<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>2
<FILENAME>nov82005press.txt
<DESCRIPTION>PRESS RELEASE DATED NOVEMBER 8, 2005
<TEXT>
                                                   Exhibit 99
MAGNA LOGO                                Magna International Inc.
                                          337 Magna Drive
                                          Aurora, Ontario L4G 7K1
                                          Tel   (905) 726-2462
                                          Fax   (905) 726-7164

                                PRESS RELEASE
            MAGNA ANNOUNCES THIRD QUARTER AND YEAR TO DATE RESULTS

November 8, 2005, Aurora, Ontario, Canada.....Magna International Inc. (TSX:
MG.SV.A, MG.MV.B; NYSE: MGA) today reported financial results for the third
quarter and nine month period ended September 30, 2005.

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                                 THREE MONTHS ENDED     NINE MONTHS ENDED
                                    SEPTEMBER 30,          SEPTEMBER 30,
                               ---------------------- -----------------------
                                  2005       2004        2005       2004
                               ---------- ----------- ---------- ------------
    Sales                       $  5,381   $  4,784    $ 16,957   $ 15,000

    Operating income            $    240   $    223(1) $    817   $    875(1)

    Net income                  $    159   $    132(1) $    556   $    499(1)

    Diluted earnings per share  $   1.44   $   1.37(1) $   5.16   $   5.13(1)

    (1) Operating income, net income and diluted earnings per share have been
        restated to reflect the accounting policy change described in Note 2
        of the unaudited interim consolidated financial statements attached
        to this press release.

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

    THREE MONTHS ENDED SEPTEMBER 30, 2005
    -------------------------------------

    We posted sales of $5.4 billion for the third quarter ended September 30,
2005, an increase of 12% over the third quarter of 2004. The higher sales
level in the third quarter of 2005 reflects increases of 24% in North American
average dollar content per vehicle and 14% in European average dollar content
per vehicle, each over the comparable quarter in 2004. During the third
quarter of 2005, North American vehicle production increased 2% and European
vehicle production declined 6%, each from the comparable quarter in 2004.
European complete vehicle assembly sales decreased 20% or $219 million to
$879 million for the third quarter of 2005 compared to $1.1 billion for the
third quarter of 2004.
    Our operating income was $240 million for the third quarter of 2005
compared to $223 million for the third quarter of 2004.
    We earned net income for the third quarter ended September 30, 2005 of
$159 million, compared to $132 million for the third quarter ending
September 30, 2004.
    Diluted earnings per share were $1.44 for the third quarter ended
September 30, 2005, compared to $1.37 for the third quarter ending
September 30, 2004.
    During the three months ended September 30, 2005, we generated cash from
operations before changes in non-cash operating assets and liabilities of
$357 million, and invested $482 million in non-cash operating assets and
liabilities. Total investment activities for the third quarter of 2005 were
$229 million, including $198 million in fixed asset additions and a
$31 million increase in other assets.

    NINE MONTHS ENDED SEPTEMBER 30, 2005
    ------------------------------------

    We posted record sales of $17.0 billion for the nine months ended
September 30, 2005, an increase of 13% over the comparable period in 2004. The
higher sales level in the first nine months of 2005 reflects increases of 21%
in North American average dollar content per vehicle and 15% in European
average dollar content per vehicle, each over the comparable period in 2004.
During the first nine months of 2005, North American vehicle production
declined 1% and European vehicle production declined 5%, each from the
comparable period in 2004. European complete vehicle assembly sales declined
6% or $195 million to $3.1 billion for the nine months ended September 30,
2005 compared to $3.3 billion for the nine months ended September 30, 2004.
    Our operating income was $817 million for the nine months ended
September 30, 2005 compared to $875 million for the comparable period in 2004.
    We earned net income for the nine months ended September 30, 2005 of
$556 million, compared to $499 million for the comparable period in 2004.
    Diluted earnings per share were $5.16 for the nine months ended
September 30, 2005, compared to $5.13 for the comparable period in 2004.
    During the nine months ended September 30, 2005, we generated cash from
operations before changes in non-cash operating assets and liabilities of
$1.1 billion, and invested $592 million in non-cash operating assets and
liabilities. Total investment activities for the first nine months of 2005
were $795 million, including $527 million in fixed asset additions,
$168 million to purchase subsidiaries and a $100 million increase in other
assets.
    A more detailed discussion of our consolidated financial results for the
third quarter and nine months ended September 30, 2005 is contained in the
Management's Discussion and Analysis of Results of Operations and Financial
Position and the unaudited interim consolidated financial statements and notes
thereto, which are attached to this press release.

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

    Our Board of Directors yesterday declared a quarterly dividend with
respect to our outstanding Class A Subordinate Voting Shares and Class B
Shares for the quarter ended September 30, 2005. The dividend of U.S. $0.38
per share is payable on December 15, 2005 to shareholders of record on
November 30, 2005.

    2005 OUTLOOK
    ------------

    All amounts below exclude the impact of any potential future
acquisitions.
    We expect our results will continue to be impacted by the negative
conditions in the automotive industry, including weak automotive production,
OEM price concessions, higher commodity costs and general economic
uncertainty. In addition, we expect that our 2005 results will be negatively
impacted by certain unusual items, including rationalization and other charges
associated with certain of our operations, including operations that supplied
MG Rover, as well as restructuring charges arising from our recently completed
privatizations.
    We expect 2005 average dollar content per vehicle to be between $730 and
$740 in North America and between $320 and $330 in Europe. We expect 2005
European complete vehicle assembly sales to be between $4.0 billion and
$4.1 billion. Further, we have assumed 2005 vehicle production volumes will be
approximately 15.7 million units in North America and approximately
15.9 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 complete vehicle assembly, tooling and other
automotive sales, we expect our consolidated sales for 2005 to be between
$22.3 billion and $22.9 billion, compared to 2004 consolidated sales of
$20.7 billion. In addition, we expect that 2005 spending for fixed assets will
be between $825 million and $875 million.
    In 2005, excluding the impact of the unusual items noted above, we
anticipate lower diluted earnings per share than 2004.

    We are the most diversified automotive supplier in the world. We design,
develop and manufacture 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, Asia and South America. Our capabilities include the design,
engineering, testing and manufacture of automotive interior and closure
systems; metal body and structural systems; exterior and interior mirror and
engineered glass systems; exterior systems including front and rear end
modules, plastic body panels, exterior trim and other systems, various
powertrain and drivetrain systems; as well as complete vehicle engineering and
assembly.
    We have over 82,000 employees in 222 manufacturing operations and
58 product development and engineering centres in 22 countries.

    -------------------------------------------------------------------------
    We will hold a conference call for interested analysts and shareholders
    to discuss our third quarter results on Tuesday, November 8, 2005 at
    8:00 a.m. EST. The conference call will be co-chaired by Mark T. Hogan,
    President and Vincent J. Galifi, Executive Vice-President and Chief
    Financial Officer. The number to use for this call is 1 800 818 6210. The
    number for overseas callers is 1 416 641 6708. 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 available on our website Tuesday morning prior to the call.

    For further information, please contact Louis Tonelli, Vice-President,
    Investor Relations at 905-726-7035.

    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. 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 principally relate to the risks associated with the
automotive industry and include those items listed in the attached
Management's Discussion and Analysis of Results of Operations and Financial
Position. In addition, for a more detailed discussion, reference is made to
the risks, assumptions, uncertainties 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 United States Securities and Exchange
Commission, and subsequent filings. 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, results or circumstances or otherwise.

    -------------------------------------------------------------------------
    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 and on the United States
    Securities and Exchange Commission's Electronic Data Gathering, Analysis
    and Retrieval System (EDGAR) which can be accessed at www.sec.gov.
    -------------------------------------------------------------------------


    MAGNA INTERNATIONAL INC.
    Management's Discussion and Analysis of Results of Operations and
    Financial Position
    -------------------------------------------------------------------------

    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 average
dollar content per vehicle, which are in U.S. dollars, unless otherwise noted.
When we use the terms "we", "us", "our" 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 and nine months ended
September 30, 2005, included in this Press Release, and the audited
consolidated financial statements and MD&A for the year ended December 31,
2004, included in our 2004 Annual Report to Shareholders. The unaudited
interim consolidated financial statements for the three months and nine months
ended September 30, 2005 and the audited consolidated financial statements for
the year ended December 31, 2004 are both prepared in accordance with Canadian
generally accepted accounting principles.
    This MD&A has been prepared as at November 7, 2005.

    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. Our products and
services are sold to original equipment manufacturers ("OEMs") of cars and
light trucks in North America, Europe, Asia and South America.
    In October 2004, we announced our intention to take each of our publicly
traded subsidiaries private to further enhance our overall competitiveness.
During the first and second quarters of 2005, we completed the privatizations
of Tesma International Inc. ("Tesma"), Decoma International Inc. ("Decoma")
and Intier Automotive Inc. ("Intier") (the "Privatizations"). The completion
of these transactions has allowed management the opportunity to evaluate
alternative operating structures that could further enhance our
competitiveness. Currently, management has not yet completed the evaluation or
implementation of these alternative operating structures. As a result, for the
third quarter of 2005, our segmented information continues to be provided
utilizing our former global systems groups, consistent with the second quarter
of 2005.

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

    Once again in the third quarter of 2005, we faced challenges, as compared
to the third quarter of 2004, including lower production volumes on certain of
our high content platforms, higher commodity prices and incremental price
concessions.
    Considering these ongoing challenges, we reported strong results in the
third quarter of 2005. Our sales increased 12% or $597 million to
$5.4 billion, operating income increased 8% to $240 million and diluted
earnings per share increased 5% to $1.44, all in comparison to the third
quarter of 2004.
    There is significant distress in the automotive supply base, brought on
by continued competitive pressures, commodity price increases, relatively weak
automotive production in North America, particularly at General Motors and
Ford, highly leveraged capital structures, and other factors. As a result, a
number of automotive component suppliers have sought court protection in order
to restructure their businesses. While we have experienced modest negative
impact from the distress in the automotive supply base, the relative weakness
of some of our direct competitors has provided, and we believe will continue
to provide business opportunities for us, given our strong financial position,
ongoing profitability and continued investment in technology.
    In July, DaimlerChrysler, announced the development of a deeper
relationship with a select group of key suppliers. Magna was identified as one
of DaimlerChrysler's Highly Integrated Partnership Organizations ("HI-POs").
This improved model of co-operation with suppliers is intended to provide
numerous benefits to the HI-POs, including early involvement in the product
development of future models. As an example of this early involvement,
DaimlerChrysler identified that Magna had been awarded the vehicle interior,
excluding seats, for a future model of the Chrysler Group, scheduled for
launch in model year 2008.
    Similarly, in September, Ford announced that it was entering into new
long term "Aligned Business Framework" agreements with select suppliers, and
identified Magna and six other automotive component suppliers as the first of
the strategic suppliers in the initial phase of Ford's new framework. The
framework anticipates a significant reduction over time in the number of
suppliers to Ford.
    We launched significant programs in newly completed production facilities
in the third quarter: our plant in Hermosillo, Mexico began to supply various
stampings for the launch of the Ford Fusion, Mercury Milan and Lincoln Zephyr;
and our facility in Bowling Green, Kentucky began to supply frames for the
launch of the new Ford Explorer. Next year, this frame facility will also
support the launch of the new Ford F-Series Super Duty pickup trucks. Although
we expect these facilities to be profitable as they reach full production,
these facilities generated start-up losses which are normal during the launch
of new programs.
    We were awarded our first ever transfer case business from a major
Japanese based OEM for two vehicle programs, one of which is built in North
America and the other in Japan. These important awards demonstrate our ability
to introduce our four-wheel and all-wheel drive competence to new customers.
    The most significant issues that affected our results in the third
quarter of 2005 included:

    -   Unusual items: During the third quarter of 2005, we recorded certain
        unusual items, including the following:

        -  the receipt of $26 million awarded by a court in a lawsuit
           commenced by us in 1998 in respect of defective materials
           installed by a supplier in a real estate project; and

        -  restructuring charges totalling $14 million substantially related
           to a European facility and the Privatizations.

    -   Commodity Prices: During the third quarter of 2005, we continued to
        pay more for raw materials, including purchased components, used in
        our production compared to the third quarter of 2004. Although a
        significant portion of our steel, resins and other components are
        covered under customer resale programs or long-term contracts,
        increased commodity prices negatively impacted our results in the
        third quarter of 2005, as compared to the third quarter of 2004 and
        we expect this trend to continue for the balance of the year. At the
        same time, scrap steel prices have decreased which has negatively
        impacted our results in the third quarter of 2005, as compared to the
        third quarter of 2004.

    -   Pricing Pressures: Given the increasingly competitive nature of the
        industry, we faced increased price concessions in the third quarter
        of 2005 as compared to the third quarter of 2004.

    -   Underperforming Divisions: We continue to experience inefficiencies
        and operating losses at Decoma's fascia moulding and paint facility
        in Georgia as it launches and ramps up production on new programs. In
        Europe, Decoma continues to experience increased losses associated
        with under-utilized paint capacity, performance issues and program
        launch costs.

    -   Plant Rationalizations and Restructuring: As discussed above, during
        the third quarter of 2005 we incurred certain restructuring costs. In
        connection with the Privatizations and industry conditions, during
        2005 we have been assessing our global operating structure and
        capacity. As a result of this assessment, we are implementing a
        facility rationalization strategy that includes operating group
        restructuring and plant consolidations, sales and/or closures, and
        the associated expenses have had, and will continue to have, an
        adverse effect on our 2005 profitability.


