加9200万至38.4亿美元，较2023年第三季度的37.5亿美元主要原因是：
| · | 自2023年第三季度期间或其后开展的项目包括： |
| · | 奇瑞 捷途旅人; | |
| · | 宝马 X2; and | |
| · | Mini Countryman; |
| · | 顾客价格提升以弥补部分较高的生产投入成本； | |
| · | 外币对美元的加强，导致美元销售额增加1600万美元；和 | |
| · | 2024年第二季度进行的收购，增加了600万美元的销售额。 |
| 12 | 2024年第三季度Magna International Inc.报告 |
这些因素部分被抵销：
| · | 某些节目的制作结束，包括： |
| · | 菲斯克 海洋; | |
| · | 道奇 收割者; 和 | |
| · | 菲亚特 500; |
| · | 某些节目的制作规模较低；并且 | |
| · | 2023年第三季度后的顾客价格折让净额。 |
 |
调整后的EBIT和调整后的EBIT作为销售额的百分比 – Power & Vision
调整后的EBIt在2024年第三季增加了5800万至27900万美元，相比之下，2023年第三季的数字为22100万美元，调整后的EBIt占销售额的比例从5.9%增至7.3%。这些增长主要是由于：
| · | 销售增加，包括由于运营卓越和成本倡议的影响改善了利润率，导致盈利增加；以及 | |
| · | 2024年第三季和2023年商业项目对年度基础具有净有利影响。 |
这些因素部分被抵销：
| · | 股权收益减少； | |
| · | 生产成本增加，包括某些商品、劳动力和 能源 的客户收回，扣除生产输入成本； | |
| · | 维修保养成本增加1500万美元。 |
座椅系统
| 在三个月内 | ||||||||||||||||
| 截至9月30日的 | ||||||||||||||||
| 2024 | 2023 | 变动 | ||||||||||||||
| 销售额 | $ | 1,379 | $ | 1,529 | $ | (150 | ) | - | 10 | % | ||||||
| 调整后的息税前利润 | $ | 51 | $ | 70 | $ | (19 | ) | - | 27 | % | ||||||
| 调整后的EBIt占销售额的百分比 | 3.7 | % | 4.6 | % | - | 0.9 | % | |||||||||
| 2024年第三季度Magna International Inc.报告 | 13 |
销售-座椅系统
2024年第三季度销售额较2023年第三季度减少10%，从15.3亿美元降至13.8十亿美元，主要原因是：
| · | 在某些节目中降低生产 包括： |
| · | 克莱斯勒 Pacifica; | |
| · | 吉普 Grand Cherokee; 和 | |
| · | 奥迪 A3; |
| · | 某些节目的制作结束，包括： |
| · | 福特 边缘; | |
| · | 雪佛兰 Bolt EV; 而 | |
| · | Škoda Superb；并 |
| · | 2023年第三季度后的顾客价格折让净额。 |
这些因素部分被抵销：
| · | 自2023年第三季度期间或其后开展的项目包括： |
| · | Mini Countryman; | |
| · | 斯柯达 科迪亚克; 而 | |
| · | 沃尔沃 EX30; |
| · | 2024年第三季和2023年的商品，在年度基础上产生了有利影响；并且 | |
| · | 外币对美元的汇率走强，使报告中的美元销售额增加了$700万。 |
 |
调整后的EBIt和调整后的EBIt占销售额百分比-座椅系统
调整后的EBIt从2024年第三季度的7000万下降到5100万，与2023年第三季度的7000万相比，调整后的EBIt占销售额的百分比下降到3.7%，低销售额主要是由于收入减少而导致这些下降。
这些因素部分被抵销：
| · | 在2024年第三季和2023年第三季的商业项目，对年度基础产生了净利影响； | |
| · | 生产力和效率提升，包括在某些先前表现不佳的设施降低成本；和 | |
| · | 降低推出成本。 |
| 14 | 2024年第三季度Magna International Inc.报告 |
完整车辆
| 在三个月内 | ||||||||||||||||
| 截至9月30日结束。 | ||||||||||||||||
| 2024 | 2023 | 变动 | ||||||||||||||
| 完成 车辆组装量 (以千计单位)(i) | 15.5 | 22.9 | (7.4 | ) | - | 32 | % | |||||||||
| 销售额 | $ | 1,159 | $ | 1,185 | $ | (26 | ) | - | 2 | % | ||||||
| 调整后的息税前利润 | $ | 27 | $ | (5 | ) | $ | 32 | — | ||||||||
| 已调整息税折与销售额之比率 | 2.3 | % | (0.4 | )% | + | 2.7 | % | |||||||||
(i)在我们的完整车辆业务生产的车辆已包含在欧洲轻型车辆生产量中。
销售 - 完整车辆
第三季度2024年的销售额较2019年第三季度的11.9亿减少了2％或2,600万美元至11.6亿，组装量减少了32％。销售额下降主要是由于组装量较低，包括Fisker Ocean，部分抵消了有利的方案组合和由于欧元对美元升值而使美元报告销售增加了1,200万美元。
调整后的EBIT和销售额占比 - 完成车辆
2024年第三季度调整后的EBIt为2700万美元，而2023年第三季度的亏损为500万美元，调整后的EBIt占销售额的比例增至2.3%。这些增加主要是由于：
| · | 在2024年第三季和2023年第三季的商业项目，对年度基础产生了净利影响； | |
| · | 较低的 推出、工程和其他成本；以及 | |
| · | 较低的 循环重组成本。 |
这些因素部分被抵销：
| · | 降低工程销售佣金率；和 | |
| · | 低装配量导致收入减少。 |
| magna international inc. 2024年第三季度报告 | 15 |
企业和其他
调整后的EBIt在2024年第三季度为损失3600万美元，而2023年第三季度为损失2900万美元。这700万美元的减少主要是由于：
| · | 2024年第三季度相对于2023年第三季度，由于以其功能货币以外的货币计量的净进延期税资产重测而导致的较高外汇亏损不利影响约900万美元；和 | |
| · | 我们各部门收到的费用下降。 |
These factors were partially offset by:
| · | lower legal fees, including costs incurred during the third quarter of 2023 due to the acquisition of Veoneer AS and financing activities; and | |
| · | lower net transactional foreign exchanges losses in the third quarter of 2024 compared to the third quarter of 2023. |
| 16 | Magna International Inc. Third Quarter Report 2024 |
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
OPERATING ACTIVITIES
| For the three months | ||||||||||||
| ended September 30, | ||||||||||||
| 2024 | 2023 | Change | ||||||||||
| Net income | $ | 508 | $ | 417 | ||||||||
| Items not involving current cash flows | 277 | 404 | ||||||||||
| 785 | 821 | $ | (36 | ) | ||||||||
| Changes in operating assets and liabilities | (58 | ) | (24 | ) | (34 | ) | ||||||
| Cash provided from operating activities | $ | 727 | $ | 797 | $ | (70 | ) | |||||
Cash provided from operating activities
Comparing the third quarter of 2024 to 2023, cash provided from operating activities decreased by $70 million primarily as a result of:
| · | a $182 million decrease in cash received from customers; | |
| · | a $56 million increase in cash taxes; and | |
| · | a $6 million increase in cash interest paid. |
These factors were partially offset by:
| · | a $134 million decrease in cash paid for materials and overhead; | |
| · | a $24 million decrease in cash paid for labour; and | |
| · | higher dividends received from equity investments of $13 million. |
Changes in operating assets and liabilities
During the third quarter of 2024, we used $58 million for operating assets and liabilities primarily consist of:
| · | a $199 million decrease in accounts payable; | |
| · | a $109 million increase in production inventory; and | |
| · | a $12 million decrease in other accrued liabilities. |
These factors were partially offset by:
| · | a $122 million increase in taxes payable; | |
| · | a $81 million increase in accrued wages and salaries; | |
| · | a $25 million decrease in production and other receivables; | |
| · | a $22 million decrease in tooling investment for current and upcoming program launches; and | |
| · | a $11 million decrease in prepaids and other. |
| Magna International Inc. Third Quarter Report 2024 | 17 |
INVESTING ACTIVITIES
| For the three months | ||||||||||||
| ended September 30, | ||||||||||||
| 2024 | 2023 | Change | ||||||||||
| Fixed asset additions | $ | (476 | ) | $ | (630 | ) | ||||||
| Increase in investments, other assets and intangible assets | (115 | ) | (176 | ) | ||||||||
| Increase in public and private equity investments | (1 | ) | (7 | ) | ||||||||
| Proceeds from dispositions | 38 | 32 | ||||||||||
| Net cash inflow (outflow) from disposal of facilities | 78 | (23 | ) | |||||||||
| Cash used for investing activities | $ | (476 | ) | $ | (804 | ) | $ | 328 | ||||
Cash used for investing activities in the third quarter of 2024 was $328 million lower compared to the third quarter of 2023. The change between the third quarter of 2024 and the third quarter of 2023 was primarily due to a $154 million decrease in cash used for fixed assets, the net cash inflow from the disposal of our Body Exteriors & Structures operations in India during the third quarter of 2024, and a $61 million decrease in cash used for investments, other assets and intangible assets.
FINANCING ACTIVITIES
| For the three months | ||||||||||||
| ended September 30, | ||||||||||||
| 2024 | 2023 | Change | ||||||||||
| Dividends paid | $ | (138 | ) | $ | (128 | ) | ||||||
| Decrease in short-term borrowings | (36 | ) | (145 | ) | ||||||||
| Repayments of debt | (20 | ) | (14 | ) | ||||||||
| Dividends paid to non-controlling interests | (10 | ) | (18 | ) | ||||||||
| Issues of debt | 9 | 24 | ||||||||||
| Issue of Common Shares on exercise of stock options | — | 8 | ||||||||||
| Cash used for financing activities | $ | (195 | ) | $ | (273 | ) | $ | 78 | ||||
Cash dividends paid per Common Share were $0.475 for the third quarter of 2024 compared to $0.46 for the third quarter of 2023.
Short-term borrowings decreased $36 million in the third quarter of 2024 primarily due to the repayment of $64 million in notes under the euro-commercial paper program, partially offset by a $46 million increase in notes outstanding under the U.S. commercial paper program.
| 18 | Magna International Inc. Third Quarter Report 2024 |
FINANCING RESOURCES
| As at | As at | |||||||||||
| September 30, | December 31, | |||||||||||
| 2024 | 2023 | Change | ||||||||||
| Liabilities | ||||||||||||
| Short-term borrowings | $ | 828 | $ | 511 | ||||||||
| Long-term debt due within one year | 65 | 819 | ||||||||||
| Current portion of operating lease liabilities | 319 | 399 | ||||||||||
| Long-term debt | 4,916 | 4,175 | ||||||||||
| Operating lease liabilities | 1,458 | 1,319 | ||||||||||
| $ | 7,586 | $ | 7,223 | $ | 363 | |||||||
Financial liabilities increased $363 million to $7.59 billion as at September 30, 2024 primarily as a result of the issuance of $400 million of Senior Notes during the first quarter of 2024, the issuance of Cdn$450 million of Senior Notes during the second quarter of 2024, and an increase in notes outstanding under the U.S commercial paper program. These increases were partially offset by the repayment of $750 million in Senior Notes during the second quarter of 2024, and the repayment of notes under the euro-commercial paper program.
CASH RESOURCES
In the third quarter of 2024, our cash resources increased by $0.1 billion to $1.1 billion, primarily as a result of cash provided from operating activities, partially offset by cash used for investing and financing activities, as discussed above. In addition to our cash resources at September 30, 2024, we had term and operating lines of credit totaling $4.1 billion, of which $2.7 billion was unused and available.
