Class A
Subordinate Voting
----------------------- Class B
Share Share Share Net
Issuance Repurchase Repurchase Impact
(a) (c) (a)
---------------------------------------------------------------------
Number of shares
issued (repurchased) 20,000,000 (11,902,654) (217,400) 7,879,946
Cash received (paid) 1,531 (1,091) (24) 416
---------------------------------------------------------------------
Increase (decrease)
in share capital 1,531 (280) - 1,251
Decrease in retained
earnings - (655) (24) (679)
Decrease in accumulated
other comprehensive
income - (156) - (156)
---------------------------------------------------------------------
Increase (decrease) in
shareholders' equity 1,531 (1,091) (24) 416
---------------------------------------------------------------------
(a) In accordance with the Arrangement:
(i) Russian Machines invested $1.54 billion to indirectly
acquire 20 million Class A Subordinate Voting Shares of
Magna from treasury. Issue costs related to the issuance of
these shares were $6 million.
(ii) The Company purchased 217,400 Class B Shares for
cancellation, representing all the outstanding Class B
Shares, other than those indirectly controlled by the
Stronach Trust, for approximately $24 million, and the
number of votes per Class B Share was reduced from
500 votes to 300 votes. The excess cash paid over the book
value of the Class B Shares repurchased of $24 million was
charged to retained earnings.
(iii) The Stronach Trust and certain members of the Company's
executive management combined their respective
shareholdings in Magna (in the case of executive
management, a portion of their shareholdings), together
with the 20 million Class A Subordinate Voting Shares
issued as part of the Arrangement into a new Canadian
holding company. At September 20, 2007, the new Canadian
holding company indirectly held 100% of the outstanding
Class B Shares and approximately 71.1% of the votes
attached to all the Class A Subordinate Voting Shares and
Class B Shares then outstanding.
(b) Prior to completion of the Arrangement Magna caused the
conversion of 148,704 Class B Shares held by the MIC Trust and
865714 Ontario Inc., a wholly-owned subsidiary of Magna, into
Class A Subordinate Voting Shares.
(c) On September 20, 2007, the Company also completed a substantial
issuer bid pursuant to which it purchased for cancellation
11.9 million Class A Subordinate Voting Shares, representing 9.2%
of the issued and outstanding Class A Subordinate Voting Shares
for an aggregate purchase price of $1.1 billion (including
$2 million of costs relating to the transaction). The excess paid
over the book value of the Class A Subordinate Voting Shares
repurchased of $655 million was charged to retained earnings.
4. GOODWILL AND LONG-LIVED ASSETS
In conjunction with the Company's annual goodwill impairment analysis
and consideration of other indicators of impairment of its long-lived
assets at certain operations, the Company recorded long-lived assets
impairment charges as follows:
Three months ended Year ended
December 31, December 31,
-------------------- --------------------
2007 2006 2007 2006
---------------------------------------------------------------------
Europe $ 12 $ 41 $ 12 $ 41
North America 22 13 44 13
---------------------------------------------------------------------
$ 34 $ 54 $ 56 $ 54
---------------------------------------------------------------------
---------------------------------------------------------------------
Europe
Due to recurring losses that were projected to continue as a result
of existing sales levels and limited sales growth prospects, during
2007 the Company recorded asset impairments of $12 million
($12 million after tax) relating to certain assets and facilities in
Germany, Austria, the Czech Republic and Spain.
During 2006, the Company recorded asset impairments of $41 million
($38 million after tax) relating to certain assets and facilities in
Germany, Austria, the United Kingdom, the Czech Republic and Spain.
The asset impairments were recorded based on recurring losses that
were projected to continue as a result of existing sales levels and
limited sales growth prospects.
North America
During 2007, the Company recorded asset impairments of $44 million
($28 million after tax) at an interiors systems facility in the
United States and certain powertrain facilities in the United States
and Canada. The asset impairments were recorded as a result of:
(i) ceasing operations and/or use of certain assets at two powertrain
facilities; and (ii) losses that were projected to be incurred
throughout the Company's business planning period based on existing
and projected sales levels.
During 2006, the Company recorded an asset impairment of $13 million
($8 million after tax) relating to certain interior system facilities
in the United States. The asset impairments were recorded as a result
of losses that were projected to be incurred throughout the Company's
business planning period based on existing and projected sales
levels.
