Greetings, and welcome to the Magna International Q4 and year-end 2023 results and 2024 outlook conference call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. At that time, if you have a question, please press the 1 followed by the 4 on your telephone. Should you require operator assistance at any time, please press star 0. As a reminder, this conference is being recorded today, Friday, February 9, 2024. I would now like to turn the call over to Louis Tonelli, Vice President, Investor Relations. Thanks. Hello, everyone, and welcome to our conference call covering our 2023 results and our 2024 outlook. Joining me today are Swamy Kotagiri and Pat McCann. Yesterday, our board of directors met and approved our financial results for the fourth quarter of 2023, as well as our 2024 financial outlook. We issued a press release this morning outlining both of these. You'll find the press release, today's conference call webcast, the slide presentation to go along with the call, and our updated quarterly financial review, all in the investor relations section of our website at magna.com. Before we get started, just as a reminder, the discussion today may contain forward-looking information or forward-looking statements within the meaning of applicable securities legislation. Such statements involve certain risks, assumptions, and uncertainties which may cause the company's actual or future results and performance to be materially different from those expressed or implied in these statements. Please refer to today's press release for a complete description of our safe harbor disclaimer. Please also refer to the reminder slide included in our presentation that relates to our commentary today. This morning, we will cover our 2023 highlights as well as our Q4 results. We will then provide our 2024 outlook and lastly, run through our financial strategy. With that, I'll pass it over to Swamy. Thank you, Louis. Good morning, everyone. I appreciate you joining our call today, and let's jump right in. Overall, I was pleased with our 2023 operating performance, including good launch execution that helped us to continue to drive organic sales growth over market and record sales of $42.8 billion. Great efforts at all levels to offset inflationary pressures and significant traction in removing costs and improving efficiencies across the company. We ended the year with solid Q4 results, considering we were slightly hampered by a couple of discrete items relative to our expectations. Pat will cover those. Our sales of $10.5 billion in the fourth quarter of 2023 were up 9% year-over-year, despite the UAW strikes that reduced sales by $275 million in the quarter and contributed to negative vehicle production mix for us relative to the comparable period in 2022. Adjusted EBIT increased 52% to $558 million in Q4, and EBIT margin increased 150 basis points to 5.3%. Adjusted EBIT margin ended the year at 5.2%, up 70 basis points year-over-year, and in the middle of the 5.1%-5.4% range we guided to in November of last year. Our adjusted EPS for the quarter was up 41% to $1.33 and ended the year at $5.49. Free Cash Flow in Q4 was $472 million, up $132 million relative to Q4 last year. Turning to key accomplishments in 2023, we executed on a number of short and midterm Operational Excellence activities, which contributed about 75 basis points to margin expansion this past year and is expected to contribute a further 75 basis points combined over the next two years. Our customers continue to recognize our efforts in Operational Excellence and innovation. Last year, we received 107 customer awards in recognition of quality and operational performance. One reason we continue to win business. And in 2023, we committed to achieve net zero emissions by 2050. Operational Excellence is enabled by our ongoing focus on people development. This past year, we launched our Operational Management Accelerator program, aimed at identifying and cultivating individuals within Magna to become future leaders in our divisions. For the second year in a row, Magna has been named one of the world's most ethical companies, and I'm proud that Magna received 16 leading employer recognitions this past year, including Fortune's World's Most Admired Companies and Forbes Best Employers, both for the seventh consecutive year. With respect to sales growth, we once again outgrew our markets in 2023. We were awarded about $12 billion in new business, which will contribute to further sales growth above market as these programs launch in the future. We are on track with integration and synergies for the Veoneer acquisition. Lastly, our commitment to innovation has helped us win business in core areas, including advanced high-volume front camera modules with a European-based global OEM, battery enclosures with four global OEMs, and eDrive systems with a European-based and North American-based global OEM. With that, I will pass it over to Pat to cover our financials in more detail. Thanks, Swamy, and good morning, everyone. I'll start with a review of our results. As Swamy indicated, we were pleased with our 2023 operating results. Overall, global light vehicle production increased 8% in 2023, or 9% weighted for our geographic sales. Our consolidated sales rose 13% year-over-year. On an organic basis, our sales increased 11%, driving a 2% weighted growth over market for the year, despite the negative impact of the UAW strikes in the third and fourth quarters. Our adjusted EBIT margin improved 70 basis points to 5.2%, reflecting earnings on higher sales, including improved margins due to the impacts of operational excellence, cost initiatives, productivity improvements, and lower costs at previously underperforming facilities. These were partially offset by higher costs associated with new assembly business, the negative impact of the UAW strikes, the net unfavorable impact of commercial items, lower amortization related to the initial value of public company securities, higher launch costs, and the impact of acquisitions net of divestitures. Mainly as a result of our sales growth and margin expansion, adjusted EPS increased 29% to $5.49. For the fourth quarter, sales increased 9% to $10.5 billion. Adjusted EBIT improved 150 basis points to 5.3%, and adjusted EPS rose 41% to $1.33. I'll take you through some of the details. North American, European, and Chinese light vehicle production were up 5%, 7%, and 12%, respectively, resulting in an overall 7% increase in global production. Breaking down North American production further, while overall production increased 5%, production by our Detroit-based customers, which were targeted in the UAW strikes, actually declined 11% in the fourth quarter. Our consolidated sales were $10.5 billion, up 9% over the fourth quarter of 2022. The sales increase was primarily due to the higher global vehicle production, the launch of new programs, the acquisition of Veoneer Active Safety, net of the divestiture of our manual transmission plant in Europe, and the net strengthening of currencies against the U.S. dollar. These were partially offset by lower complete vehicle sales, mainly due to a program changeover in Graz, Austria, and an estimated $275 million impact from the UAW strikes in North America. On an organic basis, our sales increased 4% year-over-year, or 7% excluding complete vehicles. This compares to a 6% increase in weighted global production. Once again, negative production mix, largely driven by the UAW strikes, unfavorably, unfavorably impacted our year-over-year sales growth in the fourth quarter. Adjusted EBIT was $558 million, and adjusted EBIT margin was 5.3%, compared to 3.8% in Q4 of 2022. Our continued focus on operational