Financial Overview

(in million USD)

	FY ended Dec. 31, 2012	FY ended Dec. 31, 2011	Rate of change (%)	Factors
Overall
Net Sales	30,837	28,748	7.3	1)
Net Income	1,426	1,015	40.5	-
Sales by region
North America	16,241	14,764	10.0	-
Europe	12,563	12,429	1.1	-
Rest of World	2,010	1,506	33.5	-

Factors
1) Net Sales
-During 2012, the Company posted sales of USD 30.84 billion, an increase of 7.3% from 2011. This higher sales level was a result of increases in its North American, Rest of World and European production sales and tooling, engineering and other sales partially offset by a decrease in complete vehicle assembly sales. 

Acquisitions

<Magna Powertrain>
-The Company announced that its Magna Powertrain operating unit has completed the transaction to acquire ixetic Verwaltungs GmbH, a manufacturer of automotive vacuum, engine and transmission pumps. The purchase price payable for 100% of the outstanding shares of ixetic was approximately EUR 308 million. In 2011, ixetic recorded sales of approximately EUR 300 million. Ixetic is headquartered in Bad Homburg, Germany, has manufacturing and assembly facilities in Germany, Bulgaria and China as well as locations in Brazil, India, Japan, and the United States. (From a press release on November 30, 2012)

-In 2012, the Company, through Magna Powertrain, has signed an agreement with its joint venture partner, SHW AG, to purchase the remaining 50% interest in STT Technologies Inc., a leading supplier of transmission and engine related oil pumps serving the North American automotive market. The purchase price was not announced but was estimated to be in the mid double-digit million EUR range. 

-In 2012,  the Company reached an agreement to purchase the controlling 27% interest in Magna E-Car Systems for USD 74.67 million from a company affiliated with the Stronach Group. Magna E-Car systems is a global supplier of components and systems for hybrids and electric vehicles. E-Car's component business was integrated into the Magna Powertrain operation, while vehicle integration operations were integrated into the Magna Steyr operating unit.

<Magna International>
-The Company announced that in 2011, it purchased select assets of the U.S.-based injection molding company Continental Plastics Co., the business and certain assets of a high-strength extrusion stamping facility in Germany, and the business and certain assets of a bus and light rail seating systems company. (From a press release on February 23, 2012)

<Cosma International>
-In January 2012, Cosma International, an operating unit of the Company, acquired BDW technologies group, a structural casting supplier of aluminum components. BDW technologies is an industry leader in vacuum high-pressure aluminum die casting and has operations in Germany, Poland and Hungary

<Magna Seating>
-The Company announced that its Magna Seating operating unit acquired the assets and business of Vogelsitze GmbH in Karlsruhe-Stupferich, Germany. Vogelsitze specializes in the development and production of seats for the bus and light train industries. Sales for 2011 are expected to be approximately 19 million euros. Current production customers include MAN, Mercedes-Benz, Volvo, Bombardier, VDL and GAZ. (From a press release on January 5, 2012)

Joint Ventures

-Magna E-Car Systems and Hyundai Heavy Industries (HHI) announced that the two companies agreed to form a joint venture named MAHY E-CELL. Under the agreement, HHI and Magna E-Car will jointly conduct engineering, design, development and testing activities with the goal of preliminary validation of battery cell and battery pack technologies for electric and hybrid electric vehicle applications. The joint venture will be owned 60% by Magna E-Car and 40% by HHI. (From a press release on April 3, 2012)

Contracts

<Magna Exteriors and Interiors>
-The Company announced that its Magna Exteriors and Interiors (MEI) operating unit has commenced production of its Active Grille Shutter (AGS), a louver system that blocks various front-end airflow openings, reducing drag while maintaining optimal engine temperatures. The system's louvers, functioning like household blinds, automatically open and close based on various inputs from the vehicle. MEI developed and commercialized this new product offering in 18 months. After making its debut on the 2013 Dodge "Dart" and "Ram 1500" pickup truck, the Company's AGS will be included on four additional upcoming vehicles. (From a press release on October 2, 2012) 

<Magna Electronics>
-The Company announced that the EYERIS electronic vision system developed by its Magna Electronics operating unit is being installed on the 2012 Opel "Insignia". The Company's EYERIS system has also launched on Chevrolet/GMC vehicles in North America and GM Korea vehicles in Korea, with several additional GM brands launching in the future, including Vauxhall's "Mokka" SUV and "Astra VXR". (From a press release on April 26, 2012)

<Magna International>
-The Company announced that the new Class 8 truck models, the Kenworth "T680" and Peterbilt "Model 579", feature various components and systems from the Company, including complete seat systems, cab-in-white stampings and assemblies made from aluminum and steel, composite products (hood, roof and exterior trim) and interior trim. (From a press release on March 23, 2012)

Awards

-The Company announced that 11 of its manufacturing divisions have received Supplier Quality Excellence Awards from General Motors. Company divisions receiving GM Supplier Quality Excellence Awards include:
<Cosma International>

• Cosma Shanghai – Shanghai, China
• Maple Stamping – Concord, Ontario, Canada
• Montezuma Manufacturing – Montezuma, Iowa, the U.S.
• Victor Manufacturing – Victor, Iowa, the U.S.

<Magna Closures>

• Dortec – Bradford, Ontario, Canada

<Magna Powertrain / Electronics>

• Innovative Cooling Dynamics – Mississauga, Ontario, Canada
• Magna Electronics China – Jiangsu Province, China
• MPT Lansing – Lansing, Michigan, the U.S.
• MPT Muncie – Muncie, Indiana, the U.S.
• MSM – Woodbridge, Ontario, Canada
• Pullmatic Manufacturing – Unionville, Ontario, Canada.