MAXIMUM NUMBER OF SHARES ISSUABLE
The following table presents the maximum number of shares that would be outstanding if all of the outstanding options at October 31, 2024 were exercised:
| Common Shares | 287,342,204 | |||
| Stock options (i) | 6,031,358 | |||
| 293,373,562 |
| (i) | Options to purchase Common Shares are exercisable by the holder in accordance with the vesting provisions and upon payment of the exercise price as may be determined from time to time pursuant to our stock option plans. |
CONTRACTUAL OBLIGATIONS
There have been no material changes with respect to the contractual obligations requiring annual payments during the third quarter of 2024 that are outside the ordinary course of our business. Refer to our MD&A included in our 2023 Annual Report.
| Magna International Inc. Third Quarter Report 2024 | 19 |
RESULTS OF OPERATIONS – FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024
| For the nine months ended September 30, | ||||||||||||||||||||||||
| Sales | Adjusted EBIT | |||||||||||||||||||||||
| 2024 | 2023 | Change | 2024 | 2023 | Change | |||||||||||||||||||
| Body Exteriors & Structures | $ | 12,932 | $ | 13,333 | $ | (401 | ) | $ | 912 | $ | 1,024 | $ | (112 | ) | ||||||||||
| Power & Vision | 11,605 | 10,530 | 1,075 | 575 | 437 | 138 | ||||||||||||||||||
| Seating Systems | 4,289 | 4,618 | (329 | ) | 156 | 174 | (18 | ) | ||||||||||||||||
| Complete Vehicles | 3,784 | 4,337 | (553 | ) | 74 | 81 | (7 | ) | ||||||||||||||||
| Corporate and Other | (402 | ) | (475 | ) | 73 | (77 | ) | (36 | ) | (41 | ) | |||||||||||||
| Total reportable segments | $ | 32,208 | $ | 32,343 | $ | (135 | ) | $ | 1,640 | $ | 1,680 | $ | (40 | ) | ||||||||||
BODY EXTERIORS & STRUCTURES
| For the nine months | ||||||||||||||||
| ended September 30, | ||||||||||||||||
| 2024 | 2023 | Change | ||||||||||||||
| Sales | $ | 12,932 | $ | 13,333 | $ | (401 | ) | - | 3 | % | ||||||
| Adjusted EBIT | $ | 912 | $ | 1,024 | $ | (112 | ) | - | 11 | % | ||||||
| Adjusted EBIT as a percentage of sales | 7.1 | % | 7.7 | % | - | 0.6 | % | |||||||||
Sales – Body Exteriors & Structures
Sales decreased 3% or $401 million to $12.93 billion for the nine months ended September 30, 2024 compared to $13.33 billion for the nine months ended September 30, 2023, primarily due to:
| · | the end of production of certain programs, including the: |
| · | Dodge Charger; | |
| · | Chevrolet Bolt EV; and | |
| · | Chevrolet Camaro; |
| · | lower production on certain programs, including the: |
| · | Jeep Grand Cherokee; | |
| · | Chrysler Pacifica; and | |
| · | Audi A3; |
| · | divestitures during or subsequent to the first nine months of 2023, which decreased sales by $80 million; | |
| · | the net weakening of foreign currencies against the U.S. dollar, which decreased reported U.S. dollar sales by $37 million; and | |
| · | net customer price concessions subsequent to the first nine months of 2023. |
These factors were partially offset by:
| · | the launch of programs during or subsequent to the first nine months of 2023, including the: |
| · | Ford F-Series Super Duty; | |
| · | Chevrolet Silverado EV and GMC Sierra EV; | |
| · | GMC Hummer EV SUV; and | |
| · | Chevrolet Equinox and Blazer EV. |
| 20 | Magna International Inc. Third Quarter Report 2024 |
Adjusted EBIT and Adjusted EBIT as a percentage of sales – Body Exteriors & Structures
Adjusted EBIT decreased $112 million to $912 million for the nine months ended September 30, 2024 compared to $1,024 million for the nine months ended September 30, 2023 and Adjusted EBIT as a percentage of sales decreased to 7.1% from 7.7%. These decreases were primarily as a result of:
| · | higher production input costs net of customer recoveries, primarily for labour and certain commodities; | |
| · | reduced earnings on lower sales; | |
| · | supply chain premiums, partially as a result of a supplier bankruptcy; | |
| · | higher employee profit sharing and incentive compensation; and | |
| · | higher recuring restructuring costs. |
These factors were partially offset by productivity and efficiency improvements, including lower costs at certain underperforming facilities.
POWER & VISION
| For the nine months | ||||||||||||||||
| ended September 30, | ||||||||||||||||
| 2024 | 2023 | Change | ||||||||||||||
| Sales | $ | 11,605 | $ | 10,530 | $ | 1,075 | + | 10% | ||||||||
| Adjusted EBIT | $ | 575 | $ | 437 | $ | 138 | + | 32% | ||||||||
| Adjusted EBIT as a percentage of sales | 5.0 | % | 4.2 | % | + | 0.8 | % | |||||||||
Sales – Power & Vision
Sales increased 10% or $1.08 billion to $11.61 billion for the nine months ended September 30, 2024 compared to $10.53 billion for the nine months ended September 30, 2023, primarily due to:
| · | the launch of programs during or subsequent to the first nine months of 2023, including the: |
| · | Chery Jetour Traveller; | |
| · | Mercedes-Benz E-Class; and | |
| · | BMW X2; |
| · | acquisitions, net of divestitures, during or subsequent to the first nine months of 2023, which increased sales by $609 million; | |
| · | higher production on certain programs; and | |
| · | customer price increases to recover certain higher production input costs. |
These factors were partially offset by:
| · | the end of production of certain programs, including the: |
| · | Dodge Charger; | |
| · | Fisker Ocean; and | |
| · | Chevrolet Camaro; |
| · | the net weakening of foreign currencies against the U.S. dollar, which decreased reported U.S. dollar sales by $69 million; and | |
| · | net customer price concessions subsequent to the first nine months of 2023. |
| Magna International Inc. Third Quarter Report 2024 | 21 |
Adjusted EBIT and Adjusted EBIT as a percentage of sales – Power & Vision
Adjusted EBIT increased $138 million to $575 million for the nine months ended September 30, 2024 compared to $437 million for the nine months ended September 30, 2023 and Adjusted EBIT as a percentage of sales increased to 5.0% from 4.2%. These increases were primarily as a result of:
| · | increased earnings on higher sales, including improved margins due to the impact of operational excellence and cost initiatives; | |
| · | commercial items in the first nine months of 2024 and 2023, which had a net favourable impact on a year over year basis; | |
| · | lower net engineering costs, including spending related to our electrification and active safety businesses; | |
| · | customer recoveries net of higher production input costs, including for freight and energy, partially offset by higher labour costs; and | |
| · | costs incurred during the first nine months of 2023 relating to the acquisition of Veoneer AS. |
These factors were partially offset by:
| · | lower equity income; | |
| · | higher launch costs; | |
| · | acquisitions, net of divestitures, during or subsequent to the first nine months of 2023; | |
| · | higher net warranty costs of $22 million; and | |
| · | higher recurring restructuring costs. |
SEATING SYSTEMS
| For the nine months | ||||||||||||||||
| ended September 30, | ||||||||||||||||
| 2024 | 2023 | Change | ||||||||||||||
| Sales | $ | 4,289 | $ | 4,618 | $ | (329 | ) | - | 7 | % | ||||||
| Adjusted EBIT | $ | 156 | $ | 174 | $ | (18 | ) | - | 10 | % | ||||||
| Adjusted EBIT as a percentage of sales | 3.6 | % | 3.8 | % | - | 0.2 | % | |||||||||
| 22 | Magna International Inc. Third Quarter Report 2024 |
Sales – Seating Systems
Sales decreased 7% or $329 million to $4.29 billion for the nine months ended September 30, 2024 compared to $4.62 billion for the nine months ended September 30, 2023, primarily due to:
| · | the end of production of certain programs, including the: |
| · | Chevrolet Bolt EV; | |
| · | Skoda Superb; and | |
| · | Lincoln Nautilus; |
| · | lower production on certain programs; | |
| · | the net weakening of foreign currencies against the U.S. dollar, which decreased reported U.S. dollar sales by $14 million; and | |
| · | net customer price concessions subsequent to the first nine months of 2023. |
These factors were partially offset by:
| · | the launch of programs during or subsequent to the first nine months of 2023, including the: |
| · | Mini Countryman; | |
| · | Volvo EX30; and | |
| · | Lynk & Co 08; and |
| · | commercial items in the first nine months of 2024 and 2023, which had a net favourable impact on a year over year basis. |
Adjusted EBIT and Adjusted EBIT as a percentage of sales – Seating Systems
Adjusted EBIT decreased $18 million to $156 million for the nine months ended September 30, 2024 compared to $174 million for the nine months ended September 30, 2023 and Adjusted EBIT as a percentage of sales decreased to 3.6% from 3.8%. These decreases were primarily due to:
| · | reduced earnings on lower sales; and | |
| · | higher recurring restructuring costs. |
These factors were partially offset by:
| · | lower launch costs; | |
| · | customer recoveries, net of higher production input costs primarily related to business in Argentina; and | |
| · | commercial items in the first nine months of 2024 and 2023, which had a net favourable impact on a year over year basis. |
COMPLETE VEHICLES
| For the nine months | ||||||||||||||||
| ended September 30, | ||||||||||||||||
| 2024 | 2023 | Change | ||||||||||||||
| Complete Vehicle Assembly Volumes (thousands of units)(i) | 56.4 | 83.7 | (27.3 | ) | - | 33 | % | |||||||||
| Sales | $ | 3,784 | $ | 4,337 | $ | (553 | ) | - | 13 | % | ||||||
| Adjusted EBIT | $ | 74 | $ | 81 | $ | (7 | ) | - | 9 | % | ||||||
| Adjusted EBIT as a percentage of sales | 2.0 | % | 1.9 | % | + | 0.1 | % | |||||||||
(i) Vehicles produced at our Complete Vehicle operations are included in Europe Light Vehicle Production volumes.
| Magna International Inc. Third Quarter Report 2024 | 23 |
Sales – Complete Vehicles
Sales decreased 13% or $553 million to $3.78 billion for the nine months ended September 30, 2024 compared to $4.34 billion for the nine months ended September 30, 2023 and assembly volumes decreased 33%. The decrease in sales is substantially a result of lower assembly volumes, including the end of production of the BMW 5-Series. This factor was partially offset by:
| · | favourable program mix; | |
| · | commercial items in the first nine months of 2024 and 2023, which had a net favourable impact on a year over year basis; and | |
| · | a $12 million increase in reported U.S. dollar sales due to the strengthening of the euro against the U.S. dollar. |
Adjusted EBIT and Adjusted EBIT as a percentage of sales – Complete Vehicles
Adjusted EBIT decreased $7 million to $74 million for the nine months ended September 30, 2024 compared to $81 million for the nine months ended September 30, 2023 while Adjusted EBIT as a percentage of sales increased to 2.0% from 1.9%. The decrease in Adjusted EBIT was substantially due to reduced earnings on lower assembly volumes.