    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
        component suppliers to reduce their prices and bear additional costs;
    -   globalization and consolidation of the automotive industry, including
        both automobile manufacturers and automotive component suppliers;
    -   the evolving role of independent automotive component suppliers and
        their progression up the "value chain";
    -   increased outsourcing and modularization of vehicle production;
    -   increased engineering capabilities required in order to be awarded
        new business for more complex systems and modules;
    -   increased prevalence of lower volume "niche" vehicles built off
        high-volume global vehicle platforms;
    -   growth of Asian-based automobile manufacturers in North America and
        Europe;
    -   volatility of commodity costs; and
    -   growth of the automotive industry in China and other Asian countries.

    The following are some of the more significant risks that could affect
our ability to achieve our desired results:

    -   The global automotive industry is cyclical and consumer demand for
        automobiles is sensitive to changes in certain economic and political
        conditions, including interest rates, oil and energy prices and
        international conflicts (including acts of terrorism). As a result of
        these conditions, some of our customers are currently experiencing
        reduced consumer demand for their vehicles, leading to declining
        vehicle production volumes. A continued reduction in vehicle
        production volumes could have a material adverse effect on our
        profitability.

    -   Rising healthcare, pension and other post-employment benefit costs
        are having a significant adverse effect on the profitability and
        competitiveness of certain North American based automobile
        manufacturers and automotive component suppliers. Increased raw
        material prices, including steel and resins, are also adversely
        affecting automobile manufacturers and automotive component
        suppliers. Other economic conditions, such as increased gasoline
        prices, could further threaten sales of certain models, such as
        full-sized sport utility vehicles. All of these conditions, coupled
        with a decline in market share and overall production volumes, could
        threaten the financial condition of some of our customers. Through
        our normal supply relationship, we are exposed to credit risk with
        our customers and, in the event that our customers are unable to
        satisfy their financial obligations or seek protection from their
        creditors, as in the case of MG Rover, we may incur additional
        expenses as a result of such credit exposure, which could have a
        material adverse effect on our profitability.

    -   Although we supply parts to most of the leading automobile
        manufacturers, a significant majority of our sales are to four
        automobile manufacturers. A decline in overall production volumes by
        these customers, such as in the case of GM and Ford in recent
        quarters, could have an adverse effect on our sales and
        profitability, particularly if we are unable to further diversify our
        customer base. Moreover, while we supply parts for a wide variety of
        vehicles produced in North America and Europe, we do not supply parts
        for all vehicles produced, nor is the number or value of parts evenly
        distributed among the vehicles for which we do supply parts. Shifts
        in market share among vehicles or the early termination, loss,
        renegotiation of the terms of, or delay in the implementation of any
        significant production contract could have an adverse effect on our
        sales and profitability.

    -   Over the last year we have experienced significant price increases
        for key commodities used in our parts production, particularly steel
        and resin. We expect steel prices will remain at elevated levels in
        2005. Approximately half of our steel is acquired through resale
        programs operated by the automobile manufacturers, which do not
        expose us to steel price increases, and the balance is acquired
        through spot, short-term and long-term contracts. However, one such
        supplier has challenged its agreements with one of our operating
        groups while steel prices were rising and, to the extent that it
        successfully continues to dispute, terminate or otherwise refuse to
        honour its contracts, our exposure to steel price increases will
        increase to the extent that steel prices remain at elevated levels.
        We also sell scrap steel, which is generated through our parts
        production process, and the revenues from these sales have reduced
        some of our exposure to steel price increases in the past. However,
        if scrap steel prices decline, while steel prices remain high, our
        ability to reduce our exposure to steel price increases will
        diminish. To the extent we are unable to fully mitigate our exposure
        to increased steel prices, or to pass on to our customers the
        additional costs associated with increased steel or resin prices,
        such additional costs could have a material adverse effect on our
        profitability.

    -   We rely on a number of suppliers to supply us with a wide range of
        components required in connection with our business. Economic
        conditions, intense pricing pressures, increased commodity costs and
        a number of other factors have left many automotive components
        suppliers in varying degrees of financial distress. The continued
        financial distress or the insolvency or bankruptcy of one of our
        major automotive components suppliers could disrupt the supply of
        components to us from these suppliers, possibly resulting in a
        temporary disruption in the supply of products by us to our
        customers. Additionally, the financial distress or the insolvency or
        bankruptcy of a significant supplier to one of our customers could
        disrupt the supply of products to such customer, resulting in a
        reduction in production by our customer. Such a reduction in our
        customer's production could negatively impact our production,
        resulting in unrecoverable losses. Any prolonged disruption in the
        supply of critical components by our suppliers or suppliers to one of
        our customers, the inability to re-source production of a critical
        component from a financially distressed automotive components
        sub-supplier, or any temporary shut-down of one of our production
        lines or the production lines of our customers, could have a material
        adverse effect on our operations and/or profitability. Additionally,
        the insolvency, bankruptcy or financial restructuring of any of our
        critical suppliers could result in us incurring unrecoverable costs
        related to the financial work-out of such suppliers and/or increased
        exposure for product liability, warranty or recall costs relating to
        the components supplied by such suppliers to the extent such
        suppliers are not able to assume responsibility for such amounts.

    -   Increasing price reduction pressures from our customers could reduce
        profit margins. We have entered into, and will continue to enter
        into, long-term supply arrangements with automobile manufacturers
        which provide for, among other things, price concessions over the
        supply term. To date, these concessions have been fully or partially
        offset by cost reductions arising principally from product and
        process improvements and price reductions from our suppliers.
        However, the competitive automotive industry environment in North
        America, Europe and Asia has caused these pricing pressures to
        intensify. Some of our customers have demanded, and in light of
        challenging automotive industry conditions may continue to demand,
        additional price concessions and retroactive price reductions. We may
        not be successful in offsetting all of these price concessions
        through improved operating efficiencies, reduced expenditures or
        reduced prices from our suppliers. Such concessions could have a
        material adverse effect on our profitability to the extent that they
        are not offset through cost reductions or improved operating
        efficiencies.

    -   We continue to be pressured to absorb costs related to product
        design, engineering and tooling, as well as other items previously
        paid for directly by automobile manufacturers. In particular, some
        automobile manufacturers have requested that we pay for design,
        engineering and tooling costs that are incurred up to the start of
        production and recover these costs through amortization in the piece
        price of the applicable component. Some of these costs cannot be
        capitalized, which could adversely affect our profitability until the
        programs in respect of which they have been incurred are launched. In
        addition, since our contracts generally do not include any guaranteed
        minimum purchase requirements, if estimated production volumes are
        not achieved, these costs may not be fully recovered, which could
        have an adverse effect on our profitability.

    -   Our customers continue to demand that we bear the cost of the repair
        and replacement of defective products which are either covered under
        their warranty or are the subject of a recall by them. If our
        products are, or are alleged to be, defective, we may be required to
        participate in a recall of those products, particularly if the actual
        or alleged defect relates to vehicle safety. Warranty provisions are
        established based on our best estimate of the amounts necessary to
        settle existing or probable claims on product default issues. Recall
        costs are costs incurred when we and/or our customers decide, either
        voluntarily or involuntarily, to recall a product due to a known or
        suspected performance issue. Costs typically include the cost of the
        product being replaced, the customer's cost of the recall and labour
        to remove and replace the defective part. We continue to experience
        increased customer pressure to assume greater warranty
        responsibility. Currently we only account for existing or probable
        claims, however, the obligation to repair or replace such products
        could have a material adverse effect on our operations and financial
        condition.

    -   We are also subject to the risk of exposure to product liability
        claims in the event that the failure of our products results in
        bodily injury and/or property damage. We may experience material
        product liability losses in the future and may incur significant
        costs to defend such claims. Currently, we have bodily injury
        coverage under insurance policies. This coverage will continue until
        August 2006 and is subject to renewal on an annual basis. A
        successful claim against us in excess of our available insurance
        coverage could have an adverse effect on our operations and financial
        condition.

    -   Although our financial results are reported in U.S. dollars, a
        significant portion of our sales and operating costs are realized in
        Canadian dollars, euros, British pounds and other currencies. Our
        profitability is affected by movements of the U.S. dollar against the
        Canadian dollar, the euro, the British pound and other currencies in
        which we generate revenues and incur expenses. However, as a result
        of hedging programs employed by us primarily in Canada, foreign
        currency transactions are not fully impacted by the recent movements
        in exchange rates. We record foreign currency transactions at the
        hedged rate where applicable. Despite these measures, significant
        long-term fluctuations in relative currency values, in particular a
        significant change in the relative values of the U.S. dollar,
        Canadian dollar, euro or the British pound, could have an adverse
        effect on our financial condition.

    -   In response to the increasingly competitive automotive industry
        conditions, we may further rationalize some of our production
        facilities. Additional expenses associated with such a
        rationalization, including plant closings and relocations and
        employee severance costs, could also have an adverse effect on our
        short-term profitability.

    -   We anticipate that our fourth quarter results will be impacted by
        losses at certain of our operating divisions in both North America
        and Europe. We are currently reviewing our long-term plans for some
        of these operating divisions. As a result, there is a risk that we
        may not be able to recover certain long-term assets at some of these
        operating divisions. Although we are currently unable to quantify any
        such amounts, any unrecoverable amount could have a material adverse
        effect on our short-term profitability.

    -   In connection with the recent Privatizations of our former publicly
        traded subsidiaries, we expect certain functions will be reorganized
        to streamline such functions in a manner consistent with the stated
        objectives of the Privatizations. Such reorganization could involve
        additional expenses, such as office closings and relocations and
        employee severance costs, which could have an adverse effect on our
        short-term profitability.

    -   From time to time, we may be contingently liable for contractual and
        other claims with customers, suppliers and former employees. On an
        ongoing basis, we attempt to assess the likelihood of any adverse
        judgements or outcomes to these claims, although it is difficult to
        predict final outcomes with any degree of certainty. At this time, we
        do not believe that any of the claims which we are party to will have
        a material adverse effect on our financial position, however, we
        cannot provide any assurance to this effect.


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

    Accounting Change

    Financial Instruments - Disclosure and Presentation

    In 2003, the Canadian Institute of Chartered Accountants ("CICA") amended
Handbook Section 3860 "Financial Instruments - Disclosure and Presentation"
("CICA 3860") to require certain obligations that may be settled with an
entity's own equity instruments be reflected as a liability. The amendments
require us to present our Preferred Securities and Subordinated Debentures as
liabilities, with the exception of the equity value ascribed to the holders'
option to convert the 6.5% Convertible Subordinated Debentures into Class A
Subordinate Voting Shares, and to present the related liability carrying costs
as a charge to net income. We adopted these new recommendations effective
January 1, 2005 on a retroactive basis.
    The impact of this accounting policy change on the consolidated balance
sheet as at December 31, 2004 was as follows:

    Increase in other assets                                       $       2
    -------------------------------------------------------------------------

    Decrease in income taxes payables                              $       1
    Increase in long-term debt                                           216
    Decrease in debentures' interest obligation                           38
    Decrease in minority interest                                         68
    -------------------------------------------------------------------------

    Decrease in other paid-in-capital                              $      75
    Increase in retained earnings                                          2
    Decrease in currency translation adjustment                           34
    -------------------------------------------------------------------------


    The impact of this accounting policy change on the consolidated
statements of income and retained earnings was as follows:

                                                 Three months    Nine months
                                                        ended          ended
                                                 September 30,  September 30,
                                                         2004           2004
    -------------------------------------------------------------------------

    Increase in interest expense                    $      10    $        29
    Decrease in income taxes                               (4)           (11)
    Decrease in minority interest                          (1)            (3)
    -------------------------------------------------------------------------
    Decrease in net income                                 (5)           (15)
    Decrease in financing charges on Preferred
     Securities and other paid-in-capital                   5             15
    Decrease in foreign exchange gain on
     redemption of Preferred Securities                   (18)           (18)
    -------------------------------------------------------------------------
    Decrease in net income available to Class A
     Subordinate Voting and Class B Shareholders    $     (18)   $       (18)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Reduction of earnings per Class A Subordinate
     voting or Class B Share
      Basic                                         $   (0.18)   $     (0.18)
      Diluted                                       $   (0.18)   $     (0.18)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Comparative Period Amounts

    European Average Dollar Content per Vehicle

    Our reporting of European production sales and European average dollar
content per vehicle has historically included sales related to our complete
vehicle assembly business (see "European Complete Vehicle Assembly Sales"
below). Effective with the first quarter of 2004, European production sales
and European complete vehicle assembly sales have been presented separately,
however, European average dollar content per vehicle continued to include both
European production sales and European complete vehicle assembly sales.
    Complete vehicle assembly sales are calculated as follows:

    -   where assembly programs are accounted for on a value-added basis,
        100% of the selling price to the OEM customer is included in complete
        vehicle assembly sales; and

    -   where assembly programs are accounted for on a full-cost basis,
        complete vehicle assembly sales include 100% of the selling price to
        the OEM customer, less intercompany parts purchases made by our
        assembly divisions. These intercompany purchases are included in
        European production sales.

    Effective with the first quarter of 2005, European average dollar content
per vehicle includes only European production sales. The comparative period
European average dollar content per vehicle has been restated to conform to
the current period's presentation. We do not have any complete vehicle
assembly sales in North America.

