Magna International Inc.

Magna announces record 1999 fourth quarter and fiscal year results

Aurora, Ontario (ots) - Magna International Inc. (TSE: MG.A, MG.B; NYSE: MGA) today reported record sales, profits and earnings per share for the fourth quarter and fiscal year ended December 31 1999. YEARS ENDED THREE MONTHS ENDED December 31, January 31, December 31, January 31, 1999 1999 1999 1999 ---- ---- ---- ---- Sales $9,359 $7,419 $2,563 $2,210 Net Income $ 430 $ 352(1) $ 125 $ 77 Excl. Other Income $ 430 $ 342 $ 125 $ 77 Fully diluted earnings $ 4.75 $ 4.06 $ 1.34 $ 0.88 per share Excl. Other Income $ 4.75 $ 3.95 $ 1.34 $ 0.88 (1) Includes a U.S dollars 10 million gain on the issue of shares by Decoma. All results are reported in millions of U.S. dollars, except per share figures. As previously announced, in order to more fully reflect the global nature of its automotive business, the Company changed its fiscal year end from July 31 to December 31, effective December 31, 1998 and changed its reporting currency to United States dollars. Consistent with Canadian securities legislation, comparative data for the three months and year ended January 31, 1999 has been presented. Commencing with the first quarter ending March 31, 2000, calendar quarter comparative data will be presented. Sales for the fourth quarter and fiscal year ended December 31, 1999 were $2.6 billion, and $9.4 billion respectively, an increase of approximately 16% and 26% over the comparable fiscal periods ended January 31, 1999. The higher sales level in fiscal 1999 reflects a 14% and 23% increase in North American and European content per vehicle, respectively, over the comparable fiscal year, a period in which North American and European vehicle production increased approximately 6.5% and 5.7% respectively. Tooling and other sales increased by 30% to $1.0 billion in fiscal 1999. Net income for the fourth quarter and fiscal 1999 were $125 million and $430 million respectively, compared to $77 million and $352 million respectively in the comparable fiscal periods. Fully diluted earnings per share set records for the Company at $1.34 and $4.75 for the fourth quarter and fiscal 1999 respectively, representing increases of 52% and 17% respectively over the comparable fiscal periods. During fiscal 1999, cash generated from operations was $829 million. Total investment activities during the year were $1.1 billion, including $873 million in fixed assets and $260 million in investments and other assets, principally for the acquisition of the 40% minority interest in Magna Automobiltechnik AG (``MATAG'') which enhances Magna's position as the premier metal forming company in both Europe and globally, and the acquisitions of Gulfstream Park and Golden Gate Fields by Magna Entertainment Corp. (''MEC''), formerly called MI Entertainment Corp., Magna's non-automotive group. Magna recently announced that regulatory approvals have been obtained from the U.S. and Canadian Securities Commissions which permit Magna to proceed with its previously announced plans to transform MEC into a public company by distributing approximately 20% of MEC's Class A Subordinate Voting Stock to Magna's shareholders. The distribution will take place on March 10, 2000 by way of a special stock dividend. The dividend record date will be February 25, 2000. Magna also recently announced that its Board of Directors had declared its regular quarterly dividend with respect to its outstanding Class A Subordinate Voting Shares and Class B Shares for the fiscal quarter ended December 31, 1999. The dividend of $0.30 per share, an increase from $0.25 per share is payable concurrently with the special stock dividend on March 10, 2000 to shareholders of record on February 25, 2000. Magna, one of the most diversified automotive suppliers in the world, designs, develops and manufactures automotive systems, assemblies and components, and engineers and assembles complete vehicles, primarily for sale to original equipment manufacturers of cars and light trucks in North America, Europe, Mexico, South America and Asia. Magna's products include: exterior decorative systems; interior products including complete seats, instrument and door panel systems and sound insulation; stamped and welded metal parts and assemblies; sunroofs; electro-mechanical devices and assemblies and navigation systems; a variety of plastic parts, including body panels and fascias through Decoma International Inc.; various engine, powertrain and fueling and cooling components through Tesma International Inc.; and a variety of drivetrain components and complete vehicle engineering and assembly through the Steyr-Daimler-Puch Group. Magna has over 58,000 employees in 174 manufacturing operations and 31 product development and engineering centres in 18 countries. Magna will hold a conference call to discuss the fourth quarter and year end results on Tuesday, February 22 at 10:30hrs (EST). The number to use for this call is 00 1 877 330 4535. Please call in 10 minutes prior. The number for overseas callers is 00 1 416 641 6353. The conference call will be chaired by Graham Orr, Executive Vice-President, Corporate Development. For further information, please contact Graham Orr at 00 1 905 726 7099. MAGNA INTERNATIONAL INC. CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS (Unaudited) (United States dollars in