Magna International (MGA) Announces Outlook for 2018 and 2020

Magna International Inc. (NYSE: MGA) today announced its financial outlook for 2018 and 2020.

"The pace of change in the automotive industry continues to accelerate, and we remain at the forefront, investing to further strengthen our position as an innovator and provider of solutions for our customers. These investments should drive business awards in the future and position us to continue building long-term value for shareholders. We expect to deliver above-market growth through 2020 and beyond driven by our portfolio of products tied to Vehicle Electrification, Light-Weighting, Safety and Autonomous Driving" - Don Walker, Magna's Chief Executive Officer

NEW FINANCIAL REPORTING SEGMENTSWe recently announced a realignment of our management structure along product lines, and a corresponding change to our reporting segments. Our outlook reflects our new reporting segments.

CHANGE IN ACCOUNTING FOR TOOLING AND PRE-PRODUCTION ENGINEERINGAs noted in our third quarter 2017 report, we will adopt the new revenue recognition standard and change the accounting for tooling and pre-production engineering beginning in 2018. The primary result of this change is a decrease in sales, substantially offset by a similar decrease in cost of goods sold. Our outlook also reflects this change in accounting. For comparative purposes, we expect the decrease in both sales and cost of goods sold for 2017 to be approximately $2.4 billion.

OUTLOOK In this outlook we have assumed no material unannounced acquisitions or divestitures. In addition, we have assumed that foreign exchange rates for the most common currencies in which we conduct business relative to our U.S. dollar reporting currency will approximate year end 2017 rates.

"We remain focused on striking a balance between investing for the future and improving both returns on capital and free cash flow conversion. In the short term, margins will be affected somewhat by our investments for the future related to electrification and autonomous driving. In addition, the significant growth of our Complete Vehicles business will impact margins, as anticipated. Nevertheless, we expect to generate over $6 billion in free cash flow between 2018 and 2020, which is more than 25% of our current market capitalization." - Vince Galifi, Magna's Chief Financial Officer

Certain of the forward-looking financial measures above are provided on a Non-GAAP basis. We do not provide a reconciliation of such forward-looking measures to the most directly comparable financial measures calculated and presented in accordance with U.S. GAAP. To do so would be potentially misleading and not practical given the difficulty of projecting items that are not reflective of on-going operations in any future period. The magnitude of these items, however, may be significant.

We will be making a presentation at the Deutsche Bank Global Auto Industry Conference on Tuesday, January 16, 2018 at 2:00 p.m. EST during which we will review the details of our Outlook. The presentation will be webcast and available on our website at www.magna.com. The slides accompanying the presentation will be available on our website Tuesday morning by 7:00 a.m. EST.

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