    Average Foreign Exchange

                                For the three           For the nine
                                months ended            months ended
                                September 30,           September 30,
                               --------------          --------------
                                2005    2004  Change    2005    2004  Change
    -------------------------------------------------------------------------

    1 Canadian dollar equals
     U.S. dollars              0.834   0.766    + 9%   0.818   0.753    + 9%
    1 euro equals U.S. dollars 1.221   1.223      -    1.262   1.225    + 3%
    1 British pound equals
     U.S. dollars              1.788   1.816    - 2%   1.843   1.821    + 1%
    -------------------------------------------------------------------------

    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, primarily in Canada, 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
where applicable.
    Finally, holding gains and losses on foreign currency denominated
monetary items, which are recorded in selling, general and administrative
expenses, impact reported results.


    RESULTS OF OPERATIONS - FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2005
    -------------------------------------------------------------------------

    Sales
                                                        For the three
                                                        months ended
                                                        September 30,
                                                       --------------
                                                       2005      2004  Change
    -------------------------------------------------------------------------

    Vehicle Production Volumes (millions of units)
      North America                                   3.722     3.632  +  2%
      Europe                                          3.509     3.724  -  6%
    -------------------------------------------------------------------------

    Average Dollar Content Per Vehicle
      North America                                $    756  $    608  + 24%
      Europe                                       $    338  $    297  + 14%
    -------------------------------------------------------------------------

    Sales
      North American Production                    $  2,813  $  2,210  + 27%
      European Production                             1,187     1,107  +  7%
      European Complete Vehicle Assembly                879     1,098  - 20%
      Tooling, Engineering and Other                    502       369  + 36%
    -------------------------------------------------------------------------
      Total Sales                                  $  5,381  $  4,784  + 12%
    -------------------------------------------------------------------------


    Total sales reached a third quarter record, increasing 12% or
$597 million to $5.4 billion compared to $4.8 billion for the third quarter of
2004.

    North American Production Sales

    North American production sales increased 27% or $603 million to
$2.8 billion for the third quarter of 2005 compared to $2.2 billion for the
third quarter of 2004. This increase in production sales reflects a 24%
increase in our North American average dollar content per vehicle combined
with a 2% increase in North American vehicle production volumes.
    Our average dollar content per vehicle grew by 24% or $148 to $756 for
the third quarter of 2005 compared to $608 for the third quarter of 2004,
primarily as a result of:

    -   the launch of new programs during or subsequent to the third quarter
        of 2004, including:
        -  the Chevrolet Cobalt and Pontiac Pursuit;
        -  the Hummer H3;
        -  the Dodge Charger;
        -  the Chevrolet HHR;
        -  the Mercedes M-Class;
        -  the Ford Mustang; and
        -  the Pontiac Torrent;
    -   the acquisition of the New Venture Gear, Inc. ("NVG") business in
        September 2004;
    -   an increase in reported U.S. dollar sales due to the strengthening of
        the Canadian dollar against the U.S. dollar; and
    -   increased production and/or content on certain programs, including
        the Chrysler minivans.

    These increases were partially offset by:

    -   the impact of lower production and/or content on certain high content
        programs, including:
        -  the GMT800 platform;
        -  the Dodge Ram pickup;
        -  the Ford Expedition;
        -  the Chevrolet Canyon and GMC Colorado;
        -  the Ford Freestar and Mercury Monterey; and
        -  the Dodge Magnum;
    -   programs that ended production during or subsequent to the third
        quarter of 2004; and
    -   incremental customer price concessions.

    European Production Sales

    European production sales increased 7% or $80 million to $1.2 billion for
the third quarter of 2005 compared to $1.1 billion for the third quarter of
2004. This increase in production sales reflects a 14% increase in our
European average dollar content per vehicle, partially offset by a 6% decline
in European vehicle production volumes.
    Our average dollar content per vehicle grew by 14% or $41 to $338 for the
third quarter of 2005 compared to $297 for the third quarter of 2004,
primarily as a result of:

    -   programs that launched during or subsequent to the third quarter of
        2004, including the Mercedes A-Class and B-Class;
    -   the acquisition of the European operations of NVG; and
    -   increased production on certain programs including the MINI Cooper.

    These increases were partially offset by:

    -   the impact of lower production volumes on certain programs, including
        the Mercedes E-Class;
    -   lower production volumes on the recently launched Audi A4 compared to
        the production volumes on the previous Audi A4 in the third quarter
        of 2004;
    -   incremental customer price concessions; and
    -   the end of production on all MG Rover programs as a result of MG
        Rover Group Limited ("MG Rover") being placed into administration
        during the second quarter of 2005 in the United Kingdom, which is
        similar to Chapter 11 bankruptcy protection in the United States (the
        "MG Rover situation").

    European Complete Vehicle Assembly Sales

    European complete vehicle assembly sales decreased 20% or $219 million to
$879 million for the third quarter of 2005 compared to $1.1 billion for the
third quarter of 2004. Our complete vehicle assembly volumes for the third
quarter of 2005 and the third quarter of 2004 were as follows:

                                                        For the three
                                                        months ended
                                                        September 30,
                                                       --------------
    Complete Vehicle Assembly Volumes (Units)          2005      2004  Change
    -------------------------------------------------------------------------

    Full-Costed:
      BMW X3, Mercedes E-Class and G-Class,
       Saab 9(3) Convertible                         32,105    41,109  - 22%
    Value-Added:
      Jeep Grand Cherokee, Chrysler 300,
       Chrysler Voyager                              23,930    16,426  + 46%
    -------------------------------------------------------------------------
                                                     56,035    57,535  -  3%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    The terms of our 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, we are acting as principal, and purchased components and
systems in assembled vehicles are included in our 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. Other contracts provide that
third party components and systems are held on consignment by us, and the
selling price to the OEM customer reflects a value-added assembly fee only.
    Production levels of the various vehicles assembled by us have an impact
on the level of our 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 our levels of sales and
operating margin percentage, but may not necessarily affect our 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 decrease in complete vehicle assembly sales is primarily the result
of:

    -   lower assembly volumes for vehicles accounted for on a full-cost
        basis, including:
        -  the BMW X3;
        -  the Saab 9(3) Convertible; and
        -  the Mercedes G-Class; and
    -   lower assembly volumes for the Chrysler Voyager which is accounted
        for on a value-added basis.

    These decreases were partially offset by:

    -   increased assembly volumes for certain vehicles which are accounted
        for on a value-added basis including:
        -  the launch in June 2005 of the Chrysler 300 for distribution in
           European markets and certain other markets outside North America;
           and
        -  the launch of the Jeep Grand Cherokee in the first quarter of 2005
           which had higher volumes than the previous model in the third
           quarter of 2004; and
    -   increased assembly volumes for the Mercedes E-Class 4MATIC which is
        accounted for on a full-cost basis.

    Tooling, Engineering and Other

    Tooling, engineering and other sales increased 36% or $133 million to
$502 million for the third quarter of 2005 compared to $369 million for the
third quarter of 2004. The increase was primarily attributable to:

    -   tooling and engineering revenue related to programs which launched in
        2005 or for upcoming program launches including:
        -  General Motors' next generation full-size pickup and sport
           utilities platform;
        -  the Mercedes M-Class; and
        -  the next generation MINI Cooper; and
    -   an increase in reported U.S. dollar sales due to the strengthening of
        the Canadian dollar against the U.S. dollar.


    Gross Margin

    Gross margin increased $44 million to $702 million for the third quarter
of 2005 compared to $658 million for the third quarter of 2004. Gross margin
as a percentage of total sales decreased to 13.0% for the third quarter of
2005 compared to 13.8% for the third quarter of 2004.
    Gross margin as a percentage of sales was negatively impacted by:

    -   an increase in commodity prices, combined with lower scrap steel
        prices;
    -   a decrease in production volumes for several of our high content
        programs including the GMT800 platform, and the Ford Freestar and
        Mercury Monterey;
    -   inefficiencies at certain facilities;
    -   the acquisition of the NVG business, which currently operates at
        margins that are lower than our consolidated average gross margin;
    -   incremental customer price concessions;
    -   costs incurred at new facilities in preparation for upcoming launches
        or for programs that have not fully ramped up production, including:
        -  a new frame facility in Kentucky for the recently launched Ford
           Explorer and the next generation F Series Super Duty pickup
           trucks; and
        -  a new fascia moulding and paint facility in Georgia to support the
           launch of the Mercedes M-Class and R-Class; and
    -   an increase in tooling and other sales that earn low or no margins.

    Partially offsetting these decreases in gross margin as a percentage of
sales were:

    -   the closure during 2004 of certain underperforming divisions in
        Europe;
    -   productivity improvements at certain divisions;
    -   price reductions from our suppliers; and
    -   decreased complete vehicle assembly sales for the BMW X3, which has a
        lower gross margin percentage than our consolidated average gross
        margin because the costs of this vehicle assembly contract are
        reflected on a full-cost basis in the selling price of the vehicle.

    Depreciation and Amortization

    Depreciation and amortization costs increased 16% or $24 million to
$174 million for the third quarter of 2005 compared to $150 million for the
third quarter of 2004. The increase in depreciation and amortization for the
third quarter of 2005 was primarily due to:

    -   depreciation and amortization on increased assets employed in the
        business to support future growth;
    -   depreciation and amortization on assets acquired on the acquisition
        of NVG;
    -   amortization of fair value increments related to the Privatizations;
        and
    -   an increase in reported U.S. dollar depreciation and amortization due
        to the strengthening of the Canadian dollar against the U.S. dollar.

    These increases were partially offset by accelerated depreciation
recorded in the third quarter of 2004 on certain program-specific assets that
went out of service earlier than originally planned.

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

    SG&A expenses as a percentage of sales decreased to 5.3% for the third
quarter of 2005 compared to 5.9% for the third quarter of 2004. SG&A expenses
increased $6 million to $287 million for the third quarter of 2005 compared to
$281 million for the third quarter of 2004.

    The $6 million increase in SG&A expenses includes the following items:

    -   the receipt of $26 million during the third quarter of 2005 which was
        awarded by a court in a lawsuit commenced by us in 1998 in respect of
        defective materials installed by a supplier in a real estate project;
    -   restructuring charges totalling $14 million substantially related to
        a European facility and the Privatizations; and
    -   a $2 million loss recorded in the third quarter of 2004 on the sale
        of a facility in Europe.

    Excluding these items, the remaining $20 million increase in SG&A
expenses is primarily a result of:

    -   increased SG&A spending as a result of the acquisition of NVG;
    -   an increase in reported U.S. dollar expenses due to the strengthening
        of the Canadian dollar against the U.S. dollar; and
    -   higher infrastructure costs to support upcoming launches.

    Interest Expense

    Interest expense decreased $3 million to $2 million for the third quarter
of 2005 compared to $5 million for the third quarter of 2004, primarily as a
result of:

    -   a reduction of interest expense related to the Preferred Securities
        which were redeemed for cash in the third quarter of 2004; and
    -   a reduction in outstanding long-term debt as a result of the
        repayments of government debt and other long term debt during 2004
        and 2005.

    These reductions were partially offset by:

    -   an increase in interest expense that has been accreted on the senior
        unsecured zero-coupon notes that were issued in connection with the
        acquisition of NVG; and
    -   lower interest income earned as a result of lower average cash
        balances during the third quarter of 2005 compared to the third
        quarter of 2004.

    Operating Income

    Operating income increased 8% or $17 million to $240 million for the
third quarter of 2005 compared to $223 million for the third quarter of 2004.
The discussion above provides an analysis of the $17 million increase in our
operating income. In particular, on a comparable basis, our operating income
was positively impacted by:

    -   the receipt of $26 million during the third quarter of 2005 which was
        awarded by a court in a lawsuit commenced by us in 1998 in respect of
        defective materials installed by a supplier in a real estate project;
    -   programs that launched during or subsequent to the third quarter of
        2004;
    -   the acquisition of the NVG business;
    -   improved operations at certain facilities;
    -   accelerated depreciation recorded in the third quarter of 2004 on
        certain program-specific assets that went out of service earlier than
        originally planned;
    -   a loss recorded during the third quarter of 2004 on the sale of a
        facility in Europe;
    -   productivity improvements at certain facilities;
    -   price reductions from our suppliers; and
    -   the disposal of our Anotech facility during the first quarter of 2005
        which improved our results as this division incurred operating losses
        during the third quarter of 2004.

    Partially offsetting these increases was the negative impact of:

    -   increased commodity prices;
    -   incremental price concessions;
    -   restructuring charges totalling $14 million substantially related to
        a European facility and the Privatizations;
    -   increased depreciation and amortization as a result of the
        Privatizations and the acquisition of NVG; and
    -   operating inefficiencies at certain facilities.


    Income Taxes

    Our effective income tax rate on operating income (excluding equity
income) decreased to 33.9% for the third quarter of 2005 from 36.0% for the
third quarter of 2004. The decrease in the effective income tax rate is
primarily the result of a decrease in income tax rates in Austria and Mexico
and a reduction in losses not benefited, partially offset by a change in mix
of earnings whereby proportionately more operating income (excluding equity
income) was earned in jurisdictions with higher tax rates.

    Minority Interest

    Minority interest expense decreased $11 million because no minority
interest expense was recorded in the third quarter of 2005 as a result of the
Privatizations.