The negative impact of lower volumes was partially offset by:
| · | commercial items in the first nine months of 2024 and 2023, which had a net favourable impact on a year over year basis; | |
| · | lower recurring restructuring costs; and | |
| · | lower launch, engineering and other costs. |
CORPORATE AND OTHER
Adjusted EBIT was a loss of $77 million for the nine months ended September 30, 2024 compared to a loss of $36 million for the nine months ended September 30, 2023. The $41 million decrease was primarily the result of:
| · | a $50 million unfavourable impact of foreign exchange losses in the first nine months of 2024 compared to foreign exchange gains in the first nine months of 2023 related to the re-measurement of net deferred tax assets that are denominated in a currency other than their functional currency; | |
| · | increased investments in research, development and new mobility; and | |
| · | a decrease in fees received from our divisions. |
These factors were partially offset by:
| · | lower incentive compensation; | |
| · | lower legal fees, including costs incurred during the first nine months of 2023 due to the acquisition of Veoneer AS and financing activities; | |
| · | net transactional foreign exchange gains in the first nine months of 2024 compared to net transactional foreign exchange losses during in the first nine months of 2023; and | |
| · | gain on sale of an equity-method investment during the first quarter of 2024. |
| 24 | Magna International Inc. Third Quarter Report 2024 |
NON-GAAP PERFORMANCE MEASURES - FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024
ADJUSTED EBIT AS A PERCENTAGE OF SALES
The table below shows the change in Magna's Sales and Adjusted EBIT by segment and the impact each segment's changes have on Magna's Adjusted EBIT as a percentage of sales for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023:
| Adjusted EBIT | ||||||||||||
| Adjusted | as a percentage | |||||||||||
| Sales | EBIT | of sales | ||||||||||
| Nine months ended September 30, 2023 | $ | 32,343 | $ | 1,680 | 5.2 | % | ||||||
| Increase (decrease) related to: | ||||||||||||
| Body Exteriors & Structures | (401 | ) | (112 | ) | - | 0.3 | % | |||||
| Power & Vision | 1,075 | 138 | + | 0.3 | % | |||||||
| Seating Systems | (329 | ) | (18 | ) | — | |||||||
| Complete Vehicles | (553 | ) | (7 | ) | + | 0.1 | % | |||||
| Corporate and Other | 73 | (41 | ) | - | 0.2 | % | ||||||
| Nine months ended September 30, 2024 | $ | 32,208 | $ | 1,640 | 5.1 | % | ||||||
Adjusted EBIT as a percentage of sales decreased to 5.1% for the nine months ended September 30, 2024 compared to 5.2% for the nine months ended September 30, 2023 primarily due to:
| · | higher production input costs net of customer recoveries, including for labour, partially offset by lower prices for energy; | |
| · | reduced earnings on lower assembly volumes; | |
| · | acquisitions, net of divestitures, during and subsequent to the first nine months of 2023; | |
| · | lower equity income; | |
| · | an unfavourable impact of foreign exchange losses in the first nine months of 2024 compared to foreign exchange gains in the first nine months of 2023 related to the re-measurement of net deferred tax assets that are denominated in a currency other than their functional currency; | |
| · | higher net warranty costs; | |
| · | supply chain premiums, partially as a result of a supplier bankruptcy; and | |
| · | higher recurring restructuring costs. |
These factors were offset by:
| · | productivity and efficiency improvements, including lower costs at certain underperforming facilities; | |
| · | commercial items in the first nine months of 2024 and 2023, which had a net favourable impact on a year over year basis; and | |
| · | lower net engineering costs, including spending related to our electrification and active safety businesses. |
| Magna International Inc. Third Quarter Report 2024 | 25 |
ADJUSTED RETURN ON INVESTED CAPITAL
Adjusted Return on Invested Capital decreased to 8.7% for the nine months ended September 30, 2024 compared to 10.0% for the nine months ended September 30, 2023 as a result of higher Average Invested Capital and a decrease in Adjusted After-tax operating profits.
Average Invested Capital increased $1.57 billion to $19.06 billion for the nine months ended September 30, 2024 compared to $17.48 billion for the nine months ended September 30, 2023, primarily due to:
| · | average investment in fixed assets in excess of average depreciation expense on fixed assets; | |
| · | acquisitions, net of divestitures, during and subsequent to the first nine months of 2023; and | |
| · | the net strengthening of foreign currencies against the U.S. dollar. |
These factors were partially offset by:
| · | impairments and restructuring related to Fisker during the first nine months of 2024; | |
| · | a decrease in average operating assets and liabilities; and | |
| · | lower net investments in public and private equity companies and public company warrants. |
| 26 | Magna International Inc. Third Quarter Report 2024 |
NON-GAAP FINANCIAL MEASURES RECONCILIATION
The reconciliation of Non-GAAP financial measures is as follows:
ADJUSTED EBIT
| For the three months | For the nine months | |||||||||||||||
| ended September 30, | ended September 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Net income | $ | 508 | $ | 417 | $ | 862 | $ | 988 | ||||||||
| Add: | ||||||||||||||||
| Amortization of acquired intangible assets | 28 | 32 | 84 | 57 | ||||||||||||
| Interest expense, net | 54 | 49 | 159 | 103 | ||||||||||||
| Other (income) expense, net | (188 | ) | (4 | ) | 236 | 224 | ||||||||||
| Income taxes | 192 | 121 | 299 | 308 | ||||||||||||
| Adjusted EBIT | $ | 594 | $ | 615 | $ | 1,640 | $ | 1,680 | ||||||||
ADJUSTED EBIT AS A PERCENTAGE OF SALES
| For the three months | For the nine months | |||||||||||||||
| ended September 30, | ended September 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Sales | $ | 10,280 | $ | 10,688 | $ | 32,208 | $ | 32,343 | ||||||||
| Adjusted EBIT | $ | 594 | $ | 615 | $ | 1,640 | $ | 1,680 | ||||||||
| Adjusted EBIT as a percentage of sales | 5.8 | % | 5.8 | % | 5.1 | % | 5.2 | % | ||||||||
ADJUSTED DILUTED EARNINGS PER SHARE
| For the three months | For the nine months | |||||||||||||||
| ended September 30, | ended September 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Net income attributable to Magna International Inc. | $ | 484 | $ | 394 | $ | 806 | $ | 942 | ||||||||
| Add (deduct): | ||||||||||||||||
| Amortization of acquired intangible assets | 28 | 32 | 84 | 57 | ||||||||||||
| Other (income) expense, net | (188 | ) | (4 | ) | 236 | 224 | ||||||||||
| Tax effect on Amortization of acquired intangible assets and Other (income) expense, net | 45 | (3 | ) | (57 | ) | (34 | ) | |||||||||
| Adjusted net income attributable to Magna International Inc. | 369 | 419 | 1,069 | 1,189 | ||||||||||||
| Diluted weighted average number of Common Shares outstanding during the period (millions) | 287.3 | 286.8 | 287.2 | 286.6 | ||||||||||||
| Adjusted diluted earnings per share | $ | 1.28 | $ | 1.46 | $ | 3.72 | $ | 4.15 | ||||||||
| Magna International Inc. Third Quarter Report 2024 | 27 |
ADJUSTED RETURN ON INVESTED CAPITAL
Adjusted Return on Invested Capital is calculated as Adjusted After-tax operating profits divided by Average Invested Capital for the period. Average Invested Capital for the three month period is averaged on a two-fiscal quarter basis and for the nine month period is averaged on a four-fiscal quarter basis.
| For the three months | For the nine months | |||||||||||||||
| ended September 30, | ended September 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Net income | $ | 508 | $ | 417 | $ | 862 | $ | 988 | ||||||||
| Add (deduct): | ||||||||||||||||
| Amortization of acquired intangible assets | 28 | 32 | 84 | 57 | ||||||||||||
| Interest expense, net | 54 | 49 | 159 | 103 | ||||||||||||
| Other (income) expense, net | (188 | ) | (4 | ) | 236 | 224 | ||||||||||
| Tax effect on Interest expense, net, Amortization of acquired intangible assets and Other (income) expense, net | 30 | (14 | ) | (95 | ) | (56 | ) | |||||||||
| Adjusted After-tax operating profits | $ | 432 | $ | 480 | $ | 1,246 | $ | 1,316 | ||||||||
| As at September 30, | ||||||||
| 2024 | 2023 | |||||||
| Total Assets | $ | 32,790 | $ | 31,675 | ||||
| Excluding: | ||||||||
| Cash and cash equivalents | (1,061 | ) | (1,022 | ) | ||||
| Deferred tax assets | (811 | ) | (527 | ) | ||||
| Less Current Liabilities | (12,600 | ) | (13,165 | ) | ||||
| Excluding: | ||||||||
| Short-term borrowing | 828 | 2 | ||||||
| Long-term debt due within one year | 65 | 1,398 | ||||||
| Current portion of operating lease liabilities | 319 | 384 | ||||||
| Invested Capital | $ | 19,530 | $ | 18,745 | ||||
| For the three months | For the nine months | |||||||||||||||
| ended September 30, | ended September 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Adjusted After-tax operating profits | $ | 432 | $ | 480 | $ | 1,246 | $ | 1,316 | ||||||||
| Average Invested Capital | $ | 19,240 | $ | 18,644 | $ | 19,055 | $ | 17,481 | ||||||||
| Adjusted Return on Invested Capital | 9.0 | % | 10.3 | % | 8.7 | % | 10.0 | % | ||||||||
| 28 | Magna International Inc. Third Quarter Report 2024 |
SUBSEQUENT EVENT
NORMAL COURSE ISSUER BID
Subject to approval by the Toronto Stock Exchange ["TSX"], our Board of Directors approved a new normal course issuer bid to purchase up to 28.5 million of our Common Shares, representing approximately 10% of our public float of Common Shares. The primary purposes of the normal course issuer bid are purchases for cancellation as well as purchases to fund our stock-based compensation awards or programs and/or its obligations to its deferred profit sharing plans. The normal course issuer bid is expected to commence on or about November 7, 2024 and will terminate one year later. All purchases of Common Shares will be made at the market price at the time of purchase in accordance with the rules and policies of the TSX or on the New York Stock Exchange ["NYSE"] in compliance with Rule 10b-18 under the U.S. Securities Exchange Act of 1934.
Purchases may also be made through alternative trading systems in Canada and the U.S., or by such other means permitted by the TSX, including by private agreement or specific share repurchase program at a discount to the prevailing market price, pursuant to an issuer bid exemption order issued by a securities regulatory authority.
COMMITMENTS AND CONTINGENCIES
From time to time, we may be contingently liable for litigation, legal and/or regulatory actions and proceedings and other claims. Refer to Note 14, "Contingencies" of our unaudited interim consolidated financial statements for the three and nine months ended September 30, 2024, which describes these claims.
For a discussion of risk factors relating to legal and other claims/actions against us, refer to "Item 5. Risk Factors" in our AIF and Form 40-F, each in respect of the year ended December 31, 2023.
CONTROLS AND PROCEDURES
There have been no changes in our internal controls over financial reporting that occurred during the three months ended September 30, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
| Magna International Inc. Third Quarter Report 2024 | 29 |
FORWARD-LOOKING STATEMENTS
Certain statements in this MD&A may 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", "assume", "believe", "intend", "plan", "aim", "forecast", "outlook", "project", "potential", "cyclicality", "estimate", "target" and similar expressions suggesting future outcomes or events to identify forward-looking statements.
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:
Macroeconomic, Geopolitical and Other Risks
· inflationary pressures; · interest rates; · geopolitical risks;
Risks Related to the Automotive Industry
· economic cyclicality; · regional production volume declines; · deteriorating vehicle affordability; · misalignment between EV production and sales; · intense competition;
Strategic Risks
· alignment with "Car of the Future"; · evolving business risk profile; · technology and innovation; · investments in mobility and technology companies;
Customer-Related Risks
· customer concentration; · growth with Asian OEMs; · growth of EV-focused OEMs; · risks of conducting business with newer EV-focused OEMs; · Fisker’s bankruptcy; · complete vehicle assembly business; · dependence on outsourcing; · customer cooperation and consolidation; · program cancellations, deferrals and reductions in production volumes; · market shifts; · consumer take rate shifts; · quarterly sales fluctuations; · customer purchase orders; · potential OEM production-related disruptions;
Supply Chain Risks
· semiconductor chip supply disruptions and price increases; · supply chain disruptions; · regional energy supply and pricing; · supply base condition;
Manufacturing/Operational Risks
· product launch; · operational underperformance; · restructuring costs; · impairments; · labour disruptions; · skilled labour attraction/retention; · leadership expertise and succession; |
Pricing Risks
· quote/pricing assumptions; · customer pricing pressure/contractual arrangements; · commodity cost volatility; · scrap steel/aluminum price volatility;
Warranty/Recall Risks
· repair/replace costs; · warranty provisions; · product liability;
Climate Change Risks
· transition risks and physical risks; · strategic and other risks;
IT Security/Cybersecurity Risks
· IT/cybersecurity breach; · product cybersecurity;
Acquisition Risks
· acquisition of strategic targets; · inherent merger and acquisition risks; · acquisition integration and synergies;
Other Business Risks
· joint ventures; · intellectual property; · risks of doing business in foreign markets; · relative foreign exchange rates; · currency devaluation in Argentina; · pension risks; · tax risks; · returns on capital investments; · financial flexibility; · credit ratings changes; · stock price fluctuation; · dividends;
Legal, Regulatory and Other Risks
· antitrust proceedings; · legal and regulatory proceedings; · changes in laws; · trade agreements; · trade disputes/tariffs; · increasing trade protectionism; and · environmental compliance. |
30 Magna International Inc. Third Quarter Report 2024
In evaluating forward-looking statements, we caution readers not to place undue reliance on any forward-looking statement. Additionally, 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 under the "Industry Trends and Risks" heading of our Management's Discussion and Analysis; and | |
| · | set out in our Annual Information Form filed with securities commissions in Canada, our annual report on Form 40-F filed with the United States Securities and Exchange Commission, and subsequent filings. |
Readers should also consider discussion of our risk mitigation activities with respect to certain risk factors, which can also be found in our Annual Information Form. Additional information about Magna, including our Annual Information Form, is available through the System for Electronic Data Analysis and Retrieval+ (SEDAR+) at www.sedarplus.com.
