<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>2
<FILENAME>may10_2007-ex99pressrelease.txt
<DESCRIPTION>FIRST QUARTER 2007 FINANCIAL RESULTS
<TEXT>
MAGNA INTERNATIONAL INC.
337 MAGNA DRIVE
AURORA, ONTARIO, CANADA
L4G 7K1

Magna announces first quarter results

AURORA, ON, May 10, 2007 - Magna International Inc. (TSX: MG.A, MG.B;
NYSE: MGA) today reported financial results for the first quarter ended
March 31, 2007.

    <<
    -------------------------------------------------------------------------
                                                         THREE MONTHS ENDED
                                                    -------------------------
                                                       March 31,    March 31,
                                                           2007         2006
                                                    ------------ ------------

    Sales                                           $     6,423  $     6,019

    Operating income                                $       305  $       309

    Net income                                      $       218  $       212

    Diluted earnings per share                      $      1.96  $      1.91
    -------------------------------------------------------------------------

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

    -------------------------------------------------------------------------
    >>

    We posted record sales of $6.4 billion for the first quarter ended
March 31, 2007, an increase of 7% over the first quarter of 2006. This higher
sales level was achieved as a result of increases in our North American,
European and Rest of World production sales, and our complete vehicle assembly
sales, offset in part by a reduction in our tooling, engineering and other
sales.
    During the first quarter of 2007, our North American and European average
dollar content per vehicle increased 10% and 14%, respectively, over the first
quarter of 2006. During the first quarter of 2007, North American vehicle
production declined 7% while European vehicle production increased 6%, each
compared to the first quarter of 2006.
    Complete vehicle assembly sales increased 6% to $1.10 billion for the
first quarter of 2007 compared to $1.04 billion for the first quarter of 2006,
while complete vehicle assembly volumes declined 5% to 60,769 units.
    Our operating income was $305 million for the first quarter of 2007
compared to $309 million for first quarter of 2006, and our net income for the
first quarter of 2007 was $218 million compared to $212 million for the first
quarter of 2006. Diluted earnings per share were $1.96 for the first quarter
of 2007 compared to $1.91 for the first quarter of 2006.
    During the first quarter of 2007, we generated cash from operations
before changes in non cash operating assets and liabilities of $436 million,
and invested $171 million in non cash operating assets and liabilities. Total
investment activities for the first quarter of 2007 were $191 million,
including $125 million in fixed asset additions, $46 million to purchase
subsidiaries, and a $20 million increase in other assets.
    A more detailed discussion of our consolidated financial results for the
first quarter ended March 31, 2007 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.

    DIVIDENDS AND 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 March 31, 2007. The dividend of U.S. $0.24 per
share is payable on June 15, 2007 to shareholders of record on May 31, 2007.
This dividend has been determined on the basis of the dividend formula we
announced in April 2007.
    We also announced today that Magna, the Stronach Trust and Russian
Machines (a wholly owned subsidiary of Basic Element) entered into a
transaction agreement whereby Russian Machines would make a major strategic
investment in Magna. Please refer to the Press Release issued jointly by Magna
and Basic Element on May 10, 2007.

    2007 OUTLOOK
    ------------

    For the full year 2007, we expect consolidated sales to be between
$23.5 billion and $24.8 billion, based on full year 2007 light vehicle
production volumes of approximately 15.3 million units in North America and
approximately 15.5 million units in Europe. Full year 2007 average dollar
content per vehicle is expected to be between $785 and $815 in North America
and between $390 and $415 in Europe. We expect full year 2007 complete vehicle
assembly sales to be between $3.7 billion and $4.0 billion.
    In addition, we expect that full year 2007 spending for fixed assets will
be in the range of $800 million to $850 million.
    In our 2007 outlook we have assumed no significant acquisitions or
divestitures, and no significant labour disruptions in our principal markets.
In addition, we have assumed that foreign exchange rates for the most common
currencies in which we conduct business relative to our U.S. dollar reporting
currency will approximate current rates.
    We are the most diversified automotive supplier in the world. We design,
develop and manufacture automotive systems, assemblies, modules and
components, and engineer and assemble complete vehicles, primarily for sale to
original equipment manufacturers of cars and light trucks in North America,
Europe, Asia, South America and Africa. Our capabilities include the design,
engineering, testing and manufacture of automotive metal body and structural
systems; interior systems; seating systems; exterior systems; roof systems;
powertrain systems; vision systems; electronic systems; closure systems; as
well as complete vehicle engineering and assembly.
    We have approximately 83,000 employees in 235 manufacturing operations
and 62 product development and engineering centres in 23 countries.

    -------------------------------------------------------------------------
    We will hold a conference call for interested analysts and shareholders
    to discuss our first quarter results on Friday, May 11, 2007 at
    8:00 a.m. EDT. The conference call will be chaired by Vincent J. Galifi,
    Executive Vice-President and Chief Financial Officer. The number to use
    for this call is 1-800-377-5794. The number for overseas callers is
    1-416-620-2415. Please call in at least 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 Friday morning prior to the call.

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

    For teleconferencing questions, please call Karin Kaminski at
    905-726 7103
    -------------------------------------------------------------------------

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

    The previous discussion may contain statements that, to the extent that
they are not recitations of historical fact, constitute "forward-looking
statements" within the meaning of applicable securities legislation. Forward-
looking statements may include financial and other projections, as well as
statements regarding our future plans, objectives or economic performance, or
the assumptions underlying any of the foregoing. We use words such as "may",
"would", "could", "will", "likely", "expect", "anticipate", "believe",
"intend", "plan", "forecast", "project", "estimate" and similar expressions to
identify forward-looking statements. Any such forward-looking statements are
based on assumptions and analyses made by us in light of our experience and
our perception of historical trends, current conditions and expected future
developments, as well as other factors we believe are appropriate in the
circumstances. However, whether actual results and developments will conform
with our expectations and predictions is subject to a number of risks,
assumptions and uncertainties. These risks, assumptions and uncertainties
include, but are not limited to, the impact of: declining production volumes
and changes in consumer demand for vehicles; a reduction in the production
volumes of certain vehicles, such as certain light trucks; the termination or
non-renewal by our customers of any material contracts; our ability to offset
increases in the cost of commodities, such as steel and resins, as well as
energy prices; fluctuations in relative currency values; our ability to offset
price concessions demanded by our customers; our dependence on outsourcing by
our customers; our ability to compete with suppliers with operations in low
cost countries; changes in our mix of earnings between jurisdictions with
lower tax rates and those with higher tax rates, as well as our ability to
fully benefit tax losses; other potential tax exposures; the financial
distress of some of our suppliers and customers; the inability of our
customers to meet their financial obligations to us; our ability to fully
recover pre-production expenses; warranty and recall costs; product liability
claims in excess of our insurance coverage; expenses related to the
restructuring and rationalization of some of our operations; impairment
charges; our ability to successfully identify, complete and integrate
acquisitions, potentially including a transaction involving the Chrysler
group; risks associated with new program launches; legal claims against us;
risks of conducting business in foreign countries; unionization activities at
our facilities; work stoppages and labour relations disputes; changes in laws
and governmental regulations; costs associated with compliance with
environmental laws and regulations; potential conflicts of interest involving
our controlling shareholder, the Stronach Trust; 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.

    -------------------------------------------------------------------------
    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 ended March 31, 2007
included in this Press Release, and the audited consolidated financial
statements and MD&A for the year ended December 31, 2006 included in our 2006
Annual Report to Shareholders. The unaudited interim consolidated financial
statements for the three months ended March 31, 2007 and the audited
consolidated financial statements for the year ended December 31, 2006 are
both prepared in accordance with Canadian generally accepted accounting
principles.
    This MD&A has been prepared as at May 9, 2007.

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

    We are a leading global supplier of technologically advanced automotive
systems, assemblies, modules and components. We follow a corporate policy of
functional and operational decentralization, pursuant to which we conduct our
operations through divisions, each of which is an autonomous business unit
operating within pre-determined guidelines. As at March 31, 2007, we had 235
manufacturing divisions and 62 product development and engineering centres in
23 countries. We design, develop and manufacture automotive systems,
assemblies, modules and components, and engineer and assemble complete
vehicles, primarily for sale to original equipment manufacturers ("OEMs") of
cars and light trucks in North America, Europe, Asia, South America and
Africa. Our product capabilities span a number of major automotive areas
including: complete vehicle engineering and assembly; metal body and
structural systems; interior systems; seating systems; exterior systems; roof
systems; powertrain systems; vision systems; electronic systems; and closure
systems.
    Our operations are segmented on a geographic basis between North America,
Europe, and Rest of World (primarily Asia and South America). A Co-Chief
Executive Officer heads management in each of our two primary markets, North
America and Europe. The role of the North American and European management
teams is to manage our interests to ensure a coordinated effort across our
different product capabilities. In addition to maintaining key customer,
supplier and government contacts in their respective markets, our regional
management teams centrally manage key aspects of our operations while
permitting our divisions enough flexibility through our decentralized
structure to foster an entrepreneurial environment.

