Financial Overview

(in million USD)

	FY ended Dec. 31, 2014	FY ended Dec. 31, 2013	Rate of change (%)	Factors
Overall
Net Sales	36,641	34,835	5.2	1)
Operating Income	2,539	1,905	33.3	-
External Production Sales by Region*
North America	18,282	16,744	9.2	2)
Europe	10,013	9,957	0.6	3)
Asia	1,640	1,391	17.9	4)
Rest of World	668	858	(22.1)	5)

*External production sales do not include sales from complete vehicle assembly activities nor tooling, engineering, and other activities.

Factors
1) Net Sales
-The Company's sales in the fiscal year ended December 31, 2014 increased by 5.2% from the previous year to USD 36,641 million. Production sales increases in North America, Europe and Asia were partially offset by a production sales decrease in the rest of the world. Sales were further boosted by increased sales in the Company's complete vehicle assembly and tooling, engineering, and other operations.

2) North America
-External production sales in North America increased by 9.2% in the fiscal year ended December 31, 2014 to USD 18,282 million. The increase in sales was primarily due to the following:

• Launch of new programs including the Jeep Cherokee, Lincoln MKC, Nissan Rogue, BMW X4, and various GM full-size pickups and SUVs
• Higher production volumes on specific existing programs

-The positive impact created by those factors was partially offset by the following:

• A USD 433 million decrease due to negative currency exchange effects
• Programs that ended production during or after 2013
• Customer price concessions after 2013

3) Europe
-Sales due to external production in Europe increased by 0.6% compared to the previous year to USD 10,013 million. The primary factor contributing the increase in sales was the launch of new programs, including the Mercedes-Benz GLA, A-Class, and S-Class; Porsche Macan; Skoda Octavia; and Range Rover Sport.

-Factors that partially offset the increase in sales include:

• Lower production volumes on existing programs and the conclusion of other programs during or after 2013
• Decreased content on specific existing programs, including the MINI Cooper and Mercedes-Benz C-Class
• A USD 45 million decrease due to negative currency exchange effects
• Customer price concessions after 2013

4) Asia
-The Company's external production sales in Asia recorded a gain of 17.9% over the previous year to USD 1,640 million. Contributions to the increase in sales include the following:

• Launch of new programs in China, India, and South Korea, including the Audi Q3 and Ford EcoSport
• Higher production volumes on existing programs

-The increase in sales was partially offset by customer price concessions after 2013.

5) Rest of World
-In the fiscal year ended December 31, 2014, external production sales in the Rest of World decreased by 22.1% to USD 668 million. Factors leading to the decrease in sales include:

• A USD 108 million decrease due to negative currency exchange effects
• Lower production volumes on existing programs and the conclusion of certain programs during or after 2013
• Decreased content on specific programs, including the Mercedes-Benz C-Class

-The negative effect of these factors was partially offset by the following:

• Launch of new programs during or after 2013
• Customer price increases after 2013

Restructuring

Divestiture of Magna Steyr battery pack business
-In February 2015, the Company announced it will divest the entire battery pack business of Magna Steyr to Samsung SDI Co., Ltd.

Divestiture of composites manufacturing operations to Continental Structural Plastics Inc.
-The Company completed the sale of five composites manufacturing operations in the U.S. and Mexico to Continental Structural Plastics Inc. in August 2014.

Acquisitions

-In January 2016, the Company announced that it has completed its acquisition of the Getrag Group of Companies. With a workforce of approximately 14,000 employees, Getrag offers a range of transmission systems which include manual, automated-manual, dual-clutch, hybrid and other advanced systems. In addition to its wholly-owned operations, Getrag has significant joint-venture relationships with Ford, as well as Chinese auto makers Jiangling and Dongfeng. Other Getrag customers include BMW, Daimler, Renault, Volvo and Great Wall. Including joint-venture locations, Getrag operates 13 manufacturing and 10 engineering centers in nine countries in Europe, Asia and North America. (From a press release on January 4, 2016 and July 16, 2015)

-The Company announced that one of its subsidiaries has signed an agreement to acquire the Techform Group of Companies, a U.S.-based automotive supplier of hinges, door locking rods and other closure products. The Company will acquire Techform's facilities located in Penetanguishene, Ontario, Canada; Portland, Tennessee, U.S.; and Hefei, Anhui Province, China. The transaction is scheduled to close in early October 2014. (From a press release on September 30, 2014)