excellence and performance on cost initiatives, in addition to higher volumes, is driving strong earnings on higher sales. This was despite the negative impacts of a program changeover in complete vehicles and the UAW strikes in North America, which we estimated cost us about 50 basis points. The net effect of these generated 30 basis points of net improvement. Adjusted EBIT margin was also positively impacted by about 80 basis points of net operational items, which include productivity and efficiency improvements at certain facilities and higher tooling contribution. Non-recurring items, which together had a net favorable impact of about 30 basis points and about 20 basis points related to lower net input costs. EBIT margin was negatively impacted by lower equity income, which reduced margin by about 10 basis points. Earnings on higher unconsolidated sales were more than offset by the finalization of year-end tax balances and some negative product mix in one JV. In addition to these items, relative to our expectations, there was some retiming of expected customer recoveries into 2024. As Swamy alluded to earlier, relative to our expectations for the fourth quarter, the lower equity income, together with a foreign exchange loss on the devaluation of the Argentine peso, cost us about $35 million or about $0.11 per share. Turning to a review of our cash flows and investment activities. In the fourth quarter of 2023, we generated $660 million in cash from operations before changes in working capital, up $127 million or 24% from 2022. We also generated $918 million in working capital for total cash from operations of $1.6 billion for the quarter. Investment activities in the quarter included $944 million for fixed assets, largely to support program awards, and $189 million for investments, other assets and intangible. Overall, we generated free cash flow of $472 million in Q4, and we also paid $133 million in dividends in the quarter. Growing our dividend remains an element of our financial strategy, and yesterday, our board approved an increase in our quarterly dividend to $0.475 per share, our fourteenth consecutive year of increased fourth quarter dividends, reflecting the board and management's collective confidence in the outlook for our business. We have increased our dividend per share at an average annual growth rate of 11%, going back to 2010. And now I'll pass it back to Swamy to cover our outlook. Thanks, Pat. Over the past three years, we have been highlighting our go-forward strategy to propel our business into the future. The key aspects of our strategy are unchanged despite continuing industry challenges, and we are making significant progress in our strategy. This progress is reflected in our outlook, and we expect to realize further benefits beyond our outlook period. As always, our outlook reflects both tailwinds and headwinds. In terms of tailwinds, we are launching content on a number of new programs, which is contributing to sales growth. Our megatrend business is expected to continue to grow significantly, which we anticipate will drive profitability as we leverage the sales growth. We expect further traction in our operational excellence activities, contributing to additional margin expansion. In terms of headwinds included in our outlook, we anticipate further net input cost increases substantially related to continued elevated inflation driving higher labor rates, and scrap prices are expected to continue to decline. The industry appears to be moving from supply constrained to demand constrained as macro challenges persist. Expected EV penetration rates have been pushed out, which is having some negative impact on our anticipated short- and midterm sales growth. So how does all this translate in our key financial metrics? We expect continued solid organic sales growth over market in the range of 3%-5% on average per year over our outlook period. We anticipate margin expansion of 180 basis points or more from 2023- 2026. Our engineering investments in megatrend areas should average about $1.2 billion annually before customer recoveries. This includes about $300 million related to the acquisition of Veoneer Active Safety. We expect a modest decline in megatrend engineering spend in 2026 relative to 2024 and 2025 levels, while sales are increasing. Capital spending is expected to decline beyond this year, and CapEx to sales is on a path to return to more normal levels, as we have highlighted previously. Lastly, we expect our free cash flow generation to increase each year over our outlook period as sales continue to grow, margins expand and CapEx to sales normalize. We anticipate over $2 billion in free cash flow by 2026. Last year, we highlighted our significant expected sales increases in megatrend areas and the fact that our engineering spend in absolute dollars was largely unchanged through our outlook. While our midterm sales in Megatrend areas have been somewhat impacted by lower expected volumes, particularly related to EVs, the trajectory of our sales growth in these areas remains considerable, growing by over $4 billion in the next three years. Lower expected Megatrend profits on the reduced sales is the most significant factor, shifting our profitability inflection point from 2025- 2026. While our outlook reflects a modest 2025 loss here, we continue to work to reduce or eliminate this loss. Regardless, we expect significant improvement in our results in these areas over our outlook period and solid profitability by 2026. Next, let me cover our consolidated outlook. In terms of key assumptions, our outlook reflects essentially no growth in weighted global light vehicle production... and only modest growth of about 1% on average over the 2023-2026 period. In other words, it's our content growth that is driving our organic sales. We assume exchange rates in our outlook will approximate recent rates. Net net, the impact of currency to our outlook is expected to be negligible. We expect weighted sales growth or market between 3%-5% over our outlook period. From 2023-2024, sales growth substantially reflects the launch of new and replacement programs, a higher amount of directed content on the new Mercedes G-Class assembly program, and the acquisition of Veoneer Active Safety. These are partially offset by lower sales in the remainder of our complete vehicle business, largely as a result of the end of production of certain programs and a higher proportion of vehicles assembled, whose sales we account for on a value-added basis. From 2024 to 2026, the most significant contributors to sales growth are the launch of new and replacement programs and increase directed content sales on the Mercedes G-Class as volumes ramp. In addition, we expect an 8%-9% compounded sales growth from unconsolidated JVs over our outlook period, including from our LG JV for electrified components and systems, our eDrive Systems JV in China, and our seating JVs. We expect another step up in consolidated margins in 2024 to a range of 5.4%-6%. Our 2024 margin is expected to benefit from contribution on higher sales and ongoing Operational Excellence activities. Partially offsetting these are higher launch and new facility costs associated with new programs, as well as higher net input costs expected to impact us by about 30 basis points. While we do not provide a quarterly outlook similar to last year, we expect our 2024 earnings to be lowest in the first quarter of 2024 and improve meaningfully in the second quarter. We expect a further step up in margins to the 7%-7.7% range from 2024- 2026. This is largely driven by further contribution on higher sales, continued operational excellence activities, the