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

    Our success is primarily dependent upon the levels of North American and
European car and light truck production by our customers and the relative
amount of content we have on the various programs. OEM production volumes in
different regions may be impacted by factors which may vary from one region to
the next, including general economic and political conditions, interest rates,
energy and fuel prices, international conflicts, labour relations issues,
regulatory requirements, trade agreements, infrastructure, legislative
changes, and environmental emissions and safety issues. A number of other
economic, industry and risk factors discussed in our Annual Information Form
and Annual Report on Form 40-F, each in respect of the year ended December 31,
2006, also affect our success, including such things as relative currency
values, commodities prices, price reduction pressures from our customers, the
financial condition of our supply base and competition from manufacturers with
operations in low cost countries.
    The economic, industry and risk factors discussed in our Annual
Information Form and Annual Report on Form 40-F, each in respect of the year
ended December 31, 2006, remain substantially unchanged in respect of the
first quarter ended March 31, 2007, except that:

    <<
    -  our maximum potential exposure in connection with our dispute with a
       major steel supplier has increased by approximately $10 million to
       $145 million as at March 31, 2007; and

    -  as previously disclosed, we continue to review potential alternatives
       regarding the future of the Chrysler group, including any
       constructive role we may play in a potential transaction.
       Participation in any such transaction would be material, although the
       specific opportunities and risks would vary depending on the nature
       of such participation, if any.
    >>

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

    During the first quarter of 2007, we posted record sales of $6.4 billion,
an increase of 7% over the first quarter of 2006. This higher sales level was
achieved as a result of increases in our North American, European and Rest of
World production sales, and our complete vehicle assembly sales, offset in
part by a reduction in our tooling, engineering and other sales. During the
first quarter of 2007, North American and European average dollar content per
vehicle increased 10% and 14%, respectively, over the first quarter of 2006.
During the first quarter of 2007, North American vehicle production declined
7% while European vehicle production increased 6%, each compared to the first
quarter of 2006.
    During the first quarter of 2007 two of our largest OEM customers in
North America continued to reduce vehicle production levels compared to the
first quarter of 2006. While overall North American vehicle production volumes
declined 7% in the first quarter of 2007 compared to the first quarter of
2006, both General Motors ("GM") and Ford vehicle production declined by 15%.
    The production declines reflect a number of factors that continue to
impact our largest customers in North America, including declining market
share, high inventory levels on certain vehicles, and a shift in consumer
preferences away from certain light trucks. The lower production levels at our
largest OEM customers, negatively impacted our sales and earnings, as our
content on a number of these programs is higher than our consolidated average
dollar content per vehicle in North America.
    Operating income for the first quarter of 2007 decreased 1% or $4 million
to $305 million from $309 million for the first quarter of 2006. Excluding the
unusual items recorded in 2006 (see "Unusual Items" below), operating income
for the first quarter of 2007 decreased $14 million or 4% compared to the
first quarter of 2006. The decrease in operating income excluding unusual
items was primarily due to operational inefficiencies and other costs at
certain facilities, launch costs incurred at certain facilities in preparation
for programs that will launch during or subsequent to 2007, decreased margins
earned as a result of lower production volumes on certain programs in North
America, as well as incremental customer price concessions. These factors were
partially offset by additional margins earned on the launch of new programs
during or subsequent to the first quarter of 2006, increased margins earned on
higher volumes for certain assembly programs, and productivity and efficiency
improvements at certain underperforming divisions.
    Net income for the first quarter of 2007 increased 3% or $6 million to
$218 million from $212 million for the first quarter of 2006. Excluding the
unusual items recorded in 2006 (see "Unusual Items" below), net income for the
first quarter of 2007 decreased 1% or $3 million. The decrease in net income
excluding unusual items was a result of the decrease in operating income
(excluding unusual items) partially offset by lower income taxes (excluding
unusual items).
    Diluted earnings per share for the first quarter of 2007 increased 3% or
$0.05 to $1.96 from $1.91 for the first quarter of 2006. Excluding the unusual
items recorded in 2006 (see "Unusual Items" below), diluted earnings per share
decreased 2% or $0.03 as a result of the decrease in net income (excluding
unusual items) combined with an increase in the weighted average number of
diluted shares outstanding in the first quarter of 2007, primarily as a result
of the Class A Subordinate Voting Shares issued on the exercise of stock
options during or subsequent to the first quarter of 2006.
    Subsequent to the first quarter of 2007, we announced that we are
reviewing potential alternatives regarding the future of the Chrysler Group.

    Unusual Items

    During the first quarter of 2006, we incurred restructuring and
rationalization charges of $10 million (net income - $9 million; diluted
earnings per share - $0.08) related primarily to non-contractual termination
benefits for employees at an exteriors facility in Belgium.

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

    Accounting Change

    In January 2005, the Canadian Institute of Chartered Accountants approved
Handbook Sections 1530, "Comprehensive Income", 3855 "Financial Instruments -
Recognition and Measurement", 3861 "Financial Instruments - Disclosure and
Presentation", and 3865 "Hedges". We adopted these new recommendations
effective January 1, 2007 with no restatement of prior periods, except to
classify the currency translation adjustment as a component of accumulated
other comprehensive income. With the adoption of these new standards, our
accounting for financial instruments and hedges complies with U.S. GAAP in all
material respects on January 1, 2007.

    Financial Instruments

    Under the new standards, all of our financial assets and financial
liabilities are classified as held for trading, held to maturity investments,
loans and receivables, available-for-sale financial assets or other financial
liabilities. Held for trading financial instruments, which include cash and
cash equivalents, are measured at fair value and all gains and losses are
included in net income in the period in which they arise. Held to maturity
investments are recorded at amortized cost using the effective interest
method, and include long-term interest bearing government securities held to
partially fund certain Austrian lump sum termination and long service payment
arrangements. Loans and receivables, which include accounts receivable and
long-term receivables, accounts payable, accrued salaries and wages, and
certain other accrued liabilities are recorded at amortized cost using the
effective interest method. We do not currently have any available for sale
financial assets.

    Comprehensive Income

    Other comprehensive income includes the unrealized gains and losses on
translation of our net investment in self-sustaining foreign operations, and
to the extent that cash flow hedges are effective, the change in their fair
value, net of income taxes. Other comprehensive income is presented below net
income on the Consolidated Statements of Income and Comprehensive Income.
Comprehensive income is composed of our net income and other comprehensive
income.
    Accumulated other comprehensive income is a separate component of
shareholders' equity, which includes the accumulated balances of all
components of other comprehensive income which are recognized in comprehensive
income but excluded from net income.

    Hedges

    Previously, under Canadian GAAP derivative financial instruments that met
hedge accounting criteria were accounted for on an accrual basis, and gains
and losses on hedge contracts were accounted for as a component of the related
hedged transaction. The new standards require that all derivative instruments,
whether designated in hedging relationships or not, be recorded on the balance
sheet at fair value. The fair values of derivatives are recorded in other
assets or other liabilities. To the extent that cash flow hedges are
effective, the change in their fair value is recorded in other comprehensive
income. Amounts accumulated in other comprehensive income are reclassified to
net income in the period in which the hedged item affects net income.

    The impact of this accounting policy change on the consolidated balance
sheet as at January 1, 2007 was as follows:

    <<
    Increase in prepaid expenses and other                       $        28
    Increase in other assets                                              17
    Increase in future tax assets                                         14
    -------------------------------------------------------------------------

    Increase in other accrued liabilities                        $        32
    Increase in other long-term liabilities                               17
    Increase in future tax liabilities                                    13
    -------------------------------------------------------------------------

    Decrease in accumulated other comprehensive income           $         3
    -------------------------------------------------------------------------

    Average Foreign Exchange
                                           For the three months
                                                 ended March 31,
                                      --------------------------
                                              2007         2006       Change
    -------------------------------------------------------------------------

    1 Canadian dollar equals
     U.S. dollars                            0.854        0.866        -  1%
    1 euro equals U.S. dollars               1.311        1.203        +  9%
    1 British pound equals U.S. dollars      1.954        1.752        + 12%
    -------------------------------------------------------------------------
    >>

    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
for the three months ended March 31, 2007 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 foreign 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 or
sales denominated in foreign currencies). However, as a result of hedging
programs employed by us, primarily in Canada, foreign currency transactions in
the current period have not been fully impacted by 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.

    <<
    Sales
                                           For the three months
                                                 ended March 31,
                                      --------------------------
                                              2007         2006       Change
    -------------------------------------------------------------------------

    Vehicle Production Volumes
     (millions of units)
      North America                          3.829        4.130        -  7%
      Europe                                 4.249        4.007        +  6%
    -------------------------------------------------------------------------

    Average Dollar Content Per Vehicle
      North America                    $       832  $       759        + 10%
      Europe                           $       390  $       343        + 14%
    -------------------------------------------------------------------------

    Sales
      External Production
        North America                  $     3,187  $     3,135        +  2%
        Europe                               1,657        1,373        + 21%
        Rest of World                           87           55        + 58%
      Complete Vehicle Assembly              1,104        1,040        +  6%
      Tooling, Engineering and Other           388          416        -  7%
    -------------------------------------------------------------------------
    Total Sales                        $     6,423  $     6,019        +  7%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    >>

    Total sales reached a record level in the first quarter of 2007,
increasing 7% or $404 million to $6.4 billion compared to $6.0 billion for the
first quarter of 2006.

