Magna International Inc 6-K, filed Oct 30, 2026
Magna International Inc (MGA)
About this 6-K
Magna International Inc filed this 6-K on October 30, 2026.
Magna International Inc. reported third-quarter results: sales of $10.1 billion, down 4%, Adjusted EBIT of $683 million, up 11%, and Adjusted EPS of $1.83, up 38%. AI summary
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign Private Issuer Pursuant to
Rule 13a-16 or 15d-16
under the Securities Exchange Act of 1934
For the month of October 2026
Commission File Number 001-11444
| MAGNA INTERNATIONAL INC. |
| (Exact Name of Registrant as specified in its Charter) |
| 337 Magna Drive, Aurora, Ontario, Canada L4G 7K1 |
| (Address of principal executive office) |
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Form 20-F ¨ Form 40-F x
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| MAGNA INTERNATIONAL INC. | ||
| (Registrant) | ||
| Date: October 30, 2026 | ||
| By: | /s/ “Jason Wolkove” | |
| Jason Wolkove, | ||
| Vice-President, Mergers & Acquisitions, Capital Markets and Secretary | ||
EXHIBITS
Exhibit 99.1
 |
PRESS RELEASE |
MAGNA ANNOUNCES STRONG THIRD QUARTER RESULTS
Highlights(1)
Delivered strong third-quarter 2026 results, reflecting continued productivity improvements and disciplined execution.
| · | Sales decreased 4% to $10.1 billion, reflecting lower light vehicle production and impact of divestitures |
| · | Income from operations before income taxes increased 17% to $552 million |
| · | Adjusted EBIT increased 11% to $683 million, with Adjusted EBIT margin expanding 90 basis points to 6.8% |
| · | Diluted earnings per share were $1.44; Adjusted EPS increased 38% to $1.83 |
| · | Returned $658 million to shareholders during the quarter through dividends and share repurchases |
| · | Reaffirming midpoint of full year Outlook for Adjusted EPS and increasing Free Cash Flow Outlook |
| · | Board approved new Normal Course Issuer Bid to repurchase up to 10% of public float over the next 12 months |
AURORA, Ontario, October 30, 2026 — Magna International Inc. (TSX: MG; NYSE: MGA) today reported financial results for the third quarter ended September 30, 2026.
 |
“Magna’s strong third-quarter results demonstrate that disciplined execution and operational improvements are driving higher earnings, margins and cash generation. Our year-to-date performance reinforces confidence in our Adjusted EPS outlook and supports a higher Free Cash Flow outlook, enabling us to return meaningful capital to shareholders and continue to invest for future growth.
We remain focused on finishing 2026 strong and positioning Magna for success in 2027 and beyond. At our Investor Day on November 11, we look forward to sharing more about our strategic priorities and longer-term outlook.”
- Swamy Kotagiri, Chief Executive Officer |
| THREE MONTHS ENDED SEPTEMBER 30, | NINE MONTHS ENDED SEPTEMBER 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Reported | ||||||||||||||||
| Sales | $ | 10,059 | $ | 10,462 | $ | 31,420 | $ | 31,162 | ||||||||
| Income from operations before income taxes | 552 | 473 | 1,238 | 1,194 | ||||||||||||
| Net income attributable to Magna International Inc. | 383 | 305 | 840 | 830 | ||||||||||||
| Diluted earnings per share | 1.44 | 1.08 | 3.08 | 2.94 | ||||||||||||
| Non-GAAP Financial Measures(1) | ||||||||||||||||
| Adjusted EBIT | $ | 683 | $ | 613 | $ | 1,918 | $ | 1,550 | ||||||||
| Adjusted EPS | 1.83 | 1.33 | 5.06 | 3.55 | ||||||||||||
| Free Cash Flow | 584 | 572 | 1,573 | 560 | ||||||||||||
All results are reported in millions of U.S. dollars, except per share figures, which are in U.S. dollars
(1) Adjusted EBIT, Adjusted EPS, and Free Cash Flow are Non-GAAP financial measures that have no standardized meaning under U.S. GAAP, and as a result may not be comparable to the calculation of similar measures by other companies. Further information and a reconciliation of these Non-GAAP financial measures is included in the back of this press release.
| MAGNA ANNOUNCES STRONG THIRD QUARTER RESULTS | CONNECT WITH MAGNA | 1 |
THREE MONTHS ENDED SEPTEMBER 30, 2026
We posted sales of $10.1 billion for the third quarter of 2026, a decrease of 4% from the third quarter of 2025. The lower sales largely reflects:
| · | lower global light vehicle production, including lower vehicle production in North America and China of 5% and 7%, respectively, partially offset by 3% higher vehicle production in Europe; |
| · | the end of production of certain programs; |
| · | the divestitures of our Lighting and Rooftop Systems businesses during 2026; |
| · | net customer price concessions as compared to the prior year; |
| · | lower engineering revenue, primarily in our Complete Vehicles segment; and |
| · | the net weakening of foreign currencies against the U.S. dollar. |
These factors were partially offset by:
| · | the launch of new programs during or subsequent to the third quarter of 2025; and |
| · | net favourable commercial items. |
Adjusted EBIT increased 11% to $683 million for the third quarter of 2026 compared to $613 million for the third quarter of 2025, primarily due to:
| · | net favourable commercial items; |
| · | productivity and efficiency improvements, including the benefit of operational excellence initiatives and prior restructuring actions, net of customer price concessions; and |
| · | recoveries for tariffs and lower tariff costs incurred. |
These factors were partially offset by:
| · | reduced earnings on lower organic sales, and related product mix impacts; |
| · | higher commodity costs, partially offset by higher scrap recoveries; and |
| · | net transactional foreign exchange losses in the third quarter of 2026, compared to net transactional foreign exchange gains in the third quarter of 2025. |
Income from operations before income taxes was $552 million in the third quarter of 2026, up $79 million or 17% compared to the third quarter of 2025. Income from operations before income taxes includes Other expense, net(2) and Amortization of acquired intangible assets totaling $96 million and $75 million in the third quarters of 2026 and 2025, respectively. Excluding Other expense, net and Amortization of acquired intangible assets from both periods, income from operations before income taxes in the third quarter of 2026 increased $100 million or 18% compared to the third quarter of 2025, largely reflecting the increase in Adjusted EBIT and lower interest expense.
Net income attributable to Magna International Inc. was $383 million for the third quarter of 2026 compared to $305 million in the third quarter of 2025. Excluding Other expense, net, after tax and Amortization of acquired intangibles from both periods, net income attributable to Magna International Inc. was $486 million in the third quarter of 2026 compared to $375 million in the third quarter of 2025.
Diluted earnings per share were $1.44 in the third quarter of 2026, an increase of 33% from the comparable period. Adjusted EPS were $1.83, compared to $1.33 for the third quarter of last year, an increase of 38%. The increase in Adjusted EPS primarily reflects the impact of higher Adjusted EBIT, lower interest expense and effective tax rate, and a decrease in average diluted shares outstanding resulting from share repurchases over the past 12 months.
In the third quarter of 2026, we generated cash from operations of $950 million, and Free Cash Flow of $584 million.
(2) Other expense, net is comprised of restructuring activities, loss on assets held for sale, impacts related to Fisker, and gain on investment during the three months ended September 30, 2026 & 2025. A reconciliation of these Non-GAAP financial measures is included in the back of this press release.
| MAGNA ANNOUNCES STRONG THIRD QUARTER RESULTS | CONNECT WITH MAGNA | 2 |
NINE MONTHS ENDED SEPTEMBER 30, 2026
We posted sales of $31.4 billion for the nine months ended September 30, 2026, an increase of 1% compared to $31.2 billion for the nine months ended September 30, 2025. The higher sales largely reflects:
| · | the launch of new programs during or subsequent to the first nine months of 2025; |
| · | the net strengthening of foreign currencies against the U.S. dollar, which increased reported U.S. dollar sales by $678 million; and |
| · | net favourable commercial items. |
These factors were partially offset by:
| · | the end of production of certain programs; |
| · | lower global light vehicle production; |
| · | lower complete vehicle assembly volumes with full-cost contractual arrangements; |
| · | the divestitures of our Lighting and Rooftop Systems businesses during 2026; |
| · | lower engineering revenue, primarily in our Complete Vehicles segment; and |
| · | net customer price concessions subsequent to the first nine months of 2025. |
Adjusted EBIT increased 24% to $1.9 billion for the nine months ended September 30, 2026 compared to $1.6 billion for the nine months ended September 30, 2025 primarily due to:
| · | productivity and efficiency improvements, including the benefit of operational excellence initiatives and prior restructuring actions, net of customer price concessions; |
| · | net favourable commercial items; |
| · | higher equity income, including favourable commercial items during the first nine months of 2026; |
| · | recoveries for tariffs and lower tariff costs incurred; |
| · | higher net transactional foreign exchange gains in the first nine months of 2026, compared to the first nine months of 2025; |
| · | the net strengthening of foreign currencies against the U.S. dollar, which had a favourable impact on reported U.S. dollar Adjusted EBIT; and |
| · | lower warranty costs. |
These factors were partially offset by:
| · | higher commodity costs, partially offset by higher scrap recoveries; |
| · | reduced earnings on lower organic sales; |
| · | lower income on lower engineering revenue; |
| · | higher employee profit sharing and incentive compensation; and |
| · | higher professional fees. |
During the nine months ended September 30, 2026, income from operations before income taxes was $1.2 billion, up $44 million or 4% over the prior year. Income from operations before income taxes includes Other expense, net(2) and Amortization of acquired intangible assets totaling $571 million and $189 million in the first nine months of 2026 and 2025, respectively. Net income attributable to Magna International Inc. was $840 million in the nine months ended September 30, 2026, compared to $830 million in the prior year period. Excluding Other expense, net, after tax and Amortization of acquired intangibles from both periods, net income attributable to Magna International Inc. was $1.4 billion in the first nine months of 2026 compared to $1.0 billion in the prior year period.
| MAGNA ANNOUNCES STRONG THIRD QUARTER RESULTS | CONNECT WITH MAGNA | 3 |
Diluted earnings per share were $3.08 during the nine months ended September 30, 2026, compared to $2.94 in the comparable period. Adjusted diluted earnings per share were $5.06, compared to $3.55 for the nine months ended September 30, 2025. The increase in Adjusted EPS primarily reflects the impact of higher Adjusted EBIT, lower interest expense and effective tax rate, and a decrease in average diluted shares outstanding resulting from share repurchases over the past 12 months.
During the nine months ended September 30, 2026, we generated cash from operations of $2.6 billion. Free Cash Flow was $1.6 billion in the period, including balance sheet-related customer recoveries for contract adjustments associated with certain electric vehicle programs in North America.
RETURN OF CAPITAL TO SHAREHOLDERS
During the three and nine months ended September 30, 2026, we paid dividends of $129 million and $397 million, respectively. In addition, we repurchased 7.9 million shares for $529 million and 22.9 million shares for $1.434 billion, respectively, for the three and nine months ended September 30, 2026. There were 1.3 million remaining shares available for repurchase as of September 30, 2026, under our current Normal Course Issuer Bid (“NCIB”); the remaining shares were repurchased in October.
On October 29, our Board of Directors declared a third quarter dividend of $0.495 per Common Share. The dividend is payable on November 27, 2026, to shareholders of record as of the close of business on November 13, 2026.
| MAGNA ANNOUNCES STRONG THIRD QUARTER RESULTS | CONNECT WITH MAGNA | 4 |
OTHER MATTERS
Subject to the approval by the Toronto Stock Exchange, our Board of Directors approved a new NCIB to repurchase up to approximately 25.8 million of our Common Shares, representing 10% of our public float of Common Shares. This NCIB is expected to be effective on November 9, 2026 and will terminate no later than November 8, 2027.
SEGMENT SUMMARY
| THREE MONTHS ENDED SEPTEMBER 30, | ||||||||||||||||||||||||
| ($Millions) | Sales | Adjusted EBIT | ||||||||||||||||||||||
| 2026 | 2025 | Change | 2026 | 2025 | Change | |||||||||||||||||||
| Body Exteriors & Structures | $ | 4,158 | $ | 4,147 | $ | 11 | $ | 387 | $ | 305 | $ | 82 | ||||||||||||
| Power & Vision | 3,773 | 3,854 | (81 | ) | 287 | 236 | 51 | |||||||||||||||||
| Seating Systems | 1,247 | 1,520 | (273 | ) | 28 | 62 | (34 | ) | ||||||||||||||||
| Complete Vehicles | 996 | 1,085 | (89 | ) | 33 | 29 | 4 | |||||||||||||||||
| Corporate and Other | (115 | ) | (144 | ) | 29 | (52 | ) | (19 | ) | (33 | ) | |||||||||||||
| Total Reportable Segments | $ | 10,059 | $ | 10,462 | $ | (403 | ) | $ | 683 | $ | 613 | $ | 70 | |||||||||||
| THREE MONTHS ENDED SEPTEMBER 30, | ||||||||||||
Adjusted EBIT as a percentage of sales | ||||||||||||
| 2026 | 2025 | Change | ||||||||||
| Body Exteriors & Structures | 9.3 | % | 7.4 | % | 1.9 | % | ||||||
| Power & Vision | 7.6 | % | 6.1 | % | 1.5 | % | ||||||
| Seating Systems | 2.2 | % | 4.1 | % | (1.9 | )% | ||||||
| Complete Vehicles | 3.3 | % | 2.7 | % | 0.6 | % | ||||||
| Consolidated Average | 6.8 | % | 5.9 | % | 0.9 | % | ||||||
| NINE MONTHS ENDED SEPTEMBER 30, | ||||||||||||||||||||||||
| ($Millions) | Sales | Adjusted EBIT | ||||||||||||||||||||||
| 2026 | 2025 | Change | 2026 | 2025 | Change | |||||||||||||||||||
| Body Exteriors & Structures | $ | 12,658 | $ | 12,366 | $ | 292 | $ | 1,021 | $ | 882 | $ | 139 | ||||||||||||
| Power & Vision | 11,747 | 11,357 | 390 | 784 | 522 | 262 | ||||||||||||||||||
| Seating Systems | 4,035 | 4,265 | (230 | ) | 104 | 74 | 30 | |||||||||||||||||
| Complete Vehicles | 3,380 | 3,587 | (207 | ) | 102 | 101 | 1 | |||||||||||||||||
| Corporate and Other | (400 | ) | (413 | ) | 13 | (93 | ) | (29 | ) | (64 | ) | |||||||||||||
| Total Reportable Segments | $ | 31,420 | $ | 31,162 | $ | 258 | $ | 1,918 | $ | 1,550 | $ | 368 | ||||||||||||
| NINE MONTHS ENDED SEPTEMBER 30, | ||||||||||||
Adjusted EBIT as a percentage of sales | ||||||||||||
| 2026 | 2025 | Change | ||||||||||
| Body Exteriors & Structures | 8.1 | % | 7.1 | % | 1.0 | % | ||||||
| Power & Vision | 6.7 | % | 4.6 | % | 2.1 | % | ||||||
| Seating Systems | 2.6 | % | 1.7 | % | 0.9 | % | ||||||
| Complete Vehicles | 3.0 | % | 2.8 | % | 0.2 | % | ||||||
| Consolidated Average | 6.1 | % | 5.0 | % | 1.1 | % | ||||||
For further details on our segment results, please see our Management's Discussion and Analysis of Results of Operations and Financial Position and our Interim Financial Statements.
| MAGNA ANNOUNCES STRONG THIRD QUARTER RESULTS | CONNECT WITH MAGNA | 5 |
2026 OUTLOOK
The Company is updating its outlook for Full Year 2026. Compared to our previous Outlook (July 2026), Sales have been updated primarily to reflect lower expected vehicle production in China and the unfavourable impacts of program mix. Magna is also narrowing its Outlook for Adjusted EBIT margin, reaffirming the midpoint of its Outlook for Adjusted EPS, and increasing its Outlook for Free Cash Flow.
Updated 2026 Outlook:
| Current | Previous | |||
| Segment Sales | ||||
| Body Exteriors & Structures | $16.7 - $16.9 billion | $16.6 - $17.1 billion | ||
| Power & Vision | $15.4 - $15.6 billion | $15.4 - $15.7 billion | ||
| Seating Systems | $5.2 - $5.4 billion | $5.4 - $5.6 billion | ||
| Complete Vehicles | $4.4 - $4.6 billion | $4.3 - $4.5 billion | ||
| Total Sales | $41.2 - $42.0 billion | $41.3 - $42.5 billion | ||
| Adjusted EBIT Margin(3) | 6.3% - 6.5% | 6.3% - 6.6% | ||
| Adjusted EPS(4) | $6.85 - $7.15 | $6.70 - $7.30 | ||
| Free Cash Flow(5) | $1.85 - $1.90 billion | $1.75 - $1.85 billion | ||
| Macro Assumptions: | ||||
| Light Vehicle Production (millions of units) | ||||
| North America | 15.0 | 15.0 | ||
| Europe | 16.8 | 16.8 | ||
| China | 30.4 | 31.2 | ||
| Average Foreign exchange rates: | ||||
| 1 Canadian dollar equals | U.S. $0.719 | U.S. $0.713 | ||
| 1 euro equals | U.S. $1.156 | U.S. $1.153 | ||
| Other Key Assumptions: | ||||
| Capital Spending | Approx. $1.5 billion | $1.5 - $1.6 billion | ||
| Equity Income (included in EBIT) | Approx. $200 million | $190 - $210 million | ||
| Interest Expense, net | Approx. $150 million | Approx. $160 million | ||
| Income Tax Rate(6) | Approx. 22% | Approx. 23% | ||
| Weighted average diluted shares outstanding | Approx. 270 million | Approx. 270 million |
Notes:
| (3) | Adjusted EBIT Margin is the ratio of Adjusted EBIT to Total Sales. Refer to the reconciliation of Non-GAAP financial measures in the back of this press release for further information. |
| (4) | Adjusted EPS represents Adjusted Net Income attributable to Magna divided by the Diluted weighted average number of Common Shares outstanding during the period. |
| (5) | Refer to the reconciliation of Non-GAAP financial measures in the back of this press release for further information on Free Cash Flow. |
| (6) | The Income Tax Rate has been calculated using Adjusted EBIT and is based on current tax legislation. |
Our full year Outlook for 2026 is provided annually, with quarterly updates, and is intended to provide information about management's current expectations and plans and may not be appropriate for other purposes. Although considered reasonable by Magna as of the date of this document, the 2026 Outlook above and the underlying assumptions may prove to be inaccurate. Accordingly, our actual results could differ materially from our expectations as set forth herein. The risks identified in the “Forward-Looking Statements” section below represent the primary factors which we believe could cause actual results to differ materially from our expectations.
| MAGNA ANNOUNCES STRONG THIRD QUARTER RESULTS | CONNECT WITH MAGNA | 6 |
KEY DRIVERS OF OUR BUSINESS
Our business and operating results are dependent on light vehicle production by our customers in three key regions – North America, Europe, and China. While we supply systems and components to many OEMs globally, we do not supply systems and components for every vehicle, nor is the value of our content consistent from one vehicle to the next. As a result, customer and program mix relative to market trends, as well as the value of our content on specific vehicle production programs, are also important drivers of our results.
Ordinarily, OEM production volumes are aligned with vehicle sales levels and thus affected by changes in such levels. Aside from vehicle sales levels, production volumes are typically impacted by a range of factors, including: geopolitical factors, such as military conflicts and tariffs; supply chains, including disruption to supply of and/or increased costs of steel, aluminum, resin, and energy supplies, as well as semiconductor and memory (DRAM) chips; OEM, supplier or sub-supplier disruptions; relative currency values; commodity prices; labour disruptions, as well as the availability and relative cost of skilled labour; regulatory frameworks; and other factors.
Overall vehicle sales levels are significantly affected by changes in consumer confidence levels, which may in turn be impacted by consumer perceptions and general trends related to the job, housing, and stock markets, as well as other macroeconomic and political factors. Other factors which typically impact vehicle sales levels and thus production volumes include: vehicle affordability; interest rates and/or availability of credit; fuel and energy prices; relative currency values; and considerations applicable to EVs, including EV range, charging infrastructure, and electricity pricing.
NON-GAAP FINANCIAL MEASURES RECONCILIATION
In addition to the financial results reported in accordance with U.S. GAAP, this press release contains references to the Non-GAAP financial measures reconciled below. We believe the Non-GAAP financial measures used in this press release are useful to both management and investors in their analysis of the Company’s financial position and results of operations, and to improve comparability between fiscal periods. In particular, management believes that Adjusted EBIT and Adjusted diluted earnings per share are useful measures in assessing the Company’s financial performance by excluding certain items that are not indicative of the Company's core operating performance. Management also believes that Free Cash Flow is a useful measure in assessing the Company’s ability to generate cash to maintain operations and repay its debt. The presentation of Non-GAAP financial measures should not be considered in isolation, or as a substitute for the Company’s related financial results prepared in accordance with U.S. GAAP.