reversal of launch and new facility costs as programs come on, lower engineering spend, and growing equity income. These are partially offset by a 10 basis points impact from higher directed content on the G-Class as volumes ramp. Many of the same factors that are impacting consolidated sales and margins out to 2026 are also impacting our segments. In the interest of time, we will not run through the segment detail. However, we are happy to discuss any questions on them. I'll pass it back over to Pat to cover some of the highlights of our financial strategy. Thanks, Swamy. We have been consistent in communicating our capital allocation principles over the years, and I'd like to repeat these. We want to maintain a strong balance sheet, ample liquidity, and high investment-grade ratings, invest for growth through organic and inorganic opportunities, along with innovation spending and return capital to shareholders. Our balance sheet continues to be strong, with investment-grade ratings from the major credit agencies. At the end of Q4, we had over $4 billion in liquidity, including about $1.2 billion in cash. Currently, our adjusted debt to adjusted EBITDA ratio is at 1.89. We anticipate a reduction of our leverage ratio to be back within our targeted range during 2025. We expect capital spending for 2024 to be approximately $2.5 billion. This includes about $100 million that will be funded by our customers. Under U.S. GAAP, such customer-funded amounts are included in deferred revenue, whereas previously they were netted against capital spending. In other words, this CapEx is cash flow neutral and capital spending would be $2.4 billion. Our 2024-2026 capital spending outlook also includes approximately $400 million related to recent program awards from a high-volume EV OEM that were not included in our previous outlook. Despite these new awards, we expect CapEx as a% of sales to decline over the 2024-2026 time frame, in line with what we had been indicating over the past year. EV volumes remain uncertain, and we continue to have discussions with customers about future plans. We remain laser-focused on capital to assess where we may have the opportunity to stagger, delay, or eliminate capital from our plan. As a result of growing earnings and declining CapEx levels, we expect free cash flow to accelerate through our outlook period. We anticipate over $2 billion in free cash flow by 2026. In summary, we expect continued organic growth above market, with more than $4 billion increase in megatrend sales over our outlook period. Further margin expansion this year and in each of the next two years, including through ongoing operational excellence activities, and at least $1.7 billion in increased EBITDA over our outlook period through 2026. We anticipate that these increasing metrics will lead to accelerating free cash flow generation over the next three years. We remain confident in executing our plan and continuing to drive our strategy forward. Thank you for your attention. We would be happy to answer your questions. At this time, if you would like to register for a question, please press the one followed by the four on your telephone. You will hear a three-tone prompt to acknowledge your request. If your question has been answered and would like to withdraw your registration, please press the one followed by the three. If you're using a speakerphone, please lift your handset before entering your request. Once again, to register for a question, please press the one followed by the four. One moment, please, for the first question. Our first question is from the line of John Murphy with Bank of America. Please go ahead. Good morning, guys. Thanks for all the info, particularly on the 2026 outlook. You know, if we think about on slide 35 and then 36, you know, it seems like you're remaining very committed to your CapEx plans. You know, certainly seems like you are on the R&D side. But Swamy, you know, there's obviously tectonic shifts that are going on here very quickly in the way that sort of the expectations are evolving for EV penetration, you know, program potential cancellations or at least pushouts. You know, how flexible is your CapEx spending and R&D spending to potentially be pushed down and to the right to deal with that and, you know, potentially even deal with potentially cancellations in programs? Good morning, John. Great question. If you just think through what's happening, I think one of the key things we've been focused on and have been discussing is the CapEx. If you look at the CapEx ratio, we have been talking about CapEx to sales, we've been talking about going back to the, you know, the low- to mid-fours and, you know, happy to say we are on track to that. When we talk about this year, Pat touched on his prepared comments that $100 million of the $2.5 billion that we are showing is really, you know, given by the customer. We actually talked about a program for another about $150 million-$200 million spend, which was not contemplated, but we felt given the program, it was a good idea to invest in that program going forward strategically, right? So those were the two; otherwise, it would have been around the $2.2 billion in CapEx. So that's one part of it. The second part of the question that you asked regarding R&D, and we've always talked about the $900 million plus with the VNR, $300, it's the $1.2. With the sales increasing, again, the ratio of R&D spend to revenue was gonna decline. But having said that, we are looking very seriously into the spending of that. If it's not related to the direct launch of a program, then everything is under scrutiny. And again, in the prepared comments, we talked about it. We are also looking at capital in terms of with discussion with customers, obviously, is how can we stagger, given pushout of the dates, for the launches or just even in terms of the volume ramps. So we are looking at staggering capital, looking at the modularity, having discussions with the customers. Also a little bit in how we look at volumes on given programs by the customers. Although we have to run at rate for them at PPAP and so on, we take into account the volume assumptions, when we look at revenue on such programs. So we are looking all of that. So pushing out in terms of CapEx spend or R&D engineering spend, depending on the program cadence, absolutely, yes. Just to give an example, over the last three weeks, I, along with the senior management team, have spent at least about 40 hours, line by line on all our projects, and we are looking at the value proposition of each project, what it brings to us. Keeping in mind, obviously, that it cannot hurt the future, and cannot hurt the launch. Okay. That's very helpful. And then, Pat, if we were to kind of suspend disbelief and say you guys are being too conservative on your volume forecasts, and let's say there's, you know, a 2%-3% upside, in global, you know, LVP in 2024, or maybe even just think about it sort of as a 1%, you're higher, you know, in a claim in a way being $450 million more of revenue... Do you have capacity, you know, obviously, this is kind of a generic question, but to take that on, and what kind of incremental would we be thinking of if, if all of a sudden, you know, sales came in 2%-3% higher than you were thinking because LVP was higher? Morning, John. In that scenario there, when I think of that, that's probably a best case scenario. If you go back to Swamy's comments, where we have capacity installed up to planning volumes, right? So if we flex up, you know, you might be, you could speed up the line or add another shift, and that's where you have a lot of leverage in your model. So your incrementals in that scenario