<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>2
<FILENAME>may6_2004press.txt
<DESCRIPTION>PRESS RELEASE DATED MAY 6, 2004
<TEXT>
[Magna Logo}                                      Magna International Inc.
                                                  337 Magna Drive
                                                  Aurora, Ontario L4G 7K1
                                                  Tel (905) 726-2462
                                                  Fax (905) 726-7164

                               PRESS RELEASE
                     MAGNA ANNOUNCES FIRST QUARTER RESULTS

May 6, 2004, Aurora, Ontario, Canada.... Magna International Inc. (TSX:
MG.A, MG.B; NYSE: MGA) today reported sales, profits and earnings per share
for the first quarter ended March 31, 2004.

    <<
    -------------------------------------------------------------------------
                                                    THREE MONTHS ENDED
                                              -------------------------------
                                              March 31, 2004  March 31, 2003
                                              --------------- ---------------

    Sales                                         $    5,103      $    3,496

    Net income(1)                                 $      184      $      161

    Net income from continuing operations(1),(2)  $      184      $      154

    Diluted earnings per share(1)                 $     1.84      $     1.64

    Diluted earnings per share from continuing
     operations(1),(2)                            $     1.84      $     1.57

    -------------------------------------------------------------------------

    (1) Net income, net income from continuing operations, diluted earnings
        per share and diluted earnings per share from continuing operations
        have been prepared in accordance with Canadian Generally Accepted
        Accounting Principles.

    (2) Net income from continuing operations and diluted earnings per share
        from continuing operations reflect the disclosure of Magna
        Entertainment Corp. as discontinued operations until August 29, 2003.
        On September 2, 2003, we distributed 100% of the Class A Subordinate
        Voting and Class B Shares of MI Developments Inc. to our shareholders
        of record as of August 29, 2003.

    For more information see notes 3 and 4 to the First Quarter Unaudited
    Interim Consolidated Financial Statements attached.

    -------------------------------------------------------------------------

            All results are reported in millions of U.S. dollars,
                          except per share figures.

    -------------------------------------------------------------------------

    We posted sales of $5.1 billion for the first quarter ended March 31,
2004, an increase of 46% over the first quarter of 2003. The higher sales
level in the first quarter of 2004 reflects increases of 26% in North
American content per vehicle and 86% in European content per vehicle over the
comparable quarter in 2003. The increase in content per vehicle in North
America was largely attributable to new product launches, the strengthening
of the Canadian dollar against the U.S. dollar and acquisitions completed
subsequent to the first quarter of 2003. The increase in content per vehicle
in Europe was largely attributable to new product launches, in particular the
launch of complete vehicle assembly programs at Magna Steyr, and the
strengthening of the euro and British pound against the U.S. dollar. During
the first quarter of 2004, North American vehicle production was essentially
unchanged and European vehicle production increased approximately 1%, from
the comparable quarter in 2003.
    We earned net income from continuing operations for the first quarter
ended March 31, 2004 of $184 million, representing an increase over the
comparable quarter of 19% or $30 million. Net income for the first quarter
ended March 31, 2004 was also $184 million.
    Diluted earnings per share from continuing operations were $1.84 for the
first quarter ended March 31, 2004, representing an increase over the
comparable quarter of 17% or $0.27. Diluted earnings per share for the first
quarter ended March 31, 2004 were also $1.84.
    Our strong sales and earnings in the first quarter of 2004 reflect the
rewards from our investment in launches made during 2003.
    During the three months ended March 31, 2004, we generated cash from
operations before changes in non-cash operating assets and liabilities of
$399 million, and generated $202 million from non-cash operating assets and
liabilities. Total investment activities for the first quarter of 2004 were
$182 million, including $148 million in fixed asset additions, $11 million to
purchase subsidiaries, and a $23 million increase in other assets.

    OTHER MATTERS
    -------------

    We also announced that our Board of Directors today declared a quarterly
dividend with respect to our outstanding Class A Subordinate Voting Shares
and Class B Shares for the fiscal quarter ended March 31, 2004. The dividend
of U.S. $0.38 per share is payable on June 15, 2004 to shareholders of record
on May 28, 2004. This represents an increase in our quarterly dividend of
approximately 12% or $0.04 per share.

    2004 OUTLOOK
    ------------

    All amounts below exclude the potential impact of acquisitions.
    We expect full year 2004 average dollar content per vehicle to be between
$580 and $600 in North America and between $495 and $520 in Europe. Further,
we have assumed 2004 vehicle production volumes will be approximately
16.0 million units in North America and approximately 16.4 million units in
Europe. Based on expected average dollar content per vehicle in North America
and Europe, current exchange rates, the above volume assumptions and
anticipated tooling and other automotive sales, we expect our sales for the
full year 2004 to be between $18.5 billion and $19.4 billion, compared to
2003 sales of $15.3 billion. We expect the higher sales this year to result
in earnings growth for full year 2004. In addition, we expect that full year
2004 spending for fixed assets will be in the range of $800 million to
$850 million.
    Magna, the most diversified automotive supplier in the world, designs,
develops and manufactures automotive systems, assemblies, modules and
components, and engineers and assembles complete vehicles, primarily for sale
to original equipment manufacturers of cars and light trucks in North
America,
Europe, Mexico, South America and Asia. Our products include: automotive
interior and closure components, systems and modules through Intier
Automotive
Inc.; metal body systems, components, assemblies and modules through Cosma
International; exterior and interior mirror and engineered glass systems
through Magna Donnelly; fascias, front and rear end modules, plastic body
panels, exterior trim components and systems, greenhouse and sealing systems,
roof modules and lighting components through Decoma International Inc.;
various engine, transmission and fueling systems and components through Tesma
International Inc.; a variety of drivetrain components through Magna
Drivetrain; and complete vehicle engineering and assembly through Magna
Steyr.
    Magna has approximately 75,000 employees in 212 manufacturing operations
and 47 product development and engineering centres in 23 countries.

    -------------------------------------------------------------------------
    We will hold a conference call for interested analysts and shareholders
    to discuss our first quarter results and other developments on
    Friday, May 7, 2004 at 9:00 a.m. EDT. The conference call will be chaired
    by Vincent J. Galifi, Executive Vice President and Chief Financial
    Officer. The number to use for this call is 1-800-346-5998. The number
    for overseas callers is 1-416-641-6662. Please call in 10 minutes prior
    to the call. We will also webcast the conference call at www.magna.com.
    The slide presentation accompanying the conference call will be on our
    website Friday morning prior to the call.

    For further information, please contact Vincent J. Galifi or
    Louis Tonelli at (905) 726-7100.

    For teleconferencing questions, please call (905) 726-7103.
    -------------------------------------------------------------------------

    This press release may contain statements that, to the extent that they
are not recitations of historical fact, constitute "forward-looking
statements" within the meaning of applicable securities legislation.
Forward-looking statements may include financial and other projections, as
well as statements regarding our future plans, objectives or economic
performance, or the assumptions underlying any of the foregoing. We use words
such as "may", "would", "could", "will", "likely", "expect", "anticipate",
"believe", "intend", "plan", "forecast", "project", "estimate" and similar
expressions to identify forward-looking statements. Any such forward-looking
statements are based on assumptions and analyses made by us in light of our
experience and our perception of historical trends, current conditions and
expected future developments, as well as other factors we believe are
appropriate in the circumstances. However, whether actual results and
developments will conform with our expectations and predictions is subject to
a number of risks, assumptions and uncertainties. These risks, assumptions
and
uncertainties include, but are not limited to: global economic conditions
causing decreases in production volumes; pressure from our customers to
reduce
our prices; pressure from our customers to absorb certain fixed costs;
increased product warranty and recall costs and increased product liability
risks; the impact of financially distressed automotive components
sub-suppliers; our dependence on outsourcing by automobile manufacturers;
rapid technological and regulatory changes; increased crude oil and energy
prices; raw materials prices and availability; our dependence on certain
customers and vehicle programs; fluctuations in relative currency values;
unionization activity at our facilities; the threat of work stoppages and
other labour disputes; the highly competitive nature of the auto parts supply
market; program cancellations and delays in launching new programs; delays in
constructing new facilities; changes in governmental regulations; the impact
of environmental regulations; our relationship with our controlling
shareholder; and other factors set out in our Annual Information Form filed
with the Canadian Securities Commissions and our annual report on Form 40-F
filed with the Securities and Exchange Commission, as renewed from time to
time. In evaluating forward-looking statements, readers should specifically
consider the various factors which could cause actual events or results to
differ materially from those indicated by such forward-looking statements.
Unless otherwise required by applicable securities laws, we do not intend,
nor
do we undertake any obligation, to update or revise any forward-looking
statements to reflect subsequent information, events or circumstances or
otherwise.