The following table reconciles Net income to Adjusted EBIT:
Adjusted EBIT
| THREE
MONTHS ENDED SEPTEMBER 30, | NINE
MONTHS ENDED SEPTEMBER 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Net income | $ | 400 | $ | 333 | $ | 878 | $ | 880 | ||||||||
| Add: | ||||||||||||||||
| Amortization of acquired intangible assets | 17 | 27 | 53 | 82 | ||||||||||||
| Interest expense, net | 35 | 65 | 109 | 167 | ||||||||||||
| Other expense, net | 79 | 48 | 518 | 107 | ||||||||||||
| Income taxes | 152 | 140 | 360 | 314 | ||||||||||||
| Adjusted EBIT | $ | 683 | $ | 613 | $ | 1,918 | $ | 1,550 | ||||||||
Adjusted EBIT as a percentage of sales (“Adjusted EBIT margin”)
| THREE
MONTHS ENDED SEPTEMBER 30, | NINE
MONTHS ENDED SEPTEMBER 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Sales | $ | 10,059 | $ | 10,462 | $ | 31,420 | $ | 31,162 | ||||||||
| Adjusted EBIT | $ | 683 | $ | 613 | $ | 1,918 | $ | 1,550 | ||||||||
| Adjusted EBIT as a percentage of sales | 6.8 | % | 5.9 | % | 6.1 | % | 5.0 | % | ||||||||
| MAGNA ANNOUNCES STRONG THIRD QUARTER RESULTS | CONNECT WITH MAGNA | 7 |
NON-GAAP FINANCIAL MEASURES RECONCILIATION (CONTINUED)
Adjusted EPS
| THREE MONTHS ENDED SEPTEMBER 30, | NINE
MONTHS ENDED SEPTEMBER 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Net income attributable to Magna International Inc. | $ | 383 | $ | 305 | $ | 840 | $ | 830 | ||||||||
| Add (deduct): | ||||||||||||||||
| Amortization of acquired intangible assets | 17 | 27 | 53 | 82 | ||||||||||||
| Tax effect on Amortization of acquired intangible assets | (1 | ) | (5 | ) | (4 | ) | (15 | ) | ||||||||
| Other expense, net | 79 | 48 | 518 | 107 | ||||||||||||
| Tax effect on Other expense, net | 8 | — | (27 | ) | (3 | ) | ||||||||||
| Adjusted net income attributable to Magna International Inc. | $ | 486 | $ | 375 | $ | 1,380 | $ | 1,001 | ||||||||
| Diluted weighted average number of Common Shares outstanding during the period (millions): | 266.0 | 281.8 | 273.0 | 281.9 | ||||||||||||
| Adjusted EPS | $ | 1.83 | $ | 1.33 | $ | 5.06 | $ | 3.55 | ||||||||
The following table reconciles Cash provided from operating activities to Free Cash Flow:
Free Cash Flow
| THREE MONTHS ENDED SEPTEMBER 30, | NINE
MONTHS ENDED SEPTEMBER 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Cash provided from operating activities | $ | 950 | $ | 912 | $ | 2,581 | $ | 1,616 | ||||||||
| (Deduct) add: | ||||||||||||||||
| Fixed asset additions | (307 | ) | (267 | ) | (795 | ) | (781 | ) | ||||||||
| Increase in investment, other assets, and intangible assets | (75 | ) | (100 | ) | (320 | ) | (342 | ) | ||||||||
| Proceeds from disposition | 16 | 27 | 107 | 67 | ||||||||||||
| Free Cash Flow | $ | 584 | $ | 572 | $ | 1,573 | $ | 560 | ||||||||
Certain of the forward-looking financial measures provided in our Outlook 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 ongoing operations in any future period. The magnitude of these items, however, may be significant.
| MAGNA ANNOUNCES STRONG THIRD QUARTER RESULTS | CONNECT WITH MAGNA | 8 |
This press release, together with our Management’s Discussion and Analysis of Results of Operations and Financial Position and our Interim Financial Statements, are available in the Investor Relations section of our website at www.magna.com/company/investors and filed electronically through the System for Electronic Document Analysis and Retrieval + (SEDAR+) which can be accessed at www.sedarplus.ca as well as on the United States Securities and Exchange Commission’s Electronic Data Gathering, Analysis and Retrieval System (EDGAR), which can be accessed at www.sec.gov.
We will hold a conference call for interested analysts and shareholders to discuss our third quarter ended September 30, 2026 results on Friday, October 30, 2026 at 8:00 a.m. ET. The conference call will be chaired by Swamy Kotagiri, Chief Executive Officer. The number to use for this call from North America is 1-833-461-5787. International callers should use 1-585-542-9983. Please call in at least 10 minutes prior to the call start time. We will also webcast the conference call at www.magna.com. The slide presentation accompanying the conference call as well as our financial review summary will be available on our website Friday prior to the call.
TAGS
Earnings Release, Quarterly Earnings, Third Quarter Results, Outlook, Financial Results, Global Vehicle Production
INVESTOR CONTACT
Louis Tonelli, Vice-President, Investor Relations
louis.tonelli@magna.com │ 905.726.7035
MEDIA CONTACT
Tracy Fuerst, Vice-President, Corporate Communications & Media Relations
tracy.fuerst@magna.com │ 248.761.7004
TELECONFERENCE CONTACT
Nancy Hansford, Executive Assistant, Investor Relations
nancy.hansford@magna.com │ 905.726.7108
ABOUT MAGNA
Magna is one of the world’s largest automotive suppliers and a trusted partner to automakers in the industry’s most critical markets globally. With operations in 27 countries, we combine global scale with trusted reliability and proven execution. Backed by nearly seven decades of experience, we bring together deep manufacturing expertise with innovative vehicle systems to deliver performance, safety, and quality.
For further information about Magna (NYSE:MGA; TSX:MG), please visit www.magna.com or follow us on social.
| MAGNA ANNOUNCES STRONG THIRD QUARTER RESULTS | CONNECT WITH MAGNA | 9 |
FORWARD-LOOKING STATEMENTS
Certain statements in this press release constitute "forward-looking information" or "forward-looking statements" (collectively, "forward-looking statements"). Any such forward-looking statements are intended to provide information about management's current expectations and plans and may not be appropriate for other purposes. Forward-looking statements may include financial and other projections, as well as statements regarding our future plans, strategic objectives or economic performance, or the assumptions underlying any of the foregoing, and other statements that are not recitations of historical fact. We use words such as "may", "would", "could", "should", "will", "likely", "expect", "anticipate", "assume", "believe", "intend", "plan", "aim", "forecast", "outlook", "project", "potential", "estimate", "target" and similar expressions suggesting future outcomes or events to identify forward-looking statements. The following table identifies the material forward-looking statements contained in this document, together with the material potential risks that we currently believe could cause actual results to differ materially from such forward-looking statements. Readers should also consider all of the risk factors which follow below the table:
| Material Forward-Looking Statement | Material Potential Risks Related to Applicable Forward-Looking Statement |
Light Vehicle Production
|
· Light vehicle sales levels, including due to: - A decline in consumer confidence - Economic uncertainty - Elevated interest rates and availability of consumer credit - Deteriorating vehicle affordability · Tariffs and/or other actions that erode free trade agreements · Production deferrals, cancellations and volume reductions · Production and supply disruptions · Commodities prices · Availability and relative cost of skilled labour |
Total Sales Segment Sales |
· Same risks as for Light Vehicle Production above · Alignment of our product mix with production demand · Supply disruptions, including as a result of semiconductor and memory (DRAM) chip shortages · Customer concentration · Pace of EV adoption, including North American electric vehicle program deferrals, cancellations and volume reductions · Shifts in market shares among OEMs, vehicles and/or vehicle segments · Shifts in consumer "take rates" for products we sell · Relative currency values |
Adjusted EBIT Margin Adjusted Diluted EPS Free Cash Flow |
· Same risks as for Total Sales and Segment Sales above · Execution of critical program launches · Operational underperformance · Product warranty/recall risks · Production inefficiencies · Unmitigated incremental tariff costs · Restructuring costs and/or impairment charges · Inflation · Ability to secure cost recoveries · Price concessions · Commodity cost volatility · Scrap steel price volatility |
| Equity Income | · Same risks as Adjusted EBIT Margin above · Risks related to conducting business through joint ventures · Risks of doing business in foreign markets · Legal and regulatory proceedings · Changes in law |
Share Repurchases Weighted Average Diluted Shares Outstanding |
· Same risks impacting Free Cash Flow above · Ability to repurchase shares for cancellation, including due to normal course issuer bid rules, trading blackouts, and other factors |
| MAGNA ANNOUNCES STRONG THIRD QUARTER RESULTS | CONNECT WITH MAGNA | 10 |
Forward-looking statements are based on information currently available to us and are based on assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate in the circumstances. While we believe we have a reasonable basis for making any such forward-looking statements, they are not a guarantee of future performance or outcomes. In addition to the factors in the table above, whether actual results and developments conform to our expectations and predictions is subject to a number of risks, assumptions, and uncertainties, many of which are beyond our control, and the effects of which can be difficult to predict, including, without limitation:
Macroeconomic, Geopolitical and Other Risks · geopolitical crises and military conflicts; · threats to free trade agreements; · international trade disputes; · planning and forecasting challenges; · interest rates and availability of consumer credit;
Risks Related to the Automotive Industry · pace of EV adoption; · North American EV program deferrals, cancellations and volume reductions; · economic cyclicality; · regional production volumes; · deteriorating vehicle affordability; · intense competition;
Strategic Risks · evolution of the vehicle; · evolving business risk profile; · technology and innovation; · investments in mobility and technology companies;
Customer-Related Risks · customer concentration; · market shifts; · evolving OEM competitive landscape; · dependence on outsourcing; · consumer take rate shifts; · nature of customer blanket purchase orders; · potential OEM production-related disruptions;
Supply Chain Risks · supply chain disruptions; · regional energy supply and pricing; · financial condition of supply base; · supplier claims;
Manufacturing/Operational Risks · product launch; · operational underperformance; · restructuring costs; · impairments; · skilled labour attraction/retention; |
Pricing Risks · quote/pricing assumptions; · customer pricing pressure/contractual arrangements; · commodity price volatility; · scrap steel/aluminum price volatility;
Warranty/Recall Risks · repair/replacement costs; · warranty provisions; · product liability;
IT Security/Cybersecurity Risks · IT/cybersecurity breach; · product cybersecurity breach; · risks related to the use of artificial intelligence;
Merger and Acquisition Risks · inherent merger and acquisition risks; · acquisition integration and synergies;
Other Business Risks · joint ventures; · intellectual property; · risks of doing business in foreign markets; · tax risks; · relative foreign exchange rates; · returns on capital investments; · financial flexibility; · credit ratings changes; · stock price fluctuation;
Legal, Regulatory and Other Risks · legal and regulatory proceedings; and · changes in laws. |
| MAGNA ANNOUNCES STRONG THIRD QUARTER RESULTS | CONNECT WITH MAGNA | 11 |
In evaluating forward-looking statements or forward-looking information, we caution readers not to place undue reliance on any forward-looking statement. Additionally, readers should specifically consider the various factors which could cause actual events or results to differ materially from those indicated by such forward-looking statements, including the risks, assumptions and uncertainties above which are:
| · | discussed under the “Industry Trends and Risks” heading of our Management’s Discussion and Analysis; and |
| · | set out in our Annual Information Form filed with securities commissions in Canada, our annual report on Form 40-F filed with the United States Securities and Exchange Commission, and subsequent filings. |
Readers should also consider discussion of our risk mitigation activities with respect to certain risk factors, which can be also found in our Annual Information Form. Additional information about Magna, including our Annual Information Form, is available through the System for Electronic Data Analysis and Retrieval + (SEDAR+) at www.sedarplus.ca, as well as on the United States Securities and Exchange Commission’s Electronic Data Gathering, Analysis and Retrieval System (EDGAR), which can be accessed at www.sec.gov.
| MAGNA ANNOUNCES STRONG THIRD QUARTER RESULTS | CONNECT WITH MAGNA | 12 |
Exhibit 99.2
MAGNA INTERNATIONAL INC.
Management's Discussion and Analysis of Results of Operations and Financial Position
Unless otherwise noted, all amounts in this Management's Discussion and Analysis of Results of Operations and Financial Position ["MD&A"] are in U.S. dollars and all tabular amounts are in millions of U.S. dollars, except per share figures, which are in U.S. dollars. When we use the terms "we", "us", "our" or "Magna", we are referring to Magna International Inc. and its subsidiaries and jointly controlled entities, unless the context otherwise requires.
This MD&A should be read in conjunction with the unaudited interim consolidated financial statements for the three and nine months ended September 30, 2026 included in this Quarterly Report, and the audited consolidated financial statements and MD&A for the year ended December 31, 2025 included in our 2025 Annual Report to Shareholders.
This MD&A may contain statements that are forward looking. Refer to the "Forward-Looking Statements" section in this MD&A for a more detailed discussion of our use of forward-looking statements.
This MD&A has been prepared as at October 29, 2026.
HIGHLIGHTS
Comparing the third quarters of 2026 and 2025:
| · | Global light vehicle production decreased 3%, reflecting lower production of 5% in North America and 7% in China, partially offset by 3% higher production in Europe. |
| · | Total sales decreased 4% to $10.1 billion, largely reflecting lower global light vehicle production, the end of production of certain programs, the dispositions of our Lighting and Rooftop Systems businesses, and lower complete vehicle assembly sales, partially offset by the launch of new programs. |
| · | Income from operations before income taxes increased 17% to $552 million, and Adjusted EBIT(1) increased 11% to $683 million, largely reflecting higher net favourable commercial items, the impact of productivity and efficiency improvements, and recoveries for tariffs and lower tariff costs incurred, partially offset by lower contribution on lower sales, higher commodity costs and net transactional foreign exchange losses. |
| · | Adjusted EBIT as a percentage of sales(1) increased 90 basis points to 6.8%. |
| · | Diluted earnings per share increased 33% to $1.44, and Adjusted EPS(1) was $1.83, up 38% from last year. The increase in Adjusted EPS was mainly due to the higher Adjusted EBIT, a 6% decrease in weighted average diluted shares outstanding as a result of share repurchases subsequent to the third quarter of 2025, lower interest expense and effective tax rate. |
| · | Cash from operating activities increased 4% to $950 million, primarily driven by higher net income. |
In addition, during the third quarter of 2026, we:
| · | Returned $658 million to shareholders through $529 million in share repurchases and $129 million paid in dividends; |
| · | Were awarded new transfer case and rear drive module business with a North American-based global OEM and new latching business with another North American-based global OEM; and |
| · | Completed the divestitures of our Lighting North America and Rooftop Systems businesses. |
Subject to the approval by the Toronto Stock Exchange, our Board of Directors approved a new Normal Course Issuer Bid ["NCIB"] to purchase up to 25.8 million of our Common Shares, representing approximately 10% of our public float. This NCIB is expected to be effective on November 9, 2026 and will terminate no later than November 8, 2027.
1 Adjusted EBIT, Adjusted EBIT as a percentage of sales, and Adjusted EPS are Non-GAAP financial measures. Refer to the section "Use of Non-GAAP Measures".
| Magna International Inc. Third Quarter Report 2026 | 1 |
OVERVIEW
OUR BUSINESS
Magna is one of the world's largest automotive suppliers and a trusted partner to automakers in the industry's most critical markets globally. With operations in 27 countries, we combine global scale with trusted reliability and proven execution. Backed by nearly seven decades of experience, we bring together deep manufacturing expertise with innovative vehicle systems to deliver performance, safety, and quality. For further information about Magna (NYSE:MGA; TSX:MG), please visit www.magna.com or follow us on social.
INDUSTRY TRENDS & RISKS
Our business and operating results are dependent on light vehicle production by our customers in three key regions – North America, Europe, and China. While we supply systems and components to many original equipment manufacturers ["OEMs"] globally, we do not supply systems and components for every vehicle, nor is the value of our content consistent from one vehicle to the next. As a result, customer and program mix relative to market trends, as well as the value of our content on specific vehicle production programs, are also important drivers of our results.
Ordinarily, OEM production volumes are aligned with vehicle sales levels and thus affected by changes in such levels. Aside from vehicle sales levels, production volumes may be impacted by a range of factors, including: geopolitical factors, such as military conflicts and tariffs; supply chains, including disruption to supply of and/or increased costs of steel, aluminum, resins, and energy supplies, as well as semiconductor and memory (DRAM) chips; OEM, supplier or sub-supplier disruptions; relative currency values; commodity prices; infrastructure; labour disruptions, as well as the availability and relative cost of skilled labour; regulatory frameworks; and other factors.
Overall vehicle sales levels are significantly affected by changes in consumer confidence levels, which may in turn be impacted by consumer perceptions and general trends related to the job, housing, and stock markets, as well as other macroeconomic and political factors. Other factors which may impact vehicle sales levels and thus production volumes include: vehicle affordability; interest rates and/or availability of credit; fuel and energy prices; relative currency values; and considerations applicable to EVs, including EV range, charging infrastructure, electricity pricing, and availability of government rebates.
While the foregoing economic, political and other factors are part of the general context in which the global automotive industry operates, there are a number of significant industry trends that are shaping the future of the industry and creating opportunities and risks for automotive suppliers. We continue to implement a business strategy which is rooted in our best assessment as to the rate and direction of change in the automotive industry. Our short and medium-term operational success, as well as our ability to create long-term value through our business strategy, are subject to a number of risks and uncertainties. Significant industry trends, our business strategy and the major risks we face, are discussed in our Annual Information Form ["AIF"] and Annual Report on Form 40-F ["Form 40-F"] in respect of the year ended December 31, 2025, together with subsequent filings. Those industry trends and risk factors remain substantially unchanged in respect of the third quarter ended September 30, 2026.
USE OF NON-GAAP FINANCIAL MEASURES
In addition to results presented in accordance with accounting principles generally accepted in the United States of America ["U.S. GAAP"], this MD&A includes the use of Adjusted earnings before interest and taxes ["Adjusted EBIT"], Adjusted EBIT as a percentage of sales, Adjusted diluted earnings per share ["Adjusted EPS"], Adjusted Return on Invested Capital, and Adjusted income taxes [collectively, the "Non-GAAP Measures"]. We believe these Non-GAAP financial measures provide additional information that is useful to investors in understanding our underlying performance and trends through the same financial measures employed by our management. Readers should be aware that Non-GAAP Measures have no standardized meaning under U.S. GAAP and accordingly may not be comparable to the calculation of similar measures by other companies. We believe that Adjusted EBIT, Adjusted EBIT as a percentage of sales, Adjusted EPS, Adjusted Return on Invested Capital, and Adjusted income taxes provide useful information to our investors for measuring our operational performance as they exclude certain items that are not reflective of ongoing operating profit and facilitate a comparison with prior periods. The presentation of any Non-GAAP Measures should not be considered in isolation or as a substitute for our related financial results prepared in accordance with U.S. GAAP. Non-GAAP financial measures are presented together with the most directly comparable U.S. GAAP financial measure, and a reconciliation to the most directly comparable U.S. GAAP financial measure, can be found in the "Non-GAAP Financial Measures Reconciliation" and "Income Taxes" section of this MD&A.
| 2 | Magna International Inc. Third Quarter Report 2026 |
RESULTS OF OPERATIONS
AVERAGE FOREIGN EXCHANGE
| For the three months | For the nine months | |||||||||||||||||||||||
| ended September 30, | ended September 30, | |||||||||||||||||||||||
| 2026 | 2025 | Change | 2026 | 2025 | Change | |||||||||||||||||||
| 1 Canadian dollar equals U.S. dollars | 0.715 | 0.726 | - | 2 | % | 0.722 | 0.715 | + | 1 | % | ||||||||||||||
| 1 euro equals U.S. dollars | 1.152 | 1.169 | - | 1 | % | 1.162 | 1.118 | + | 4 | % | ||||||||||||||
| 1 Chinese renminbi equals U.S. dollars | 0.148 | 0.140 | + | 6 | % | 0.147 | 0.139 | + | 6 | % | ||||||||||||||
The preceding table reflects the average foreign exchange rates between the most common currencies in which we conduct business and our U.S. dollar reporting currency.
The results of operations for which the functional currency is not the U.S. dollar are translated into U.S. dollars using the average exchange rates for the relevant period. Throughout this MD&A, reference is made to the impact of translation of foreign operations on reported U.S. dollar amounts where relevant.