Magna International Inc. Third Quarter Report 2024 31
MAGNA INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF INCOME
[Unaudited]
[U.S. dollars in millions, except per share figures]
| Three months ended | Nine months ended | ||||||||||||||||||
| September 30, | September 30, | ||||||||||||||||||
| Note | 2024 | 2023 | 2024 | 2023 | |||||||||||||||
| Sales | 15 | $ | 10,280 | $ | 10,688 | $ | 32,208 | $ | 32,343 | ||||||||||
| Costs and expenses | |||||||||||||||||||
| Cost of goods sold | 8,828 | 9,264 | 27,964 | 28,224 | |||||||||||||||
| Selling, general and administrative | 487 | 491 | 1,526 | 1,484 | |||||||||||||||
| Depreciation | 384 | 358 | 1,134 | 1,064 | |||||||||||||||
| Amortization of acquired intangible assets | 28 | 32 | 84 | 57 | |||||||||||||||
| Interest expense, net | 54 | 49 | 159 | 103 | |||||||||||||||
| Equity income | (13 | ) | (40 | ) | (56 | ) | (109 | ) | |||||||||||
| Other (income) expense, net | 2 | (188 | ) | (4 | ) | 236 | 224 | ||||||||||||
| Income from operations before income taxes | 700 | 538 | 1,161 | 1,296 | |||||||||||||||
| Income taxes | 5 | 192 | 121 | 299 | 308 | ||||||||||||||
| Net income | 508 | 417 | 862 | 988 | |||||||||||||||
| Income attributable to non-controlling interests | (24 | ) | (23 | ) | (56 | ) | (46 | ) | |||||||||||
| Net income attributable to Magna International Inc. | $ | 484 | $ | 394 | $ | 806 | $ | 942 | |||||||||||
| Earnings per Common Share: | 3 | ||||||||||||||||||
| Basic | $ | 1.68 | $ | 1.37 | $ | 2.81 | $ | 3.29 | |||||||||||
| Diluted | $ | 1.68 | $ | 1.37 | $ | 2.81 | $ | 3.29 | |||||||||||
| Cash dividends paid per Common Share | $ | 0.475 | $ | 0.460 | $ | 1.425 | $ | 1.380 | |||||||||||
| Weighted average number of Common Shares outstanding during the period [in millions]: | 3 | ||||||||||||||||||
| Basic | 287.3 | 286.3 | 287.2 | 286.1 | |||||||||||||||
| Diluted | 287.3 | 286.8 | 287.2 | 286.6 | |||||||||||||||
See accompanying notes
32 Magna International Inc. Third Quarter Report 2024
MAGNA INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
[Unaudited]
[U.S. dollars in millions]
| Three months ended | Nine months ended | |||||||||||||||||
| September 30, | September 30, | |||||||||||||||||
| Note | 2024 | 2023 | 2024 | 2023 | ||||||||||||||
| Net income | $ | 508 | $ | 417 | $ | 862 | $ | 988 | ||||||||||
| Other comprehensive income (loss), net of tax: | 12 | |||||||||||||||||
| Net unrealized gain (loss) on translation of net investment in foreign operations | 296 | (153 | ) | (12 | ) | (187 | ) | |||||||||||
| Net unrealized gain (loss) on cash flow hedges | 3 | (23 | ) | (16 | ) | 66 | ||||||||||||
| Reclassification of net loss (gain) on cash flow hedges to net income | 4 | (21 | ) | (42 | ) | (38 | ) | |||||||||||
| Reclassification of net gain on pensions to net income | 1 | 1 | 2 | 2 | ||||||||||||||
| Pension and post retirement benefits | — | — | — | (4 | ) | |||||||||||||
| Other comprehensive income (loss) | 304 | (196 | ) | (68 | ) | (161 | ) | |||||||||||
| Comprehensive income | 812 | 221 | 794 | 827 | ||||||||||||||
| Comprehensive income attributable to non-controlling interests | (37 | ) | (21 | ) | (56 | ) | (20 | ) | ||||||||||
| Comprehensive income attributable to Magna International Inc. | $ | 775 | $ | 200 | $ | 738 | $ | 807 | ||||||||||
See accompanying notes
Magna International Inc. Third Quarter Report 2024 33
MAGNA INTERNATIONAL INC.
CONSOLIDATED BALANCE SHEETS
[Unaudited]
[U.S. dollars in millions]
| As at | As at | |||||||||
| September 30, | December 31, | |||||||||
| Note | 2024 | 2023 | ||||||||
| ASSETS | ||||||||||
| Current assets | ||||||||||
| Cash and cash equivalents | 4 | $ | 1,061 | $ | 1,198 | |||||
| Accounts receivable | 8,377 | 7,881 | ||||||||
| Inventories | 6 | 4,592 | 4,606 | |||||||
| Prepaid expenses and other | 303 | 352 | ||||||||
| 14,333 | 14,037 | |||||||||
| Investments | 7 | 1,165 | 1,273 | |||||||
| Fixed assets, net | 9,836 | 9,618 | ||||||||
| Operating lease right-of-use assets | 1,780 | 1,744 | ||||||||
| Intangible assets, net | 812 | 876 | ||||||||
| Goodwill | 2,806 | 2,767 | ||||||||
| Deferred tax assets | 811 | 621 | ||||||||
| Other assets | 8 | 1,247 | 1,319 | |||||||
| $ | 32,790 | $ | 32,255 | |||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||
| Current liabilities | ||||||||||
| Short-term borrowing | 10 | $ | 828 | $ | 511 | |||||
| Accounts payable | 7,608 | 7,842 | ||||||||
| Other accrued liabilities | 9 | 2,642 | 2,626 | |||||||
| Accrued salaries and wages | 962 | 912 | ||||||||
| Income taxes payable | 176 | 125 | ||||||||
| Long-term debt due within one year | 65 | 819 | ||||||||
| Current portion of operating lease liabilities | 319 | 399 | ||||||||
| 12,600 | 13,234 | |||||||||
| Long-term debt | 10 | 4,916 | 4,175 | |||||||
| Operating lease liabilities | 1,458 | 1,319 | ||||||||
| Long-term employee benefit liabilities | 571 | 591 | ||||||||
| Other long-term liabilities | 2 | 339 | 475 | |||||||
| Deferred tax liabilities | 219 | 184 | ||||||||
| 20,103 | 19,978 | |||||||||
| Shareholders' equity | ||||||||||
| Capital stock | ||||||||||
| Common Shares | ||||||||||
| [issued: 287,342,204; December 31, 2023 – 286,552,908] | 11 | 3,404 | 3,354 | |||||||
| Contributed surplus | 145 | 125 | ||||||||
| Retained earnings | 9,691 | 9,303 | ||||||||
| Accumulated other comprehensive loss | 12 | (966 | ) | (898 | ) | |||||
| 12,274 | 11,884 | |||||||||
| Non-controlling interests | 413 | 393 | ||||||||
| 12,687 | 12,277 | |||||||||
| $ | 32,790 | $ | 32,255 | |||||||
See accompanying notes
34 Magna International Inc. Third Quarter Report 2024
MAGNA INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
[Unaudited]
[U.S. dollars in millions]
| Three months ended | Nine months ended | |||||||||||||||||
| September 30, | September 30, | |||||||||||||||||
| Note | 2024 | 2023 | 2024 | 2023 | ||||||||||||||
| Cash provided from (used for): | ||||||||||||||||||
| OPERATING ACTIVITIES | ||||||||||||||||||
| Net income | $ | 508 | $ | 417 | $ | 862 | $ | 988 | ||||||||||
| Items not involving current cash flows | 4 | 277 | 404 | 1,195 | 1,280 | |||||||||||||
| 785 | 821 | 2,057 | 2,268 | |||||||||||||||
| Changes in operating assets and liabilities | 4 | (58 | ) | (24 | ) | (333 | ) | (697 | ) | |||||||||
| Cash provided from operating activities | 727 | 797 | 1,724 | 1,571 | ||||||||||||||
| INVESTMENT ACTIVITIES | ||||||||||||||||||
| Fixed asset additions | (476 | ) | (630 | ) | (1,469 | ) | (1,556 | ) | ||||||||||
| Acquisitions | — | — | (86 | ) | (1,475 | ) | ||||||||||||
| Increase in investments, other assets and intangible assets | (115 | ) | (176 | ) | (410 | ) | (373 | ) | ||||||||||
| Net cash inflow (outflow) from disposal of facilities | 4 | 78 | (23 | ) | 82 | (48 | ) | |||||||||||
| Increase in public and private equity investments | (1 | ) | (7 | ) | (22 | ) | (10 | ) | ||||||||||
| Proceeds from dispositions | 38 | 32 | 182 | 95 | ||||||||||||||
| Cash used for investing activities | (476 | ) | (804 | ) | (1,723 | ) | (3,367 | ) | ||||||||||
| FINANCING ACTIVITIES | ||||||||||||||||||
| Issues of debt | 9 | 24 | 767 | 2,067 | ||||||||||||||
| (Decrease) increase in short-term borrowings | (36 | ) | (145 | ) | 324 | (5 | ) | |||||||||||
| Repayments of debt | (20 | ) | (14 | ) | (797 | ) | (17 | ) | ||||||||||
| Issue of Common Shares on exercise of stock options | — | 8 | 30 | 14 | ||||||||||||||
| Tax withholdings on vesting of equity awards | — | — | (5 | ) | (10 | ) | ||||||||||||
| Repurchase of Common Shares | 11 | — | — | (5 | ) | (11 | ) | |||||||||||
| Dividends paid to non-controlling interests | (10 | ) | (18 | ) | (36 | ) | (49 | ) | ||||||||||
| Dividends | (138 | ) | (128 | ) | (406 | ) | (389 | ) | ||||||||||
| Cash (used for) provided from financing activities | (195 | ) | (273 | ) | (128 | ) | 1,600 | |||||||||||
| Effect of exchange rate changes on cash and cash equivalents | 6 | 21 | (10 | ) | (16 | ) | ||||||||||||
| Net increase (decrease) in cash, cash equivalents during the period | 62 | (259 | ) | (137 | ) | (212 | ) | |||||||||||
| Cash and cash equivalents, beginning of period | 999 | 1,281 | 1,198 | 1,234 | ||||||||||||||
| Cash and cash equivalents, end of period | 4 | $ | 1,061 | $ | 1,022 | $ | 1,061 | $ | 1,022 | |||||||||
See accompanying notes
Magna International Inc. Third Quarter Report 2024 35
MAGNA INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
[Unaudited]
[U.S. dollars in millions]
| Nine months ended September 30, 2024 | ||||||||||||||||||||||||||||||
| Common Shares | Non- | |||||||||||||||||||||||||||||
| Stated | Contributed | Retained | controlling | Total | ||||||||||||||||||||||||||
| Note | Number | Value | Surplus | Earnings | AOCL[i] | Interest | Equity | |||||||||||||||||||||||
| [in millions] | ||||||||||||||||||||||||||||||
| Balance, December 31, 2023 | 286.6 | $ | 3,354 | $ | 125 | $ | 9,303 | $ | (898 | ) | $ | 393 | $ | 12,277 | ||||||||||||||||
| Net income | 806 | 56 | 862 | |||||||||||||||||||||||||||
| Other comprehensive loss | (68 | ) | (68 | ) | ||||||||||||||||||||||||||
| Shares issued on exercise of stock options | 0.7 | 36 | (6 | ) | 30 | |||||||||||||||||||||||||
| Release of stock and stock units | 0.2 | 12 | (12 | ) | — | |||||||||||||||||||||||||
| Tax withholdings on vesting of equity rewards | (0.2 | ) | (1 | ) | (4 | ) | (5 | ) | ||||||||||||||||||||||
| Repurchase and cancellation under normal course issuer bid | 11 | (0.1 | ) | (1 | ) | (4 | ) | (5 | ) | |||||||||||||||||||||
| Stock-based compensation expense | 38 | 38 | ||||||||||||||||||||||||||||
| Dividends paid to non-controlling interests | (36 | ) | (36 | ) | ||||||||||||||||||||||||||
| Dividends paid | 0.1 | 4 | (410 | ) | (406 | ) | ||||||||||||||||||||||||
| Balance, September 30, 2024 | 287.3 | $ | 3,404 | $ | 145 | $ | 9,691 | $ | (966 | ) | $ | 413 | $ | 12,687 | ||||||||||||||||
| Three months ended September 30, 2024 | ||||||||||||||||||||||||||||||
| Common Shares | Non- | |||||||||||||||||||||||||||||
| Stated | Contributed | Retained | controlling | Total | ||||||||||||||||||||||||||
| Note | Number | Value | Surplus | Earnings | AOCL[i] | Interest | Equity | |||||||||||||||||||||||
| [in millions] | ||||||||||||||||||||||||||||||
| Balance, June 30, 2024 | 287.3 | $ | 3,404 | $ | 132 | $ | 9,345 | $ | (1,257 | ) | $ | 386 | $ | 12,010 | ||||||||||||||||
| Net income | 484 | 24 | 508 | |||||||||||||||||||||||||||
| Other comprehensive income | 291 | 13 | 304 | |||||||||||||||||||||||||||
| Stock-based compensation expense | 13 | 13 | ||||||||||||||||||||||||||||
| Dividends paid to non-controlling interests | (10 | ) | (10 | ) | ||||||||||||||||||||||||||
| Dividends paid | (138 | ) | (138 | ) | ||||||||||||||||||||||||||
| Balance, September 30, 2024 | 287.3 | $ | 3,404 | $ | 145 | $ | 9,691 | $ | (966 | ) | $ | 413 | $ | 12,687 | ||||||||||||||||
[i] AOCL is Accumulated Other Comprehensive Loss.