    Net Income

    Net income increased 20% or $27 million to $159 million for the third
quarter of 2005 compared to $132 million for the third quarter of 2004. The
increase in net income is a result of the $17 million increase in operating
income combined with the $11 million decrease in minority interest, partially
offset by the $1 million increase in income taxes (see above).

    Earnings per Share
                                                        For the three
                                                        months ended
                                                        September 30,
                                                       --------------
                                                       2005      2004  Change
    -------------------------------------------------------------------------

    Earnings per Class A Subordinate Voting
     or Class B Share:
      Basic                                        $   1.47  $   1.37  +  7%
      Diluted                                      $   1.44  $   1.37  +  5%
    -------------------------------------------------------------------------

    Average number of Class A Subordinate Voting
     and Class B Shares outstanding (millions):
      Basic                                           108.4      96.8  + 12%
      Diluted                                         111.2      97.4  + 14%
    -------------------------------------------------------------------------


    Diluted earnings per share increased 5% or $0.07 to $1.44 for the third
quarter of 2005 compared to $1.37 for the third quarter of 2004. Included in
the $0.07 increase in diluted earnings per share is the net increase in
diluted earnings per share of $0.10 related to the following items in the
third quarters of 2005 and 2004:

    -   the receipt of $26 million during the third quarter of 2005 which was
        awarded by a court in a lawsuit commenced by us in 1998 in respect of
        defective materials installed by a supplier in a real estate project;
    -   restructuring charges recorded in the third quarter of 2005
        substantially related to a facility in Europe and the Privatizations;
    -   accelerated depreciation on certain program-specific assets recorded
        in the third quarter of 2004; and
    -   a loss recorded in the third quarter of 2004 on the sale of a
        facility in Europe.

    Excluding these items, diluted earnings per share decreased $0.03 from
the third quarter of 2004 as a result of an increase in the weighted average
number of diluted shares outstanding during the quarter, partially offset by
the increase in net income (excluding the above items).

    The increase in the weighted average number of diluted shares outstanding
was a result of:

    -   approximately 11.9 million additional shares that were included in
        the weighted average number of shares outstanding as a result of the
        Privatizations;
    -   approximately 1.1 million additional shares that are issuable as a
        result of assuming Decoma's obligation for its 6.5% Convertible
        Subordinated Debentures;
    -   0.3 million additional shares that were issued on the exercise of
        stock options during the third quarter of 2004 and the first nine
        months of 2005; and
    -   an increase in the number of options outstanding as a result of
        assuming the Tesma, Decoma and Intier stock options.

    This increase in the weighted average number of shares outstanding was
partially offset by a lower average trading price for our Class A Subordinate
Voting Shares, which results in fewer options becoming dilutive.

    Return on Funds Employed

    An important financial ratio that we use across all of our operating
units to measure return on investment is return on funds employed ("ROFE")(1).
    ROFE for the third quarter of 2005 was 14.9%, a decline from 18.6% for
the third quarter of 2004. In the third quarters of 2005 and 2004, we had the
following items that accounted for a net 1.3% increase in our ROFE:

    -   the receipt of $26 million during the third quarter of 2005 which was
        awarded by a court in a lawsuit commenced by us in 1998 in respect of
        defective materials installed by a supplier in a real estate project;
    -   restructuring charges recorded in the third quarter of 2005
        substantially related to a facility in Europe and the Privatizations;
    -   accelerated depreciation on certain program specific assets recorded
        in the third quarter of 2004; and
    -   a loss recorded in the third quarter of 2004 on the sale of a
        facility in Europe.

    Excluding these items, the remaining 5.0% decrease in ROFE can be
attributed to a decrease in our EBIT(2) (excluding unusual items) combined
with an increase in our average funds employed(3) for the third quarter of
2005 compared to the third quarter of 2004. The increase in our average funds
employed was primarily a result of:

    -   the acquisition of the NVG business;
    -   the Privatizations, which added approximately $600 million of funds
        employed;
    -   an increase in our average investment in non-cash operating assets
        and liabilities as discussed below in the "Cash Flow from Operations"
        section; and
    -   increased funds employed for new facilities associated with new or
        upcoming launches.


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

                                              For the three months
                                               ended September 30,
                                  -------------------------------------------
                                            2005                  2004
                                  --------------------- ---------------------
                                      Total                 Total
                                      sales       EBIT      sales       EBIT
    -------------------------------------------------------------------------

    Decoma                         $    765   $      5   $    639   $     12
    Intier                            1,308         26      1,278         41
    Tesma                               363         25        322         20
    Magna Steyr                       1,554         60      1,432         51
    Other Automotive Operations       1,442         86      1,153         76
    Corporate and Other (i)             (51)        40        (40)        28
    -------------------------------------------------------------------------
                                   $  5,381   $    242   $  4,784   $    228
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (i) Included in Corporate and Other are intercompany fee revenue, and
        intercompany sales eliminations.


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

    -------------------------------------------------------------------------
    (1) ROFE is defined as EBIT(2) divided by the average funds employed(3)
        for the period.
    (2) EBIT is defined as operating income as presented on our unaudited
        interim consolidated financial statements before net interest
        expense.
    (3) Funds employed is defined as long term assets, excluding future tax
        assets plus non-cash operating assets and liabilities(4).
    (4) Non-cash operating assets and liabilities are defined as the sum of
        accounts receivable, inventory, income taxes recoverable and prepaid
        assets less the sum of accounts payable, accrued salaries and wages,
        other accrued liabilities, income taxes payable and deferred
        revenues.


    Decoma

    Sales

    Decoma's sales increased by 20% or $126 million to $765 million for the
third quarter of 2005 from $639 million for the third quarter of 2004. The
increase in sales is primarily the result of an increase in Decoma's North
American and European average dollar content per vehicle and an increase in
Decoma's tooling, engineering and other sales, combined with a 2% increase in
North American vehicle production volumes, partially offset by a 6% decline in
European vehicle production volumes.

    In North America, the increase in Decoma's average dollar content per
vehicle was primarily attributable to:

    -   an increase in reported U.S. dollar sales due to the strengthening of
        the Canadian dollar against the U.S. dollar; and
    -   increased production and/or content on several programs, related
        principally to the launch of new programs during or subsequent to the
        third quarter of 2004 including:
        -   the Mercedes M-Class;
        -   the Chrysler 300/300C, Dodge Magnum and Charger;
        -   the Cadillac DTS;
        -   the Chevrolet Equinox, Cobalt and Impala;
        -   the Pontiac Pursuit; and
        -   the Jeep Grand Cherokee.

    These increases were partially offset by incremental customer price
concessions.

    In Europe, the increase in Decoma's average dollar content per vehicle
was primarily attributable to:

    -   increased production and/or content on several programs, related
        principally to the launch of new programs during or subsequent to the
        third quarter of 2004 including:
        -  the launch of the fascia and front end module for the Mercedes
           A-Class and B-Class;
        -  the ramp up of the fascia and front end module for the Volkswagen
           City Car; and
        -  the launch of various Porsche, Audi and other Mercedes programs.

    These increases were partially offset by incremental customer price
concessions and the end of production on all MG Rover programs as a result of
the MG Rover situation.

    EBIT

    Decoma's EBIT decreased 58% or $7 million to $5 million for the third
quarter of 2005 compared to $12 million for the third quarter of 2004. This
decrease is primarily attributable to:

    -   operating losses at Decoma's fascia moulding and paint facility in
        Georgia as it launches and ramps up production on new programs;
    -   inefficiencies at facilities in Europe, including increased losses
        associated with under-utilized paint capacity, performance issues and
        program launch costs;
    -   incremental customer price concessions; and
    -   increased raw material costs.

    These decreases were partially offset by:

    -   operational improvements realized at certain facilities;
    -   price reductions from our suppliers;
    -   the disposal of Decoma's Anotech facility during the first quarter of
        2005 which improved results as this division incurred operating
        losses during the third quarter of 2004; and
    -   contributions from new launches.

    Intier

    Sales

    Intier's sales increased by 2% or $30 million to $1.31 billion for the
third quarter of 2005 compared to $1.28 billion for the third quarter of 2004.
The increase in sales is primarily the result of an increase in Intier's North
American and European average dollar content per vehicle combined with a 2%
increase in North American vehicle production volumes, partially offset by a
6% decline in European vehicle production volumes.

    In North America, the increase in Intier's average dollar content per
vehicle was primarily attributable to:

    -   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 third quarter
        of 2004, including:
           -  the complete interior, excluding seats, for the Hummer H3;
           -  the complete seats for the Chevrolet Cobalt and the Pontiac
              Pursuit; and
           -  the complete seats, headliner, instrument panel, front console
              and latches for the Pontiac Torrent; and
    -   increased production and/or content on certain programs including:
           -  the second and third row stow-in-floor seats for Chrysler
              minivans;
           -  the complete seats for the Chrysler Pacifica; and
           -  the side door latches for the Ford Freestyle.

    These increases were partially offset by:

    -   incremental customer price concessions;
    -   lower volumes on certain high content programs including:
           -  the Ford Freestar and Mercury Monterey;
           -  the Ford Expedition;
           -  the Ford Explorer and Mercury Mountaineer; and
           -  the GMT800 platform; and
    -   reduced content for the Dodge Ram pickup.

    In Europe, the increase in Intier's average dollar content per vehicle
was primarily attributable to:

    -   the launch of new programs during or subsequent to the third quarter
        of 2004 including:
           -  a side door latch for the Seat Altea and Volkswagen Passat; and
           -  the floorspace for the Mercedes S-Class; and
    -   increased volume on a number of programs including a modular side
        door latch for a number of Audi programs.

    These increases were partially offset by:

    -   incremental customer price concessions;
    -   lower volumes on certain programs including the Audi A6 and the
        Mercedes E-Class; and
    -   the end of production on all MG Rover programs as a result of the
        MG Rover situation.

    EBIT

    Intier's EBIT decreased by 37% or $15 million to $26 million for the
third quarter of 2005 compared to $41 million for the third quarter of 2004.
The decrease is primarily a result of:

    -   reduced operating margin resulting from lower vehicle volumes on
        certain of Intier's high content programs;
    -   reduced operating margin resulting from reduced content on the Dodge
        Ram pickup;
    -   increased raw material prices, including purchased components,
        partially offset by price reductions from certain suppliers;
    -   incremental customer price concessions;
    -   operating inefficiencies at certain facilities;
    -   costs incurred to support future launches; and
    -   costs incurred in Asia on new joint-venture facilities.

    These decreases in EBIT were partially offset by:

    -   additional gross margin earned on sales from new product launches and
        increased volumes on certain programs;
    -   an increase in reported U.S. dollar EBIT due to the strengthening of
        the Canadian dollar against the U.S. dollar;
    -   a $2 million loss recorded in the third quarter of 2004 on the sale
        of a facility in Europe; and
    -   operational improvements at certain facilities.

    Tesma

    Sales

    Tesma's sales increased by 13% or $41 million to $363 million for the
third quarter of 2005 compared to $322 million for the third quarter of 2004.
The increase in sales is primarily the result of an increase in Tesma's North
American and European average dollar content per vehicle, combined with a 2%
increase in North America vehicle production volumes, partially offset by a 6%
decline in European vehicle production volumes.
    In North America, Tesma's average dollar content per vehicle increased
over the prior year, as a result of an increase in reported U.S. dollar sales
due to the strengthening of the Canadian dollar against the U.S. dollar and
increased production and/or content on certain programs including:

    -   the launch of assemblies including oil pans, flexplates and an
        integrated front cover with water pump for General Motors' 3.9L
        engine program;
    -   General Motors' Line 4, 5 and 6 engines, which are installed into
        mid-size sport utility vehicles ("SUVs") and mid-size pick-up trucks;
    -   water pump modules, flexplates and tensioner assemblies for the 5.7L
        Hemi engine for the Dodge Durango, Chrysler 300/300C and Dodge
        Magnum;
    -   various stamped components included in 6-speed and continuously
        variable transmission applications for Ford; and
    -   engine front cover and water pump modules for Hyundai's high volume
        Lambda V6 engine program.

    Partially offsetting these sales were incremental customer price
concessions and lower production volumes on certain programs at General Motors
and Ford including:

    -   the General Motors GEN IV engine, and 4L60E and LCT 1000
        transmissions, which are installed in General Motors' larger pickup
        trucks and SUVs;
    -   the General Motors L850/LE5 engine program used in smaller compact
        cars and SUVs; and
    -   the Ford Modular V8 engine which is used in Ford's high volume pickup
        trucks and larger cars.

    In Europe, Tesma's average dollar content per vehicle increased as a
result of:

    -   the launch of stainless steel fuel tank assemblies for
        DaimlerChrysler's W221/211 vehicle platforms;
    -   increased volumes and content for stainless steel fuel tank
        assemblies for Audi's D3 platform;
    -   higher shipments of fuel filler pipes for Ford's high volume Focus
        program; and
    -   volume increases and new launches of water pumps for Fiat.

    EBIT

    Tesma's EBIT increased 25% or $5 million to $25 million for the third
quarter of 2005 compared to $20 million for the third quarter of 2004. The
increase in EBIT was largely a result of:

    -   decreased year-over-year material costs driven by lower steel
        surcharge levels and price reductions from certain suppliers;
    -   higher operating margin earned as a result of higher sales levels;
        and
    -   operational improvements at certain underperforming facilities in
        North America.

    These increases were partially offset by incremental customer price
concessions.