Our results can also be affected by the impact of movements in exchange rates on foreign currency transactions (such as raw material purchases, or sales denominated in foreign currencies). However, as a result of our hedging programs, foreign currency transactions in the current period may not have been fully impacted by movements in exchange rates. We record foreign currency transactions at the hedged rate where applicable.
Finally, foreign exchange gains and losses on revaluation and/or settlement of monetary items denominated in a currency other than an operation's functional currency impact reported results. These gains and losses are recorded in selling, general and administrative expense.
LIGHT VEHICLE PRODUCTION VOLUMES
Our operating results are mostly dependent on light vehicle production in the regions reflected in the table below:
Light Vehicle Production Volumes (thousands of units)
| For the three months | For the nine months | |||||||||||||||||||||||
| ended September 30, | ended September 30, | |||||||||||||||||||||||
| 2026 | 2025 | Change | 2026 | 2025 | Change | |||||||||||||||||||
| North America | 3,750 | 3,933 | - | 5 | % | 11,453 | 11,603 | - | 1 | % | ||||||||||||||
| Europe | 3,860 | 3,761 | + | 3 | % | 12,533 | 12,347 | + | 2 | % | ||||||||||||||
| China | 7,595 | 8,143 | - | 7 | % | 21,370 | 22,945 | - | 7 | % | ||||||||||||||
| Other | 6,759 | 6,841 | - | 1 | % | 21,176 | 20,703 | + | 2 | % | ||||||||||||||
| Global | 21,964 | 22,678 | - | 3 | % | 66,532 | 67,598 | - | 2 | % | ||||||||||||||
| Magna International Inc. Third Quarter Report 2026 | 3 |
RESULTS OF OPERATIONS – FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2026
SALES
Sales decreased 4%, or $403 million, to $10.06 billion for the third quarter of 2026 compared to $10.46 billion for the third quarter of 2025 primarily due to:
| · | lower global light vehicle production; |
| · | the end of production of certain programs; |
| · | the divestitures of our Lighting and Rooftop Systems businesses during 2026; |
| · | net customer price concessions subsequent to the third quarter of 2025; |
| · | lower engineering revenue, primarily in our Complete Vehicles segment; and |
| · | the net weakening of foreign currencies against the U.S. dollar, which decreased reported U.S. dollar sales by $14 million. |
These factors were partially offset by:
| · | the launch of new programs during or subsequent to the third quarter of 2025; and |
| · | net commercial items, which had a favourable impact on a year-over-year basis. |
COST OF GOODS SOLD
| For the three months | ||||||||||||
| ended September 30, | ||||||||||||
| 2026 | 2025 | Change | ||||||||||
| Material | $ | 5,965 | $ | 6,374 | $ | (409 | ) | |||||
| Direct labour | 709 | 743 | (34 | ) | ||||||||
| Overhead | 1,759 | 1,856 | (97 | ) | ||||||||
| Cost of goods sold | $ | 8,433 | $ | 8,973 | $ | (540 | ) | |||||
Cost of goods sold decreased $540 million to $8.43 billion for the third quarter of 2026 compared to $8.97 billion for the third quarter of 2025, primarily due to:
| · | lower material, direct labour, and overhead associated with lower organic sales; |
| · | the divestitures of our Lighting and Rooftop Systems businesses during 2026; |
| · | productivity and efficiency improvements, including the benefit of operational excellence initiatives and prior restructuring actions; |
| · | recoveries for tariffs and lower tariff costs incurred; |
| · | lower net engineering costs on lower engineering revenue, primarily in our Complete Vehicles segment; and |
| · | the net weakening of foreign currencies against the U.S. dollar, which decreased reported U.S. dollar costs of goods sold by $16 million. |
These factors were partially offset by:
| · | higher commodity costs; and |
| · | higher pre-operating costs incurred at new facilities. |
| 4 | Magna International Inc. Third Quarter Report 2026 |
SELLING, GENERAL AND ADMINISTRATIVE ["SG&A"]
SG&A expense increased $60 million to $591 million for the third quarter of 2026 compared to $531 million for the third quarter of 2025, primarily as a result of:
| · | net transactional foreign exchange losses in the third quarter of 2026 compared to net transactional foreign exchange gains in the third quarter of 2025; |
| · | higher implementation costs related to operational excellence initiatives; |
| · | higher professional fees; and |
| · | higher incentive compensation expense. |
These factors were partially offset by:
| · | lower investments in research, development, and reduced spending in our new mobility business; |
| · | the divestitures of our Lighting and Rooftop Systems businesses during 2026; and |
| · | lower labour and benefit costs. |
DEPRECIATION
Depreciation decreased $2 million to $387 million for the third quarter of 2026 compared to $389 million for the third quarter of 2025, primarily due to the divestitures of our Lighting and Rooftop Systems businesses during 2026, and the end of production of certain programs. These factors were partially offset by increased capital deployed at new and existing facilities, including to support the launch of programs.
AMORTIZATION OF ACQUIRED INTANGIBLE ASSETS
Amortization of acquired intangible assets decreased $10 million to $17 million for the third quarter of 2026 compared to $27 million for the third quarter of 2025 primarily due to the impairment of acquired intangible assets in our Electronics reporting unit in our Power & Vision segment during the fourth quarter of 2025.
INTEREST EXPENSE, NET
During the third quarter of 2026, we recorded net interest expense of $35 million compared to $65 million for the third quarter of 2025. The $30 million decrease was primarily a result of lower interest expense on decreased long-term debt and short-term borrowings, and interest incurred on a value-added tax ["VAT"] reassessment during the third quarter of 2025.
EQUITY INCOME
Equity income decreased $9 million to $35 million for the third quarter of 2026 compared to $44 million for the third quarter of 2025, primarily as a result of reduced earnings on lower sales and unfavourable product mix at certain equity-accounted entities, and higher income tax expense. These factors were partially offset by net commercial items, which had a favourable impact on a year-over-year basis, and lower depreciation expense, primarily due to the impairment of long-lived assets during the fourth quarter of 2025 at certain equity-accounted entities.
| Magna International Inc. Third Quarter Report 2026 | 5 |
OTHER EXPENSE, NET
| For the three months | ||||||||
| ended September 30, | ||||||||
| 2026 | 2025 | |||||||
| Restructuring activities (1) | $ | 83 | $ | 46 | ||||
| Loss on assets held for sale (2) | 5 | — | ||||||
| Impacts related to Fisker (3) | (4 | ) | — | |||||
| Investments (4) | (5 | ) | 2 | |||||
| Other expense, net | $ | 79 | $ | 48 | ||||
| (1) | Restructuring activities |
| For the three months | ||||||||
| ended September 30, | ||||||||
| 2026 | 2025 | |||||||
| Power & Vision | $ | 76 | $ | 34 | ||||
| Body Exteriors & Structures | 7 | — | ||||||
| Complete Vehicles | — | 12 | ||||||
| Other expense, net | 83 | 46 | ||||||
| Tax effect | — | — | ||||||
| Net loss attributable to Magna | $ | 83 | $ | 46 | ||||
During the third quarter of 2026, we recorded restructuring charges of $76 million [$76 million after tax] in our Power & Vision segment related to plant closures and significant rightsizing at facilities in Europe. In our Body Exteriors & Structures segment, we recorded restructuring charges of $7 million [$7 million after tax] related to rightsizing at a facility in Europe.
During the third quarter of 2025, we recorded $24 million [$24 million after tax] of charges related to significant rightsizing activities and plant consolidations at facilities primarily in Europe, as well as $10 million [$10 million after tax] of equity losses related to our share of restructuring activities at an equity method investee, each in our Power & Vision segment. In our Complete Vehicles segment, we recorded $12 million [$12 million after tax] of charges related to rightsizing activities at two facilities in Europe.
| (2) | Loss on assets held for sale |
| Three months ended | Nine months ended | |||||||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||||||
| Rooftop | Rooftop | |||||||||||||||||||||||
| Lighting | Systems | Total | Lighting | Systems | Total | |||||||||||||||||||
| Total asset impairment | $ | 3 | $ | — | $ | 3 | $ | 424 | $ | 74 | $ | 498 | ||||||||||||
| Costs to sell incurred | — | 1 | 1 | 2 | 2 | 4 | ||||||||||||||||||
| Total impairment loss | 3 | 1 | 4 | 426 | 76 | 502 | ||||||||||||||||||
| Loss (gain) on divestiture | 3 | (2 | ) | 1 | 1 | (2 | ) | (1 | ) | |||||||||||||||
| Other expense (income), net | 6 | (1 | ) | 5 | 427 | 74 | 501 | |||||||||||||||||
| Tax effect | 6 | — | 6 | (27 | ) | — | (27 | ) | ||||||||||||||||
| Net loss (gain) attributable to Magna | $ | 12 | $ | (1 | ) | $ | 11 | $ | 400 | $ | 74 | $ | 474 | |||||||||||
Sale of Lighting and Rooftop Systems Businesses
During the three and nine months ended September 30, 2026, we recognized an impairment loss of $4 million and $502 million related to the held for sale assets of our Lighting and Rooftop Systems businesses.
On June 29, 2026, we completed the sale of our Lighting Europe business to Mutares SE & Co. KGaA ["Mutares"] and provided the buyer with $18 million of funding, net of transaction costs. We recognized a gain on divestiture of $2 million upon closing.
On August 4, 2026, we completed the sale of our Rooftop Systems business to Mutares and provided the buyer with $19 million of funding, net of transaction costs. We recognized a gain on divestiture of $2 million upon closing.
On August 4, 2026, we completed the sale of our Lighting North America business to AURELIUS Investment Lux Alpha SARL ["AURELIUS"] for total consideration of $62 million, net of transaction costs. We recognized a loss on divestiture of $3 million upon closing.
| 6 | Magna International Inc. Third Quarter Report 2026 |
| (3) | Impacts related to Fisker |
During the third quarter of 2026, we recognized a gain of $4 million [$3 million after tax] related to the settlement of claims associated with Fisker's bankruptcy.
| (4) | Investments |
| For the three months | ||||||||
| ended September 30, | ||||||||
| 2026 | 2025 | |||||||
| Net revaluation gain on public and private equity investments | $ | (5 | ) | $ | (1 | ) | ||
| Non-cash impairment charge | — | 2 | ||||||
| Loss on sales of public equity investments | — | 1 | ||||||
| Other (income) expense, net | (5 | ) | 2 | |||||
| Tax effect | 1 | — | ||||||
| Net (gain) loss attributable to Magna | $ | (4 | ) | $ | 2 | |||
INCOME FROM OPERATIONS BEFORE INCOME TAXES
Income from operations before income taxes was $552 million for the third quarter of 2026 compared to $473 million for the third quarter of 2025. The $79 million increase is a result of the following changes, each as discussed above:
| For the three months | ||||||||||||
| ended September 30, | ||||||||||||
| 2026 | 2025 | Change (i) | ||||||||||
| Sales | $ | 10,059 | $ | 10,462 | $ | (403 | ) | |||||
| Costs and expenses | ||||||||||||
| Cost of goods sold | 8,433 | 8,973 | 540 | |||||||||
| Selling, general & administrative | 591 | 531 | (60 | ) | ||||||||
| Depreciation | 387 | 389 | 2 | |||||||||
| Amortization of acquired intangible assets | 17 | 27 | 10 | |||||||||
| Interest expense, net | 35 | 65 | 30 | |||||||||
| Equity income | (35 | ) | (44 | ) | (9 | ) | ||||||
| Other expense, net | 79 | 48 | (31 | ) | ||||||||
| Income from operations before income taxes | $ | 552 | $ | 473 | $ | 79 | ||||||
| (i) | Change represents the increase (decrease) on Income from operations before income taxes. |
INCOME TAXES
| For the three months ended September 30, | ||||||||||||||||
| 2026 | 2025 | |||||||||||||||
| Income taxes as reported | $ | 152 | 27.5 | % | $ | 140 | 29.6 | % | ||||||||
| Tax effect on Other expense, net and | ||||||||||||||||
| Amortization of acquired intangible assets | (7 | ) | (5.1 | ) | 5 | (3.1 | ) | |||||||||
| Adjusted income taxes | $ | 145 | 22.4 | % | $ | 145 | 26.5 | % | ||||||||
Excluding the tax effect on Other expense, net and Amortization of acquired intangible assets, our effective income tax rate decreased to 22.4% for the third quarter of 2026, compared to 26.5% for the third quarter of 2025, primarily due to a change in mix of earnings and lower unfavourable changes in our reserves for uncertain tax positions.
INCOME ATTRIBUTABLE TO NON-CONTROLLING INTERESTS
Income attributable to non-controlling interests was $17 million for the third quarter of 2026 compared to $28 million for the third quarter of 2025. The $11 million decrease was primarily due to lower income at certain entities in China, and the acquisition of the non-controlling 35% interest in a consolidated subsidiary, which had income during the third quarter of 2025, prior to the acquisition.
| Magna International Inc. Third Quarter Report 2026 | 7 |
NET INCOME ATTRIBUTABLE TO MAGNA INTERNATIONAL INC.
Net income attributable to Magna International Inc. was $383 million for the third quarter of 2026 compared to $305 million for the third quarter of 2025. This $78 million increase was as a result of an increase in income from operations before income taxes of $79 million, and a decrease in income attributable to non-controlling interests of $11 million, partially offset by an increase in income taxes of $12 million.
EARNINGS PER SHARE
| For the three months | ||||||||||||
| ended September 30, | ||||||||||||
| 2026 | 2025 | % Change | ||||||||||
| Earnings per Common Share | ||||||||||||
| Basic | $ | 1.45 | $ | 1.08 | + | 34 | % | |||||
| Diluted | $ | 1.44 | $ | 1.08 | + | 33 | % | |||||
| Weighted average number of Common Shares outstanding (millions) | ||||||||||||
| Basic | 263.7 | 281.8 | - | 6 | % | |||||||
| Diluted | 266.0 | 281.8 | - | 6 | % | |||||||
| Adjusted EPS | $ | 1.83 | $ | 1.33 | + | 38 | % | |||||
Diluted earnings per share was $1.44 for the third quarter of 2026, compared to diluted earnings per share of $1.08 for the third quarter of 2025. The $0.36 increase was driven primarily by higher net income attributable to Magna International Inc., as discussed above, and a decrease in the weighted average number of diluted shares outstanding. The decrease in the weighted average number of diluted shares outstanding was substantially due to the purchase and cancellation of Common Shares subsequent to the third quarter of 2025, pursuant to our normal course issuer bid, partially offset by the impact of equity-based compensation during the same period.
Other expense, net, and Amortization of acquired intangible assets, each after tax, negatively impacted diluted earnings per share by $0.39 in the third quarter of 2026 and $0.25 in the third quarter of 2025, respectively. Adjusted EPS, as reconciled in the "Non-GAAP Financial Measures Reconciliation" section, was $1.83 for the third quarter of 2026, compared to $1.33 for the third quarter of 2025, an increase of $0.50 or 38%.
| 8 | Magna International Inc. Third Quarter Report 2026 |
NON-GAAP PERFORMANCE MEASURES – FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2026
ADJUSTED EBIT AS A PERCENTAGE OF SALES
The table below shows the change in Magna's Sales and Adjusted EBIT by segment, as well as the impact each segment's changes had on Magna's Adjusted EBIT as a percentage of sales, for the third quarter of 2026 compared to the third quarter of 2025:
| Adjusted EBIT | ||||||||||||
| Adjusted | as a percentage | |||||||||||
| Sales | EBIT | of sales | ||||||||||
| Third quarter of 2025 | $ | 10,462 | $ | 613 | 5.9 | % | ||||||
| Increase (decrease) related to: | ||||||||||||
| Body Exteriors & Structures | 11 | 82 | + | 0.8 | % | |||||||
| Power & Vision | (81 | ) | 51 | + | 0.5 | % | ||||||
| Seating Systems | (273 | ) | (34 | ) | - | 0.2 | % | |||||
| Complete Vehicles | (89 | ) | 4 | + | 0.1 | % | ||||||
| Corporate and Other | 29 | (33 | ) | - | 0.3 | % | ||||||
| Third quarter of 2026 | $ | 10,059 | $ | 683 | 6.8 | % | ||||||
Adjusted EBIT as a percentage of sales increased to 6.8% for the third quarter of 2026 compared to 5.9% for the third quarter of 2025 primarily due to:
| · | net commercial items, which had a favourable impact on a year-over-year basis; |
| · | productivity and efficiency improvements, including the benefit of operational excellence initiatives and prior restructuring actions, net of customer price concessions; |
| · | recoveries for tariffs and lower tariff costs incurred; and |
| · | the divestitures of our Lighting and Rooftop Systems businesses during 2026. |
These factors were partially offset by:
| · | higher commodity costs partially offset by higher scrap recoveries; |
| · | reduced earnings on lower organic sales, and related product mix impacts; |
| · | net transactional foreign exchange losses in the third quarter of 2026 compared to net transactional foreign exchange gains in the third quarter of 2025; |
| · | higher employee profit sharing and incentive compensation; |
| · | lower equity income; and |
| · | lower income on lower engineering revenue. |
| Magna International Inc. Third Quarter Report 2026 | 9 |
ADJUSTED RETURN ON INVESTED CAPITAL
Adjusted Return on Invested Capital increased to 12.2% for the third quarter of 2026, compared to 9.2% for the third quarter of 2025, as a result of an increase in Adjusted After-tax operating profits, and lower Average Invested Capital.
Average Invested Capital decreased $2.26 billion to $17.32 billion for the third quarter of 2026, compared to $19.58 billion for the third quarter of 2025, primarily due to:
| · | long-lived asset impairments during or subsequent to the third quarter of 2025; |
| · | average depreciation expense on fixed assets in excess of average investment in fixed assets; |
| · | a decrease in average operating assets and liabilities; |
| · | the net weakening of foreign currencies against the U.S. dollar; and |
| · | divestitures, net of acquisitions, during or subsequent to the third quarter of 2025. |
These factors were partially offset by:
| · | higher net investments in public and private equity companies; and |
| · | average amortization expense on operating lease right-of-use assets in excess of average investment in operating lease right-of-use assets. |
| 10 | Magna International Inc. Third Quarter Report 2026 |
SEGMENT ANALYSIS
We are a global automotive supplier that has complete vehicle engineering and contract manufacturing expertise, as well as product capabilities which include body, chassis, exterior, seating, powertrain, active driver assistance, electronics, mechatronics, mirrors and lighting systems. We also have electronic and software capabilities across many of these areas.