Joint Ventures

-The Company and Tata AutoComp Systems Ltd. have signed a 50/50 joint venture agreement to provide seating systems to the Indian commercial vehicle industry. The joint venture will be headquartered in Pune, India, and will focus on delivering innovative seating systems to bus and commercial vehicle manufacturers. (From a press release on September 23, 2014)

-The Company's Magna Exteriors operating unit, and Chongqing Guangneng Rongneng Trim Co., Ltd., announced the formation of a 50/50 joint-venture partnership. The newly formed JV, called Magna Guangneng Automotive Trim System (Hangzhou) Co., Ltd., will supply China's automotive market through a new facility located in Hangzhou, China. The facility will assemble and sequence front-end modules. (From a press release on February 3, 2014)

Contracts

-The Company announced that it is supplying its next-generation Actimax transfer case to power the all-wheel-drive (AWD) system of the new 2015 BMW X4. The Actimax transfer case is built and shipped from the Company's powertrain facilities in Ramos Arizpe, Mexico to the BMW plant in Spartanburg, South Carolina, U.S. The Company has supplied the Actimax transfer case for all BMW xDrive models since 2003. (From a press release on November 11, 2014)

-The Company announced that it produces a lightweight composite liftgate assembly on the BMW i3. The liftgate assembly is being produced at a facility in the Czech Republic. All of the liftgate's components including rear window, rear wiper system, interior trim, taillights, and locking and latching system, are integrated by using the Company's fully automated accelerated joining technology. The fully assembled module is transported to BMW Group's Leipzig facility in Germany for direct assembly. (From a press release on September 29, 2014)

-The Company announced that it is supplying two systems on the BMW i8 plug-in electric sports car: outside mirrors with hidden turn signals and SmartLatch, an electronic side-door latch system. (From a press release on September 17, 2014)

-The Company announced that its Magna Powertrain operating unit is the supplier of the new all-wheel-drive (AWD) system available on the 2015 Hyundai Genesis. The 2015 Genesis marks the first Hyundai sedan to offer an AWD system known as HTRAC. The new AWD system is produced and shipped from Magna Powertrain's Lannach and Ilz facilities in Austria. (From a press release on June 25, 2014)

-The Company announced that its Magna Powertrain operating unit is supplying an all-wheel-drive (AWD) system for the new Mercedes-Benz GLA compact SUV, the A45 AMG, and the CLA. The AWD system, called ProActive Rear Drive Module, is specifically designed as a platform solution for C-segment vehicles and achieves a high level of integration for an AWD coupling and rear axle drive. This fully integrated system significantly improves vehicle performance in terms of drag, torque, system efficiency and weight. ProActive Rear Drive Module was jointly developed by Magna Powertrain and Daimler. Magna Powertrain developed the rear axle drive and the AWD coupling while Daimler integrated the system into the vehicle. (From a press release on June 4, 2014)

-The Company announced that its Magna Exteriors operating unit is producing its all-thermoplastic, fully recyclable liftgate module for the 2014 Nissan Rogue crossover utility vehicle. The full liftgate assembly is 30% lighter than comparable stamped steel systems. The Company developed the liftgate in collaboration with Nissan, Hitachi Chemical, and materials suppliers LyondellBasell and Advanced Composites Inc. The liftgate assembly is made by Magna Exteriors' Decostar division in Carrollton, Georgia, and is delivered to Nissan for single-point installation at its assembly plant in Smyrna, Tennessee. (From a press release on April 15, 2014)

-The Company announced that its Magna Exteriors operating unit has been awarded new business to supply painted automotive body panels made from carbon fiber composite material for two 2016 model-year vehicles. The Company's solution was developed with Zoltek Panex 35 carbon fiber to provide industry-leading value. This effort followed a collaboration between the Company and Zoltek to develop CFS-Z carbon fiber sheet molding compound. The Company now offers global manufacturers a complete range of lightweight composite parts, sub-systems and semi-structural applications for automotive, commercial truck, and other markets. (From a press release on March 11, 2014)

Awards

-The Company announced that 17 of its manufacturing divisions across six countries have received the General Motors Supplier Quality Excellence Award. (From a press release on October 15, 2014)

-The Company announced that it has received a PSA Peugeot-Citroen Supplier Award in the category of Program Management. The award was given for the development and industrialization of the sliding folding roof for the new Peugeot 108 and Citroen C1. The program was developed at its Magna Car Top Systems Engineering Centre in Bietigheim, Germany, with support from a Company office in Paris, and is manufactured at its plant in Tychy, Poland. (From a press release on July 2, 2014)