    -------------------------------------------------------------------------
    Readers are asked to refer to the unaudited interim consolidated
    financial statements and the Management's Discussion and Analysis of
    Results of Operations and Financial Position attached to this Press
    Release for more detailed information regarding the financial results for
    the first quarter of fiscal 2004. For further information about Magna,
    please see our website at www.magna.com. Copies of financial data and
    other publicly filed documents are available through the internet on the
    Canadian Securities Administrators' System for Electronic Document
    Analysis and Retrieval (SEDAR) which can be accessed at www.sedar.com.
    -------------------------------------------------------------------------



    MAGNA INTERNATIONAL INC.
    CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
    (Unaudited)
    (United States dollars in millions, except per share figures)

                                                        Three months ended
                                                      March 31,     March 31,
                                            Note          2004          2003
    -------------------------------------------------------------------------
                                                                   (restated
                                                                 notes 2 & 3)

    Sales                                           $    5,103    $    3,496
    -------------------------------------------------------------------------

    Cost of goods sold                                   4,353         2,887
    Depreciation and amortization                          135           118
    Selling, general and administrative        7           293           236
    Interest income, net                                    (1)           (3)
    Equity income                                           (6)           (4)
    -------------------------------------------------------------------------
    Income from continuing operations before
     income taxes and minority interest                    329           262
    Income taxes                                           121            89
    Minority interest                                       24            19
    -------------------------------------------------------------------------
    Net income from continuing operations                  184           154
    Net income from discontinued
     operations - MEC                       3, 4             -             7
    -------------------------------------------------------------------------
    Net income                                      $      184    $      161
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Financing charges on Preferred
     Securities and other paid-in capital           $       (5)   $       (4)
    -------------------------------------------------------------------------
    Net income available to Class A
     Subordinate Voting and Class B
     Shareholders                                          179           157
    Retained earnings, beginning of period               2,390         2,570
    Dividends on Class A Subordinate
     Voting and Class B Shares                             (33)          (32)
    Adjustment for change in accounting
     policy related to asset retirement
     obligation                                2            (6)           (4)
    -------------------------------------------------------------------------
    Retained earnings, end of period                $    2,530    $    2,691
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Earnings per Class A Subordinate
     Voting or Class B Share
     from continuing operations:
      Basic                                         $     1.85    $     1.57
      Diluted                                       $     1.84    $     1.57
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Earnings per Class A Subordinate
     Voting or Class B Share:
      Basic                                         $     1.85    $     1.64
      Diluted                                       $     1.84    $     1.64
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Cash dividends paid per Class A
     Subordinate Voting or Class B Share            $     0.34    $     0.34
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Average number of Class A Subordinate
     Voting and Class B Shares outstanding
     during the period (in millions):
      Basic                                               96.5          95.6
      Diluted                                             97.1          95.8
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

                           See accompanying notes




    MAGNA INTERNATIONAL INC.
    CONSOLIDATED STATEMENTS OF CASH FLOWS
    (Unaudited)
    (United States dollars in millions)

                                                        Three months ended
                                                      March 31,     March 31,
                                            Note          2004          2003
    -------------------------------------------------------------------------
                                                                   (restated
                                                                 notes 2 & 3)
    Cash provided from (used for):

    OPERATING ACTIVITIES
    Net income from continuing operations           $      184    $      154
    Items not involving current cash flows                 215           154
    -------------------------------------------------------------------------
                                                           399           308
    Changes in non-cash operating assets
     and liabilities                                       202            43
    -------------------------------------------------------------------------
                                                           601           351
    -------------------------------------------------------------------------

    INVESTMENT ACTIVITIES
    Fixed asset additions                                 (148)         (115)
    Purchase of subsidiaries                               (11)            -
    Increase in other assets                               (23)          (35)
    Proceeds from disposition of
     investments and other                                  18             6
    -------------------------------------------------------------------------
                                                          (164)         (144)
    -------------------------------------------------------------------------

    FINANCING ACTIVITIES
    Net issues (repayments) of debt                        (25)           28
    Issues of subordinated debentures
     by subsidiaries                                         -            66
    Repayments of debentures' interest obligations          (1)           (1)
    Preferred Securities distributions                      (7)           (6)
    Issues of Class A Subordinate Voting Shares              6             2
    Issues of shares by subsidiaries                         6             -
    Dividends paid to minority interests                    (4)           (3)
    Dividends                                              (33)          (32)
    -------------------------------------------------------------------------
                                                           (58)           54
    -------------------------------------------------------------------------

    Effect of exchange rate changes
     on cash and cash equivalents                          (32)           31
    -------------------------------------------------------------------------

    Net increase in cash and cash equivalents
     during the period                                     347           292
    Cash and cash equivalents, beginning of period       1,528         1,121
    -------------------------------------------------------------------------
    Cash and cash equivalents, end of period        $    1,875    $    1,413
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

                           See accompanying notes




    MAGNA INTERNATIONAL INC.
    CONSOLIDATED BALANCE SHEETS
    (Unaudited)
    (United States dollars in millions)
                                                        Three months ended
                                                      March 31,  December 31,
                                            Note          2004          2003
    -------------------------------------------------------------------------
                                                                   (restated
                                                                 notes 2 & 3)


    ASSETS
    Current assets
    Cash and cash equivalents                       $    1,875    $    1,528
    Accounts receivable                                  2,784         2,615
    Inventories                                          1,186         1,116
    Prepaid expenses and other                             100           112
    -------------------------------------------------------------------------
                                                         5,945         5,371
    -------------------------------------------------------------------------
    Investments                                            127           127
    Fixed assets, net                                    3,303         3,313
    Goodwill, net                                          570           505
    Future tax assets                                      178           181
    Other assets                               5           286           334
    -------------------------------------------------------------------------
                                                    $   10,409    $    9,831
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current liabilities
    Bank indebtedness                               $      303    $      298
    Accounts payable                                     2,795         2,471
    Accrued salaries and wages                             416           368
    Other accrued liabilities                              292           244
    Income taxes payable                                    31            19
    Long-term debt due within one year                      36            35
    -------------------------------------------------------------------------
                                                         3,873         3,435
    -------------------------------------------------------------------------
    Deferred revenue                                        75            80
    Long-term debt                                         278           267
    Debentures' interest obligation                         39            41
    Other long-term liabilities                            236           230
    Future tax liabilities                                 254           230
    Minority interest                                      642           625
    -------------------------------------------------------------------------
                                                         5,397         4,908
    -------------------------------------------------------------------------

    Shareholders' equity
    Capital stock                              6
      Class A Subordinate Voting Shares
        (issued: 95,428,845;
         December 31, 2003 - 95,310,518)                 1,599         1,592
      Class B Shares
        (convertible into Class A
         Subordinate Voting Shares)
        (issued: 1,096,509)                                  -             -
    Preferred Securities                                   277           277
    Other paid-in capital                                   70            68
    Contributed surplus                        7            14             3
    Retained earnings                                    2,530         2,384
    Currency translation adjustment                        522           599
    -------------------------------------------------------------------------
                                                         5,012         4,923
    -------------------------------------------------------------------------
                                                    $   10,409    $    9,831
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

                           See accompanying notes



    MAGNA INTERNATIONAL INC.
    NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)
    (All amounts in U.S. dollars and all tabular amounts in millions unless
    otherwise noted)
    -------------------------------------------------------------------------


    1.  BASIS OF PRESENTATION

        The unaudited interim consolidated financial statements of Magna
        International Inc. and its subsidiaries (collectively "Magna" or the
        "Company") have been prepared in U.S. dollars following the
        accounting policies as set out in the 2003 annual consolidated
        financial statements.

        The unaudited interim consolidated financial statements do not
        conform in all respects to the requirements of generally accepted
        accounting principles for annual financial statements. Accordingly,
        these unaudited interim consolidated financial statements should be
        read in conjunction with the 2003 annual consolidated financial
        statements.

        In the opinion of management, the unaudited interim consolidated
        financial statements reflect all adjustments, which consist only of
        normal and recurring adjustments, necessary to present fairly the
        financial position at March 31, 2004 and the results of operations
        and cash flows for the three-month periods ended March 31, 2004 and
        2003.


    2.  ACCOUNTING CHANGE

        (a) Stock-Based Compensation

            In November 2003, the Canadian Institute of Chartered Accountants
            ("CICA") amended Handbook Section 3870 "Stock-Based Compensation
            and Other Stock-Based Payments" ("CICA 3870"). The revised
            standard requires the use of the fair value method for all
            stock-based compensation paid to employees. As permitted by CICA
            3870, the Company adopted these new recommendations prospectively
            effective January 1, 2003. For awards granted prior to
            January 1, 2003, the Company continues to use the intrinsic value
            method (see note 7).

            The impact of this accounting policy change on reported net
            income and earnings per share for the three-month periods ended
            March 31, 2004 and 2003 is as follows:

                                                          2004          2003
            -----------------------------------------------------------------

            Increase in selling, general and
             administrative expenses                $       13    $        1
            -----------------------------------------------------------------
            Reduction of net income                 $       13    $        1
            -----------------------------------------------------------------

            Reduction of earnings per Class A
             Subordinate Voting or Class B Share
              Basic                                 $     0.13    $     0.01
              Diluted                               $     0.13    $     0.01
            -----------------------------------------------------------------

        (b) Asset Retirement Obligation

            In December 2003, the CICA issued Handbook Section 3110, "Asset
            Retirement Obligations", which establishes standards for the
            recognition, measurement and disclosure of asset retirement
            obligations and the related asset retirement costs. The Company
            adopted these new recommendations effective January 1, 2004 on a
            retroactive basis. The retroactive changes to the consolidated
            balance sheet as at December 31, 2003 were as follows:


            Increase in fixed assets                              $       13
            Increase in future tax assets                                  2
            -----------------------------------------------------------------

            Increase in other long term liabilities               $       23
            Decrease in minority interest                                 (1)
            -----------------------------------------------------------------

            Decrease in retained earnings                         $       (6)
            Decrease in currency translation adjustment                   (1)
            -----------------------------------------------------------------

            The impact of this accounting policy change on reported net
            income for the three-month periods ended March 31, 2004 and 2003
            was not material.

        (c) Revenue Recognition

            The Company adopted CICA Emerging Issues Committee Abstract
            No. 142, "Revenue Arrangements with Multiple Deliverables"
            ("EIC 142") prospectively for new revenue arrangements with
            multiple deliverables entered into by the Company on or after
            January 1, 2004. EIC 142 addresses how a vendor determines
            whether an arrangement involving multiple deliverables contains
            more than one unit of accounting and also addresses how
            consideration should be measured and allocated to the separate
            units of accounting in the arrangement. Separately priced tooling
            and engineering services can be accounted for as a separate
            revenue element only in circumstances where the tooling and
            engineering has value to the customer on a standalone basis and
            there is objective and reliable evidence of the fair value of the
            subsequent parts production or vehicle assembly. The adoption of
            EIC 142 did not have a material effect on the Company's revenue
            or net income for the three-month period ended March 31, 2004.