Our reporting segments are: Body Exteriors & Structures; Power & Vision; Seating Systems; and Complete Vehicles.
| For the three months ended September 30, | ||||||||||||||||||||||||
| Sales | Adjusted EBIT | |||||||||||||||||||||||
| 2026 | 2025 | Change | 2026 | 2025 | Change | |||||||||||||||||||
| Body Exteriors & Structures | $ | 4,158 | $ | 4,147 | $ | 11 | $ | 387 | $ | 305 | $ | 82 | ||||||||||||
| Power & Vision | 3,773 | 3,854 | (81 | ) | 287 | 236 | 51 | |||||||||||||||||
| Seating Systems | 1,247 | 1,520 | (273 | ) | 28 | 62 | (34 | ) | ||||||||||||||||
| Complete Vehicles | 996 | 1,085 | (89 | ) | 33 | 29 | 4 | |||||||||||||||||
| Corporate and Other | (115 | ) | (144 | ) | 29 | (52 | ) | (19 | ) | (33 | ) | |||||||||||||
| Total reportable segments | $ | 10,059 | $ | 10,462 | $ | (403 | ) | $ | 683 | $ | 613 | $ | 70 | |||||||||||
BODY EXTERIORS & STRUCTURES
| For the
three months ended September 30, | ||||||||||||||||
| 2026 | 2025 | Change | ||||||||||||||
| Sales | $ | 4,158 | $ | 4,147 | $ | 11 | — | |||||||||
| Adjusted EBIT | $ | 387 | $ | 305 | $ | 82 | + | 27 | % | |||||||
| Adjusted EBIT as a percentage of sales | 9.3 | % | 7.4 | % | + | 1.9 | % | |||||||||
Sales – Body Exteriors & Structures
Sales increased $11 million, to $4.16 billion for the third quarter of 2026, compared to $4.15 billion for the third quarter of 2025, primarily due to:
| · | the launch of programs during or subsequent to the third quarter of 2025; and |
| · | net commercial items, which had a favourable impact on a year-over-year basis. |
These factors were partially offset by:
| · | lower global light vehicle production; |
| · | the end of production of certain programs; |
| · | net customer price concessions; and |
| · | the net weakening of foreign currencies against the U.S. dollar, which decreased reported U.S. dollar sales by $13 million. |
| Magna International Inc. Third Quarter Report 2026 | 11 |
Adjusted EBIT and Adjusted EBIT as a percentage of sales – Body Exteriors & Structures
Adjusted EBIT increased $82 million to $387 million for the third quarter of 2026, compared to $305 million for the third quarter of 2025, and Adjusted EBIT as a percentage of sales increased to 9.3% from 7.4%. These increases were primarily due to:
| · | net commercial items, which had a favourable impact on a year-over-year basis; |
| · | productivity and efficiency improvements, including the benefit of operational excellence initiatives and prior restructuring actions, net of customer price concessions; and |
| · | recoveries for tariffs and lower tariff costs incurred. |
These factors were partially offset by:
| · | reduced earnings on lower organic sales, and related product mix impacts; and |
| · | higher commodity costs partially offset by higher scrap recoveries. |
POWER & VISION
| For the
three months ended September 30, | ||||||||||||||||
| 2026 | 2025 | Change | ||||||||||||||
| Sales | $ | 3,773 | $ | 3,854 | $ | (81 | ) | - | 2 | % | ||||||
| Adjusted EBIT | $ | 287 | $ | 236 | $ | 51 | + | 22 | % | |||||||
| Adjusted EBIT as a percentage of sales | 7.6 | % | 6.1 | % | + | 1.5 | % | |||||||||
Sales – Power & Vision
Sales decreased 2%, or $81 million, to $3.77 billion for the third quarter of 2026, compared to $3.85 billion for the third quarter of 2025, primarily due to:
| · | lower global light vehicle production; |
| · | the divestitures of our Lighting and Rooftop Systems businesses during 2026; |
| · | the end of production of certain programs; and |
| · | net customer price concessions. |
These factors were partially offset by:
| · | the launch of programs during or subsequent to the third quarter of 2025; |
| · | net commercial items, which had a favourable impact on a year-over-year basis; and |
| · | the net strengthening of foreign currencies against the U.S. dollar, which increased reported U.S. dollar sales by $14 million. |
| 12 | Magna International Inc. Third Quarter Report 2026 |
Adjusted EBIT and Adjusted EBIT as a percentage of sales – Power & Vision
Adjusted EBIT increased $51 million to $287 million for the third quarter of 2026, compared to $236 million for the third quarter of 2025, and Adjusted EBIT as a percentage of sales increased to 7.6% from 6.1%. These increases were primarily due to:
| · | productivity and efficiency improvements, including the benefit of operational excellence initiatives and prior restructuring actions, net of customer price concessions; |
| · | net commercial items, which had a favourable impact on a year-over-year basis; |
| · | recoveries for tariffs and lower tariff costs incurred; |
| · | the divestitures of our Lighting and Rooftop Systems businesses during 2026; |
| · | lower warranty costs of $6 million; and |
| · | the net strengthening of foreign currencies against the U.S. dollar, which had a $5 million favourable impact on reported U.S. dollar Adjusted EBIT. |
These factors were partially offset by:
| · | higher commodity costs; |
| · | reduced earnings on higher organic sales, including the impact of product mix; and |
| · | lower equity income. |
SEATING SYSTEMS
| For the
three months ended September 30, | ||||||||||||||||
| 2026 | 2025 | Change | ||||||||||||||
| Sales | $ | 1,247 | $ | 1,520 | $ | (273 | ) | - | 18 | % | ||||||
| Adjusted EBIT | $ | 28 | $ | 62 | $ | (34 | ) | - | 55 | % | ||||||
| Adjusted EBIT as a percentage of sales | 2.2 | % | 4.1 | % | - | 1.9 | % | |||||||||
Sales – Seating Systems
Sales decreased 18%, or $273 million, to $1.25 billion for the third quarter of 2026, compared to $1.52 billion for the third quarter of 2025, primarily due to:
| · | lower global light vehicle production; |
| · | the end of production of certain programs; |
| · | the timing of a significant program in North America transitioning from the end of production to the launch of the related replacement program; and |
| · | net customer price concessions. |
These factors were partially offset by the launch of programs during or subsequent to the third quarter of 2025 and net commercial items, which had a favourable impact on a year-over-year basis.
| Magna International Inc. Third Quarter Report 2026 | 13 |
Adjusted EBIT and Adjusted EBIT as a percentage of sales – Seating Systems
Adjusted EBIT decreased $34 million to $28 million for the third quarter of 2026, compared to $62 million for the third quarter of 2025, and Adjusted EBIT as a percentage of sales decreased to 2.2% from 4.1%. These decreases were primarily due to:
| · | reduced earnings on lower organic sales; |
| · | higher launch costs; and |
| · | the benefit of government research and development incentives in the third quarter of 2025. |
These factors were partially offset by:
| · | net commercial items, which had a favourable impact on a year-over-year basis; |
| · | lower tariff costs incurred; and |
| · | productivity and efficiency improvements, including the benefit of operational excellence initiatives and prior restructuring actions, net of customer price concessions. |
COMPLETE VEHICLES
| For the
three months ended September 30, | ||||||||||||||||
| 2026 | 2025 | Change | ||||||||||||||
| Complete Vehicle Assembly Volumes (thousands of units)(i) | 25.8 | 14.7 | + | 11.1 | + | 76 | % | |||||||||
| Sales | $ | 996 | $ | 1,085 | $ | (89 | ) | - | 8 | % | ||||||
| Adjusted EBIT | $ | 33 | $ | 29 | $ | 4 | + | 14 | % | |||||||
| Adjusted EBIT as a percentage of sales | 3.3 | % | 2.7 | % | + | 0.6 | % | |||||||||
(i) Vehicles produced at our Complete Vehicle operations are included in Europe Light Vehicle Production volumes.
Sales – Complete Vehicles
Sales decreased 8%, or $89 million, to $1.00 billion for the third quarter of 2026, compared to $1.09 billion for the third quarter of 2025, while complete vehicle assembly volumes increased 76%. The increase in volumes was primarily due to higher volumes with value-added contractual arrangements.
The decrease in sales is primarily a result of the end of production of certain programs with full-costed contractual arrangements, lower engineering revenue, and a $15 million decrease in reported U.S. dollar sales as a result of the weakening of the euro against the U.S. dollar. These factors were partially offset by the launch of programs with value-added contractual arrangements during the third quarter of 2025.
| 14 | Magna International Inc. Third Quarter Report 2026 |
Adjusted EBIT and Adjusted EBIT as a percentage of sales – Complete Vehicles
Adjusted EBIT increased $4 million to $33 million for the third quarter of 2026, compared to $29 million for the third quarter of 2025, and Adjusted EBIT as a percentage of sales increased to 3.3% from 2.7%. These increases were primarily due to higher earnings as a result of net favourable program mix.
This factor was partially offset by:
| · | net commercial items, which had an unfavourable impact on a year-over-year basis; and |
| · | lower income on lower engineering revenue. |
CORPORATE AND OTHER
Adjusted EBIT was a loss of $52 million for the third quarter of 2026 compared to a loss of $19 million for the third quarter of 2025. The $33 million decrease was primarily due to:
| · | net transactional foreign exchange losses in the third quarter of 2026 compared to net transactional foreign exchange gains in the third quarter of 2025; |
| · | higher incentive compensation expense; and |
| · | higher professional fees. |
These factors were partially offset by lower investments in research, development and reduced spending in our new mobility business.
| Magna International Inc. Third Quarter Report 2026 | 15 |
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
OPERATING ACTIVITIES
| For the
three months ended September 30, | ||||||||||||
| 2026 | 2025 | Change | ||||||||||
| Net income | $ | 400 | $ | 333 | ||||||||
| Items not involving current cash flows | 406 | 454 | ||||||||||
| 806 | 787 | $ | 19 | |||||||||
| Changes in operating assets and liabilities | 144 | 125 | 19 | |||||||||
| Cash provided from operating activities | $ | 950 | $ | 912 | $ | 38 | ||||||
Cash provided from operating activities
Comparing the third quarter of 2026 to 2025, cash provided from operating activities increased by $38 million primarily as a result of higher net income, higher changes in operating assets and liabilities, offset by lower items not involving current cash flows. The key components of this increase were:
| · | a $95 million decrease in cash paid for labour; |
| · | a $27 million decrease in cash interest paid; |
| · | a $14 million increase in cash received from customers; and |
| · | a $1 million increase in dividends received from equity investments. |
These factors were partially offset by an $81 million increase in cash paid for materials and overhead and an $18 million increase in cash taxes.
Changes in operating assets and liabilities
During the third quarter of 2026, we generated $144 million from operating assets and liabilities primarily consisting of:
| · | a $326 million decrease in production and other receivables; |
| · | a $137 million increase in other accrued liabilities; |
| · | a $72 million increase in accrued wages and salaries; |
| · | a $22 million increase in taxes payable; and |
| · | an $11 million decrease in prepaids and other. |
These factors were partially offset by:
| · | a $249 million decrease in accounts payable; |
| · | a $122 million increase in production inventory; and |
| · | a $53 million increase in tooling investment for current and upcoming program launches. |
| 16 | Magna International Inc. Third Quarter Report 2026 |
INVESTING ACTIVITIES
| For the
three months ended September 30, | ||||||||||||
| 2026 | 2025 | Change | ||||||||||
| Fixed asset additions | $ | (307 | ) | $ | (267 | ) | ||||||
| Increase in investments, other assets and intangible assets | (75 | ) | (100 | ) | ||||||||
| Proceeds from divestitures, net of funding provided | 33 | — | ||||||||||
| Proceeds from dispositions of fixed assets, other assets and investments | 16 | 27 | ||||||||||
| Increase in public and private equity investments | — | (2 | ) | |||||||||
| Acquisitions | — | (1 | ) | |||||||||
| Cash used for investing activities | $ | (333 | ) | $ | (343 | ) | $ | 10 | ||||
Cash used for investing activities in the third quarter of 2026 was $10 million lower compared to the third quarter of 2025. The change between the third quarter of 2026, and the third quarter of 2025, was primarily due to: $33 million of net proceeds from the sale of our Lighting North America and Rooftop Systems businesses, and a $25 million decrease in cash used for investments, other assets and intangible assets. These factors were partially offset by a $40 million increase in cash used for fixed assets, and an $11 million decrease in proceeds from dispositions of fixed assets, other assets and investments.
FINANCING ACTIVITIES
| For the
three months ended September 30, | ||||||||||||
| 2026 | 2025 | Change | ||||||||||
| Repurchase of Common Shares | $ | (529 | ) | $ | — | |||||||
| Dividends | (129 | ) | (136 | ) | ||||||||
| Dividends paid to non-controlling interests | (29 | ) | (15 | ) | ||||||||
| Repayments of debt | (5 | ) | (672 | ) | ||||||||
| Issues of debt | 3 | 1 | ||||||||||
| Increase in short-term borrowings | — | 88 | ||||||||||
| Acquisitions of non-controlling interest | — | (40 | ) | |||||||||
| Cash used for financing activities | $ | (689 | ) | $ | (774 | ) | $ | 85 | ||||
During the third quarter of 2026, we repurchased 7.9 million Common Shares under normal course issuer bids for aggregate cash consideration of $529 million.
Cash dividends paid per Common Share were $0.495 for the third quarter of 2026, compared to $0.485 for the third quarter of 2025.
| Magna International Inc. Third Quarter Report 2026 | 17 |
FINANCING RESOURCES
| As at | As at | |||||||||||
| September 30, | December 31, | |||||||||||
| 2026 | 2025 | Change | ||||||||||
| Liabilities | ||||||||||||
| Long-term debt due within one year | $ | 709 | $ | 27 | ||||||||
| Current portion of operating lease liabilities | 318 | 328 | ||||||||||
| Long-term debt | 3,921 | 4,685 | ||||||||||
| Operating lease liabilities | 1,483 | 1,649 | ||||||||||
| $ | 6,431 | $ | 6,689 | $ | (258 | ) | ||||||
Financial liabilities decreased $258 million to $6.43 billion as at September 30, 2026, primarily as a result of payments related to existing lease obligations in excess of operating leases agreements renewed and newly entered into, and the weakening of foreign currencies against the U.S. dollar.
CASH RESOURCES
In the third quarter of 2026, our cash resources, including restricted cash equivalents, decreased by $63 million to $1.4 billion, primarily as a result of cash used for investing and financing activities, partially offset by cash provided from operating activities. In addition to our cash resources at September 30, 2026, we had lines of credit totaling $3.7 billion, of which $3.5 billion was available.
MAXIMUM NUMBER OF SHARES ISSUABLE
The following table presents the maximum number of shares that would be outstanding if all the dilutive instruments outstanding at October 29, 2026 were exercised:
| Common Shares | 258,660,289 | |||
| Stock options (i) and share awards | 4,080,753 | |||
| 262,741,042 |
| (i) | Options to purchase Common Shares are exercisable by the holder in accordance with the vesting provisions and upon payment of the exercise price as may be determined from time to time pursuant to our stock option plans. |
CONTRACTUAL OBLIGATIONS
There have been no material changes with respect to the contractual obligations requiring annual payments during the third quarter of 2026 that are outside the ordinary course of our business. Refer to our MD&A included in our 2025 Annual Report.
| 18 | Magna International Inc. Third Quarter Report 2026 |
RESULTS OF OPERATIONS – FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2026
| For the nine months ended September 30, | ||||||||||||||||||||||||
| Sales | Adjusted EBIT | |||||||||||||||||||||||
| 2026 | 2025 | Change | 2026 | 2025 | Change | |||||||||||||||||||
| Body Exteriors & Structures | $ | 12,658 | $ | 12,366 | $ | 292 | $ | 1,021 | $ | 882 | $ | 139 | ||||||||||||
| Power & Vision | 11,747 | 11,357 | 390 | 784 | 522 | 262 | ||||||||||||||||||
| Seating Systems | 4,035 | 4,265 | (230 | ) | 104 | 74 | 30 | |||||||||||||||||
| Complete Vehicles | 3,380 | 3,587 | (207 | ) | 102 | 101 | 1 | |||||||||||||||||
| Corporate and Other | (400 | ) | (413 | ) | 13 | (93 | ) | (29 | ) | (64 | ) | |||||||||||||
| Total reportable segments | $ | 31,420 | $ | 31,162 | $ | 258 | $ | 1,918 | $ | 1,550 | $ | 368 | ||||||||||||
BODY EXTERIORS & STRUCTURES
| For the
nine months ended September 30, | ||||||||||||||||
| 2026 | 2025 | Change | ||||||||||||||
| Sales | $ | 12,658 | $ | 12,366 | $ | 292 | + | 2 | % | |||||||
| Adjusted EBIT | $ | 1,021 | $ | 882 | $ | 139 | + | 16 | % | |||||||
| Adjusted EBIT as a percentage of sales | 8.1 | % | 7.1 | % | + | 1.0 | % | |||||||||
Sales – Body Exteriors & Structures
Sales increased 2%, or $292 million, to $12.66 billion for the nine months ended September 30, 2026, compared to $12.37 billion for the nine months ended September 30, 2025, primarily due to:
| · | the launch of programs during or subsequent to the third quarter of 2025; |
| · | the net strengthening of foreign currencies against the U.S. dollar, which increased reported U.S. dollar sales by $173 million; and |
| · | net commercial items, which had a favourable impact on a year-over-year basis. |
These factors were partially offset by:
| · | the end of production of certain programs; |
| · | lower global light vehicle production; and |
| · | net customer price concessions. |
| Magna International Inc. Third Quarter Report 2026 | 19 |
Adjusted EBIT and Adjusted EBIT as a percentage of sales – Body Exteriors & Structures
Adjusted EBIT increased $139 million to $1,021 million for the nine months ended September 30, 2026, compared to $882 million for the nine months ended September 30, 2025, and Adjusted EBIT as a percentage of sales increased to 8.1% from 7.1%. These increases were primarily due to:
| · | net commercial items, which had a favourable impact on a year-over-year basis; |
| · | productivity and efficiency improvements, including the benefit of operational excellence initiatives and prior restructuring actions, net of customer price concessions; |
| · | net transactional foreign exchange gains in the first nine months of 2026, compared to net transactional foreign exchange losses in the first nine months of 2025; |
| · | recoveries for tariffs and lower tariff costs incurred; and |
| · | the net strengthening of foreign currencies against the U.S. dollar, which had an $8 million favourable impact on reported U.S. dollar Adjusted EBIT. |
These factors were partially offset by:
| · | reduced earnings on lower organic sales, and related product mix impacts; |
| · | higher commodity costs partially offset by higher scrap recoveries; |
| · | higher employee profit sharing and incentive compensation; and |
| · | higher pre-operating costs incurred at new facilities. |
POWER & VISION
| For the
nine months ended September 30, | ||||||||||||||||
| 2026 | 2025 | Change | ||||||||||||||
| Sales | $ | 11,747 | $ | 11,357 | $ | 390 | + | 3 | % | |||||||
| Adjusted EBIT | $ | 784 | $ | 522 | $ | 262 | + | 50 | % | |||||||
| Adjusted EBIT as a percentage of sales | 6.7 | % | 4.6 | % | + | 2.1 | % | |||||||||
Sales – Power & Vision
Sales increased 3%, or $390 million, to $11.75 billion for the nine months ended September 30, 2026, compared to $11.36 billion for the nine months ended September 30, 2025, primarily due to:
| · | the launch of programs during or subsequent to the first nine months of 2025; and |
| · | the net strengthening of foreign currencies against the U.S. dollar, which increased reported U.S. dollar sales by $310 million. |
These factors were partially offset by:
| · | the end of production of certain programs; |
| · | the divestitures of our Lighting and Rooftop Systems businesses during 2026; |
| · | lower global light vehicle production; and |
| · | net customer price concessions. |
| 20 | Magna International Inc. Third Quarter Report 2026 |
Adjusted EBIT and Adjusted EBIT as a percentage of sales – Power & Vision
Adjusted EBIT increased $262 million to $784 million for the nine months ended September 30, 2026, compared to $522 million for the nine months ended September 30, 2025, and Adjusted EBIT as a percentage of sales increased to 6.7% from 4.6%. These increases were primarily due to:
| · | productivity and efficiency improvements, including the benefit of operational excellence initiatives and prior restructuring actions, net of customer price concessions; |
| · | higher equity income, including favourable commercial items during the first nine months of 2026; |
| · | net transactional foreign exchange gains in the first nine months of 2026, compared to net transactional foreign exchange losses in the first nine months of 2025; |
| · | the net strengthening of foreign currencies against the U.S. dollar, which had a $22 million favourable impact on reported U.S. dollar Adjusted EBIT; |
| · | earnings on higher organic sales, net of product mix impacts; and |
| · | the divestitures of our Lighting and Rooftop Systems businesses during 2026. |
These factors were partially offset by:
| · | higher commodity costs; and |
| · | higher employee profit sharing and incentive compensation. |
SEATING SYSTEMS
| For the
nine months ended September 30, | ||||||||||||||||
| 2026 | 2025 | Change | ||||||||||||||
| Sales | $ | 4,035 | $ | 4,265 | $ | (230 | ) | - | 5 | % | ||||||
| Adjusted EBIT | $ | 104 | $ | 74 | $ | 30 | + | 41 | % | |||||||
| Adjusted EBIT as a percentage of sales | 2.6 | % | 1.7 | % | + | 0.9 | % | |||||||||
Sales – Seating Systems
Sales decreased 5%, or $230 million, to $4.04 billion for the nine months ended September 30, 2026, compared to $4.27 billion for the nine months ended September 30, 2025, primarily due to:
| · | the end of production of certain programs; |
| · | lower global light vehicle production; and |
| · | net customer price concessions. |
These factors were partially offset by:
| · | the launch of programs during or subsequent to the first nine months of 2025; |
| · | the net strengthening of foreign currencies against the U.S. dollar, which increased reported U.S. dollar sales by $76 million; and |
| · | net commercial items, which had a favourable impact on a year-over-year basis. |
| Magna International Inc. Third Quarter Report 2026 | 21 |
Adjusted EBIT and Adjusted EBIT as a percentage of sales – Seating Systems
Adjusted EBIT increased $30 million to $104 million for the nine months ended September 30, 2026, compared to $74 million for the nine months ended September 30, 2025, and Adjusted EBIT as a percentage of sales increased to 2.6% from 1.7%. These increases were primarily due to:
| · | lower warranty costs of $31 million; |
| · | productivity and efficiency improvements, including the benefit of operational excellence initiatives and prior restructuring actions, net of customer price concessions; |
| · | recoveries for tariffs and lower tariff costs incurred; |
| · | net commercial items, which had a favourable impact on a year-over-year basis; |
| · | lower pre-operating costs incurred at new facilities; |
| · | lower net transactional foreign exchange losses; and |
| · | higher equity income. |
These factors were partially offset by:
| · | reduced earnings on lower organic sales; |
| · | higher launch costs; and |
| · | the benefit of government research and development incentives in the third quarter of 2025. |
COMPLETE VEHICLES
| For the
nine months ended September 30, | ||||||||||||||||
| 2026 | 2025 | Change | ||||||||||||||
| Complete Vehicle Assembly Volumes (thousands of units)(i) | 79.4 | 48.4 | + | 31.0 | + | 64 | % | |||||||||
| Sales | $ | 3,380 | $ | 3,587 | $ | (207 | ) | - | 6 | % | ||||||
| Adjusted EBIT | $ | 102 | $ | 101 | $ | 1 | + | 1 | % | |||||||
| Adjusted EBIT as a percentage of sales | 3.0 | % | 2.8 | % | + | 0.2 | % | |||||||||
(i) Vehicles produced at our Complete Vehicle operations are included in Europe Light Vehicle Production volumes.