would be quite strong, and that would be what we've seen historically. You know, they're different by segment, but you know, the 20s for BES and P&V, and then seating, you know, depending on the region, 12%-17.5%. And start is a little bit different, John. It's- Yep. because of all the recoveries. But, you know, I think that would be a best case scenario for Magna. The worst case scenario is when you have to put in new facilities, and that's... You know, when you go through our business plan and you look out into the future, some of the incrementals aren't at that, let's say, 20-ish%, and it's because they're coming through more at the corporate average, where you're adding bricks and mortar and new facilities and overheads. So long answer, but the scenario you're describing is the best case for Magna. And then just one last question. Can you comment on what region that high volume EV manufacturer is domiciled in? Is it a North American manufacturer or a China manufacturer? And is that for battery tray or battery structure, or is there something else that CapEx is allocated for the $400 million? John, under strict confidentiality, we are not able to give too much details, but I can say that this is material investment in Southern U.S. and Mexico for a significant future product of Tesla. Okay. Very helpful. Thank you very much, guys. Thanks, John. Thanks, John. Our next question is from the line of Chris McNally with Evercore. Please go ahead. Thanks so much, gentlemen. One really benign question on seating and then maybe on the capital and the buyback. So seating, Swami, can we take a step back? You know, this has now been an underperformer for a couple of years, and obviously, you have a different, you know, ROIT, so a slightly different margin compared to peers. But I know you can't be happy with the margin that, you know, has perpetually been a target and, you know, so that 5%-6% range. Can you help us walk through what are some of the issues and what will get us, you know, eventually to that 5%-6%? Good morning, Chris. I think if you look at the last couple of years, the significant impact on seating have been, the mix, and certain programs, significantly underperforming the volume expectations, compared to the planned volumes, right? And as you know, in seating, once you have the facility and you have the labor, it's pretty much dedicated to the program, we do our response to flex, but it's not possible to negate everything. So that has been one of the primary reasons. The one other thing that you will see in the dynamics looking this year and going forward a little bit, on the seating, last year, we had assumed that we would exit a high volume, low margin program, and we were having discussions with the customer. And during the process, we were able to secure a fair and good appropriate margin and return on the next generation. So we are maintaining the existing business now. So that's having a negative impact in the short term. The new program, the next generation with the appropriate margins and returns, is starting to launch in 2026. It's a staggered launch, but it will start on the 2026. Also, the seating team has been extremely focused on all the items of Operational Excellence. So looking at all the details during our planning process, you know, minus the big program that I talked about going out into 26, 27, I feel comfortable that we are on the path, you know, to the margins that we talked about, that is in the 5%-6%. Okay, super, super helpful, detail on, on that problematic, platform. Can we just now maybe move to, you know, to capital allocation and, and the idea of the, of the buyback? So, I know you have, you know, sort of the, the debt to EBITDA ratios you used in the, the past. Obviously, net debt is a little bit more attractive, and also given where your, your, your stock is, you know, can you talk about, you know, what the potential for more of a historical buyback ratio, could be? Obviously, the free cash flow goes up every year, 2024- 2026, but, you know, sort of like your investors buying low, you know, rather than buying high as always sort of a favorable, strategy. you know, just how are you thinking about getting ahead of some of those better free cash flow numbers in years to come? I think the capital allocation strategy and how we are looking at that, as Pat talked about in the prepared comments, remains truly as a North Star for us, Chris. If you look at the leverage ratio in 2024, our first priority is to get back to the 1-1.5, right? And we seem to—given, you know, the EBITDA profile and the sales, we see that in the early part of 2025. So once we start having the cash and the cash flow operational rises on track to what we expect it to be, then we go back to our priority being investing organically or inorganically for the appropriate returns, you know, that are accretive to value. Anything remaining, obviously, the preference is to go back to the share buybacks. So we'll be looking at it towards the end of 2024, in the normal course of action, and, you know, getting back and staying in the leverage ratio that we talked about. Okay, thanks so much. Thanks, Chris. Our next question is from the line of Tamy Chen with BMO Capital Markets. Please go ahead. Thanks. Good morning. First question is, I guess on the low end of your 2024 EBIT margin guidance, I mean, it would imply very modest year-over-year improvement of 2023, which I had a number of headwinds, such as cost inflation, the underperforming BES facility, unstable production schedules, and, and of course, the UAW strike. So I, I'm just wondering, can we just go back to what assumptions you've got in there for the, the low end of the range? Like, are, are you baking in just a degree of conservatism? Morning, Tamy. I don't, you know, I don't think it's conservatism. I think we have a well-balanced out plan. There's a fair amount of volume uncertainty, and, you know, inflation continues to be a headwind. The one part you do have to consider is the impact of the G-Class repricing. So the G-Class at Steyr is a new contract that's launching in 2024. And effectively, what's happened with all the inflation, their bill of materials has increased. So we have higher revenue and exactly same higher cost of sales. So we're dollar margin neutral, but you have a drag that's impacting us by about 10 basis points, just on that one program alone. So, you know, I think just the starting point, apples to apples, would be a 10 basis point difference. And then you start going through it. We were in a flat volume scenario. We do have some negative mix, and then we have headwinds again, also on scrap sales. So I think when you put them all together, I think a couple of things to think about is last year we were at 100 basis point spread. We've tightened our gap because we feel more confident in our plan. You add the 10 basis points, I think it's a pretty balanced plan, Tammy. Okay, I see. And on the continuing cost inflation, at this point, do you expect you could still realize some additional recoveries from customers, or are we sort of in a different environment versus last year with respect to recoveries from the OEM? Yeah, I think, good morning, Tamy. We talked about, you know, inflation and some of these topics still as continuing headwinds. Last year, we talked about $100 million magnitude, and as of November, we said we were gonna negate that with various activities, including recoveries, and we achieved that. And this year, we still have embedded, you know, inflation in terms of labor. Some things have trended down, like energy and so on, but there is some stickiness on some of the products still, commodities, I mean, including