5. INVESTMENTS
At December 31, 2007, the Company held Canadian third party ABCP with
a face value of Cdn$134 million. When acquired, these investments
were rated R1 (High) by Dominion Bond Rating Service, which was the
highest credit rating issued for commercial paper. These investments
did not settle at the scheduled maturity during the third quarter of
2007 due to ABCP market liquidity issues. As a result, the Company
reclassified its ABCP to long-term investments from cash and cash
equivalents. In addition, the Company recorded a $12 million
impairment in the carrying value of this investment based on a
valuation technique estimating the fair value of these investments
from the perspective of a market participant. Significant estimates
and assumptions incorporated into the valuation were as follows:
(i) a high likelihood of a successful restructuring of the ABCP
during 2008;
(ii) available public information regarding the expected amount and
timing of estimated underlying cash flows and relevant
conditions;
(iii) a charge against potentially non-performing assets (primarily
sub-prime residential mortgages), which was determined based on
a probability weighted basis;
(iv) a charge related to restructured notes which are expected to
continue performing. The return on these notes is expected to
be below current market rates for instruments of comparable
credit quality, term and structure, and accordingly, an
impairment charge was recorded using a discounted cash flow
analysis; and,
(v) costs expected to be incurred by the noteholders related to the
restructuring.
Continuing uncertainties regarding the value of the assets which
underlie the ABCP, the amount and timing of cash flows associated
with the ABCP and the outcome of the restructuring process could give
rise to a change in the value of the Company's investment in ABCP
which would impact the Company's earnings.
6. ACQUISITIONS
(a) For the year ended December 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, Mercedes 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.
(b) For the year ended December 31, 2006
(i) CTS Fahrzeug-Dachsysteme GmbH, Bietigheim-Bissingen ("CTS")
On February 2, 2006, Magna acquired 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 Mercedes, 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.
(ii) Magna Golf Club and Fontana Golf and Sports Club
On August 25, 2006, the Company acquired the net assets of the
Magna Golf Club located in Aurora, Ontario from Magna
Entertainment Corp. ("MEC") for total cash consideration of
$46 million. On November 1, 2006, the Company purchased the
Fontana Golf and Sports Club in Austria from MEC for total
consideration of $38 million. These transactions were reviewed by
a Special Committee of, and approved by the independent members
of, Magna's Board of Directors following the unanimous
recommendation of the Special Committee.
(iii) Other
During 2006, the Company also acquired a number of small
manufacturing and engineering facilities. Total consideration for
these acquisitions amounted to $19 million, consisting of
$18 million paid in cash and $1 million of assumed debt.
7. 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
Expense, net 8 7
Settlements (7) (3)
Foreign exchange and other 9 5
---------------------------------------------------------------------
Balance, June 30, 103 115
Expense (income), net 6 (39)
Settlements (5) (9)
Foreign exchange and other 6 -
---------------------------------------------------------------------
Balance, September 30, 110 67
Expense, net 2 33
Settlements (14) (10)
Foreign exchange and other 5 4
---------------------------------------------------------------------
Balance, December 31, $ 103 $ 94
---------------------------------------------------------------------
---------------------------------------------------------------------
8. EMPLOYEE FUTURE BENEFIT PLANS
The Company recorded employee future benefit expenses as follows:
Three months ended Year ended
December 31, December 31,
-------------------- --------------------
2007 2006 2007 2006
---------------------------------------------------------------------
Defined benefit pension
plans and other $ 7 $ 7 $ 22 $ 23
Termination and long
service arrangements 12 5 28 19
Retirement medical
benefits plan 6 5 15 14
---------------------------------------------------------------------
$ 25 $ 17 $ 65 $ 56
---------------------------------------------------------------------
---------------------------------------------------------------------
9. CAPITAL STOCK
(a) Changes in the Class A Subordinate Voting Shares and Class B
Shares consist of the following (numbers of shares in the