See accompanying notes
36 Magna International Inc. Third Quarter Report 2024
MAGNA INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
[Unaudited]
[U.S. dollars in millions]
| Nine months ended September 30, 2023 | ||||||||||||||||||||||||||||||
| Common Shares | Non- | |||||||||||||||||||||||||||||
| Note | Number | Stated Value | Contributed Surplus | Retained Earnings | AOCL[i] | controlling Interest | Total Equity | |||||||||||||||||||||||
| [in millions] | ||||||||||||||||||||||||||||||
| Balance, December 31, 2022 | 285.9 | $ | 3,299 | $ | 111 | $ | 8,639 | $ | (1,114 | ) | $ | 400 | $ | 11,335 | ||||||||||||||||
| Net income | 942 | 46 | 988 | |||||||||||||||||||||||||||
| Other comprehensive loss | (135 | ) | (26 | ) | (161 | ) | ||||||||||||||||||||||||
| Shares issued on exercise of stock options | 0.4 | 17 | (3 | ) | 14 | |||||||||||||||||||||||||
| Release of stock and stock units | 0.4 | 19 | (19 | ) | — | |||||||||||||||||||||||||
| Tax withholdings on vesting of equity rewards | (0.2 | ) | (2 | ) | (8 | ) | (10 | ) | ||||||||||||||||||||||
| Repurchase and cancellation under normal course issuer bid | (0.2 | ) | (2 | ) | (9 | ) | (11 | ) | ||||||||||||||||||||||
| Stock-based compensation expense | 34 | 34 | ||||||||||||||||||||||||||||
| Dividends paid to non-controlling interests | (48 | ) | (48 | ) | ||||||||||||||||||||||||||
| Dividends paid | 0.1 | 2 | (391 | ) | (389 | ) | ||||||||||||||||||||||||
| Balance, September 30, 2023 | 286.4 | $ | 3,333 | $ | 123 | $ | 9,173 | $ | (1,249 | ) | $ | 372 | $ | 11,752 | ||||||||||||||||
| Three months ended September 30, 2023 | ||||||||||||||||||||||||||||||
| Common Shares | Non- | |||||||||||||||||||||||||||||
| Note | Number | Stated Value | Contributed Surplus | Retained Earnings | AOCL[i] | controlling Interest | Total Equity | |||||||||||||||||||||||
| [in millions] | ||||||||||||||||||||||||||||||
| Balance, June 30, 2023 | 286.2 | $ | 3,323 | $ | 113 | $ | 8,907 | $ | (1,055 | ) | $ | 368 | $ | 11,656 | ||||||||||||||||
| Net income | 394 | 23 | 417 | |||||||||||||||||||||||||||
| Other comprehensive loss | (194 | ) | (2 | ) | (196 | ) | ||||||||||||||||||||||||
| Shares issued on exercise of stock options | 0.2 | 10 | (2 | ) | 8 | |||||||||||||||||||||||||
| Stock-based compensation expense | 12 | 12 | ||||||||||||||||||||||||||||
| Dividends paid to non-controlling interests | (17 | ) | (17 | ) | ||||||||||||||||||||||||||
| Dividends paid | (128 | ) | (128 | ) | ||||||||||||||||||||||||||
| Balance, September 30, 2023 | 286.4 | $ | 3,333 | $ | 123 | $ | 9,173 | $ | (1,249 | ) | $ | 372 | $ | 11,752 | ||||||||||||||||
[i] AOCL is Accumulated Other Comprehensive Loss.
See accompanying notes
Magna International Inc. Third Quarter Report 2024 37
MAGNA INTERNATIONAL INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
[Unaudited]
[All amounts in U.S. dollars and all tabular amounts in millions unless otherwise noted]
| 1. | SIGNIFICANT ACCOUNTING POLICIES |
| [a] | Basis of presentation |
The unaudited interim consolidated financial statements of Magna International Inc. and its subsidiaries [collectively "Magna" or the "Company"] have been prepared in U.S. dollars following accounting principles generally accepted in the United States of America ["GAAP"]. The unaudited interim consolidated financial statements do not conform in all respects to the requirements of GAAP for annual financial statements. Accordingly, these unaudited interim consolidated financial statements should be read in conjunction with the December 31, 2023 audited consolidated financial statements and notes thereto included in the Company's 2023 Annual Report.
The unaudited interim consolidated financial statements reflect all adjustments, which consist only of normal and recurring adjustments, necessary to present fairly the financial position as at September 30, 2024 and the results of operations, changes in equity, and cash flows for the three and nine-month periods ended September 30, 2024 and 2023.
| [b] | Use of Estimates |
The preparation of the unaudited interim consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed in the interim consolidated financial statements and accompanying notes. Due to the inherent uncertainty involved in making estimates, actual results could ultimately differ from those estimates.
38 Magna International Inc. Third Quarter Report 2024
MAGNA INTERNATIONAL INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
[Unaudited]
[All amounts in U.S. dollars and all tabular amounts in millions unless otherwise noted]
| 2. | OTHER (INCOME) EXPENSE, NET |
| Three
months ended September 30, |
Nine
months ended September 30, |
|||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||||||
| Impacts related to Fisker Inc. [“Fisker”] | [a] | $ | (189 | ) | $ | — | $ | 146 | $ | — | ||||||||||
| Investments | [b] | 1 | (19 | ) | 6 | 103 | ||||||||||||||
| Restructuring activities | [c] | — | (1 | ) | 93 | 82 | ||||||||||||||
| Gain on business combination | [d] | — | — | (9 | ) | — | ||||||||||||||
| Operations in Russia | [e] | — | 16 | — | 16 | |||||||||||||||
| Veoneer Active Safety Business transaction costs | [f] | — | — | — | 23 | |||||||||||||||
| $ | (188 | ) | $ | (4 | ) | $ | 236 | $ | 224 | |||||||||||
| [a] | Impacts related to Fisker |
During 2024, Fisker filed for Chapter 11 bankruptcy protection in the United States and for similar protection in Austria. In connection with this, the Company recorded impairment charges on its Fisker related assets during the year, as well as restructuring charges in the first quarter of 2024. In the course of such bankruptcy proceedings, the Company terminated its manufacturing agreement for the Fisker Ocean SUV during the third quarter of 2024, as a result of which the Company recognized $196 million of previously deferred revenue related to its Fisker warrants.
Impairment of Fisker related assets
During the first quarter of 2024, the Company recorded a $261 million [$205 million after tax] impairment charge on its Fisker related assets including production receivables, inventory, fixed assets and other capitalized expenditures. In connection with purchase obligations and supplier settlements related to the Fisker program, the Company recorded an additional $19 million [$15 million after tax] of charges in the second quarter of 2024, and $7 million [$5 million after tax] of charges in the third quarter of 2024. For the nine months ended September 30, 2024, impairment charges totaled $287 million [$225 million after tax] on our Fisker related assets.
The following table summarizes the net asset impairments for the nine months ended September 30, 2024, by segment:
| Body Exteriors & Structures | Power & Vision | Seating Systems | Complete Vehicles | Total | ||||||||||||||||
| Accounts receivable | $ | 3 | $ | 4 | $ | 2 | $ | 14 | $ | 23 | ||||||||||
| Inventories | 5 | 53 | 8 | 2 | 68 | |||||||||||||||
| Other assets, net | — | 54 | — | 90 | 144 | |||||||||||||||
| Fixed assets, net | 1 | 49 | 5 | 3 | 58 | |||||||||||||||
| Other accrued liabilities | (5 | ) | 1 | 6 | (10 | ) | (8 | ) | ||||||||||||
| Operating lease right-of-use assets | 1 | — | 1 | — | 2 | |||||||||||||||
| $ | 5 | $ | 161 | $ | 22 | $ | 99 | $ | 287 | |||||||||||
The Company continues to be exposed to risks related to contractual obligations and cancellation claims from its suppliers of approximately $50 million in relation to the termination of production of the Fisker Ocean SUV.
Impairment of Fisker warrants and recognition of the related deferred revenue
Fisker issued approximately 19.5 million penny warrants to the Company to purchase common stock in connection with our agreements with Fisker for platform sharing, engineering and manufacturing of the Fisker Ocean SUV. These warrants vested during 2021 and 2022 based on specified milestones and were marked to market each quarter.
During the first quarter of 2024, Magna recorded a $33 million [$25 million after tax] impairment charge on these warrants reducing the value of the warrants to nil.
When the warrants were issued and the vesting provisions realized, the Company recorded offsetting amounts to deferred revenue within other accrued liabilities and other long-term liabilities. Portions of this deferred revenue were recognized in income as performance obligations were satisfied. During the third quarter of 2024, the agreement for manufacturing of the Fisker Ocean SUV was terminated, and the Company recognized the remaining $196 million of previously deferred revenue in income. Relevant bankruptcy protection laws had prevented the earlier termination of the agreement and the recognition of the related deferred revenue by the Company.