    External Production Sales - North America

    External production sales in North America increased 2% or $52 million to
$3.187 billion for the first quarter of 2007 compared to $3.135 billion for
the first quarter of 2006. This increase in production sales reflects a 10%
increase in our North American average dollar content per vehicle partially
offset by a 7% decrease in North American vehicle production volumes. More
importantly, production volumes at two of our largest North American customers
for the first quarter of 2007 continued to deteriorate when compared to the
first quarter of 2006. While North American vehicle production volumes
declined 7% during the first quarter of 2007 compared to the first quarter of
2006, production volumes at both GM and Ford declined 15%.

    Our average dollar content per vehicle grew by 10% or $73 to $832 for the
first quarter of 2007 compared to $759 for the first quarter of 2006,
primarily as a result of:

    <<
    -  the launch of new programs during or subsequent to the first quarter
       of 2006, including:
       -  the Ford Edge and Lincoln MKX;
       -  GM's full-size pickups;
       -  the Jeep Wrangler;
       -  the Saturn Outlook and GMC Acadia;
       -  the BMW X5;
       -  the Dodge Nitro;
       -  the Dodge Caliber; and
       -  the Dodge Avenger and Chrysler Sebring; and
    -  increased production and/or content on certain programs, including
       the Dodge Grand Caravan and Chrysler Town & Country.

    These factors were partially offset by:

    -  the impact of lower production and/or content on certain programs,
       including:
       -  the Dodge Ram;
       -  the Ford Fusion, Mercury Milan and Lincoln MKZ/Zephyr;
       -  the Chrysler 300 and 300C, and Dodge Charger and Magnum;
       -  the Ford Explorer and Mercury Mountaineer;
       -  the Pontiac Montana SV6, Saturn Relay, Buick Terraza and
          Chevrolet Uplander;
       -  the GMC Envoy, Buick Rainier and Chevrolet Trailblazer; and
       -  the Chevrolet HHR;
    -  programs that ended production during or subsequent to the first
       quarter of 2006, including the Ford Freestar and Mercury Monterey;
    -  a decrease in reported U.S. dollar sales due to the weakening of the
       Canadian dollar against the U.S. dollar; and
    -  incremental customer price concessions.
    >>

    External Production Sales - Europe

    External production sales in Europe increased 21% or $284 million to
$1.657 billion for the first quarter of 2007 compared to $1.373 billion for
the first quarter of 2006. This increase in production sales reflects a 14%
increase in our European average dollar content per vehicle combined with a 6%
increase in European vehicle production volumes for the first quarter of 2007,
each as compared to the first quarter of 2006.
    Our average dollar content per vehicle grew by 14% or $47 to $390 for the
first quarter of 2007 compared to $343 for the first quarter of 2006,
primarily as a result of:

    <<
    -  an increase in reported U.S. dollar sales due to the strengthening of
       the euro and British Pound, each against the U.S. dollar;
    -  the launch of new programs during or subsequent to the first quarter
       of 2006, including:
       -  the MINI Cooper; and
       -  the Mercedes-Benz C-Class;
    -  acquisitions completed subsequent to the first quarter of 2006,
       including the acquisition of two facilities from Pressac Investments
       Limited ("Pressac") in January 2007; and
    -  increased production and/or content on certain programs, including
       the Opel Astra Twin Top.

    These factors were partially offset by:

    -  the impact of lower production and/or content on certain programs,
       including:
       -  the Nissan Micra; and
       -  the Mercedes-Benz E-Class; and
    -  incremental customer price concessions.

    External Production Sales - Rest of World

    External production sales in the Rest of World increased 58% or
$32 million to $87 million for the first quarter of 2007 compared to
$55 million for the first quarter of 2006. The increase in production sales is
primarily as a result of:

    -  increased production and/or content on certain programs in Korea,
       China and Brazil;
    -  the launch of new programs during or subsequent to the first quarter
       of 2006 in Korea, China and Brazil;
    -  the acquisition of a mirrors facility in South Africa during 2006; and
    -  an increase in reported U.S. dollar sales as a result of the
       strengthening of the Korean Won and Chinese Renminbi, each against
       the U.S. dollar.
    >>

    Complete Vehicle Assembly Sales

    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 impacts our level 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, however, 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.

    <<
                                           For the three months
                                                 ended March 31,
                                      --------------------------
                                              2007         2006       Change
    -------------------------------------------------------------------------

    Complete Vehicle Assembly Sales    $    1,104   $     1,040        +  6%
    -------------------------------------------------------------------------

    Complete Vehicle Assembly Volumes
     (Units)
      Full-Costed:
        BMW X3, Mercedes-Benz E-Class
         and G-Class, and Saab 9(3)
         Convertible                       38,237        39,347        -  3%
      Value-Added:
        Jeep Grand Cherokee, Chrysler
         300, Chrysler Voyager, and
         Jeep Commander                    22,532        24,810        -  9%
    -------------------------------------------------------------------------
                                           60,769        64,157        -  5%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Complete vehicle assembly sales increased 6% or $64 million to
$1.104 billion for the first quarter of 2007 compared to $1.040 billion for
the first quarter of 2006 while assembly volumes decreased 5% or 3,388 units.
The increase in complete vehicle assembly sales is primarily as a result of:

    -  an increase in reported U.S. dollar sales due to the strengthening of
       the euro against the U.S. dollar; and
    -  higher assembly volumes for the BMW X3.

    These factors were partially offset by:

    -  the end of production of the Mercedes-Benz E-Class 4MATIC at our Graz
       assembly facility in the fourth quarter of 2006, as DaimlerChrysler
       is assembling this vehicle in-house; and
    -  a decrease in assembly volumes for the Saab 9(3) Convertible and
       Mercedes-Benz G-Class.

    Tooling, Engineering and Other

    Tooling, engineering and other sales decreased 7% or $28 million to
$388 million for the first quarter of 2007 compared to $416 million for the
first quarter of 2006.
    In the first quarter of 2007 the major programs for which we recorded
tooling, engineering and other sales were:

    -  the Saturn Vue;
    -  GM's full-size pickups;
    -  the MINI Cooper;
    -  the Dodge Grand Caravan and Chrysler Town & Country; and
    -  the Ford Flex.

    In the first quarter of 2006 the major programs for which we recorded
tooling, engineering and other sales were:

    -  the MINI Cooper;
    -  the BMW X5;
    -  GM's full-size pickup and SUV platform;
    -  the Ford Edge and Lincoln MKX; and
    -  the Ford F-Series SuperDuty.

    In addition, tooling, engineering and other sales increased as a result of
the strengthening of the euro against the U.S. dollar.

    Gross Margin

    Gross margin increased $23 million to $843 million for the first quarter
of 2007 compared to $820 million for the first quarter of 2006 while gross
margin as a percentage of total sales decreased to 13.1% for the first quarter
of 2007 compared to 13.6% for the first quarter of 2006.
    The unusual items discussed in the "Highlights" section above, negatively
impacted gross margin as a percent of total sales in the first quarter of 2006
by 0.2%. Excluding these unusual items, the 0.7% decrease in gross margin as a
percentage of total sales was primarily as a result of:

    -  continued underperformance at certain of our interior systems
       facilities;
    -  operational inefficiencies and other costs at certain facilities; and
    -  incremental customer price concessions.

    These factors were partially offset by:

    -  incremental gross margin earned on new programs that launched during
       or subsequent to the first quarter of 2006;
    -  productivity and efficiency improvements at certain underperforming
       divisions; and
    -  the end of production of the Mercedes-Benz E-Class 4MATIC at our Graz
       assembly facility, since this program was accounted for on a
       full-cost basis.

    Depreciation and Amortization

    Depreciation and amortization costs increased 8% or $15 million to
$203 million for the first quarter of 2007 compared to $188 million for the
first quarter of 2006. The increase in depreciation and amortization was
primarily as a result of:

    -  the launch of new programs during or subsequent to the first quarter
       of 2006, including GM's full-size pickups and the Ford F-Series
       SuperDuty;
    -  accelerated depreciation on certain program specific assets in North
       America;
    -  an increase in assets employed to support the growth of our business;
       and
    -  an increase in reported U.S. dollar depreciation and amortization due
       to the strengthening of the euro against the U.S. dollar.

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

    SG&A expenses as a percentage of sales was 5.4% for the first quarter of
2007, unchanged from the first quarter of 2006. SG&A expenses increased 8% or
$26 million to $350 million for the first quarter of 2007 compared to
$324 million for the first quarter of 2006. Excluding the unusual items
discussed in the "Highlights" section above, SG&A expenses increased by
$28 million primarily as a result of:

    -  an increase in reported U.S. dollar SG&A expenses due to the
       strengthening of the euro against the U.S. dollar;
    -  higher infrastructure costs to support the increase in sales,
       including spending related to programs that launched during or
       subsequent to the first quarter of 2006; and
    -  increased spending as a result of the acquisition of two facilities
       from Pressac in January 2007.


