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Segmented Information
 12 Months Ended
Dec. 31, 2014
Segment Reporting [Abstract]  
Segmented Information

23. SEGMENTED INFORMATION

 

[a] Magna is a global automotive supplier whose product capabilities include producing body, chassis, interior, exterior, seating, powertrain, electronic, vision, closure 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 Asia and 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. Beginning in the fourth quarter of 2013, the Company’s segments consist of North America, Europe, Asia 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, Asia 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, net; and other expense (income), 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:

 

     2014  
     Total
sales		     External
sales		      Depreciation
and
amortization		      Adjusted
EBIT [iii]		     Goodwill      Fixed
asset
additions		      Fixed
assets,
net		  

North America

                   

Canada

    $ 6,799      $ 6,324               $ 204       $ 638   

United States

      9,780        9,252                 351         1,260   

Mexico

      4,357        4,027                 160         655   

Eliminations

      (1,224 )      —                   —           —     
  

 

 

    

 

 

     

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

North America

   19,712      19,603    $ 421    $ 1,992    $ 635      715      2,553   
  

 

 

    

 

 

     

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

Europe

Western Europe (excluding Great Britain)

   11,775      11,487      375      1,359   

Great Britain

   783      781      51      98   

Eastern Europe

   2,580      2,226      91      555   

Eliminations

   (432 )    —        —        —     
  

 

 

    

 

 

     

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

Europe

   14,706      14,494      357      434      588      517      2,012   
  

 

 

    

 

 

     

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

Asia

   1,983      1,837      71      162      127      141      650   

Rest of World

   695      694      17      (35 )    —        8      82   

Corporate and Other [i]

   (455 )    13      24      79      —        206      367   
  

 

 

    

 

 

     

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

Total reportable segments

 $ 36,641    $ 36,641    $ 890    $ 2,632    $ 1,350    $ 1,587    $ 5,664   

Current assets

   10,007   

Investments, goodwill, deferred tax assets and other assets

   2,468   
                  

 

 

  

Consolidated total assets

 $ 18,139   
                  

 

 

  

 

     2013  
     Total
sales		     External
sales		      Depreciation
and
amortization		      Adjusted
EBIT [iii]		     Goodwill      Fixed
asset
additions		      Fixed
assets, net		  

North America

                   

Canada

    $ 6,734      $ 6,223               $ 167       $ 601   

United States

      8,409        7,938                 349         1,135   

Mexico

      3,993        3,698                 129         611   

Eliminations

      (1,182 )      —                   —           —     
  

 

 

    

 

 

     

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

North America

   17,954      17,859    $ 598    $ 1,645    $ 656      645      2,347   
  

 

 

    

 

 

     

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

Europe

Western Europe (excluding Great Britain)

   11,813      11,544      225      1,463   

Great Britain

   975      968      24      70   

Eastern Europe

   2,317      2,013      112      636   

Eliminations

   (387 )    —        —        —     
  

 

 

    

 

 

     

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

Europe

   14,718      14,525      355      375      655      361      2,169   
  

 

 

    

 

 

     

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

Asia

   1,684      1,539      64      85      129      114      597   

Rest of World

   889      889      20      (76 )    —        20      102   

Corporate and Other [i]

   (410 )    23      26      36      —        30      226   
  

 

 

    

 

 

     

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

Total reportable segments

 $ 34,835    $ 34,835    $ 1,063    $ 2,065    $ 1,440    $ 1,170    $ 5,441   

Current assets

   9,923   

Investments, goodwill, deferred tax assets and other assets

   2,626   
                  

 

 

  

Consolidated total assets

 $ 17,990   
                  

 

 

  

 

     2012  
     Total
sales		     External
sales		      Depreciation
and
amortization		      Adjusted
EBIT [iii]		     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      15      58   

Eastern Europe

   1,847      1,684      117      584   

Eliminations

   (188 )    —        —        —     
  

 

 

    

 

 

     

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

Europe

   12,709      12,563      283      165      611      378      2,132   
  

 

 

    

 

 

     

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

Asia

   1,289      1,188      42      49      74      214      558   

Rest of World

   822      822      17      (77 )    87      56      128   

Corporate and Other [i, ii]

   (318 )    23      27      —        —        11      249   
  

 

 

    

 

 

     

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

Total reportable segments

 $ 30,837    $ 30,837    $ 801    $ 1,658    $ 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   
                  

 

 

  

 

  [i] Included in Corporate and Other Adjusted EBIT are intercompany fees charged to the automotive segments.
  [ii] For the year ended December 31, 2012, Corporate and Other includes $35 million equity loss related to the Company’s investment in E-Car.
  [iii] The following table reconciles Adjusted EBIT to Income from operations before income taxes:

 

     2014      2013      2012  

Adjusted EBIT

    $ 2,632       $ 2,065       $ 1,658   

Other (expense) income, net

      (64 )       (144 )       108   

Interest expense, net

      (29 )       (16 )       (16 ) 
  

 

 

     

 

 

     

 

 

  

Income from operations before income taxes

 $ 2,539    $ 1,905    $ 1,750   
  

 

 

     

 

 

     

 

 

  

 

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

 

     2014      2013      2012  

General Motors

    $ 6,734       $ 6,394       $ 5,704   

Fiat / Chrysler Group

      5,897         5,137         4,637   

Ford Motor Company

      4,714         4,450         3,848   

BMW

      4,649         4,882         4,100   

Daimler AG

      4,262         3,949         3,367   

Volkswagen

      4,144         4,047         3,835   

Other

      6,241         5,976         5,346   
  

 

 

     

 

 

     

 

 

  
$ 36,641    $ 34,835    $ 30,837   
  

 

 

     

 

 

     

 

 

  

 

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

 

     2014      2013      2012  

Exterior and interior systems

    $ 12,840       $ 12,308       $ 11,673   

Body systems and chassis systems

      8,079         7,874         7,123   

Powertrain systems

      4,954         4,634         3,825   

Complete vehicle assembly

      3,067         3,062         2,561   

Tooling, engineering and other

      2,971         2,823         2,317   

Vision and electronic systems

      2,644         2,193         2,132   

Closure systems

      2,086         1,941         1,206   
  

 

 

     

 

 

     

 

 

  
$ 36,641    $ 34,835    $ 30,837