Magna International Inc. Third Quarter Report 2024 39
MAGNA INTERNATIONAL INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
[Unaudited]
[All amounts in U.S. dollars and all tabular amounts in millions unless otherwise noted]
| 2. | OTHER (INCOME) EXPENSE, NET (CONTINUED) |
Restructuring
In the first quarter of 2024, the Company recorded restructuring charges of $22 million [$17 million after tax] in its Complete Vehicles segment in connection with its Fisker related assembly operations.
| [b] | Investments |
| Three months ended | Nine months ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Revaluation of public and private equity investments | $ | 8 | $ | (1 | ) | $ | 12 | $ | 1 | |||||||
| Revaluation of public company warrants | (7 | ) | (18 | ) | (6 | ) | 17 | |||||||||
| Non-cash impairment charge [i] | — | — | — | 85 | ||||||||||||
| Other expense (income), net | 1 | (19 | ) | 6 | 103 | |||||||||||
| Tax effect | 2 | 5 | — | (4 | ) | |||||||||||
| Net loss (income) attributable to Magna | $ | 3 | $ | (14 | ) | $ | 6 | $ | 99 | |||||||
[i] The non-cash impairment charge relates to impairment of a private equity investment and related long-term receivables within Other assets.
| [c] | Restructuring activities |
| Three months ended | Nine months ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Power & Vision [i] | $ | — | $ | (1 | ) | $ | 55 | $ | 60 | |||||||
| Complete Vehicles | — | — | 26 | — | ||||||||||||
| Body Exteriors & Structures | — | — | 12 | 22 | ||||||||||||
| Other (income) expense, net | — | (1 | ) | 93 | 82 | |||||||||||
| Tax effect | — | (1 | ) | (16 | ) | (18 | ) | |||||||||
| Net loss attributable to Magna | $ | — | $ | (2 | ) | $ | 77 | $ | 64 | |||||||
[i] During the third quarter of 2023, the Company recorded restructuring charges of $7 million [$5 million after tax] and an $8 million [$7 million after tax] gain on the sale of a building as a result of restructuring activities in its Power & Vision segment.
| [d] | Gain on business combination |
During the second quarter of 2024, the Company acquired a business in the Body Exteriors & Structures segment for $5 million, resulting in a bargain purchase gain of $9 million [$9 million after tax].
| [e] | Operations in Russia |
During the third quarter of 2023, the Company completed the sale of all of its investments in Russia resulting in a loss of $16 million [$16 million after tax] including a net cash outflow of $23 million.
| [f] | Veoneer Active Safety Business transaction costs |
During 2023, the Company incurred $23 million [$22 million after tax] of transaction costs related to the acquisition of the Veoneer Active Safety Business.
| 40 | Magna International Inc. Third Quarter Report 2024 |
MAGNA INTERNATIONAL INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
[Unaudited]
[All amounts in U.S. dollars and all tabular amounts in millions unless otherwise noted]
| 3. | EARNINGS PER SHARE |
| Three months ended | Nine months ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Basic earnings per Common Share: | ||||||||||||||||
| Net income attributable to Magna International Inc. | $ | 484 | $ | 394 | $ | 806 | $ | 942 | ||||||||
| Weighted average number of Common Shares outstanding | 287.3 | 286.3 | 287.2 | 286.1 | ||||||||||||
| Basic earnings per Common Share | $ | 1.68 | $ | 1.37 | $ | 2.81 | $ | 3.29 | ||||||||
| Diluted earnings per Common Share [a]: | ||||||||||||||||
| Net income attributable to Magna International Inc. | $ | 484 | $ | 394 | $ | 806 | $ | 942 | ||||||||
| Weighted average number of Common Shares outstanding Adjustments | 287.3 | 286.3 | 287.2 | 286.1 | ||||||||||||
| Stock options and restricted stock | — | 0.5 | — | 0.5 | ||||||||||||
| 287.3 | 286.8 | 287.2 | 286.6 | |||||||||||||
| Diluted earnings per Common Share | $ | 1.68 | $ | 1.37 | $ | 2.81 | $ | 3.29 | ||||||||
| [a] | For the three and nine months ended September 30, 2024, diluted earnings per Common Share excluded 6.1 million and 5.0 million [2023 – 1.4 million and 2.3 million] Common Shares, respectively, issuable under the Company's Incentive Stock Option Plan because these options were not "in-the-money". The dilutive effect of participating securities using the two-class method was excluded from the calculation of earnings per share because the effect would be immaterial. |
| Magna International Inc. Third Quarter Report 2024 | 41 |
MAGNA INTERNATIONAL INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
[Unaudited]
[All amounts in U.S. dollars and all tabular amounts in millions unless otherwise noted]
| 4. | DETAILS OF CASH FROM OPERATING ACTIVITIES |
| [a] | Cash, and cash equivalents: |
| September 30, | December 31, | |||||||
| 2024 | 2023 | |||||||
| Bank term deposits and bankers' acceptances | $ | 350 | $ | 502 | ||||
| Cash | 711 | 696 | ||||||
| $ | 1,061 | $ | 1,198 | |||||
| [b] | Items not involving current cash flows: |
| Three months ended | Nine months ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Depreciation | $ | 384 | $ | 358 | $ | 1,134 | $ | 1,064 | ||||||||
| Amortization of acquired intangible assets | 28 | 32 | 84 | 57 | ||||||||||||
| Other asset amortization | 68 | 53 | 160 | 171 | ||||||||||||
| Deferred revenue amortization | (35 | ) | (42 | ) | (191 | ) | (131 | ) | ||||||||
| Dividends received in excess of equity income | 29 | (11 | ) | 51 | 26 | |||||||||||
| Deferred tax (recovery) expense | (13 | ) | 28 | (165 | ) | (44 | ) | |||||||||
| Other non-cash charges | 4 | 2 | 1 | 31 | ||||||||||||
| Non-cash portion of Other (income) expense, net [note 2] | (188 | ) | (16 | ) | 121 | 21 | ||||||||||
| Impairment charges | — | — | — | 85 | ||||||||||||
| $ | 277 | $ | 404 | $ | 1,195 | $ | 1,280 | |||||||||
| [c] | Changes in operating assets and liabilities: |
| Three months ended | Nine months ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Accounts receivable | $ | (11 | ) | $ | (35 | ) | $ | (463 | ) | $ | (1,616 | ) | ||||
| Inventories | (68 | ) | (160 | ) | (116 | ) | (438 | ) | ||||||||
| Prepaid expenses and other | 11 | 25 | (16 | ) | 32 | |||||||||||
| Accounts payable | (181 | ) | 33 | (209 | ) | 832 | ||||||||||
| Accrued salaries and wages | 81 | 61 | 55 | 27 | ||||||||||||
| Other accrued liabilities | (12 | ) | (14 | ) | 317 | 542 | ||||||||||
| Income taxes payable | 122 | 66 | 99 | (76 | ) | |||||||||||
| $ | (58 | ) | $ | (24 | ) | $ | (333 | ) | $ | (697 | ) | |||||
Cash from investment activities
During the third quarter of 2024, the Company disposed of its Body Exteriors & Structures operations in India for proceeds of $78 million in cash and $14 million in a convertible note. No gain or loss was recognized on disposal during the quarter.
| 42 | Magna International Inc. Third Quarter Report 2024 |
MAGNA INTERNATIONAL INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
[Unaudited]
[All amounts in U.S. dollars and all tabular amounts in millions unless otherwise noted]
| 5. | INCOME TAX |
For the three and nine months ended September 30, 2024, the Company’s effective income tax rate does not reflect the customary rate due to unfavourable foreign exchange adjustments recognized for GAAP purposes. The three-month rate is also adversely affected by unfavourable changes in the Company’s reserves for uncertain tax positions.
| 6. | INVENTORIES |
Inventories consist of:
| September 30, | December 31, | |||||||
| 2024 | 2023 | |||||||
| Raw materials and supplies | $ | 1,822 | $ | 1,861 | ||||
| Work-in-process | 465 | 450 | ||||||
| Finished goods | 612 | 569 | ||||||
| Tooling and engineering | 1,693 | 1,726 | ||||||
| $ | 4,592 | $ | 4,606 | |||||
Tooling and engineering inventory represents costs incurred on tooling and engineering services contracts in excess of billed and unbilled amounts included in accounts receivable.
| 7. | INVESTMENTS |
| September 30, | December 31, | |||||||
| 2024 | 2023 | |||||||
| Equity method investments | $ | 889 | $ | 987 | ||||
| Public and private equity investments | 236 | 230 | ||||||
| Debt investments | 31 | 22 | ||||||
| Warrants | 9 | 34 | ||||||
| $ | 1,165 | $ | 1,273 | |||||
Cumulative unrealized gains and losses on equity securities held as at September 30, 2024 were $51 million and $55 million [$28 million and $323 million as at December 31, 2023], respectively.
| 8. | OTHER ASSETS |
Other assets consist of:
| September 30, | December 31, | |||||||
| 2024 | 2023 | |||||||
| Preproduction costs related to long-term supply agreements | $ | 739 | $ | 835 | ||||
| Long-term receivables | 348 | 321 | ||||||
| Pension overfunded status | 44 | 41 | ||||||
| Unrealized gain on cash flow hedges | — | 4 | ||||||
| Other, net | 116 | 118 | ||||||
| $ | 1,247 | $ | 1,319 | |||||
| Magna International Inc. Third Quarter Report 2024 | 43 |
MAGNA INTERNATIONAL INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
[Unaudited]
[All amounts in U.S. dollars and all tabular amounts in millions unless otherwise noted]
| 9. | WARRANTY |
The following is a continuity of the Company's warranty accruals, included in Other accrued liabilities:
| 2024 | 2023 | |||||||
| Balance, January 1 | $ | 270 | $ | 257 | ||||
| Expense, net | 33 | 49 | ||||||
| Settlements | (18 | ) | (23 | ) | ||||
| Foreign exchange and other | (1 | ) | 1 | |||||
| Balance, March 31 | 284 | 284 | ||||||
| Expense, net | 39 | 5 | ||||||
| Settlements | (21 | ) | (20 | ) | ||||
| Acquisition | — | 3 | ||||||
| Foreign exchange and other | (4 | ) | 22 | |||||
| Balance, June 30 | 298 | 294 | ||||||
| Expense, net | 28 | 14 | ||||||
| Settlements | (26 | ) | (11 | ) | ||||
| Foreign exchange and other | 5 | (11 | ) | |||||
| Balance, September 30 | $ | 305 | $ | 286 | ||||
| 10. | DEBT |
Short-term borrowings
Commercial Paper Program
As at September 30, 2024, $827 million [$299 million as at December 31, 2023] of notes were outstanding under the U.S. commercial paper program, with a weighted average interest rate of 5.29% [2023 - 5.57%]. No notes were outstanding under the euro-commercial paper program as at September 30, 2024 [$210 million as at December 31, 2023 with a weighted average interest rate of 4.02%]. Maturities on amounts outstanding are less than three months.
Credit Facilities
On May 10, 2024, the Company extended the maturity date of its $800 million 364-day syndicated revolving credit facility from June 24, 2024 to June 24, 2025. The facility can be drawn in U.S. dollars or Canadian dollars. The Company has no borrowings under this credit facility.
Long-term borrowings
Senior notes
The Company issued the following Senior Notes during 2024:
| Issuance Date | Net Cash Proceeds | Maturity Date | ||||
| Cdn$450 million Senior Notes at 4.80% | May 30, 2024 | Cdn$448 million | May 30, 2029 | |||
| $400 million Senior Notes at 5.050% | March 14, 2024 | $397 million | March 14, 2029 |
The Senior Notes were issued for general corporate purposes, including the repayment of $750 million in Senior Notes on June 17, 2024.