following table are expressed in whole numbers):
Class A
Subordinate Voting Class B
--------------------- ---------------------
Number of Stated Number of Stated
shares value shares value
-------------------------------------------------------------------------
Issued and outstanding at
December 31, 2006 108,787,387 $ 2,505 1,092,933 $ -
Issued under the Incentive
Stock Option Plan 74,082 5
Issued under the Dividend
Reinvestment Plan ("DRIP") 1,381 -
Release of restricted stock
(notes 9(c), 10) - 3
-------------------------------------------------------------------------
Issued and outstanding at
March 31, 2007 108,862,850 2,513 1,092,933 -
Issued under the Incentive
Stock Option Plan 288,644 22
Issued under Stock
Appreciation Rights
(note 9(d)) 301,364 11
Issued under the DRIP 1,466 -
Release of restricted stock
(notes 9(c), 10) - 6
Repurchase (note 9(c)) - (7)
-------------------------------------------------------------------------
Issued and outstanding at
June 30, 2007 109,454,324 2,545 1,092,933 -
Issued for cash under the
Arrangement (note 3) 20,000,000 1,531
Repurchase and Cancellation
(note 3) (11,902,654) (280) (217,400) -
Conversion of Class B Shares
into Class A Subordinate
Voting Shares (note 3) 148,704 - (148,704) -
Issued under the Incentive
Stock Option Plan 157,844 6
Issued under the DRIP 2,004 -
Release of restricted stock
(notes 9(c), 10) - 1
Repurchase of Class A
Subordinate Voting Shares
(note 9(c)) - (1)
-------------------------------------------------------------------------
Issued and outstanding at
September 30, 2007 117,860,222 3,802 726,829 -
Repurchase and cancellation
(note 9(b)) (2,521,553) (82)
Issued under the Incentive
Stock Option Plan 3,240 -
Issued under the DRIP 2,275 -
Repurchase (note 9(b)) - (12)
-------------------------------------------------------------------------
Issued and outstanding at
December 31, 2007 115,344,184 $ 3,708 726,829 $ -
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(b) On November 8, 2007, the Toronto Stock Exchange ("TSX') accepted
the Company's Notice of Intention to Make a Normal Course Issuer
Bid (the "Notice") relating to the purchase for cancellation
and/or for purposes of the Company's long-term retention
(restricted stock), restricted stock unit ("RSU") and similar
programs, of up to 9.0 million Class A Subordinate Voting Shares
of the Company (the "Bid"), representing approximately 9.9% of
its public float of such shares. The Bid commenced on
November 12, 2007 and will terminate no later than November 11,
2008. All purchases of Class A Subordinate Voting Shares will be
made at the market price at the time of purchase in accordance
with the rules and policies of the TSX and Rule 10b-18 under the
U.S. Securities Exchange Act of 1934. Subject to certain
exceptions for block purchases, the maximum number of shares
which can be purchased per day during the Bid is 91,737, for
purchases on the TSX, and 25% of the average daily trading volume
for the four calendar weeks preceding the date of purchase, for
purchases on the New York Stock Exchange ("NYSE").
During the three months ended December 31, 2007, the Company
repurchased for cancellation 2,521,553 Class A Subordinate Voting
Shares for aggregate cash consideration of approximately
$207 million. The excess of the cash paid over the book value of
the Class A Subordinate Voting Shares repurchased of $100 million
was charged to retained earnings.
During the three months ended December 31, 2007, the Company also
repurchased 133,539 Magna Class A Subordinate Voting Shares for
aggregate cash consideration of $12 million. These shares are
being held in trust for purposes of the Company's restricted
stock unit program and are reflected as a reduction in the stated
value of the Company's Class A Subordinate Voting Shares.
(c) At December 31, 2007, 893,541 (December 31, 2006 - 958,688) Magna
Class A Subordinate Voting Shares, which were purchased by the
Company at a cumulative cost of $55 million (December 31, 2006 -
$57 million), have been awarded on a restricted basis to certain
executives. The stock that has not been released to the
executives is reflected as a reduction in the stated value of the
Company's Class A Subordinate Voting Shares.
(d) On June 29, 2007, following approval by the Company's Corporate
Governance and Compensation Committee and in accordance with the
Amended and Restated Incentive Stock Option Plan, the Company
granted stock appreciation rights ("SARs") to the Company's
Chairman, Mr. Stronach, and an associated company, Stronach &
Co., in respect of 648,475 previously granted and unexercised
stock options.