(From a press release on November 13, 2012)

<Cosma International>
-The Company announced that Cosma International's manufacturing facility in Camacari, Brazil has won a Silver World Excellence Award from Ford Motor Company. Cosma Camacari supplies chassis structures and welded metallic assemblies to Ford. (From a press release on July 5, 2012)

-The Company's Cosma division was awarded Volvo's "Quality Award of Excellence" for the first time in 2012.

<Magna Mirrors>
-The Company announced that its Magna Mirrors operating unit was selected as a 2012 Automotive News PACE Award winner for its Infinity rearview mirror. The Infinity mirror differs from traditional rearview mirrors by replacing the bezel around the mirror's perimeter with a polished ground glass edge. This not only provides a clean design which automakers see as a differentiating feature, but it also cuts mirror size by 24 percent, reducing forward obstruction. (From a press release on Apr. 4, 2012)

R&D Expenditure

-The Company's Corporate Constitution requires a minimum of 7% of its Pre-Tax Profits for any fiscal year to be allocated to research and development during that fiscal year or the immediately following fiscal year. 

Technological Alliance

-Magna Exteriors and Interiors, an operating unit of the Company and Zoltek Companies, Inc., a U.S.-based producer of commercial carbon fiber, have announced an exclusive collaborative partnership to develop low cost carbon fiber sheet molding compounds (SMC). The newly developed carbon fiber SMC material will use Zoltek's Panex 35 commercial carbon fiber combined with Magna's EpicBlendSMC sheet molding compound formulations and production expertise. The new material named, EpicBlendSMC EB CFS-Z, will be part of the Magna Exteriors and Interiors' EpicBlendSMC product line allowing the Company to offer an expanded range of lightweight parts and sub-systems for automotive, commercial truck and other markets. EpicBlendSMC EB CFS-Z is particularly suitable for electric vehicle battery enclosures.  (From a press release on March 28, 2012)

Product development

<Active Grille Shutter system>
-The Company announced that its Magna Exteriors and Interiors operating unit has started production of its Active Grille Shutter (AGS) system. The AGS system is a louver system that blocks various front-end airflow openings based on inputs from the vehicle, thus reducing drag while maintaining optimal engine temperatures. For example, while travelling at high speeds, the louvers will close, thereby reducing drag and enabling better fuel efficiency. At lower speeds, the shutters will open, allowing air to flow into the engine compartment for optimal engine cooling. (From a press release on Oct. 3, 2012)

<Seats>
-GRA-MAG Truck Interior Systems, LLC, a joint venture between Grammer AG and Magna Seating, an operating unit of the Company, is launching the new GT700 series seats for Kenworth's "T700" and Peterbilt's "587" trucks targeted for the fourth quarter of 2012. The new GT701, GT702, and GT703 seats have a range of options and features, including an advanced air suspension system that can automatically adjust to the driver's weight and all offer optional heating. In addition, these seats come in vinyl, cloth or ultraleather. (From a press release on September 19, 2012)

<MILA concept car>
-The Company has announced that its Magna Steyr operating unit will unveil the MILA Coupic concept study at the Geneva Motor Show 2012. The sixth concept car in the MILA innovation family, the MILA Coupic combines three different vehicle concepts in one - a SUV coupe, a pick-up and an open-air convertible. The front and rear roof sections of the MILA Coupic can be opened independently of each other due to two separate roof modules. In this way the passengers can enjoy a classic open-air experience. By opening the rear folding roof in the direction of the driver's side and folding up the rear seat module, the coupe can be transformed into a pick-up at the touch of a button. (From a press release on February 28, 2012)

Capital Expenditure

(in million USD)

	FY ended Dec. 31, 2012	FY ended Dec. 31, 2011	FY ended Dec. 31, 2010
Overall	1,274	1,236	746

Investment Outside Canada

<Russia>
<Magna International>
-The Company and Russian carmaker Avtotor announced a cooperation agreement in Kaliningrad, Russia, to establish an automotive manufacturing cluster. Once complete, the project is expected to combine new vehicle production factories and several new joint ventures for automotive components production. It is anticipated that up to six full-cycle vehicle assembly operations for different automakers and up to 15 automotive components production plants will be set up in Kaliningrad. The automotive components facilities will produce parts for Avtotor's needs, and may also supply to other Russian automotive companies as well as export parts to other countries. The final production capacity in the new cluster is expected to increase throughout several phases with the potential to reach up to 250,000 vehicles per year by 2018, with an annual product output expected of over RUB 300 billion (approximately USD 10 billion). (From a press release on November 27, 2012)

<Romania>
<Magna Exteriors and Interiors>
-Magna Exteriors and Interiors (MEI), an operating unit of the Company, announced the opening of its new operation in Craiova, Romania. MEI is located within the Ford plant in Craiova, where 100 employees produce front and rear bumpers as well as various other exterior trim components for the Ford "B-MAX". MEI Craiova, which covers a production area of 13,000 square meters, provides injection molding, painting and assembly services to Ford. (From a press release on October 25, 2012)

<United States>
<Magna E-Car Systems>
-Magna E-Car Systems announced the opening of its new facility, a plant in Grand Blanc Township, Michigan, USA, that manufactures components for hybrid and electric vehicles. The 66,000-square-foot facility, which houses approximately 95 employees, makes electric motors, inverters and electronic powertrain controllers for the Ford "Focus Electric", as well as inverters for the Fisker "Karma". Including Grand Blanc Township, Magna E-Car Systems now has four facilities in North America and two in Europe. (From a press release on April 16, 2012)