millions, except per share figures) Twelve months ended Three months ended December January December January 31, 31, 31, 31, 1999 1999 1999 1999 Sales Automotive $9,260 $7,405 $2,535 $2,196 Magna Entertainment Corp. 99 14 28 14 -------------------------------------------------------------------- 9,359 7,419 2,563 2,210 -------------------------------------------------------------------- Automotive costs and expenses Cost of goods sold 7,622 6,128 2,068 1,846 Depreciation and amortisation 354 267 93 85 Selling, general and administrative 607 497 166 152 Interest expense (income), net 16 (6) 11 (2) Equity income (17) (15) (4) (2) Magna Entertainment Corp. costs and expenses 95 10 31 10 -------------------------------------------------------------------- Operating income - automotive 678 534 201 117 Operating income (loss) - Magna Entertainment Corp. 4 4 (3) 4 Other income - 10 - - -------------------------------------------------------------------- Income before income taxes and minority interest 682 548 198 121 Income taxes 233 184 67 41 Minority interest 19 12 6 3 -------------------------------------------------------------------- Net Income $ 430 $ 352 $ 125 $ 77 ==================================================================== Financing charges on Preferred Securities and other paid-in capital $ (31) $ (27) $ (10) $ (6) -------------------------------------------------------------------- Net income available to Class A Subordinate Voting and Class B Shareholders 399 325 115 71 Retained earnings, beginning of period 1,202 969 1,436 1,182 Dividends on Class A Subordinate Voting and Class B Shares (70) (65) (20) (16) Cumulative adjustment for change in accounting policy (note iii)) - 8 - - -------------------------------------------------------------------- Retained earnings, end of period $1,531 $1,237 $1,531 $1,237 -------------------------------------------------------------------- -------------------------------------------------------------------- Earnings per Class A Subordinate Voting or Class B Share: Basic $ 5.08 $ 4.30 $ 1.46 $0.91 Fully diluted $ 4.75 $ 4.06 $ 1.34 $0.88 -------------------------------------------------------------------- -------------------------------------------------------------------- Cash dividends paid per Class A Subordinate Voting or Class B Share $ 1.11 $ 0.87 $ 0.25 $0.22 -------------------------------------------------------------------- -------------------------------------------------------------------- Average number of Class A Subordinate Voting and Class B Shares outstanding during the period (in millions): Basic 78.5 75.5 78.5 78.4 Fully diluted 91.8 89.3 92.5 91.3 -------------------------------------------------------------------- --------------------------------------------------------------------- MAGNA INTERNATIONAL INC. CONSOLIDATED STATEMENTS OF CASH FLOWS --------------------------------------------------------------------- (Unaudited) (United States dollars in millions) --------------------------------------------------------------------- Twelve months ended Three months ended December January December January 31, 31, 31, 31, 1999 1999 1999 1999 -------------------------------------------------------------------- Cash provided from (used for): OPERATING ACTIVITIES Net income $ 430 $ 352 $ 125 $ 77 Items not involving current cash flows 399 291 130 80 -------------------------------------------------------------------- 829 643 255 157 Changes in non-cash working capital (79) (9) 82 103 -------------------------------------------------------------------- 750 634 337 260 -------------------------------------------------------------------- INVESTMENT ACTIVITIES Fixed asset additions (873) (785) (227) (272) Purchase of subsidiaries (211) (458) (72) (127) Increase in investments and other (49) (115) (21) (24) Proceeds from disposition of investments and other 146 89 38 4 -------------------------------------------------------------------- (987) (1,269) (282) (419) -------------------------------------------------------------------- FINANCING ACTIVITIES Net issue of debt 144 92 65 120 Issues of subordinated debentures (note (iv)) 104 435 - - Issue of Preferred Securities (note (iv)) 274 - - - Issue of Class A Subordinate Voting Shares - 260 - - Issues of shares by subsidiaries 1 28 1 - Repayments of debentures' interest obligation (30) (20) (8) - Preferred Securities distribution (3) - (3) - Dividends paid to minority interests (3) (3) (1) (1) Dividends (87) (66) (20) (17) -------------------------------------------------------------------- 400 726 34 102 -------------------------------------------------------------------- Effect of exchange rate changes on cash and cash equivalents (15) 38 (8) (5) -------------------------------------------------------------------- Net increase (decrease) in cash and cash equivalents during the period 148 129 81 (62) Cash and cash equivalents, beginning of period 484 299 551 490 -------------------------------------------------------------------- Cash and cash equivalents, end of period $ 632 $ 428 $ 632 $ 428 -------------------------------------------------------------------- --------------------------------------------------------------------- MAGNA INTERNATIONAL INC. CONSOLIDATED BALANCE SHEETS --------------------------------------------------------------------- (Unaudited) (United States dollars in