labor. So it's going to be a combination of recoveries as well as definitely our continued efforts on Operational Excellence. Okay, got it. Sir, one last question here. Back on the customer-funded CapEx that you've highlighted for 2024, the $100 million. So is that a new thing or you, you, you've had that and you're just highlighting it now? Is that the only one in your 2024 CapEx guidance that's customer funded, and so you're just calling that out? Thanks. It's a new program that was awarded, Tammy, and previously, you would have just shown it as a subsidy under the old rules. But effectively, what's happened more broadly when you think about the commercial issues is we went to the customer and said they wanted our support, and we said, "We need your support to do that." And in that scenario, what we did was we looked at it on a cash basis, and you have some crazy accounting happening, but on a cash flow basis, it's you have higher CapEx, and you have higher deferred revenue, and in 2024, we're cash neutral. So we didn't look at the account. We didn't—we looked at the business decision, which was, it's a good program, it's a good customer, and the customer is paying for the capital, and we had the open space, so we took on the program. Okay, thank you. I think, Tammy, just to add, just to add to that, it's not normal for customers to invest in capital. They fund and own tooling, typically, but this is one of the things that we've been considering and working through. ... Right, I see. Thank you. Thanks, Tamy. Our next question is from the line of Mark Delaney with Goldman Sachs. Please go ahead. Yep, good morning. Appreciate you guys taking the questions. With the new outlook for Megatrend revenue, can you help us better understand how conservative Magna was with its, with its assumptions around customer build schedules and EV volumes, especially given that some of the North America OEMs have emphasized they're going to be flexible on how fast they plan to ramp up their new EV programs? Good morning, Mark. Over the last number of years, I would say, going back even 6, 8 years, we have typically been saying that, you know, the global EV market penetration would be somewhere in the low 30s, globally. Obviously, higher in China, followed by Europe and then North America. I think we still believe it's in that ballpark. And I also said previously, as we look at program by program, whether it's EV or not, we tend to have our own viewpoint on the program volumes for revenue calculation purposes, right? To estimate our revenues, although we have to hit the run rates. We definitely are weighted a little bit in OEMs production in North America for the megatrend areas or call the electrification. As that tends to have a decline, we'll, it have a negative impact, and like I said, we'll do everything to stagger capital, work with the customers, look at modularity and program both products and processes, but it'll have a negative impact. But I think the magnitude of the impact we are seeing on the revenue would be a little bit lower than what the market is seeing based on the assumptions we made before. But this is something that we need to watch continuously and be agile about it. So that's the long answer. Yeah, very helpful. I appreciate all the, the context, and I know a very dynamic situation, for, for you all to deal with. You know, on, on a related topic, you know, as, as OEMs are adjusting, generally lower their EV build plans, right, there's perhaps some offset toward hybrid and, and, and ICE builds. You know, are, are you, are you seeing any, higher, higher revenue coming from, different, different powertrains? And, and maybe talk a little bit more to what extent with the 2024 and, and, and 2026 outlooks that you gave, you know, have you seen some, some increased revenue coming from, ICE and, and hybrid vehicles? Thanks. Yeah, I would say, Mark, a vast majority of our capabilities are really agnostic to powertrain, right? But, in some cases, like in the powertrain, our DCT or dual-clutch transmission has a package neutral, yeah, you know, hybrid option that we're currently producing with three OEMs. Too early to say, like, how the dynamics of the volumes are playing out. We also have eDrive capabilities that can support high voltage hybrids. And as you know, as you would remember, the LGJV can supply electrification components like motors and inverters that also apply for the hybrids. So, you know, in some cases we are on both platforms, both ICE and EVs, for example, on seating. But that dynamic, we have to see how it goes. But on 2027 looking out, I would still say, the targets that we have provided in terms of the megatrend areas, we feel comfortable that we are still on track. Thank you. Our next question is from the line of Tom Narayan with RBC. Please go ahead. Hi, thanks for taking the questions. A couple of little housekeeping ones. Slide 31, that's the segment outlook or guidance for 2024. Seating, top line is coming down in 2024. Just, I'm sure you—I think you maybe explained that. Apologies if I missed it. Just curious what's going on there. Then on complete vehicle, thanks, Pat, for talking about the G-Class repricing. That's explaining the margins coming down despite top lines, the revenue going up. Are there any other things we should be aware of explaining that dynamic in 2024 for complete vehicle? Thanks. Morning, Tom. I think on the seating, let's go through it firstly. So if you look at the seating piece, the volume decline is effectively mixed. We have, the way a seating business works is you have dedicated JIT facilities, and one of our programs in North America, the volumes from the customer is down on a year-over-year basis. That's the primary driver in the seating space. On the Magna Steyr piece or the complete vehicle piece, the volume is up, as I mentioned, because of the G-Wagon, primarily. And then within there, there's also a little bit of... But that's the majority of the reduction. But we also have, we had some commercial benefits in 2023 that we don't expect to recur, and there's a little bit of amortization related to some of the warrants or some of the engineering on the Fisker program that's rolling off. We still have growth of our market in seating through that 2022-2026 period, so it's just 2024 is a blip, but we still see it going back in. ... Got it. And then my next one, you know, we heard some inventory build chatter from a particular supplier in 2023 that impacted their 2024 kind of guidance. That company is, basically is their own market. So, but just curious if that is something you guys were seeing at all, you know, on your guys' end, just inventory build that might be impacting your 2024 outlook, or are you not seeing that? Thanks. Go ahead, Swamy. I think, Tom, for us, I would say the simple answer is no, we don't see that impact. And, you know, the other way of looking, we even looked at, I would say, safety stock, you know, last year versus going into this year. If anything, that's even reducing. We were kind of in the magnitude of $200 million. We see it now towards the $100 million. So short answer, materially, we don't see that happening in our case. And Tom- Okay, great. Thank you. Yep. We don't have the ability to do what they're doing. We're on a pull system, so we only- Yeah. We're only able to sell to our customers what they call off, so we don't have an ability to push stuff into the supply, into our customers, compared to that company you're referring to. Got it. Maybe I'll just do a quick follow-up that, you know, at CES, it was, you guys showcased some really impressive ADAS capabilities. We met folks from Veoneer, et cetera. Just curious, you know, as