-The Company announced that its Magna Powertrain operating unit has received Volkswagen's top supplier award - The 2014 Volkswagen Group Award. This award reflects the efforts the Company has made to support Volkswagen globally by developing and manufacturing All-Wheel Drive systems for them. (From a press release on June 23, 2014)

-The Company announced that its Cosma International manufacturing division in Ibirite, Brazil, received a Fiat Qualitas Award in the "Metal Materials and Powertrain" category. Cosma's Ibirite facility employs approximately 150 people and manufactures chassis structure assemblies for Fiat. (From a press release on June 3, 2014)

-The Company announced that a Magna Powertrain manufacturing division in Sterling Heights, Michigan, U.S., received a Jatco Global Best Performance Award for its continuous variable transmission plunger and cylinder products. Magna Powertrain's Sterling Heights facility employees approximately 230 people and manufactures automatic transmission and CVT parts, clutch apply rings and reluctor wheels, transmission oil pans, differential covers, drive plates, and deep draw reaction shells. (From a press release on May 28, 2014)

-The Company's Cosma International operating unit, ArcelorMittal, and Honda announced that a joint nomination for the 2014 Automotive News PACE Awards was selected as the winner in the 'Manufacturing Process and Capital Equipment' category as the industry's first laser-welded, hot-stamped door ring in the 2014 Acura MDX. Additionally, Honda, in partnership with ArcelorMittal and Cosma International, was awarded the 2014 Innovation Partnership Award. (From a press release on April 8, 2014)

-The Company announced its Magna Electronics manufacturing division in Tiengen, Germany, has received the Volvo Cars Quality Excellence (VQE) Award. Magna Electronics' Tiengen facility employs approximately 320 people and manufactures 180-degree front/side-view megapixel cameras for Volvo Cars as well as engine electronics for other automakers. (From a press release on January 29, 2014)

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 fiscal year that immediately follows.

R&D Activities

-The Company will showcase its MILA Blue vehicle concept at the 2014 Geneva Motor Show. MILA Blue is a natural-gas powered, A-segment lightweight vehicle that produces less than 49g CO2/km. MILA Blue, the seventh concept vehicle in the MILA family, is 300kg lighter than typical current A-segment vehicles. (From a press release on February 26, 2014)

Technological Alliance

Partnership with Ford in developing multi-material lightweight vehicle concept
-The Company and Ford Motor Company unveiled a multi-material lightweight vehicle (MMLV) concept that uses advanced material solutions to achieve a nearly 25% weight reduction compared to the current production vehicle. The joint project was co-funded by the U.S. Department of Energy. The vehicle concept is based on a 2013 Ford Fusion production model and features an aluminum-intensive structure. The concept has a weight similar to a 2013 Ford Fiesta, essentially reducing the weight of a C/D segment family sedan to that of a subcompact B-car without compromising performance or occupant safety. Vehma International, an engineering and prototype division within the Company's Cosma International operating unit, manufactured and integrated the multi-material body-in-white, closures, chassis and bumper components. (From a press release on June 11, 2014)

Partnership with bio-on for applications of sugar beet plastic
-The Company and bio-on, an Italian intellectual property company, signed a cooperation agreement in December 2013 to start exclusive R&D activities on the use of bio plastics for the automotive industry. bio-on has developed a new kind of bio plastic created through the use of naturally occurring bacteria which feed off sugar beet byproducts. The Magna Interiors operating unit is pairing its automotive knowledge with bio-on's chemical expertise to research how production of this natural polyester product can be elevated to an industrial, cost-effective scale. Additionally, the two companies will test and evaluate how bio-on's bio plastics perform in different standard industry processes such as thermoforming. Magna Interiors will utilize its facility in Liberec, Czech Republic, for joint testing. (From a press release on February 7, 2014)

Product development

EYERIS Gen 2.5 vision and driver assistance system
-The Company launched its EYERIS Gen 2.5 vision system, entering the market on the 2014 Cadillac ATS and Dongfeng Honda Spirior. EYERIS Gen 2.5 includes features found on the previous EYERIS platform such as Lane Departure Warning, Traffic Sign Recognition and Forward Collision Warning systems. New features on EYERIS Gen 2.5 include Lane Keeping Assistance, Glare-Free High Beam, and Collision Mitigation. The new version also has increased memory and processing power. (From a press release on November 11, 2014)

Sedan Slouch rear-passenger sedan seats
-The Magna Seating operating unit has developed a new seating concept called Sedan Slouch, the first-to-market rear-passenger sedan seats to offer both seatback recline and fold-flat functionality. For example, a vehicle owner could haul lumber or gardening supplies with the seats folded flat, then take a trip with passengers riding in the reclined rear seats. This is accomplished by using Magna Seating's META tracks and a sliding/pivoting seatback latch. Sedan Slouch is available in both manual and power versions. (From a press release on July 8, 2014)