    Earnings before Interest and Taxes ("EBIT")(1)

                                           For the three months
                                                 ended March 31,
                                      --------------------------
                                              2007         2006       Change
    -------------------------------------------------------------------------

    North America                      $       146  $       219        - 33%
    Europe                                     120           69        + 74%
    Rest of World                                5            -            -
    Corporate and Other                         25           22        + 14%
    -------------------------------------------------------------------------
    Total EBIT                         $       296  $       310        -  5%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    (1) EBIT is defined as operating income as presented on our unaudited
        interim consolidated financial statements before net interest
        (income) expense.


    Included in EBIT for the first quarter of 2006 were the following unusual
items, which have been discussed in the "Highlights" section above.


                                                        For the three months
                                                              ended March 31,
                                                   --------------------------
                                                           2007         2006
    -------------------------------------------------------------------------

    North America
      Restructuring charges                         $         -  $        (2)

    Europe
      Restructuring charges                                   -           (8)
    -------------------------------------------------------------------------
                                                    $         -  $       (10)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    North America

    EBIT in North America decreased 33% or $73 million to $146 million for the
first quarter of 2007 compared to $219 million for the first quarter of 2006.
Excluding the North American unusual item discussed in the "Highlights"
section above, the $75 million decrease in EBIT was primarily as a result of:

    -  operational inefficiencies and other costs at certain facilities;
    -  lower earnings as a result of a decrease in production and/or content
       on certain programs;
    -  costs incurred in preparation for upcoming launches or for programs
       that have not fully ramped up production;
    -  higher affiliation fees paid to Corporate; and
    -  incremental customer price concessions.

    These factors were partially offset by:

    -  margins earned on new programs that launched during or subsequent to
       the first quarter of 2006;
    -  margins earned on increased production and/or content on certain
       programs; and
    -  productivity and efficiency improvements at certain underperforming
       divisions.

    Europe

    EBIT in Europe increased 74% or $51 million to $120 million for the first
quarter of 2007 compared to $69 million for the first quarter of 2006.
Excluding the European unusual item discussed above, the remaining $43 million
increase in EBIT was primarily as a result of:

    -  increased margins earned as a result of higher complete vehicle
       assembly sales;
    -  productivity and efficiency improvements at certain underperforming
       divisions;
    -  increased margins earned on production programs that launched during
       or subsequent to the first quarter of 2006; and
    -  an increase in reported U.S. dollar EBIT as a result of the
       strengthening of the euro against the U.S. dollar.

    These factors were partially offset by:

    -  operating inefficiencies at certain interior systems facilities;
    -  higher affiliation fees paid to Corporate; and
    -  incremental customer price concessions.

    Rest of World

    Rest of World EBIT increased $5 million to $5 million for the first
quarter of 2007. The increase in EBIT was primarily as a result of:

    -  additional margin earned on the increase in production sales
       discussed above;
    -  improved operating efficiencies at certain new facilities, primarily
       in China; and
    -  equity income earned on our 41% interest in Shin Young Metal Ind. Co.,
       which we acquired during 2006.

    These factors were partially offset by costs incurred at other new
facilities, primarily in China, as we continue to pursue opportunities in this
growing market.

    Corporate and Other

    Corporate and Other EBIT increased 14% or $3 million to $25 million for
the first quarter of 2007 compared to $22 million for the first quarter of
2006. The increase in EBIT was primarily as a result of:

    -  an increase in affiliation fees earned from our divisions;
    -  lower charitable donations, related primarily to lower Hurricane
       Katrina disaster relief spending; and
    -  an increase in equity income.

    These factors were partially offset by:

    -  an increase in salaries and wages; and
    -  higher depreciation and amortization.

    Interest (Income) Expense, net

    During the first quarter of 2007, we earned net interest income of
$9 million, compared to net interest expense of $1 million for the first
quarter of 2006. The $10 million positive variance is primarily as a result
of:
    -  a reduction in interest expense, primarily as a result of:
       -  the repayment in January 2007 of the third series of our senior
          unsecured notes related to the acquisition of New Venture Gear
          ("NVG"); and
    -  the $59 million and $48 million repayment of senior unsecured notes
       in May 2006 and October 2006, respectively; and
    -  an increase in interest income earned.

    Operating Income

    Operating income decreased 1% or $4 million to $305 million for the first
quarter of 2007 compared to $309 million for the first quarter of 2006.
Excluding the unusual items discussed in the "Highlights" section above,
operating income for the first quarter of 2007 decreased 4% or $14 million.
This decrease in operating income was the result of the decrease in EBIT
(excluding unusual items), partially offset by the increase in net interest
income earned, all as discussed above.

    Income Taxes

    Our effective income tax rate on operating income (excluding equity
income) decreased to 29.1% for the first quarter of 2007 compared to 31.6% for
the first quarter of 2006. In the first quarter of 2006, the income tax rate
was negatively impacted by the unusual items discussed in the "Highlights"
section above. Excluding the unusual items, our effective income tax rate for
the first quarter of 2006 was 30.9%. Excluding the unusual items, the
remaining decrease in the effective income tax rate was primarily as a result
of:

    -  a change in mix of earnings, whereby proportionately more income was
       earned in jurisdictions with lower income tax rates; and
    -  a decrease in losses not benefited, primarily at certain interior
       systems facilities in Europe.

    Net Income

    Net income increased by 3% or $6 million to $218 million for the first
quarter of 2007 compared to $212 million for the first quarter of 2006.
Excluding unusual items (discussed in the "Highlights" section above), net
income decreased $3 million as a result of the decrease in operating income
(excluding unusual items), partially offset by lower income taxes (excluding
unusual items), all as discussed above.


    Earnings per Share

                                           For the three months
                                                 ended March 31,
                                      --------------------------
                                              2007         2006       Change
    -------------------------------------------------------------------------

    Earnings per Class A Subordinate
     Voting or Class B Share
      Basic                            $      2.00  $      1.95        +  3%
      Diluted                          $      1.96  $      1.91        +  3%
    -------------------------------------------------------------------------

    Average number of Class A
     Subordinate Voting and Class B
     Shares outstanding (millions)
      Basic                                  109.0        108.4        +  1%
      Diluted                                111.8        111.2        +  1%
    -------------------------------------------------------------------------


    Diluted earnings per share increased 3% or $0.05 to $1.96 for the first
quarter of 2007 compared to $1.91 for the first quarter of 2006. Excluding the
unusual items (discussed in the "Highlights" section above), diluted earnings
per share decreased $0.03 from the first quarter of 2006 as a result of a
decrease in net income (excluding unusual items) combined with an increase in
the weighted average number of diluted shares outstanding during the quarter.
    The increase in the weighted average number of diluted shares outstanding
was primarily as a result of additional Class A Subordinate Voting Shares that
were issued on the exercise of stock options during or subsequent to the first
quarter of 2006.

    Return on Funds Employed ("ROFE")(1)

    An important financial ratio that we use across all of our operations to
measure return on investment is ROFE.
    ROFE for the first quarter of 2007 was 18.8%, a decrease from 19.6% for
the first quarter of 2006. The unusual items discussed in the "Highlights"
section above negatively impacted ROFE for the first quarter of 2006 by 0.6%.
    Excluding these unusual items, the 1.4% decrease in ROFE can be attributed
to a decrease in EBIT (excluding unusual items), as described above, partially
offset by a $46 million decrease in average funds employed for the first
quarter of 2007 compared to the first quarter of 2006. The decrease in our
average funds employed was primarily as a result of a decrease in our average
investment in non-cash operating assets and liabilities, partially offset by
acquisitions completed during or subsequent to the first quarter of 2006.

    -------------------------------------------------------------------------
    (1) ROFE is defined as EBIT divided by the average funds employed for the
        period. Funds employed is defined as long-term assets, excluding
        future tax assets, plus non-cash operating assets and liabilities.
        Non-cash operating assets and liabilities are defined as the sum of
        accounts receivable, inventory, 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.

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

    Cash Flow from Operations

                                           For the three months
                                                 ended March 31,
                                      --------------------------
                                              2007         2006       Change
    -------------------------------------------------------------------------

    Net income                         $       218  $       212
    Items not involving current
     cash flows                                218          215
    -------------------------------------------------------------------------
                                       $       436  $       427  $         9
    Changes in non-cash operating
     assets and liabilities                   (171)        (225)
    -------------------------------------------------------------------------
    Cash provided from operating
     activities                        $       265  $       202  $        63
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Cash flow from operations before changes in non-cash operating assets and
liabilities increased $9 million to $436 million for the first quarter of 2007
compared to $427 million for the first quarter of 2006. The increase in cash
flow from operations was due to a $6 million increase in net income (as
discussed above) and a $3 million increase in items not involving current cash
flows.
    Cash invested in operating assets and liabilities amounted to $171 million
for the first quarter of 2007 which was comprised of the following sources
(and uses) of cash:


                                                        For the three months
                                                              ended March 31,
                                                  ---------------------------
                                                           2007         2006
    -------------------------------------------------------------------------

    Accounts receivable                             $      (455) $      (520)
    Inventory                                               (61)         (42)
    Prepaid expenses and other                               (4)         (13)
    Accounts payable and other accrued liabilities          362          345
    Income taxes payable                                    (10)          10
    Deferred revenue                                         (3)          (5)
    -------------------------------------------------------------------------
    Changes in non-cash operating assets and
     liabilities                                    $      (171) $      (225)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    The increase in accounts receivable in the first quarter of 2007 was
primarily due to an increase in production receivables related to higher
production sales, in particular during the month of March compared to the
month of December, since December typically has relatively less sales due to
lower OEM production schedules. In addition to the increase in production
sales, payments from several customers occurred prior to quarter end in
December 2006, whereas similar payments were received subsequent to quarter
end in April 2007. The increase in accounts payable and other accrued
liabilities was primarily due to the increase in production in March 2007
compared to December 2006.