Simultaneously, all such SARs were exercised and all of the
previously granted and unexercised stock options were surrendered
and cancelled. On exercise of the SARs, Stronach & Co. and
Mr. Stronach received 301,364 Magna Class A Subordinate Voting
Shares, representing an amount equal to the difference between
the aggregate fair market value of the shares covered by the
surrendered options and the aggregate exercise price of such
surrendered options. Fair market value was determined based on
the weighted average closing price of the Company's Class A
Subordinate Voting Shares on the Toronto Stock Exchange or the
New York Stock Exchange (based on the surrendered options'
currency) for the five consecutive trading days ending on the
trading day immediately prior to the date of exercise.
(e) The following table presents the maximum number of shares that
would be outstanding if all the dilutive instruments outstanding
at February 25, 2008, were exercised or converted:
Class A Subordinate Voting and Class B Shares 116,072,243
Subordinated Debentures(i) 1,096,589
Stock options(ii) 2,945,973
-----------------------------------------------------------------
120,114,805
-----------------------------------------------------------------
-----------------------------------------------------------------
(i) The above amounts include shares issuable if the holders of
the 6.5% Convertible Subordinated Debentures exercise their
conversion option but exclude Class A Subordinate Voting
Shares issuable, only at the Company's option, to settle
interest and principal related to the 6.5% Convertible
Subordinated Debentures. The number of Class A Subordinate
Voting Shares issuable at the Company's option is dependent
on the trading price of the Class A Subordinate Voting
Shares at the time the Company elects to settle the 6.5%
Convertible Subordinated Debenture interest and principal
with shares.
The above amounts also exclude Class A Subordinate Voting
Shares issuable, only at the Company's option, to settle the
7.08% Subordinated Debentures on redemption or maturity. The
number of shares issuable is dependent on the trading price
of Class A Subordinate Voting Shares at redemption or
maturity of the 7.08% Subordinated Debentures.
(ii) Options to purchase Class A Subordinate Voting Shares are
exercisable by the holder in accordance with the vesting
provisions and upon payment of the exercise price as may be
determined from time to time pursuant to the Company's stock
option plans.
10. 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, theaccumulated
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)
Release of restricted stock (note 9(b)) (3) -
---------------------------------------------------------------------
Balance, March 31, 60 61
Stock-based compensation expense 14 3
Exercise of options (3) (3)
Exercise of stock appreciation rights
(note 9(c)) (11) -
Release of restricted stock (note 9(b)) (6) -
---------------------------------------------------------------------
Balance, June 30, 54 61
Stock-based compensation expense 2 4
Release of restricted stock (note 9(b)) (1) -
---------------------------------------------------------------------
Balance, September 30, 55 65
Stock-based compensation expense - 3
Exercise of options - (6)
---------------------------------------------------------------------
Balance, December 31, 55 62
Holders' conversion option 3 3
---------------------------------------------------------------------
$ 58 $ 65
---------------------------------------------------------------------
---------------------------------------------------------------------
11. ACCUMULATED OTHER COMPREHENSIVE INCOME
The following is a continuity schedule of accumulated other
comprehensive income:
Three months ended Year ended
December 31, December 31,
-------------------- --------------------
2007 2006 2007 2006
---------------------------------------------------------------------
Accumulated net unrealized
gains on translation of
net investment in foreign
operations
Balance, beginning of
period $ 1,267 $ 837 $ 814 $ 621
Repurchase of shares
(notes 3,9) (25) - (181) -
Reclassification of gains
on translation of net
investment in foreign
operations to net income (19) - (26) -
Net unrealized gains
(losses) on translation
of net investment in
foreign operations 137 (23) 753 193
---------------------------------------------------------------------
Balance, end of period 1,360 814 1,360 814
---------------------------------------------------------------------
Accumulated net unrealized
gain on cash flow hedges
Balance, beginning of
period (6) - - -
Adjustment for change in
accounting policy
(note 2) - - (3) -
Net unrealized losses on
cash flow hedges(i) (2) - (8) -
Reclassifications of net
losses (gains) on cash
flow hedges to net
income(ii) (2) - 1 -
---------------------------------------------------------------------
Balance, end of period (10) - (10) -
---------------------------------------------------------------------
Total accumulated other
comprehensive income $ 1,350 $ 814 $ 1,350 $ 814
---------------------------------------------------------------------
---------------------------------------------------------------------
(i) Net of income tax benefit of $1 million for the three months
ended December 31, 2007 and income tax benefit of $3 million for
the twelve months ended December 31, 2007.