you see things, you know, evolve with, with autonomy, Level 3, you know, et cetera. You know, we met with some tier twos, with the LiDAR makers, too, at CES, who were kind of, I don't know, lack of a better word, in trouble. It seems like the tier ones, like you guys, are really well positioned in ADAS, as the time horizon for things like Level 4 get pushed out farther and farther. Do you guys view, you know, the, these tier two LiDAR players as potential acquisition targets for you guys? Or is that something you would potentially do organically if and when we ever get to level four happening? Thanks. Tom, I think we've been pretty consistent in saying our focus is very much on what I call the driver assist systems, away from autonomy, to a high degree of driver assist systems, as I call it, right? Because there's so much ambiguity on what we call L2 plus and L3. That's why I use the term driver assist functions. So given that, we believe we are in a good position from sensor capabilities, the software associated and the integration capabilities to bring all the sensors together, the compute, call it an ECU or a domain controller of all types. So I think we're really focused on getting through the integration process that we have, which is going on track, and we are happy to report that. So we wanna get that through, and there is a lot of interest from the customers and programs and us launching. So as you look into the future, the way you talked about, we are really focused now on getting the market share and launching the programs and getting the growth that we talked about on the ADAS towards 2027, Louis. I think we were in the $4.25 billion range. Yes. So we are on track, and we are focused on that. So will we be obviously looking at some building blocks of the future? Yes, but that remains to seem. I think we can give more color as we get towards the end of the year. Great. Thank you so much. Our next question is from the line of Itay Michaeli with Citigroup. Please go ahead. Great, thanks. Good morning, everybody. Just a couple questions for me. First, just going back to the margin bridge this year, just wanna ask a question on the Operational Excellence activities. Just curious how much line of sight you have on those initiatives, how much you've already identified? And then kind of just remind us what you're seeing in terms of broader production stability and kind of what you're assuming for, you know, production volatility or stability for 2024. Good morning, Itay. If you just look at the prepared comments, I talked about achieving 75 basis points this year, which we achieved. We have good line of sight for achieving the 75 basis points in 2024 and 2025. Typically, we have continuous improvement activities and on top initiatives that we work through or Operational Excellence initiatives, I should say, that we work through. They're very, very granular. There is very defined streams of work that are championed by executive team all the way, you know, into the divisions. So we feel pretty good about the visibility of those going forward. But again, in the beginning of the call, I made a few comments on, given the volume volatility and whatever else is happening in terms of programs being pushed out and so on, we are not stopping there, right? We'll continue to look at any dollar spent, does it provide the value, and at what time? And maybe it's not right now, and it retains value in the future, we'll go back to it. But we're looking at all of that aspects. We feel pretty comfortable from a visibility perspective for the 75 basis points coming up or adding to the bottom line in 2024, 2025? That's 2024, 2025 collectively. It's not each year. Right. It's over the 2-year period. Right, over a two-year period. That, that's helpful. Just as a quick follow-up on the megatrends outlook for 2026, just curious, what portion of the revenue outlook is already booked? And maybe broadly, Swamy, if you can just comment on what you're seeing along the pace of ADAS bookings and penetration there. Yeah, I think I just mentioned a little bit a little while ago that looking at 2027, right, we were talking about the $4.25 billion, roughly. I think we are on track to that, right? That's what we had talked about during our Investor Day. In the megatrend areas, we have talked about battery enclosures in addition to ADAS and powertrain. Again, looking at the 2027 timeframe, we were over $4, $4.5 or $4 billion in the powertrain electrification managed sales. I think we are still on track to that. Battery enclosures, we talked in the range of $2-$2.5 billion. Again, we are on track to that. We have to keep in mind that if the volumes on certain programs change drastically, obviously, we'll have to come back and talk about it. But, yeah, we are working through those. I feel pretty comfortable to the numbers we talked about in 2027. Louis, I don't know. Yeah, great. Yeah. Yep, that's, that's very helpful. Thank you. Just to add, maybe for 2026, 90% of our sales is booked. 90, great. That's, that's very helpful. Thank you. Our next question is from the line of Krista Friesen with CIBC. Please go ahead. Hi, thanks for taking my question. Just on here on the margin guide, so for 2026, 7%-7.7%, and then looking back to the Investor Day, the 2025 guide, I believe the top end was 7.8%. So 2026 is about 10 bits lower at the top end. Can you just walk us through what's led you to this? And is it mostly the megatrends or a lower production environment? Morning, Krista. Big picture, when you look at the puts and takes in 25 itself, if we just look where we are today, projecting for 25 and compared to last year, you know, we do have a lower volume assumptions as we go through the plan. And we have some higher launch and new facility costs just because of the book business increasing, but offsetting that is some operational improvements that Swamy touched on earlier. So the net effect of those at the midpoint, we were previously at 7.35%. The impact of those is about 30 basis points. And then the last piece, again, I'm gonna come back to this Mercedes-Benz G-Wagon pricing. The impact in 25 as we... And into 26 is 20 basis points alone on it. So apples to apples, I would say we're in line with the midpoint of our range. Great, thank you. Maybe just a housekeeping one. Have you seen any sort of supply chain impact from any of the issues going on in the Red Sea right now? Nothing material. I haven't seen—we haven't seen really anything material. You know, a lot of the industry disruptions, whether it was chips, we're probably more into what we would have seen historically for OEMs going down. There's not a real... It's very different than it was 18 months ago, Krista. Okay, great. And, and- Thanks. I'll jump back in the queue. Yep. Thank you. Our next question is from the line of Rod Lache with Wolfe Research. Please go ahead. Good morning, everybody. I wanted to ask about just a couple earnings bridge questions. I believe your ADAS business was $1.8-$1.9 billion revenue and a few hundred million dollars loss-making in 2023, since your gross profit couldn't really, at that point, offset the R&D that's spent in the business. I think which it's about two-thirds of your megatrend spending. Are you still expecting ADAS revenue of $3 billion and EBIT around break even in 2024, and then corporate average margins in 2025? Good morning, Rod. I think there's a couple of things. I think when we talked about premier, you know, one of the key things was being EBIT neutral in 2024. I think we are on track to get there, and we feel comfortable about it. Looking at the sales for 2024, I think we are on track. We're still there. Yeah. As I mentioned, we are