The Senior Notes are unsecured obligations and do not include any financial covenants. The Company may redeem the notes in whole or in part at any time, and from time to time, at specified redemption prices determined in accordance with the terms of the indenture governing the Senior Notes.
| 44 | Magna International Inc. Third Quarter Report 2024 |
MAGNA INTERNATIONAL INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
[Unaudited]
[All amounts in U.S. dollars and all tabular amounts in millions unless otherwise noted]
| 11. | CAPITAL STOCK |
| [a] | During the nine month period ended September 30, 2024, the Company repurchased 0.1 million shares under a normal course issuer bid for cash consideration of $5 million to settle certain equity compensation plans. |
| [b] | The following table presents the maximum number of shares that would be outstanding if all the dilutive instruments outstanding at October 31, 2024 were exercised or converted: |
| Common Shares | 287,342,204 | ||
| Stock options [i] | 6,031,358 | ||
| 293,373,562 |
| [i] | Options to purchase Common Shares are exercisable by the holder in accordance with the vesting provisions and upon payment of the exercise price as may be determined from time to time pursuant to the Company's stock option plans. |
| Magna International Inc. Third Quarter Report 2024 | 45 |
MAGNA INTERNATIONAL INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
[Unaudited]
[All amounts in U.S. dollars and all tabular amounts in millions unless otherwise noted]
| 12. | ACCUMULATED OTHER COMPREHENSIVE LOSS |
The following is a continuity schedule of accumulated other comprehensive loss:
| 2024 | 2023 | |||||||
| Accumulated net unrealized loss on translation of net investment in foreign operations | ||||||||
| Balance, January 1 | $ | (836 | ) | $ | (1,018 | ) | ||
| Net unrealized (loss) gain | (235 | ) | 43 | |||||
| Repurchase of shares under normal course issuer bid | — | 1 | ||||||
| Balance, March 31 | (1,071 | ) | (974 | ) | ||||
| Repurchase of shares under normal course issuer bid | — | (1 | ) | |||||
| Net unrealized loss | (60 | ) | (53 | ) | ||||
| Balance, June 30 | (1,131 | ) | (1,028 | ) | ||||
| Net unrealized gain (loss) | 283 | (151 | ) | |||||
| Balance, September 30 | (848 | ) | (1,179 | ) | ||||
| Accumulated net unrealized gain (loss) on cash flow hedges [i] | ||||||||
| Balance, January 1 | 43 | 5 | ||||||
| Net unrealized (loss) gain | (13 | ) | 41 | |||||
| Reclassifications to net income | (29 | ) | (3 | ) | ||||
| Balance, March 31 | 1 | 43 | ||||||
| Net unrealized (loss) gain | (6 | ) | 48 | |||||
| Reclassifications to net income | (17 | ) | (14 | ) | ||||
| Balance, June 30 | (22 | ) | 77 | |||||
| Net unrealized gain (loss) | 3 | (23 | ) | |||||
| Reclassifications to net income | 4 | (21 | ) | |||||
| Balance, September 30 | (15 | ) | 33 | |||||
| Accumulated net unrealized loss on pensions | ||||||||
| Balance, January 1 | (105 | ) | (101 | ) | ||||
| Revaluation | — | (5 | ) | |||||
| Reclassifications to net income | 1 | 1 | ||||||
| Balance, March 31 | (104 | ) | (105 | ) | ||||
| Revaluation | — | 1 | ||||||
| Balance, June 30 | (104 | ) | (104 | ) | ||||
| Reclassifications to net income | 1 | 1 | ||||||
| Balance, September 30 | (103 | ) | (103 | ) | ||||
| Total accumulated other comprehensive loss | $ | (966 | ) | $ | (1,249 | ) | ||
| [i] | The amount of income tax expense that has been netted in the accumulated net unrealized gain on cash flow hedges is as follows: |
| 2024 | 2023 | |||||||
| Balance, January 1 | $ | (16 | ) | $ | — | |||
| Net unrealized gain (loss) | 4 | (15 | ) | |||||
| Reclassifications to net income | 10 | 1 | ||||||
| Balance, March 31 | (2 | ) | (14 | ) | ||||
| Net unrealized gain (loss) | 2 | (17 | ) | |||||
| Reclassifications to net income | 7 | 4 | ||||||
| Balance, June 30 | 7 | (27 | ) | |||||
| Net unrealized (loss) gain | (1 | ) | 7 | |||||
| Reclassifications to net income | (1 | ) | 7 | |||||
| Balance, September 30 | $ | 5 | $ | (13 | ) | |||
The amount of other comprehensive loss that is expected to be reclassified to net income over the next 12 months is $14 million.
| 46 | Magna International Inc. Third Quarter Report 2024 |
MAGNA INTERNATIONAL INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
[Unaudited]
[All amounts in U.S. dollars and all tabular amounts in millions unless otherwise noted]
| 13. | FINANCIAL INSTRUMENTS |
| [a] | Financial assets and liabilities |
The Company's financial assets and financial liabilities consist of the following:
| September 30, | December 31, | |||||||
| 2024 | 2023 | |||||||
| Financial assets | ||||||||
| Cash and cash equivalents | $ | 1,061 | $ | 1,198 | ||||
| Accounts receivable | 8,377 | 7,881 | ||||||
| Warrants and public and private equity investments | 245 | 264 | ||||||
| Debt investments | 31 | 22 | ||||||
| Long-term receivables included in other assets | 348 | 321 | ||||||
| $ | 10,062 | $ | 9,686 | |||||
| Financial liabilities | ||||||||
| Short-term borrowing | $ | 828 | $ | 511 | ||||
| Long-term debt (including portion due within one year) | 4,981 | 4,994 | ||||||
| Operating lease liabilities (including current portion) | 1,777 | 1,718 | ||||||
| Accounts payable | 7,608 | 7,842 | ||||||
| $ | 15,194 | $ | 15,065 | |||||
| Derivatives designated as effective hedges, measured at fair value | ||||||||
| Foreign currency contracts | ||||||||
| Prepaid expenses | $ | 4 | $ | 78 | ||||
| Other assets | — | 4 | ||||||
| Other accrued liabilities | (13 | ) | (13 | ) | ||||
| Other long-term liabilities | (4 | ) | (8 | ) | ||||
| $ | (13 | ) | $ | 61 | ||||
| [b] | Supplier financing program |
The Company has supplier financing programs with third-party financial institutions that provide financing to suppliers of tooling related materials. These arrangements allow suppliers to elect to be paid by a financial institution at a discount earlier than the maturity date of the receivable, which may extend from 6 to 18 months. The Company will pay the full amount owing to the financial institution on the maturity dates. Amounts outstanding under these programs as at September 30, 2024 were $113 million [$132 million at December 31, 2023] and are presented within accounts payable.
| Magna International Inc. Third Quarter Report 2024 | 47 |
MAGNA INTERNATIONAL INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
[Unaudited]
[All amounts in U.S. dollars and all tabular amounts in millions unless otherwise noted]
| 13. | FINANCIAL INSTRUMENTS (CONTINUED) |
| [c] | Fair value |
The Company determined the estimated fair values of its financial instruments based on valuation methodologies it believes are appropriate; however, considerable judgment is required to develop these estimates. Accordingly, these estimated fair values are not necessarily indicative of the amounts the Company could realize in a current market exchange. The estimated fair value amounts can be materially affected by the use of different assumptions or methodologies. The methods and assumptions used to estimate the fair value of financial instruments are described below:
Cash and cash equivalents, accounts receivable, accounts payable and short-term borrowings
Due to the short period to maturity of the instruments, the carrying values as presented in the consolidated balance sheets are reasonable estimates of fair values.
Publicly traded and private equity securities
The fair value of the Company’s investments in publicly traded equity securities is determined using the closing price on the measurement date, as reported on the stock exchange on which the securities are traded. [Level 1 input based on the GAAP fair value hierarchy.]
The Company estimates the value of its private equity securities based on valuation methods using the observable transaction price at the transaction date and other observable inputs including rights and obligations of the securities held by the Company. [Level 3 input based on the GAAP fair value hierarchy.]
Warrants
The Company estimates the value of its warrants based on the quoted prices in the active market for the common shares, [Level 2 inputs based on the GAAP fair value hierarchy], followed by an impairment review considering both qualitative and quantitative factors that may have a significant impact on the investee’s fair value.
Term Loans
The Company’s Term Loans consists of advances in the form of 1, 3 or 6-month loans that may be rolled over until the end of the 3 and 5-year terms. Due to the short-term maturity of each loan, the carrying value as presented in the consolidated balance sheets is a reasonable estimate of its fair value.
Senior Notes
At September 30, 2024, the net book value of the Company's Senior Notes was $4.5 billion and the estimated fair value was $4.6 billion. The fair value of the Senior Notes are classified as Level 1 when quoted prices in active markets are available and Level 2 when the quoted prices are from less active markets or when other observable inputs are used to determine fair value.
| [d] | Credit risk |
The Company's financial assets that are exposed to credit risk consist primarily of cash and cash equivalents, accounts receivable, debt investments, and foreign exchange and commodity forward contracts with positive fair values. Cash and cash equivalents, which consist of short-term investments, are only invested in bank term deposits and bank commercial paper with an investment grade credit rating. Credit risk is further reduced by limiting the amount which is invested in certain major financial institutions.
The Company is also exposed to credit risk from the potential default by any of its counterparties on its foreign exchange forward contracts. The Company mitigates this credit risk by dealing with counterparties who are major financial institutions that the Company anticipates will satisfy their obligations under the contracts.
| 48 | Magna International Inc. Third Quarter Report 2024 |
MAGNA INTERNATIONAL INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
[Unaudited]
[All amounts in U.S. dollars and all tabular amounts in millions unless otherwise noted]
| 13. | FINANCIAL INSTRUMENTS (CONTINUED) |
In the normal course of business, the Company is exposed to credit risk from its customers, substantially all of which are in the automotive industry and are subject to credit risks associated with the automotive industry. For the three and nine months ended September 30, 2024, sales to the Company's six largest customers represented 73% and 74% of the Company's total sales; and substantially all of its sales are to customers with which the Company has ongoing contractual relationships. The Company conducts business with newer electric vehicle-focused customers, which poses incremental credit risk due to their relatively short operating histories; limited financial resources; less mature product development and validation processes; uncertain market acceptance of their products/services; and untested business models. These factors may elevate the Company’s risks in dealing with such customers, particularly with respect to recovery of: pre-production (including tooling, engineering, and launch) and production receivables; inventory; fixed assets and capitalized preproduction expenditures; as well as other third party obligations related to such items. As at September 30, 2024, the Company’s balance sheet exposure related to newer electric vehicle-focused customers was approximately $300 million. In determining the allowance for expected credit losses, the Company considers changes in customer's credit ratings, liquidity, customer's historical payments and loss experience, current economic conditions, and the Company's expectations of future economic conditions.
| [e] | Interest rate risk |
The Company is not exposed to significant interest rate risk due to the short-term maturity of its monetary current assets and current liabilities. In particular, the amount of interest income earned on cash and cash equivalents is impacted more by investment decisions made and the demands to have available cash on hand than by movements in interest rates over a given period.
The Company is exposed to interest rate risk on its Term Loans as the interest rate is variable, however the Company is not exposed to interest rate risk on Senior Notes as the interest rates are fixed.
| [f] | Currency risk and foreign exchange contracts |
The Company is exposed to fluctuations in foreign exchange rates when manufacturing facilities have committed to the delivery of products, and/or the purchase of materials and equipment in currencies other than the facilities' functional currency. In an effort to manage this net foreign exchange exposure, the Company employs hedging programs, primarily through the use of foreign exchange forward contracts.
