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Segmented Information
 12 Months Ended
Dec. 31, 2011
Segmented Information [Abstract]  
SEGMENTED INFORMATION

24. SEGMENTED INFORMATION

 

[a]

Magna, a diversified global automotive supplier, follows a corporate policy of functional and operational decentralization. It conducts its operations through divisions, which function as autonomous business units. As at December 31, 2011, Magna had 286 manufacturing operations and 88 product development, engineering and sales centres in 26 countries. Magna designs, develops and manufactures technologically advanced automotive systems, assemblies, modules and components, and engineers and assembles complete vehicles, primarily for sale to OEMs of cars and light trucks. The Company’s capabilities include the design, engineering, testing and manufacture of automotive interior systems; seating systems; closure systems; body and chassis systems; vision systems; electronic systems; exterior systems; powertrain systems; roof systems; hybrid and electric vehicles/systems as well as complete vehicle engineering and assembly.

 

Magna’s success is directly dependent upon the levels of North American and European [and currently to a lesser extent on Rest of World] car and light truck production by its customers. OEM production volumes in each of North America and Europe may be impacted by a number of geographic factors, including general economic conditions, interest rates, consumer credit availability, fuel prices and availability, infrastructure, legislative changes, environmental emission and safety issues, and labour and/or trade relations.

Given the differences between the regions in which the Company operates, Magna’s operations are segmented on a geographic basis between North America, Europe and Rest of World. The Company maintains management teams in each of the Company’s two primary markets, North America and Europe. The role of the North American and European management teams is to manage Magna’s interests to ensure a coordinated effort across the Company’s different product capabilities. In addition to maintaining key customer, supplier and government contacts in their respective markets, the regional management teams centrally manage key aspects of the Company’s operations while permitting the divisions enough flexibility through Magna’s decentralized structure to foster an entrepreneurial environment.

Consistent with the above, the Company’s internal financial reporting separately segments key internal operating performance measures between North America, Europe and Rest of World for purposes of presentation to the chief operating decision maker to assist in the assessment of operating performance, the allocation of resources, and the long-term strategic direction and future global growth in the Company.

 

The Company’s chief operating decision maker uses 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 represents income from operations before income taxes; interest income, net; and other expense, net.

The accounting policies of each segment are the same as those set out under “Significant Accounting Policies” [note 1] and intersegment sales and transfers are accounted for at fair market value.

The following tables show certain information with respect to segment disclosures:

 

 

                                                         
    2011  
   

Total

sales

     External
sales		     Depreciation
and
amortization		     Adjusted
EBIT		     Goodwill     Fixed
asset
additions		     Fixed 
assets, 
net 		  

 

  

 North America

                                                        

Canada

   $ 5,951     $ 5,552                             $ 115     $ 586   

United States

     7,025       6,514                               281       804   

Mexico

     2,902       2,698                               162       477   

Eliminations

     (1,023 )      —                               —       —   

 

  

 North America

     14,855       14,764           $        358     $ 1,373     $ 644       558       1,867   

 

  

 Europe

                                                        

Euroland [i]

     10,122       9,956                               292       1,012   

Great Britain

     913       909                               7       53   

Other European countries

     1,707       1,564                               124       537   

Eliminations

     (186 )      —                               —       —   

 

  

 Europe

     12,556       12,429       259       (22 )      393       423       1,602   

 

  

 Rest of World

     1,599       1,506       38       56       158       236       485   

 Corporate and Other [ii], [iii]

     (262 )      49       31       (40 )      1       19       282   

 

  

 Total reportable segments

     28,748       28,748       686       1,367       1,196       1,236       4,236   

 Other expense, net

                             (156 )                         

 Interest income, net

                             6                          

 

  
    $     28,748     $     28,748           $        686           $  1,217     $     1,196     $     1,236       4,236   

 Current assets

                                                     8,146   

 Investments, goodwill, deferred tax assets and other assets

                                                     2,297   

 

  

 Consolidated total assets

                                                   $     14,679   

 

  
                                                         
    2010  
    Total sales     External
sales		     Depreciation
and
amortization		     Adjusted
EBIT		     Goodwill     Fixed
asset
additions		    

Fixed 
assets, 

net 

  

 

  

 North America

                                                        

Canada

   $ 5,122     $ 4,777                             $ 126     $ 638   

United States

     5,808       5,348                               130       668   

Mexico

     2,346       2,189                               49       371   

Eliminations

     (906 )      —                               —       —   

 

  

 North America

     12,370       12,314         $ 358     $ 1,116     $ 651       305       1,677   

 

  

 Europe

                                                        

Euroland [i]