    3.  DISTRIBUTION OF MID SHARES

        On August 19, 2003, Magna shareholders approved the distribution to
        shareholders of 100% of the outstanding shares of MI Developments
        Inc. ("MID"), a wholly owned subsidiary of the Company (the "MID
        distribution"). MID owns substantially all of Magna's automotive real
        estate and the Company's former controlling interest in Magna
        Entertainment Corp. ("MEC"). On September 2, 2003, the Company
        distributed 100% of MID's Class A Subordinate Voting and Class B
        Shares to shareholders of record as of August 29, 2003 and,
        accordingly, no longer has any ownership interest in MID and MEC.

        In accordance with CICA 3475 "Disposal of Long-lived Assets and
        Discontinued Operations", the financial results of MEC have been
        disclosed as discontinued operations until August 29, 2003 (note 4).
        However, because Magna and its operating subsidiaries continue to
        occupy their facilities under long-term leases with MID, the
        operations of the real estate business of MID cannot be reflected as
        discontinued operations. Therefore, the results of the real estate
        business are disclosed in continuing operations in the consolidated
        financial statements until August 29, 2003.


    4.  DISCONTINUED OPERATIONS - MEC

        The Company's revenues and expenses, and cash flows related to MEC
        are as follows:

        Statement of income:

                                                                Three months
                                                                       ended
                                                              March 31, 2003
        ---------------------------------------------------------------------

        Sales                                                     $      270
        Costs and expenses                                               248
        ---------------------------------------------------------------------
        Income before income taxes and minority interest                  22
        Income taxes                                                      10
        Minority interest                                                  5
        ---------------------------------------------------------------------
        Net income                                                $        7
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

        Statement of cash flows:

                                                                Three months
                                                                       ended
                                                              March 31, 2003
        ---------------------------------------------------------------------

        Cash provided from (used for):

        OPERATING ACTIVITIES
        Net income                                                $        7
        Items not involving current cash flows                            15
        ---------------------------------------------------------------------
                                                                          22
        Changes in non-cash operating assets and liabilities              12
        ---------------------------------------------------------------------
                                                                          34
        ---------------------------------------------------------------------

        INVESTMENT ACTIVITIES
        Fixed asset additions                                            (13)
        Decrease in other assets                                           1
        ---------------------------------------------------------------------
                                                                         (12)
        ---------------------------------------------------------------------

        FINANCING ACTIVITIES
        Net repayment of debt                                            (35)
        ---------------------------------------------------------------------

        Effect of exchange rate changes on cash and cash
         equivalents                                                       2
        ---------------------------------------------------------------------

        Net decrease in cash and cash equivalents during
         the period                                                      (11)
        Cash and cash equivalents, beginning of period                   106
        ---------------------------------------------------------------------
        Cash and cash equivalents, end of period                  $       95
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------


    5.  ACQUISITIONS

        (a) On January 2, 2004, Tesma International Inc. ("Tesma"), completed
            the acquisition of Davis Industries Inc. ("Davis"). Davis
            produces stamped powertrain components and assemblies at three
            manufacturing facilities in the United States. For the fiscal
            year ended September 30, 2003, Davis reported sales of
            approximately $130 million.

            The total consideration for the acquisition of Davis amounted to
            $75 million, consisting of $45 million paid in cash, which was
            held in escrow and included in other assets at December 31, 2003
            and subsequently released, and $30 million of assumed debt.
            Goodwill recorded on the acquisition amounted to $42 million.
            Tesma has recorded the assets, liabilities, revenue, expenses and
            cash flows of Davis in its consolidated results commencing on
            January 3, 2004.

        (b) On January 4, 2004, the Company acquired a 51% interest in
            I&T Group which is located in Siegendorf, Austria. The I&T Group
            produces flat flexible cables for the automotive industry. The
            total consideration for the acquisition amounted to approximately
            $43 million, consisting of $10 million paid in cash and
            $33 million of assumed debt. The Company has recorded 100% of the
            assets, liabilities, revenue, expenses and cash flows of
            I&T Group in its consolidated results commencing on
            January 5, 2004.

        The purchase price allocations for these acquisitions are preliminary
        and adjustments to the purchase price and related preliminary
        allocations may occur as a result of obtaining more information
        regarding asset valuations, liabilities assumed, purchase price
        adjustments pursuant to the purchase agreements, and revisions of
        preliminary estimates of fair value made at the date of purchase.


    6.  CAPITAL STOCK

        The following table presents the maximum number of Class A
        Subordinate Voting and Class B Shares that would be outstanding if
        all dilutive instruments outstanding at April 30, 2004 were
        exercised:

        Class A Subordinate Voting and Class B Shares
         outstanding at April 30, 2004                                  96.7
        Stock options                                                    2.8
        ---------------------------------------------------------------------
                                                                        99.5
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

        The above amounts exclude Class A Subordinate Voting Shares issuable,
        at the Company's option, to settle the 7.08% subordinated debentures
        and Preferred Securities on redemption or maturity.


    7.  STOCK BASED COMPENSATION

        (a) The following is a continuity schedule of options outstanding
            (number of options in the table below are expressed in whole
            numbers and have not been rounded to the nearest million):

                               2004                          2003
                  ----------------------------- -----------------------------
                  Options outstanding           Options outstanding
                  -------------------           -------------------
                                       Options                       Options
                            Exercise     exer-            Exercise     exer-
                    Options  price(i)  cisable   Options  price(i)   cisable
                        No.     Cdn$       No.       No.     Cdn$        No.
        ---------------------------------------------------------------------

        Beginning
         of year  3,046,450   82.31  1,991,950  3,377,875   89.19  1,958,375
        Granted      15,000  105.19          -    320,000   93.19          -
        Exercised  (117,600)  62.63   (117,600)   (36,850)  66.55    (36,850)
        Vested            -       -     46,625          -       -     65,000
        Cancelled    (3,000)  97.47     (3,000)         -       -          -
        ---------------------------------------------------------------------
        March 31  2,940,850   83.20  1,917,975  3,661,025   89.77  1,986,525
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

        (i) The exercise price noted above, represents the weighted average
            exercise price in Canadian dollars.

        (b) As a result of the dilutive impact of the MID distribution
            (note 3), all issued but unexercised options for Magna Class A
            Subordinate Voting Shares were adjusted down by Cdn$11.98 in
            accordance with the adjustment mechanism prescribed by the
            Toronto Stock Exchange. The adjustment mechanism is intended to
            ensure that the difference between the fair market value of a
            Class A Subordinate Voting Share and the exercise price of the
            stock options after the MID distribution is not greater than the
            difference between the fair market value of a Class A Subordinate
            Voting Share and the exercise price of the stock options
            immediately before the MID distribution.

        (c) Prior to 2003, the Company did not recognize compensation expense
            for its outstanding fixed price stock options. Effective
            January 1, 2003, the Company adopted the fair value recognition
            provisions of CICA 3870 for all stock options granted after
            January 1, 2003. The fair value of stock options is estimated at
            the date of grant or modification using the Black-Scholes option
            pricing model with the following weighted average assumptions:

                                                          2004          2003
            -----------------------------------------------------------------

            Risk free interest rate                      3.29%         4.25%
            Expected dividend yield                      1.63%         2.12%
            Expected volatility                            32%           28%
            Expected time until exercise               4 years       4 years
            -----------------------------------------------------------------

            The weighted average fair value of options granted or modified
            during the three-month period ended March 31, 2004 was Cdn$29.64
            (2003 - $21.78).

            For the three-month period ended March 31, 2004 the compensation
            expense recognized in selling, general and administration expense
            related to the Company's outstanding fixed price stock options
            amounted to approximately $13 million (2003 - $1 million). During
            the three-month period ended March 31, 2004, option agreements
            with certain former employees of the Company were modified, which
            resulted in a one-time charge to compensation expense of
            $12 million. This charge represents the remaining measured but
            unrecognized compensation expense related to the options granted
            during 2003, and the fair value at the date of modification of
            all of the options that were granted prior to January 1, 2003.

            If the fair value recognition provisions would have been adopted
            effective January 1, 2002 for all stock options granted after
            January 1, 2002, the Company's pro forma net income and pro forma
            basic and diluted earnings per Class A Subordinate Voting or
            Class B Share for the three-month periods ended March 31, 2004
            and 2003 would have been as follows:

                                                        Three months ended
                                                      March 31,     March 31,
                                                          2004          2003
            -----------------------------------------------------------------

            Net income as reported                  $      184    $      161
            Pro forma adjustment for the fair
             value of stock options granted
             prior to January 1, 2003                        3            (1)
            -----------------------------------------------------------------
            Pro forma net income                    $      187    $      160
            -----------------------------------------------------------------
            -----------------------------------------------------------------

            Pro forma earnings per Class A
             Subordinate Voting or Class B Share
              Basic                                 $     1.88    $     1.62
              Diluted                               $     1.87    $     1.62
            -----------------------------------------------------------------
            -----------------------------------------------------------------

        (d) Contributed surplus consists of accumulated stock option
            compensation expense less the fair value of options at the grant
            date that have been exercised and reclassified to share capital.
            The following is a continuity schedule of contributed surplus:

                                                          2004          2003
            -----------------------------------------------------------------

            Balance, beginning of period            $        3    $        -
            Stock option compensation expense               12             1
            Exercise of options                             (1)            -
            -----------------------------------------------------------------
            Balance, end of period                  $       14    $        1
            -----------------------------------------------------------------
            -----------------------------------------------------------------


    8.  SEGMENTED INFORMATION

                            Three months ended         Three months ended
                              March 31, 2004             March 31, 2003
                        -------------------------- --------------------------
                                            Fixed                      Fixed
                          Total            assets,   Total            assets,
                          sales  EBIT(i)      net    sales   EBIT(i)     net
        ---------------------------------------------------------------------

        Public Operations
          Decoma
           International
           Inc.         $   720  $   49  $    683  $   577  $    50  $   553
          Intier
           Automotive
           Inc.           1,393      52       541    1,032       31      476
          Tesma
           International
           Inc.             362      39       333      269       25      270

         Wholly Owned
          Operations
           Magna Steyr    1,385      39       519      527        5      456
           Other
            Automotive
            Operations    1,289     125     1,148    1,126      115      983

         Corporate
          and other         (46)     24        79      (35)      33    1,039
        ---------------------------------------------------------------------
         Total
          reportable
          segments      $ 5,103  $  328   $ 3,303  $ 3,496  $   259  $ 3,777
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

        (i) EBIT represents operating income before interest income or
            expense.