looking at the profitability of ADAS, you know, overall, as we look at that segment or that piece of the megatrend. We feel comfortable looking at the spend on the programs that we have, unless the program mix changes, and as you know, we have to still launch the programs and work through the stuff, and if the revenue gets smaller, only based on volumes, it might impact. ... otherwise, I think we feel, we are progressing, from the spend to revenue and towards the profitability, in the right way. Okay. Yeah, I'm just thinking about the midpoint of your revenue and the midpoint of your margin guidance implies about $300 million of earnings growth this year in 2024 versus 2023. And, I had thought that the ADAS improvement alone, I know you had about $70 million of Veoneer synergies, and it seemed like there was a meaningful amount of improvement year-over-year in ADAS. And, if you get half of the 75 basis points of performance this year, that's another $150 million. Is there something that I'm missing in terms of the headwinds on a year-over-year basis that brings it back down to about $300 million of earnings growth in 2024? Yeah. Morning, Rod. I think your math you're throwing out is in the ballpark for our ADAS business, so I think you're bang on there. The couple of pieces just to consider as well is when you look big picture, our sales are flat year-over-year, and it's gonna be the third time I say it. I feel like a broken record, but our G-Wagon impact is our sales are up $620 million. So what we are seeing is some volume weakness beyond it, given the flat environment. Mm-hmm. Beyond that, we also have continued inflationary headwinds and lower scrap pricing, which has impacted us in the range of about 30 basis points. And then that's the positive offset is the operational excellence that Swamy spoke about. And then the last piece really is what you referred to on the ADAS piece and some of the megatrends as the sales grow. So net, that works out to your 300. Okay. And then just lastly, it sounds like you're not anticipating any recovery on the 30 basis points of higher input costs. Can you just give us a little bit of color? Because it seemed like you had some significant impact in 2021, 2022. You kind of neutralized the headwind in 2023, but had not yet recovered the cost that you had absorbed prior to that. And now, it sounds like there's another round of material cost headwinds. So, just on a very high-level basis, how are you thinking about the recoveries for what you've absorbed and these additional headwinds? Yeah, it's primarily not material related headwinds other than the scrap, right? So scrap reprices every month, and it's just a factor when you're selling your engineered scrap back into the dealers. But the primary driver of higher cost is the elevated inflation that we're seeing globally, and it's driving higher labor rates, Rod. So if you think about, you know, traditionally you'd be in North America, whether you're U.S. or Canada, Germany, Austria, are big regions, you'd be operating, pick a number, say roughly 2% labor inflation on a year-over-year basis. We're seeing increases that are above that. I would say in North America, so in Canada, U.S., we're seeing increases, maybe a couple of points above that. In Europe, we're seeing bigger, bigger impacts, and it's primarily driven by the higher energy costs that the local residents are feeling. So there is embedded inflation through the labor side. Mm-hmm. The flip side to that is we do have assumed recoveries from our customers to offset those amounts. We're not taking it lightly. But as Swamy said earlier, the more important thing is how do we become more efficient so that we're actually changing our fixed cost structure, that these labor impacts aren't as impactful to Magna overall as we go forward. Yeah, it makes sense. Thanks for the clarity. Sure. Thanks, Rod. Thanks, Rod. As a reminder, if you would like to register for a question, please press the one followed by the four. Our next question is from the line of Brian Morrison with TD Securities. Please go ahead. Thanks. Good morning. Pat, I just want to clarify from a Veoneer perspective, your engineering costs, have they increased or the duration been extended from your prior outlook? And then my second question is, I know it's not typical that you talk about your prior three-year guidance, but you did reiterate your guidance for 2025 back in as late as November. I'm wondering if you can provide us an update on what your outlook is for that, or at least the cadence from 5.7 this year to, I guess, it's 7.3-7.35 in 2026. Hey, Brian. Morning. Morning. I think two questions. So on the first one being the megatrend engineering spend, so we're projecting on average $1.2 billion per year over our outlook period. That's in line with what we provided as an update in September, so it's really unchanged. So last year's outlook, we had talked about the $900 million range. We increased it to $1.2 billion fully to reflect the acquisition of Veoneer. So no change in our engineering profile. When you talk about our 2025 margin from September, when I took Krista through the walk. So we're not, you know, long story short, when you look at our 2025 numbers, you know, we, we do see some headwinds related to volumes and some launch costs and new facility costs, given some of the recent awards. But it's partially being offset by operational improvements that Swamy covered in detail. So the net of those, if you look at our midpoint for 2025, we were 7.35. The impact of those three categories is about a 30 basis point negative impact. And then lastly, we have again this G-Wagon pricing, which is about a 20 basis point headwind. Just to be clear, when we're talking about updating 2025, we wanted to make sure we could incorporate the impact of Veoneer import, incorporate the impact of the amortization. But I think we have a footnote that says that's based on the assumptions that we had when we started the year, right? We were right in the middle of our business plan, so when we're giving that information, volumes have changed since then, and mix has changed. That's fair. It just looks like it's a mid-6% margin for 2025 is what you're implying. I appreciate it. Thank you. Our next question is from the line of... Pardon me. Our next question is from the line of Colin Langan with Wells Fargo. Please go ahead. Oh, great. Thanks for taking my questions. Any color on your exposure to Fisker? Obviously, there's some, you know, concerns there. If something happened, I mean, what kind of sales or earnings impact could you see? Morning, Colin. When you think about the exposure, obviously, Fisker is a big customer for our assembly operations. And you know, as far as our exposure to them, we do disclose in our financial statements our exposure related to all new entrants. And when I talk about exposure, it's basically related to you know, working capital, long-term assets, dedicated type assets. And you know, the statement, the numbers aren't out, but it's going to be in the range. That gross number is probably in the range of about $600 million. The majority of that is Fisker. Got it. But if sales were to go away, too, there'd be some earnings drag, too. Should we should be thinking about if there's a risk there? It's a little bit tricky, Colin. I don't want to bog you down in this call, but it - the contracts we have with Steyr, not only with Fisker, but all the contracts, they're a little bit more complicated than you'd see in the normal industry, where it's a no volume requirement PO. These have much more complex contracts, where you have fixed cost recoveries depending on fixed costs incurred and then assumptions