millions) --------------------------------------------------------------------- December 31, December 31, 1999 1998 --------------------------------------------------------------------- ASSETS --------------------------------------------------------------------- Current assets: Cash and cash equivalents $ 632 $ 484 Accounts receivable 1,584 1,452 Inventories 672 681 Prepaid expenses and other 46 54 --------------------------------------------------------------------- 2,934 2,671 --------------------------------------------------------------------- Investments 89 106 --------------------------------------------------------------------- Fixed assets, net 3,543 2,873 --------------------------------------------------------------------- Goodwill, net 267 306 --------------------------------------------------------------------- Future tax assets 113 68 --------------------------------------------------------------------- Other assets 272 209 --------------------------------------------------------------------- $7,218 $6,233 --------------------------------------------------------------------- --------------------------------------------------------------------- LIABILITIES AND SHAREHOLDERS' EQUITY --------------------------------------------------------------------- Current liabilities: Bank indebtedness $ 339 $ 262 Accounts payable and other accruals 1,862 1,803 Long-term debt due within one year 70 42 --------------------------------------------------------------------- 2,271 2,107 --------------------------------------------------------------------- Long-term debt 253 205 --------------------------------------------------------------------- Debentures' interest obligation (note (iv)) 208 181 --------------------------------------------------------------------- Other long term liabilities 85 89 --------------------------------------------------------------------- Future tax liabilities 253 123 --------------------------------------------------------------------- Minority interest 124 117 --------------------------------------------------------------------- Shareholders' equity: Capital stock issued and outstanding - Class A Subordinate Voting Shares (issued: 77,438,465; December 31, 1998 - 77,256,183) 1,441 1,430 Class B Shares (convertible into Class A Subordinate Voting Shares) (issued: 1,097,909; December 31, 1998 - 1,098,109) 1 1 Preferred Securities (note (iv)) 277 - Other paid-in capital (note (iv)) 689 599 Retained earnings 1,531 1,202 Currency translation adjustment 85 179 --------------------------------------------------------------------- 4,024 3,411 --------------------------------------------------------------------- $7,218 $6,233 Notes: (i) The Company changed its fiscal year end from July 31 to December 31, effective December 31, 1998. Consistent with Canadian securities legislation, comparative data for the three and twelve months ended January 31, 1999 has been presented as the periods coincide with the Company's previously reported quarter end prior to the year end change. (ii) Effective December 31, 1998, the Company changed its currency to U.S. dollars. In accordance with accounting principles generally accepted in Canada ("Canadian GAAP"), results up to December 31, 1998 have been restated in U.S. dollars using the December 31, 1998 exchange rate of Cdn$1.5305 per US$1.00. Results subsequent to December 31, 1998 have translated using the current rate method which uses the average exchange rate during the period to translate revenues, expenses and cash flows and the balance sheet date rate to translate assets and liabilities. (iii) In the comparative period, the Company adopted the liability method of tax allocation for accounting for income taxes. The cumulative effect of adopting these recommendations was a reduction in future tax liabilities and an increase in retained earnings of $8 million. There was no material impact on net income for any of the periods presented herein. (iv) During the year ended December 31, 1999 the Company issued Cdn$165 million of 8.65% series A preferred securities and US$170 million of 8.875% series B preferred securities (collectively, the "Preferred Securities"). Under Canadian GAAP, the Preferred Securities are included in shareholders' equity and financing charges on the Preferred Securities are accrued over time and charged directly to retained earnings. Also during the year ended December 31, 1999 the Company issued Euro 100 million of 7.08% subordinated debentures. Under Canadian GAAP, the Euro subordinated debentures are recorded as components of debt (under Debentures' interest obligation) and equity (under Other paid-in capital). The interest cost associated with the Euro subordinated debentures is presented in part as Interest expense and in part as a charge directly to retained earnings. (v) The revenues and expenses of the Company's recently established non-automotive group, Magna Entertainment Corp. ("MEC"), have been separately presented in the consolidated statement of income from January 1, 1999. Prior to January 1, 1999, MEC revenues expenses were not significant. ots Original Text Service: Magna Internet: http://www.newsaktuell.de Contact: Graham Orr, Executive Vice-President, Corporate Development at +1 905 726-7099 Original-Content von: Magna International Inc., übermittelt durch news aktuell

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