(ii) Net of income tax benefit of $1 million for the three months
ended December 31, 2007 and income tax expense of $nil for the
twelve months ended December 31, 2007.
The amount of other comprehensive income that is expected to be
reclassified to net income over the next 12 months is $1 million (net
of income taxes of $1 million).
12. STOCK BASED COMPENSATION
(a) The following is a continuity of options outstanding (number of
options in the table below are expressed in whole numbers):
2007 2006
----------------------------- -----------------------------
Options outstanding Options outstanding
------------------- -------------------
Options Options
Exercise exer- Exercise exer-
Options price(i) cisable Options price(i) cisable
# Cdn$ # # Cdn$ #
-------------------------------------------------------------------------
Beginning
of year 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
Granted 40,000 88.87 - - - -
Exercised (590,008) 64.08 (590,008) (140,535) 62.92 (140,535)
Vested - - 29,000 - - 8,138
Cancelled (366,686) 69.78 (361,641) (6,862) 73.11 (2,658)
-------------------------------------------------------------------------
June 30 3,089,167 81.41 2,865,648 4,384,432 76.76 3,882,881
Granted 15,000 95.96 - - - -
Exercised (157,844) 59.99 (157,844) (10,137) 65.55 (10,137)
Vested - - 3,880 - - 107,004
Cancelled (880) 71.71 - (15,198) 107.83 (15,198)
-------------------------------------------------------------------------
September 30 2,945,443 82.64 2,711,684 4,359,097 76.68 3,964,550
Exercised (3,240) 58.27 (3,240) (271,028) 65.16 (271,028)
Vested - - 204,433 - - 118,429
Cancelled - - - (820) 60.25 (615)
-------------------------------------------------------------------------
December 31 2,942,203 82.66 2,912,877 4,087,249 77.45 3,811,336
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(i) The exercise price noted above represents the weighted
average exercise price in Canadian dollars.
(b) The fair value of stock options is estimated at the date of grant
using the Black Scholes option pricing model. The weighted
average assumptions used in measuring the fair value of stock
options granted or modified, during the three-months and years
ended December 31, 2007 and 2006 are as follows:
Three months ended Year ended
December 31, December 31,
-------------------- --------------------
2007 2006 2007 2006
---------------------------------------------------------------------
Risk free interest rate - - 4.33% 3.99%
Expected dividend yield - - 1.14% 2.05%
Expected volatility - - 22% 23%
Expected time until exercise - - 4 years 4 years
---------------------------------------------------------------------
Weighted average fair value
of options granted or
modified in period (Cdn$) - - $ 19.50 $14.89
---------------------------------------------------------------------
Compensation expense
recorded in selling,
general and administrative
expenses $ 2 $ 1 $ 4 $ 5
---------------------------------------------------------------------
(c) During 2007, $17 million (2006 - $7 million) was charged to
compensation expense relating to the restricted stock
arrangements. At December 31, 2007, unamortized compensation
expense related to the restricted stock arrangements was
$36 million (2006 - $42 million), and has been presented as a
reduction of shareholders' equity.
