Mr. Don Walker reports
MAGNA ANNOUNCES SECOND QUARTER AND YEAR TO DATE RESULTS
Magna International Inc. has released financial results for the second quarter ended June
30, 2014.
All currency amounts are in U.S. dollars, unless otherwise indicated.
Three months ended June 30, 2014
Magna posted record sales of $9.46-billion for the second quarter ended
June 30, 2014, an increase of 6 per cent over the second quarter of 2013. Magna achieved this sales increase in a period when vehicle production
increased 3 per cent in North America and 2 per cent in Europe, both relative to the
second quarter of 2013. In the second quarter of 2014, Magna's North
American, European and Asian production sales increased, while rest of
world production sales, complete vehicle assembly sales, and tooling,
engineering and other sales decreased, in each case relative to the
comparable quarter in 2013.
Complete vehicle assembly sales decreased to $793-million for the second
quarter of 2014 compared with $796-million for the second quarter of
2013, while complete vehicle assembly volumes decreased 11 per cent to
approximately 34,000 units.
During the second quarter of 2014, income from operations before income
taxes was $692-million, net income attributable to Magna International
was $510-million and diluted earnings per share were $2.32,
increases of $149-million, $95-million and 54 cents, respectively, each
compared with the second quarter of 2013.
During the second quarter ended June 30, 2014, Magna generated cash from
operations of $748-million before changes in operating assets and
liabilities, and invested $148-million in operating assets and
liabilities. Total investment activities for the second quarter of 2014
were $432-million, including $384-million in fixed asset additions, and
$48-million in investments and other assets.
Financing activities during the second quarter ended June 30, 2014,
included the issuance of $750-million of 3.625-per-cent fixed-rate senior notes
which mature on June 15, 2024, as well as the repurchase of $575-million of Magna's common shares.
Six months ended June 30, 2014
Magna posted record sales of $18.43-billion for the six months ended June
30, 2014, an increase of 6 per cent from the six months ended June 30, 2013.
This higher sales level reflected increases in Magna's North American,
European and Asian production sales, as well as complete vehicle
assembly sales, partially offset by decreases in rest of world
production sales, and tooling, engineering and other sales, in each case
relative to the first six months of 2013.
During the six months ended June 30, 2014, vehicle production increased
4 per cent to 8.6 million units in North America and 6 per cent to 10.5 million units
in Europe, each compared with the first six months of 2013.
Complete vehicle assembly sales increased 1 per cent to $1.61-billion for the
six months ended June 30, 2014, compared with the six months ended June
30, 2013, while complete vehicle assembly volumes decreased 8 per cent to
approximately 70,000 units.
During the six months ended June 30, 2014, income from operations before
income taxes was $1.27-billion, net income attributable to Magna
International was $903-million and diluted earnings per share were
$4.08, increases of $273-million, $119-million and 73 cents, respectively,
each compared with the first six months of 2013.
During the six months ended June 30, 2014, Magna generated cash from
operations before changes in operating assets and liabilities of $1.42-billion, and invested $345-million in operating assets and liabilities.
Total investment activities for the first six months of 2014 were $703-million, including $601-million in fixed asset additions, and a $102-million increase in investments and other assets.
Financing activities during the six months ended June 30, 2014, included
the issuance of $750-million of 3.625-per-cent fixed-rate senior notes which
mature on June 15, 2024, as well as the repurchase of $815-million of
Magna's common shares.
A more detailed discussion of Magna's consolidated financial results for the
second quarter and six months ended June 30, 2014, is contained in the
management's discussion and analysis of results of operations and
financial position, and the unaudited interim consolidated financial
statements and notes thereto.
Dividends
Yesterday, Magna's board of directors declared a quarterly dividend of 38
cents with respect to Magna's outstanding common shares for the quarter ended
June 30, 2014. This dividend is payable on Sept. 12, 2014, to
shareholders of record on Aug. 29, 2014.
UPDATED 2014 OUTLOOK
Light vehicle production (units)
North America 16.9 million
Europe 19.8 million
Production sales
North America $17.6-billion to $18.2-billion
Europe $9.9-billion to $10.3-billion
Asia $1.6-billion to $1.8-billion
Rest of world $700-million to $800-million
Total production sales $29.8-billion to $31.1-billion
Complete vehicle assembly sales $3.0-billion to $3.3-billion
Total sales $35.6-billion to $37.3-billion
Operating margin(1) High 6-per-cent range
Tax rate(1) Approximately 24.5 per cent
Capital spending Approximately $1.4-billion
(1) Excluding other expense, net
In the 2014 outlook, in addition to 2014 light vehicle production, Magna has assumed no material acquisitions or divestitures. In addition, Magna has assumed that foreign exchange rates for the most common currencies
in which it conducts business relative to Magna's U.S.-dollar reporting
currency will approximate current rates.
Magna will hold a conference call for interested analysts and shareholders to discuss Magna's second-quarter results on Friday, Aug. 8, 2014, at 8 a.m. EDT. The conference call will be chaired by Don Walker, chief executive officer. The number to use for this call is 1-800-404-8174. The number for overseas callers is 1-416-981-9093. Please call in at least 10 minutes prior to the call. Magna will also webcast the conference call on the company's website. The slide presentation accompanying the conference call will be available on Magna's website Friday morning prior to the call.
CONSOLIDATED STATEMENTS OF INCOME
(in millions of U.S. dollars, except per share figures)
Three months ended Six months ended
June 30, June 30,
2014 2013 2014 2013
Sales $ 9,464 $ 8,962 $18,425 $17,323
Costs and expenses
Cost of goods sold 8,155 7,794 15,917 15,111
Depreciation and amortization 223 260 440 515
Selling, general and administrative 433 410 858 777
Interest expense, net 7 4 9 8
Equity (income) (57) (49) (105) (94)
Other expense, net 11 - 33 6
-------- -------- -------- --------
Income from operations before income taxes 692 543 1,273 1,000
Income taxes 182 131 371 221
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Net income $ 510 $ 412 $ 902 $ 779
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Net loss attributable to non-controlling interests - 3 1 5
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Net income attributable to Magna International 510 415 903 784
Earnings per common share
Basic $ 2.36 $ 1.80 $ 4.13 $ 3.39
Diluted 2.32 1.78 4.08 3.35
Cash dividends paid per common share 0.38 0.32 0.76 0.64
We seek Safe Harbor.
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