    Capital and Investment Spending

                                           For the three months
                                                 ended March 31,
                                      --------------------------
                                              2007         2006       Change
    -------------------------------------------------------------------------

    Fixed assets                       $      (125) $      (167)
    Other assets                               (20)          (9)
    -------------------------------------------------------------------------
    Fixed and other assets additions   $      (145) $      (176)
    Purchase of subsidiaries                   (46)        (203)
    Proceeds from disposals                     15           24
    -------------------------------------------------------------------------
    Cash used in investing activities  $      (176) $      (355) $       179
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Fixed and other assets additions

    In the first quarter of 2007 we invested $125 million in fixed assets.
While investments were made to refurbish or replace assets consumed in the
normal course of business and for productivity improvements, a large portion
of the investment in the first quarter of 2007 was for manufacturing equipment
for programs that launched during the first quarter of 2007, or will be
launching subsequent to the first quarter of 2007.
    In the first quarter of 2007, we invested $20 million in other assets
related primarily to fully reimbursable planning and engineering costs
relating to programs that will be launching during or subsequent to 2007.

    Purchase of subsidiaries

    During the first quarter of 2007, we acquired two facilities from Pressac
for total consideration of $52 million, consisting of $46 million paid in
cash, net of cash acquired, and $6 million of assumed debt. During the first
quarter of 2006, we acquired CTS Fahrzeug-Dachsysteme GmbH, Bietingheim-
Bissingen, for total consideration of $271 million, consisting of $203 million
paid in cash and $68 million of assumed debt.

    Proceeds from disposal

    For the first quarter of 2007, proceeds from disposal were $15 million,
which represents normal course fixed and other asset disposals.

    Financing

                                           For the three months
                                                 ended March 31,
                                      --------------------------
                                              2007         2006       Change
    -------------------------------------------------------------------------

    Repayments of debt                 $       (56) $       (59)
    Issues of debt                              23           48
    Issues of Class A Subordinate
     Voting Shares                               4            8
    Dividends                                  (21)         (41)
    -------------------------------------------------------------------------
    Cash used in financing activities  $       (50) $       (44) $        (6)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    The repayments of debt in the first quarters of 2006 and 2007 include the
repayment of the second and third series, respectively, of senior unsecured
notes issued in connection with the NVG acquisition.
    The issues of debt relate primarily to increases in bank indebtedness to
support the increase in working capital.
    During the first quarter of 2007, we received cash proceeds of $4 million
on the exercise of stock options for Class A Subordinate Voting Shares
compared to $8 million during the first quarter of 2006.
    Cash dividends paid per Class A Subordinate Voting or Class B Share were
$0.19 for the first quarter of 2007 compared to $0.38 for the first quarter of
2006.
    Our Dividend Policy entitles Magna Class A Subordinate Voting and Class B
shareholders to dividends which, in aggregate in respect of a financial year,
shall be: (a) equal to at least 10% of Magna's After Tax Profits (as defined
in the Corporate Constitution) for that financial year; and (b) on average,
equal to at least 20% of Magna's After Tax Profits for that year and the two
immediately preceding financial years. Magna has complied with this
requirement since 1992 and intends to continue to fully comply in the
following manner:

    (1) the dividend per share to be paid in respect of each of the first
        three quarters of a financial year will be approximately 5% of
        Magna's After Tax Profits for the prior financial year, divided by
        the number of shares outstanding at the end of the prior financial
        year; and

    (2) the dividend per share to be paid in respect of the fourth quarter of
        a financial year will be calculated based on the amount, if any, by
        which 20% of Magna's actual After Tax Profits for the current
        financial year exceeds the aggregate amount distributed as dividends
        in respect of the prior three quarters, divided by the number of
        shares outstanding at the end of the current financial year.

    As a result of the foregoing dividend formula, our quarterly dividend
payable in respect of the first quarter ending March 31, 2007 is $0.24 per
Class A Subordinate Voting or Class B share, payable on June 15, 2007 to
shareholders of record on May 31, 2007.

    Financing Resources

                                             As at        As at
                                          March 31, December 31,
                                              2007         2006       Change
    -------------------------------------------------------------------------

    Liabilities
      Bank indebtedness                $        84  $        63
      Long-term debt due within
       one year                                 76           98
      Long-term debt                           563          605
    -------------------------------------------------------------------------
                                               723          766
    Shareholders' equity                     7,420        7,157
    -------------------------------------------------------------------------
    Total capitalization               $     8,143  $     7,923  $       220
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Total capitalization increased by 3% or $220 million to $8.1 billion at
March 31, 2007 compared to $7.9 billion at December 31, 2006. The increase in
capitalization was a result of a $263 million increase in shareholders'
equity, offset in part by a $43 million decrease in liabilities.

    The increase in shareholders' equity was primarily as a result of:

    -  net income earned during the first quarter of 2007 (as discussed
       above);
    -  a $60 million increase in accumulated other comprehensive income,
       primarily due to the strengthening of the euro against the U.S.
       dollar between December 31, 2006 and March 31, 2007; and
    -  Class A Subordinate Voting Shares issued on the exercise of stock
       options.

    The increases in equity were partially offset by dividends paid during the
first quarter of 2007.
    The decrease in liabilities was primarily as a result of the repayment in
January of the third series of senior unsecured notes related to the NVG
acquisition.
    These decreases were partially offset by an increase in reported U.S.
dollar amounts, primarily as a result of the strengthening of the euro against
the U.S. dollar.
    During the first quarter of 2007, our cash resources increased by
$68 million to $1.953 billion as a result of the cash provided from operating
activities, partially offset by the cash used in investing and financing
activities, all as discussed above. In addition to our cash resources, we had
term and operating lines of credit totalling $2.0 billion, of which
$1.8 billion was unused and available.

    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 May 9, 2007 were exercised or converted:

    Class A Subordinate Voting and Class B Shares                109,955,783
    Subordinated Debentures(i)                                     1,096,589
    Stock options(ii)                                              4,003,881
    -------------------------------------------------------------------------
                                                                 115,056,253
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    (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 on redemption or maturity. 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 the 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 pursuant to our stock option plans.

    Contractual Obligations and Off Balance Sheet Financing

    There have been no material changes with respect to the contractual
obligations requiring annual payments during the first quarter of 2007 that
are outside the ordinary course of our business. Refer to our MD&A included in
our 2006 Annual Report.
    Long-term receivables in other assets are reflected net of outstanding
borrowings from a customer's finance subsidiary of $43 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.

    SUBSEQUENT EVENTS
    -------------------------------------------------------------------------

    On May 10, 2007, we announced a strategic investment in Magna by Russian
Machines, a wholly-owned subsidiary of Basic Element. Under the terms of the
transaction agreement entered into by Magna, our controlling shareholder the
Stronach Trust and Russian Machines, Russian Machines would invest
approximately $1.54 billion to indirectly acquire 20 million Magna Class A
Subordinate Voting Shares from treasury. A new Canadian holding company
("Newco") would hold the respective holdings in Magna of the Stronach Trust,
Russian Machines, and certain principals who are also members of our executive
management. We would continue to be a Canadian company whose shares are listed
on the Toronto Stock Exchange ("TSX") and New York Stock Exchange ("NYSE").
    Subject to acceptance and approval by the TSX, the 20 million Magna Class
A Subordinate Voting Shares would be issued for $76.83 per share, representing
the volume-weighted average closing price of our Class A Subordinate Voting
Shares on the NYSE over the 20 trading days ended April 20, 2007, the last
trading day prior to the receipt of the proposal letter from Russian Machines.
    Following the completion of the transaction, each of the Stronach Trust
and Russian Machines will be entitled to nominate six Board members including
at least four independent directors. Our Co-CEO's will also be nominated to
serve as directors on the 14 member Board.
    In addition, under the terms of the proposed transaction:

    -  Subject to the approval of a "majority of the minority" of the
       holders of the Class B Shares, we would repurchase all Magna Class B
       Shares not held by the Stronach Trust for cash consideration of
       Cdn$114 per share, representing a premium of approximately 30% over
       the volume-weighted average closing price of our Class A Subordinate
       Voting Shares on the TSX over the 20 trading days ended April 20,
       2007. The effective cost to Magna of the repurchase is approximately
       Cdn$24.8 million. Concurrent with the repurchase of such Magna Class
       B Shares, the voting power of each remaining Class B share would be
       reduced to 300 votes per share, in order to maintain approximately
       the same level of control of Magna that is currently exercised by
       Mr. Stronach and the Stronach Trust;

    -  Russian Machines commits to use commercially reasonable efforts to
       assist and support us in identifying, developing and implementing
       opportunities in the Russian and other automotive markets; and

    -  Russian Machines would also invest a net amount of $150 million for a
       50% interest in a European company that will provide the consulting
       services of Mr. Stronach in relation to our business outside Canada
       and Austria. As a result of this investment, Russian Machines would
       be entitled to a 50% share of consulting fees paid by Magna and its
       affiliates to Stronach & Co. and its affiliates under the existing
       arrangements.

