Financial Overview

(in million dollars)

	FY2010	FY2009	Rate of change (%)	Factors
Overall
Sales	24,102	17,367	38.8	-
EBIT	1,187	(504)	-	-
Sales by region
North America	12,757	8,306	53.6	+Increase in North American vehicle production volume +Increase in its North American average dollar content per vehicle...(1) +Acquisition of several facilities from Meridian Automotive Systems in the third quarter of 2009.
Europe	10,457	8,551	22.3	+Increase in European vehicle production volume +Increase in its European average dollar content per vehicle...(1) +Acquisitions completed during or subsequent to 2009, including Cadence.
Rest of World	1,185	786	50.8	+Increased production and /or content on certain programs in China and Korea +The acquisition of Karmann Japan. +The launch of new programs during or subsequent to 2009 in China and Korea

Factors
(1)  The Company's average dollar content per vehicle grew by 13% to $988 in North America and by 8% to $536 in Europe.

North America	Europe
<Launch of new program> Chevrolet Equinox, GMC Terrain, Jeep Grand Cherokee, Ford Fiesta, Chevrolet Cruze, Cadillac SRX	<Launch of new program> MINI Countryman; Mercedes Benz SLS, Peugeot RCZ, Porsche Panamera, Porsche Cayenne, VW Touareg
<Favourable production> Dodge Grand Caravan, Chrysler Town & Country, VW Routan, GM full sized pickups and SUVs, Chevrolet Traverse, GMC Acadia, Buick Enclave, Jeep Wrangler

Contracts

 The Company awarded new business in 2010, including;
 -Frame assembly for GM's next generation of full-size pickups and SUVs
 -Body and structural components, window regulators, decklid latches, instrument panels, sealing systems, B & C pillar trim covers, complete seating systems for VW's new mid sized sedan, Passat. The vehicle is expected to enter production for the U.S. market in 2011 at the automaker's Chattanooga facility, Tennessee.

Acquisition

The Company significantly expanded its presence in South America through acquisitions in 2010;
 -Resil Minas (Brazil); the largest supplier of seat frames in South America. The acquired business is primarily located in Brazil with sales to various customers, including Fiat, Ford, GM, VW, IVECO and PSA. The new entity will operate under the name Magna Seating Brazil with four manufacturing facilities
 -Pabsa S.A. (Argentina); a supplier of complete seats, foam products, trim covers and seat structures. The new entity will operate as Magna Seating Argentina and includes three production facilities.

Other acquisitions
-Karmann Japan (Japan); a convertible system supplier. The new entity was combined with Magna Steyr's Car Top Systems operations in Japan.
-Erhard & Sohne (Germany); a manufacturer of fuel tanks for commercial vehicles and other tanks. Its customer includes MAN, Daimler and Scania.

Joint-ventures

-GS Yuasa Corporation is planning to establish a joint-venture company with Mitsubishi Corporation, a major Japanese trading firm; and Magna International; to manufacture electric vehicle batteries in Europe. The new company is scheduled to begin production operations in 2012 to supply its lithium-ion batteries to European automakers. GS Yuasa is likely to take a majority stake in the joint venture. (From an article in the Nikkan Jidosha Shimbun on September. 18, 2010)

-Effective August 31, 2010, the Company spun-off its E-Car Systems operating unit and established a new joint venture with the Stronach Trust. Under the terms of the Magna E-Car joint venture, Magna indirectly holds a 73-percent equity interest and the Stronach Trust holds a 27-percent equity interest in the new vehicle electrification joint venture.

Awards

-Cosma international (body and chassis systems unit): 2009 supplier of the year from GM
-World Excellence awards from Ford
-Supplier performance award from American Honda Motor
-Supplier performance award from Toyota Motor Engineering & Manufacturing North America
-Supplier performance award from Toyota Motor Europe
-Excellent Technology Award from Toyota

Divestitures

- During 2010, the Company sold its interest in an electronics systems joint venture in China.

R&D Facilities

-Magna E-Car Systems,a joint venture with Stronach Trust announced the grand opening of its latest facility, a new hybrid- and electric-vehicle system development center and battery/materials testing facility in Auburn Hills, Michigan, USA. Including Auburn Hills, Magna E-Car Systems has four facilities throughout North America and three facilities in Europe working on several programs, including the Ford Focus Battery Electric Vehicle, a Volvo hybrid program and powertrain controllers for General Motors. (From a press release on September 20, 2010)

Product development

-Dynamax (TM)
The Company launched the new Dynamax(TM) All-Wheel-Drive (AWD) system through Wia-Magna Powertrain, Magna Powertrain's 50:50 joint venture with Hyundai WIA. The AWD system features an intelligent control unit that continuously monitors driving conditions and anticipates AWD system requirements. The new Kia Sportage is the first of several vehicles planned to feature the system.

-New technology for environment
Magna seating received an Innovation Award in the environmental category from the Society of Plastics Engineers (SPE) Automotive Division for a new technology that converts polyurethane foam scrap into renewed polyol. This technology has its first commercial automotive application in the seats of the 2011 Jeep Grand Cherokee.

Capital Expenditure

(in million dollars)

	FY2010	FY2009	FY2008
Overall	784	629	739

Consistent with its strategy to expand in developing markets, approximately 19% (2009-18%) of this investment was in Russia, China, Brazil and India.

Investment outside Canada

<South America>
-The Company announced it will expand its presence in South America. Two of its operating units, Cosma International, manufacturer of body and chassis systems, and Magna Seating, developer and manufacturer of complete seating solutions, are establishing manufacturing facilities in the Sao Paulo area, Brazil. Cosma's new facility will produce stamped and welded assemblies for automakers. The launch of the plant is scheduled for early 2011. Magna Seating's new facility will produce complete seats for a future General Motors program. The plant is expected to open in 2012. In addition to these two new facilities, Magna Closures, a door latch supplier, has recently announced it has won additional business for door handles and window regulators and will be increasing the size of its Sao Paulo facility. The group has recently been awarded new mirror business with automakers in Brazil. (From a press release on October 5, 2010)

<Russia>
-In September 2010, the Company announced the opening of three production facilities in the suburbs of St. Petersburg, Two of the new facilities operate as a joint venture between Cosma International and Shin Young Metal, a Korean supplier and will product body, chassis and energy-management systems for OEM customers such as Hyundai, GM, Nissan and VW. The third facility products exterior and interior components for OEM customers including Ford and Nissan.

-In October 2010, the Company announced the opening of new manufacturing facility in Kaluga, Russia. The facility will produce bumpers, front end modules, radiator grilles (assembly) and instrument panel-beams (assembly) for OEM customers such as Volkswagen/Skoda, PSA and Renault. The full production will be reached in 2012. (From a press release on October 28, 2010)