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Segmented Information
 12 Months Ended
Dec. 31, 2016
Segment Reporting [Abstract]  
Segmented Information
24.

SEGMENTED INFORMATION

 

[a]

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, vision, closure and roof systems. Magna also has electronic and software capabilities across many of these areas.

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. 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 is calculated by taking net income from continuing operations and adding back 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:

 

     2016  
     Total
sales		     External
sales		      Depreciation
and
amortization		      Adjusted
EBIT [ii]		     Goodwill      Fixed
asset
additions		      Fixed
assets,
net		  

North America

                   

Canada

    $ 6,784     $ 6,214              $ 201      $ 721  

United States

      10,226       9,857                400        1,573  

Mexico

      5,121       4,586                309        999  

Eliminations

      (1,387 )      —                  —          —    
  

 

 

    

 

 

     

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

North America

      20,744       20,657      $ 486      $ 2,061     $ 595        910        3,293  
  

 

 

    

 

 

     

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

Europe

                   

Western Europe (excluding Great Britain)

      10,537       10,159                578        1,912  

Great Britain

      658       656                24        127  

Eastern Europe

      2,285       2,000                136        545  

Eliminations

      (400 )      —                  —          —    
  

 

 

    

 

 

     

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

Europe

      13,080       12,815        431        543       1,116        738        2,584  
  

 

 

    

 

 

     

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

Asia

      2,674       2,502        103        266       212        97        679  

Rest of World

      465       464        13        (17 )      —          11        62  

Corporate and Other [i]

      (518 )      7        23        45       —          51        404  
  

 

 

    

 

 

     

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

Total reportable segments

    $ 36,445     $ 36,445      $ 1,056      $ 2,898     $ 1,923      $ 1,807      $ 7,022  

Current assets

                      10,163  

Investments, intangible assets, goodwill, deferred tax assets and other assets

                      5,381  
  

 

 

    

 

 

     

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

Consolidated total assets

                    $ 22,566  
  

 

 

    

 

 

     

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

 

     2015  
     Total
sales		     External
sales		      Depreciation
and
amortization		      Adjusted
EBIT [ii]		     Goodwill      Fixed
asset
additions		      Fixed
assets,
net		  

North America

                   

Canada

    $ 6,329     $ 5,856              $ 242      $ 645  

United States

      9,603       9,183                421        1,422  

Mexico

      4,261       3,869                233        755  

Eliminations

      (1,178 )      —                  —          —    
  

 

 

    

 

 

     

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

North America

      19,015       18,908      $ 411      $ 1,934     $ 590        896        2,822  
  

 

 

    

 

 

     

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

Europe

                   

Western Europe (excluding Great Britain)

      8,936       8,635                357        1,263  

Great Britain

      404       404                26        145  

Eastern Europe

      2,110       1,873                112        471  

Eliminations

      (327 )      —                  —          —    
  

 

 

    

 

 

     

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

Europe

      11,123       10,912        276        451       525        495        1,879  
  

 

 

    

 

 

     

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

Asia

      1,981       1,846        77        149       229        121        811  

Rest of World

      461       461        17        (25 )      —          15        51  

Corporate and Other [i]

      (446 )      7        21        20       —          64        385  
  

 

 

    

 

 

     

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

Total reportable segments

    $ 32,134     $ 32,134      $ 802      $ 2,529     $ 1,344      $ 1,591      $ 5,948  

Current assets

                      11,144  

Investments, intangible assets, goodwill, deferred tax assets, and other assets

                      2,595  
  

 

 

    

 

 

     

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

Consolidated total assets

                    $ 19,687  
  

 

 

    

 

 

     

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

 

[i] Included in Corporate and Other Adjusted EBIT are intercompany fees charged to the automotive segments.
[ii] The following table reconciles Net income from continuing operations to Adjusted EBIT:

 

     2016      2015  

Net Income from continuing operations

    $ 2,074      $ 1,940  

Add (deduct):

      

Interest expense, net

      88        44  

Other expense (income), net

      30        (166 ) 

Income taxes

      706        711  
  

 

 

     

 

 

  

Adjusted EBIT

    $ 2,898      $ 2,529  
  

 

 

     

 

 

  

 

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

 

     2016      2015  

General Motors

    $ 7,207      $ 6,424  

Ford Motor Company

      5,667        4,923  

Fiat / Chrysler Group

      5,349        5,094  

Daimler AG

      4,294        3,779  

BMW

      3,786        3,300  

Volkswagen

      3,758        3,301  

Other

      6,384        5,313  
  

 

 

     

 

 

  
   $ 36,445      $ 32,134  
  

 

 

     

 

 

  

 

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

 

     2016      2015  

Body systems and chassis systems

    $ 9,157      $ 7,790  

Powertrain systems

      6,489        4,755  

Exterior systems

      5,272        5,155  

Seating systems

      5,079        4,497  

Tooling, engineering and other

      3,078        2,700  

Vision and electronic systems

      2,768        2,583  

Closure systems

      2,412        2,297  

Complete vehicle assembly

      2,190        2,357  
  

 

 

     

 

 

  
   $ 36,445      $ 32,134