    9.  COMPARATIVE FIGURES

        Certain of the comparative figures have been reclassified to conform
        to the current period's method of presentation.



    MAGNA INTERNATIONAL INC.

    Management's Discussion and Analysis of Results of Operations and
    Financial Position
    May 6, 2004

    All amounts in this Management's Discussion and Analysis of Results of
Operations and Financial Position ("MD&A") are in U.S. dollars and all
Tabular amounts are in millions of U.S. dollars, except per share figures and
content per vehicle, which are in U.S. dollars, unless otherwise noted. When
we use the terms "we", "us", "our", the "Company" or "Magna", we are
 referring to Magna International Inc. and its subsidiaries and jointly
controlled entities, unless the context otherwise requires.
    This MD&A should be read in conjunction with the unaudited interim
consolidated financial statements for the three months ended March 31, 2004,
included elsewhere herein, and the audited consolidated financial statements
and MD&A for the year ended December 31, 2003, included in our 2003 Annual
Report to Shareholders. The unaudited interim consolidated financial
statements for the three months ended March 31, 2004 and the audited
consolidated financial statements for the year ended December 31, 2003 are
both prepared in accordance with Canadian generally accepted accounting
principles.

    OVERVIEW
    -------------------------------------------------------------------------

    We are the most diversified automotive supplier in the world. We design,
develop and manufacture automotive systems, assemblies, modules and
components, and engineer and assemble complete vehicles, primarily for sale
to original equipment manufacturers ("OEMs") of cars and light trucks in
North America, Europe, South America and Asia. We supply our products and
services through the following global automotive systems groups:

    Public Subsidiaries

    -  Decoma International Inc. ("Decoma")

         -  exterior components and systems which include fascias (bumpers),
            front and rear end modules, plastic body panels, roof modules,
            exterior trim components, sealing and greenhouse systems and
            lighting components

    -  Intier Automotive Inc. ("Intier")

         -  interior and closure components, systems and modules

    -  Tesma International Inc. ("Tesma")

         -  powertrain (engine, transmission, and fuel) components, modules
            and systems

    Wholly Owned Subsidiaries

    -  Magna Steyr

         -  Magna Steyr - complete vehicle engineering and assembly of low
            volume derivative, niche and other vehicles
         -  Magna Drivetrain - complete drivetrain technologies

    -  Other Automotive Operations

         -  Cosma International - stamped, hydroformed, roll-formed and
            welded metal body systems, components, assemblies and modules
         -  Magna Donnelly - exterior and interior mirror, interior lighting
            and engineered glass systems, including advanced electronics

    HIGHLIGHTS
    -------------------------------------------------------------------------

    During the first quarter ended March 31, 2004, we posted record financial
    results, including:

    -  Sales of $5.1 billion;

    -  Operating income of $329 million;

    -  Net income of $184 million; and

    -  Diluted earnings per share of $1.84.

    Other significant developments in the first quarter of 2004 included the
    following:

    -  As previously reported, on January 2, 2004, Tesma completed the
       acquisition of Davis Industries Inc. ("Davis"). This acquisition
       increases Tesma's presence in the United States with a product base
       that is complementary to Tesma's existing transmission product
       offerings and other stamped components. The total consideration paid
       for the acquisition of Davis amounted to approximately $75 million,
       consisting of $45 million paid in cash, and $30 million of assumed
       debt.

    -  Our Board of Directors raised our quarterly dividend to $0.38 per
       share, representing a 12% increase over the prior level. This dividend
       increase underscores our strong cash flow and the Board's confidence
       in our future.

    -  In association with the award of the transfer case on General Motors'
       next-generation full-size pick ups and sport utilities program, we
       recently established our seventh group, Magna Drivetrain. Magna
       Drivetrain provides highly engineered drivetrain products (transfer
       cases, balance shafts and other drivetrain components) to customers in
       North America and Europe and combines our former Magna Steyr
       Powertrain business with the new transfer case on General Motors'
       next-generation full-size pick-ups and sport utilities program.


    INDUSTRY TRENDS AND RISKS
    -------------------------------------------------------------------------

    A number of trends have had a significant impact on the global automotive
    industry in recent years, including:

    -  increased pressure by automobile manufacturers on automotive
       components suppliers to reduce their prices and bear additional costs;

    -  globalization and consolidation of the automotive industry, including
       both automobile manufacturers and automotive components suppliers;

    -  the evolving role of independent automotive components suppliers and
       their progression up the "value chain";

    -  increased out-sourcing and modularization of vehicle production;

    -  increased prevalence of lower volume "niche" vehicles built off high
       volume global vehicle platforms; and

    -  growth of foreign-based automobile manufacturers in North America and
       Europe.

    Refer to the MD&A included in our December 31, 2003 Annual Report for a
discussion of the more significant risks and trends relating to the
automotive industry that could affect our ability to achieve our desired
results.


    RESULTS OF OPERATIONS
    -------------------------------------------------------------------------

    Accounting Changes

    Stock Based Compensation

    In 2003, the Canadian Institute of Chartered Accountants ("CICA") amended
Handbook Section 3870 "Stock-Based Compensation and Other Stock-Based
Payments" ("CICA 3870"). The revised standard requires the use of the fair
value method for all stock-based compensation paid to employees. As permitted
by CICA 3870, and described more fully in Note 23 of our audited consolidated
financial statements for the year ended December 31, 2003, we adopted these
new recommendations prospectively effective January 1, 2003. As a result, our
financial statements for the three months ended March 31, 2003 have been
restated to include a $1 million increase in selling, general and
administration expense and a $1 million increase in contributed surplus. For
awards granted prior to January 1, 2003, we continue to use the intrinsic
value method.

    Asset Retirement Obligation

    In 2003, the CICA issued Handbook Section 3110, "Asset Retirement
Obligations", which establishes standards for the recognition, measurement
and disclosure of asset retirement obligations and the related asset
retirement costs. This standard requires us to estimate and accrue for the
present value of our obligations to restore leased premises at the end of the
lease. At lease inception, the present value of this obligation is recognized
in other long-term liabilities with a corresponding amount recognized in
fixed assets.
The fixed asset amount is amortized, and the liability amount is accreted,
over the period from lease inception to the time we expect to vacate the
premises resulting in both depreciation and additional rent in cost of sales
in the consolidated statements of income.
    We adopted these new recommendations effective January 1, 2004 on a
retroactive basis. The retroactive changes to the consolidated balance sheet
as at December 31, 2003 were increases in fixed assets, future tax assets and
other long-term liabilities of $13 million, $2 million and $23 million,
respectively, and decreases in minority interest, retained earnings and
currency translation adjustment of $1 million, $6 million and $1 million,
respectively. The impact of this accounting policy change on reported net
income for the three months ended March 31, 2004 and 2003 was not material.

    Revenue Recognition

    In 2003, the CICA issued Emerging Issues Committee Abstract No. 142,
"Revenue Arrangements with Multiple Deliverable" ("EIC-142"), which provides
guidance on accounting by a vendor for arrangements involving multiple
deliverables. It specifically addresses how a vendor determines whether an
arrangement involving multiple deliverables contains more than one unit of
accounting and also addresses how consideration should be measured and
allocated to the separate units of accounting in the arrangement. Separately
priced tooling and engineering services are accounted for as a separate
revenue element where the tooling and engineering has value to the customer
on a standalone basis and there is objective and reliable evidence of the
fair value of the subsequent parts production or vehicle assembly. The
adoption of these recommendations did not have an effect on our revenues or
net income for the three months ended March 31, 2004.

    Comparative Period Amounts

    European Production Sales

    European production sales, as reported by us, have historically included
sales related to the complete vehicle assembly business carried out by our
Magna Steyr group (see "Magna Steyr" discussion in "SEGMENTS" below).
Effective with the first quarter of 2004, European production sales and
complete vehicle assembly sales are presented separately. The comparative
period European production sales and complete vehicle assembly sales have
been restated to conform to the current period's presentation. We do not have
any complete vehicle assembly sales in North America. European average
content per vehicle continues to include both production sales and complete
vehicle assembly sales.

    MID Transaction

    As reported previously, on September 2, 2003, we distributed 100% of the
outstanding shares of MI Developments Inc. ("MID") to our shareholders (the
"MID Distribution"). MID owns substantially all of what was previously our
automotive real estate and our former controlling interest in Magna
Entertainment Corp. ("MEC"). As a result of the MID distribution, we no
Longer have any ownership interest in MID or MEC. In accordance with the
recommendations of the CICA, our results for all periods prior to August 29,
2003 have been restated to reflect the financial results of MEC as
discontinued operations. However, because we continue to occupy the
automotive real estate under long-term leases with MID, the operations of
MID's real estate business are disclosed as continuing operations in our
consolidated financial statements until August 29, 2003.