    The transaction is proposed to be carried out by way of a court-approved
plan of arrangement under Ontario law and is subject to court, regulatory and
shareholder approvals, including "majority of the minority" approval of the
holders of Magna's Class A Subordinate Voting Shares, voting as a separate
class. Completion of the proposed transaction is also subject to finalizing
definitive documentation, including a shareholders' agreement in respect of
Newco, and customary closing conditions.
    Conditional upon completion of the transaction and subject to regulatory
approval, we intend to conduct an issuer bid to repurchase up to 20 million
outstanding Magna Class A Subordinate Voting Shares.

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

    From time to time, we may be contingently liable for litigation and other
claims. Refer to note 21 of our 2006 audited consolidated financial
statements, which describes these claims.

    CONTROLS AND PROCEDURES
    -------------------------------------------------------------------------

    There have been no changes in our internal controls over financial
reporting that occurred during the three months ended March 31, 2007 that have
materially affected, or are reasonably likely to materially affect, our
internal control over financial reporting.

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

    The previous discussion may contain statements that, to the extent that
they are not recitations of historical fact, constitute "forward-looking
statements" within the meaning of applicable securities legislation. Forward-
looking statements may include financial and other projections, as well as
statements regarding our future plans, objectives or economic performance, or
the assumptions underlying any of the foregoing. We use words such as "may",
"would", "could", "will", "likely", "expect", "anticipate", "believe",
"intend", "plan", "forecast", "project", "estimate" and similar expressions to
identify forward-looking statements. Any such forward-looking statements are
based on assumptions and analyses made by us in light of our experience and
our perception of historical trends, current conditions and expected future
developments, as well as other factors we believe are appropriate in the
circumstances. However, whether actual results and developments will conform
with our expectations and predictions is subject to a number of risks,
assumptions and uncertainties. These risks, assumptions and uncertainties
include, but are not limited to, the impact of: declining production volumes
and changes in consumer demand for vehicles; a reduction in the production
volumes of certain vehicles, such as certain light trucks; the termination or
non-renewal by our customers of any material contracts; our ability to offset
increases in the cost of commodities, such as steel and resins, as well as
energy prices; fluctuations in relative currency values; our ability to offset
price concessions demanded by our customers; our dependence on outsourcing by
our customers; our ability to compete with suppliers with operations in low
cost countries; changes in our mix of earnings between jurisdictions with
lower tax rates and those with higher tax rates, as well as our ability to
fully benefit tax losses; other potential tax exposures; the financial
distress of some of our suppliers and customers; the inability of our
customers to meet their financial obligations to us; our ability to fully
recover pre-production expenses; warranty and recall costs; product liability
claims in excess of our insurance coverage; expenses related to the
restructuring and rationalization of some of our operations; impairment
charges; our ability to successfully identify, complete and integrate
acquisitions, potentially including a transaction involving the Chrysler
group; risks associated with new program launches; legal claims against us;
risks of conducting business in foreign countries; unionization activities at
our facilities; work stoppages and labour relations disputes; changes in laws
and governmental regulations; costs associated with compliance with
environmental laws and regulations; potential conflicts of interest involving
our controlling shareholder, the Stronach Trust; 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 AND COMPREHENSIVE INCOME
    (Unaudited)
    (United States dollars in millions, except per share figures)

                                                          Three months ended
                                                   --------------------------
                                                       March 31,    March 31,
                                              Note         2007         2006
    -------------------------------------------------------------------------

    Sales                                           $     6,423  $     6,019
    -------------------------------------------------------------------------

    Cost of goods sold                                    5,580        5,199
    Depreciation and amortization                           203          188
    Selling, general and administrative          9          350          324
    Interest (income) expense, net                           (9)           1
    Equity income                                            (6)          (2)
    -------------------------------------------------------------------------
    Income from operations before income taxes              305          309
    Income taxes                                             87           97
    -------------------------------------------------------------------------
    Net income                                              218          212
    Other comprehensive income:                2,8
      Net unrealized gains on translation of
       net investment in foreign operations                  56           36
      Net unrealized gains on cash flow hedges                2            -
      Reclassifications of net losses on cash
       flow hedges to net income                              5            -
    -------------------------------------------------------------------------
    Comprehensive income                            $       281  $       248
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Earnings per Class A Subordinate Voting
     or Class B Share:
      Basic                                         $      2.00  $      1.95
      Diluted                                       $      1.96  $      1.91
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Cash dividends paid per Class A Subordinate
     Voting or Class B Share                        $      0.19  $      0.38
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Average number of Class A Subordinate Voting
     and Class B Shares outstanding during the
     period (in millions):
      Basic                                               109.0        108.4
      Diluted                                             111.8        111.2
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

                           See accompanying notes



    CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
    (Unaudited)
    (United States dollars in millions)

                                                          Three months ended
                                                   --------------------------
                                                       March 31,    March 31,
                                                           2007         2006
    -------------------------------------------------------------------------

    Retained earnings, beginning of period          $     3,773  $     3,409
    Net income                                              218          212
    Dividends on Class A Subordinate Voting
     and Class B Shares                                     (21)         (42)
    -------------------------------------------------------------------------
    Retained earnings, end of period                $     3,970  $     3,579
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

                           See accompanying notes



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

                                                          Three months ended
                                                   --------------------------
                                                       March 31,    March 31,
                                              Note         2007         2006
    -------------------------------------------------------------------------

    Cash provided from (used for):

    OPERATING ACTIVITIES
    Net income                                      $       218  $       212
    Items not involving current cash flows                  218          215
    -------------------------------------------------------------------------
                                                            436          427
    Changes in non cash operating
     assets and liabilities                                (171)        (225)
    -------------------------------------------------------------------------
                                                            265          202
    -------------------------------------------------------------------------

    INVESTMENT ACTIVITIES
    Fixed asset additions                                  (125)        (167)
    Purchase of subsidiaries                      3         (46)        (203)
    Increase in other assets                                (20)          (9)
    Proceeds from disposition                                15           24
    -------------------------------------------------------------------------
                                                           (176)        (355)
    -------------------------------------------------------------------------

    FINANCING ACTIVITIES
    Repayments of debt                                      (56)         (59)
    Issues of debt                                           23           48
    Issues of Class A Subordinate Voting Shares               4            8
    Dividends                                               (21)         (41)
    -------------------------------------------------------------------------
                                                            (50)         (44)
    -------------------------------------------------------------------------

    Effect of exchange rate changes on cash and
     cash equivalents                                        29           19
    -------------------------------------------------------------------------

    Net increase (decrease) in cash and cash
     equivalents during the period                           68         (178)
    Cash and cash equivalents, beginning of period        1,885        1,682
    -------------------------------------------------------------------------
    Cash and cash equivalents, end of period        $     1,953  $     1,504
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

                           See accompanying notes



    MAGNA INTERNATIONAL INC.
    CONSOLIDATED BALANCE SHEETS
    (Unaudited)
    (United States dollars in millions)

                                                       March 31, December 31,
                                              Note         2007         2006
    -------------------------------------------------------------------------

    ASSETS
    Current assets
    Cash and cash equivalents                       $     1,953  $     1,885
    Accounts receivable                                   4,148        3,629
    Inventories                                           1,521        1,437
    Prepaid expenses and other                   2          111          109
    -------------------------------------------------------------------------
                                                          7,733        7,060
    -------------------------------------------------------------------------
    Investments                                             153          151
    Fixed assets, net                                     4,086        4,114
    Goodwill                                     3        1,133        1,096
    Future tax assets                            2          289          255
    Other assets                                 2          485          478
    -------------------------------------------------------------------------
                                                    $    13,879  $    13,154
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current liabilities
    Bank indebtedness                               $        84  $        63
    Accounts payable                                      3,496        3,608
    Accrued salaries and wages                              545          453
    Other accrued liabilities                  2,4          898          426
    Income taxes payable                                    155          135
    Long term debt due within one year                       76           98
    -------------------------------------------------------------------------
                                                          5,254        4,783
    -------------------------------------------------------------------------
    Deferred revenue                                         71           73
    Long term debt                                          563          605
    Other long term liabilities                  2          312          288
    Future tax liabilities                       2          259          248
    -------------------------------------------------------------------------
                                                          6,459        5,997
    -------------------------------------------------------------------------

    Shareholders' equity
    Capital stock                                6
      Class A Subordinate Voting Shares
       (issued: 108,862,850; December 31, 2006
       - 108,787,387)                                     2,510        2,505
      Class B Shares
       (convertible into Class A Subordinate
        Voting Shares)
        (issued: 1,092,933)                                    -            -
    Contributed surplus                          7            66           65
    Retained earnings                                      3,970        3,773
    Accumulated other comprehensive income     2,8           874          814
    -------------------------------------------------------------------------
                                                           7,420        7,157
    -------------------------------------------------------------------------
                                                    $     13,879  $    13,154
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

                           See accompanying notes



    MAGNA INTERNATIONAL INC.
    NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)
    (All amounts in United States 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 United States dollars following
        Canadian generally accepted accounting principles ("GAAP") with
        respect to the preparation of interim financial information.
        Accordingly, they do not include all the information and footnotes as
        required in the preparation of annual financial statements and should
        be read in conjunction with the December 31, 2006 audited
        consolidated financial statements and notes included in the Company's
        2006 Annual Report. These interim consolidated financial statements
        have been prepared using the same accounting policies as the
        December 31, 2006 annual consolidated financial statements, except
        for the accounting change set out in note 2.