Sales – Complete Vehicles
Sales decreased 6%, or $207 million, to $3.38 billion for the nine months ended September 30, 2026, compared to $3.59 billion for the nine months ended September 30, 2025, while complete vehicle assembly volumes increased 64%. The increase in volumes was primarily due to higher volumes with value-added contractual arrangements.
The decrease in sales is primarily a result of the end of production of certain programs with full-costed contractual arrangements, lower engineering revenue and lower complete vehicle assembly volumes with full-costed contractual arrangements. These factors were partially offset by a $134 million increase in reported U.S. dollar sales as a result of the strengthening of the euro against the U.S. dollar, and the launch of programs with value-added contractual arrangements during the third quarter of 2025.
| 22 | Magna International Inc. Third Quarter Report 2026 |
Adjusted EBIT and Adjusted EBIT as a percentage of sales – Complete Vehicles
Adjusted EBIT increased $1 million to $102 million for the nine months ended September 30, 2026, compared to $101 million for the nine months ended September 30, 2025, and Adjusted EBIT as a percentage of sales increased to 3.0% from 2.8%. These increases were primarily due to:
| · | higher earnings due to net favourable program mix; |
| · | productivity and efficiency improvements, including the benefit of operational excellence initiatives and prior restructuring actions; and |
| · | the net strengthening of foreign currencies against the U.S. dollar, which had a $3 million favourable impact on reported U.S. dollar Adjusted EBIT. |
These factors were partially offset by:
| · | lower income on lower engineering revenue; and |
| · | net commercial items, which had an unfavourable impact on a year-over-year basis. |
CORPORATE AND OTHER
Adjusted EBIT was a loss of $93 million for the nine months ended September 30, 2026, compared to a loss of $29 million for the nine months ended September 30, 2025. The $64 million decrease was primarily due to:
| · | lower net transactional foreign exchange gains in the first nine months of 2026 compared to the first nine months of 2025; |
| · | higher professional fees; |
| · | higher incentive compensation expense; |
| · | higher costs to accelerate our operational excellence initiatives; and |
| · | higher restructuring costs. |
These factors were partially offset by lower investments in research, development and reduced spending in our new mobility business.
| Magna International Inc. Third Quarter Report 2026 | 23 |
NON-GAAP PERFORMANCE MEASURES - FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2026
ADJUSTED EBIT AS A PERCENTAGE OF SALES
The table below shows the change in Magna's Sales and Adjusted EBIT by segment, as well as the impact each segment's changes have on Magna's Adjusted EBIT as a percentage of sales, for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025:
| Adjusted EBIT | ||||||||||||
| Adjusted | as a percentage | |||||||||||
| Sales | EBIT | of sales | ||||||||||
| Nine months ended September 30, 2025 | $ | 31,162 | $ | 1,550 | 5.0 | % | ||||||
| Increase (decrease) related to: | ||||||||||||
| Body Exteriors & Structures | 292 | 139 | + | 0.4 | % | |||||||
| Power & Vision | 390 | 262 | + | 0.8 | % | |||||||
| Seating Systems | (230 | ) | 30 | + | 0.1 | % | ||||||
| Complete Vehicles | (207 | ) | 1 | — | ||||||||
| Corporate and Other | 13 | (64 | ) | - | 0.2 | % | ||||||
| Nine months ended September 30, 2026 | $ | 31,420 | $ | 1,918 | 6.1 | % | ||||||
Adjusted EBIT as a percentage of sales increased to 6.1% for the nine months ended September 30, 2026, compared to 5.0% for the nine months ended September 30, 2025, primarily due to:
| · | productivity and efficiency improvements, including the benefit of operational excellence initiatives and prior restructuring actions, net of customer price concessions; |
| · | net commercial items, which had a favourable impact on a year-over-year basis; |
| · | higher equity income, including favourable commercial items during the first nine months of 2026; |
| · | recoveries for tariffs and lower tariff costs incurred; |
| · | higher net transactional foreign exchange gains in the first nine months of 2026, compared to the first nine months of 2025; and |
| · | lower warranty costs. |
These factors were partially offset by:
| · | higher commodity costs partially offset by higher scrap recoveries; |
| · | higher employee profit sharing and incentive compensation; |
| · | reduced earnings on lower organic sales; |
| · | lower income on lower engineering revenue; and |
| · | higher professional fees. |
| 24 | Magna International Inc. Third Quarter Report 2026 |
ADJUSTED RETURN ON INVESTED CAPITAL
Adjusted Return on Invested Capital increased to 11.3% for the nine months ended September 30, 2026, compared to 8.2% for the nine months ended September 30, 2025, as a result of an increase in Adjusted After-tax operating profits, and lower Average Invested Capital.
Average Invested Capital decreased $1.41 billion to $17.67 billion for the nine months ended September 30, 2026, compared to $19.08 billion for the nine months ended September 30, 2025, primarily due to:
| · | long-lived asset impairments during or subsequent to the first nine months of 2025; |
| · | average depreciation expense on fixed assets in excess of average investment in fixed assets; and |
| · | divestitures, net of acquisitions, during or subsequent to the third quarter of 2025. |
These factors were partially offset by:
| · | the net strengthening of foreign currencies against the U.S. dollar; |
| · | higher net investments in public and private equity companies; and |
| · | an increase in average operating assets and liabilities. |
| Magna International Inc. Third Quarter Report 2026 | 25 |
NON-GAAP FINANCIAL MEASURES RECONCILIATION
The reconciliation of Non-GAAP financial measures is as follows:
ADJUSTED EBIT
| For the three months | For the nine months | |||||||||||||||
| ended September 30, | ended September 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Net income | $ | 400 | $ | 333 | $ | 878 | $ | 880 | ||||||||
| Add: | ||||||||||||||||
| Amortization of acquired intangible assets | 17 | 27 | 53 | 82 | ||||||||||||
| Interest expense, net | 35 | 65 | 109 | 167 | ||||||||||||
| Other expense, net | 79 | 48 | 518 | 107 | ||||||||||||
| Income taxes | 152 | 140 | 360 | 314 | ||||||||||||
| Adjusted EBIT | $ | 683 | $ | 613 | $ | 1,918 | $ | 1,550 | ||||||||
ADJUSTED EBIT AS A PERCENTAGE OF SALES
| For the three months | For the nine months | |||||||||||||||
| ended September 30, | ended September 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Sales | $ | 10,059 | $ | 10,462 | $ | 31,420 | $ | 31,162 | ||||||||
| Adjusted EBIT | $ | 683 | $ | 613 | $ | 1,918 | $ | 1,550 | ||||||||
| Adjusted EBIT as a percentage of sales | 6.8 | % | 5.9 | % | 6.1 | % | 5.0 | % | ||||||||
ADJUSTED EPS
| For the three months | For the nine months | |||||||||||||||
| ended September 30, | ended September 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Net income attributable to Magna International Inc. | $ | 383 | $ | 305 | $ | 840 | $ | 830 | ||||||||
| Add (deduct): | ||||||||||||||||
| Amortization of acquired intangible assets | 17 | 27 | 53 | 82 | ||||||||||||
| Other expense, net | 79 | 48 | 518 | 107 | ||||||||||||
| Tax effect on Amortization of acquired intangible assets and Other expense, net | 7 | (5 | ) | (31 | ) | (18 | ) | |||||||||
| Adjusted net income attributable to Magna International Inc. | $ | 486 | $ | 375 | $ | 1,380 | $ | 1,001 | ||||||||
| Diluted weighted average number of Common Shares outstanding during the period (millions) | 266.0 | 281.8 | 273.0 | 281.9 | ||||||||||||
| Adjusted EPS | $ | 1.83 | $ | 1.33 | $ | 5.06 | $ | 3.55 | ||||||||
| 26 | Magna International Inc. Third Quarter Report 2026 |
ADJUSTED RETURN ON INVESTED CAPITAL
Adjusted Return on Invested Capital is calculated as Adjusted After-tax operating profits divided by Average Invested Capital for the period. Average Invested Capital for the three month period is averaged on a two-fiscal quarter basis and for the nine month period is averaged on a four-fiscal quarter basis.
| For the three months | For the nine months | |||||||||||||||
| ended September 30, | ended September 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Net income | $ | 400 | $ | 333 | $ | 878 | $ | 880 | ||||||||
| Add (deduct): | ||||||||||||||||
| Amortization of acquired intangible assets | 17 | 27 | 53 | 82 | ||||||||||||
| Interest expense, net | 35 | 65 | 109 | 167 | ||||||||||||
| Other expense, net | 79 | 48 | 518 | 107 | ||||||||||||
| Tax effect on Interest expense, net, Amortization of acquired intangible assets and Other expense, net | (1 | ) | (22 | ) | (55 | ) | (59 | ) | ||||||||
| Adjusted After-tax operating profits | $ | 530 | $ | 451 | $ | 1,503 | $ | 1,177 | ||||||||
| As at September 30, | ||||||||
| 2026 | 2025 | |||||||
| Total Assets | $ | 30,985 | $ | 32,907 | ||||
| Excluding: | ||||||||
| Cash and cash equivalents | (1,378 | ) | (1,327 | ) | ||||
| Deferred tax assets | (894 | ) | (920 | ) | ||||
| Less Current Liabilities | (12,532 | ) | (12,059 | ) | ||||
| Excluding: | ||||||||
| Short-term borrowing | — | 433 | ||||||
| Long-term debt due within one year | 709 | 33 | ||||||
| Current portion of operating lease liabilities | 318 | 323 | ||||||
| Invested Capital | $ | 17,208 | $ | 19,390 | ||||
| For the three months | For the nine months | |||||||||||||||
| ended September 30, | ended September 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Adjusted After-tax operating profits | $ | 530 | $ | 451 | $ | 1,503 | $ | 1,177 | ||||||||
| Average Invested Capital | $ | 17,317 | $ | 19,575 | $ | 17,669 | $ | 19,077 | ||||||||
| Adjusted Return on Invested Capital | 12.2 | % | 9.2 | % | 11.3 | % | 8.2 | % | ||||||||
| Magna International Inc. Third Quarter Report 2026 | 27 |
SUBSEQUENT EVENT
NORMAL COURSE ISSUER BID
Subsequent to September 30, 2026, we purchased 1,273,234 Common Shares for cancellation under our existing normal course issuer bid for cash consideration of $82 million.
Subject to approval by the Toronto Stock Exchange ["TSX"], our Board of Directors approved a new normal course issuer bid to purchase up to 25.8 million of our Common Shares, representing approximately 10% of our public float. The primary purposes of the normal course issuer bid are purchases for cancellation as well as purchases to fund our stock-based compensation awards and programs. The normal course issuer bid is expected to be effective on November 9, 2026 and will terminate no later than November 8, 2027. All purchases of Common Shares will be made at the market price at the time of purchase in accordance with the rules and policies of the TSX or on the New York Stock Exchange ["NYSE"] in compliance with Rule 10b-18 under the U.S. Securities Exchange Act of 1934.
Purchases may also be made through alternative trading systems in Canada and the U.S., or by such other means permitted by the TSX, including by private agreement or specific share repurchase program at a discount to the prevailing market price, pursuant to an issuer bid exemption order issued by a securities regulatory authority.
COMMITMENTS AND CONTINGENCIES
From time to time, we may be contingently liable for litigation, legal and/or regulatory actions and proceedings, and other claims. Refer to Note 16, "Contingencies" of our unaudited interim consolidated financial statements for the three and nine months ended September 30, 2026.
For a discussion of risk factors relating to legal and other claims/actions against us, refer to "Risk Factors" in our Annual Information Form, filed with the securities commissions in Canada, our Annual Report on Form 40-F, filed with the United States Securities and Exchange Commission, each in respect of the year ended December 31, 2025, and updated in our subsequent quarterly filings.
CONTROLS AND PROCEDURES
There have been no changes in our internal controls over financial reporting that occurred during the three months ended September 30, 2026, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
| 28 | Magna International Inc. Third Quarter Report 2026 |
FORWARD-LOOKING STATEMENTS
Certain statements in this MD&A may constitute "forward-looking information" or "forward-looking statements" (collectively, "forward-looking statements"). Any such forward-looking statements are intended to provide information about management's current expectations and plans and may not be appropriate for other purposes. Forward-looking statements may include financial and other projections, as well as statements regarding our future plans, strategic objectives or economic performance, or the assumptions underlying any of the foregoing, and other statements that are not recitations of historical fact. We use words such as "may", "would", "could", "should", "will", "likely", "expect", "anticipate", "assume", "believe", "intend", "plan", "aim", "forecast", "outlook", "project", "potential", "estimate", "target" and similar expressions suggesting future outcomes or events to identify forward-looking statements.
Forward-looking statements are based on information currently available to us and are based on assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate in the circumstances. While we believe we have a reasonable basis for making any such forward-looking statements, they are not a guarantee of future performance or outcomes. Whether actual results and developments conform to our expectations and predictions is subject to a number of risks, assumptions, and uncertainties, many of which are beyond our control, and the effects of which can be difficult to predict, including, without limitation:
Macroeconomic, Geopolitical and Other Risks
· geopolitical crises and military conflicts; · threats to free trade agreements; · international trade disputes; · planning and forecasting challenges; · interest rate levels;
Risks Related to the Automotive Industry
· pace of EV adoption; · North American EV program deferrals, cancellations and volume reductions; · economic cyclicality; · regional production volume declines; · deteriorating vehicle affordability; · intense competition;
Strategic Risks
· evolution of the vehicle; · evolving business risk profile; · technology and innovation; · investments in mobility and technology companies;
Customer-Related Risks
· customer concentration; · market shifts; · evolving OEM competitive landscape; · dependence on outsourcing; · consumer take rate shifts; · nature of customer blanket purchase orders; · potential OEM production-related disruptions;
Supply Chain Risks
· supply chain disruptions; · regional energy supply and pricing; · financial condition of supply base; · supplier claims;
Manufacturing/Operational Risks
· product launch; · operational underperformance; · restructuring costs; · impairments; · skilled labour attraction/retention; |
Pricing Risks
· quote/pricing assumptions; · customer pricing pressure/contractual arrangements; · commodity cost volatility; · scrap steel/aluminum price volatility;
Warranty/Recall Risks
· repair/replace costs; · warranty provisions; · product liability;
IT Security/Cybersecurity Risks
· IT/cybersecurity breach; · product cybersecurity breach; · risks related to the use of artificial intelligence;
Merger and Acquisition Risks
· inherent merger and acquisition risks; · acquisition integration and synergies;
Other Business Risks
· joint ventures; · intellectual property; · risks of doing business in foreign markets; · tax risks; · relative foreign exchange rates; · returns on capital investments; · financial flexibility; · credit ratings changes; · stock price fluctuation;
Legal and Regulatory Risks
· legal and regulatory proceedings; and · changes in laws. |
| Magna International Inc. Third Quarter Report 2026 | 29 |
In evaluating forward-looking statements, we caution readers not to place undue reliance on any forward-looking statement. Additionally, readers should specifically consider the various factors which could cause actual events or results to differ materially from those indicated by such forward-looking statements, including the risks, assumptions and uncertainties above which are:
| · | discussed under the "Industry Trends and Risks" heading of our Management's Discussion and Analysis; and |
| · | set out in our Annual Information Form filed with securities commissions in Canada, our annual report on Form 40-F filed with the United States Securities and Exchange Commission, and subsequent filings. |
Readers should also consider discussion of our risk mitigation activities with respect to certain risk factors, which can also be found in our Annual Information Form. Additional information about Magna, including our Annual Information Form, is available through the System for Electronic Data Analysis and Retrieval+ (SEDAR+) at www.sedarplus.ca, as well as on the United States Securities and Exchange Commission’s Electronic Data Gathering, Analysis and Retrieval System (EDGAR), which can be accessed at www.sec.gov.
| 30 | Magna International Inc. Third Quarter Report 2026 |
MAGNA INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF INCOME
[Unaudited]
[U.S. dollars in millions, except per share figures]
| Three months ended | Nine months ended | ||||||||||||||||||
| September 30, | September 30, | ||||||||||||||||||
| Note | 2026 | 2025 | 2026 | 2025 | |||||||||||||||
| Sales | 17 | $ | 10,059 | $ | 10,462 | $ | 31,420 | $ | 31,162 | ||||||||||
| Costs and expenses | |||||||||||||||||||
| Cost of goods sold | 8,433 | 8,973 | 26,759 | 26,927 | |||||||||||||||
| Selling, general and administrative | 591 | 531 | 1,733 | 1,635 | |||||||||||||||
| Depreciation | 387 | 389 | 1,185 | 1,146 | |||||||||||||||
| Amortization of acquired intangible assets | 17 | 27 | 53 | 82 | |||||||||||||||
| Interest expense, net | 35 | 65 | 109 | 167 | |||||||||||||||
| Equity income | (35 | ) | (44 | ) | (175 | ) | (96 | ) | |||||||||||
| Other expense, net | 3 | 79 | 48 | 518 | 107 | ||||||||||||||
| Income from operations before income taxes | 552 | 473 | 1,238 | 1,194 | |||||||||||||||
| Income taxes | 12 | 152 | 140 | 360 | 314 | ||||||||||||||
| Net income | 400 | 333 | 878 | 880 | |||||||||||||||
| Income attributable to non-controlling interests | (17 | ) | (28 | ) | (38 | ) | (50 | ) | |||||||||||
| Net income attributable to Magna International Inc. | $ | 383 | $ | 305 | $ | 840 | $ | 830 | |||||||||||
| Earnings per Common Share: | 4 | ||||||||||||||||||
| Basic | $ | 1.45 | $ | 1.08 | $ | 3.10 | $ | 2.94 | |||||||||||
| Diluted | $ | 1.44 | $ | 1.08 | $ | 3.08 | $ | 2.94 | |||||||||||
| Cash dividends paid per Common Share | $ | 0.495 | $ | 0.485 | $ | 1.485 | $ | 1.455 | |||||||||||
| Weighted average number of Common Shares outstanding during the period [in millions]: | 4 | ||||||||||||||||||
| Basic | 263.7 | 281.8 | 270.9 | 281.9 | |||||||||||||||
| Diluted | 266.0 | 281.8 | 273.0 | 281.9 | |||||||||||||||
See accompanying notes
| Magna International Inc. Third Quarter Report 2026 | 31 |
MAGNA INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
[Unaudited]
[U.S. dollars in millions]
| Three
months ended September 30, | Nine
months ended September 30, | ||||||||||||||||||
| Note | 2026 | 2025 | 2026 | 2025 | |||||||||||||||
| Net income | $ | 400 | $ | 333 | $ | 878 | $ | 880 | |||||||||||
| Other comprehensive income (loss), net of tax: | 14 | ||||||||||||||||||
| Net unrealized gain (loss) on translation of net investment in foreign operations | 83 | (41 | ) | 4 | 527 | ||||||||||||||
| Net unrealized gain on cash flow hedges | 14 | 15 | 4 | 162 | |||||||||||||||
| Reclassification of net (gain) loss on cash flow hedges to net income | (11 | ) | (6 | ) | (39 | ) | 17 | ||||||||||||
| Reclassification of net loss on pensions to net income | 1 | 1 | 1 | 3 | |||||||||||||||
| Pension and post retirement benefits | — | — | (1 | ) | — | ||||||||||||||
| Other comprehensive income (loss) | 87 | (31 | ) | (31 | ) | 709 | |||||||||||||
| Comprehensive income | 487 | 302 | 847 | 1,589 | |||||||||||||||
| Comprehensive income attributable to non-controlling interests | (20 | ) | (29 | ) | (48 | ) | (57 | ) | |||||||||||
| Comprehensive income attributable to Magna International Inc. | $ | 467 | $ | 273 | $ | 799 | $ | 1,532 | |||||||||||
See accompanying notes
| 32 | Magna International Inc. Third Quarter Report 2026 |
MAGNA INTERNATIONAL INC.