    Magna Steyr

    Sales

    Magna Steyr's sales increased by 9% or $122 million to $1.6 billion for
the third quarter of 2005 compared to $1.4 billion for the third quarter of
2004. The increase in sales was a result of:

    -   the acquisition of the NVG business;
    -   an increase in transfer case sales for the Land Rover Discovery and
        BMW 3-Series and 5-Series;
    -   increased assembly volumes for certain vehicles which are accounted
        for on a value-added basis including:
           -  the launch in June 2005 of the Chrysler 300 for distribution in
              European markets and certain other markets outside North
              America; and
           -  the launch of the Jeep Grand Cherokee in the first quarter of
              2005 which had higher volumes than the previous model in the
              third quarter of 2004; and
    -   increased assembly volumes for the Mercedes E-Class 4MATIC which is
        accounted for on a full-cost basis.

    These increases were partially offset by:

    -   lower complete vehicle assembly volumes for vehicles accounted for on
        a full-cost basis, including:
           -  the BMW X3;
           -  the Saab 9(3) Convertible; and
           -  the Mercedes G-Class;
    -   lower complete vehicle assembly volumes for the Chrysler Voyager
        which is accounted for on a value-added basis; and
    -   lower volumes for the BMW X3 for which we have production content in
        addition to the assembly contract.

    EBIT

    Magna Steyr's EBIT increased by 18% or $9 million to $60 million for the
third quarter of 2005 compared to $51 million for the third quarter of 2004.
The increase in EBIT is primarily a result of:

    -   the acquisition of the NVG business;
    -   the increase in operating margin generated by increased sales,
        including the launch of the Chrysler 300/300C; and
    -   lower planning, engineering and start-up costs associated with
        General Motors' next generation full-size pick-ups and sport
        utilities program in comparison to the third quarter of 2004.

    Partially offsetting these increases were lower operating margins earned
as a result of the decrease in complete vehicle assembly sales.

    Other Automotive Operations

    Sales

    Our Other Automotive Operations' sales increased 25% or $289 million to
$1.4 billion for the third quarter of 2005 compared to $1.2 billion for the
third quarter of 2004. The increase in sales was primarily a result of an
increase in tooling sales and increases in the segment's North American and
European average dollar content per vehicle combined with a 2% increase in
North America vehicle production volumes, partially offset by a 6% decline in
European vehicle production volumes.

    In North America, the increase in average dollar content per vehicle is
primarily a result of:

    -   the launch of new programs during or subsequent to the third quarter
        of 2004 including:
           -  frames and liftgate window encapsulation for the new
              Ford Explorer;
           -  various stampings for the Ford Mustang;
           -  Class A stampings and all window encapsulation for the
              Mercedes M-Class;
           -  various stampings for the Ford Fusion, Mercury Milan and
              Lincoln Zephyr;
           -  various stampings for the Chevrolet HHR; and
           -  Class A stampings for the Dodge Charger; and
    -  an increase in reported U.S. dollar sales due to the strengthening of
        the Canadian dollar against the U.S. dollar.

    These increases were partially offset by:

    -  lower volumes on certain programs, in particular:
           -  the GMT800 platform; and
           -  the Ford Freestar and Mercury Monterey; and
    -  incremental customer price concessions.

    In Europe, the increase in average dollar content per vehicle is
primarily the result of:

    -   the launch of new programs including the Mercedes S-Class and
        Volkswagen Passat, partially offset by reductions in volumes on
        several programs including the BMW 5-Series and electrochromic
        mirrors on various platforms, and incremental price concessions.

    Tooling sales increased as a result of revenues earned on tooling for
several programs including:

    -   General Motors' next generation full-size pickup and sport utilities
        platform;
    -   the Mercedes M-Class;
    -   the Dodge Charger; and
    -   the Ford Fusion, Mercury Milan and the Lincoln Zephyr.

    EBIT

    Our Other Automotive Operations' EBIT increased 13% or $10 million to
$86 million for the third quarter of 2005 compared to $76 million for the
third quarter of 2004. The increase in EBIT is primarily a result of:

    -   higher gross margin earned from programs which launched during or
        subsequent to the third quarter of 2004;
    -   price reductions from our suppliers; and
    -   accelerated depreciation recorded during the third quarter of 2004 on
        program-specific assets that went out of service earlier than
        originally planned.

    These increases were partially offset by:

    -   lower operating margin earned on lower sales on certain high content
        programs;
    -   incremental customer price concessions;
    -   restructuring costs incurred at a facility in Europe; and
    -   increased commodity prices for steel and resins combined with lower
        scrap steel prices.

    Corporate and Other

    Corporate and Other EBIT increased 43% or $12 million to $40 million for
the third quarter of 2005 compared to $28 million for the third quarter of
2004. The increase in EBIT is primarily a result of:

    -   the receipt of $26 million during the third quarter of 2005 which was
        awarded by a court in a lawsuit commenced by us in 1998 in respect of
        defective materials installed by a supplier in a real estate project;
        and
    -   increased affiliation and other fee income earned as a result of
        higher sales.

    These increases in EBIT were partially offset by:

    -   increased stock compensation expense as a result of the assumption of
        the stock option plans of Tesma, Intier and Decoma;
    -   increased incentive compensation;
    -   additional depreciation recorded as a result of the Privatizations;
        and
    -   a decrease in investment tax credits.


    RESULTS OF OPERATIONS - FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2005
    -------------------------------------------------------------------------

    Sales
                                                        For the nine
                                                        months ended
                                                        September 30,
                                                       --------------
                                                       2005      2004  Change
    -------------------------------------------------------------------------

    Vehicle Production Volumes (millions of units)
      North America                                  11.812    11.942  -  1%
      Europe                                         11.894    12.489  -  5%
    -------------------------------------------------------------------------

    Average Dollar Content Per Vehicle
      North America                                $    729  $    603  + 21%
      Europe                                       $    324  $    281  + 15%
    -------------------------------------------------------------------------

    Sales
      North American Production                    $  8,609  $  7,198  + 20%
      European Production                             3,849     3,504  + 10%
      European Complete Vehicle Assembly              3,059     3,254  -  6%
      Tooling, Engineering and Other                  1,440     1,044  + 38%
    -------------------------------------------------------------------------
      Total Sales                                  $ 16,957  $ 15,000  + 13%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    North American Production Sales

    North American production sales increased 20% or $1.4 billion to
$8.6 billion for the nine months ended September 30, 2005 compared to
$7.2 billion for the nine months ended September 30, 2004. This increase in
production sales reflects a 21% increase in our North American average dollar
content per vehicle, partially offset by a 1% decline in North American
vehicle production volumes.
    Our average dollar content per vehicle grew by 21% or $126 to $729 for
the nine months ended September 30, 2005 compared to $603 for the nine months
ended September 30, 2004, primarily as a result of:

    -   the launch of new programs during or subsequent to the nine months
        ended September 30, 2004, including:
           -  the Chevrolet Cobalt and Pontiac Pursuit;
           -  the Hummer H3;
           -  the Ford Mustang;
           -  the Cadillac STS;
           -  the Chrysler 300/300C;
           -  the Dodge Charger;
           -  the Mercedes M-Class;
           -  the Chevrolet Equinox; and
           -  the Mercury Mariner;
    -   the acquisition of the NVG business in September 2004;
    -   an increase in reported U.S. dollar sales due to the strengthening of
        the Canadian dollar against the U.S. dollar; and
    -   increased production and/or content on certain programs, including
        Chrysler minivans.

    These increases were partially offset by:

    -   the impact of lower volumes and/or content on certain programs
        including:
           -  the GMT800 platform;
           -  the Ford Freestar and Mercury Monterey;
           -  the Dodge Ram pickup;
           -  the GMC Canyon and Chevrolet Colorado; and
           -  the Ford Expedition;
    -   programs that ended production during or subsequent to the nine
        months ended September 30, 2004; and
    -   incremental customer price concessions.

    European Production Sales

    European production sales increased 10% or $345 million to $3.8 billion
for the nine months ended September 30, 2005 compared to $3.5 billion for the
nine months ended September 30, 2004. This increase in sales reflects a 15%
increase in our European average dollar content per vehicle, partially offset
by a 5% decline in European vehicle production volumes.
    Our average dollar content per vehicle grew by 15% or $43 to $324 for the
nine months ended September 30, 2005 compared to $281 for the nine months
ended September 30, 2004, primarily as a result of:

    -   programs that launched during or subsequent to the first nine months
        of 2004, including:
           -  the Land Rover Discovery;
           -  the Mercedes A and B-Class; and
           -  the BMW 1-Series;
    -   an increase in reported U.S. dollar sales due to the strengthening of
        European currencies against the U.S. dollar, in particular the euro;
        and
    -   the acquisition of the European operations of NVG.

    These increases were partially offset by:

    -   lower production on certain programs, including the Mercedes E-Class;
    -   incremental customer price concessions; and
    -   the end of production on all MG Rover programs as a result of the
        MG Rover situation.

    European Complete Vehicle Assembly Sales

    European complete vehicle assembly sales decreased 6% or $195 million to
$3.1 billion for the nine months ended September 30, 2005 compared to
$3.3 billion for the nine months ended September 30, 2004. This decrease in
sales is primarily the result of:

    -   lower assembly volumes for vehicles accounted for on a full-cost
        basis, including:
           -  the BMW X3;
           -  the Mercedes E-Class 4MATIC;
           -  the Mercedes G-Class; and
           -  the Saab 9(3) Convertible; and
    -   lower assembly volumes for the Chrysler Voyager which is accounted
        for on a value-added basis.

    These decreases were partially offset by increased assembly volumes for
certain vehicles which are accounted for on a value-added basis including:

    -   the launch in June 2005 of the Chrysler 300 for distribution in
        European markets and certain other markets outside North America; and
    -   the launch of the Jeep Grand Cherokee in the first quarter of 2005
        which had higher volumes than the previous model in the third quarter
        of 2004.

    Tooling, Engineering and Other

    Tooling, engineering and other sales increased 38% or $396 million to
$1.4 billion for the nine months ended September 30, 2005 compared to
$1.0 billion for the nine months ended September 30, 2004. The increase was
attributable to higher level of tooling and engineering revenue activities and
an increase in reported U.S. dollar sales due to the strengthening of the
Canadian dollar and euro, each against the U.S. dollar. Tooling and
engineering revenue recorded in the first nine months of 2005 relates to a
number of programs, including:

    -   the Ford Fusion, Mercury Milan and Lincoln Zephyr launched in 2005;
    -   General Motors' next generation full-size pickup and sport utilities
        platform;
    -   the next generation MINI Cooper launching subsequent to the third
        quarter of 2005;
    -   the Mercedes M-Class launched in 2005;
    -   the Hummer H3 launched in 2005; and
    -   the Jeep Grand Cherokee launched in 2005.

    Operating Income

    Operating income decreased 7% or $58 million to $817 million for the nine
months ended September 30, 2005 compared to $875 million for the nine months
ended September 30, 2004. On a comparable basis, our operating income was
negatively impacted by:

    -   reduced volumes on certain high content GM and Ford programs;
    -   incremental price concessions;
    -   increased commodity prices;
    -   costs incurred at new facilities in preparation for upcoming launches
        or for programs that have not fully ramped up production;
    -   increased depreciation and amortization as a result of the
        Privatizations and the acquisition of NVG;
    -   restructuring costs and impairment charges;
    -   charges recorded related to our MG Rover assets and supplier
        obligations as a result of the MG Rover situation;
    -   costs to rationalize a facility in North America;
    -   operating inefficiencies at certain facilities; and
    -   the expensing of capitalized bank facility fees.

    Partially offsetting these decreases was the positive impact of:

    -   the receipt of $26 million during the third quarter of 2005 which was
        awarded by a court in a lawsuit commenced by us in 1998 in respect of
        defective materials installed by a supplier in a real estate project;
    -   realization of a foreign currency gain on the repatriation of funds
        from Europe;
    -   a gain on the disposal of a non-core seat component facility;
    -   the one-time charge to compensation expense of $12 million recorded
        in the first quarter of 2004;
    -   programs that launched during or subsequent to the first nine months
        of 2004;
    -   operational improvements at certain facilities;
    -   productivity improvements at certain divisions;
    -   price reductions from our suppliers;
    -   charges recorded during the first quarter of 2004 with respect to the
        closure of facilities in Europe;
    -   accelerated depreciation recorded in the third quarter of 2004 for
        assets that were going out of service earlier than originally
        planned; and
    -   the loss on sale of a facility in Europe during the third quarter of
        2004.


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

    Cash Flow from Operations
                                                        For the three
                                                        months ended
                                                        September 30,
                                                       --------------
                                                       2005      2004  Change
    -------------------------------------------------------------------------

    Net income                                     $    159  $    132
    Items not involving current cash flows              198       179
    -------------------------------------------------------------------------
                                                   $    357  $    311  $  46
    Changes in non-cash operating assets and
     liabilities                                       (482)      (74)
    -------------------------------------------------------------------------
    Cash provided from (used in) operating
     activities                                    $   (125) $    237  $(362)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Cash flow from operations before changes in non-cash operating assets and
liabilities increased $46 million to $357 million for the third quarter of
2005 compared to $311 million for the third quarter of 2004. The increase in
cash flow from operations was due to a $27 million increase in net income (as
explained above) combined with a $19 million increase in items not involving
current cash flows.