        In the opinion of management, the unaudited interim consolidated
        financial statements reflect all adjustments, which consist only of
        normal and recurring adjustments, necessary to present fairly the
        financial position at March 31, 2007 and the results of operations
        and cash flows for the three-month periods ended March 31, 2007 and
        2006.

    2.  ACCOUNTING CHANGE

        In January 2005, the Canadian Institute of Chartered Accountants
        approved Handbook Sections 1530, "Comprehensive Income", 3855
        "Financial Instruments - Recognition and Measurement", 3861
        "Financial Instruments - Disclosure and Presentation", and 3865
        "Hedges". The Company adopted these new recommendations effective
        January 1, 2007 with no restatement of prior periods, except to
        classify the currency translation adjustment as a component of
        accumulated other comprehensive income. With the adoption of these
        new standards, the Company's accounting for financial instruments and
        hedges complies with U.S. GAAP in all material respects on January 1,
        2007.

        Financial Instruments

        Under the new standards, all of our financial assets and financial
        liabilities are classified as held for trading, held to maturity
        investments, loans and receivables, available-for-sale financial
        assets, or other financial liabilities. Held for trading financial
        instruments, which include cash and cash equivalents, are measured at
        fair value and all gains and losses are included in net income in the
        period in which they arise. Held to maturity investments are recorded
        at amortized cost using the effective interest method, and include
        long-term interest bearing government securities held to partially
        fund certain Austrian lump sum termination and long service payment
        arrangements. Loans and receivables, which include accounts
        receivable and long-term receivables, accounts payable, accrued
        salaries and wages and certain other accrued liabilities are recorded
        at amortized cost using the effective interest method. The Company
        does not currently have any available for sale financial assets.

        Comprehensive Income

        Other comprehensive income includes unrealized gains and losses on
        translation of the Company's net investment in self-sustaining
        foreign operations, and to the extent that cash flow hedges are
        effective, the change in their fair value, net of income taxes. Other
        comprehensive income is presented below net income on the
        Consolidated Statements of Income and Comprehensive Income.
        Comprehensive income is composed of net income and other
        comprehensive income.

        Accumulated other comprehensive income is a separate component of
        shareholders' equity which includes the accumulated balances of all
        components of other comprehensive income which are recognized in
        comprehensive income but excluded from net income.

        Hedges

        Previously, under Canadian GAAP, derivative financial instruments
        that met hedge accounting criteria were accounted for on an accrual
        basis, and gains and losses on hedge contracts were accounted for as
        a component of the related hedged transaction. The new standards
        require that all derivative instruments, whether designated in
        hedging relationships or not, be recorded on the balance sheet at
        fair value. The fair values of derivatives are recorded in other
        assets or other liabilities. To the extent that cash flow hedges are
        effective, the change in their fair value is recorded in other
        comprehensive income. Amounts accumulated in other comprehensive
        income are reclassified to net income in the period in which the
        hedged item affects net income.

        The impact of this accounting policy change on the consolidated
        balance sheet as at January 1, 2007 was as follows:

        Increase in prepaid expenses and other                      $    28
        Increase in other assets                                         17
        Increase in future tax assets                                    14
        -------------------------------------------------------------------

        Increase in other accrued liabilities                       $    32
        Increase in other long-term liabilities                          17
        Increase in future tax liabilities                               13
        -------------------------------------------------------------------

        Decrease in accumulated other comprehensive income          $     3
        -------------------------------------------------------------------

    3.  ACQUISITIONS

        (a)  For the three months ended March 31, 2007

             On January 15, 2007, Magna acquired two facilities from Pressac
             Investments Limited ("Pressac"). The facilities in Germany and
             Italy manufacture electronic components for sale to various
             customers, including Volkswagen, DaimlerChrysler and Fiat.

             The total consideration for the acquisition amounted to
             $52 million ((euro) 40 million), consisting of $46 million paid
             in cash, net of cash acquired, and $6 million of assumed debt.
             The excess purchase price over the book value of assets acquired
             and liabilities assumed was $29 million.

             The purchase price allocations for Pressac are preliminary and
             adjustments to the allocations may occur as a result of
             obtaining more information regarding asset valuations. On a
             preliminary basis, an allocation of the excess purchase price
             over the book value of assets acquired and liabilities assumed
             has been made to fixed assets and goodwill.

        (b)  For the three months ended March 31, 2006

             On February 2, 2006, Magna acquired CTS Fahrzeug-Dachsysteme
             GmbH, Bietingheim-Bissingen ("CTS"), a leading manufacturer of
             roof systems for the automotive industry. CTS manufactures soft
             tops, hard tops and modular retractable hard tops. In addition
             to Porsche, its customers include DaimlerChrysler, Ferrari,
             Peugeot and General Motors. CTS has six facilities in Europe and
             two facilities in North America.

             The total consideration for the acquisition of CTS amounted to
             $271 million, consisting of $203 million paid in cash and
             $68 million of assumed debt.

    4.  WARRANTY

        The following is a continuity of the Company's warranty accruals:

                                                         2007          2006
        -------------------------------------------------------------------

        Balance, beginning of period                  $    94       $    96
        Expense, net                                        3             7
        Settlements                                        (6)           (5)
        Acquisition                                         1             6
        Foreign exchange and other                          1             2
        -------------------------------------------------------------------
        Balance, March 31,                            $    93           106
        -------------------------------------------------------------------
        -------------------------------------------------------------------

    5.  EMPLOYEE FUTURE BENEFIT PLANS

        The Company recorded employee future benefit expenses as follows:

                                                        Three months ended
                                                     ----------------------
                                                     March 31,     March 31,
                                                         2007          2006
        -------------------------------------------------------------------

        Defined benefit pension plan and other         $    6        $    4
        Termination and long service arrangements           6             5
        Retirement medical benefits plan                    2             1
        -------------------------------------------------------------------
                                                       $   14        $   10
        -------------------------------------------------------------------
        -------------------------------------------------------------------

    6.  CAPITAL STOCK

        (a)  Changes in the Class A Subordinate Voting Shares for the
             three-month period ended March 31, 2007 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, 2006                     108,787,387   $   2,505
             Issued under the Incentive Stock
              Option Plan                                74,082           5
             Issued under the Dividend Reinvestment
              Plan                                        1,381           -
             --------------------------------------------------------------
             Issued and outstanding at
              March 31, 2007                        108,862,850   $   2,510
             --------------------------------------------------------------
             --------------------------------------------------------------

        (b)  The following table presents the maximum number of shares that
             would be outstanding if all dilutive instruments outstanding
             at May 9, 2007 were exercised:

             Class A Subordinate Voting and Class B Shares
              outstanding                                       109,955,783
             Subordinated Debentures(i)                           1,096,589
             Stock options(ii)                                    4,003,881
             --------------------------------------------------------------
                                                                115,056,253
             --------------------------------------------------------------
             --------------------------------------------------------------

             (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 on redemption or maturity. The
                  number of Class A Subordinate Voting Shares issuable at the
                  Company's option is dependent on the trading price of Class
                  A Subordinate Voting Shares at the time the Company elects
                  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 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 the Company's
                  stock option plans.