    Average Foreign Exchange

                                                For the three months
                                                   ended March 31,
                                                ---------------------
                                                    2004      2003    Change
    -------------------------------------------------------------------------

    1 Canadian dollar equals U.S. dollars          0.758     0.662    +  15%
    1 Euro equals U.S. dollars                     1.248     1.073    +  16%
    1 British pound equals U.S. dollars            1.840     1.602    +  15%
    -------------------------------------------------------------------------

    The preceding table reflects the average foreign exchange rates between
the most common currencies in which we conduct business and our U.S. dollar
reporting currency. The significant changes in these foreign exchange rates
impacted the reported U.S. dollar amounts of our sales, expenses and income.
    The results of operations whose functional currency is not the
U.S. dollar are translated into U.S. dollars using the average exchange rates
in the table above for the relevant period. Throughout this MD&A, reference
is made to the impact of translation of these operations on reported U.S.
dollar amounts where relevant.
    Our results can also be affected by the impact of movements in exchange
rates on foreign currency transactions (such as raw material purchases
denominated in foreign currencies). However, as a result of historical
hedging programs employed by us, foreign currency transactions in the current
period have not been fully impacted by the recent movements in exchange
rates. We record foreign currency transactions at the hedged rate.
    Finally, holding gains and losses on foreign currency denominated
monetary items, which are recorded in selling, general and administrative
expenses, impact reported results. This MD&A makes reference to the impact of
these amounts where relevant.

    Sales
                                                For the three months
                                                   ended March 31,
                                                ---------------------
                                                    2004      2003    Change
    -------------------------------------------------------------------------

    Vehicle Production Volumes (millions of units)
      North America                                4.134     4.152        -%
      Europe                                       4.342     4.279    +   1%
    -------------------------------------------------------------------------

    Average Dollar Content Per Vehicle
      North America                             $    606  $    480    +  26%
      Europe                                    $    512  $    276    +  86%
    -------------------------------------------------------------------------

    Sales
      North American Production                 $  2,504  $  1,994    +  26%
      European Production                          1,198       908    +  32%
      European Complete Vehicle Assembly           1,023       274    + 273%
      Tooling, Engineering and Other                 378       320    +  18%
    -------------------------------------------------------------------------
      Total Sales                               $  5,103  $  3,496    +  46%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Total sales reached a record level in the first quarter of 2004,
increasing by 46% or $1.6 billion to $5.1 billion compared to $3.5 billion
for the first quarter of 2003.

    North American Production Sales

    North American production sales increased 26% or $510 million to
$2.5 billion for the first quarter of 2004 compared to $2.0 billion for the
first quarter of 2003. This increase in production sales reflects a 26%
increase in our North American average dollar content per vehicle from the
first quarter of 2003. North American vehicle production volumes were
relatively unchanged from the first quarter of 2003 to the first quarter of
2004.
    In North America, our average dollar content per vehicle grew by 26% or
$126 to $606 for the first quarter of 2004 compared to $480 for the first
quarter of 2003. The increase relates primarily to increased content and/or
production on several programs, related primarily to the launch of new
programs during, or subsequent to the three months ended March 31, 2003, an
increase in reported U.S. dollar sales due to the strengthening of the
Canadian dollar against the U.S. dollar and the acquisition of Davis on
January 2, 2004, partially offset by the impact of lower volumes on certain
high content programs and customer price concessions.
    New programs launched during, or subsequent to the three months ended
March 31, 2003, include the Ford Freestar and Mercury Monterey, the Chevrolet
Colorado, the GMC Canyon, the Chrysler Pacifica, the Cadillac SRX, the
Chevrolet Malibu, the Dodge Durango, the Ford F-150 and the Chevrolet
Equinox.
Supplementing the new program launches was higher production on several
programs, including the BMW X5, the Dodge Ram pick-up, and the Ford Crown
Victoria and Mercury Grand Marquis. These increases were partially offset by
the impact of lower content and/or production on certain high content
programs, including the Ford Explorer and Mercury Mountaineer, the General
Motors GMT800 program, the Chrysler Minivan program and the BMW Z4 program.
Also negatively impacting our average content per vehicle was the end of
production on the DaimlerChrysler LH program and start-up on the new
DaimlerChrysler LX program.

    European Production and Complete Vehicle Assembly Sales

    European Production and Complete Vehicle Assembly sales increased 88% or
$1.0 billion to $2.2 billion for the first quarter of 2004 compared to
$1.2 billion for the first quarter of 2003. This increase in sales reflects
an 86% increase in our European average dollar content per vehicle combined
with a 1% increase in European vehicle production volumes over the first
quarter of 2003.
    In Europe, our average dollar content per vehicle grew by 86% or $236 to
$512 for the first quarter of 2004 compared to $276 for the first quarter of
2003. The increase in content is primarily a result of a substantial increase
in content and/or production related to complete vehicle assembly, higher
reported U.S. dollar sales due to the strengthening of the euro and British
pound, each against the U.S. dollar, and content growth on our parts
production programs, partially offset by increased customer price
concessions.
    The increase in content and/or production related to complete vehicle
assembly reflects the launch at Magna Steyr during 2003 of the BMW X3 and the
Saab 9(3) Convertible programs as well as an increase in production on the
Mercedes E-Class, offset in part by a reduction in production for the
Mercedes G-Class.
    The increased content on our production programs is the result of
programs launched during or subsequent to the first quarter of 2003,
including the BMW X3, a program in which we have production content in
addition to the assembly contract, and increased production on programs
including the Mercedes S, E and C Class sequencing business and the
Volkswagen Touareg program, partially offset by decreased production on
programs including the Mercedes S and CL Class programs, the Volkswagen Golf
program and the Opel Vivaro, Renault Trafic and Nissan Primastar programs.

    Tooling, Engineering and Other

    Tooling, engineering and other sales continued to be strong at
$378 million for the first quarter of 2004, representing an increase of 18%
or $58 million compared to $320 million for the first quarter of 2003. The
increase was primarily the result of an increase in reported U.S. dollar
sales due to the strengthening of the Canadian dollar, euro and British
pound, each against the U.S. dollar. The level of tooling, engineering and
other sales reflects our continued involvement in new production and assembly
programs.
    Refer also to the sales discussion in "SEGMENTS" below.

    Gross Margin

    Gross margin for the first quarter of 2004 increased by 23% or
$141 million over the first quarter of 2003 primarily as a result of the
increase in sales discussed above. Gross margin as a percentage of total
sales for the first quarter of 2004 was 14.7% compared to 17.4% for the first
quarter of 2003. As anticipated, gross margin as a percentage of sales was
negatively impacted by the launch of the Saab 9(3) Convertible and the BMW X3
at Magna Steyr, since the costs of these vehicle assembly contracts are
reflected on a full-cost basis in the selling price of the vehicle (see
"Magna Steyr" discussion in "SEGMENTS" below). Gross margin as a percent of
sales was also negatively impacted by the MID distribution, the strengthening
of the euro and British pound, each against the U.S. dollar, and customer
price concessions. The MID distribution effectively added additional lease
expense compared to the first quarter of 2003. The strengthening of the euro
against the U.S. dollar impacts our gross margin percentage since
proportionately more of our consolidated gross margin was earned in Europe
during the first quarter of 2004 compared to the first quarter of 2003 and
certain of our European operations earn margins that are currently lower than
our average margin. Partially offsetting these decreases was the positive
impact of the programs that launched during or subsequent to the first
quarter of 2003, improved performance and productivity at a number of
divisions, as well as the relatively unchanged level of tooling, engineering
and other sales that earn low or no margins.

    Depreciation and Amortization

    Depreciation and amortization costs increased 14% or $17 million to
$135 million for the first quarter of 2004 compared to $118 million for the
first quarter of 2003. The increase in depreciation and amortization in the
first quarter of 2004 was primarily due to an increase in reported U.S.
dollar depreciation and amortization due to the strengthening of the euro,
Canadian dollar and British pound, each against the U.S. dollar, and
increased assets employed in the business to support future growth, partially
offset by reduced building depreciation as a result of the MID distribution.

    Selling, General and Administrative ("SG&A")

    SG&A expenses as a percentage of sales decreased to 5.7% for the first
quarter of 2004 compared to 6.8% for the first quarter of 2003. SG&A expenses
decreased as a percentage of sales primarily as a result of the increase in
complete vehicle assembly sales, as previously discussed above. SG&A expenses
increased 24% or $57 million to $293 million for the first quarter of 2004,
compared to $236 million for the first quarter of 2003. The increase in SG&A
expenses for the first quarter of 2004 relates primarily to an increase in
reported U.S. dollar SG&A due to the strengthening of the euro, Canadian
dollar and British pound, each against the U.S. dollar, higher infrastructure
costs to support the increase in sales levels, including spending to support
launches and new programs and an increase in compensation expense related to
stock options. Specifically, during the first quarter of 2004, option
agreements with certain of our former employees were modified, which resulted
in a one-time charge to compensation expense of $12 million. This charge
represents the remaining measured but unrecognized compensation expense
related to the options granted during 2003, and the fair value at the date of
modification of all of the options that were granted prior to January 1,
2003.

    Operating Income

    Operating income was a record $329 million for the first quarter of 2004
compared to $262 million for the first quarter of 2003. The 26% growth in
operating income is the result of increases in gross margin of $141 million
and equity income of $2 million, partially offset by increases in SG&A
spending of $57 million and depreciation and amortization of $17 million and
a decrease in interest income of $2 million.

    Income Taxes

    Our effective income tax rate on operating income (excluding equity
income) increased to 37.5% for the first quarter of 2004 from 34.5% in the
first quarter of 2003. The increase in the effective tax rate is primarily
the result of the $12 million stock option expense, which has not been
tax-effected, an increase in income tax rates in Ontario, Canada, and a
change in the distribution of earnings, whereby more profits were earned in
higher taxed jurisdictions during the first quarter of 2004 than in the first
quarter of 2003.