    The increase in items not involving current cash flows was due to:

    -   a $24 million increase in depreciation and amortization as explained
        above;
    -   a $3 million increase in future income taxes; and
    -   a $3 million increase in other non-cash charges.

    These increases were partially offset by an $11 million decrease in
minority interest primarily as a result of the Privatizations.
    Cash invested in operating assets and liabilities amounted to
$482 million for the third quarter of 2005 which was comprised of the
following sources and (uses) of cash:

    Accounts receivable                                             $   (505)
    Inventory                                                           (116)
    Prepaid expenses and other                                           (11)
    Accounts payable and other accrued liabilities                       140
    Income taxes payable                                                   8
    Deferred revenues                                                      2
    -------------------------------------------------------------------------
    Changes in non-cash operating assets and liabilities            $   (482)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    The increase in accounts receivable is primarily due to the timing of
cash receipts whereby approximately $500 million of cash was received shortly
after the end of the third quarter.
    The increase in inventory is a result of increased tooling inventory on
certain programs that will be launching subsequent to the third quarter of
2005, an increase in work-in-process at one of our assembly facilities as a
result of temporary supply disruptions and an increase in raw material
inventory to support future production.
    The increase in accounts payable and other accrued liabilities is
consistent with the inventory build described above.

    Capital and Investment Spending

                                                        For the three
                                                        months ended
                                                        September 30,
                                                       --------------
                                                       2005      2004  Change
    -------------------------------------------------------------------------

    Fixed assets                                   $   (198) $   (211)
    Other assets                                        (31)       (2)
    -------------------------------------------------------------------------
    Fixed assets and other additions               $   (229) $   (213)
    Purchase of subsidiaries                              1      (353)
    Proceeds from disposals                               7         6
    -------------------------------------------------------------------------
    Cash used in investing activities              $   (221) $   (560) $ 339
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    In the third quarter of 2005 we invested $198 million in fixed assets.
While investments were made to refurbish or replace assets consumed in the
normal course and for productivity improvements, most of the investment was
for component manufacturing, painting and assembly equipment for programs
launching in future periods.
    We invested $31 million in other assets in the third quarter of 2005
primarily representing fully reimbursable planning and engineering costs
relating to programs that will be launching subsequent to the third quarter of
2005.
    Purchase of subsidiaries in the third quarter of 2004 relates primarily
to the acquisition of the NVG business. The cash portion of the purchase
price, net of $3 million of cash acquired, amounted to $348 million. During
the third quarter of 2005, we received a $1 million cash adjustment with
respect to the acquisition of the NVG business.
    Proceeds from disposals reflect proceeds from normal course fixed and
other asset disposals.

    Financing

                                                        For the three
                                                        months ended
                                                        September 30,
                                                       --------------
                                                       2005      2004  Change
    -------------------------------------------------------------------------

    Issues of debt                                 $     60  $    287
    Repayments of debt                                  (16)      (25)
    Redemption of Preferred Securities                    -      (300)
    Issues of Class A Subordinate Voting Shares           6         -
    Issues of shares by subsidiaries                      -         3
    Dividends paid to minority interests                  -        (5)
    Dividends                                           (41)      (37)
    -------------------------------------------------------------------------
    Cash provided from (used in) financing
     activities                                    $      9  $    (77) $  86
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    In association with the acquisition of the NVG business in the third
quarter of 2004, we issued five series of senior unsecured zero-coupon notes
with an aggregate issue price of Cdn$365 million ($287 million on issue date).
The issues of debt in the third quarter of 2005 relate primarily to increases
in bank indebtedness.
    During the third quarter of 2004, we redeemed all of our outstanding
Preferred Securities for $300 million in cash.
    During the third quarter of 2005, we issued $6 million in Class A
Subordinate Voting Shares on the exercise of stock options. The issue of
shares by our subsidiaries in 2004 is comprised primarily of the issue of
$3 million of Intier Class A Subordinate Voting Shares to the Intier employee
deferred profit sharing program and on the exercise of stock options.
    Dividends paid during the third quarter of 2005 were $41 million. These
payments relate to dividends declared in respect of the three-month period
ended June 30, 2005. The increase in quarterly dividends paid in the third
quarter of 2005 compared to the third quarter of 2004 relates to the increase
in the number of Class A Subordinate Voting Shares outstanding, primarily as a
result of the Privatizations. There were no dividends paid to minority
interests in the third quarter of 2005 as a result of the Privatizations.


    Financing Resources

                                                      As at     As at
                                                    Sept 30,   Dec 31,
                                                       2005    2004(i) Change
    -------------------------------------------------------------------------

    Liabilities
      Bank indebtedness                            $    186  $    136
      Long-term debt due within one year                124        84
      Long-term debt                                    705       984
      Minority interest                                   -       634
    -------------------------------------------------------------------------
                                                      1,015     1,838  $(823)
    Shareholders' equity                              6,556     5,335  1,221
    -------------------------------------------------------------------------
    Total capitalization                           $  7,571  $  7,173  $ 398
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (i) As required by CICA 3860, restated to reclassify our 7.08%
        Subordinated Debentures and 6.5% Convertible Subordinated Debentures
        to long-term debt from shareholders' equity and minority interest,
        respectively.


    Total capitalization increased by $398 million in the nine months ended
September 30, 2005 to $7.6 billion. The increase in capitalization is a result
of a $1.2 billion increase in shareholders' equity offset in part by an
$823 million decrease in liabilities.

    The increase in shareholders' equity is a result of:

    -   the Class A Subordinate Voting Shares issued as part of the purchase
        price for the Privatizations and on the exercise of stock options;
        and
    -   net income earned during the nine months ended September 30, 2005.

    These increases were partially offset by:

    -   dividends paid;
    -   a decrease in the currency translation adjustment; and
    -   a reduction in share capital as a result of the repurchase of Class A
        Subordinate Voting Shares for issuance to certain executives on a
        restricted basis.

    The acquisition of the remaining interest in Decoma resulted in the
amalgamation of Magna and Decoma. As a result of this amalgamation, Decoma's
three-year term credit facility (see below) and Decoma's 6.5% Convertible
Subordinated Debentures maturing March 31, 2010 became direct obligations of
Magna.

    The decrease in liabilities is primarily due to:

    -   the decrease in minority interest as a result of the acquisitions of
        the remaining minority interest in Tesma, Intier and Decoma; and
    -   decreases in long term debt as a result of the repayment of:
           -  the first series of our senior unsecured notes related to the
              acquisition of NVG; and
           -  the outstanding debt on Decoma's term debt facility.

    During the third quarter of 2005, our cash resources decreased by
$528 million to $991 million as a result of the cash used in operating and
investing activities, partially offset by the cash provided from financing
activities, all as discussed above. In addition to our cash resources, we had
unused and available operating lines of credit of $27 million and term lines
of credit of $814 million. During the first quarter of 2005, we repaid the
outstanding borrowings of Cdn $197 million under the former Decoma term credit
facility and the facility was cancelled. On March 31, 2005, we amended and
extended our existing Cdn $500 million 364-day revolving credit facility to
increase the permitted borrowing under the facility to $745 million.
    Subsequent to the third quarter of 2005, we completed a new five-year
revolving term facility that expires on October 12, 2010. The facility has a
North American tranche of $1.57 billion and a European tranche of
(euro) 300 million. An Asian tranche of $50 million has been committed to by
the bank group and is in the process of being finalized. On closing, we
cancelled our existing facility of $745 million and Intier's facility of
$365 million and (euro) 100 million.
    In addition to the above unused and available financing resources, we
sponsored a tooling finance program for tooling suppliers to finance tooling
under construction for use in our operations. The maximum facility amount was
Cdn $100 million. This tooling finance program has been cancelled for new
business. As at September 30, 2005, less than Cdn $1 million remains
outstanding under this facility and is included in accounts payable on our
consolidated balance sheet.

    Maximum Number of Shares Issuable

    The following table presents the maximum number of shares that would be
outstanding if all of the outstanding options and Subordinated Debentures
issued and outstanding at November 7, 2005 were exercised or converted:

    Class A Subordinate Voting and Class B Shares                109,266,709
    Subordinated Debentures (i)                                    1,096,582
    Stock options (ii)                                             4,606,189
    -------------------------------------------------------------------------
                                                                 114,969,480
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    (i)  The above amounts include shares issuable if the holders of the 6.5%
         Convertible Subordinated Debentures exercise their conversion option
         but exclude Class A Subordinate Voting Shares issuable, only at our
         option, to settle interest and principal related to the 6.5%
         Convertible Subordinated Debentures. The number of Class A
         Subordinate Voting Shares issuable at our option is dependent on the
         trading price of Class A Subordinate Voting Shares at the time we
         elect to settle 6.5% Convertible Subordinated Debenture interest and
         principal with shares.

         The above amounts also exclude Class A Subordinate Voting Shares
         issuable, only at our option, to settle the 7.08% Subordinated
         Debentures on redemption or maturity. The number of shares issuable
         is dependent on the trading price of Class A Subordinate Voting
         Shares at redemption or maturity of the 7.08% Subordinated
         Debentures.

    (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, Tesma's amended and restated Stock Option Plan, Decoma's
         Option Plan and Intier's 2001 Incentive Stock Option Plan.


    Contractual Obligations and Off Balance Sheet Financing

    There have been no material changes with respect to the contractual
obligations requiring annual payments during the third quarter of 2005 that
are outside the ordinary course of our business. Refer to our MD&A included in
our 2004 Annual Report.
    Long term receivables in other assets are reflected net of outstanding
borrowings from a customer's finance subsidiary of $60 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.


    2005 OUTLOOK
    -------------------------------------------------------------------------

    All amounts below exclude the impact of any potential future
acquisitions.

    We expect our results will continue to be impacted by the negative
conditions in the automotive industry, including weak automotive production,
OEM price concessions, higher commodity costs and general economic
uncertainty. In addition, we expect that our 2005 results will be negatively
impacted by certain unusual items, including rationalization and other charges
associated with certain of our operations, including operations that supplied
MG Rover, as well as restructuring charges arising from our recently completed
privatizations.
    We expect 2005 average dollar content per vehicle to be between $730 and
$740 in North America and between $320 and $330 in Europe. We expect 2005
European complete vehicle assembly sales to be between $4.0 billion and
$4.1 billion. Further, we have assumed 2005 vehicle production volumes will be
approximately 15.7 million units in North America and approximately
15.9 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 complete vehicle assembly, tooling and other
automotive sales, we expect our consolidated sales for 2005 to be between
$22.3 billion and $22.9 billion, compared to 2004 consolidated sales of
$20.7 billion. In addition, we expect that 2005 spending for fixed assets will
be between $825 million and $875 million.
    In 2005, excluding the impact of the unusual items noted above, we
anticipate lower diluted earnings per share than 2004.

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

    From time to time, we may be contingently liable for litigation and other
claims. Refer to note 28 to our 2004 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: changes in consumer demand due to global
economic and political conditions (including acts of terrorism); decreases in
automotive production volumes; shifts in market share away from vehicles or
vehicle platforms on which we have high content and margins; our reliance on a
small number of automobile manufacturers, some of which have been experiencing
declining overall production volumes; our success in further diversifying our
customer base; the impact of the declining competitiveness and deteriorating
financial condition of some of our customers and suppliers; a decline in
outsourcing by automobile manufacturers; pressure from our customers to reduce
our prices and absorb certain fixed costs; the competitiveness of the
automotive supply industry; our ability to reduce our exposure to, or recover,
increases in prices for commodities such as steel and resins; increased crude
oil and energy prices; product warranty and recall costs, as well as product
liability risks; fluctuations in relative currency values; risks associated
with doing business in foreign countries; the success of our proposed
rationalization of production and/or the streamlining of administrative
functions due to the privatization of our former publicly traded subsidiaries;
rapid technological and regulatory changes; the threat of labour disruptions
affecting us, our customers or our suppliers; program cancellations and delays
in launching new programs; delays in constructing new facilities; changes in
governmental regulations; the impact of environmental laws and regulations;
the impact of legal proceedings to which we are or may become a party; our
relationship with our controlling shareholder; and other factors set out in
our Annual Information Form filed with securities commissions in Canada and
our annual report on Form 40-F filed with the United States Securities and
Exchange Commission, and subsequent filings. 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, results or circumstances or otherwise.