    7.  CONTRIBUTED SURPLUS

        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 accumulated
        restricted stock compensation expense, and the value of the holders
        conversion option on the 6.5% Convertible Subordinated Debentures.
        The following is a continuity schedule of contributed surplus:

                                                         2007          2006
        --------------------------------------------------------------------

        Stock-based compensation
          Balance, beginning of period                $    62       $    62
          Stock-based compensation expense                  2             2
          Exercise of options                              (1)           (3)
        --------------------------------------------------------------------
          Balance, March 31,                               63            61
        Holders conversion option                           3             3
        --------------------------------------------------------------------
                                                      $    66       $    64
        --------------------------------------------------------------------
        --------------------------------------------------------------------

    8.  ACCUMULATED OTHER COMPREHENSIVE INCOME

        The following is a continuity schedule of accumulated other
        comprehensive income:

                                                        Three months ended
                                                     ----------------------
                                                     March 31,     March 31,
                                                         2007          2006
        -------------------------------------------------------------------

        Accumulated net unrealized gains on
         translation of net investment in
         foreign operations
           Balance, beginning of period                $  814        $  621
           Net unrealized gains on translation
            of net investment in foreign operations        56            36
        -------------------------------------------------------------------
           Balance, end of period                         870           657
        -------------------------------------------------------------------

        Accumulated net unrealized gain on
         cash flow hedges
           Balance, beginning of period                     -             -
           Adjustment for change in accounting
            policy (note 2)
              (net of income taxes of $1 million)          (3)            -
           Net unrealized gains on cash flow hedges
              (net of income taxes of $1 million)           2             -
           Reclassifications of net losses on cash
            flow hedges to net income
              (net of income taxes of $2 million)           5             -
        -------------------------------------------------------------------
           Balance, end of period                           4             -
        -------------------------------------------------------------------
        Total accumulated other comprehensive income   $  874        $  657
        -------------------------------------------------------------------
        -------------------------------------------------------------------

        The amount of other comprehensive income that is expected to be
        reclassified to net income over the next 12 months is $3 million (net
        of income taxes of $2 million).

    9.  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):


                              2007                         2006
                    ---------------------------  ---------------------------
                    Options outstanding          Options outstanding
                    -------------------          -------------------
                                       Options                      Options
                             Exercise  exercis-           Exercise  exercis-
                    Options  price(i)     able   Options  price(i)     able
                         No.    Cdn$        No.       No.    Cdn$        No.
        --------------------------------------------------------------------

        Beginning
         of
         period    4,087,249  77.45  3,811,336  4,600,039  75.46  4,116,104
        Granted            -      -          -    115,000  87.80          -
        Exercised    (74,082) 63.21    (74,082)  (166,209) 58.32   (166,209)
        Vested             -      -     55,443          -      -     80,100
        Cancelled     (7,306) 73.64     (4,400)   (17,001) 93.35    (12,059)
        --------------------------------------------------------------------
        March 31   4,005,861  77.72  3,788,297  4,531,829  76.33  4,017,936
        --------------------------------------------------------------------
        --------------------------------------------------------------------

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

        (b)  The weighted average assumptions used in measuring the fair
             value of stock options granted or modified and the compensation
             expense recorded in selling, general and administrative expenses
             are as follows:

                                                        Three months ended
                                                     ----------------------
                                                     March 31,     March 31,
                                                         2007          2006
        -------------------------------------------------------------------

        Risk free interest rate                             -            4%
        Expected dividend yield                             -            2%
        Expected volatility                                 -           23%
        Expected time until exercise                        -       4 years
        -------------------------------------------------------------------

        Weighted average fair value of options granted
         or modified in the period (Cdn$)                   -    $    14.89
        -------------------------------------------------------------------

        Compensation expense recorded in selling,
         general and administrative expenses       $        1    $        2
        -------------------------------------------------------------------

        (c)  During the three-month period ended March 31, 2007, $1 million
             (2006 - $1 million) was charged to compensation expense related
             to restricted stock arrangements. At March 31, 2007, unamortized
             compensation expense related to the restricted stock
             arrangements was $41 million (December 31, 2006 - $42 million)
             and has been presented as a reduction of shareholders' equity.

    10. SEGMENTED INFORMATION

                                                Three months ended
                                                  March 31, 2007
                                  -------------------------------------------
                                                                       Fixed
                                      Total   External                assets,
                                      sales      sales     EBIT(i)       net
        ---------------------------------------------------------------------

        North America
          Canada                   $  1,683   $  1,622              $  1,046
          United States               1,475      1,435                 1,076
          Mexico                        341        295                   366
          Eliminations                 (135)         -                     -
        ---------------------------------------------------------------------
                                      3,364      3,352    $   146      2,488
        Europe
          Euroland                    2,563      2,518                 1,036
          Great Britain                 286        285                    85
          Other European countries      189        171                   119
          Eliminations                  (43)         -                     -
        ---------------------------------------------------------------------
                                      2,995      2,974        120      1,240
        Rest of World                   108         96          5        131
        Corporate and Other             (44)         1         25        227
        ---------------------------------------------------------------------
        Total reportable segments  $  6,423   $  6,423    $   296      4,086
        Current assets                                                 7,733
        Investments, goodwill and
         other assets                                                  2,060
        ---------------------------------------------------------------------
        Consolidated total assets                                   $ 13,879
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

                                                Three months ended
                                                  March 31, 2006
                                  -------------------------------------------
                                                                       Fixed
                                      Total   External                assets,
                                      sales      sales     EBIT(i)       net
        ---------------------------------------------------------------------

        North America
          Canada                   $  1,698   $  1,636             $   1,070
          United States               1,457      1,397                 1,262
          Mexico                        358        349                   329
          Eliminations                 (114)         -                     -
        ---------------------------------------------------------------------
                                      3,399      3,382    $   219      2,661
        Europe
          Euroland                    2,260      2,223                 1,143
          Great Britain                 243        242                    69
          Other European countries      154        116                    93
          Eliminations                  (49)         -                     -
        ---------------------------------------------------------------------
                                      2,608      2,581         69      1,305
        Rest of World                    64         56          -         87
        Corporate and Other             (52)         -         22        110
        ---------------------------------------------------------------------
        Total reportable segments  $  6,019   $  6,019    $   310      4,163
        Current assets                                                 7,173
        Investments, goodwill and
          other assets                                                 1,790
        ---------------------------------------------------------------------
        Consolidated total assets                                  $  13,126
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

        (i) EBIT represents operating income before interest expense, net.

    11. SUBSEQUENT EVENTS

        On May 10, 2007, the Company announced a strategic investment in
        Magna by Russian Machines, a wholly-owned subsidiary of Basic
        Element. Under the terms of the transaction agreement entered into by
        Magna, its controlling shareholder the Stronach Trust and Russian
        Machines, Russian Machines would invest approximately $1.54 billion
        to indirectly acquire 20 million Magna Class A Subordinate Voting
        Shares from treasury. A new Canadian holding company ("Newco") would
        hold the respective holdings in Magna of the Stronach Trust, Russian
        Machines, and certain principals who are also members of Magna's
        executive management. Magna would continue to be a Canadian-based
        company whose shares are listed on the Toronto Stock Exchange ("TSX")
        and New York Stock Exchange ("NYSE").

        Subject to acceptance and approval by the TSX, the 20 million Magna
        Class A Subordinate Voting Shares would be issued for $76.83 per
        share, representing the volume-weighted average closing price of
        Magna's Class A Subordinate Voting Share on the NYSE over the
        20 trading days ended April 20, 2007, the last trading day prior to
        the receipt of the proposal letter from Russian Machines.

        Following the completion of the transaction, each of the Stronach
        Trust and Russian Machines will be entitled to nominate six Board
        members including at least four independent directors. Magna's
        Co-CEO's will also be nominated to serve as directors on the
        14 member Board.

        In addition, under the terms of the proposed transaction:

        -  Subject to the approval of a "majority of the minority" of the
           holders of the Class B Shares, Magna would repurchase all Magna
           Class B Shares not held by the Stronach Trust for cash
           consideration of Cdn$114 per share, representing a premium of
           approximately 30% over the volume-weighted average closing price
           of Magna's Class A Subordinate Voting Shares on the TSX over the
           20 trading days ended April 20, 2007. The effective cost of the
           repurchase is approximately Cdn$24.8 million. Concurrent with the
           repurchase of certain Magna Class B Shares, the voting power of
           each remaining Class B share would be reduced to 300 votes per
           share, in order to maintain approximately the same level of
           control of Magna that is currently exercised by Mr. Stronach and
           the Stronach Trust;

        -  Russian Machines commits to use commercially reasonable efforts to
           assist and support Magna in identifying, developing and
           implementing opportunities in the Russian and other automotive
           markets; and

        -  Russian Machines would also invest a net amount of $150 million
           for a 50% interest in a European company that will provide the
           consulting services of Mr. Stronach in relation to Magna's
           business outside Canada and Austria. As a result of this
           investment, Russian Machines would be entitled to a 50% share of
           consulting fees paid by Magna and its affiliates to Stronach & Co.
           and its affiliates under the existing arrangements.

        The transaction is proposed to be carried out by way of a court-
        approved plan of arrangement under Ontario law and is subject to
        court, regulatory and shareholder approvals, including "majority
        of the minority" approval of the holders of Magna's Class A
        Subordinate Voting Shares, voting as a separate class. Completion
        of the proposed transaction is also subject to finalizing
        definitive documentation, including a shareholders' agreement in
        respect of Newco, and customary closing conditions.

        Conditional upon completion of the transaction and subject to
        regulatory approval, Magna intends to conduct an issuer bid to
        repurchase up to 20 million outstanding Magna Class A Subordinate
        Voting Shares.

    12. COMPARATIVE FIGURES

        Certain of the comparative figures have been reclassified to conform
        to the current period's method of presentation.
    >>
</TEXT>
</DOCUMENT>
