23. SEGMENTED INFORMATION

[a]

Magna is a leading global automotive supplier with 313 manufacturing operations and 88 product development, engineering and sales centres in 29 countries. Magna’s 119,000 employees are focused on delivering superior value to customers through innovative processes and World Class Manufacturing. The Company’s capabilities include body, chassis, interiors, exteriors, seating, powertrain, electronics, mirrors, closures and roof systems and modules, as well as complete vehicle engineering and contract manufacturing.

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 expense (income), net; and other (income) 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.

As more fully described in notes 3 and 6, on August 31, 2012 the Company acquired the controlling 27% interest in the E-Car partnership. From August 31, 2010 to August 31, 2012, the Company held a 73% non-controlling interest in E-Car and accounted for this investment using the equity method of accounting. Prior to the deconsolidation of E-Car on August 31, 2010, 100% of the results of E-Car were fully consolidated.

For segment reporting purposes, prior to August 31, 2012 the Company recorded its proportionate share of the losses of E-Car in the Corporate and Other segment. Beginning on August 31, 2012, the consolidated results of E-Car are recorded in the Company’s North America and Europe segments. The footnotes to the following tables provide information regarding amounts that are recorded in each operating segment related to E-Car.

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

2012

Total
sales

External
sales

Depreciation
and
amortization

Adjusted
EBIT

Goodwill

Fixed
asset
additions

Fixed
assets,
net

North America

Canada

6,343

5,907

158

660

United States

7,518

7,053

294

973

Mexico

3,520

3,281

163

573

Eliminations

(1,046

)

—

North America

16,335

16,241

432

1,521

701

615

2,206

Europe

Western Europe (excluding Great Britain)

10,089

9,927

246

1,490

Great Britain

961

952

Eastern Europe

1,847

1,684

117

584

Eliminations

(188

)

—

Europe

12,709

12,563

283

165

611

378

2,132

Rest of World

2,111

2,010

(28

)

160

270

686

Corporate and Other [i]

(318

)

—

249

Total reportable segments

30,837

801

1,658

1,473

1,274

5,273

Other income, net

108

Interest expense, net

(16

)

30,837

801

1,750

1,473

1,274

5,273

Current assets

9,135

Investments, goodwill, deferred tax assets and other assets

2,701

Consolidated total assets

17,109

Included in the table above are the following amounts related to Magna’s share of the E-Car Partnership:


	Total sales		Equity loss		Amortization of intangibles		Adjusted EBIT

*North America*	$	12	$	—	$	52	$	*(76*	)
*Europe*		12		—		—		(6	)
*Corporate and Other*		—		35		—		*(35*	)

*Total reportable segments*	$	24	$	35	$	52	$	*(117*	)

For the year ended December 31, 2012, E-Car had total sales of $91 million and total adjusted EBIT loss of $130 million.


	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
Western Europe (excluding Great Britain)		10,124			9,963									284		1,111
Great Britain		913			909									7		53
Eastern Europe		1,708			1,557									132		438
Eliminations		(189	)		—									—		—

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 [i]		(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

Included in the table above are the following amounts related to Magna’s share of the E-Car Partnership:


	Total sales		Equity loss		Amortization of intangibles		Adjusted EBIT

North America	$	—	$	—	$	—	$	—
Europe		—		—		—		—
Corporate and Other		—		66		—		(66	)

Total reportable segments	$	—	$	66	$	—	$	(66	)

For the year ended December 31, 2011, E-Car had total sales of $92 million and total adjusted EBIT loss of $91 million.


	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
Western Europe (excluding Great Britain)		8,349			8,190									189		1,109
Great Britain		813			813									5		58
Eastern Europe		1,256			1,165									119		351
Eliminations		(129	)		—									—		—

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 [i]		(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

Included in the table above are the following amounts related to Magna’s share of the E-Car Partnership:


					Amortization
	Total sales		Equity loss		of intangibles		Adjusted EBIT

North America	$	—	$	—	$	—	$	—
Europe		—		—		—		—
Corporate and Other		8		30		—		(80	)

Total reportable segments	$	8	$	30	$	—	$	(80	)

For the year ended December 31, 2010, E-Car had total sales of $20 million and total adjusted EBIT loss of $89 million.

[i]	Included in Corporate and Other Adjusted EBIT are intercompany fees charged to the automotive segments.

[b]	The following table aggregates external revenues by customer as follows:


	2012		2011		2010

General Motors	$	5,704	$	6,202	$	4,731
Fiat / Chrysler Group		4,637		3,864		3,102
BMW		4,100		4,191		3,090
Ford Motor Company		3,848		3,549		3,371
Volkswagen		3,835		3,187		2,567
Daimler AG		3,367		2,793		2,354
Other		5,346		4,962		4,250

	$	30,837	$	28,748	$	23,465

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


	2012		2011		2010

Exterior and interior systems	$	11,673	$	11,020	$	8,637
Body systems and chassis systems		7,123		6,056		4,801
Powertrain systems		3,825		3,667		3,064
Complete vehicle assembly		2,561		2,690		2,163
Tooling, engineering and other		2,317		2,065		2,005
Vision and electronic systems		2,132		2,066		1,756
Closure systems		1,206		1,184		1,039

	$	30,837	$	28,748	$	23,465