CONSOLIDATED BALANCE SHEETS
[Unaudited]
[U.S. dollars in millions]
| As at | As at | ||||||||||
| September 30, | December 31, | ||||||||||
| Note | 2026 | 2025 | |||||||||
| ASSETS | |||||||||||
| Current assets | |||||||||||
| Cash and cash equivalents | 5 | $ | 1,378 | $ | 1,612 | ||||||
| Accounts receivable | 8,298 | 7,593 | |||||||||
| Inventories | 7 | 4,161 | 4,126 | ||||||||
| Prepaid expenses and other | 5, 6 | 364 | 407 | ||||||||
| Assets held for sale | 2 | 38 | — | ||||||||
| 14,239 | 13,738 | ||||||||||
| Investments | 8 | 1,287 | 1,103 | ||||||||
| Fixed assets, net | 8,781 | 9,507 | |||||||||
| Operating lease right-of-use assets | 1,766 | 1,928 | |||||||||
| Intangible assets, net | 407 | 490 | |||||||||
| Goodwill | 2,453 | 2,512 | |||||||||
| Other assets | 9 | 1,158 | 1,275 | ||||||||
| Deferred tax assets | 894 | 864 | |||||||||
| $ | 30,985 | $ | 31,417 | ||||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||
| Current liabilities | |||||||||||
| Long-term debt due within one year | 11 | $ | 709 | $ | 27 | ||||||
| Accounts payable | 7,080 | 6,895 | |||||||||
| Other accrued liabilities | 10 | 3,259 | 2,745 | ||||||||
| Accrued salaries and wages | 995 | 888 | |||||||||
| Income taxes payable | 141 | 106 | |||||||||
| Current portion of operating lease liabilities | 318 | 328 | |||||||||
| Liabilities held for sale | 2 | 30 | — | ||||||||
| 12,532 | 10,989 | ||||||||||
| Long-term debt | 11 | 3,921 | 4,685 | ||||||||
| Operating lease liabilities | 1,483 | 1,649 | |||||||||
| Long-term employee benefit liabilities | 521 | 554 | |||||||||
| Other long-term liabilities | 362 | 399 | |||||||||
| Deferred tax liabilities | 254 | 302 | |||||||||
| 19,073 | 18,578 | ||||||||||
| Shareholders' equity | |||||||||||
| Common Shares [issued: 259,656,733; December 31, 2025 – 280,242,006] | 13 | 3,228 | 3,352 | ||||||||
| Contributed surplus | 139 | 142 | |||||||||
| Retained earnings | 8,982 | 9,765 | |||||||||
| Accumulated other comprehensive loss | 14 | (770 | ) | (766 | ) | ||||||
| 11,579 | 12,493 | ||||||||||
| Non-controlling interests | 6 | 333 | 346 | ||||||||
| 11,912 | 12,839 | ||||||||||
| $ | 30,985 | $ | 31,417 | ||||||||
See accompanying notes
| Magna International Inc. Third Quarter Report 2026 | 33 |
MAGNA INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
[Unaudited]
[U.S. dollars in millions]
| Three months ended | Nine months ended | ||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||
| Note | 2026 | 2025 | 2026 | 2025 | |||||||||||||||
| Cash provided from (used for): | |||||||||||||||||||
| OPERATING ACTIVITIES | |||||||||||||||||||
| Net income | $ | 400 | $ | 333 | $ | 878 | $ | 880 | |||||||||||
| Items not involving current cash flows | 5 | 406 | 454 | 1,426 | 1,216 | ||||||||||||||
| 806 | 787 | 2,304 | 2,096 | ||||||||||||||||
| Changes in operating assets and liabilities | 5 | 144 | 125 | 277 | (480 | ) | |||||||||||||
| Cash provided from operating activities | 950 | 912 | 2,581 | 1,616 | |||||||||||||||
| INVESTMENT ACTIVITIES | |||||||||||||||||||
| Fixed asset additions | (307 | ) | (267 | ) | (795 | ) | (781 | ) | |||||||||||
| Acquisitions | — | (1 | ) | — | (1 | ) | |||||||||||||
| Increase in investments, other assets and intangible assets | (75 | ) | (100 | ) | (320 | ) | (342 | ) | |||||||||||
| Increase in public and private equity investments | — | (2 | ) | (5 | ) | (6 | ) | ||||||||||||
| Proceeds from dispositions of fixed assets, other assets and investments | 16 | 27 | 107 | 67 | |||||||||||||||
| Proceeds from divestitures, net of funding provided | 2 | 33 | — | 2 | — | ||||||||||||||
| Cash used for investing activities | (333 | ) | (343 | ) | (1,011 | ) | (1,063 | ) | |||||||||||
| FINANCING ACTIVITIES | |||||||||||||||||||
| Issues of debt | 3 | 1 | 6 | 1,047 | |||||||||||||||
| Increase in short-term borrowing | — | 88 | 6 | 119 | |||||||||||||||
| Repayments of debt | (5 | ) | (672 | ) | (20 | ) | (1,086 | ) | |||||||||||
| Issue of Common Shares on exercise of stock options | — | — | 107 | — | |||||||||||||||
| Tax withholdings on vesting of equity awards | — | — | (12 | ) | (4 | ) | |||||||||||||
| Repurchase of Common Shares | 13 | (529 | ) | — | (1,434 | ) | (51 | ) | |||||||||||
| Acquisition of non-controlling interest | 6 | — | (40 | ) | — | (40 | ) | ||||||||||||
| Dividends paid to non-controlling interests | (29 | ) | (15 | ) | (61 | ) | (40 | ) | |||||||||||
| Dividends | (129 | ) | (136 | ) | (397 | ) | (409 | ) | |||||||||||
| Cash used for financing activities | (689 | ) | (774 | ) | (1,805 | ) | (464 | ) | |||||||||||
| Effect of exchange rate changes on cash and cash equivalents | 9 | (4 | ) | 13 | (9 | ) | |||||||||||||
| Net (decrease) increase in cash and cash equivalents including restricted cash during the period | (63 | ) | (209 | ) | (222 | ) | 80 | ||||||||||||
| Cash and cash equivalents including restricted cash, beginning of period | 1,453 | 1,536 | 1,612 | 1,247 | |||||||||||||||
| Cash and cash equivalents including restricted cash, end of period | 5 | $ | 1,390 | $ | 1,327 | $ | 1,390 | $ | 1,327 | ||||||||||
See accompanying notes
| 34 | Magna International Inc. Third Quarter Report 2026 |
MAGNA INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
[Unaudited]
[U.S. dollars in millions]
| Nine months ended September 30, 2026 | |||||||||||||||||||||||||||||||
| Common Shares | Contri- | Non- | |||||||||||||||||||||||||||||
| Stated | buted | Retained | controlling | Total | |||||||||||||||||||||||||||
| Note | Number | Value | Surplus | Earnings | AOCL[i] | Interest | Equity | ||||||||||||||||||||||||
| [in millions] | |||||||||||||||||||||||||||||||
| Balance, December 31, 2025 | 280.3 | $ | 3,352 | $ | 142 | $ | 9,765 | $ | (766 | ) | $ | 346 | $ | 12,839 | |||||||||||||||||
| Net income | 840 | 38 | 878 | ||||||||||||||||||||||||||||
| Other comprehensive (loss) income | (41 | ) | 10 | (31 | ) | ||||||||||||||||||||||||||
| Shares issued on exercise of stock options | 2.1 | 133 | (26 | ) | 107 | ||||||||||||||||||||||||||
| Release of stock and stock units | 0.4 | 25 | (25 | ) | — | ||||||||||||||||||||||||||
| Tax withholdings on vesting of equity awards | (0.2 | ) | (2 | ) | (10 | ) | (12 | ) | |||||||||||||||||||||||
| Repurchase and cancellation under normal course issuer bid | 13 | (23.0 | ) | (285 | ) | (1,211 | ) | 37 | (1,459 | ) | |||||||||||||||||||||
| Stock-based compensation expense | 51 | 51 | |||||||||||||||||||||||||||||
| Acquisition of non-controlling interest | (3 | ) | (3 | ) | |||||||||||||||||||||||||||
| Dividends paid to non-controlling interests | (61 | ) | (61 | ) | |||||||||||||||||||||||||||
| Dividends paid | 0.1 | 5 | (402 | ) | (397 | ) | |||||||||||||||||||||||||
| Balance, September 30, 2026 | 259.7 | $ | 3,228 | $ | 139 | $ | 8,982 | $ | (770 | ) | $ | 333 | $ | 11,912 | |||||||||||||||||
| Three months ended September 30, 2026 | |||||||||||||||||||||||||||||||
| Common Shares | Contri- | Non- | |||||||||||||||||||||||||||||
| Stated | buted | Retained | controlling | Total | |||||||||||||||||||||||||||
| Note | Number | Value | Surplus | Earnings | AOCL[i] | Interest | Equity | ||||||||||||||||||||||||
| [in millions] | |||||||||||||||||||||||||||||||
| Balance, June 30, 2026 | 267.5 | $ | 3,325 | $ | 126 | $ | 9,183 | $ | (868 | ) | $ | 342 | $ | 12,108 | |||||||||||||||||
| Net income | 383 | 17 | 400 | ||||||||||||||||||||||||||||
| Other comprehensive income | 84 | 3 | 87 | ||||||||||||||||||||||||||||
| Shares issued on exercise of stock options | 1 | (1 | ) | — | |||||||||||||||||||||||||||
| Repurchase and cancellation under normal course issuer bid | 13 | (7.9 | ) | (100 | ) | (453 | ) | 14 | (539 | ) | |||||||||||||||||||||
| Stock-based compensation expense | 14 | 14 | |||||||||||||||||||||||||||||
| Dividends paid to non-controlling interests | (29 | ) | (29 | ) | |||||||||||||||||||||||||||
| Dividends paid | 0.1 | 2 | (131 | ) | (129 | ) | |||||||||||||||||||||||||
| Balance, September 30, 2026 | 259.7 | $ | 3,228 | $ | 139 | $ | 8,982 | $ | (770 | ) | $ | 333 | $ | 11,912 | |||||||||||||||||
[i] AOCL is Accumulated Other Comprehensive Loss.
See accompanying notes
| Magna International Inc. Third Quarter Report 2026 | 35 |
MAGNA INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
[Unaudited]
[U.S. dollars in millions]
| Nine months ended September 30, 2025 | |||||||||||||||||||||||||||||||
| Common Shares | Contri- | Non- | |||||||||||||||||||||||||||||
| Stated | buted | Retained | controlling | Total | |||||||||||||||||||||||||||
| Note | Number | Value | Surplus | Earnings | AOCL[i] | Interest | Equity | ||||||||||||||||||||||||
| [in millions] | |||||||||||||||||||||||||||||||
| Balance, December 31, 2024 | 282.9 | $ | 3,359 | $ | 149 | $ | 9,598 | $ | (1,584 | ) | $ | 418 | $ | 11,940 | |||||||||||||||||
| Net income | 830 | 50 | 880 | ||||||||||||||||||||||||||||
| Other comprehensive income | 702 | 7 | 709 | ||||||||||||||||||||||||||||
| Release of stock and stock units | 0.2 | 18 | (18 | ) | — | ||||||||||||||||||||||||||
| Tax withholdings on vesting of equity awards | (0.1 | ) | (1 | ) | (3 | ) | (4 | ) | |||||||||||||||||||||||
| Repurchase and cancellation under normal course issuer bid | 13 | (1.3 | ) | (16 | ) | (38 | ) | 2 | (52 | ) | |||||||||||||||||||||
| Stock-based compensation expense | 45 | 45 | |||||||||||||||||||||||||||||
| Acquisition of non-controlling interest | (35 | ) | (99 | ) | (134 | ) | |||||||||||||||||||||||||
| Dividends paid to non-controlling interests | (40 | ) | (40 | ) | |||||||||||||||||||||||||||
| Dividends paid | 0.1 | 3 | (412 | ) | (409 | ) | |||||||||||||||||||||||||
| Balance, September 30, 2025 | 281.8 | $ | 3,363 | $ | 141 | $ | 9,975 | $ | (880 | ) | $ | 336 | $ | 12,935 | |||||||||||||||||
| Three months ended September 30, 2025 | |||||||||||||||||||||||||||||||
| Common Shares | Contri- | Non- | |||||||||||||||||||||||||||||
| Stated | buted | Retained | controlling | Total | |||||||||||||||||||||||||||
| Note | Number | Value | Surplus | Earnings | AOCL [i] | Interest | Equity | ||||||||||||||||||||||||
| [in millions] | |||||||||||||||||||||||||||||||
| Balance, June 30, 2025 | 281.7 | $ | 3,363 | $ | 161 | $ | 9,806 | $ | (848 | ) | $ | 421 | $ | 12,903 | |||||||||||||||||
| Net income | 305 | 28 | 333 | ||||||||||||||||||||||||||||
| Other comprehensive (loss) income | (32 | ) | 1 | (31 | ) | ||||||||||||||||||||||||||
| Stock-based compensation expense | 15 | 15 | |||||||||||||||||||||||||||||
| Acquisition of non-controlling interest | (35) | (99 | ) | (134 | ) | ||||||||||||||||||||||||||
| Dividends paid to non-controlling interests | (15 | ) | (15 | ) | |||||||||||||||||||||||||||
| Dividends paid | 0.1 | (136 | ) | (136 | ) | ||||||||||||||||||||||||||
| Balance, September 30, 2025 | 281.8 | $ | 3,363 | $ | 141 | $ | 9,975 | $ | (880 | ) | $ | 336 | $ | 12,935 | |||||||||||||||||
[i] AOCL is Accumulated Other Comprehensive Loss.
See accompanying notes
| 36 | Magna International Inc. Third Quarter Report 2026 |
MAGNA INTERNATIONAL INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
[Unaudited]
[All amounts in U.S. dollars and all tabular amounts in millions unless otherwise noted]
1. SIGNIFICANT ACCOUNTING POLICIES
[a] Basis of Presentation
The unaudited interim consolidated financial statements of Magna International Inc. and its subsidiaries [collectively "Magna" or the "Company"] have been prepared in U.S. dollars in accordance with accounting principles generally accepted in the United States of America ["GAAP"]. The unaudited interim consolidated financial statements do not conform in all respects to the requirements of GAAP for annual financial statements. Accordingly, these unaudited interim consolidated financial statements should be read in conjunction with the December 31, 2025 audited consolidated financial statements and notes thereto included in the Company's 2025 Annual Report.
The unaudited interim consolidated financial statements reflect all adjustments, which consist only of normal and recurring adjustments, necessary to present fairly the financial position as at September 30, 2026 and the results of operations, changes in equity, and cash flows for the three and nine-month periods ended September 30, 2026 and 2025.
[b] Use of Estimates
The preparation of the unaudited interim consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed in the interim consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates.
| Magna International Inc. Third Quarter Report 2026 | 37 |
MAGNA INTERNATIONAL INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
[Unaudited]
[All amounts in U.S. dollars and all tabular amounts in millions unless otherwise noted]
2. ASSETS AND LIABILITIES HELD FOR SALE
Sale of Lighting and Rooftop Systems Businesses
During the first quarter of 2026, the Company entered into definitive agreements to sell its Lighting Europe business and its Rooftop Systems business to Mutares SE & Co. KGaA (“Mutares”). As of March 31, 2026, the Company committed to a plan to sell its Lighting North America, South America, and China business, and in the second quarter of 2026, entered into a definitive agreement with AURELIUS Investment Lux Alpha SARL (“AURELIUS”) to sell the business.
Held for sale classification and impairment
The Company determined that the assets and liabilities of its Lighting and Rooftop Systems businesses met the criteria to be classified as held for sale as of March 31, 2026. Accordingly, the assets and liabilities of the Lighting and Rooftop Systems businesses were reclassified in the consolidated balance sheet at March 31, 2026 to current assets held for sale or current liabilities held for sale, respectively, as the sale of such assets and liabilities was expected within one year. These businesses were reported within the Company’s Power & Vision segment and did not meet the criteria to be classified as discontinued operations.
Upon classification as held for sale during the three months ended March 31, 2026, the Company recorded a pretax impairment charge of $485 million to write down the disposal groups to their estimated fair value less costs to sell. This impairment is recorded within Other expense, net [Note 3]. During the three months ended June 30, 2026 and September 30, 2026, the Company recorded additional pretax impairment charges of $13 million and $4 million, respectively, within Other expense, net, resulting from changes in the estimated fair value less costs to sell and changes in the carrying value of the disposal groups.
| Three months ended | Nine months ended | |||||||||||||||||||||||
| September 30, 2026 | September 30, 2026 | |||||||||||||||||||||||
| Rooftop | Rooftop | |||||||||||||||||||||||
| Lighting | Systems | Total | Lighting | Systems | Total | |||||||||||||||||||
| Accounts receivable | $ | — | $ | — | $ | — | $ | 76 | $ | 16 | $ | 92 | ||||||||||||
| Inventories | — | — | — | 52 | 25 | 77 | ||||||||||||||||||
| Fixed assets, net | 3 | — | 3 | 237 | 13 | 250 | ||||||||||||||||||
| Operating lease, right-of-use asset | — | — | — | 22 | 7 | 29 | ||||||||||||||||||
| Intangibles, net | — | — | — | 3 | 4 | 7 | ||||||||||||||||||
| Goodwill[i] | — | — | — | 21 | — | 21 | ||||||||||||||||||
| Other Assets | — | — | — | 13 | 9 | 22 | ||||||||||||||||||
| Total asset impairment | $ | 3 | $ | — | $ | 3 | $ | 424 | $ | 74 | 498 | |||||||||||||
| Costs to sell incurred | — | 1 | 1 | 2 | 2 | 4 | ||||||||||||||||||
| Total impairment loss | $ | 3 | $ | 1 | $ | 4 | $ | 426 | $ | 76 | $ | 502 | ||||||||||||
[i] $21 million of goodwill was allocated to the Lighting business in North America, South America, and China from the Mechatronics, Mirrors and Lighting reporting unit based on its relative fair value.
| 38 | Magna International Inc. Third Quarter Report 2026 |
MAGNA INTERNATIONAL INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
[Unaudited]
[All amounts in U.S. dollars and all tabular amounts in millions unless otherwise noted]
| 2. | ASSETS AND LIABILITIES HELD FOR SALE (CONTINUED) |
Divestiture
On June 29, 2026, the Company completed the sale of its Lighting Europe business to Mutares (“Lighting Europe Agreement”). Under the terms of the Lighting Europe Agreement, the Company provided the buyer with $18 million of funding, net of transaction costs.
On August 4, 2026, the Company completed the sale of its Rooftop Systems business to Mutares (“Rooftop Systems Agreement”). Under the terms of the Rooftop Systems Agreement, the Company provided the buyer with $19 million of funding, net of transaction costs.
On August 4, 2026, the Company completed the sale of its Lighting North America business to AURELIUS for total consideration of $62 million, net of transaction costs. The sale of the Lighting South America and China business is expected to close during the fourth quarter of 2026, subject to customary closing conditions and regulatory approvals.
The Company recognized (losses) gains on the sales within other expense, net as follows:
| Three months ended | Nine months ended | |||||||||||||||||||||||
| September 30, 2026 | September 30, 2026 | |||||||||||||||||||||||
| Rooftop | Rooftop | |||||||||||||||||||||||
| Lighting | Systems | Total | Lighting | Systems | Total | |||||||||||||||||||
| Proceeds received (funding provided) | $ | 48 | $ | (15 | ) | $ | 33 | $ | 17 | $ | (15 | ) | $ | 2 | ||||||||||
| Estimated purchase price adjustments, net of transaction costs | 14 | (4 | ) | 10 | 27 | (4 | ) | 23 | ||||||||||||||||
| Consideration, net of transaction costs | 62 | (19 | ) | 43 | 44 | (19 | ) | 25 | ||||||||||||||||
| Net assets (liabilities) divested | 65 | (21 | ) | 44 | 45 | (21 | ) | 24 | ||||||||||||||||
| (Loss) gain on divestiture | $ | (3 | ) | $ | 2 | $ | (1 | ) | $ | (1 | ) | $ | 2 | $ | 1 | |||||||||
Consideration associated with the sale remains subject to further adjustments, primarily related to working capital.