     8,338       8,185                               177       970   

Great Britain

     813       813                               5       58   

Other European countries

     1,271       1,170                               131       490   

Eliminations

     (133 )      —                               —       —   

 

  

 Europe

     10,289       10,168       242       117       402       313       1,518   

 

  

 Rest of World

     1,016       930       27       72       140       44       211   

 Corporate and Other [ii], [iii]

     (210 )      53       29       (94 )      1       84       336   

 

  

 Total reportable segments

     23,465       23,465       656       1,211       1,194       746       3,742   

 Other expense, net

                             (25 )                         

 Interest income, net

                             11                          

 

  
    $     23,465     $     23,465         $     656     $     1,197     $     1,194     $     746       3,742   

 Current assets

                                                     7,485   

 Investments, goodwill, deferred tax assets and other assets

                                                     2,447   

 

  

 Consolidated total assets

                                                   $     13,674   

 

  

 

 

 

                                                         
    2009  
   

Total

sales

     External
sales		     Depreciation
and
amortization		     Adjusted
EBIT		     Goodwill     Fixed
asset
additions		    

Fixed 
assets, 

net 

  

 

  

 North America

                                                        

Canada

   $ 3,299     $ 3,000                             $ 62     $ 644   

United States

     4,008       3,762                               71       709   

Mexico

     1,240       1,150                               60       363   

Eliminations

     (550 )      —                               —       —   

 

  

 North America

     7,997       7,912         $ 410     $ 25     $ 639       193       1,716   

 

  

 Europe

                                                        

Euroland [i]

     6,810       6,675                               186       1,041   

Great Britain

     748       748                               4       67   

Other European countries

     1,047       927                               103       379   

Eliminations

     (160 )      —                               —       —   

 

  

 Europe

     8,445       8,350       274       (273 )      421       293       1,487   

 

  

 Rest of World

     650       600       21       40       78       23       150   

 Corporate and Other [ii], [iii]

     (216 )      14       20       (71 )      —       107       388   

 

  

 Total reportable segments

     16,876       16,876       725       (279 )      1,138       616       3,741   

 Other expense, net

                             (191 )                         

 Interest expense, net

                             (7 )                         

 

  
    $     16,876     $     16,876         $     725     $     (477 )    $     1,138     $     616       3,741   

 Current assets

                                                     6,085   

 Investments, goodwill deferred tax assets and other assets

                                                     2,312   

 

  

 Consolidated total assets

                                                   $     12,138   

 

  

 

  [i]

For purposes of segmentation, Euroland has been defined as those European countries that have adopted the euro as their common currency.

 

 

  [ii]

Included in Corporate and Other EBIT are intercompany fees charged to the automotive segments.

 

 

  [iii]

Corporate and Other includes equity loss of $66 million [2010 - $30 million, 2009 - $nil] related to the Company’s proportionate share of the net loss in E-Car. For the year ended December 31, 2010, Corporate and Other also includes sales of $8 million and an Adjusted EBIT loss of $50 million related to E-Car prior to the deconsolidation of E-Car under the Arrangement [note 3].

 

For the year ended December 31, 2011, E-Car had sales of $92 million [2010 - $20 million, 2009 - $5 million], an Adjusted EBIT loss of $91 million [2010 - $89 million, 2009 - $45 million] and fixed assets of $77 million [2010 - $76 million, 2009 - $15 million].

 

[b]

The following table aggregates external revenues by customer as follows:

 

 

                         
    2011     2010     2009   

 

  
       

 General Motors

   $ 6,202     $ 4,731     $ 3,141   

 BMW

     4,191       3,090       2,850   

 Fiat / Chrysler Group

     3,864       3,102       1,817   

 Ford Motor Company

     3,549       3,371       2,525   

 Volkswagen

     3,187       2,567       2,001   

 Daimler AG

     2,793       2,354       1,757   

 Other

     4,962       4,250       2,785   

 

  
    $     28,748     $     23,465     $     16,876   

 

  

 

 

[c]

The following table summarizes external revenues generated by automotive products and services:

 

 

                         
    2011     2010     2009   

 

  
       

 Exterior and interior systems

   $ 11,020     $ 8,637     $ 5,927   

 Body systems and chassis systems

     6,056       4,801       3,374   

 Powertrain systems

     3,667       3,064       2,114   

 Complete vehicle assembly

     2,690       2,163       1,764   

 Vision and electronic systems

     2,066       1,756       1,315   

 Tooling, engineering and other

     2,065       2,005       1,625   

 Closure systems

     1,184       1,039       757   

 

  
    $     28,748     $     23,465     $     16,876