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Segmented Information | 12 Months Ended
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Dec. 31, 2017
Segment Reporting [Abstract] |
Segmented Information |
23. | 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 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 from operations and adding back income taxes, interest expense, 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. The following tables show segment information for the Company’s reporting segments and a reconciliation of Adjusted EBIT to the Company’s consolidated income before income taxes:
|  | 2017 |
|  | Total sales |  |  | External sales |  |  | Depreciation and amortization |  |  | Adjusted EBIT [ii] |  |  | Goodwill |  |  | Fixed asset additions |  |  | Fixed assets, net |
North America |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Canada |  | $ | 6,888 |  |  | $ | 6,215 |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 268 |  |  | $ | 883 |
United States |  |  | 9,989 |  |  |  | 9,742 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 301 |  |  |  | 1,593 |
Mexico |  |  | 5,505 |  |  |  | 4,867 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 241 |  |  |  | 1,084 |
Eliminations |  |  | (1,477 | ) |  |  | — |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | — |  |  |  | — |
North America |  |  | 20,905 |  |  |  | 20,824 |  |  | $ | 549 |  |  | $ | 2,064 |  |  | $ | 612 |  |  |  | 810 |  |  |  | 3,560 |
Europe |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Western Europe |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
(excluding Great Britain) |  |  | 12,371 |  |  |  | 11,949 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 624 |  |  |  | 2,443 |
Great Britain |  |  | 597 |  |  |  | 595 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 35 |  |  |  | 162 |
Eastern Europe |  |  | 2,674 |  |  |  | 2,379 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 199 |  |  |  | 728 |
Eliminations |  |  | (465 | ) |  |  | — |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | — |  |  |  | — |
Europe |  |  | 15,177 |  |  |  | 14,923 |  |  |  | 478 |  |  |  | 596 |  |  |  | 1,264 |  |  |  | 858 |  |  |  | 3,333 |
Asia |  |  | 2,791 |  |  |  | 2,608 |  |  |  | 106 |  |  |  | 366 |  |  |  | 223 |  |  |  | 117 |  |  |  | 726 |
Rest of World |  |  | 584 |  |  |  | 583 |  |  |  | 13 |  |  |  | 12 |  |  |  | — |  |  |  | 8 |  |  |  | 57 |
Corporate and Other [i] |  |  | (511 | ) |  |  | 8 |  |  |  | 27 |  |  |  | 70 |  |  |  | — |  |  |  | 65 |  |  |  | 465 |
Total reportable segments |  | $ | 38,946 |  |  | $ | 38,946 |  |  | $ | 1,173 |  |  | $ | 3,108 |  |  | $ | 2,099 |  |  | $ | 1,858 |  |  | $ | 8,141 |
Current assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 11,220 |
Investments, intangible assets, goodwill, deferred tax assets and other assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 6,032 |
Consolidated total assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 25,393 |
|  | 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 |
[i] | Included in Corporate and Other Adjusted EBIT are intercompany fees charged to the automotive segments.
[ii] | The following table reconciles Net income from operations to Adjusted EBIT:
|  | 2017 |  |  | 2016 |
Net Income from operations |  | $ | 2,255 |  |  | $ | 2,074 |
Add (deduct): |  |  |  |  |  |  |  |
Interest expense, net |  |  | 70 |  |  |  | 88 |
Other expense, net |  |  | 39 |  |  |  | 30 |
Income taxes |  |  | 744 |  |  |  | 706 |
Adjusted EBIT |  | $ | 3,108 |  |  | $ | 2,898 |
[b] | The following table aggregates external revenues by customer as follows:
|  | 2017 |  |  | 2016 |
General Motors |  | $ | 6,854 |  |  | $ | 7,207 |
Ford Motor Company |  |  | 6,058 |  |  |  | 5,667 |
Fiat / Chrysler Group |  |  | 5,502 |  |  |  | 5,349 |
Daimler AG |  |  | 4,719 |  |  |  | 4,294 |
BMW |  |  | 4,231 |  |  |  | 3,786 |
Volkswagen |  |  | 4,025 |  |  |  | 3,758 |
Other |  |  | 7,557 |  |  |  | 6,384 |
|  | $ | 38,946 |  |  | $ | 36,445 |
[c] | The following table summarizes external revenues generated by automotive products and services:
|  | 2017 |  |  | 2016 |
Body systems and chassis systems |  | $ | 9,744 |  |  | $ | 9,157 |
Powertrain systems |  |  | 6,773 |  |  |  | 6,489 |
Exterior systems |  |  | 5,325 |  |  |  | 5,272 |
Seating systems |  |  | 5,203 |  |  |  | 5,079 |
Tooling, engineering and other |  |  | 3,397 |  |  |  | 3,078 |
Complete vehicle assembly |  |  | 2,944 |  |  |  | 2,190 |
Vision and electronic systems |  |  | 2,891 |  |  |  | 2,768 |
Closure systems |  |  | 2,669 |  |  |  | 2,412 |
|  | $ | 38,946 |  |  | $ | 36,445 |

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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