    MAGNA INTERNATIONAL INC.
    CONSOLIDATED STATEMENTS OF INCOME
    (Unaudited)
    (U.S. dollars in millions, except per share figures)

                                     Three months ended    Nine months ended
                                        September 30,         September 30,
                                   --------------------  --------------------
                              Note     2005       2004       2005       2004
    -------------------------------------------------------------------------
                                             (restated             (restated
                                                note 2)               note 2)

    Sales                          $  5,381   $  4,784   $ 16,957   $ 15,000
    -------------------------------------------------------------------------

    Cost of goods sold                4,679      4,126     14,737     12,816
    Depreciation and
     amortization                       174        150        515        425
    Selling, general and
     administrative             7       287        281        884        872
    Interest expense, net                 2          5          5         22
    Equity income                        (1)        (1)        (6)       (10)
    Impairment charges                    -          -          5          -
    -------------------------------------------------------------------------
    Income from operations
     before income taxes
     and minority interest              240        223        817        875
    Income taxes                         81         80        250        315
    Minority interest           3         -         11         11         61
    -------------------------------------------------------------------------
    Net income                     $    159   $    132   $    556   $    499
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Earnings per Class A
     Subordinate Voting or
     Class B Share:
      Basic                        $   1.47   $   1.37   $   5.24   $   5.17
      Diluted                      $   1.44   $   1.37   $   5.16   $   5.13
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Cash dividends paid per
     Class A Subordinate
     Voting or Class B Share       $   0.38   $   0.38   $   1.14   $   1.10
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Average number of Class A
     Subordinate Voting and
     Class B Shares outstanding
     during the period
     (in millions):
      Basic                           108.4       96.8      106.2       96.6
      Diluted                         111.2       97.4      108.3       97.3
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
    (Unaudited)
    (U.S. dollars in millions)

                                     Three months ended    Nine months ended
                                        September 30,         September 30,
                                   --------------------  --------------------
                              Note     2005       2004       2005       2004
    -------------------------------------------------------------------------

    Retained earnings,
     beginning of period           $  3,251   $  2,701   $  2,935   $  2,384
    Net income                          159        132        556        499
    Dividends on Class A
     Subordinate Voting
     and Class B Shares                 (42)       (37)      (125)      (107)
    Adjustment for change in
     accounting policy related
     to financial instruments   2         -          -          2         20
    -------------------------------------------------------------------------
    Retained earnings,
     end of period                 $  3,368   $  2,796   $  3,368   $  2,796
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

                           See accompanying notes



    MAGNA INTERNATIONAL INC.
    CONSOLIDATED STATEMENTS OF CASH FLOWS
    (Unaudited)
    (U.S. dollars in millions)

                                     Three months ended    Nine months ended
                                        September 30,         September 30,
                                   --------------------  --------------------
                              Note     2005       2004       2005       2004
    -------------------------------------------------------------------------
                                             (restated             (restated
                                                note 2)               note 2)

    Cash provided from
     (used for):

    OPERATING ACTIVITIES
    Net income                     $    159   $    132   $    556   $    499
    Items not involving
     current cash flows                 198        179        564        607
    -------------------------------------------------------------------------
                                        357        311      1,120      1,106
    Changes in non cash
     operating assets
     and liabilities                   (482)       (74)      (592)        78
    -------------------------------------------------------------------------
                                       (125)       237        528      1,184
    -------------------------------------------------------------------------

    INVESTMENT ACTIVITIES
    Fixed asset additions              (198)      (211)      (527)      (531)
    Purchase of subsidiaries    3         1       (353)      (168)      (417)
    Increase in other assets            (31)        (2)      (100)       (35)
    Proceeds from disposition             7          6         65         28
    -------------------------------------------------------------------------
                                       (221)      (560)      (730)      (955)
    -------------------------------------------------------------------------

    FINANCING ACTIVITIES
    Issues of debt                       60        287        122        316
    Repayments of debt          4       (16)       (25)      (294)      (106)
    Redemption of Preferred
     Securities                 4         -       (300)         -       (300)
    Issues of Class A
     Subordinate Voting Shares            6          -         19         26
    Issues of shares by
     subsidiaries                         -          3          1         13
    Dividends paid to minority
     interests                            -         (5)        (1)       (14)
    Dividends                           (41)       (37)      (124)      (107)
    -------------------------------------------------------------------------
                                          9        (77)      (277)      (172)
    -------------------------------------------------------------------------

    Effect of exchange rate
     changes on cash and
     cash equivalents                    34         43        (49)        16
    -------------------------------------------------------------------------

    Net increase (decrease) in
     cash and cash equivalents
     during the period                 (303)      (357)      (528)        73
    Cash and cash equivalents,
     beginning of period              1,294      1,958      1,519      1,528
    -------------------------------------------------------------------------
    Cash and cash equivalents,
     end of period                 $    991   $  1,601   $    991   $  1,601
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

                           See accompanying notes



    MAGNA INTERNATIONAL INC.
    CONSOLIDATED BALANCE SHEETS
    (Unaudited)
    (U.S. dollars in millions)

                                                  September 30,  December 31,
                                          Note            2005          2004
    -------------------------------------------------------------------------
                                                                   (restated
                                                                      note 2)

    ASSETS
    Current assets
    Cash and cash equivalents                         $    991      $  1,519
    Accounts receivable                                  4,109         3,276
    Inventories                                          1,422         1,376
    Prepaid expenses and other                             125           110
    -------------------------------------------------------------------------
                                                         6,647         6,281
    -------------------------------------------------------------------------
    Investments                                            141           139
    Fixed assets, net                                    4,110         3,967
    Goodwill                                3              953           747
    Future tax assets                                      184           195
    Other assets                                           343           282
    -------------------------------------------------------------------------
                                                      $ 12,378      $ 11,611
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current liabilities
    Bank indebtedness                                 $    186      $    136
    Accounts payable                                     3,243         3,006
    Accrued salaries and wages                             478           449
    Other accrued liabilities                              389           350
    Income taxes payable                                    14            35
    Long-term debt due within one year                     124            84
    -------------------------------------------------------------------------
                                                         4,434         4,060
    -------------------------------------------------------------------------
    Deferred revenue                                        64            70
    Long-term debt                        3,4              705           984
    Other long-term liabilities                            239           240
    Future tax liabilities                                 380           288
    Minority interest                       3                -           634
    -------------------------------------------------------------------------
                                                         5,822         6,276
    -------------------------------------------------------------------------

    Shareholders' equity
    Capital stock                           6
      Class A Subordinate Voting Shares
        (issued: 108,137,989;
        December 31, 2004 - 95,850,377)                  2,467         1,610
      Class B Shares
        (convertible into Class A
        Subordinate Voting Shares)
        (issued: 1,093,983)                                  -             -
    Other paid-in capital                                    3             -
    Contributed surplus                     7               61            16
    Retained earnings                                    3,368         2,937
    Currency translation adjustment                        657           772
    -------------------------------------------------------------------------
                                                         6,556         5,335
    -------------------------------------------------------------------------
                                                      $ 12,378      $ 11,611
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

                           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 Canadian
        generally accepted accounting principles, as well as following the
        accounting policies as set out in the 2004 annual consolidated
        financial statements, except for the accounting change set out in
        note 2.

        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 2004 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 September 30, 2005 and the results of
        operations and cash flows for the three month and nine-month periods
        ended September 30, 2005 and 2004.

    2.  ACCOUNTING CHANGE

        Financial Instruments - Disclosure and Presentation

        In 2003, the Canadian Institute of Chartered Accountants ("CICA")
        amended Handbook Section 3860 "Financial Instruments - Disclosure and
        Presentation" ("CICA 3860") to require certain obligations that may
        be settled with an entity's own equity instruments be reflected as a
        liability. The amendments require the Company to present Preferred
        Securities and Subordinated Debentures as liabilities, with the
        exception of the equity value ascribed to the holders' option to
        convert the 6.5% Convertible Subordinated Debentures into Class A
        Subordinate Voting Shares, and to present the related liability
        carrying costs as a charge to net income. The Company adopted these
        new recommendations effective January 1, 2005 on a retroactive basis.

        The impact of this accounting policy change on the consolidated
        balance sheet as at December 31, 2004 was as follows:

        Increase in other assets                                    $      2
        ---------------------------------------------------------------------

        Decrease in income taxes payable                            $      1
        Increase in long-term debt                                       216
        Decrease in debentures' interest obligation                       38
        Decrease in minority interest                                     68
        ---------------------------------------------------------------------

        Decrease in other paid-in-capital                           $     75
        Increase in retained earnings                                      2
        Decrease in currency translation adjustment                       34
        ---------------------------------------------------------------------


        The impact of this accounting policy change on the consolidated
        statements of income and retained earnings was as follows:

                                                            Three       Nine
                                                           months     months
                                                            ended      ended
                                                        September  September
                                                         30, 2004   30, 2004
        ---------------------------------------------------------------------

        Increase in interest expense                     $     10   $     29
        Decrease in income taxes                               (4)       (11)
        Decrease in minority interest                          (1)        (3)
        ---------------------------------------------------------------------
        Decrease in net income                                 (5)       (15)
        Decrease in financing charges on Preferred
         Securities and other paid-in-capital                   5         15
        Decrease in foreign exchange gain on
         redemption of Preferred Securities                   (18)       (18)
        ---------------------------------------------------------------------
        Decrease in net income available to
         Class A Subordinate Voting and
         Class B Shareholders                            $    (18)  $    (18)
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

        Reduction of earnings per Class A
         Subordinate voting or Class B Share
            Basic                                        $  (0.18)  $  (0.18)
            Diluted                                      $  (0.18)  $  (0.18)
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

    3.  ACQUISITIONS

        (a) For the nine months ended September 30, 2005

           (i) Tesma

               On February 1, 2005, the shareholders of Tesma International
               Inc. ("Tesma") approved a plan of arrangement that became
               effective on February 6, 2005 under which Magna acquired the
               outstanding 56% equity interest in Tesma that it did not
               previously own. Total consideration for the outstanding
               Class A Subordinate Voting Shares of Tesma not owned by the
               Company was approximately $613 million, which was satisfied by
               issuing 6.7 million Magna Class A Subordinate Voting Shares
               (note 6) and cash of approximately $103 million. In addition,
               Magna assumed responsibility for the existing stock options of
               Tesma, resulting in an increase in the purchase price of
               approximately $17 million, representing the approximate fair
               value of the stock options assumed. This fair value has been
               credited to contributed surplus (note 7). The excess of the
               purchase price over the Company's incremental interest in the
               book value of the assets acquired and liabilities assumed was
               $270 million.

          (ii) Decoma

               On February 28, 2005, the shareholders of Decoma International
               Inc. ("Decoma") approved a plan of arrangement that became
               effective on March 6, 2005 under which Magna acquired the
               outstanding 27% equity interest in Decoma that it did not
               previously own. Total consideration for the outstanding
               Class A Subordinate Voting Shares of Decoma not owned by the
               Company was approximately $239 million, which was satisfied by
               issuing 2.9 million Magna Class A Subordinate Voting Shares
               (note 6) and cash of approximately $31 million. In addition,
               Magna assumed responsibility for the existing stock options of
               Decoma, resulting in an increase in the purchase price of
               approximately $2 million, representing the approximate fair
               value of the stock options assumed. This fair value has been
               credited to contributed surplus (note 7). The excess of the
               purchase price over the Company's incremental interest in the
               book value of the assets acquired and liabilities assumed was
               $78 million.

               The Decoma plan of arrangement resulted in the amalgamation of
               Magna and Decoma. As a result of this amalgamation, Decoma's
               three-year term credit facility maturing September 30, 2007
               and Decoma's 6.5% Convertible Subordinated Debentures maturing
               March 31, 2010 became direct obligations of the Company. In
               March 2005, the Company repaid outstanding borrowings of
               Cdn $197 million under the former Decoma term credit facility
               and the facility was cancelled (note 4).

         (iii) Intier

               On March 30, 2005 the shareholders of Intier Automotive Inc.
               ("Intier") approved a plan of arrangement that became
               effective on April 3, 2005 under which Magna acquired the
               outstanding 15% equity interest in Intier that it did not
               previously own. Total consideration for the outstanding
               Class A Subordinate Voting Shares of Intier not owned by the
               Company was approximately $202 million, which was satisfied by
               issuing 2.3 million Magna Class A Subordinate Voting Shares
               (note 6) and cash of approximately $50 million. In addition,
               Magna assumed responsibility for the existing stock options of
               Intier, resulting in an increase in the purchase price of
               approximately $23 million, representing the approximate fair
               value of the stock options assumed. This fair value has been
               credited to contributed surplus (note 7). The excess of the
               purchase price over the Company's incremental interest in the
               book value of the assets acquired and liabilities assumed was
               $87 million.

            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. On a preliminary basis, an allocation of the
            excess purchase price over the Company's incremental interest in
            the book value of the assets acquired and liabilities assumed has
            been made to fixed assets for each of the Tesma, Decoma and
            Intier acquisitions.

        (b) For the nine months ended September 30, 2004

            In September 2004, the Company completed the acquisition of the
            worldwide operations of DaimlerChrysler Corporation's ("DCC")
            wholly owned subsidiary, New Venture Gear, Inc. ("NVG"). The
            transaction involved the creation of a new joint venture named
            New Process Gear, Inc. ("NPG") that acquired the manufacturing
            assets and now operates the manufacturing facility in Syracuse.
            Magna currently owns 80% of the NPG joint venture and DCC owns
            the remaining 20% interest. Magna is consolidating 100% of NPG
            from the date of closing and accounting for DCC's remaining
            interest as debt, since such interest will be purchased by Magna
            at a fixed and predetermined price.

            Total consideration for the acquisition of 100% of NVG amounted
            to $428 million, subject to post-closing adjustments. The
            purchase price was satisfied with a combination of $348 million
            in cash (net of cash acquired of $3 million) and $80 million in
            zero-coupon notes payable to DCC, which have a face value of
            $95 million and are due in December 2008.

            In connection with the NVG acquisition, Magna issued five series
            of senior unsecured zero-coupon notes with an aggregate issue
            price of Cdn $365 million ($287 million on issue date) and an
            aggregate amount due at maturity of Cdn $415 million. The notes,
            which mature at various dates to December 2008, were sold in
            Canada on an underwritten private placement basis.

    4.  LONG-TERM DEBT

        In March 2005, the Company repaid the outstanding borrowings of
        Cdn $197 million under the former Decoma term credit facility and the
        facility was cancelled. On March 31, 2005, Magna amended and extended
        its existing Cdn $500 million 364-day revolving credit facility to
        increase the permitted borrowing under the facility to $745 million.