Assets and Liabilities held for sale
The following table summarizes the carrying value of the major classes of assets and liabilities of the Lighting business which were classified as held for sale as of September 30, 2026, after giving effect to the impairment on assets held for sale recorded during the nine months ended September 30, 2026 and the divestiture of the Lighting Europe and Lighting North America businesses. Refer to Note 3[b] Other Expense, net for additional information.
| September 30, 2026 | ||||
| Accounts receivable | $ | 14 | ||
| Inventories | 9 | |||
| Prepaid expenses and other | 4 | |||
| Deferred tax assets | 11 | |||
| Assets held for sale | $ | 38 | ||
| Accounts payable | $ | 16 | ||
| Accrued salaries and wages | 4 | |||
| Other accrued liabilities | 6 | |||
| Current lease liabilities | 1 | |||
| Long-term lease liabilities | 3 | |||
| Liabilities held for sale | $ | 30 | ||
| Magna International Inc. Third Quarter Report 2026 | 39 |
MAGNA INTERNATIONAL INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
[Unaudited]
[All amounts in U.S. dollars and all tabular amounts in millions unless otherwise noted]
3. OTHER EXPENSE, NET
| Three months ended | Nine months ended | |||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||
| Restructuring activities | [a] | $ | 83 | $ | 46 | $ | 124 | $ | 103 | |||||||||||
| Loss on assets held for sale | [b] | 5 | — | 501 | — | |||||||||||||||
| Impacts related to Fisker | [c] | (4 | ) | — | (6 | ) | — | |||||||||||||
| Investments | [d] | (5 | ) | 2 | (101 | ) | 4 | |||||||||||||
| $ | 79 | $ | 48 | $ | 518 | $ | 107 | |||||||||||||
[a] Restructuring activities
| Three months ended | Nine months ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Power & Vision | $ | 76 | $ | 34 | $ | 86 | $ | 58 | ||||||||
| Body Exteriors & Structures | 7 | — | 7 | — | ||||||||||||
| Complete Vehicles | — | 12 | 21 | 45 | ||||||||||||
| Seating Systems | — | — | 10 | — | ||||||||||||
| Other expense, net | 83 | 46 | 124 | 103 | ||||||||||||
| Tax effect | — | — | (2 | ) | (4 | ) | ||||||||||
| Net loss attributable to Magna | $ | 83 | $ | 46 | $ | 122 | $ | 99 | ||||||||
During the third quarter of 2026, the Company recorded restructuring charges of $76 million [$76 million after tax] in its Power & Vision segment related to plant closures and significant rightsizing at facilities in Europe. In its Body Exteriors & Structures segment, the Company recorded restructuring charges of $7 million [$7 million after tax] related to rightsizing at a facility in Europe.
During the third quarter of 2025, the Company recorded $24 million [$24 million after tax] of charges related to significant rightsizing activities and plant consolidations at facilities primarily in Europe, as well as $10 million [$10 million after tax] of equity losses related to the Company’s share of restructuring activities at an equity method investee in its Power & Vision segment. In its Complete Vehicles segment, the Company recorded $12 million [$12 million after tax] of charges related to rightsizing activities at two facilities in Europe.
| 40 | Magna International Inc. Third Quarter Report 2026 |
MAGNA INTERNATIONAL INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
[Unaudited]
[All amounts in U.S. dollars and all tabular amounts in millions unless otherwise noted]
3. OTHER EXPENSE, NET (CONTINUED)
[b] Loss on assets held for sale
| Three months ended | Nine months ended | |||||||||||||||||||||||
| September 30, 2026 | September 30, 2026 | |||||||||||||||||||||||
| Rooftop | Rooftop | |||||||||||||||||||||||
| Lighting | Systems | Total | Lighting | Systems | Total | |||||||||||||||||||
| Total asset impairment | $ | 3 | $ | — | $ | 3 | $ | 424 | $ | 74 | $ | 498 | ||||||||||||
| Costs to sell incurred | — | 1 | 1 | 2 | 2 | 4 | ||||||||||||||||||
| Total impairment loss | $ | 3 | $ | 1 | $ | 4 | $ | 426 | $ | 76 | 502 | |||||||||||||
| Loss (gain) on divestiture | 3 | (2 | ) | 1 | 1 | (2 | ) | (1 | ) | |||||||||||||||
| Other expense (income), net | $ | 6 | $ | (1 | ) | $ | 5 | $ | 427 | $ | 74 | $ | 501 | |||||||||||
| Tax effect | 6 | — | 6 | (27 | ) | — | (27 | ) | ||||||||||||||||
| Net loss (gain) attributable to Magna | $ | 12 | $ | (1 | ) | $ | 11 | $ | 400 | $ | 74 | $ | 474 | |||||||||||
Sale of Lighting and Rooftop Systems Businesses
During the three and nine months ended September 30, 2026, the Company recognized an impairment loss of $4 million and $502 million related to the held for sale assets of its Lighting and Rooftop Systems businesses.
On June 29, 2026, the Company completed the sale of its Lighting Europe business to Mutares and provided the buyer with $18 million of funding, net of transaction costs. The Company recognized a gain on divestiture of $2 million upon closing.
On August 4, 2026, the Company completed the sale of its Rooftop Systems business to Mutares and provided the buyer with $19 million of funding, net of transaction costs. The Company recognized a gain on divestiture of $2 million upon closing.
On August 4, 2026, the Company completed the sale of its Lighting North America business to AURELIUS for total consideration of $62 million, net of transaction costs. The Company recognized a loss on divestiture of $3 million upon closing.
[c] Impacts related to Fisker
During the third quarter of 2026, the Company recognized a gain of $4 million [$3 million after tax] related to the settlement of claims associated with Fisker's bankruptcy.
[d] Investments
| Three months ended | Nine months ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Net revaluation gain on public and private equity investments | $ | (5 | ) | $ | (1 | ) | $ | (115 | ) | $ | (3 | ) | ||||
| Non-cash impairment charge | — | 2 | 14 | 2 | ||||||||||||
| Loss (gain) on sales of public equity investments | — | 1 | — | (3 | ) | |||||||||||
| Revaluation loss on public company warrants | — | — | — | 8 | ||||||||||||
| Other (income) expense, net | (5 | ) | 2 | (101 | ) | 4 | ||||||||||
| Tax effect | 1 | — | 1 | 1 | ||||||||||||
| Net (gain) loss attributable to Magna | $ | (4 | ) | $ | 2 | $ | (100 | ) | $ | 5 | ||||||
| Magna International Inc. Third Quarter Report 2026 | 41 |
MAGNA INTERNATIONAL INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
[Unaudited]
[All amounts in U.S. dollars and all tabular amounts in millions unless otherwise noted]
4. EARNINGS PER SHARE
| Three months ended | Nine months ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Basic earnings per Common Share: | ||||||||||||||||
| Net income attributable to Magna International Inc. | $ | 383 | $ | 305 | $ | 840 | $ | 830 | ||||||||
| Weighted average number of Common Shares outstanding | 263.7 | 281.8 | 270.9 | 281.9 | ||||||||||||
| Basic earnings per Common Share | $ | 1.45 | $ | 1.08 | $ | 3.10 | $ | 2.94 | ||||||||
| Diluted earnings per Common Share [a]: | ||||||||||||||||
| Net income attributable to Magna International Inc. | $ | 383 | $ | 305 | $ | 840 | $ | 830 | ||||||||
| Weighted average number of Common Shares outstanding | 266.0 | 281.8 | 273.0 | 281.9 | ||||||||||||
| Diluted earnings per Common Share | $ | 1.44 | $ | 1.08 | $ | 3.08 | $ | 2.94 | ||||||||
| [a] | For the three and nine months ended September 30, 2026, diluted earnings per Common Share excluded 1.4 million [2025 – 4.8 million] and 1.4 million [2025 – 5.4 million] Common Shares, respectively, issuable under the Company's Incentive Stock Option Plan because these options were not "in-the-money". The dilutive effect of participating securities using the two-class method was excluded from the calculation of earnings per share because the effect would be immaterial. |
| 42 | Magna International Inc. Third Quarter Report 2026 |
MAGNA INTERNATIONAL INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
[Unaudited]
[All amounts in U.S. dollars and all tabular amounts in millions unless otherwise noted]
5. DETAILS OF CASH FLOWS FROM OPERATING ACTIVITIES
| [a] | Cash and cash equivalents including restricted cash, consist of: |
| September 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Cash | $ | 547 | $ | 960 | ||||
| Bank term deposits and bankers' acceptances | 831 | 652 | ||||||
| Cash and cash equivalents | $ | 1,378 | $ | 1,612 | ||||
| Restricted cash equivalents included in prepaid expenses and other [note 6] | 12 | — | ||||||
| $ | 1,390 | $ | 1,612 | |||||
| [b] | Items not involving current cash flows: |
| Three months ended | Nine months ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Depreciation | $ | 387 | $ | 389 | $ | 1,185 | $ | 1,146 | ||||||||
| Amortization of acquired intangible assets | 17 | 27 | 53 | 82 | ||||||||||||
| Amortization of other assets and intangible assets included in cost of goods sold | 57 | 58 | 180 | 164 | ||||||||||||
| Deferred revenue amortization | (76 | ) | (54 | ) | (289 | ) | (188 | ) | ||||||||
| Other non-cash charges | 23 | 26 | 37 | 31 | ||||||||||||
| Deferred tax recovery | (14 | ) | (2 | ) | (93 | ) | (44 | ) | ||||||||
| Dividends received in excess of (less than) equity income | 7 | (3) | (52 | ) | 10 | |||||||||||
| Non-cash portion of Other expense, net [note 3] | 5 | 13 | 405 | 15 | ||||||||||||
| $ | 406 | $ | 454 | $ | 1,426 | $ | 1,216 | |||||||||
| [c] | Changes in operating assets and liabilities: |
| Three months ended | Nine months ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Accounts receivable | $ | 271 | $ | (168 | ) | $ | (624 | ) | $ | (662 | ) | |||||
| Inventories | (147 | ) | (34 | ) | (248 | ) | 136 | |||||||||
| Prepaid expenses and other | 11 | 40 | 50 | 79 | ||||||||||||
| Accounts payable | (222 | ) | 143 | 376 | (255 | ) | ||||||||||
| Accrued salaries and wages | 72 | 81 | 154 | 71 | ||||||||||||
| Other accrued liabilities | 137 | 47 | 546 | 310 | ||||||||||||
| Income taxes payable (receivable) | 22 | 16 | 23 | (159 | ) | |||||||||||
| $ | 144 | $ | 125 | $ | 277 | $ | (480 | ) | ||||||||
| Magna International Inc. Third Quarter Report 2026 | 43 |
MAGNA INTERNATIONAL INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
[Unaudited]
[All amounts in U.S. dollars and all tabular amounts in millions unless otherwise noted]
6. ACQUISITION OF NON-CONTROLLING INTEREST
On August 29, 2025, the Company acquired the non-controlling 35% interest in a consolidated subsidiary, increasing the Company's interest to 100%. The total purchase price was $144 million, of which $12 million remains in escrow and is included in prepaid expenses and other. The acquisition was accounted for as an equity transaction, and resulted in a reduction to the Company’s non-controlling interest of $99 million and contributed surplus of $45 million.
7. INVENTORIES
Inventories consist of:
| September 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Raw materials and supplies | $ | 1,668 | $ | 1,647 | ||||
| Work-in-process | 479 | 484 | ||||||
| Finished goods | 639 | 661 | ||||||
| Tooling and engineering | 1,375 | 1,334 | ||||||
| $ | 4,161 | $ | 4,126 | |||||
Tooling and engineering inventory represents costs incurred on tooling and engineering services contracts in excess of billed and unbilled amounts included in accounts receivable.
8. INVESTMENTS
| September 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Equity method investments | $ | 959 | $ | 846 | ||||
| Public and private equity investments | 310 | 225 | ||||||
| Debt investments | 18 | 32 | ||||||
| $ | 1,287 | $ | 1,103 | |||||
Cumulative unrealized gains and losses on equity securities held as at September 30, 2026 were $126 million and $10 million [$19 million and $18 million as at December 31, 2025], respectively.
9. OTHER ASSETS
Other assets consist of:
| September 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Preproduction costs recoverable under long-term supply agreements | $ | 730 | $ | 759 | ||||
| Long-term receivables | 230 | 286 | ||||||
| Pension overfunded status | 74 | 75 | ||||||
| Unrealized gain on cash flow hedges | 64 | 83 | ||||||
| Other, net | 60 | 72 | ||||||
| $ | 1,158 | $ | 1,275 | |||||
| 44 | Magna International Inc. Third Quarter Report 2026 |
MAGNA INTERNATIONAL INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
[Unaudited]
[All amounts in U.S. dollars and all tabular amounts in millions unless otherwise noted]
10. WARRANTY
The following is a continuity of the Company's warranty accruals, included in Other accrued liabilities:
| 2026 | 2025 | |||||||
| Balance, beginning of period | $ | 383 | $ | 309 | ||||
| Expense, net | 28 | 55 | ||||||
| Settlements | (36 | ) | (51 | ) | ||||
| Transfer to liabilities held for sale [note 2] | (5 | ) | — | |||||
| Foreign exchange and other | — | 5 | ||||||
| Balance, March 31 | 370 | 318 | ||||||
| Expense, net | 31 | 31 | ||||||
| Settlements | (30 | ) | (28 | ) | ||||
| Foreign exchange and other | (35 | ) | 10 | |||||
| Balance, June 30 | 336 | 331 | ||||||
| Expense, net | 14 | 23 | ||||||
| Settlements | (34 | ) | (40 | ) | ||||
| Foreign exchange and other | — | (1 | ) | |||||
| Balance, September 30 | $ | 316 | $ | 313 | ||||
11. DEBT
Short-term borrowings
[a] Commercial Paper Program
As at September 30, 2026, no notes were outstanding under either the U.S. commercial paper program or the euro-commercial paper program [no amounts outstanding as at December 31, 2025]. The U.S. notes and euro notes are backstopped by the Company's existing global credit facility.
[b] Credit Facilities
On April 22, 2026, the Company extended the maturity date of its $800 million 364-day syndicated revolving credit facility from June 24, 2026, to June 24, 2027. The facility can be drawn in U.S. dollars or Canadian dollars. As at September 30, 2026, no amounts are outstanding under this credit facility.
Long-term borrowings
On April 22, 2026, the Company extended the maturity date of its $2.7 billion syndicated revolving credit facility from June 25, 2030 to June 25, 2031. As at September 30, 2026, no amounts are outstanding under this credit facility.
As at September 30, 2026, the Company reclassified its €600 million Senior Notes due September 2027 from long-term debt to long-term debt due within one year.
12. INCOME TAXES
For the three months ended September 30, 2026, the Company’s effective income tax rate does not reflect the customary rate primarily due to higher losses not benefited in Europe and loss on assets held for sale described in note 3.
For the nine months ended September 30, 2026, the Company’s effective income tax rate does not reflect the customary rate primarily due to the loss on assets held for sale and revaluations of investments described in note 3.
For the three months ended September 30, 2025, the Company’s effective income tax rate is higher than the customary rate due to an unfavourable change in the mix of earnings and an increase in reserves for uncertain tax positions.
For the nine months ended September 30, 2025, the Company’s effective income tax rate is higher than the customary rate due to an unfavourable change in the mix of earnings and higher losses not benefited in Europe, partially offset by a decrease in reserves for uncertain tax positions.
| Magna International Inc. Third Quarter Report 2026 | 45 |
MAGNA INTERNATIONAL INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
[Unaudited]
[All amounts in U.S. dollars and all tabular amounts in millions unless otherwise noted]
13. CAPITAL STOCK
| [a] | During the nine-month period ended September 30, 2026, the Company repurchased 23.0 million shares under a normal course issuer bid for cash consideration of $1.4 billion. |
| [b] | The following table presents the maximum number of shares that would be outstanding if all the dilutive instruments outstanding at October 29, 2026 were exercised or converted: |
| Common Shares | 258,660,289 | |||
| Stock options [i] and share awards | 4,080,753 | |||
| 262,741,042 |
[i] Options to purchase Common Shares are exercisable by the holder in accordance with the vesting provisions and upon payment of the exercise price as may be determined from time to time pursuant to the Company's stock option plans.
| 46 | Magna International Inc. Third Quarter Report 2026 |
MAGNA INTERNATIONAL INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
[Unaudited]
[All amounts in U.S. dollars and all tabular amounts in millions unless otherwise noted]
14. ACCUMULATED OTHER COMPREHENSIVE LOSS
The following is a continuity schedule of accumulated other comprehensive loss:
| 2026 | 2025 | |||||||
| Accumulated net unrealized loss on translation of net investment in foreign operations | ||||||||
| Balance, beginning of year | $ | (802 | ) | $ | (1,368 | ) | ||
| Net unrealized (loss) gain | (56 | ) | 186 | |||||
| Repurchase of shares under normal course issuer bid | 9 | 2 | ||||||
| Balance, March 31 | (849 | ) | (1,180 | ) | ||||
| Net unrealized (loss) gain | (30 | ) | 376 | |||||
| Repurchase of shares under normal course issuer bid | 14 | — | ||||||
| Balance, June 30 | (865 | ) | (804 | ) | ||||
| Net unrealized gain (loss) | 80 | (42 | ) | |||||
| Repurchase of shares under normal course issuer bid | 14 | — | ||||||
| Balance, September 30 | (771 | ) | (846 | ) | ||||
| Accumulated net unrealized gain (loss) on cash flow hedges [i] | ||||||||
| Balance, beginning of year | 99 | (113 | ) | |||||
| Net unrealized (loss) gain | (6 | ) | 49 | |||||
| Reclassifications to net income | (13 | ) | 16 | |||||
| Balance, March 31 | 80 | (48 | ) | |||||
| Net unrealized (loss) gain | (4 | ) | 98 | |||||
| Reclassifications to net income | (15 | ) | 7 | |||||
| Balance, June 30 | 61 | 57 | ||||||
| Net unrealized gain | 14 | 15 | ||||||
| Reclassifications to net income | (11 | ) | (6 | ) | ||||
| Balance, September 30 | 64 | 66 | ||||||
| Accumulated net unrealized loss on other long-term liabilities | ||||||||
| Balance, beginning of year | (65 | ) | (103 | ) | ||||
| Revaluation | (1 | ) | — | |||||
| Reclassifications to net income | — | 1 | ||||||
| Balance, March 31 | (66 | ) | (102 | ) | ||||
| Reclassifications to net income | — | 1 | ||||||
| Balance, June 30 | (66 | ) | (101 | ) | ||||
| Reclassifications to net income | 1 | 1 | ||||||
| Balance, September 30 | (65 | ) | (100 | ) | ||||
| Accumulated net unrealized gain on available-for-sale investments Balance, beginning of year through September 30 | 2 | — | ||||||
| Total accumulated other comprehensive loss | $ | (770 | ) | $ | (880 | ) | ||
| Magna International Inc. Third Quarter Report 2026 | 47 |
MAGNA INTERNATIONAL INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
[Unaudited]
[All amounts in U.S. dollars and all tabular amounts in millions unless otherwise noted]
14. ACCUMULATED OTHER COMPREHENSIVE LOSS (CONTINUED)
| [i] | The amount of income tax expense that has been netted in the accumulated net unrealized (loss) gain on cash flow hedges is as follows: |
| 2026 | 2025 | |||||||
| Balance, beginning of year | $ | (39 | ) | $ | 44 | |||
| Net unrealized gain (loss) | 3 | (17 | ) | |||||
| Reclassifications to net income | 4 | (7 | ) | |||||
| Balance, March 31 | (32 | ) | 20 | |||||
| Net unrealized loss | (1 | ) | (39 | ) | ||||
| Reclassifications to net income | 5 | (3 | ) | |||||
| Balance, June 30 | (28 | ) | (22 | ) | ||||
| Net unrealized loss | (7 | ) | (8 | ) | ||||
| Reclassifications to net income | 4 | 3 | ||||||
| Balance, September 30 | $ | (31 | ) | $ | (27 | ) | ||
The amount of other comprehensive gain that is expected to be reclassified to net income over the next 12 months is $74 million.