    Minority Interest

                                         Net income              Minority
                                   for the three months       interest as at
                                       ended March 31,           March 31,
                                   --------------------  --------------------
                                       2004       2003       2004       2003
    -------------------------------------------------------------------------

    Decoma                          $    28    $    28        26%        31%
    Intier                          $    25    $    15        14%        11%
    Tesma                           $    25    $    16        56%        56%
    -------------------------------------------------------------------------

    Minority interest expense increased by $5 million or 26% to $24 million
for the first quarter of 2004 compared to $19 million for the first quarter
of 2003. The increase in minority interest expense is primarily due to higher
earnings at Tesma and Intier, coupled with a marginally higher minority
interest percentage at Intier offset by a lower minority interest percentage
at Decoma. The decrease in minority interest percentage at Decoma is the
result of our conversion of Decoma's series 1, 2 and 3 Convertible Preferred
Shares into 14,895,729 Decoma Class A Subordinate Voting Shares during the
year ended December 31, 2003. The increase in the minority interest
percentage for Intier is the result of the issuance of Intier Class A
Subordinate Voting Shares to the Intier employee deferred profit sharing plan
during the year ended December 31, 2003.

    Net Income From Continuing Operations

    For the first quarter of 2004, net income from continuing operations
increased $30 million or 19% to $184 million compared to $154 million for the
first quarter of 2003. The increase in net income from continuing operations
is a result of increases in gross margin of $141 million and equity income of
$2 million, partially offset by increases in SG&A spending of $57 million,
depreciation and amortization of $17 million, income taxes of $32 million and
minority interest of $5 million and a decrease in interest income of
$2 million.

    Net Income From Discontinued Operations - MEC

    For the three months ended March 31, 2003, net income from MEC was
$7 million, representing net income of $12 million partially offset by
minority interest expense of $5 million.

    Earnings per Share
                                                For the three months
                                                   ended March 31,
                                                ---------------------
                                                    2004      2003    Change
    -------------------------------------------------------------------------

    Earnings per Class A Subordinate Voting
     or Class B Share from continuing operations
      Basic                                     $   1.85  $   1.57    +  18%
      Diluted                                   $   1.84  $   1.57    +  17%
    -------------------------------------------------------------------------

    Earnings per Class A Subordinate Voting
     or Class B Share
      Basic                                     $   1.85  $   1.64    +  13%
      Diluted                                   $   1.84  $   1.64    +  12%
    -------------------------------------------------------------------------

    Average number of Class A Subordinate
     Voting and Class B Shares outstanding
     (millions)
      Basic                                         96.5      95.6    +   1%
      Diluted                                       97.1      95.8    +   1%
    -------------------------------------------------------------------------

    Diluted earnings per share from continuing operations for the first
quarter of 2004 were $1.84, an increase of 17% or $0.27 over the first
quarter of 2003 diluted earnings per share from continuing operations. The
increase in diluted earnings per share from continuing operations was a
result of the increase in net income from continuing operations, offset in
part by an increase in the weighted average number of diluted shares
outstanding during the quarter, substantially as a result of the increase in
the number of     "in-the-money" stock options and additional grants of stock
options to purchase Class A Subordinate Voting Shares.


    RETURN ON INVESTMENT
    ------------------------------------------------------------------------

    An important financial ratio that we use across all of our operating
units to measure return on investment is return on funds employed. Return on
funds employed from continuing operations ("ROFE") is defined as EBIT divided
by the average funds employed for the past period. EBIT is defined as
operating income as presented on our unaudited interim consolidated financial
statements before interest income or expense. Funds employed is defined as
long term assets, excluding future tax assets, plus non-cash operating assets
and liabilities. Non-cash operating assets and liabilities are defined as the
sum of accounts receivable, inventory and prepaid assets less the sum of
accounts payable, accrued salaries and wages, other accrued liabilities,
income taxes payable and deferred revenues.
    ROFE for the first quarter of 2004 was 27.1%, an increase from 18.3% for
the first quarter of 2003. The improvement in ROFE was primarily the result
of the $67 million increase in operating income for reasons described above,
combined with the positive impact of the MID distribution, since MID
generated ROFE below our consolidated average ROFE. As expected, the MID
distribution positively impacted our ROFE in the first quarter of 2004 and
this positive impact is expected to continue going forward.


    SEGMENTS
    ------------------------------------------------------------------------

    Refer to note 29 of our 2003 audited consolidated financial statements,
which explains the basis of segmentation. The segments below do not include
the results of our discontinued operations.

                                        For the three months ended March 31,
                                    -----------------------------------------
                                            2004                  2003
                                    ------------------- ---------------------
                                      Total                 Total
                                      sales     EBIT(i)     sales     EBIT(i)
    -------------------------------------------------------------------------

    Public Operations
      Decoma International Inc.     $   720    $    49    $   577    $    50
      Intier Automotive Inc.          1,393         52      1,032         31
      Tesma International Inc.          362         39        269         25

    Wholly Owned Operations
      Magna Steyr                     1,385         39        527          5
      Other Automotive Operations     1,289        125      1,126        115

    Corporate and Other(ii)             (46)        24        (35)        33
    -------------------------------------------------------------------------
                                    $ 5,103    $   328    $ 3,496    $   259
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    (i)  EBIT represents operating income as presented on our unaudited
         interim consolidated financial statements before interest income or
         expense.

    (ii) Included in Corporate and Other are intercompany fees, rent income
         in 2003 only, and intercompany sales eliminations.

    The sales amounts in the following discussion are before intersegment
eliminations.

    Decoma International Inc.

    Sales

    Decoma's sales increased by $143 million or 25% to $720 million for the
first quarter of 2004 from $577 million for the first quarter of 2003. The
increase in sales reflects increases in Decoma's North American and European
average dollar content per vehicle, and a 1% increase in European vehicle
production volumes.
    In North America, the increase in Decoma's dollar content per vehicle was
primarily attributable to an increase in Decoma's reported U.S. dollar sales
due to the strengthening of the Canadian dollar against the U.S. dollar and
the acquisition of certain of Federal Mogul Corporation's original equipment
automotive lighting operations in the second quarter of 2003. In addition,
Decoma's North American content per vehicle benefited from new takeover
business including the Chevrolet Monte Carlo and Impala programs, sales on
programs that launched during or subsequent to the first quarter of 2003,
including the Pontiac Grand Prix and Chevrolet Malibu programs, increased
content on the Ford Escape program and strong volumes on other high content
programs including the Cadillac CTS, the Dodge Ram pick-up and the Ford Crown
Victoria and Mercury Grand Marquis programs, partially offset by end of
production on the DaimlerChrysler LH program and start-up on the new
DaimlerChrysler LX program, end of production on the Ford Windstar program,
lower volumes on certain other long running high content programs including
the Ford Explorer program and continued customer price concessions.
    In Europe, Decoma's content per vehicle growth was attributable to the
ramp-up of sales as a result of programs launched during or subsequent to the
first quarter of 2003, including the Volkswagen Golf fascia and front end
module program, the Volkswagen Transit Van fascia and front end module
program and the DaimlerChrysler E-Class 4MATIC front end module program, and
to the increase in reported U.S. dollar sales due to the strengthening of the
euro and British pound, each against the U.S. dollar. The remaining increase
in content per vehicle was a result of increased sales associated with higher
volumes on the Jaguar X400 program, other new program launches, including
various Audi and Porsche programs, and strong Mini volumes, partially offset
by lower volumes on certain long running high content programs such as the
Ford Mondeo and various Rover programs.

    EBIT

    Decoma's EBIT decreased by 2% or $1 million to $49 million for the first
quarter of 2004 compared to EBIT of $50 million for the first quarter of
2003.
The increase in sales and improvements at certain facilities in Europe
generated additional EBIT when compared to the first quarter of 2003,
however, this increase was offset by the negative impact of customer price
concessions, operating inefficiencies at certain facilities, and increased
costs incurred in Europe to support European sales growth and new product
launches, including higher depreciation and amortization expenses and
selling, general and administrative spending.

    Intier Automotive Inc.

    Sales

    Intier's sales increased by $361 million or 35% to $1.4 billion for the
first quarter of 2004 compared to $1.0 billion for the first quarter of 2003.
The increase in sales reflects increases in Intier's average dollar content
per vehicle in both North America and Europe and a 1% increase in European
vehicle production volumes.
    In North America, the increase in Intier's average dollar content per
vehicle related primarily to new product launches during or subsequent to the
first quarter of 2003 and an increase in Intier's reported U.S. dollar sales
due to the strengthening of the Canadian dollar against the U.S. dollar,
partially offset by customer price concessions.
    The programs launched during or subsequent to the first quarter of 2003
include the complete seats, headliner and instrument panel for the Chevrolet
Equinox, the second and third row stow in floor seats for the DaimlerChrysler
minivan, the complete seats, overhead system and interior trim for the Ford
Freestar and Mercury Monterey, the integration of the complete interior,
excluding seats, for the Cadillac SRX, the seat mechanisms for the Honda
Accord and Honda Pilot, the door panels for the Chevrolet Malibu, and the
cockpit module and seat tracks for the Chevrolet Colorado and GMC Canyon.
    In Europe, the increase in Intier's average dollar content per vehicle
related primarily to increases in Intier's reported U.S. dollar sales due to
the strengthening of the euro and British pound, each against the U.S.
dollar, and new products launched during or subsequent to the first quarter
of 2003 including the complete interior, excluding seats, for the BMW 6
Series, the cargo management system and other interior trim for the BMW X3,
and the complete seats for the Volkswagen Caddy.

    EBIT

    Intier's EBIT increased $21 million or 68% to $52 million for the first
quarter of 2004 compared to $31 million for the first quarter of 2003. This
increase is primarily the result of gross margin earned as a result of
increased sales from new product launches and operating improvements at
certain facilities in Europe. This increase in EBIT was partially offset by
charges incurred with respect to the reorganization and closure of certain
facilities in Europe, operating inefficiencies at certain other divisions in
both North America and Europe, increased depreciation and amortization
expenses resulting from the continued investment in capital to support new
production programs and facilities, increased SG&A spending and affiliation
fees associated with the increase in sales, increased commodity prices,
customer price concessions, and a reduction of reported U.S. dollar EBIT as a
result of the strengthening of the euro and British pound, each against the
U.S. dollar, which had the effect of magnifying the reported U.S. dollar
losses at certain European facilities.