        Subsequent to September 30, 2005, Magna completed a new five-year
        revolving term facility that expires on October 12, 2010. The
        facility has a North American tranche of $1.57 billion and a European
        tranche of (euro) 300 million. An Asian tranche of $50 million has
        been committed to by the bank group and is in the process of being
        finalized. On closing, the Company cancelled its existing facility of
        $745 million and Intier's facility of $365 million and
        (euro) 100 million.

        In September 2004, the Company redeemed all of the Preferred
        Securities for an aggregate cash payment of $300 million.

    5.  EMPLOYEE FUTURE BENEFIT PLANS

        The Company recorded employee future benefit expenses as follows:

                                     Three months ended    Nine months ended
                                        September 30,         September 30,
                                   --------------------  --------------------
                                       2005       2004       2005       2004
        ---------------------------------------------------------------------

        Defined benefit pension
         plans and other           $      4   $      4   $     11   $     14
        Termination and long
         service arrangements             3          6         11         13
        Retirement medical
         benefits plan                    2          2          7          6
        ---------------------------------------------------------------------
                                   $      9   $     12   $     29   $     33
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------


    6.  CAPITAL STOCK

        (a) Changes in the Class A Subordinate Voting Shares for the three
            and nine months ended September 30, 2005 are shown in the
            following table (numbers of shares in the following table are
            expressed in whole numbers):

                                                         Subordinate Voting
                                                       ----------------------
                                                        Number of     Stated
                                                           shares      value
        ---------------------------------------------------------------------

        Issued and outstanding at December 31, 2004    95,850,377   $  1,610
        Issued on privatization of Tesma (i)            6,687,709        510
        Issued on privatization of Decoma (i)           2,854,400        208
        Issued for cash under the Incentive
         Stock Option Plan                                170,106         13
        Issued under the Dividend Reinvestment Plan         2,438          -
        Exchange of subsidiary restricted stock for
         Magna restricted stock (i)                             -        (19)
        ---------------------------------------------------------------------
        Issued and outstanding at March 31, 2005      105,565,030      2,322
        Issued on privatization of Intier (i)           2,332,748        152
        Issued for cash under the Incentive
         Stock Option Plan                                 80,486          6
        Issued under the Dividend Reinvestment Plan         3,046          -
        Exchange of subsidiary restricted stock for
         Magna restricted stock (i)                             -         (8)
        ---------------------------------------------------------------------
        Issued and outstanding at June 30, 2005       107,981,310      2,472
        Issued for cash under the Incentive
         Stock Option Plan                                152,211          9
        Issued under the Dividend Reinvestment Plan         4,468          1
        Repurchase of Class A Subordinate
         Voting Shares (ii)                                     -        (15)
        ---------------------------------------------------------------------
        Issued and outstanding at September 30, 2005  108,137,989   $  2,467
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

           (i) During 2003 and 2004, a subsidiary of the Company purchased
               275,462 Tesma Class A Subordinate Voting Shares, 1,138,941
               Decoma Class A Subordinate Voting Shares and 525,665 Intier
               Class A subordinate Voting Shares for cash consideration of
               $6 million, $9 million and $8 million, respectively, which
               were then awarded on a restricted basis to certain executives.
               Also during 2004, Decoma purchased 451,685 Decoma Class A
               Subordinate Voting Shares for cash consideration of
               $4 million, which were then awarded on a restricted basis to
               an executive of Decoma.

               The shares issued on privatization of Tesma, Decoma and Intier
               include the shares issued by Magna in exchange for these
               shares, and since this stock has not been released to the
               executives, it has been reflected as a reduction in the stated
               value of Magna's Class A Subordinate Voting Shares.
               Previously, these amounts had been reflected in minority
               interest (note 7).

          (ii) During the third quarter of 2005, 190,723 Magna Class A
               Subordinate Voting Shares were purchased for cash
               consideration of $15 million and awarded on a restricted basis
               to certain executives. Since this stock has not been released
               to the executives, it has been reflected as a reduction in the
               stated value of the Company's Class A Subordinate Voting
               Shares (note 7).

        (b) The following table presents the maximum number of shares that
            would be outstanding if all dilutive instruments outstanding at
            November 7, 2005 were exercised:

            Class A Subordinate Voting and Class B Shares
             outstanding at November 7, 2005                     109,266,709
            Subordinated Debentures (i)                            1,096,582
            Stock options (ii)                                     4,606,189
            -----------------------------------------------------------------
                                                                 114,969,480
            -----------------------------------------------------------------
            -----------------------------------------------------------------

           (i) The above amounts include shares issuable if the holders of
               the 6.5% Convertible Subordinated Debentures exercise their
               conversion option but exclude Class A Subordinate Voting
               Shares issuable, only at the Company's option, to settle
               interest and principal related to the 6.5% Convertible
               Subordinated Debentures. The number of Class A Subordinate
               Voting Shares issuable at the Company's option is dependent on
               the trading price of the Class A Subordinate Voting Shares at
               the time the Company elects to settle the 6.5% Convertible
               Subordinated Debenture interest and principal with shares.

               The above amounts also exclude Class A Subordinate Voting
               Shares issuable, only at the Company's option, to settle the
               7.08% Subordinated Debentures on redemption or maturity. The
               number of shares issuable is dependent on the trading price of
               Class A Subordinate Voting Shares at redemption or maturity of
               the 7.08% Subordinated Debentures.

          (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, Tesma's amended and
               restated Stock Option Plan, Decoma's Option Plan and Intier's
               2001 Incentive Stock Option Plan.


    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):

                                                          2005
                                           ----------------------------------
                                            Options outstanding
                                           ---------------------
                                                       Exercise      Options
                                               Options  price(i) exercisable
                                                   No.     Cdn$          No.
        ---------------------------------------------------------------------

        Beginning of year                    2,614,376    85.74    2,042,876
        Assumed on privatization             1,053,353    71.31      864,688
        Granted                                 35,000    85.75            -
        Exercised                             (170,106)   61.09     (170,106)
        Vested                                       -        -        9,291
        Cancelled                                    -        -            -
        ---------------------------------------------------------------------
        March 31                             3,532,623    82.62    2,746,749
        Assumed on privatization             1,377,067    54.11      973,668
        Exercised                              (80,486)   53.67      (80,486)
        Vested                                       -        -       11,775
        Cancelled                              (17,033)   84.60            -
        ---------------------------------------------------------------------
        June 30                              4,812,171    74.94    3,651,706
        Granted                                      -        -            -
        Exercised                             (152,211)   60.56     (152,211)
        Vested                                       -        -      281,020
        Cancelled                               (4,506)   94.66       (1,163)
        ---------------------------------------------------------------------
        September 30                         4,655,454    75.39    3,779,352
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------


                                                          2004
                                           ----------------------------------
                                            Options outstanding
                                           ---------------------
                                                       Exercise      Options
                                               Options  price(i) exercisable
                                                   No.     Cdn$          No.
        ---------------------------------------------------------------------

        Beginning of year                    3,046,450    82.31    1,991,950
        Assumed on privatization                     -        -            -
        Granted                                 15,000   105.19            -
        Exercised                             (117,600)   62.63     (117,600)
        Vested                                       -        -       43,625
        Cancelled                               (3,000)   97.47            -
        ---------------------------------------------------------------------
        March 31                             2,940,850    83.20    1,917,975
        Assumed on privatization                     -        -            -
        Exercised                             (414,474)   71.43     (414,474)
        Vested                                       -        -            -
        Cancelled                                    -        -            -
        ---------------------------------------------------------------------
        June 30                              2,526,376    85.13    1,503,501
        Granted                                100,000   100.69            -
        Exercised                                    -        -            -
        Vested                                       -        -       44,375
        Cancelled                                    -        -            -
        ---------------------------------------------------------------------
        September 30                         2,626,376    85.72    1,547,876
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

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


        (b) The fair value of stock options is estimated at the date of grant
            using the Black Scholes option pricing model. The weighted
            average assumptions used in measuring the fair value of stock
            options, the weighted average fair value of options granted,
            modified or assumed on privatization and the compensation expense
            recorded in selling, general and administrative expenses are as
            follows:

                                     Three months ended    Nine months ended
                                        September 30,         September 30,
                                   --------------------  --------------------
                                       2005       2004       2005       2004
        ---------------------------------------------------------------------

        Risk free interest rate           -      3.70%      3.24%      3.04%
        Expected dividend yield           -      2.00%      2.18%      1.70%
        Expected volatility               -        31%        23%        32%
        Expected time until exercise      -    4 years    2 years    4 years
        ---------------------------------------------------------------------

        Weighted average fair value
         of options granted or
         modified in period (Cdn$) $      -   $  24.64   $  18.48   $  28.64
        ---------------------------------------------------------------------

        Compensation expense
         recorded in selling,
         general and administrative
         expenses                  $      4   $      1   $     13   $     14
        ---------------------------------------------------------------------

            In connection with the privatization of Tesma, Decoma and Intier,
            the terms of outstanding Tesma, Decoma and Intier stock options
            were modified through either the exchange of Tesma, Decoma and
            Intier options for Magna replacement options or through
            adjustment provisions to existing options such that holders of
            Tesma, Decoma and Intier continuing options would be entitled to
            receive Magna Class A Subordinate Voting shares in lieu of Tesma,
            Decoma or Intier Class A Subordinate Voting Shares when
            exercised. Where the original options were granted prior to
            January 1, 2003 and were unvested at the date of privatization,
            the above modifications create incremental compensation expense
            over the remaining vesting period.

            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 and nine month periods ended
            September 30, 2005 and 2004 would have been as follows:

                                     Three months ended    Nine months ended
                                        September 30,         September 30,
                                   --------------------  --------------------
                                       2005       2004       2005       2004
        ---------------------------------------------------------------------

        Pro forma net income       $    159   $    131   $    554   $    500

        Pro forma earnings per
         Class A Subordinate
         Voting or Class B Share
          Basic                    $   1.46   $   1.36   $   5.22   $   5.18
          Diluted                  $   1.44   $   1.36   $   5.15   $   5.14
        ---------------------------------------------------------------------

        (c) At September 30, 2005, unamortized compensation expense related
            to the restricted stock arrangements was $44 million, and has
            been presented as a reduction of shareholders' equity.

        (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 fair value of options assumed through the privatization of
            Tesma, Decoma and Intier, and the accumulated restricted stock
            compensation expense less the portion of restricted stock that
            has been released to the executives and reclassified to share
            capital. The following is a continuity schedule of contributed
            surplus:

                                                             2005       2004
        ---------------------------------------------------------------------

        Balance, beginning of year                       $     16   $      3
        Impact of privatization transactions (note 6)          20          -
        Stock-based compensation expense                        2         12
        Exercise of options                                    (5)        (1)
        ---------------------------------------------------------------------
        Balance, March 31,                                     33         14
        Impact of privatization transaction (note 6)           25          -
        Stock-based compensation expense                        5          -
        Exercise of options                                    (2)         -
        ---------------------------------------------------------------------
        Balance, June 30,                                      61         14
        Stock-based compensation expense                        3          1
        Exercise of options                                    (3)         -
        ---------------------------------------------------------------------
        Balance, September 30,                           $     61   $     15
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

    8.  SEGMENTED INFORMATION

                            Three months ended         Three months ended
                            September 30, 2005         September 30, 2004
                        -------------------------- --------------------------
                                           Fixed                      Fixed
                         Total            assets,   Total            assets,
                         sales   EBIT(i)    net     sales   EBIT(i)    net
        ---------------------------------------------------------------------

        Decoma          $   765  $     5  $   669  $   639  $    12  $   702
        Intier            1,308       26      539    1,278       41      547
        Tesma               363       25      423      322       20      365
        Magna Steyr       1,554       60      690    1,432       51      778
        Other Automotive
         Operations       1,442       86    1,419    1,153       76    1,273
        Corporate
         and other          (51)      40      370      (40)      28       75
        ---------------------------------------------------------------------
        Total reportable
         segments       $ 5,381  $   242    4,110  $ 4,784  $   228    3,740
        Current assets                      6,647                      6,312
        Investments,
         goodwill and
         other assets                       1,621                      1,216
        ---------------------------------------------------------------------
        Consolidated
         Total Assets                     $12,378                    $11,268
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

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


                             Nine months ended          Nine months ended
                            September 30, 2005         September 30, 2004
                        -------------------------- --------------------------
                                           Fixed                      Fixed
                         Total            assets,   Total            assets,
                         sales   EBIT(i)    net     sales   EBIT(i)    net
        ---------------------------------------------------------------------

        Decoma          $ 2,333  $    34  $   669  $ 2,048  $   105  $   702
        Intier            4,294      159      539    4,081      160      547
        Tesma             1,109       71      423    1,025       94      365
        Magna Steyr       5,190      201      690    4,278      151      778
        Other Automotive
         Operations       4,190      264    1,419    3,689      326    1,273
        Corporate
         and other         (159)      93      370     (121)      61       75
        ---------------------------------------------------------------------
        Total
         reportable
         segments       $16,957  $   822    4,110  $15,000  $   897    3,740
        Current assets                      6,647                      6,312
        Investments,
         goodwill and
         other assets                       1,621                      1,216
        ---------------------------------------------------------------------
        Consolidated
         Total Assets                     $12,378                    $11,268
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

        (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.
</TEXT>
</DOCUMENT>