15. FINANCIAL INSTRUMENTS
| [a] | Financial assets and liabilities |
The Company's financial assets and financial liabilities consist of the following:
| September 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Financial assets | ||||||||
| Cash and cash equivalents | $ | 1,378 | $ | 1,612 | ||||
| Restricted cash equivalents included in prepaid expenses and other [note 6] | 12 | — | ||||||
| Accounts receivable | 8,298 | 7,593 | ||||||
| Public and private equity investments | 310 | 225 | ||||||
| Debt investments | 18 | 32 | ||||||
| Long-term receivables included in other assets | 230 | 286 | ||||||
| Financial assets held for sale [note 2] | ||||||||
| Accounts receivable held for sale | 14 | — | ||||||
| $ | 10,260 | $ | 9,748 | |||||
| Financial liabilities | ||||||||
| Long-term debt (including current portion) | $ | 4,630 | $ | 4,712 | ||||
| Operating lease liability (including current portion) | 1,801 | 1,977 | ||||||
| Accounts payable | 7,080 | 6,895 | ||||||
| Financial liabilities held for sale [note 2] | ||||||||
| Accounts payable held for sale | 16 | — | ||||||
| $ | 13,527 | $ | 13,584 | |||||
| Foreign currency contracts designated as effective hedges, measured at fair value | ||||||||
| Prepaid expenses | $ | 105 | $ | 98 | ||||
| Other assets | 63 | 83 | ||||||
| Other accrued liabilities | (40 | ) | (19 | ) | ||||
| Other long-term liabilities | (42 | ) | (19 | ) | ||||
| $ | 86 | $ | 143 | |||||
| 48 | Magna International Inc. Third Quarter Report 2026 |
MAGNA INTERNATIONAL INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
[Unaudited]
[All amounts in U.S. dollars and all tabular amounts in millions unless otherwise noted]
15. Financial instruments (CONTINUED)
| [b] | Supplier financing program |
The Company has supplier financing programs with third-party financial institutions that provide financing to suppliers that provide tooling related materials. These arrangements allow these suppliers to elect to be paid by a financial institution at a discount earlier than the maturity date of the receivable, which may extend from 6 to 18 months. The Company pays the full amount owing to the financial institution on the maturity dates. Amounts outstanding under these programs as at September 30, 2026 were $100 million [$116 million as at December 31, 2025] and are presented within accounts payable.
| [c] | Fair value |
The Company determines the estimated fair values of its financial instruments based on valuation methodologies it believes are appropriate; however, considerable judgment is required to develop these estimates. Accordingly, these estimated fair values are not necessarily indicative of the amounts the Company could realize in a current market exchange. The estimated fair value amounts can be materially affected by the use of different assumptions or methodologies. The methods and assumptions used to estimate the fair value of financial instruments are described below:
Cash and cash equivalents, restricted cash equivalents, accounts receivable, accounts payable and short-term borrowings
Due to the short period to maturity of the instruments, the carrying values as presented in the consolidated balance sheets are reasonable estimates of fair values.
Publicly traded and private equity securities
The fair value of the Company’s investments in publicly traded equity securities is determined using the closing price on the measurement date, as reported on the stock exchange on which the securities are traded [Level 1 input based on the GAAP fair value hierarchy].
The Company estimates the value of its private equity securities based on valuation methods using the observable transaction price at the transaction date and other observable inputs including rights and obligations of the securities held by the Company [Level 3 input based on the GAAP fair value hierarchy].
Senior Notes
At September 30, 2026, the net book value of the Company's Senior Notes was $4.6 billion and the estimated fair value was $4.5 billion. The fair value of our Senior Notes are classified as Level 1 when quoted prices in active markets are available and Level 2 when the quoted prices are from less active markets or when other observable inputs are used to determine fair value.
| Magna International Inc. Third Quarter Report 2026 | 49 |
MAGNA INTERNATIONAL INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
[Unaudited]
[All amounts in U.S. dollars and all tabular amounts in millions unless otherwise noted]
15. Financial instruments (CONTINUED)
| [d] | Credit risk |
The Company's financial assets that are exposed to credit risk consist primarily of cash and cash equivalents, accounts receivable, debt investments, and foreign exchange and commodity forward contracts with positive fair values. Cash and cash equivalents, which consist of short-term investments, are only invested in bank term deposits and bank commercial paper with an investment grade credit rating. Credit risk is further reduced by limiting the amount which is invested in certain major financial institutions.
The Company is also exposed to credit risk from the potential default by any of its counterparties on its foreign exchange forward contracts. The Company mitigates this credit risk by dealing with counterparties who are major financial institutions that the Company anticipates will satisfy their obligations under the contracts.
In the normal course of business, the Company is exposed to credit risk from its customers, substantially all of which are in the automotive industry and are subject to credit risks associated with the automotive industry. For the three months ended September 30, 2026, sales to the Company's six largest customers represented 74% of the Company's total sales; and substantially all of its sales are to customers with which the Company has ongoing contractual relationships. The Company conducts business with newer electric vehicle-focused customers, which poses incremental credit risk due to their relatively short operating histories; limited financial resources; less mature product development and validation processes; uncertain market acceptance of their products/services; and untested business models. These factors may elevate the Company’s risks in dealing with such customers, particularly with respect to recovery of: pre production (including tooling, engineering, and launch) and production receivables; inventory; fixed assets and capitalized preproduction expenditures; as well as other third party obligations related to such items. As at September 30, 2026, the Company’s balance sheet exposure related to newer electric vehicle-focused customers was approximately $150 million [$200 million as at December 31, 2025] and sales to these customers represented less than 5% of the Company’s total sales. In determining the allowance for expected credit losses, the Company considers changes in customers’ credit ratings, liquidity, customers’ historical payments and loss experience, current economic conditions, and the Company's expectations of future economic conditions.
[e] Interest rate risk
The Company is not exposed to significant interest rate risk due to the short-term maturity of its monetary current assets and current liabilities. In particular, the amount of interest income earned on cash and cash equivalents is impacted more by investment decisions made and the demands to have available cash on hand, than by movements in interest rates over a given period.
The Company is exposed to interest rate risk on its Term Loans as the interest rate is variable, however the Company is not exposed to interest rate risk on Senior Notes as the interest rates are fixed.
| 50 | Magna International Inc. Third Quarter Report 2026 |
MAGNA INTERNATIONAL INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
[Unaudited]
[All amounts in U.S. dollars and all tabular amounts in millions unless otherwise noted]
15. Financial instruments (CONTINUED)
[f] Currency risk and foreign exchange contracts
The Company is exposed to fluctuations in foreign exchange rates when manufacturing facilities have committed to the delivery of products for which the selling price has been quoted in currencies other than the facilities' functional currency, and when materials and equipment are purchased in currencies other than the facilities' functional currency. In an effort to manage this net foreign exchange exposure, the Company employs hedging programs, primarily through the use of foreign exchange forward contracts.
At September 30, 2026, the Company had outstanding foreign exchange forward contracts representing commitments to buy and sell various foreign currencies. Significant commitments are as follows:
| For Canadian dollars | For U.S. dollars | For Euros | ||||||||||||||||||||||||||||||
| Weighted | Mexican | Weighted | Weighted | Czech | Weighted | |||||||||||||||||||||||||||
| U.S. dollar | average | Peso | average | U.S. dollar | average | Koruna | average | |||||||||||||||||||||||||
| amount | rate | amount | rate | amount | rate | amount | rate | |||||||||||||||||||||||||
| Buy | 163 | 1.34770 | 21,821 | 0.04975 | 1,294 | 0.84153 | 12,148 | 0.03983 | ||||||||||||||||||||||||
| (Sell) | (1,497 | ) | 0.74322 | (104 | ) | 20.31602 | (1,482 | ) | 1.18431 | — | — | |||||||||||||||||||||
Forward contracts mature at various dates through 2030. Foreign currency exposures are reviewed quarterly.
16. CONTINGENCIES
From time to time, the Company may become involved in regulatory proceedings, or become liable for legal, contractual and other claims by various parties, including customers, suppliers, former employees, class action plaintiffs and others. On an ongoing basis, the Company attempts to assess the likelihood of any adverse judgements or outcomes to these proceedings or claims, together with potential ranges of probable costs and losses. A determination of the provision required, if any, for these contingencies is made after analysis of each individual issue. The required provision may change in the future due to new developments in each matter or changes in approach such as a change in settlement strategy in dealing with these matters.
In the third quarter of 2025, Ford initiated recalls covering approximately 3.8 million vehicles equipped with rearview cameras or image processing modules supplied by the Company. Ford also announced a new 15-year extended warranty program for up to approximately 14.9 million vehicles also equipped with rearview cameras supplied by us. Ford is now claiming approximately $236 million in costs related to these recalls and warranty claims, as the image processing module claim was settled in the third quarter of 2026. Additional recalls and/or extended warranty programs remain possible. The Company is in technical and commercial discussions with Ford, however, at this time, root cause determinations have not been made and/or confirmed for the vehicles covered by Ford’s recalls and warranty extension program. Even after root cause(s) have been determined, other challenges make it difficult to fully quantify the Company’s potential financial exposure, if any. These challenges include: integration with other vehicle systems and non camera components; the age of affected vehicles; duration of the original warranty; number of affected vehicles brought to Ford dealers for inspection; and dealer discretion to determine the nature of the remedy to be applied, which may range from software upgrades, inspection of the rearview camera and other components, repairs, or replacement of the rearview camera. In the absence of certainty as to the scope of potentially affected vehicles, the root cause(s) of the alleged product failures, and/or the related costs of service actions, the Company is unable to fully estimate its potential exposure, if any, for recall-related costs and the extension of product warranties by Ford to affected vehicle owners. If the Company is determined to be fully or partially responsible for defective rearview cameras, any recall and extended warranty costs in excess of amounts accrued could be material to the Company’s profitability in the period(s) in which such costs are recognized or provided for.
As a result of the bankruptcy of Fisker, Inc., owners of Fisker Ocean SUVs have asserted claims for alleged vehicle defects and breaches of state “lemon laws” against J.P. Morgan Chase, N.A. [“Chase”], the direct financer of approximately 2,000 such vehicles in the United States. Chase has indicated that it will seek indemnification from the Company, as contract manufacturer, for damages and legal costs incurred with the resolution of these claims. The Company has insufficient information to determine the existence or extent of potential liability, if any, related to this matter at this time.
| Magna International Inc. Third Quarter Report 2026 | 51 |
MAGNA INTERNATIONAL INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
[Unaudited]
[All amounts in U.S. dollars and all tabular amounts in millions unless otherwise noted]
17. SEGMENTED INFORMATION
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, electronics, mechatronics, mirrors and lighting systems.
The Company is organized under four operating segments: Body Exteriors & Structures, Power & Vision, Seating Systems, and Complete Vehicles. These segments have been determined on the basis of technological opportunities, product similarities, market and operating factors, and are also the Company's reportable segments.
The Company's chief operating decision maker is the Chief Executive Officer. The 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. The chief operating decision maker uses Adjusted EBIT to assess operating performance, allocate resources, and to help plan the Company's long-term strategic direction and future global growth. Adjusted EBIT is calculated by taking Net income and adding back Amortization of acquired intangible assets, Income taxes, Interest expense, net and Other expense, net.
| [a] | The following tables show segment information for the Company's reporting segments and a reconciliation of Adjusted EBIT to the Company's consolidated net income: |
| Three months ended September 30, 2026 | ||||||||||||||||||||||||
| Fixed | ||||||||||||||||||||||||
| Total | External | Adjusted | Equity | asset | ||||||||||||||||||||
| sales | sales | EBIT [ii] | Depreciation | income | additions | |||||||||||||||||||
| Body Exteriors & Structures | $ | 4,158 | $ | 4,107 | $ | 387 | $ | 202 | $ | — | $ | 137 | ||||||||||||
| Power & Vision | 3,773 | 3,708 | 287 | 134 | (19 | ) | 123 | |||||||||||||||||
| Seating Systems | 1,247 | 1,247 | 28 | 24 | (15 | ) | 29 | |||||||||||||||||
| Complete Vehicles | 996 | 990 | 33 | 17 | (1 | ) | 15 | |||||||||||||||||
| Corporate & Other [i] | (115 | ) | 7 | (52 | ) | 10 | — | 3 | ||||||||||||||||
| Total Reportable Segments | $ | 10,059 | $ | 10,059 | $ | 683 | $ | 387 | $ | (35 | ) | $ | 307 | |||||||||||
| Three months ended September 30, 2025 | ||||||||||||||||||||||||
| Fixed | ||||||||||||||||||||||||
| Total | External | Adjusted | Equity | asset | ||||||||||||||||||||
| sales | sales | EBIT [ii] | Depreciation | income | additions | |||||||||||||||||||
| Body Exteriors & Structures | $ | 4,147 | $ | 4,086 | $ | 305 | $ | 191 | $ | (1 | ) | $ | 120 | |||||||||||
| Power & Vision | 3,854 | 3,769 | 236 | 146 | (27 | ) | 112 | |||||||||||||||||
| Seating Systems | 1,520 | 1,518 | 62 | 27 | (16 | ) | 20 | |||||||||||||||||
| Complete Vehicles | 1,085 | 1,077 | 29 | 17 | — | 12 | ||||||||||||||||||
| Corporate & Other [i] | (144 | ) | 12 | (19 | ) | 8 | — | 3 | ||||||||||||||||
| Total Reportable Segments | $ | 10,462 | $ | 10,462 | $ | 613 | $ | 389 | $ | (44 | ) | $ | 267 | |||||||||||
| 52 | Magna International Inc. Third Quarter Report 2026 |
MAGNA INTERNATIONAL INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
[Unaudited]
[All amounts in U.S. dollars and all tabular amounts in millions unless otherwise noted]
| 17. | Segmented Information (CONTINUED) |
| Nine months ended September 30, 2026 | ||||||||||||||||||||||||
| Fixed | ||||||||||||||||||||||||
| Total | External | Adjusted | Equity | asset | ||||||||||||||||||||
| sales | sales | EBIT [ii] | Depreciation | income | additions | |||||||||||||||||||
| Body Exteriors & Structures | $ | 12,658 | $ | 12,489 | $ | 1,021 | $ | 617 | $ | (3 | ) | $ | 340 | |||||||||||
| Power & Vision | 11,747 | 11,519 | 784 | 414 | (133 | ) | 329 | |||||||||||||||||
| Seating Systems | 4,035 | 4,028 | 104 | 73 | (37 | ) | 72 | |||||||||||||||||
| Complete Vehicles | 3,380 | 3,362 | 102 | 54 | (2 | ) | 41 | |||||||||||||||||
| Corporate & Other [i] | (400 | ) | 22 | (93 | ) | 27 | — | 13 | ||||||||||||||||
| Total Reportable Segments | $ | 31,420 | $ | 31,420 | $ | 1,918 | $ | 1,185 | $ | (175 | ) | $ | 795 | |||||||||||
| Nine months ended September 30, 2025 | ||||||||||||||||||||||||
| Fixed | ||||||||||||||||||||||||
| Total | External | Adjusted | Equity | asset | ||||||||||||||||||||
| sales | sales | EBIT [ii] | Depreciation | income | additions | |||||||||||||||||||
| Body Exteriors & Structures | $ | 12,366 | $ | 12,185 | $ | 882 | $ | 566 | $ | (4 | ) | $ | 353 | |||||||||||
| Power & Vision | 11,357 | 11,128 | 522 | 427 | (57 | ) | 323 | |||||||||||||||||
| Seating Systems | 4,265 | 4,259 | 74 | 78 | (30 | ) | 56 | |||||||||||||||||
| Complete Vehicles | 3,587 | 3,562 | 101 | 52 | (3 | ) | 36 | |||||||||||||||||
| Corporate & Other [i] | (413 | ) | 28 | (29 | ) | 23 | (2 | ) | 13 | |||||||||||||||
| Total Reportable Segments | $ | 31,162 | $ | 31,162 | $ | 1,550 | $ | 1,146 | $ | (96 | ) | $ | 781 | |||||||||||
| [i] | Included in Corporate and Other Adjusted EBIT are intercompany fees charged to the automotive segments. |
| [ii] | The following table reconciles Net income to Adjusted EBIT: |
| Three months ended | Nine months ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Net income | $ | 400 | $ | 333 | $ | 878 | $ | 880 | ||||||||
| Add: | ||||||||||||||||
| Amortization of acquired intangible assets | 17 | 27 | 53 | 82 | ||||||||||||
| Interest expense, net | 35 | 65 | 109 | 167 | ||||||||||||
| Other expense, net | 79 | 48 | 518 | 107 | ||||||||||||
| Income taxes | 152 | 140 | 360 | 314 | ||||||||||||
| Adjusted EBIT | $ | 683 | $ | 613 | $ | 1,918 | $ | 1,550 | ||||||||
Other segment items constitute the difference between External sales by segment and Adjusted EBIT by segment, and are comprised of cost of goods sold, selling, general, and administrative expenses, depreciation, and equity income. No significant expense categories are being provided to the chief operating decision maker on a regular basis.
| Magna International Inc. Third Quarter Report 2026 | 53 |
MAGNA INTERNATIONAL INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
[Unaudited]
[All amounts in U.S. dollars and all tabular amounts in millions unless otherwise noted]
| 17. | Segmented Information (CONTINUED) |
[b] The following table shows segment information for Goodwill, Investments, and Net Assets for the Company's reporting segments:
| September 30, 2026 | December 31, 2025 | |||||||||||||||||||||||
| Goodwill | Investments | Net Assets | Goodwill | Investments | Net Assets | |||||||||||||||||||
| Body Exteriors & Structures | $ | 459 | $ | 13 | $ | 8,293 | $ | 461 | $ | 24 | $ | 8,725 | ||||||||||||
| Power & Vision [i] | 1,599 | 636 | 6,303 | 1,654 | 524 | 6,699 | ||||||||||||||||||
| Seating Systems | 264 | 225 | 1,190 | 260 | 226 | 1,372 | ||||||||||||||||||
| Complete Vehicles | 112 | 120 | 543 | 116 | 115 | 471 | ||||||||||||||||||
| Corporate & Other | 19 | 293 | 935 | 21 | 214 | 1,029 | ||||||||||||||||||
| Total Reportable Segments | $ | 2,453 | $ | 1,287 | $ | 17,264 | $ | 2,512 | $ | 1,103 | $ | 18,296 | ||||||||||||
[i] Includes $8 million of net assets held for sale.
| [c] | The following table reconciles Total Assets to Net Assets: |
| September 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Total Assets | $ | 30,985 | $ | 31,417 | ||||
| Deduct assets not included in segment net assets: | ||||||||
| Cash and cash equivalents | (1,378 | ) | (1,612 | ) | ||||
| Deferred tax assets | (894 | ) | (864 | ) | ||||
| Long-term receivables from joint venture partners | (85 | ) | (117 | ) | ||||
| Deduct liabilities included in segment net assets: | ||||||||
| Accounts payable | (7,080 | ) | (6,895 | ) | ||||
| Accrued salaries and wages | (995 | ) | (888 | ) | ||||
| Other accrued liabilities | (3,259 | ) | (2,745 | ) | ||||
| Liabilities held for sale | (30 | ) | — | |||||
| Segment Net Assets | $ | 17,264 | $ | 18,296 | ||||
18. SUBSEQUENT EVENT
Normal Course Issuer Bid
Subsequent to September 30, 2026, the Company purchased 1,273,234 Common Shares for cancellation under its existing normal course issuer bid for cash consideration of $82 million.
Subject to approval by the Toronto Stock Exchange ["TSX"], the Company’s Board of Directors approved a new normal course issuer bid to purchase up to 25.8 million Common Shares of the Company, representing approximately 10% of the Company’s public float. The primary purposes of the normal course issuer bid are purchases for cancellation as well as purchases to fund the Company’s stock-based compensation awards and programs. The normal course issuer bid is expected to be effective on November 9, 2026 and will terminate no later than November 8, 2027. All purchases of Common Shares will be made at the market price at the time of purchase in accordance with the rules and policies of the TSX or on the New York Stock Exchange ["NYSE"] in compliance with Rule 10b-18 under the U.S. Securities Exchange Act of 1934.
Purchases may also be made through alternative trading systems in Canada and the U.S., or by such other means permitted by the TSX, including by private agreement or specific share repurchase program at a discount to the prevailing market price, pursuant to an issuer bid exemption order issued by a securities regulatory authority.
| 54 | Magna International Inc. Third Quarter Report 2026 |
Exhibit 99.3
FORM 52-109F2
CERTIFICATION OF INTERIM FILINGS
FULL CERTIFICATE
I, Seetarama (Swamy) Kotagiri, President and Chief Executive Officer of Magna International Inc., certify the following:
1. Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of Magna International Inc. (the “issuer”) for the interim period ended September 30, 2026.
2. No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.
3. Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.
4. Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer.
5. Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings
(a) designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that
(i) material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and
(ii) information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and
(b) designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.
5.1 Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is the Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
5.2 N/A
5.3 N/A
6. Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on July 1, 2026 and ended on September 30, 2026 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.
Date: October 30, 2026.
| /s/ Seetarama (Swamy) Kotagiri | |
| Seetarama (Swamy) Kotagiri | |
| President and Chief Executive Officer |
Exhibit 99.4
FORM 52-109F2
CERTIFICATION OF INTERIM FILINGS
FULL CERTIFICATE
I, Philip Fracassa, Executive Vice-President and Chief Financial Officer of Magna International Inc., certify the following:
1. Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of Magna International Inc. (the “issuer”) for the interim period ended September 30, 2026.
2. No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.
3. Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.
4. Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer.
5. Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings
(a) designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that
(i) material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and
(ii) information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and
(b) designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.
5.1 Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is the Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
5.2 N/A
5.3 N/A
6. Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on July 1, 2026 and ended on September 30, 2026 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.
Date: October 30, 2026.
| /s/ Philip Fracassa | |
| Philip Fracassa | |
| Executive Vice-President and Chief Financial Officer |