    Tesma International Inc.

    Sales

    Tesma's sales increased by $93 million or 35% to $362 million for the
first quarter of 2004. The increase in sales reflects an increase in Tesma's
average dollar content per vehicle in both North America and Europe and a 1%
increase in European vehicle production volumes. Also contributing to the
increase in Tesma's sales was an increase in tooling and other sales,
primarily in North America in preparation for upcoming launches, which
exceeded the tooling revenues recorded primarily in Europe in the first
quarter of 2003.
    In North America, Tesma's content per vehicle increased largely due to
the acquisition of Davis in January 2004. The remaining increase in content
per vehicle was the result of the strengthening of the Canadian dollar
against the U.S. dollar, new program launches and program volumes increases,
partially offset by lower vehicle production volumes on certain high content
General Motors programs, and continued customer price concessions. The new
program launches and program volume increases include volume increases on the
integrated front engine covers for General Motors' high Feature V6 engine,
increased volumes of tensioner assemblies supplied for various truck programs
for Ford and General Motors, the continued ramp-up in volumes of balance
shaft assemblies for General Motors' Line 4 and Line 5 engine programs, new
launches and volume increases for filler pipe assemblies for
DaimlerChrysler's Durango, Sebring, Stratus and 300 programs, recent launches
of water pumps and oil filter assemblies for General Motors' Premium V8 and
Line 4 engine programs, respectively, and the commencement of production of
stainless steel fuel tank assemblies supplied for the DaimlerChrysler JR
platform.
    In Europe, the increase in content per vehicle was a result of an
increase in reported U.S. dollar sales due to the strengthening of the euro
against the U.S. dollar, volume increases for fuel filler pipe assembly for
Ford's high volume C1 (Focus) program launched in the third quarter of 2003,
the continued ramp-up in volumes for the stainless steel fuel tank assemblies
for the Volkswagen PQ34 program, and an increased supply of service parts.

    EBIT

    Tesma's EBIT increased by $14 million or 56%, to $39 million for the
first quarter of 2004. The increase in EBIT is the result of gross margin
generated on increased sales including the acquisition of Davis, and improved
capacity utilization, labour efficiencies and production efficiencies at
certain facilities. These increases were partially offset by continued
customer price concessions, increased costs incurred to support new business
at certain facilities, higher depreciation charges and SG&A spending as Tesma
continues to grow and invest to increase their global presence, and increased
affiliation fees.

    Magna Steyr

    Sales

    Magna Steyr's sales increased by 163% or $858 million to $1.4 billion for
the first quarter of 2004 compared to $527 million for the first quarter of
2003. The increase in sales was due to an increase in complete vehicle
assembly sales, including the launches of the BMW X3 and the Saab 9(3)
Convertible programs subsequent to the first quarter of 2003, an increase in
reported U.S. dollar sales related to the strengthening of the euro against
the U.S. dollar, and an increase in sales at Magna Drivetrain.
    Magna Steyr's vehicle assembly volumes for the first quarter of 2004 and
the first quarter of 2003 were as follows:

                                                For the three months
                                                   ended March 31,
                                                ---------------------
    Vehicle Assembly Volumes (Units)                2004      2003    Change
    -------------------------------------------------------------------------

    Full - Costed                                 36,327     7,201    + 404%
    Value - Added                                 14,782    21,284    -  31%
    -------------------------------------------------------------------------
                                                  51,109    28,485    +  79%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    During the first quarter of 2003, Magna Steyr assembled the Mercedes
E-Class 4X2, the Mercedes G-Class, the Chrysler Voyager and the Chrysler Jeep
Grand Cherokee. During the first quarter of 2004, Magna Steyr also assembled
the BMW X3, the Saab 9(3) Convertible and the Mercedes E-Class 4MATIC, but no
longer assembled the Mercedes E-Class 4x2.
    The terms of Magna Steyr's various vehicle assembly contracts differ with
respect to the ownership of components and supplies related to the assembly
process and the method of determining the selling price to the OEM customer.
Under certain contracts, Magna Steyr is acting as principal, and purchased
components and systems in assembled vehicles are included in its inventory
and cost of sales. These costs are reflected on a full-cost basis in the
selling price of the final assembled vehicle to the OEM customer. Contracts
to assemble Mercedes E-Class and G-Class, Saab 9(3) Convertible and BMW X3
vehicles are accounted for in this manner. Other contracts provide that third
party components and systems are held on consignment by Magna Steyr, and the
selling price to the OEM customer reflects a value-added assembly fee only.
Contracts to assemble the Chrysler Voyager and Jeep Grand Cherokee are
accounted for in this manner.
    Production levels of the various vehicles assembled by Magna Steyr have
an impact on the level of its sales and profitability. In addition, the
relative proportion of programs accounted for on a full-cost basis and
programs accounted for on a value-added basis also impact Magna Steyr's
levels of sales and operating margin percentage, but may not necessarily
affect its overall level of profitability. Assuming no change in total
vehicles assembled, a relative increase in the assembly of vehicles accounted
for on a full-cost basis has the effect of increasing the level of total
sales and, because purchased components are included in cost of sales,
profitability as a percentage of total sales is reduced. Conversely, a
relative increase in the assembly of vehicles accounted for on a value-added
basis has the effect of reducing the level of total sales and increasing
profitability as a percentage of total sales.
    The increase in complete vehicle assembly sales reflects the launch at
Magna Steyr subsequent to the first quarter of 2003 of the BMW X3 and the
Saab 9(3) Convertible programs as well as an increase in production on the
Mercedes E-Class. Partially offsetting these increases was reduced production
for the Mercedes G-Class and the 31% decrease in volumes of vehicles
accounted for on a value-added basis.
    Sales at Magna Drivetrain increased as a result of an increase in
reported U.S. dollar sales due to the strengthening of the euro against the
U.S. dollar and an increase in sales at our drivetrain facility in Europe as
a result of the launch of the BMW X3 and X5 programs.

    EBIT

    Magna Steyr's EBIT increased by $34 million to $39 million for the first
quarter of 2004. The increase in EBIT is primarily the result of the launch
of the BMW X3 and Saab 9(3) Convertible assembly programs, improved results
for the Mercedes E-Class assembly and Mercedes S, E and C Class sequencing
programs that were both incurring launch costs and other inefficiencies in
the first quarter of 2003, and an increase in reported U.S. dollar EBIT as a
result of the strengthening of the euro against the U.S. dollar. These
increases in EBIT were partially offset by planning and engineering costs
associated with the newly awarded transfer case on General Motors'
next-generation full-size pick-ups and sport utilities program.

    Other Automotive Operations

    Sales

    Our Other Automotive Operations' sales increased by 14% or $163 million
to $1.3 billion for the first quarter of 2004. The increase in sales reflects
increases in the segment's North American and European average content per
vehicle, a 1% increase in European vehicle production volumes and an increase
in tooling and other sales primarily related to tooling for the new Ford
Explorer program.
    In North America, the increase in content is primarily the result of an
increase in reported U.S. dollar sales due to the strengthening of the
Canadian dollar against the U.S. dollar, the launch of new programs during or
subsequent to the first quarter of 2003, including the Dodge Durango program,
the Ford Explorer, F-150 and Freestar programs, and the DaimlerChrysler LX
program, and takeover stamping business for the Dodge Durango program,
partially offset by continued customer price concessions.
    In Europe, the increase in average content per vehicle is primarily the
result of an increase in reported U.S. dollar sales due to the strengthening
of the euro against the U.S. dollar and the launch of the rear cradle
assembly for the Volvo XC90 and launch of the Volkswagen Golf.

    EBIT

    Our Other Automotive Operations' EBIT increased 9% or $10 million to
$125 million for the first quarter of 2004 compared to $115 million for the
first quarter of 2003. The increase in EBIT is primarily the result of gross
margin generated on the increase in sales, as well as operational
improvements at Magna Donnelly. These increases were partially offset by
customer price concessions, higher SG&A spending and higher depreciation and
amortization expenses incurred to support the increase in sales, and higher
reported U.S. dollar depreciation and amortization expense and SG&A spending
due to the strengthening of the Canadian dollar against the U.S. dollar.

    Corporate and Other

    Corporate and Other EBIT decreased 27% or $9 million to $24 million for
the first quarter of 2004 compared to $33 million for the first quarter of
2003. The decrease in EBIT is primarily a result of the $12 million of
additional stock compensation expense and the impact of the MID distribution.
Specifically, during the first quarter of 2004, option agreements with
certain of our former employees were modified, which resulted in a one-time
charge to compensation expense of $12 million. This charge represents the
remaining measured but unrecognized compensation expense related to the
options granted during 2003, and the fair value at the date of modification
of all of the options that were granted prior to January 1, 2003. The MID
distribution had the effect of reducing intercompany rent income. These
reductions in EBIT were partially offset by additional affiliation fee income
earned as a result of higher sales.


    FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
    -------------------------------------------------------------------------

    Cash Flow from Operations

                                                For the three months
                                                   ended March 31,
                                                ---------------------
                                                    2004      2003    Change
    -------------------------------------------------------------------------

    Net income from continuing operations       $    184  $    154
    Items not involving current cash flows           215       154
    -------------------------------------------------------------------------
                                                $    399  $    308  $     91
    Changes in non-cash operating assets
     and liabilities                                 202        43
    -------------------------------------------------------------------------
    Cash provided from operating activities     $    601  $    351  $    250
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Overall, cash provided from operating activities for the first quarter of
2004 was $601 million as compared to cash provided from operating activities
of $351 million for the first quarter of 2003, an increase of $250 million.
    Cash flow from operations before changes in non-cash operating assets and
liabilities increased by $91 million to $399 million for the first quarter of
2004. Cash flow from operations increased as a result of the $30 million
increase in net income from continuing operations as described above and a
$61 million increase in items not involving current cash flows, including a
$22 million increase in other non-cash charges which includes the $12 million
increase in stock compensation expense (see "Selling, General and
Administrative" above), a $19 million increase in future taxes, a $17 million
increase in depreciation and amortization, and a $5 million increase in
minority interest, offset in part by a $2 million increase in equity income.
    Cash generated by non-cash operating assets and liabilities for the first
quarter of 2004 amounted to $202 million, which was primarily attributable to
a $462 million increase in accounts payable and accrued liabilities, offset
in part by a $191 million increase in accounts receivable and an $86 million
increase in inventory, all of which can be attributed to the increase in
sales during the first quarter of 2004, including the launch of the BMW X3
and Saab 9(3) Convertible programs. Also contributing to the cash generated
by non-cash working capital was an $11 million decrease in prepaid expenses
and other and an $8 million increase in income taxes payable, and a $2
million decrease in deferred revenues.