on original volume projections versus actual. So there is a true-up mechanism. So it's not an easy answer. Okay. That's why you don't see CVA's margins move around as revenues go increase or decrease, like our other segments. Okay. And just a quick one. Equity income, I think, was only $3 million in the quarter, but the guidance is, like $120-$150 million for next year. What was the unusual issue in Q4 and the confidence in getting back to those higher numbers? Yeah, I think Q4, there was a... I, I would say there was, one was operational, which was we had a, a mix issue within one joint venture between products that drove... So even though you don't see it, but even though the revenue within the joint venture was consistent, we had negative product mix, and then you had margin negative headwinds on that. We also had some commercial items that we had expected to collect in the fourth quarter that have been pushed into 2024. And then the, the most significant piece of it are, it was when you- when we did the, not we, but when the, the joint venture partner did a finalization of all the deferred tax assets for U.S. GAAP purposes, there was an adjustment to our final tax numbers. Because equity income is on an after-tax basis, that flows through that line. Okay, got it. All right. Thanks for taking my question. All right. Thanks. Our next question is from the line of Joseph Spak with UBS Securities. Please go ahead. Thanks. Good morning, everyone. Just quickly back on the, the customer-funded CapEx. Is, is it possible to sort of indicate what, what product line that is, or is it across product lines? And, and is some of that associated revenue already considered in the 2026 guide? Yeah, I think the associated revenue is included for sure. I don't think we can get into the specifics of the product line, but- Okay ... It's towards the electrification, I would say, yeah. Okay. Maybe to follow on from some of Rod's question before. If we look at power and vision, and if I'm looking at, you know, the 2024-2026, like, the incremental margins there, are significantly stronger, which I imagine is in part driven by, you know, the breakthrough and the active safety business. But is there anything else sort of driving that? Like, are synergies maybe coming in, maybe better than that $70 million that you sort of originally targeting, or anything else sort of driving the strong incrementals there? So just so I, Part of it is the synergies, but I, you know, we talked about- ... rate by end of 2025. So, seem to be a, a good path to that, so we'll hit 24, half of that run rate going forward. That's one of it. The other one, is also the sales revenue coming, right? And keeping the, R&D costs and engineering spend constant. If you look at the trajectory that we talked about going into 2025, 2026, that also contributes, you know, to the margin expansion compared to where we were in 2023. Okay. If I could- One other thing to add to that is when Swamy refers to the sales growth, and we're starting to see that inflection point in the megatrends, and most of the megatrends are in the P&V group. Swamy is also referring to unconsolidated sales. So when you look at our equity income, we're seeing a benefit come through equity income. And as equity income goes up with those sales, we're seeing about a 15 basis point benefit, just even out of equity income on its own. Okay, that's super helpful. Maybe just one more quick one. If I'm not mistaken, I think you did push out your megatrend breakeven by a year, and I just wanna make sure. Is that basically solely related to some of the slower EV development you've talked about, or is there anything else going on there? It's purely related to the volume and programs being pushed out, Joseph, nothing different. Okay. Like I said, again, we'll continue to look at it from R&D and spend and all that stuff to see what opportunities we have to bring it back. Okay. Thank you very much. Our final question is from the line of Michael Glen with Raymond James. Please go ahead. Oh, thanks for getting me in. The $900 million of Megatrend spending that sits as part of the $1.2 billion, are you able to give a kind of a rough breakdown of what those buckets consist of across the segments? Yeah. Good morning, Michael. I think typically when we do that, there is some, call it cross synergies going between, you know, whether it's software or whether some other aspects of it, but predominantly it is in the electrification and the ADAS area. It will be difficult to break it down exactly what those are. There is some overlapping, you know, areas that we do spend to keep the synergies where we need to. So, okay. Michael, just to be clear, so the vast majority of it is in the P&V segment. Right. Okay. How do we think about if you—like, are you able to shut that level of spend, like the $1.2 billion, if we're thinking about that, are you able to turn that off pretty quickly? It depends on the project. The part associated with the engineering or efforts that are towards the launch of an awarded program, we have to be cautious, and we work with the customers to see how we can work through it. And again, the $1.2 is the growth spend at the end of the day, right? So some of it will be recovered on awarded programs, and we have to make sure we keep the efforts going. On the future, like, if you're looking at a specific project, you know, out three or four years and there's not a specified program associated with it, then obviously, you know, we can turn that off or defer it to the future. And just one more. So if we think of the history of megatrend spending, how do we... And in terms of what we've seen from the results, like what's the takeaway that we should have with respect to return on invested capital with these investments up till now? Because it just doesn't look good from what we've seen so far. I'm just looking for some commentary that works against that in terms of we're not seeing what's taking place beneath the surface or something like that. Yeah, we've talked about this $900 million for a few years now, right? And they're all a part of the megatrend spend for programs that we have won and are launching, and there are some which are actually for the evolution of the product line going into the future, so we don't have a melting ice cube. This is a long-term view of how to keep stability in the business as the industry is evolving. How we go about it is just as we get a project, we look at what programs and what platforms, which customers, what is the market size, and what is our right to win. Those are some of the questions we answer before, you know, we start investing on a project. The one way to measure it is the program wins that we are getting. Like, we talked about the megatrends, you know, going in revenue from 2022 in $a few hundred million to 2027, right? And as I mentioned in my previous, comments, that we're on track for ADAS, we are on track for electrification, managed sales, and on track, for battery enclosures. So that's a measure of the return we are getting, and also getting the mix that we need. That means the product line is evolving as the industry and, you know, the car of the future is evolving. So that's the discipline we have, and we feel pretty good, how we are going about it. And like I said, we continue to look at it as market conditions change. Okay. Thank you for taking the questions. Thanks, Michael. Thanks, everyone, for listening in today. I'm pleased with the progress we made in 2023 and want to reassure we remain highly focused on executing our strategy and meeting our mid- and long-term outlook, and we are confident that we can achieve them. Thank you, and have a great day.