Press-formed aluminum transmission oil pan
-The Company has developed the world's first press-formed aluminum transmission oil pan. The press-formed aluminum oil pan has substantial weight savings compared to conventional steel oil pans and aluminum-casted oil pans. The Company will complete pilot production in 2014 and will start supplying the aluminum-casted oil pans to U.S. automakers in 2015. The new oil pan will be marketed as a product that can effectively enhance a vehicle's environmental friendliness and driving performance. (From an article in the Nikkan Jidosha Shimbun on June 5, 2014)

Class A Magnesium sheet roof panel
-The Company developed the first serially produced Class A Magnesium sheet roof panel. Featured on the 2015 Porsche 911 GT3 RS sports car, the magnesium sheet roof panel is developed through a thermally-assisted forming process and weighs significantly less than existing steel or aluminum roof panels.

PureView rear sliding window for pick-up trucks
-The Company has developed the PureView rear sliding window for pick-up trucks. Conventional rear sliding windows use three pieces of glass that are supported by a structure containing numerous components. The PureView window uses a continuous piece of glass with a window opening. A second sliding piece of glass is then installed over the opening. The PureView window features less components than a conventional sliding window, which leads to reduced manufacturing complexity and increased weight savings. Additionally, the PureView window utilizes a lighter control module for its power sliding function and features continuous defrost capabilities. The PureView window is featured on the 2015 Ford F-150.

Capital Expenditure

(in million USD)

	FY ended Dec. 31, 2014	FY ended Dec. 31, 2013	FY ended Dec. 31, 2012
Overall	1,586	1,169	1,274

Investment in Canada

-The Company announced that its Magna Closures operating unit has expanded its Dortec manufacturing facility to begin producing electronic systems and modules for the automotive industry. The USD 1.5 million expansion will create 75 new jobs. Dortec, located in Newmarket, Ontario, Canada, manufactures closure and latching systems for global automakers. Components produced at the expanded facility are expected to include electronic control modules for power closure and roof systems, and electronic side-door latches. (From a press release on April 7, 2014)

Investment outside Canada

<U.S.>
-The Company announced the grand opening of DexSys, a new facility in Delta Township, Michigan, U.S., for the manufacture of automotive exterior products. The 290,000-square-foot injection molding and robotic paint line facility will employ approximately 340 people at full production. The facility will produce front and rear fascias for several vehicles within the General Motors line-up, including the Cadillac ATS, GMC Acadia and Buick Enclave. (From a press release on October 28, 2014)

-The Company announced that it has started construction on a new, manufacturing facility located in Spring Hill, Tennessee, U.S. The 122,500-square-foot facility will manufacture complete seat assemblies for General Motors' Spring Hill Assembly Plant. The plant will be fully operational in January 2015. The new facility will be the Company's fifth location in Tennessee and is expected to employ approximately 75 people when it begins production. (From a press release on September 3, 2014)

<India>
-The Company announced the establishment of two new facilities in Sanand, Gujarat, India. At one of the new facilities, the Company will make complete seat systems for a leading automaker. The 215,000-square-foot plant will employ approximately 200 people and is expected to begin volume production in 2015. The Company will manufacture body and chassis systems for multiple customers at the other facility in Sanand. The 356,000-square-foot plant will employ approximately 400 people and also expects to begin volume production in 2015. (From a press release on September 23, 2014)

<Slovakia>
-The Company announced the expansion of its interiors manufacturing facility in Trnava, Slovakia, to accommodate recently awarded additional automotive interiors business. Magna Interiors Trnava will nearly double in size from 8,700 square meters to over 15,500 square meters. The facility produces interiors products such as door panels, instrument panels and armrests. Currently, Magna Interiors Trnava has nearly 400 employees. (From a press release on July 28, 2014)

<Mexico>
-The Company announced that its Magna Powertrain (MPT) operating unit has started construction of a new manufacturing facility in Ramos Arizpe, Coahuila, Mexico. The new facility will be the third building at MPT's operation in Ramos Arizpe and is expected to span approximately 16,000 square meters. Approximately USD 75 million will be invested in the facility, which is scheduled to launch in 2016. MPT Ramos will create jobs for an additional 230 people at full capacity and produce all-wheel drive systems for Audi vehicles. (From a press release on April 29, 2014)