    Capital and Investment Spending

                                                For the three months
                                                   ended March 31,
                                                ---------------------
                                                    2004      2003    Change
    -------------------------------------------------------------------------

    Fixed assets, investments and other
     additions                                  $   (182) $   (150)
    Proceeds from disposals                           18         6
    -------------------------------------------------------------------------
    Cash used in investing activities           $   (164) $   (144) $    (20)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    We invested $148 million in fixed assets in the first quarter of 2004.
While moderate investments were made for productivity improvements and to
refurbish or replace assets consumed in the normal course, most of the
investment was for component manufacturing, painting, and assembly equipment
and facilities for programs launching in 2004 and future years including the
following major programs: the Chrysler LX, the Chrysler RS, the Chevrolet
Equinox, the Cadillac STS, the Ford Freestar, and the Mercedes Benz M-Class
in North America; and the Audi A6, the Mini Convertible, the Mercedes Benz
A-Class, the BMW 3 Series, and the Volkswagen Toledo in Europe.
    We invested $23 million in other assets in the first quarter of 2004
primarily representing long-term tooling receivables for a number of tooling
programs for BMW and DaimlerChrysler.
    For the first quarter of 2004, proceeds from disposals were $18 million,
reflecting proceeds from normal course fixed and other asset disposals and
proceeds received on maturity of commercial investments held to partially
fund certain Austrian lump sum termination and long service payment
arrangements.

    Financing

                                                For the three months
                                                   ended March 31,
                                                ---------------------
    Vehicle Assembly Volumes (Units)                2004      2003    Change
    -------------------------------------------------------------------------

    Net issues (repayments) of debt             $    (25) $     28
    Issues of subordinated debentures
     by subsidiary                                     -        66
    Repayments of debentures' interest
     obligations                                      (1)       (1)
    Preferred Securities distributions                (7)       (6)
    Issues of Class A Subordinate Voting Shares        6         2
    Issues of shares by subsidiaries                   6         -
    Dividends paid to minority interests              (4)       (3)
    Dividends                                        (33)      (32)
    -------------------------------------------------------------------------
    Cash provided from (used in) financing
     activities                                 $    (58) $     54  $   (112)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    During the first quarter of 2004, the net repayments of debt relate
primarily to Decoma, where cash provided from operating activities in excess
of investing activities was used to reduce bank indebtedness. During the
first quarter of 2003, the net issues of debt represented increases in bank
indebtedness in our Other Automotive operations in North America and in
Corporate Europe. In March 2003, Decoma issued Cdn$100 million of 6.5%
convertible unsecured subordinated debentures, which mature on March 31,
2010.
    During the first quarter of 2004, we issued $6 million in Class A
Subordinate Voting Shares on the exercise of stock options compared to
issuing $2 million in Class A Subordinate Voting Shares on the exercise of
stock options during the first quarter of 2003. The issue of shares by our
subsidiaries in 2004 is comprised primarily of the issue of $5 million of
Intier Class A Subordinate Voting Shares to the Intier employee deferred
profit sharing program and on the exercise of stock options, and the issue of
$1 million of Tesma Class A Subordinate Voting Shares on the exercise of
stock options.
    Dividends in the first quarter of 2004 were $33 million. The increase in
dividends paid in the first quarter of 2004 compared to the first quarter of
2003 is due to the increase in the aggregate number of Class A Subordinate
Voting and Class B Shares outstanding arising from the issue of Class A
Subordinate Voting Shares on the exercise of stock options subsequent to the
first quarter of 2003.

    Financing Resources

                                              As at          As at
                                           March 31,   December 31,
                                               2004           2003    Change
    -------------------------------------------------------------------------

    Liabilities
      Bank indebtedness                    $    303       $    298
      Long-term debt due within one year         36             35
      Long-term debt                            278            267
      Debentures' interest obligation            39             41
      Minority interest                         642            625
    -------------------------------------------------------------------------
                                              1,298          1,266
    Shareholders' equity                      5,012          4,923
    -------------------------------------------------------------------------
    Total capitalization                   $  6,310       $  6,189  $    121
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Total capitalization increased by 2% or $121 million in the first quarter
of 2004 to $6.3 billion. The increase in capitalization is a result of a
$32 million increase in liabilities and an $89 million increase in
shareholders' equity. The increase in liabilities is a result of an increase
in minority interest and increases in bank indebtedness and long-term debt as
a result of the acquisitions of Davis and the I&T Group during the three
months ended March 31, 2004, partially offset by the reduction of bank
indebtedness in Decoma (see "Financing" above). The increase in shareholders'
equity is a result of net income less dividends paid to Class A and Class B
shareholders and a decrease in the currency translation adjustment.
    During the first quarter of 2004, Magna's cash resources increased by
$347 million to $1.9 billion. In addition to its cash resources, Magna had
unused and available operating lines of credit of $309 million and term lines
of credit of $568 million. Of such amounts, our wholly owned operations had
cash of $1.3 billion and unused and available operating and term credit
facilities of $206 million at March 31, 2004, while our publicly traded
operations had cash of $527 million and unused and available operating and
term credit facilities of $671 million at March 31, 2004.
    In addition to the above unused and available financing resources, we
sponsor a tooling finance program for tooling suppliers to finance tooling
under construction for use in our operations. The maximum facility amount is
Cdn$100 million. As at March 31, 2004, Cdn$52 million had been advanced to
tooling suppliers under this facility. This amount is included in accounts
payable on our consolidated balance sheet.

    Maximum Number of Shares Issuable

    As of April 30, 2004, the following of our securities were issued and
outstanding:

    Class A Subordinate Voting Shares                             95,584,969
    Class B Shares(i)                                              1,096,509
    Stock options(ii)                                              2,784,726
    -------------------------------------------------------------------------

    (i)  Each Class B Share is convertible at the option of the holder, at
         any time, into one Class A Subordinate Voting Share.

    (ii) Options to purchase Class A Subordinate Voting Shares are
         exercisable by the holder in accordance with the vesting provisions
         and upon payment of the exercise price as may be determined from
         time to time and pursuant to our 1987 Incentive Stock Option Plan,
         as amended.

    Contractual Obligations and Off-Balance Sheet Financing

    There have been no material changes with respect to the contractual
obligations requiring annual payments during the three months ended March 31,
2004 that are outside the ordinary course of our business. Refer to our MD&A
included in our 2003 Annual Report.
    Long-term receivables in other assets are reflected net of outstanding
borrowings from a customer's finance subsidiary of $84 million since we have
the legal right of set-off of our long-term receivable against such
borrowings and we are settling the related amounts simultaneously.


    COMMITMENTS AND CONTINGENCIES
    -------------------------------------------------------------------------

    From time to time, we may be contingently liable for litigation and other
claims. Refer to note 28 of our 2003 audited consolidated financial
statements, which describe these claims.


    FORWARD LOOKING STATEMENTS
    -------------------------------------------------------------------------

    The previous discussion contains statements that, to the extent that they
are not recitations of historical fact, constitute "forward-looking
statements" within the meaning of applicable securities legislation.
Forward-looking statements may include financial and other projections, as
well as statements regarding our future plans, objectives or economic
performance, or the assumptions underlying any of the foregoing. We use words
such as "may", "would", "could", "will", "likely", "expect", "anticipate",
"believe", "intend", "plan", "forecast", "project", "estimate" and similar
expressions to identify forward-looking statements. Any such forward-looking
statements are based on assumptions and analyses made by us in light of our
experience and our perception of historical trends, current conditions and
expected future developments, as well as other factors we believe are
appropriate in the circumstances. However, whether actual results and
developments will conform with our expectations and predictions is subject to
a number of risks, assumptions and uncertainties. These risks, assumptions
and uncertainties include, but are not limited to: global economic conditions
causing decreases in production volumes; pressure from our customers to
reduce our prices; pressure from our customers to absorb certain fixed costs;
increased product warranty and recall costs and increased product liability
risks; the impact of financially distressed automotive components
sub-suppliers; our dependence on outsourcing by automobile manufacturers;
rapid technological and regulatory changes; increased crude oil and energy
prices; raw materials prices and availability; our dependence on certain
customers and vehicle programs; fluctuations in relative currency values;
unionization activity at our facilities; the threat of work stoppages and
other labour disputes; the highly competitive nature of the auto parts supply
market; program cancellations and delays in launching new programs; delays in
constructing new facilities; changes in governmental regulations; the impact
of environmental regulations; our relationship with our controlling
shareholder; and other factors set out in our Annual Information Form filed
with the Canadian Securities Commissions and our annual report on Form 40-F
filed with the Securities and Exchange Commission, as renewed from time to
time. In evaluating forward-looking statements, readers should specifically
consider the various factors which could cause actual events or results to
differ materially from those indicated by such forward-looking statements.
Unless otherwise required by applicable securities laws, we do not intend,
nor do we undertake any obligation, to update or revise any forward-looking
statements to reflect subsequent information, events or circumstances or
otherwise.

</TEXT>
</DOCUMENT>