At September 30, 2024, the Company had outstanding foreign exchange forward contracts representing commitments to buy and sell various foreign currencies. Significant commitments are as follows:
| For Canadian dollars | For U.S. dollars | For Euros | |||||||||||||||||||||||
| Weighted | Weighted | Weighted | Weighted | ||||||||||||||||||||||
| U.S. dollar | average | Peso | average | Canadian | average | U.S dollar | average | ||||||||||||||||||
| amount | rate | amount | rate | amount | rate | amount | rate | ||||||||||||||||||
| Buy | 5 | 0.74077 | 402 | 0.04449 | 443 | 0.77954 | 2 | 0.89171 | |||||||||||||||||
| (Sell) | (346 | ) | 1.28280 | — | — | (7 | ) | 1.34994 | (24 | ) | 1.09042 | ||||||||||||||
Forward contracts mature at various dates through 2026. Foreign currency exposures are reviewed quarterly.
| [g] | Equity price risk |
Public equity securities and warrants
The Company's public equity securities are subject to market price risk due to the risk of loss in value that would result from a decline in the market price of the common shares or underlying common shares.
| Magna International Inc. Third Quarter Report 2024 | 49 |
MAGNA INTERNATIONAL INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
[Unaudited]
[All amounts in U.S. dollars and all tabular amounts in millions unless otherwise noted]
| 14. | CONTINGENCIES |
From time to time, the Company may become involved in regulatory proceedings, or become liable for legal, contractual and other claims by various parties, including customers, suppliers, former employees, class action plaintiffs and others. On an ongoing basis, the Company attempts to assess the likelihood of any adverse judgments or outcomes to these proceedings or claims, together with potential ranges of probable costs and losses. A determination of the provision required, if any, for these contingencies is made after analysis of each individual issue. The required provision may change in the future due to new developments in each matter or changes in approach such as a change in settlement strategy in dealing with these matters.
In December 2023, the Company received a notification [the “Notification Letter”] from a customer informing the Company as to the customer’s initial determination that one of the Company’s operating groups bears responsibility for costs totaling $352 million related to two product recalls. The Notification Letter triggered a negotiation period regarding financial allocation of the total costs for the two recalls, which remains on-going. In the event such negotiations are not concluded successfully, the customer has discretion under its Terms and Conditions to debit Magna up to 50% of the parts and labour costs actually incurred related to the recalls. The Company believes that the product in question met the customer’s specifications, and accordingly, is vigorously contesting the customer’s determination. Magna does not currently anticipate any material liabilities.
In July 2024, a Tier 2 supplier filed a claim against the Company for alleged damages arising from de-sourcing of its component on one OEM customer’s applications, as well as volume shortfalls on another OEM customer’s applications containing the component. Although the supplier has indicated that its claim cannot be fully quantified at this time, the supplier has estimated that the aggregate amount of financial loss incurred will be approximately €250 million. The same supplier has also filed multiple patent infringement claims seeking a preliminary injunction restricting the Company’s sale of systems alleged to infringe the supplier’s patents, as well as monetary damages. On October 31, 2024, the applicable court granted the preliminary injunction but expressly allowed the Company to continue to supply its OEM customer with the systems on those vehicle models that it currently supplies. The Company disagrees with the court's ruling and will be filing an appeal. The Company continues to believe it has valid defenses to the supplier’s claims and is vigorously contesting all claims. Due to the early stage of the proceedings, it is too early to predict the final outcome.
| 15. | 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, 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 Amortization of acquired intangible assets, Income taxes, Interest expense, net and Other (income) expense, net.
| 50 | Magna International Inc. Third Quarter Report 2024 |
MAGNA INTERNATIONAL INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
[Unaudited]
[All amounts in U.S. dollars and all tabular amounts in millions unless otherwise noted]
| 15. | Segmented Information (CONTINUED) |
| [a] | The following tables show segment information for the Company's reporting segments and a reconciliation of Adjusted EBIT to the Company's consolidated net income: |
| Three months ended September 30, 2024 | ||||||||||||||||||||||||
| Fixed | ||||||||||||||||||||||||
| Total | External | Adjusted | Equity | asset | ||||||||||||||||||||
| sales | sales | EBIT [ii] | Depreciation | income | additions | |||||||||||||||||||
| Body Exteriors & Structures | $ | 4,038 | $ | 3,981 | $ | 273 | $ | 186 | $ | (1 | ) | $ | 285 | |||||||||||
| Power & Vision | 3,837 | 3,769 | 279 | 145 | (4 | ) | 139 | |||||||||||||||||
| Seating Systems | 1,379 | 1,376 | 51 | 25 | (6 | ) | 27 | |||||||||||||||||
| Complete Vehicles | 1,159 | 1,150 | 27 | 20 | (2 | ) | 17 | |||||||||||||||||
| Corporate & Other [i] | (133 | ) | 4 | (36 | ) | 8 | — | 8 | ||||||||||||||||
| Total Reportable Segments | $ | 10,280 | $ | 10,280 | $ | 594 | $ | 384 | $ | (13 | ) | $ | 476 | |||||||||||
| Three months ended September 30, 2023 | ||||||||||||||||||||||||
| Equity | Fixed | |||||||||||||||||||||||
| Total | External | Adjusted | loss | asset | ||||||||||||||||||||
| sales | sales | EBIT [ii] | Depreciation | (income) | additions | |||||||||||||||||||
| Body Exteriors & Structures | $ | 4,354 | $ | 4,297 | $ | 358 | $ | 178 | $ | 2 | $ | 424 | ||||||||||||
| Power & Vision | 3,745 | 3,685 | 221 | 133 | (46 | ) | 156 | |||||||||||||||||
| Seating Systems | 1,529 | 1,526 | 70 | 20 | 5 | 24 | ||||||||||||||||||
| Complete Vehicles | 1,185 | 1,176 | (5 | ) | 24 | (1 | ) | 21 | ||||||||||||||||
| Corporate & Other [i] | (125 | ) | 4 | (29 | ) | 3 | — | 5 | ||||||||||||||||
| Total Reportable Segments | $ | 10,688 | $ | 10,688 | $ | 615 | $ | 358 | $ | (40 | ) | $ | 630 | |||||||||||
| Nine months ended September 30, 2024 | ||||||||||||||||||||||||
| Equity | Fixed | |||||||||||||||||||||||
| Total | External | Adjusted | (income) | asset | ||||||||||||||||||||
| sales | sales | EBIT [ii] | Depreciation | loss | additions | |||||||||||||||||||
| Body Exteriors & Structures | $ | 12,932 | $ | 12,745 | $ | 912 | $ | 548 | $ | (2 | ) | $ | 902 | |||||||||||
| Power & Vision | 11,605 | 11,416 | 575 | 431 | (37 | ) | 443 | |||||||||||||||||
| Seating Systems | 4,289 | 4,278 | 156 | 73 | (15 | ) | 65 | |||||||||||||||||
| Complete Vehicles | 3,784 | 3,760 | 74 | 63 | (5 | ) | 38 | |||||||||||||||||
| Corporate & Other [i] | (402 | ) | 9 | (77 | ) | 19 | 3 | 21 | ||||||||||||||||
| Total Reportable Segments | $ | 32,208 | $ | 32,208 | $ | 1,640 | $ | 1,134 | $ | (56 | ) | $ | 1,469 | |||||||||||
| Nine months ended September 30, 2023 | ||||||||||||||||||||||||
| Equity | Fixed | |||||||||||||||||||||||
| Total | External | Adjusted | loss | asset | ||||||||||||||||||||
| sales | sales | EBIT [ii] | Depreciation | (income) | additions | |||||||||||||||||||
| Body Exteriors & Structures | $ | 13,333 | $ | 13,083 | $ | 1,024 | $ | 538 | $ | 3 | $ | 1,005 | ||||||||||||
| Power & Vision | 10,530 | 10,336 | 437 | 378 | (108 | ) | 422 | |||||||||||||||||
| Seating Systems | 4,618 | 4,603 | 174 | 62 | (3 | ) | 64 | |||||||||||||||||
| Complete Vehicles | 4,337 | 4,310 | 81 | 75 | (3 | ) | 45 | |||||||||||||||||
| Corporate & Other [i] | (475 | ) | 11 | (36 | ) | 11 | 2 | 20 | ||||||||||||||||
| Total Reportable Segments | $ | 32,343 | $ | 32,343 | $ | 1,680 | $ | 1,064 | $ | (109 | ) | $ | 1,556 | |||||||||||
| [i] | Included in Corporate and Other Adjusted EBIT are intercompany fees charged to the automotive segments. |
| Magna International Inc. Third Quarter Report 2024 | 51 |
MAGNA INTERNATIONAL INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
[Unaudited]
[All amounts in U.S. dollars and all tabular amounts in millions unless otherwise noted]
| 15. | Segmented Information (CONTINUED) |
| [ii] | The following table reconciles Net income to Adjusted EBIT: |
| Three months ended | Nine months ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Net income | $ | 508 | $ | 417 | $ | 862 | $ | 988 | ||||||||
| Add: | ||||||||||||||||
| Amortization of acquired intangible assets | 28 | 32 | 84 | 57 | ||||||||||||
| Interest expense, net | 54 | 49 | 159 | 103 | ||||||||||||
| Other (income) expense, net | (188 | ) | (4 | ) | 236 | 224 | ||||||||||
| Income taxes | 192 | 121 | 299 | 308 | ||||||||||||
| Adjusted EBIT | $ | 594 | $ | 615 | $ | 1,640 | $ | 1,680 | ||||||||
[b] The following table shows Goodwill for the Company's reporting segments:
| September 30, | December 31, | |||||||
| 2024 | 2023 | |||||||
| Body Exteriors & Structures | $ | 454 | $ | 452 | ||||
| Power & Vision | 1,964 | 1,928 | ||||||
| Seating Systems | 259 | 258 | ||||||
| Complete Vehicles | 110 | 109 | ||||||
| Corporate and Other | 19 | 20 | ||||||
| Total Reportable Segments | $ | 2,806 | $ | 2,767 | ||||
| [c] | The following table shows Net Assets for the Company's reporting segments: |
| September 30, | December 31, | |||||||
| 2024 | 2023 | |||||||
| Body Exteriors & Structures | $ | 9,191 | $ | 8,147 | ||||
| Power & Vision | 7,799 | 7,880 | ||||||
| Seating Systems | 1,431 | 1,340 | ||||||
| Complete Vehicles | 413 | 574 | ||||||
| Corporate & Other | 802 | 1,066 | ||||||
| Total Reportable Segments | $ | 19,636 | $ | 19,007 | ||||
The following table reconciles Total Assets to Net Assets:
| September 30, | December 31, | |||||||
| 2024 | 2023 | |||||||
| Total Assets | $ | 32,790 | $ | 32,255 | ||||
| Deduct assets not included in segment net assets: | ||||||||
| Cash and cash equivalents | (1,061 | ) | (1,198 | ) | ||||
| Deferred tax assets | (811 | ) | (621 | ) | ||||
| Long-term receivables from joint venture partners | (70 | ) | (49 | ) | ||||
| Deduct liabilities included in segment net assets: | ||||||||
| Accounts payable | (7,608 | ) | (7,842 | ) | ||||
| Accrued salaries and wages | (962 | ) | (912 | ) | ||||
| Other accrued liabilities | (2,642 | ) | (2,626 | ) | ||||
| Segment Net Assets | $ | 19,636 | $ | 19,007 | ||||
| 52 | Magna International Inc. Third Quarter Report 2024 |
MAGNA INTERNATIONAL INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
[Unaudited]
[All amounts in U.S. dollars and all tabular amounts in millions unless otherwise noted]
| 16. | SUBSEQUENT EVENT |
Normal Course Issuer Bid
Subject to approval by the Toronto Stock Exchange ["TSX"], the Company’s Board of Directors approved a new normal course issuer bid to purchase up to 28.5 million of the Company’s Common Shares, representing approximately 10% of the Company’s public float of Common Shares. The primary purposes of the normal course issuer bid are purchases for cancellation as well as purchases to fund the Company’s stock-based compensation awards or programs and/or its obligations to its deferred profit sharing plans. The normal course issuer bid is expected to commence on or about November 7, 2024 and will terminate one year later. All purchases of Common Shares will be made at the market price at the time of purchase in accordance with the rules and policies of the TSX or on the New York Stock Exchange ["NYSE"] in compliance with Rule 10b-18 under the U.S. Securities Exchange Act of 1934.
Purchases may also be made through alternative trading systems in Canada and the U.S., or by such other means permitted by the TSX, including by private agreement or specific share repurchase program at a discount to the prevailing market price, pursuant to an issuer bid exemption order issued by a securities regulatory authority.
| Magna International Inc. Third Quarter Report 2024 | 53 |