13. SEGMENTED INFORMATION
Three months ended
December 31, 2007
------------------------------------------
Fixed
Total External assets,
sales sales EBIT(i) net
---------------------------------------------------------------------
North America
Canada $ 1,893 $ 1,774 $ 1,137
United States 1,540 1,483 989
Mexico 422 364 380
Eliminations (211) - -
---------------------------------------------------------------------
3,644 3,621 $ 115 2,506
Europe
Euroland 2,622 2,564 1,126
Great Britain 321 320 95
Other European countries 226 192 136
Eliminations (61) - -
---------------------------------------------------------------------
3,108 3,076 59 1,357
Rest of World 152 137 8 152
Corporate and Other (68) 2 - 292
---------------------------------------------------------------------
Total reportable segments $ 6,836 $ 6,836 $ 182 4,307
Current assets 8,770
Investments, goodwill
and other assets 2,266
---------------------------------------------------------------------
Consolidated total assets $ 15,343
---------------------------------------------------------------------
---------------------------------------------------------------------
Three months ended
December 31, 2006
------------------------------------------
Fixed
Total External assets,
sales sales EBIT(i) net
---------------------------------------------------------------------
North America
Canada $ 1,577 $ 1,518 $ 1,065
United States 1,361 1,320 1,096
Mexico 441 395 368
Eliminations (132) - -
---------------------------------------------------------------------
3,247 3,233 $ 40 2,529
Europe
Euroland 2,630 2,583 1,032
Great Britain 272 272 84
Other European countries 164 188 118
Eliminations (1) - -
---------------------------------------------------------------------
3,065 3,043 (35) 1,234
Rest of World 103 92 4 127
Corporate and Other (47) - 27 224
---------------------------------------------------------------------
Total reportable segments $ 6,368 $ 6,368 $ 36 4,114
Current assets 7,060
Investments, goodwill
and other assets 1,980
---------------------------------------------------------------------
Consolidated total assets $ 13,154
---------------------------------------------------------------------
---------------------------------------------------------------------
Year ended
December 31, 2007
------------------------------------------
Fixed
Total External assets,
sales sales EBIT(i) net
---------------------------------------------------------------------
North America
Canada $ 7,043 $ 6,721 $ 1,137
United States 5,972 5,792 989
Mexico 1,560 1,370 380
Eliminations (628) - -
---------------------------------------------------------------------
13,947 13,883 $ 688 2,506
Europe
Euroland 10,021 9,839 1,126
Great Britain 1,203 1,201 95
Other European countries 793 689 136
Eliminations (195) - -
---------------------------------------------------------------------
11,822 11,729 359 1,357
Rest of World 504 446 20 152
Corporate and Other (206) 9 23 292
---------------------------------------------------------------------
Total reportable segments $ 26,067 $ 26,067 $ 1,090 4,307
Current assets 8,770
Investments, goodwill
and other assets 2,266
---------------------------------------------------------------------
Consolidated total assets $ 15,343
---------------------------------------------------------------------
---------------------------------------------------------------------
Year ended
December 31, 2006
------------------------------------------
Fixed
Total External assets,
sales sales EBIT(i) net
---------------------------------------------------------------------
North America
Canada $ 6,410 $ 6,165 $ 1,065
United States 5,594 5,403 1,096
Mexico 1,644 1,493 368
Eliminations (540) - -
---------------------------------------------------------------------
13,108 13,061 $ 575 2,529
Europe
Euroland 9,485 9,323 1,032
Great Britain 956 954 84
Other European countries 621 541 118
Eliminations (143) - -
---------------------------------------------------------------------
10,919 10,818 126 1,234
Rest of World 343 301 - 127
Corporate and Other (190) - 77 224
---------------------------------------------------------------------
Total reportable segments $ 24,180 $ 24,180 $ 778 4,114
Current assets 7,060
Investments, goodwill
and other assets 1,980
---------------------------------------------------------------------
Consolidated total assets $ 13,154
---------------------------------------------------------------------
---------------------------------------------------------------------
(i) EBIT represents operating income before interest income or
expense.
14. RELATED PARTY TRANSACTION
During the fourth quarter of 2007, the Company entered into an
agreement to purchase 225 acres of real estate located in Austria
from MEC for $29 million ((euro) 20 million). The closing of the
transaction is expected to occur during the first quarter of 2008
following the satisfaction of customary closing conditions including
obtaining all necessary regulatory approvals. The transactions was
reviewed by a Special Committee of, and approved by the independent
members of, Magna's Board of Directors following the unanimous
recommendation of the Special Committee.
15. SUBSEQUENT EVENTS
On February 22, 2008, the United Auto Workers' Union announced the
ratification of a four-year wage and benefit contract (expiring in
September 2011) at a powertrain facility in Syracuse, New York. Under
the terms of the agreement, the Company will make a number of lump-
sum payments to each eligible employee totalling $87,500 to offset
future wage and benefit reductions. These lump-sum payments will be
paid in four annual instalments beginning April 1, 2008.
16. COMPARATIVE FIGURES
Certain of the comparative figures have been reclassified to conform
to the current period's method of presentation.
Magna International Inc.
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